Northfield School District to Offer Teachers Early Retirement Incentives

As Northfield School District administrators plan to cut more than $700,000 from their budget for next year, they hope to reduce expenses by offering senior teachers a financial incentive to retire early.

At Monday's school board meeting, Director of Human Resources and Technology Matt Hillmann and Director of Business Services Stephanie Shawback presented a plan that could save the district about $2.4 million in salaries over 10 years.

The board approved the proposal to offer early retirement to teachers with the most experience and training as part of wide-ranging cost cutting efforts in advance of cuts in state school funding. The savings come from replacing these more senior teachers and their higher salaries with less experienced teachers and their more modest salaries.

Teachers can get a one-time payment of as much as $20,000 to retire early, Hillman said.

The district is offering two incentive levels: if as many as 10 teachers accept the offer, they will each receive a one-time payment of $15,000. If 15 or more teachers opt in, the district will pay them $20,000 each. As many as 70 teachers are eligible.

Shawback estimates the district would save about $1.6 million in the next 10 years if 10 teachers take early retirement. With 15 teachers, the savings could be $2.4 million. The actual savings will depend on the number of educators who accept the package, as well as the pay rates of the replacement teachers.

Hillman said that the district is not eager to lose its best teachers but said that there is a “bumper crop” of teachers with growing expertise to replace them.

The incentives for retiring teachers would be paid in the current fiscal year from a fund designated for pensions. The savings would be realized in the coming years, until the replacement teachers reach the pay level of the teachers who retire at the end of the school year.

School board member John Fossum said that voluntary retirements will help the district avoid layoffs.

On a related topic, Superintendent Chris Richardson updated the board on where they are in the budgeting process for the next school year. Proposed cuts will be offered for public review at a meeting at 3:45 p.m. March 2.

A projected for the 2011-12 school year has led the board to seek $705,000 in cuts. The remaining $1.7 million will be covered by the district’s fund balance.

As a result, the board implemented a program-based budgeting process.

Some 123 people from the schools and the community have been hard at work looking at expenditures in five categories: district operations, special education, athletics/activities, and the biggest part of the budget, elementary and secondary education.

Their job was to cut each budget by 4 percent, indicating which items they would restore if funds allowed.

From this, the board will vote on a budget and will present it at a March 16 public hearing scheduled for 7-9 p.m. at the .

The school board expects to vote on a budget at its April 11 meeting.

“The plan we have in place is what we think is the worst-case scenario,” Shawback said.

The district needs to have a budget in place, even though the level of state aid to school may not be known for months. The hope is that items can be restored to the budget if aid is reduced less than projected.