Lehighton to save $400K on staff
Spirited debate in recent months will culminate Thursday with Lehighton Area School District’s board of directors voting on its 2019-20 budget during a special meeting starting at 6:30 p.m.
Since the last finance committee meeting last Wednesday, when the district’s projected deficit stood at $4.47 million, several retirements and resignations have dropped that number by over $400,000.
“Coming in to today, the recent retirements and resignations would cut the proposed budget expenditures by $303,691,” Lehighton Business Administrator Patricia Denicola said.
“Just today, we had another tentative resignation and if that would happen, we could realign that position and lower the budget by another $100,971.”
At the school board’s meeting on Monday, the board, by an 8-1 vote, passed a memorandum of understanding with the Lehighton Area Education Association, the union representing the district’s teachers, which amends retirement benefits in the current collective bargaining agreement. The memorandum pertains to any professional staff member in Lehighton with at least 15 years employment who, by Monday, submitted an irrevocable letter of intent to retire by June 30, In exchange for getting a cash payment for any unused sick days, those individuals could elect to trade those sick days in for extended coverage on the district’s health insurance plan.
Fifty unused sick days will get an employee one year of “employee only coverage” in the district’s medical and dental plans at no contribution cost to the employee, while 100 unused sick days will provide for one year of coverage for an employee and their spouse.
The coverage would continue until the earliest of the following occurs:
• A retiree exhausts all unused sick days
• Reaches age 65
• Becomes eligible for Medicare
Director David Bradley, who cast the lone vote against the MOU, said the district was trading a known value for an unknown value.
“This sounds like a golden parachute,” Bradley said.
Though district officials said they don’t know what the level of claims will be in a given year, there is a maximum liability as stop loss insurance kicks in at $65,000 per person on the plan.
“Under this agreement, individuals are, in our estimation, retiring earlier than they normally would have,” Denicola said. “That is giving us a savings in the time of a budgetary gap that we need because we can absorb these positions within our current staffing levels.”
Bradley also questioned district officials over whether individual members of the union indicated they would take retirement if the changes were passed by the board.
“We did not know how many individual members would take this,” Denicola said. “We looked at an overview of how many people would be eligible for a full retirement and used a best estimate as to how many of them would participate in this incentive.”
Lehighton’s current millage rate is 47.88. The district hasn’t raised taxes since 2014-15, spending down its fund balance in the process. It has the option this year to raise taxes up to 3.2 percent based on the state’s Act 1 index. A 1-mill increase would result in a $39.63 annual increase to the average Lehighton taxpayer and generate $379,578 in income. A 1.5 mill increase would be a $59.45 annual increase to the average taxpayer and generate $569,367 in income.
In all budget presentations to this point, the district has not included a tax increase in its projections.
Approximately 4,500 property owners will receive the homestead/farmstead reduction on their property tax bill from state gambling money, estimated to be $266.31.