MCPSS looks to reduce staff with retirement bonus

The Mobile County Public School System is looking to reduce the number of its top-earning administrators by offering a $20,000 retirement bonus to qualifying employees.

The Board of School Commissioners approved the measure during its regular meeting on Monday, Feb. 26, after it was proposed by outgoing Superintendent Martha Peek.

“In an effort to continue being conservative with our expenditures and our budgeting and also to continue to work toward accumulating a one-month reserve fund balance, we’re proposing a retirement incentive plan for employees to consider,” Peek said. “This will help reduce the number of locally funded units and be an overall savings for the system. It does not implicate any classroom teachers, reduce services in the schools or impact academic achievement.”

Peek said the optional retirement package would be available only to administrative staff members making $75,000 a year or more that have at least 30 years in the system or 10 years for those 62 and older. It’s expected that 34 to 42 staff members could be eligible for the bonus.

According to Peek, if all of those eligible accept the offer it would cost MCPSS $680,000, but “would result eventually” in an annual savings of up to $918,066 because of reduced salary costs.

In a handout, the system noted the bonus was proposed with the goal of reducing MCPSS’ annual salary expenditure and its number of employees. The same handout said the system currently has more assistant principals than the state of Alabama allocates money to pay for.

Those types of overages are where local teacher units have historically been used. Funding from county ad valorem taxes and others sources pay for those teachers, some of whom are placed in schools with low student populations because Alabama funds education based on enrollment.

In addition to the schools’ expenditures, Peek said cutting the number of top-tier positions could help the system move closer to compliance with a state requirement to maintain the equivalent of one month’s operating expenses in a reserve funding account. For MCPSS, that would equal $36 million, though only $17 million was set aside for that purpose as of 2017.

The Mobile County Public School System is offering a $20,000 retirement bonus to incentivize an early departure for some of its highest paid employees. (MCPSS)

Jesse McDaniel, a representative of the Alabama Education Association, has been critical of the system’s use of local funding to pay administrative salaries in the past. He said there are currently more than two dozen MCPSS central office employees making more than $100,000 per year.

“MCPSS is right to look at these individuals and ask them to do more to help the system financially,” McDaniel wrote via email. “They certainly don’t mind asking more of their teachers every year, and just cutting a few of those top earners can save the system millions.”

He said it’s in everyone’s best interest for MCPSS to have strong financial footing, adding the “AEA wants the system to avoid a mandatory layoff situation or the risk of a takeover by the state.”

Separate from these local bonuses, all public education employees are looking at a possible 2.5 percent pay increase at the state level this year. Asked whether employees might take advantage of the raise and forgo the retirement incentive, Peek told the board the lump-sum bonus would “far outpace what a 2.5 percent raise would do.”

For the teachers and support staff looking to the state Legislature for a salary increase, McDaniel said the notion of a $20,000 bonus “does carry a degree of sticker shock.”

“Some see it as the rich getting richer,” he said. “We would like the MCPSS to investigate ways to offer financial incentives to other employees who are not among the ranks of the highest-paid but may also be eligible for retirement.”

The decision to incentivize retirement isn’t unheard of in Alabama education.

Hartselle City Schools used a similar “buyout plan” in 2016 that offered employees 1 percent of their salary for each year of participation in the Retirement Systems of Alabama. However, that package was extended to teachers as well, and less than a dozen took the retirement option.

According to Peek, MCPSS will have an “informational period” about the retirement bonus option beginning March 5 to advise those who might be eligible. There would then be an open application period from March 21 to April 13, including a two-day grace period.

Following the initial rollout, information provided by MCPSS suggests the system will strategically identify necessary positions needing to be filled, as well as those that could be combined or phased out entirely.

A representative of MCPSS wasn’t immediately available to comment for this report.