Yes it’s really true, more than the governor!

Yes it really is true.  In Sauk Rapids Minnesota our superintendent makes more than the governor of Minnesota and nearly double the national median superintendent salary.  So what is going on in this central minnesota town where MCA scores for 11^th graders are in the tank, yet we are, and have been, paying our superintendent nearly double the going rate.  Other administrators such as principals and assistant principals are also paid above the state averages.

Sauk Rapids-Rice is a school district composed of one high school, one (1) middle school and three (3) elementary schools.  There are 3,757 students and according to the department of education we employ 223.3 full time equivalent teachers in our district.  We have a total population in our district encompasing much of Benton County, Rice and Sauk Rapids of just 25,000.  The BoardWatcher finds it absurd that we need to pay double the going rate to manage a grand total of five schools.  The BoardWatcher thinks Someone ought to do something about that! 

Yes, in this small rural central Minnesota town, we pay our superintendent more than the governor of Minnesota.  So, what’s up? is Tim Pawlenty underpaid?  Not exactly–it turns out that we actually pay our superintendent more than 32 of the 50 governors in the United States.  Yes, that’s right there are only 18 U.S. governors with higher salaries than our superintendent.  

Sauk Rapids-Rice is now in the bottom 20th percentile state wide in 11th grade math scores.  Yet, our little town can proudly boast that we will pay our superintendent $135,500 in 2007/2008 and $140,200 in 2008/2009, nearly double the national median superintendent salary of $75,000 and over 30% higher than the Minnesota State average salary of $101,849. 

In addition, we will provide a 100% severance package in addition to a full suite of fringe benefits that would make a GM executive green with envy.  For those of us who don’t have severance packages — district tax payers will pay 100% of the superintendents’ final year salary upon termination of his contract over and above retirement contributions and other accumulated cash-out features.  So when the superintendent quits or retires we will be paying the equivalent of at least 4 entry level teachers.  In fact our superintendent is actually already drawing down the banked severance money at a rate of $15,000 per year apparently to ease the burden of the one time payout.

While this is apparently legal and even becoming common in Minnesota, the BoardWatcher questions the wisdom of spending tax dollars in this way when at the same time MCA II scores are declining and teachers are being cut.  The BoardWatcher has done some research and found that the Minnesota State Auditor has also questioned these “exceedingly large” compensation packages for school superintendents throughout the state and particularly in the Twin Cities Metro area. 

What Does the State Auditor Think? 

The state auditor researched this question at length in 2003 producing the 91 page Special Study:  School Superintendent Compensation.  In short, the State Auditor was critical of the overly exuberant compensation packages that superintendents have negotiated since the salary cap was lifted in 1998.  Prior to 1998, government employees including superintendents were limited to 95% of the governor’s salary.  In 1998 this limit was lifted for superintendents (only) in efforts to make compensation packages more transparent to taxpayers.  In particular, there were increasing problems valuing total compensation packages because of the institution of large severance packages, automobile allowances, leave cash-out deals and other methods of hiding compensation through deferred benefits.  School districts were essentially dodging the salary cap by hiding benefits.

The intent of lifting salary caps was to reduce complexity of compensation packages so that tax payers could participate in the negotiation process.  It was thought that removing the salary cap would allow districts to pay superintendents more transparently, primarily through salary rather than by hiding benefits in deferred compensation packages.  The idea was to allow taxpayers to get a handle on out of control compensation packages by making the negotiation process more transparent.

Unfortunately, in 2003 the State Auditor found that both salary and deferred compensation packages have increased dramatically since the cap was lifted.  The State Auditor said “The idea behind removing pay limits for superintendents …was to squash the temptation of hiding compensation in benefit packages.”  She emphasized that “Taxpayers should be outraged by some of the severence packages found in some superintendent contracts” in reference to the $245,000 total cash-out payment for the Hastings superinetendent including six months salary, six months leave, unused vacation time etc.  Bear in mind that Sauk Rapids taxpayers have promised the superintendent 12 months salary and other assorted cash-outs.  Has anyone asked the board how big this number really is?  If the State Auditor is right they may not know.

In general, superintendents have negotiated sweetheart deals taking them over and above common pay levels for other government and private sector employees with similar responsibilities.  The State Auditor also found that compensation packages are so complex that “Districts themselves often do not know how much their superintendent is owed in compensation”. 

What is it about Sauk Rapids Minnesota that requires the services of one of the most highly compensated superintendents in the state?  Some moderate sized rural districts that are similar to Sauk Rapids actually reduce these administrative costs by consolidating with nearby districts and even subcontracting administrative services.  Some distrcts do not feel the need to have a full time superintendent.  It should be noted that in addition to the superintendent, Sauk Rapids also employs a business manager and a curriculum coordinator (recently re-labeld as assessment director) so it is reasonable to question the need for all three positions.  Remember we are talking about 1 high school, 1 Middle school and 3 elementary schools.  This is not 3M.

I’m an Underpaid CEO 

In efforts to rationalize these excessive compensation packages superintendents often argue that “I’m the CEO of a moderate sized business”.  We have heard our own superintendent use these words.  Unfortunately not everyone agrees with this analogy to business CEOs.   Martin L. Gross in his 1999 book The Conspiracy of Ignorance recommends that school boards should 1) hire a school manager (not an EdD or PhD) to run day to day activities of the district including and especially the financial responsibilities, and 2) hire a “true scholar”  with a PhD in any subject except education to direct and improve the curriculum and testing and quality of teachers.  He additionally advocates that state legislatures completely elimination the EdD degree and the associated title of doctor with it’s “false impression of scholarship”.  Our district has a business manager, a curriculum (oops assessment) coordinator and a superintendent.  If Gross is right two are company and three are a crowd.

Dave Ziffer on the IllinoisLoop.org wrote:  “The ‘underpaid CEO’ notion is based upon a grossly inaccurate view of what CEOs do and why they are so highly paid.  CEOs do not simply sit at the top of their respective management chains and direct operations.”  On the contrary, Ziffer argues that the duties of a school superintendent are more akin to the mundane duties of a mid level corporate manager. 

Outside Consulting and Lobbying:

In addition to this big city compensation package our superintendent is also permitted to work as a consultant in any field, including education, provided that it does not interfere with his duties as superintendent.   Most notably our superintendent works as a “facilitator” for P.S. Minnesota.  The stated mission of this organization is to fix the broken funding formulas in the state of Minnesota.   Unfortunately, fixing the funding formula according to P.S. Minnesoata includes adding an additional $2 Billion to the cost of the education system.  This is spun as a good deal because these additional funds would come from the State rather than from property taxes.  Unfortunately, it really doesn’t make much difference at the end of the day given that all state tax dollars originate in the same taxpayer pockets.  This is a slick sales job intended to take money from hard working taxpayers and put it in the hands of education bureaucratspreparing for the “21st century”.   Sorry but China and India are already there. 

The BoardWatcher fully supports the rights of citizens to pursue their interests on their own time.  However, we are acutely aware of the potential conflicts of interest that may arise when our Superintendent is changing hats from lobbyist, err..ugh…Facilitator, seeking a $2 Billion increase in funding to his day job working for taxpayers to hold down the costs of education.  Bear in mind as education spending increases the less absurd the P.S. Minnesota funding framework  begins to sound.  After a while you start to lose track of the Bs and Ms in those cost estimates.  The BoardWatcher is not the first to wonder about the structure of these education lobbying groups.

This potential for conflicts of interest is in all likelihood only of theoretical concern.  However, the BoardWatcher is also aware that P.S. Minnesota, lists only one point of contact (our superintendent) and one phone number on it’s web site.  Yes you guessed it the political group P.S. Minnesota lists the main phone number (320 253-4703) for the Sauk Rapids-Rice School District office as it’s only point of contact.  Apparently P.S. Minnesota is enjoying the benefits of our tax dollars in the form of telephone and clerical services in the district office. 

Given this number is listed for contact to our superintendent in his role as facilitator for P.S. Minnesota one can only conclude that he is conducting at least some level of P.S. Minnesota business from within the district office on our time.  Apparently Victoria used the districts services in December of 2006 while trying to inquire about P.S. Minnesota.   Ask yourself if P.S. Minnesota represents your interests and if our superintendent and his staff should be fielding calls at the district office.

In addition to the apparent subsidy our district is providing P.S. Minnesota in the form of telephone services, there appear to be other Enron like arrangements that may be problematic.  The District is also a member of the lobbying group Schools For Equity in Education (SEE).  In August 2006 the district paid SEE membership dues of $3,690.  In turn, according to their web site, SEE is a partner organization with P.S. Minnesota which is headed up (oops, I mean “facilitated”) by our superintendent. 

It is not clear if SEE and other partner organizations pay membership fees to P.S. Minnesota, but P.S. Minnesota apparently generates income somehow as they contracted with a consulting firm from Colorado to tell the legislature that a $2 Billion increase in education funding is necessary.  In any event, our tax dollars have been spent to pay SEE to lobby the legislature for the progam being promoted by P.S. Minnesota that would increase the cost of our education system by $2 Billion.  This under the guise of funding equity.  At the same time we are providing at least telephone services to front P.S. Minnesota in their efforts to achieve the same ends.   

Some Basics to be Further Elaborated

• The district claims that people (We aren’t sure who?) are concerned with class sizes. Yet, according to the Minnesota Department of Education there are 3,757 students and 223.3 full time equivalent teachers in the district. This equates to a student to teacher ration of 17 to 1. Why does the district characterize this as a problem? This sounds quite reasonable to the BoardWatcher.  Notice that the district simply claims that the class sizes are “larger” but never  actually publishes the number. Who is concerned over an average class size of 17 per teacher?  The BoardWatcher challenges anyone to find a statement of student teacher ratios on the ISD47 web site. 

• The district claims it is necessary to raise an additional $2.8 million from the property tax levy. The BoardWatcher believes that the primary objective in the near term should be to get enthusiastic motivated teachers back in the classroom. The district laid off 18 probationary teachers earning approximately $30,000 to $35,000 in salary and at most an additional 30% ($10,000) in benefits. Conservatively, it should take no more than $810,000 (18 x $45,000) to put these teachers back in the class room. Why is the district asking for $2.8 million, nearly 4 times the amount needed to get these teachers back to work? What are the assumptions behind this amount. What new services are being proposed to take up the additional $2 Million? The taxpayers need an itemized list of the proposed new spending.

• The BoardWatcher believes that the district is not currently taking advantage of nearly $1 Million in available State funding.  To accept this funding would require that the district institute the performance based pay system called Q-COMP.  WE will have more on this in subsequent posts, but suffice it to say it is extremely disturbing that this source of State funding is not being utilized, much less even being discussed on the ISD47 web site.   Why is the district seemingly ignoring this ready source of essentially free money?  District residents have already paid income, sales and other state taxes to fund this program, yet the district is not bringing any of that tax money back to the district.

Attend Meetings and Ask Hard Questions:

District voters need to attend meetings and ask the hard questions.  What will the money be spent on?  New Programs?  Improvement to existing programs?  How will the district reduce spending to stay out of trouble the next time inflation catches up again? 

Upcoming public meetings will be held by the district:

October 8, 7:00 PM at the Rice Elementary Media Center.

October 22, 8:00 PM at the SRR High School Community Room (Door 1)