The Clay Community School Board of Trustees voted unanimously to no longer offer stipends to administrators beginning July 1, 2011, and restore insurance and retirement benefits to all administrators. Board member Tina Heffner made the motion and board member Amy Adams seconded. Board members Dottie King and Jennifer Kaelber were not present.
According to documentation provided to board members, the stipends were stopped September 2006 and have not been offered since. Board members expressed interest in the reasons why the stipends were only offered to select corporation administrators.
"If it is such a cost saving device to the corporation, then why did it stop," Adams asked.
CCSC Supt. Dan Schroeder and Business Manager Mike Fowler explained the stipends were opened up for a certain period of time and administrators were given a chance to choose between health insurance and a stipend.
"Through corresponding back and forth, we managed to get more information. And one of the pieces of information we got was a letter from Donald Meyer, who is an attorney for Bose, McKinney and Evans in Indianapolis, who is the corporation attorney," Adams said. "It is dated February 2007 to (Fowler)."
She began to talk about the letter and information in it.
"The words that catch my eye the most are on the third page," she said.
Adams again read from the letter.
"You should also remember any change you make would generate additional cost to the school, when it speaks of implementing stipends," she said. "Then it lists four reasons it is going to cost the corporation more money. He then wraps it up by saying some schools decided to limit the change in premium payments to a select group of administrators."
Adams told the board that she spoke with Meyer on the phone and was told it is something the board does not have to offer.
"This is something that does cost the corporation because we have to match FICA (Federal Insurance Contributions Act) taxes because the base pay and the stipend is now what is going towards how the state views retirements. So we have to match the FICA taxes on those," she said. "So it does cost the corporation some. It was also designed to allow the administrators to have more put into their retirement. The idea was for them to go back and purchase the insurance through the corporation."
Adams said the letter talked about the different ways in which the corporation should go about doing the stipend. Inevitably, Adams explained how by taking the stipends the administrators are still entitled to health insurance.
"So if you take a look at your administrator handbooks, it explains how the administrators are entitled to insurance as well," she said. "So, if you look at your handbook, you are allowed the stipend and access to the insurance. And it had to be written in there for it to be legal. That's why you were advised to change the wording of your corporation policy to make it legal."
She clarified that she was not saying the corporation had done anything illegal, but there was a lot of "rigmarole" to make it happen.
"I have to ask myself after months of researching it, is who did this benefit," Adams said. "Was it designed to benefit the corporation, and truly save the corporation money, or was it designed to benefit a few select individuals?"
Schroeder and Fowler explained how other school corporations have stipends set up and how they compare and contrast to CCSC. Other corporations pay retirement matching as well FICA insurance in addition to the stipend.
"Here we have done a different approach," Fowler said. "We've said our family plan costs $23,000 on a family. The stipend is not that and we are going to take away the retirement contribution. So it's not truly health insurance for stipend, its health insurance 401a, and 403b contributions to stipend. So we have done a different approach compared to other corporations."
Adams continued to ask Fowler about the answers she received from Meyer.
"He also indicated to me that it would not cost anymore money to insure an administrator or an administrator's family than it does the teachers, it is the same exact amount," Adams said. "I would like to look at this as a negative thing as removing a stipend, but look at it as a positive thing of restoring insurance in very uncertain economic times."