Board is making outrageous payments to administrators

The frequent use of unused sick day payouts is really the tip of the iceberg. There are much more flagrant abuses of the financial system by the “public employee cartel” that is allowed to operate in New Jersey’s school districts.

In the Howell K-8 School District, for example, five of the senior administrators have contracts that include the following intentionally ambiguous wording: “The Board of Education recognizes its annuitized liability to (Name).”

What this sentence means is that the board will reimburse the administrator (and in one case a retired administrator) what he/she contributed to his/her personal retirement 403b or 457 accounts, netting his/her out-of-pocket contributions at $0.

By law, the board cannot add these monies directly to the individual’s retirement plan, so the board (aka, the taxpayers) pays it out directly to the individual in the form of a reimbursement.

For these five administrators, this additional compensation can range from $40,000 to $57,000, every year over the period of the contract. The dollar amount is clearly missing from the contract wording.

As mentioned in one of the Howell school board’s videotaped meetings last year, this wording came from and was approved by a Monmouth County executive superintendent. For example, on a salary of $175,000, this reimbursement brings the total cost to the taxpayers to about $227,000. That’s for each administrator who has this clause in his/her contract and it is not a one-time payment. Rather, it is a payment for every year of the contract.

In my conversations with various Department of Education officials, they have remarked that although these payments are distasteful, unethical and clearly designed to be unclear to the normal taxpayer, they are not illegal because they are in the contracts.

In the March 2006 New Jersey State Commission of Investigation report “Taxpayers Beware,” the independent investigators found many serious issues relating to public school administrators’ compensation.

On page 7 of that report they point out how their examinations of W-2 forms raised the question whether these perks are being reported for federal and state tax purposes, and on page 8 they state, “Such reimbursements are sometimes inappropriately included in base salaries for pension calculation purposes.”

The top administrators (and their peers) have mastered the art of using the public system for their own enrichment while we pay and pay and pay.

Sal Runfola