Grass Valley School District Superintendent and Board of Trustees

Additional Recommendations 4

These recommendations are not explicitly linked to specific findings.

• R3
  The Board should ensure that all job positions have defined duties and responsibilities.
• R4
  The Board should not award salary increases that could reasonably be perceived as “pension spiking.”
• R5
  The Board should ensure that the superintendent’s contract is current and accurate.
• R6
  The Board should develop a procedure to ensure that any change to the superintendent’s compensation is approved by the Board prior to implementation. Responses Grass Valley School District Board of Trustees: Due Date: September 4, 2012 2011-2012 Nevada County Grand Jury grass var(ey Schoor'District Eric Fredrickson Superi ntendent 10840 Gilmore Way, Grass Valley, CA 95945 (530) 273-4483 Fax (530) 273-0248 August 29, 2012 Honorable Judge Thomas r'\nderson Presiding Judge of the Grand Jury 20 1 Church Street Nevada City, CA 95959 Re: Grass Valley School District's Response to the June 4, 2012 Nevada County GI"and JUlY Report Dear Judge Anderson: Pursuant to California Penal Code sections 933 and 933.05, the Board of Trustees for the Grass Valley School District ("Board" or "Trustees") hereby submits this formal response to the 2011­ 2012 Nevada County Grand Jury Report ("Report") regarding "Grass Valley School District Superintendent and Board of Trustees." OVERVIEW OF DISTRICT RESPONSE The Board of the Grass Valley School District ("Board ') shares the Grand Jury's commitment to managerial and tiscal responsibility. To that end, the Board has seriously considered the Grand Jury's findings and recommendations; has communicated with the District's administration and either has implemented or will implement responsive measures that address the Grand Jury's findi ngs and recommendations. The Trustees do, however, strongly disagree with the Grand Jury 's characterization of the Board as failing to exercise its financial responsibilities. The Board is vigilant in monitoring and maintaining the District's fiscal well-being; but, it is not the role of the Board to verify employee salaries. Determining the accuracy of salary payments made to the District's 241 employees is the type of activity inherent to the Djstrict's day-to-day operations and, as such, is necessarily delegated to the District s administrative staff. In addition, the Board wants to be very clear that it has always had, and continues to have, the utmost respect for and h-ust in the District's former Superintendent. The former Superintendent faithfully discharged his duties and for more than two decades, dedicated himself to the students of Grass Valley School District. The Board has never doubted the former Superintendent's honesty and is convinced that the issues outlined in the Grand Jury 's report regarding the former Superintendent'S salary resulted from an inadvertent lapse in the District's protocol for obtaining Board approval of changes in the terms of an employment agreement While we respectfully disagree with some of the Grand Jury's findings, we agree that improvements can be made and have implemented or will implement the vast majority of the Grand Jury's recommendations. \} . Scotten School Lyman Gilmore Middle School Grass Valley Charter School Child Development Office ~~1J (530) 273-6472 (530) 273-8479 (530) 273-8723 PreschooVBefore & After School \ ' tl \\ Programs (530) 273-9528 DISTRICT'S RESPONSE TO GRAND JURY'S FINDINGS Finding No. F.I.l: The Superintendent's income was improperly increased by: -The unauthorized payment of cash-in-lieu of health benefits beginning in 2006. -The unauthorized salary increase in 2008. Response to Finding No. F.I.l: The Board respectfully disagrees in part with Finding No. F.I.1. A. The Board agrees that the increase in the Superintendent's income, beginning in 2006 by way of the payment of cash-ill-lieu of health benefits, was not authorized to the extent that the Superintendent's contract did not specifically provide for such payment and the Governing Board did not take official action to approve it. However, the Board also notes that in its Report at F.A.l 0, the Grand JUly quotes from Section 4 of the former Superintendent's 2004-2007 contract which states that "The SUPERINTENDENT may, at the SUPERINTENDENT's discretion, elect to not purchase the above mentioned benefit package and apply the equivalent amount to a DISTRICT approved Tax Shelter Annuity program (TSA)." Because the contract gave the former Superintendent complete discretion regarding whether to take District provided fringe benefits or not, the Board was not required to formally approve the Superintendent's ultimate decision on that issue. In addition, although, the former Superintendent's contract was specific as to the dollar equivalent of the fringe benefit cost being deposited in a TSA, the Board does not believe that the former Superintendent's decision to take cash-in-Lieu was ever mofvated by an intention to enhance his retirement income, but rather, because he must have mistakenly misinterpreted the contract terms as permitting the cash-in-lieu payment. B. However, the Board disagrees with Finding No. F.1.1 in stating that the Superintendent's income was improperly increased by "the unauthorized salary increase in 2008." There were two increases to the Superintendent's salary in 2008. Contrary to Finding No. F.I.1, the first increase in the Superintendent's salary from $116,720.00 to $121,388.80 was specifically authorized by the Governing Board. The matter of this increase was properly included as Item LL on the consent agenda for the June 10, 2008 meeting; was approved by unanimous vote of the Board and was recorded in the Board's official minutes. C. The Board agrees that the second increase in the Superintendent's salary from $121,388.80 to $134,227.00 was not listed the June 10, 2008 agenda, nor is there a record of any action by the Board approving such increase in the Board meeting minutes for the June 10, 2008 meeting. 005937.00005/\ 04 58998v8 Although he has no specific recollection of signing the Contract Addendum that reflects this increase, the Board President at that time has always acknowledged the signature on that document as his own. In addition, one Board member has given the matter of the increase to $134,227.00 considerable thought in the months since appearing before the Grand Jury and has some recollection of a discussion between the former Superintendent and the Board regarding a multi-year increase to the Superintendent's salary. However, the Board understands that there is no documentation to support any recollection of this nature. From the Board's perspective, the failure to include the increase in the former Superintendent's income to $134,227.00 on the June 8, 2008 agenda for a formal vote was a mistake and as a result, there is no record of a vote by the Board approving the increase. Finding No. F.I.2: The Superintendent's income increases, described in the Report as F.I.l, were not approved by the Board. Response to Finding No. F.I.2: The Board respectfully disagrees in part with Finding No. F.I.2 and hereby incorporates its Response to Finding No. F.I.l by reference as if fully set forth herein. The Board agrees with this finding to the extent that neither the 2006 increase in the Superintendent's income by way of cash payment in lieu of health benefits, nor the June 2008 increase in the Superintendent's salary from $12] ,388.80 to $134,227.00, were included on any Board agenda or voted on by the Board. The Board is convinced that the failure to include these items on an agenda for a formal vote was the result of an unintentional lapse in the District's longstanding procedure for authorizing changes in the Superintendent's compensation. However, as stated above, the increase in the Superintendent's salary from $1 16,720.00 to $1 21,388.80 was included on the June 10,2008 Board agenda and was approved by a formal vote of the Board. Findin No. F.I.3: The Superintendent's unauthorized income increases, described in F.Ll, should not have been included in calculations of his retirement compensation. Response to Finding No. F.I.3: The Board respectfully disagrees in part with this finding based on the reasons stated above in response to Findings Nos. F.I.1 and F.l.2 and specifically, with respect to the Jlme 2008 increase in the Superintendent' s salary from $116,720.00 to $121 ,388.80, which was included on the June 10, 2008 Board agenda and was approved by a formal vote of the Board. It is the Board's understanding that for compensation to be included in calculating an individual's retirement benefit, it must be "creditable compensation" as defined by the laws adrninistered by the California State Teachers Retirement System ("CaISTRS"). Thus, while the 005937.00005/ 10458998v8 Board is responsible for establishing the Superintendent's compensation and authorizing any changes in the Superintendent's salary and benefits, CalSTRS is responsible for calculating retirement benefit compensation. CalSTRS has notified the District that it is reviewing the former Superintendent's retirement benefit entitlement and will be notifying the former Superintendent of its determination. Findin No. F.I.4: The failure by the Board to reconcile the salaries approved by the Board with the salaries actually being paid resulted in increased retirement fund liabilities to the GVSD. Res onse to Finding No. F.I.4: The Board respectfully disagrees with this finding. However, the Board does acknowledge its responsibility for establishing the Superintendent's salary and approving the salary schedules governing the compensation paid to the District's management, certificated and classified personnel. With respect to the 2006 increase in the Superintendent's income by way of cash payment in lieu of health benefi ts and the June 2008 increase in the Superintendent's salary from $121,388.80 to $134,227.00, the Board's responses to Finding No. F.l.1 and F.I.2 clearly establish that neither of these increases in the Superintendent's compensation were ever presented to the Board as part of an agenda or approved by a fOIDlal vote of the Board. The Board did not vote to approve the cash payment in lieu of health benefits or the salary increase to $134,277.00 and therefore, had no knowledge that the amounts being paid to the former Superintendent were anything other than the amounts the Board had specifically approved by formal action at duly noticed public meetings. As stated previously, the Board is responsible for overseeing the management of the District's major systems and the administration is responsible for the day to day operations of the District, including reconciling the amount of the salaries actually paid to employees with amounts approved by the Board. In June 201 2, the Board acted to establish a new Personnel Technician position in order to provide the administration with the assistance necessary to maintain accurate persolmel information for all its employees and to reconcile employee salaries on a regular basis. On August 6, 2012, the District hired a Personnel Technician who is responsible for the management of all personnel information in the District. While the addition of a Personnel Technjcian is an important step in the overall management of the District's personnel processes and procedures, the Board nevertheless cannot agree to Finding No. F.1.4 considering the lack of any information evidencing that the District's retirement fund liabilities increased as a result of the Board's alleged failure to reconcile the former Superintendent's salary. 00593700005fl 0458998v8 Findin No. F.I.S: The Board failed to require written job descriptions or to otherwise document the job duties and responsibilities of the AAI and AAII job positions. Res onse to Findin No. F.I.S: The Board respectfully disagrees in part with Finding No F.I.S. The Board must maintain a level of flexibility in responding to the District's staffing needs particularly when as a result of a gradual accretion of job duties, an existing position evolves into a separate and distinct position as occurred in connection with the Administrative Assistant J and Administrative Assistant II positions. In these circumstances, the duties of the new position are already being performed before those duties can be memorialized in a new lob description. The District is nonetheless still able to adequately assess the work performance of the employee who has experienced this type of change in job functions because the new duties represent an evolution in the employee's existing work load or .level of responsibility as opposed to an entirely new field of endeavor. Thus, while emp!oyees often begin performing duties of what will ultimately become a new position before the job description for that new position is presented to the Board for approval, the Board acknowledges the importance of ensuring that specific job descriptions exist in order that both management and labor understand what is required for each position in terms of the work to be pe formed and the training/experience necessary to perform that work. Accordingly the Board agrees that the District should have written job descriptions documenting the duties and responsi bilities required of the Administrative Assistant I and IT positions. In an effort to ensure that job descriptions exist or are ultimately created for every position in the District, the Board created a new Personnel Technician position and hired an individual to fill that p'osition on August 6, 2012. One of the primary duties required of the Personnel Technician is to "revise and maintain job descriptions for a dministrative, certificated and classified positions." No. F.I.6: The lack of defined job duties and responsibilities prevents the individual's supervisor from effectively evaluating job performance and eligibility for promotion. Response to Finding No. f.I.6: The Board respectfully disagrees in part with this finding for the reasons set forth in its response to Finding No. F.LS and on that basis, incorporates its response to Finding No. F.LS as if fully set forth at this point. Without waiving the reasons for its partial disagreement with Finding No. F.1.6, the Board again acknowledges the importance of having written job descriptions to enhance employee perfonnance and to facilitate supervisorial oversight. Consistent with this acknowledgment and as stated above, the Board has hired a Persormel Technician who will be responsible for creating and maintaining accurate, up-to-date job descriptions for aU positions in the District. 005937.00005/1 0458998v8 Finding No. F.I.7: The promotion of and increase in salary for an individual into an undefined position demonstrates a lack of management and fiscal responsibility by the Board. Response to Finding No. F.I.7: The Board respectfully disagrees with this fInding and for the sake of brevity, generally incorporates by reference its responses to Findings No. F.T.S and No. F.1.6 above. In addition, the Board disagrees with Finding F.I.7 on the basis that decisions regarding employee promotions, and resulting increases in salary, depend on the particular circumstances of each case, and as a result, these decisions must necessarily be made on a case by case basis. A blanket conclusion that the Board automatically demonstrated a lack of management and fiscal responsibility simply because it promoted an employee to a position prior to the development of a job description for that position, ignores the specific facts and circumstances relevant to that promotion decision. Notwithstanding the above, the Board shares the Grand Jury's commitment to managerial responsibility and fiscal oversight. The strength of the Board 's commitment can be measured by the fact that it created an entirely new Personnel Technician position for the purpose of reviewing all of the District's personnel practices, including those related to the creation of new positions and the promotion of existing employees. Finding No. F.I.8: The Board failed to exercise financial responsibility when it promoted an individual, with an accompanyIng salary increase, retroactive for one year, one week prior to the individual's retirement Response to Finding No. F.1.8: The Governing Board respectfully disagrees with this finding and for the sake of brevity, incorporates its responses to Finding Nos. F.r .S, F.I.6, and F.L7 above as if fully set forth herein. In deciding whether to promote an employee, the Governing Board is obligated to analyze specific facts and consider the particular circumstances relevant to an employee's job duties, work history and performance. The Grand Jury would have the Governing Board ignore this obligation and automatically reject the promotion at issue based first, as stated in Finding F.I.7, on the lack of a job description, and now, as stated in this fmding, on the timing of the employee's ensuing retirement. However, automatically rejecting the promotion on either of these two grounds without further inquiry into the nature and extent of the actual duties performed by the employee in question dilling the prior school year would have been arbitrary. In addition, an automatic rejection would have left the District vulnerable to a claim from. the employee for "out of class" pay and interest. 00593 7.00005/10458998v8 In addition, it is important to note Lhat school districts in California have a mandatory duty to negotiate with employee unions regarding salary, benefits and other terms and conditions of employment. Collective bargaining is a time consuming process and more often than not, it wi ll take months for the parties to reach final agreement. As a result, it is not W1conunon for school districts to be retroactively increasing employee salaries at the end of the school year. Because most school districts treat represented and unrepresented employee groups alike in terms of salary increases, management and confidential employees will also receive increases on a retroactive basis back to the beginning of the school year. But, regardless oftlle exigencies that resulL in the need for retroactive salary increases, the Board shares the Grand Jury's commitment to managerial responsibility and fiscal oversight and to that end, the Board will ensure that the Personnel Technician reviews the District's personnel practices and procedures to ensure that all promotional decisions are reasonable and can be supported by the specific facts relevant to each particular case. Promotions and salary increases given to individuals concurrent with their retirement gives the impression of "pension spiking," potentialiy damaging the credibility of the Board. Res onse to Findin No. F.I.9: The Board respectfully disagrees in part with this finding. For the sake of brevity, the Board incorporates its respor.ses to Finding Nos. F.I.S, F.I.f\, F.I.7 and F.l.8 as if fully set forth herein. Without waiving its objections to this finding as set forth in the above-listed responses, the Board acknowledges unless the factual basis supporting the decision to promote an employee who is about to retire is either well known or can legally be disclosed, such a promotion is susceptible to being characterized as "pension spiking and has the potential of damaging the Board's credibiLity. Accordingly, the Board intends to seriously consider the Grand Jury's observation as set forth in Finding F.I.9 in an effort to foreclose the possibility for public misapprehension in connection with employee promotions in the future. Findin No. F.I.l0: The Board's failure to renew the Superintendent's Contract when it expired in 2007 showed a lack of engagement and responsibility by the Board. Res onse to Findin No. F.I.l0: The Board respectfully disagrees with this finding on the basis.that the Board did, in fact, act to extend the former Superintendent'S contract prior to its exp'ration date of June 30, 2007. The Board's June 12, 2007 agenda included as Item PP the approval of a Contract Addendum increasing the former Superintendent's salary to $116,720.00. This Contract Addendum was approved by the Board in open session at the June 12, 2007 mee~ing and remained in effect through June 30, 2008. 0059] 7.00005/1 04 58998v8 Moreover, as stated above in the responses to Finding Nos. F.I.l and F.I.2, the agenda for the Board meeting of June 10, 2008 included as [tem LL approval of a Contract Addendum increasing the former Superintendent's salary from $116720.00. This Contract Addendum was approved by the Board in open session at the June 10, 2008 meeting and recorded in the Board's official minutes. Based on the foregoing, the Board did take action consistent with its contractual obligations to extend the term of the former Superintendent's contract. DISTRICT'S RESPONSE TO GRAND JURY'S RECOMMENDATIONS Recommendation No.1: The Board should notify CalSTRS of the unauthorized income increases which were included in calculations of the Superintendent's retirement compensation. Res onse to Recommendation No.1: The Board will not implement this recommendation because it is not warranted. CalSTRS has already initiated communication with the District regarding the former Superintendent's retirement compensation, and therefore, no notification from the District to CalSTRS is necessary. Recommendation No.2: The Board should annually reconcile the salaries approved by the Board with salaries actually being paid by the GVSD. Res ponse to Recommendation No.2: While the Board agrees with this recommendation, the Board itself cannot implement it. As stated previously, the Board oversees the management of the District's major systems. The administration is charged with directing the District's day-to-day operations, includ ing such tasks as annually reconciling the salaries paid to individual employees with amounts approved by the Board. For this reason, the Board created a new Personnel Technician position and the employee serving in that position will implement Recommendation No.2 by establishing a procedure for reconciling employee salaries on an annual basis. Recommendation No.3: The Board should ensure that alljob positions have defined duties and responsibilities. Response to Recommendation No.3: Although the Board generally agrees that the District's jobs should have defined duties and responsibilities, the Board itself is unable to implement this recommendation as the Board manages the District's major systems, not its day-to-day operations. 005937000051 I0458 998"8 Moreover, as set forth in the response to Finding No. F.I.5, the Board must maintain a level of t1exibility in responding to the District's staffing needs particularly when as a result of a gradual accretion of job duties, an existing position evoJves into a separate and distinct position and the duties of that new position are already being performed before the administration can memorialize those duties in a new job description. Based on these reasons, the Board will not implement Recommendation No.3, but instead, has hired a Personnel Technician who, under the Superintendent's supervision, will analyze whether the District cmrently has any positions not covered by job descriptions and if so, will prepare the necessary job descriptions and establish the timeline for their implementation. Recommendation No.4: The Board should not award salary increases that could reasonably be perceived as "pension spiking. " Rcs onsc to Recommendation No.4: While the Board agrees that as a general rule, salary increases that can be perceived as "pension spiking" should be avoided, the District cannot implement this recommendation as written without abandoning its responsibility to decide matters of employee compensation and/or promotion on a case by case basis, consistent with all applicable facts and circumstances. Moreover, the Board must maintain ability to provide employees with salary increases when factually warranted regardless of any pension spiking perception. Recommendation No.5: The Board should ensme that the Superintendent's contract is current and accurate. Res onse to Recommendation No.5: The Board has implemented Recommendation No. 5 to the extent of ensuring that the existing Superintendent's contract is current. The term of the Superintendent's contract was recently extended by formal action of the Board taken in open session consistent with the agenda for June 12, 2012 meeting and that action was recorded in the official minutes for that meeting. As to the recommendation that the Board ensure the Superintendent's contract is "accurate," the Board will not implement this recommendation itself; but as set forth in response to Recommendation No. 2, will ensure that on an annual basis, the Personnel Technician reconciles the amount of salary actually paid to employees with the salaries as approved by this Board. Rc£ommendation No.6: The Board should develop a procedure to ensure that any change to the superintendent's compensation is approved by the Board prior to implementation. 005937.00005/ I0 458993v8 Response to Recommendation No.6: While we agree with this recommendation that any change in the Superintendent's compensation must be approved by the Board prior to implementation, there is no need for the Board to develop a procedure in this regard. Government Code section 53262(a), as well as the Ralph M. Brown Act, Government Code section 54950 et seq., already require that superintendent contracts be approved by the school district's governing board in open session at a properly noticed public meeting and that the Board's action be memorialized in the Board's official minutes. CONCLUSION The Board of Tmstees of the Grass Valley School District appreciates the time and dedication of the Grand Jury members in providing the District with its report and recommendations. The Board will implement the Grand Jury 's recommendations to the extent and in the manner set forth above. In closing, the Board wishes to reemphasize its convIctIOn that during the former Superintendent's 21 years of dedicated service, he always acted with integrity and in the best interests of the Grass Valley School District. As the Grand Jury knows from its exhaustive review of the Board's agendas and minutes from 2004 to the present, the District has consistently met its Brown Act obligations with respect to employment contracts and that the two incidents outlined in the Report regarding the former Superintendent s salary were procedural failures in otherwise a strong record of compliance. If you have any questions, please do not hesitate to contact me. Thank you. Sincerely, f~~~ President, Governing Board 005937.00005/10458998v8