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'A big IOU'

Lancaster County school districts have spent millions since 2013 in payouts for employees' unused sick, vacation and personal leave

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That's how many sick days Joseph Herman took in his 39-and-a-half-year career as a social studies teacher at Penn Manor High School.

And it paid off — literally.

When he retired in 2014, Herman received $27,090 for 387 unused sick days — plus $140 for two unused personal days.

Lancaster school districts offer payouts for unused time off: here's how much the average employee got

Teaching was never about the money, Herman said. It was about the kids. But he admitted the extra financial boost upon retirement was a pleasant surprise.

"It's a real nice pat on the back at the end of your career when they recognize that you came to work to teach children and you tried to make sure you were there every day," Herman, 66, said in a phone interview.

That appreciation is a major reason why these perks exist, school officials told LNP. They say they hope to avoid employee turnover and chronic teacher absences by offering a benefit that rewards consistently showing up to work.

But these payouts, which are determined by contracts negotiated by school boards and employees, can be costly. And with rising pension, special education and charter school costs, some question if these decades-old benefits are worth it.

"If you're doing the books, you have to put that on the balance sheet," said Rick Dreyfuss, a senior fellow with the Commonwealth Foundation, a Libertarian think tank. "That's a big IOU that's accumulating, and it's just another cost to the taxpayers."

You'd be "hard-pressed" to find similar payouts in the private sector, added Dreyfuss, a retired human resources executive for The Hershey Company. And while other public sector employees receive payouts for unused vacation time and sick days, they're typically much less.

Updated school district table

Paying out

Through requests made through Pennsylvania's Right to Know Law, LNP found that Lancaster County's 17 school districts have spent $7.9 million in payouts to employees — from secretaries to superintendents — from 2013 through 2018.

Twenty employees received more than $25,000 each, LNP found. They include nine superintendents, two business managers, one chief information officer, four principals, three teachers and one secretary.

These funds usually go straight into employees' retirement accounts, officials said.

Pedro Rivera, who left School District of Lancaster in 2015 to become the state's education secretary, received the county’s largest payout, despite only working for the district for seven years.

He received $117,075 in 2015 for 99 and a half unused sick days and 54 unused vacation days. His salary in 2015, according to newspaper records, was $187,277.

An Education Department spokesman said Rivera was not available for comment.

“Large unexpected payments are difficult to budget for, however they are not the norm,” Matthew Przywara, Lancaster’s chief of finance and operations, said in an email. He added that payouts can be made up with either district reserves or unexpected budget savings.

Payouts of that magnitude, indeed, are rare. The average single payout in the county during the time period LNP reviewed was $5,539. Payouts for other public workers in Pennsylvania averaged $1,023, according to 2017-18 state data.

Districts, on average, spend $77,508 a year — typically less than 1% of their annual budgets — on payouts for unused paid time off.

Who gets what?

Payouts for teachers and support staff are determined by their collective bargaining agreements. Higher paid administrators, such as superintendents, assistant superintendents and business managers, have their own contracts.

Many districts include contract provisions so only seasoned educators with decades of experience are eligible.

Employees who retire after sticking with the same district throughout their careers often receive the largest payouts, because those who resign may not be able to transfer all of their accrued time to a different employer. State law allows school employees to transfer up to 25 unused sick days to another district.

Some districts also limit the amount employees may receive. Lampeter-Strasburg, for example, caps the amount at $23,000, business manager Keith Stoltzfus told LNP.

Tight budgets

Still, it can be difficult tracking —and budgeting for — unused sick, personal and vacation days.

"What you hope is that your employee base is spread out in terms of seniority, that you don't have a massive amount of retirees in any one year," said Jay Himes, executive director for the Pennsylvania Association of School Business Officials. "So it's like most other things in school district budgets. … You just try to be as accurate as possible."

That's in addition to the typical pressures school districts face every year when crafting their budgets.

Costs for charter school tuition, special education and employee pensions increased $704 million statewide in 2017-18, according to the 2019 spring budget report released this month by PASBO and the Pennsylvania Association of School Administrators.

That has led to more tax increases, staff cuts and unfilled positions, the report states.

Nearly 40% of about 250 respondents said they planned some staff reduction in 2019-20. Fifty-four percent indicated that they anticipated leaving some vacancies unfilled. And 74% said they would need to raise property taxes.

Not ‘gouging taxpayers’

Himes and others, however, argue that payouts for unused paid time off is not detrimental to the budget, and educators, who aren't known for their high wages, have earned them.

"I don't buy the idea that this is some type of extraordinary benefit that's gouging taxpayers," Mark DiRocco, executive director of the Pennsylvania Association of School of Administrators, told LNP.

School districts can actually save money this way, he said, because the cost of a substitute teacher is often more than the amount paid out per sick day.

The average cost for a substitute teacher through the Substitute Teacher Service in Lancaster County is $120 per day.

The per-diem rate teachers receive for unused sick days in Lancaster County ranges from about $50 to $110.

This also incentivizes teachers to maintain strong attendance, school officials told LNP. Using sick days judiciously not only leads to a reward in retirement but also helps maintain a healthy, stable environment in the classroom, they say.

However, it's not clear that it's working as intended. An LNP investigation in March found that 36% of Lancaster County's 4,888 public school teachers missed more than 10 days of the 180-day school year in 2015-16.

Another potential benefit of the payouts: reducing employee turnover.

"The district wants to encourage longevity and keep experienced teachers in the district," said Lauri Lebo, a spokeswoman for the Pennsylvania State Education Association, the state's largest teacher union.

Rewarding dedication, she said, is important. Local school board members seem to agree. But balancing that with fiscal responsibility is challenging, they say.

"I have an end goal of being able to fairly compensate our teachers in a manner that our community can afford," Elizabethtown Area school board President Terry Seiders said.

"We don't want to squander taxpayer dollars," Pequea Valley school board President Bryan Ferris added. "But we also have an exceptional professional staff and administrative team, and we'd like to keep them in place."

This is especially important for school districts, such as Solanco, that can't afford to pay their teachers as much as other local school districts.

Solanco teachers, on average, earn $58,956 a year — the second-lowest in the county, ahead of only Columbia Borough.

"They look for creative ways to retain staff and, to be honest with you, they struggle with it," said Tim Shrom, who retired as Solanco's business manager in 2018.

Shrom, 64, took about 20 sick days in his 36-year career. His payout: $52,992.