Billings Public Schools FREQUENTLY ASKED QUESTIONS:

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1 Billings Public Schools FREQUENTLY ASKED QUESTIONS: EMPLOYEE COMPENSATION 1. What categories of employees does the District hire, and how are they organized? Three different collective bargaining associations represent many of the District s employees: - The Billings Education Association (BEA) represents certified employees, including teachers, counselors, and nurses. - The Billings Classified Education Association (BCEA) represents classified employees, including accountants, technicians, specialists, para-professionals, clerks, and secretaries. - The Montana Public Employees Association (MPEA) represents custodial, maintenance, and warehouse employees. The District also employs two groups of employees who are not members of a bargaining unit: - Administrators certificated and classified, including the Central Office Leadership Team, principals, and assistant principals - Administrative support personnel, including administrative assistants, benefits technician, HR manager, HR assistants, HR clerk, budget analyst, payroll manager, payroll accountants, payroll clerk, and special education bus assistant manager. 2. What are the components of an employee s total compensation? An employee s total compensation can be made up of numerous components, including: - Base salary (hourly or salaried) - Healthcare benefits (medical, dental, life insurance, disability) - Stipends - Retirement benefits - Time off - Severance package/service credit - Sick leave - Personal leave - Jury duty leave

2 The District provides the following to all qualifying employees in full or prorated amounts based upon their full-time equivalency (FTE) of employment. A. Base Salary (hourly or salaried). For example, teachers receive an annual salary based upon the length of their workday (.20 FTE to 1.0 FTE) and their number of workdays (typically a maximum of 180 student days and 7 professional development days PIR = 187 contract days). Classified employees receive an hourly rate multiplied by the number of hours they work in a year. Teachers advance on the salary schedule each year by virtue of having completed a year of employment. This is called step movement. Additionally, teachers may advance on the salary schedule by accumulating additional credit hours or degrees beyond their bachelor s degree. This is called lane movement. Teachers may use continuing education units, non-college technical course work, and college/university course work for lane advancement. The specifics of step and lane advancement are subject to negotiation. (NOTE: For information on District costs associated with steps and lanes, refer to question 8.) Teachers also receive an additional annual $1,500 for an earned Master s degree, $2,000 for an earned Doctorate degree, and $2,000 for an earned National Board Teaching Certificate. Qualifying classified employees receive a longevity wage increase per hour. B. Healthcare Benefits The District provides health, dental, life ($50,000), and long-term disability insurance to qualifying employees. On a prorated basis (based on the FTE of the employee), the District pays the full premium for single coverage for the highest deductible medical and dental plans offered. This equates to an average cost to the District of $6,732 per qualifying employee for FY 2011 (July 1, 2010 through June 30, 2011). The District s Health Benefits Committee projects a 6.5% increase in District costs for current coverage for FY This would correspond to an annual cost per qualifying employee of $7,170. Click here for a more detailed FAQ on employee healthcare benefits. C. Teacher Retirement Service (TRS) or Public Employees Retirement Service (PERS) The District contributes to the State of Montana retirement plans for each qualifying District employee. The contributions are 7.47% of the monthly salary of each qualifying employee for TRS, and 6.80% of the monthly salary of each qualifying employee for PERS. D. Social Security The District contributes 6.20% of each qualifying employee s monthly salary to the U. S. Social Security Fund.

3 E. Medicare - The District contributes 1.45% of each qualifying employee s monthly salary to Medicare taxes. F. Workers Compensation The District contributes 0.508% of the monthly salary of BEA members to state worker s compensation insurance (this insurance provides employees with an income in the event they are unable to work due to an injury on the job). (The percent of the monthly salary paid for worker s compensation by the District varies for the different categories of employees discussed in question 1. For purposes of illustration, only the BEA percent is indicated here.) G. Unemployment Insurance - The District contributes 0.17% of the monthly salary of each qualifying employee to the Montana Unemployment Insurance Fund to provide employees with an income in the event of a layoff. TOTAL COMPENSATION FOR SCHOOL YEAR FOR SAMPLE TEACHER Lane MA15 / Step 11 $56,842 Additional for MA $ 1,500 Healthcare Benefits $ 6,732 Retirement $ 4,358 Social Security $ 3,617 Medicare $ 846 Workers Comp. $ 296 Unemployment Ins. $ 99 Total Annual Compensation $74,290* *Many teachers earn additional income from serving as department chairs, coaches, sponsors, directors, working additional hours, curriculum work, teaching summer school, etc. H. Mileage Reimbursement The District reimburses employees at $0.51 per mile for each mile they drive their vehicles in the course of performing their job, excluding mileage to and from work and home. I. Stipends The District pays annual stipends (paid proportionally on a monthly basis) to employees who serve outside of their regular positions for example as football coaches, basketball coaches, yearbook advisors, forensics coaches, or marching band instructors. J. Leaves with Pay The District provides qualifying employees with a variety of leaves, all of which have a compensation value: i. Holidays - Qualifying employees receive up to 17 paid holidays per year.

4 ii. Vacation Leave Qualifying employees receive 15 or more vacation days with pay per year. (Number of days depends on number of years of service.) iii. Sick Leave Qualifying employees receive 12 working days of sick leave with pay for each year of service, and may accumulate sick leave days without limitation. An employee who terminates employment with the District receives a lump-sum payment equal to one-fourth of the daily rate of pay attributed to the accumulated sick leave. iv. Critical Family Illness (CFI) Leave Qualifying employees may use up to 3 working days of CFI leave with pay for each incident. v. Personal Leave Qualifying employees may take up to 2 days of personal leave with pay each year ( in addition to vacation, sick, and CFI leave). vi. Bereavement Leave Qualifying employees may take up to 5 days of bereavement leave with pay for each death of a family member as defined in the collective bargaining agreements. vii. Legal Leave Qualifying employees may take leave with pay for the purpose of complying with a legal order that requires the presence of the employee. viii. Jury Duty Leave - Qualifying employees may take leave with pay for the purpose of complying with a legal order requiring their service on a jury. 3. How does the District determine compensation for its employees? The District negotiates all issues of compensation with the BEA, BCEA, and MPEA. Specific collective bargaining agreements control salary (including step and lane advancement and longevity pay), stipends, health benefits, sick leave, critical family illness leave, personal leave, bereavement leave, and legal leave. State statutes and/or federal laws control vacation leave and accumulation, as well as jury leave, retirement service, social security, Medicare, workers compensation, unemployment insurance, and mileage reimbursement. 4. How much does the District spend on total compensation? How much comes from the General Fund Budget? In FY11, the District paid $114,236,018 in total compensation from all K-12 funds. From the General Funds only: - The Elementary District paid $54,543,333 in total compensation - The High School District paid $31,417, 830 in total compensation 5. What is the current salary schedule for each employee bargaining unit?

5 Click here for the salary schedule for BEA members. Click here for the salary schedule for BCEA members. Click here for the salary schedule for MPEA members. 6. How much has the salary for employees increased since 2000? From FY2000 to FY 2011, the total General Fund cost for salaries for the combined elementary and high school districts increased more than 50%, from $52,052,234 to $78,320,645. During the same period, the average FTE salary increased 61%, from $33,431 to $53,939 (not counting healthcare and statutory benefits). 7. How much has the cost of healthcare (medical and dental) insurance increased since 2000? Between FY 2000 and FY 2011, the District s average cost for healthcare benefits per full-time qualifying employee increased approximately 136%, from $2,855 to $6,732. In FY 2012, this cost is expected to increase to $7,170. If FY 2012 projections hold, the total increase from FY 2000 through FY 2012 will be more than 150%. 8. For FY 12, what is the estimated cost of step and lane advancement and longevity for employees? For FY 2012 (the school year), step, lane, and longevity advancement for all qualifying employees are expected to cost the General Fund the following: - Elementary District $917,387 - High School District $483,798 (Note: The answers assume a 0% increase to the base salary. See question 2A for an explanation of step and lane advancement.) 9. What makes up the severance package (service credit) for teachers? A severance package, also called a service credit, is available for teachers who have worked for the District at least 10 years, but not more than 35 years. (Note: The accrual of service credit for payment freezes after accumulating 35 years of service.) This severance/service package is paid for out of the General Fund. Specifically, upon terminating employment (resigning or retiring), an eligible teacher receives: a) $100 per year for years of service prior to June 30, 1986 b) 2.5 days multiplied by each year of service after July 1, 1986, multiplied by the teacher s daily rate of pay at the time of termination (daily rate of pay is for the normal teaching contract only; it excludes stipends, extended employment, etc.) c) Total days of accrued sick leave multiplied by 25%, multiplied by the teacher s daily rate of pay at the time of termination

6 d) An additional 5% bonus on the total amount of items a-c, above, if the teacher notifies the District by March 1 of the applicable year of his/her intent to terminate his/her employment e) An additional amount paid into the Teachers Retirement System by the District on behalf of the teacher if the teacher opts to 1) accept the amount of the package as ordinary income, paying all applicable taxes and deductions, and 2) use the money to purchase additional service credit with the TRS, which would increase the teacher s monthly pension for life. In event of this election, the District would also be required to pay an additional amount into TRS. This additional amount paid by the District does not come from the General Fund. This payment comes from the Retirement Fund. For an example showing the amount of the severance package for a sample teacher, refer to Example: Teacher Severance/Service Credit Package at the end of this FAQ. 10. What makes up the severance package for administrators? District and school administrators are also eligible for a severance package (service credit) at the time of their termination. This severance/service package is paid for out of the General Fund. All of the components of teacher severance (see question 9) also apply to administrators, with an additional component for accrued vacation up to a maximum of 60 days. For an example showing the amount of the severance package for a sample teacher, refer to Example: Administrator Severance/Service Credit Package at the end of this FAQ. In the example, item c-1) represents the additional component for accrued vacation. 11. What are national trends/responses to the budget deficit challenge with regard to teacher compensation? States and school districts take a variety of approaches in response to their specific budget challenges and needs. However, strategies commonly used include: - 0% increase to base salary (freeze) - X% reduction to the base salary - Freeze on all step, lane, and longevity salary advancements - 0% increase to all stipends (freeze) - Eliminate selected stipends, i.e., department chair - Decrease the number of work days by 1 10 days - Increase in the length of the workday to 8 hours - Increase class size (student-teacher ratio) - Decrease amount of paid planning time during the workday - Decrease district workdays to 4 days, with increased daily instruction time 12. What are some of the District s noncompensation expenditures?

7 Among the District s noncompensation expenditures (all funds) are: Textbooks (including library books): $1,061,953 Instructional Materials & Supplies: $2,445,657 Transportation (other than to/from home/school): $ 770,318 Athletics & Activities (includes coaching stipends and schools extracurricular accounts): $6,425,630 Non-Instructional Materials & Supplies: $7,709,987 Utilities: $2,272,998 Insurance: $ 758,601 Maintenance (non-personnel): $3,046,482 Technology (non-personnel): $2,617,456 EXAMPLE: TEACHER SEVERANCE/SERVICE CREDIT PACKAGE The following example is for a teacher who in earned $56,842 in base salary. At the time of termination the teacher had completed 30 years of service to the District, and accrued 180 days of unused sick leave. a) 5 years of service prior to June 30, 1986 multiplied by $100 $ b) 2.5 days multiplied by 25 years of service (after 1986), multiplied by the daily rate ($56,842 divided by 187 days equals $303.97) $18, c) 180 days of accrued sick leave multiplied by 25%, multiplied by the teacher s daily rate ($303.97) $13, Subtotal items a-c $33, d) 5% bonus for notifying District by March 1 of intent to terminate employment $ 1, Subtotal items a-d $34, e) District pays into TRS as per teacher s choice to use total severance in items a-d to purchase additional service credit with the Teachers Retirement System. District pay-in would be: Subtotal of items a-d multiplied by 1) a unique employer contribution rate (%) based upon each teacher s age, years of service, and compensation (3.50% in this example), and 2) the teacher s years of service (30 years in this example): $34, X X 30 = $ 36,577.40

8 TOTAL COST to District for the severance/service $71, package for teacher example EXAMPLE: ADMINISTRATOR SEVERANCE/SERVICE CREDIT PACKAGE The following example is for a high school principal who earned $101,760 in base salary in At the time of termination, the principal had completed 30 years of service to the District, had accrued 180 days of sick leave, and had accrued 60 days of vacation. a) 5 years of service prior to June 30, 1986 multiplied by $100 $ b) 2.5 days multiplied by 25 years of service (after 1986) multiplied by the daily rate ($101,760 divided by 255 days equals $399.06) $24, c) 180 days of accrued sick leave multiplied by 25% multiplied by the principal s daily rate ($399.06) $17, c1) 60 days of accrued vacation leave multiplied by the the administrator s daily rate ($399.06) $23, Subtotal items a-c1 $67, d) Bonus for notifying District of intent to Terminate prior to March 1 of the applicable year, the administrator also receives a 5% bonus: 0.05 x $67, = $ 3, Subtotal items a-d $70, e) District pays into TRS as per administrator s choice to use subtotal of severance in items a-d to purchase additional service credit with the Teachers Retirement System. District pay-in would be: Subtotal of items a-d multiplied by 1) a unique employer contribution rate based upon each teacher s age, years of service, and 2) compensation (3.50% in this example), and 2) the teacher s years of service (30 years in this example): $70, X X 30 = $74, TOTAL COST to District for the severance/service $144, package for administrator example

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