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Early Retirement Policy Considered, West’s Lunch Price Increased

By Staff | Nov 3, 2011

Offering an early retirement policy at the end of the 2011-2012 school year was debated by members of the Emmetsburg Community Schools Board of Education during their Oct. 17, meeting.

“I provided you with a sample of an early retirement policy based on what we did a couple of years ago,” said Superintendent John Joynt, indicating to the board’s packet of information for the meeting.

Joynt explained that the previous early retirement policy stated that potential retirees must have attained the age of at least 55 years by July 1. The “rule of 88” (years of service to the district plus the employee’s age) must also apply for the employee to receive the maximum amount from IPERS. The policy is to pay the cost of a single health insurance plan up to the age of 65 for the employee and up to a cost of $10,000.

“Each single insurance plan is about $7,000 now and we would tax for that in the management fund,” Joynt added. “It’s all property tax.”

Joynt noted that the savings to the district is realized when an experienced teacher, who may be earning around $50,000, retires. That vacancy is then filled by a younger teacher, who is earning less money, typically around $30,000.

“On average, we save around $15,000. Currently, we have nine people eligible, but only one is in the ‘rule of 88,’ so I’d recommend not having an early retirement policy at this time,” said Joynt. “You don’t want to have a policy every year because that becomes a kind of a roll-over thing where it becomes expected. We want to use it when we think it could be beneficial.”

Rick Brennan, board member, wondered if $10,000 was adequate.

“Right now we’re at $7,000, and we’d max it out at $10,000,” Joynt answered. “If the employee goes out at 55, they’re on there for ten years until age 65. It’s a ten-year commitment for some of these people, so it isn’t much tax to start with, but it is over ten years. For example, if all nine people would take it, that’s a big tax jump, so you have to consider that.”

“Financially, we’re not in a situation where we need to have retirees this year,” said board member Tammy Naig.

“We’re certainly not desperate, but if our enrollment continues to decline over the next two or three years we may be begging the board to have an early retirement policy,” said Joynt. “It’s an enticement, you want to entice people to retire early to save money in the general fund.”

Board member Karla Anderson asked if the board was concerned about capping the amount at $10,000.

“You hear health insurance is going to skyrocket again. Have you heard anything from our insurance carrier?” Anderson questioned.

“We won’t hear from them until January,” said Joynt. “It was in the newspaper the other day that individual plans went up 9.5-percent.”

Anderson surmised, “I don’t think we want to consider it this year, but this could become a very significant expense in three or four years.”

In other business, the board considered raising lunch prices at the West Elementary as a way to increase the value of the meal.

“The federal government says that we have to raise our school lunch prices. They have a formula and I had our Food Services Director Deb Goeders take a look at it. If we don’t get our plan approved, we don’t get reimbursement for school lunch. So, at the West Elementary she has proposed raising lunch prices from $2 to $2.10.”

The superintendent explained that because the district has not been running a deficit over the past three years, they could increase the value of their school lunches. The district currently meets nutrition guidelines, and cannot simply add quantities of food to increase the value of the meal as that could put the meal over the maximum calories allowed. Deb Goeders is researching possibilities such as utilizing whole grain bread instead of white bread and adding more servings of fresh fruit to school lunches. Switching from cardboard milk containers to plastic is also being considered.

With little discussion, the board approved increasing the school lunch prices at West Elementary from $2 to $2.10 starting Dec. 1.