The six senior district administrators in the Palo Alto Unified School District are each now earning more than $200,000 a year due to "me too" clauses in their contracts that automatically pass along the increases granted to union employees to all non-union professionals, managers and administrators, according to district data provided to the Weekly.
The practice makes the compensation of all administrators, principals, assistant principals, deans, directors, coordinators and classified managers directly tied to whatever increases are negotiated with the employee unions, without regard to performance.
Mirroring the union employees, these six highest paid administrators, who report directly to Superintendent Max McGee (who is not subject to the "me too" provision), and the district's 125 other non-represented employees received in June a retroactive increase of 5 percent going back to July 2015 and a 4 percent increase that took effect on July 1.
McGee's compensation, including a $750-per-month auto allowance, is set in his contract at $316,000 for this school year, a 2 percent increase. This does not include retirement, health and statutory benefits, nor the $1.5 million interest-free loan the district gave him a year ago to purchase a home in Palo Alto.
Assistant Superintendent for Human Resources Scott Bowers, who negotiates the union contracts on behalf of the district and is the second-highest paid district official, has seen his compensation increase from $198,000 in the 2014-15 school year to $219,000 in 2016-17. This includes a $450-per-month car allowance paid to all of the senior administrative team and extra pay for advanced degrees and longevity with the district, but it does not include retirement, health and other benefits.
Chief Business Officer Cathy Mak's 2016-17 compensation is now $217,000, while Associate Superintendent Markus Autrey, hired a year ago, is at $216,000. Both figures include the $450-per-month car allowance.
Holly Wade, promoted in 2015 from director of special education to chief student-services officer, will make $211,000 this school year, including the car allowance, almost 20 percent more than she was paid in 2014-15.
Barbara Harris, also promoted last June from the title of director of elementary education to chief academic officer for elementary education, will receive $209,000, including the car allowance, a 35 percent increase over 2014-15. Sharon Ofek, promoted in June from principal of JLS Middle School to chief academic officer for secondary education, will receive $204,000.
For all employees, direct insurance, retirement and statutory benefits add approximately 20 percent to the total cost to the district of employing the individual, according to district data provided to the Weekly. Senior administrators are contracted to work 224 days per year, while other non-union positions vary between 200 and 220 days.
The practice of the automatic "me too" raises surfaced when the school board discussed the proposed union contracts during its two May meetings. The board voted 4-1, with Ken Dauber dissenting, to approve both the union contracts and the identical increases for administrators and managers, but it agreed to discuss the "me too" practice further at its August retreat to be held this Thursday, Aug. 11. (No agenda is available yet for the retreat, which has been set for 8:30 a.m. at the district office.)
Since then, an erroneous estimate of property-tax revenues has created a $3.7 million deficit in the current year's budget and, likely, a much larger deficit for next year.
New property-tax estimates came in last month 3 percent lower than the district had budgeted for, resulting in a $5.2 million shortfall, $1.5 million of which was made up with the automatic elimination of 1 percent off-schedule bonuses for employees through a clause built into new union contracts.
The board will also discuss at the Aug. 11 retreat options for how to address the deficit. At least one board member, Dauber, has voiced support for eliminating administrator and managers' 4 percent "me too" raises for this year, saying doing so is preferable to cuts that would more directly affect students. He has raised concerns about the potential harm the budget deficit could have on the district's ability to mitigate growing class sizes at the high schools, which expect to see approximately 600 additional students over the next five years, according to a moderate projection in an April demographer's report. One preliminary proposal from Mak and McGee for how to address the budget deficit is to use $375,000 in the budget that had been reserved for the potential hiring of teachers to accommodate future enrollment growth. (The budget is based on projected enrollment, which came in this year at the elementary level lower than expected, leaving the leftover funds.)
"We really need to ask for each of the expenses we have -- is that expense more important than teachers in our classrooms, than preventing class-size increases?" he asked his colleagues at a special budget study session last week. "And if it's not, we need to be willing to bite the bullet in order to protect that."
Board President Heidi Emberling, however, in an interview with the Weekly asserted that rescinding administrator and manager raises will impact the classroom. High-quality principals create school climate, help the district retain teachers and improve student achievement, she said. And district administrators are the "leaders of the leaders," helping to drive and support schools toward district-wide goals, she said.
"I can't imagine that anyone wants to take away or not compensate our leadership," she said.
School-board candidate Todd Collins said that while revisiting administrator raises should be "high" on a list of potential expense cuts considered by the board, it's difficult to evaluate without information on the multi-year impact of the tax shortfall, which the district has yet to provide publicly. He also pointed to data collected by Bowers showing that many Santa Clara County school districts use the same "me too" system. Out of 18 districts that responded to his inquiry, only one negotiates with represented and non-represented groups separately. Four, however, are reviewing this practice.
"There is no reason that it should be that way other than that seems to be a norm in the market, and we have to decide whether it's valuable enough to us to break away from the norm," Collins said.
Jennifer DiBrienza, a former teacher who is running for the school board, said there is "some merit" to the automatic raises "in that our teachers are our biggest asset and the administrators are the instructional leaders in those schools that guide what's happening in the school, the tone of the school."
But in the current budget crisis, the district should be willing to consider all cost-saving options, including rolling back raises for senior administrators, she said.
"I think it would be irresponsible to not look at everything," she told the Weekly. "It doesn't mean that that it's not valued or that we cut it, but we need to look at everything because we don't want to make this a bigger problem next year."
The process through which the district's managers and other professional employees receive compensation increases is based on tradition, not board policy, and has rarely, if ever, received any attention or discussion.
Each year when the proposed union contracts with teachers and classified employees are presented for approval by the school board, companion agenda items seek approval of identical increases for two different groups: "Non-Represented Management Employees" and "Non-Represented Confidential/Supervisory Employees."
Together, these account for about 125 employees, including principals, deans, assistant principals, district office directors and coordinators and managers who oversee classified employees.
The school board routinely, and usually without any discussion, approves these increases, which are automatic and are based on achieving "satisfactory" performance. In recommending board approval of the identical raises given to the union employees, the May 10 staff recommendation stated: "In past years, the board has given consideration to settlements with other employee groups when determining compensation changes for non-represented employees."
Compensation increases for the top district administrators are never actually approved by the school board because they work under employment contracts that tie their annual compensation increases to whatever increase is given to the group of management employees.
According to Bowers, the "me too" approach to pay increases for non-union managers and supervisors has been a longtime practice in the district, but he is unsure when it was first implemented. In his 23 years as an administrator, the superintendent has always recommended and the board approved the same pay increase for administrators, as well as the confidential/supervisory staff, who also are not unionized, Bowers wrote in an email to the Weekly. Staff who have worked in the district longer than he has also could not "think of a time that this did not happen," he said.
"Why is this done -- to recognize the hard work of these two other groups of employees," Bowers continued. "The fact that they aren't unionized and don't bargain doesn't make them any less deserving of the raise that teachers and classified staff receive. I imagine we might have 4 unions to bargain with if this was not the practice."
Minutes from a board discussion on compensation changes for non-represented management employees in March 2009, the year that management employees formed the Palo Alto Management Association (PAMA) and negotiated a management salary schedule that is adjusted each year after the board approves the union contract, state that Bowers "mentioned the longstanding understanding with the unrepresented group that they will receive the same compensation increases as the two unions."
• Editorial: End 'me too' raises | Aug. 5, 2016