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Helmut Schmidt, Published November 27 2012

Fargo replacing school employee longevity plan

FARGO – The Fargo School Board voted Tuesday to end the district’s current employee longevity award plan and replace it with a multiyear program to drastically cut payments to employees and shrink a potential $7.4 million in retirement-related costs.

However, what sort of plan the board will approve is still up in the air.

The school board’s planning committee will try to hammer out a new plan or plans for the full board to debate and give final approval at their Dec. 11 meeting.

At the same time, district staff were directed by board President Jim Johnson to put a cost-savings tag to any of the alternatives presented.

In the meantime, the president of the Fargo Education Association fumed over the prospect that the employee appreciation payments – which have been in place since the late 1990s – could be slashed and ended.

“I’m deeply disappointed for our teachers and support staff who have been relying on this policy,” Kim Belgarde said.

“Staff will have difficulty understanding how the board can rescue Bluestem but not keep the promises they’ve made to their staff,” she said. “I’m sure our members will be voicing their opinions.”

In all, 240 of the school district’s 1,427 employees are eligible for payments under the rules of the old plan if they were to retire or leave the district.

For the 2012-13 school year, they can cash in up to 180 days of accumulated sick leave at $247.34 a day for administrators, and $211.43 a day for teachers and other support staff eligible for the plan.

If the 97 district employees who are eligible to retire were to give their notice by January, the district would have to pony up $3.3 million in payments, Business Manager Broc Lietz calculated.

Another 143 employees, who have served 15 consecutive years in the district and have reached the age of 55 or older, could collect nearly $4.1 million if they all opted to leave at once, Lietz said.

Younger employees are part of a Paid Leave System in which they will be paid 50 percent of their daily salary for accrued sick leave. That program, which has been in place two years, has $3.7 million in obligations, Lietz said.

The biggest change that the board agreed to after 90 minutes of debate and a raft of votes was to create a phase-out longevity plan.

The initial proposal – which could well be stretched out a few more years during planning committee discussions – calls for the payouts to start changing as soon as the 2013-14 school year, when all in the program would receive $200 per sick leave day cashed in.

By 2014-15, the reimbursement would drop to $150 per day. By 2015-16, it would drop to $100 per day. And for 2016-17 and beyond, the payment would be $50 per day.

Other changes to the longevity plan approved by the board include:

• Tightening a requirement that an employee must serve 15 years continuously with the district, leaving exceptions up to the superintendent.

• Removing language that allowed an employee to be able to take part in the program at age 55. Instead, the employee must be eligible for full retirement under rules set by the state’s Teachers Fund For Retirement or Public Employees Retirement System.

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583