Loudoun County School Board

Budget Work SessionSalaries and Benefits

January 7, 2016

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2

All Other Costs

10.2%

Salaries &

Benefits 89.8%

Where does the money go?

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New salary schedules proposed include mandated 1% VRS

increase.

Plus step increases−2.1% average increase across all scales.

Additional increases to teachers’ schedule to increase

competiveness when recruiting experienced, mid-career

teachers.

Reclassification process to review classified and administrative

positions on a six-year cycle.

One-time payments and other adjustments for those ineligible for

step increases.

Salary Increases

4Source: FY16 WABE Guide

Salary Comparison FY16 BA/MA Step 1

DIVISION BA Step 1

Falls Church $49,350

Arlington $48,228

Loudoun $47,975

Alexandria $47,242

Fairfax $47,046

Prince William $46,458

Manassas City $46,078

Manassas Park $44,750

DIVISION MA Step 1

Falls Church $54,750

Alexandria $54,188

Loudoun $53,688

Arlington $53,173

Fairfax $52,856

Prince William $52,031

Manassas City $51,578

Manassas Park $50,750

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Salary Comparison FY16 MA Step 10

DIVISION MA +10

Arlington $77,093

Alexandria $74,376

Falls Church $72,140

Manassas City $61,642

Fairfax $61,633

Loudoun $60,687

Prince William $59,482

Manassas Park City $57,991

LCPS lags behind other

Northern Virginia

divisions when

comparing salaries of

mid-career teachers.

Source: FY16 WABE Guide

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FY16 Salary Schedules MA Compared

50,000

60,000

70,000

80,000

90,000

100,000

110,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

LCPS FX PW

Teacher Career Earnings - MA

Across a

career, a

teacher with a

Masters

degree that

works at LCPS

for 30 years

will make

about $119k

less than a

teacher who

works 30 years

at Fairfax.

$45,000

$55,000

$65,000

$75,000

$85,000

$95,000

$105,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

LCPS

FCPS

30-year market

gap = $118,747

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50,000

60,000

70,000

80,000

90,000

100,000

110,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

LCPS FX PW

Narrowing the Sag – FY17 Proposal

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Staff Contingency Compared

DIVISION FTE $ in millions

Alexandria 18.0 $1.5

Arlington 0.0 $3.6

Fairfax 230.0 $11.0

Loudoun 35.0 $3.2

Montgomery (MD) 100.0 $6.4

Source: FY16 E-mail Survey

Position lapse and turnover defined

Budgeting for lapse and turnover

Negative number

New position assumptions

Fluctuations

Unspent Salary and Benefit Line Items

Planned Salary Savings

100 experienced retire

Salary 100 * $99,207 = $9.9 m

100 inexperienced replace

Salary 100 * $53,688 = $5.4 m

Planned Savings

$9.9 - $5.4 = $4.5 m

Impact of Retiring Employees

Actual Salary Savings

200 experienced retire

Salary 200 * $99,207 = $19.8 m

200 inexperienced replace

Salary 200 * $53,688 = $10.7 m

Actual Savings

$19.8 - $10.7 = $9.1 m

Savings essentially double or increase by $4.6 million.

Health Plan LCPS Annual Contribution

Employee only $8,466

Employee + child $11,206

Employee + spouse $14,751

Family plan $17,752

Budget

100 with Family plan $1.8 m

Actual

100 with Employee only $0.8 m

Potential employee benefit savings $1.0 million

Impact of Employee Benefits Savings

New position assumption 100

• MA step 6 ~ $57k $5.7 m

• Benefits $3.2 m

Total $8.9 m

Actual new positions 100

• BA step 5 ~ $50k $5.0 m

• Benefits $3.0 m

Total $8.0 m

New position assumptions yield savings of $0.9 million

Impact of New Positions

Instructional Aides 1,190

• Assumption - 5% vacant each month 60

• Average salary/benefit savings $2.1 m

Bus Drivers 685

• Assumption - 5% vacant each month 34

• Average salary/benefit savings $1.4 m

Impact of Lapse

Routine lapse in high turnover positions can yield savings of $3.5 m

Examples Amount

• Retiree salary savings $9.1 m

• Employee benefit savings $1.0 m

• New positions savings $0.9 m

• Lapse savings $3.5 m

Total $14.5 m

Potential Surplus of Examples

• Predicting human behavior

• Averages and historical trends

• Un-controllables

State and federal legislation

Unanticipated local decisions

Enrollment variances

Market forces

Other Variables

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FY16 Lapse & Turnover Compared

DIVISION $ in millions % Salaries & Benefits

Alexandria ($3.6) 1.6%

Arlington ($3.8) 0.9%

Fairfax ($44.0) 1.9%

Falls Church n/a n/a

Loudoun ($12.5) 1.4%

Manassas City ($1.3) 1.7%

Manassas Park n/a n/a

Prince William ($10.0) 1.3%

Average ($12.5) 1.6%

In FY 17, LCPS is budgeting $15.2 million; which results in a decrease to salaries. $15.2 million is 1.6% of total salary and benefit costs.

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LCPS Paid

Basic Group Term Life

Insurance (through

VRS)

Short-Term Disability

Employee Assistance

Program

LCPS/Employee Shared

VRS

Healthcare – Medical,

Prescription, Dental,

Vision

Employee Paid (Voluntary)

403(b) & 457 Elective

Deferral Programs

Optional Life Insurance

Long-Term Disability

(VRS Plans 1 & 2)

Long-Term Care

ICU/Cancer Insurance

Flexible Spending

Family Sick Leave Bank

VA 529 College Saving

Donated Leave Program

LCPS Employee Benefits

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LCPS Paid Benefits

Basic Group Term Life

• Administered through Minnesota

Life for VRS.

• The coverage is equal to two (2)

times current annual salary for

group term life and an additional

two (2) times annual salary for

accidental death and

dismemberment.

Short-term Disability

• Maintains a portion of an

employee’s salary throughout

any period of disability

resulting from a non-work

related injury/illness.

• All benefits eligible employees

(not enrolled in the VRS Hybrid

plan), are automatically

enrolled and accepted into the

program.

• The elimination period is 20

calendar days benefits are

paid for up to 10 weeks

following the elimination

period at 60% of the

employee’s regular income up

to a maximum of $1,730 per

week.

Basic Group Term Life

• Administered through Minnesota

Life for VRS.

• The coverage is equal to two (2)

times current annual salary for

group term life and an additional

two (2) times annual salary for

accidental death and

dismemberment.

Basic Group Term Life

• Administered through Minnesota

Life for VRS.

• The coverage is equal to two (2)

times current annual salary for

group term life and an additional

two (2) times annual salary for

accidental death and

dismemberment.

Employee Assistance Program

• Confidential assistance for

employees going through medical,

financial and other personal issues

Participation

• 526 Web Page hits

• 198 Active Referrals

Employees who retire from Loudoun County Public Schools‘ employment are eligible to begin receiving retirement benefits upon reaching the required age and service combinations. Retirement benefits are determined by employee's age at retirement, average final compensation, years of service, type of retirement, and position class.

• VRS Plan 1 (Defined Benefit Plan)

Hired prior to July 1, 2010

Unreduced retirement - Age 50 w/ 30 years

• VRS Plan 2 (Defined Benefit Plan)

Hired after July 1, 2010 or not vested in Plan 1 by January 1, 2013

Unreduced retirement - Social Security Retirement Age with 5 years of service or Age and Years of service equal to or greater than 90

• Hybrid Plan

Hired on or after January 1, 2014.

Combines the features of a defined benefit plan and a defined contribution plan. 20

Virginia Retirement System

Loudoun County Public Schools provides health insurance to eligible employees and dependents. Medical/Prescription, Dental and Vision can be elected separately or in combination. Medical Insurance is provided by CIGNA Healthcare, Pharmacy Insurance by Express Scripts, Dental Insurance by Delta Dental Plan of Virginia and Vision Insurance by Davis Vision.

Active Employee Participants 8,629Retiree Participants 1,242Total 9,871

Opt-out Election 1,070

Medical Enrollment Stats 2013 2014 2015 2016 POS 91% 57% 51% 43%OAP 9% 43% 49% 57%

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LCPS Healthcare Participation

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LCPS Healthcare Changes

• Increase annual deductibles & out-of-pocket

maximums (OAP/POS) effective 1/1/17

• Introduce High Deductible Health Plan (HDHP)

with Health Savings Account (HSA) effective 1/1/17

• Eight percent (8%) LCPS and employee premium

increase (OAP/POS) effective 1/1/17

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Healthcare Premium Cost-sharing

DIVISION Employee Employer

Alexandria 23% 77%

Arlington 38% 62%

Fairfax 25% 75%

Falls Church 25% 75%

Loudoun 29% 71%

Manassas City 34.5% 65.5%

Manassas Park 35.4% 64.6%

Prince William 39% 61%

Source: FY16 WABE Guide - Point of Service Family Plan

403(b) Elective Deferral Program

An optional retirement savings program for employees of public schools. Options include pre-tax or Roth (after-tax) contributions through payroll deduction. Investment options include a selection of mutual funds provided through Lincoln Financial Group.

457 Deferred Compensation Program

A voluntary supplemental retirement savings program that LCPS offers utilizing the Virginia Retirement System’s program, with ICMA-RC as the record keeper. Employees can invest in a variety of funds through payroll deduction.

403(b) pre-tax participants 2,566

403(b) post-tax participants 753

457 participants 331

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Optional Employee-Paid 403B & 457

Plan Participants

Optional Life 1,836

Long-Term Disability 4,620

Long-Term Care 133

Cancer Policy 464

Family Sick Leave Bank 4,276

Flexible Spending 1,424

VA 529 College Savings Programs 49

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Other Optional Employee Paid Plans

Loudoun County School Board

Budget Work SessionSalaries and Benefits

January 7, 2016

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