09.02.10: City of Bell Scandal Results in New School Superintendent Contract Procedures
By David Walrath
In responding to the scandals from the City of Bell, other cities and the Public Employees’ Retirement System, the Legislature cast a wide net in making changes to employment and retirement provisions for local government management positions. Normally school districts are not considered to be local government, but for the purpose of these bills schools and the California State Teachers’ Retirement System were included. SSDA, ACSA and CSBA were all involved with trying to limit the bills’ effects on school districts and superintendents. The following are the three bills that have the most significant effects on school districts and school management:
Senate Bill 1425
- Prohibits a CalSTRS retiree from returning to work in a CalSTRS covered position for any purpose until more than 180 days after retirement.
- Limits the percentage of salary increase that can be applied for the defined benefit retirement to no more than 25% combined during the five years immediately preceding retirement. This applies only to management positions. Contributions would be credited to the defined contribution account (Defined Benefit Supplement Account) for any salary in excess of the percentage amount.
- Eliminates a class of one for comparing compensation and benefits in management positions. It does not repeal a class of one for bargaining purposes.
Assembly Bill 827
- This bill is limited to individuals who are “at-will’ employees and those who are required to file conflict of interest documents (Form 700 filers).
- The bill contains contract limitations that include prohibiting automatic renewals of contracts, automatic compensation increases that exceed the cost-of-living, an automatic increase tied to a third party contract, and severance packages that exceed current law.
- The bill defines compensation to be salary, payments to deferred compensation plans, defined benefit employer contributions, automobile and equipment allowances, supplemental incentive and bonus payments and benefits that are provided to the filer in excess of the standard benefits provided all other employees.
- If the employer wants to provide compensation in excess of the cost-of-living, there has to be a separate employee performance review.
Assembly Bill 194
This bill applies only to individuals newly entering either PERS or CalSTRS. For any person in a position reporting directly to a legislative body (superintendent for instance), the person will not be credited for retirement purposes with any salary greater than 125% of the Governor’s compensation.
We were successful in stopping some bills (AB 1955) and making these bills better than they were when introduced.
