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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Santa Cruz County Grand Jury • 2008-2009

Trainings/Briefings Attended County CAL-Card user Training Program County Purchasing User Group Meeting, November 20,

Published: November 20, 2008 10 pages
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Findings 15 findings

F1 Page 57
On March 12, 2008, PVUSD Board Agenda item 13.4 reports that the district will not have the funding to meet the current budget. Due to the State’s financial crisis, A Tale of a SERP 47 2008–2009 Santa Cruz County Grand Jury Final Report with Responses
F2 Page 58
PVUSD hired Keenan and Associates, a financial planner, to conduct a Fiscal Cost Analysis to analyze the potential savings of offering a SERP. The report was prepared and submitted to the district on June 6, 2008. It established plan assumptions, benefit options, demographic analysis, SERP cost analysis, and benefit data sheets for three employee groups in the district. PVUSD staff stated that offering a SERP to management employees could generate a cost savings of approximately $159,000 depending upon the number of employees who took advantage of the opportunity. The proposal identified twelve managers as potential candidates for the incentive.
F3 Page 58
Three months before Keenan and Associates submitted the Fiscal Cost Analysis, PVUSD Board of Education approved Resolution 0708-22 on March 12, 2008, offering a SERP for management employees. The criteria set forth by the Board requires that the employee: • is a certificated or classified management employee • will be at least 55 years of age by June 30, 2008 • has at lease five years of continuous service with the district by date of retirement • submits a letter of resignation and SERP enrollment package by May 9, 2008 • is eligible to retire from State Teacher Retirement System (STRS) or Public Employee Retirement System (PERS) • retires from the district as of June 30, 2008 • will not be eligible for reemployment in the district other than as a substitute 48 A Tale of a SERP 2008–2009 Santa Cruz County Grand Jury Final Report with Responses Response: Pajaro Valley Unified School District - AGREES The projections were brought to the board March 12, 2008 with the resolution to request permission to proceed with the offering. This criterion is the same for management and teachers.
F4 Page 59
The PVUSD SERP offered eligible employees 95% of current salary to be paid according to the option selected by the employee. The terms of payment varied from a monthly payment through the remainder of life or a five to ten year distribution.
F5 Page 59
The Associate Superintendent of Business and the Interim Superintendent prepared the SERP Resolution 0708-22 and the agenda item for the PVUSD Board. The resolution was approved in open session and the public had the opportunity to see the item on the agenda prior to the action taken by the board. Both the Interim Superintendent and the Secretary of the Board signed the resolution according to district procedures.
F6 Page 59
PVUSD Board Members did not have a copy of the Fiscal Cost Analysis prepared by Keenan and Associates and were not privy to the information in the document except what was reported to them by staff prior to approving the SERP.
F7 Page 59
The district SERP administrators were the Associate Superintendent of Business and Assistant Superintendent, Human Resources. Keenan Financial Services served as the contract administrator to assist in implementation of the plan.
F8 Page 60
Following the approval of the SERP by the PVUSD Board, an announcement flyer was prepared and distributed to all management employees in the district.
F9 Page 60
Twelve employees submitted the proper paperwork and met the established criteria to receive the retirement incentive.
F10 Page 60
Eleven of those employees, the Associate Superintendent of Business and the Assistant Superintendent of Human Resources were subordinate to the superintendent and they reported directly to the superintendent.
F11 Page 60
One of the employees was directly evaluated by the PVUSD Board and had a specific written contract that stipulated all terms and conditions of employment including compensation and benefits. The contract did not provide authorization for a SERP. In addition, this employee had previously retired from the district and was serving in an interim capacity.
F12 Page 60
Keenan Financial Services estimated cost savings of $159,000 if all eligible management employees took advantage of the SERP. Interviews with the PVUSD officials revealed that the SERP savings was approximately $46,000, $113,000 less than projected.
F13 Page 61
A financial analysis of the projected savings compared to the actual savings was not shared with the Board of Education.
F14 Page 61
PVUSD stated that the County Office of Education was informed about the SERP. However officials at the county office stated they were not involved in the SERP offered by PVUSD and would only be involved if the SERP was part of a fiscal recovery plan or a payment agreement with employee bargaining units.
F15 Page 62
County Office of Education officials weren’t aware of a SERP being awarded to a retired employee serving as interim administrator for a district. County officials stated the practice of awarding a SERP in that situation was unusual and they had never heard of it happening before in the county.

Recommendations 8