Public Feedback - The New Jersey Fiscal Crisis
Case Study of Union County School Superintendent Contracts - 07/10/2008 last updated

By Horace Corbin, - "A Working Document, In Progress with Your Input" Email to:

July 9, 2008 Borrowing: Corzine To Taxpayers: Drop Dead! by Assemblyman Merkt

Governor signs $3.9 billion borrowing bill without voter approval. Assemblyman Richard Merkt today said Governor Corzine’s decision to sign legislation authorizing $3.9 billion in non-voter approved bonding for school construction projects is an insult to New Jersey taxpayers to whom he promised in January to put a stop to state borrowing without voter approval.

“The Governor looked New Jersey voters in the eye and told them that he was committed to ending non-voter approved debt, only to sign-off this morning on a massive $3.9 billion borrowing program,” said Merkt, R-Morris. “This is a program that will spend $1.5 billion more than that which was ordered by the Supreme Court, with no safeguards for how the money will be spent, and it is being done without voter approval.”

In his State of the State speech on January 8th Governor Corzine proposed a constitutional amendment requiring voter approval for all debt. The Governor stated that, “It is up to those of us in this room to change the ‘credit card’ culture of New Jersey’s finances,” and that, “The public must be put back in charge of the State’s credit card. Borrowing must be done sparingly.” Merkt noted that the Supreme Court had only ordered the state to fund another $2.5 billion in school construction costs, but somehow Trenton has allowed the borrowing to balloon to $3.9 billion – which will total more than $7 billion once the debt service is calculated.

“There was no reason why this borrowing could not have been placed before the voters,” Merkt said. “The Governor’s action today is a slap in the face to the state’s voters and it will only deepen the quicksand into which our state’s fiscal stability is sinking.”
July 9, 2008: Governor Signs Legislation to Borrow $3.9 Billion For School Projects

Governor Jon Corzine today signed legislation, bill (S1457/A2873), that provides $3.9 billion in state borrowing to replace or rebuild dozens of substandard schools across the state.

“Today, we fulfill an important obligation to our children by making a down payment on the future of their education,” Governor Corzine said. “Every student deserves to attend school in a safe and healthy building. This legislation recognizes that there are needs in both the SDA districts and in the suburban and rural districts.”

The legislation designates $2.9 billion for Abbott districts and $1 billion for other districts. school facilities projects. $50 million has also been directed toward county vocational school projects.

The new legislation calls for the Education Commissioner to institute a process that prioritizes financing for school facilities projects in those districts and to set-up a process for the annual allocation of school facilities project grant funding available to them.

The bill was sponsored in the Senate by Senators Ronald L. Rice (D-Essex) and Shirley K. Turner (D-Mercer). Assembly sponsors were Albert Coutinho (D–Essex and Union), Grace L. Spencer (D-Essex and Union), Nellie Pou (D-Bergen and Passaic), Elease Evans (D-Passaic), Mila M. Jasey (D-Essex ), Cleopatra G. Tucker (D-Essex ) and Bonnie Watson Coleman (D-Mercer).
June 30, 2008 Public Feedback

Pending Legislation On Compensation For Superintendents Of Schools: Source is the state legislature's website. Two bills passed the General Assembly on June 16, 2008.

A1113, reduces the length of time that school districts have to notify superintendents of their decision not to renew a superintendent's employment contract.

A2975 prohibits Executive County Superintendents ("super-superintendents") from approving employment contracts that provide for severance pay to local superintendents other than unused vacation and sick days, up to $15,000. This bill allows ECS's to void existing contractual provisions that go beyond $15,000 in severance payments.

Both bills are pending before the Senate Education Committee.

Quite a few more bills and two resolutions are also pending, but have not come up for committee vote. One legislator that has introduced quite a bit of legislation that attempts to reign in education costs is Assemblywoman Marcia Karrow, a Hunterdon County Republican. - 

Other potential sources might be the Rutgers-Newark Institute on Education Law and Policy, that conducts studies on education topics, including school district accountability, school choice, public education finance and shared services in public school districts.

A615 (Karrow, R, Warren & Hunterdon) Requires boards of education to provide more detailed information on compensation of school district employees not covered by collective bargaining agreements.

A3046 (Littell, R, and Chiusano, R, Sussex , etc.) Limits salaries of school business administrators, superintendents and assistant superintendents to the salary of the Commissioner of Education.

A 1113/ S1898 Reduces notice that a school district is required to give the superintendent of schools if a board determines not to reappoint, to 30 days for each year of employment contract [or, 30-150 days’ notice]
Passed Assembly unanimously 6/16/08;
pending before Senate Education Committee

A1164/S1519 Caps supplemental compensation for unused sick leave for school administrators at $15,000.00

Unlike A2975, this bill is not retroactive; applies to policies and contracts on or after effective date of the act; bill pending before Assembly State Government Committee.

A2975/S2097 Includes limitations on amount of retirement compensation which may be provided by a school board in the employment contracts of superintendents of schools, assistant superintendents of schools, and school business administrators.
Passed Assembly 6/16/08; pending before Senate Education Committee

A2551/S1216 Limits leave and supplemental compensation benefits for school district superintendents, assistant superintendents, and school business administrators; provides procedures and penalties for enforcement of TPAF provisions; highlights:
· Limits sick days to 15/year
· Caps $15,000 on supplemental compensation
· Caps vacation days at 25/calendar year, regardless of seniority; allows carryover of unused days for one year only
· Caps other types of leave (e.g., bereavement, personal, etc.) to 3/year
· This bill wouldn’t impair current contracts

AR142/SR82 These bills direct the General Assembly and Senate Education committees to hold hearings and investigate the prevalence of employment contracts for superintendents that are deemed excessive.

AR145 Introduced on 6/23/08 by Marcia Karrow, R, Warren & Hunterdon. Expresses the General Assembly’s lack of confidence in Commissioner of Education and urges her resignation, in large part because audits of superintendent employment contracts for superintendents in Hoboken and Keansburg were permitted by her department, despite providing for large severance payouts.
June 30, 2008 Public Feedback

Horace, I found your information very interesting and comprehensive. Working in the area of taxation for almost 20 years, I have long felt that the biggest problem, the elephant in the corner of the room if you will, is the simple lack of enforcement of the laws as they exist on the books. The sad reality is that every time that shortfall exists, regardless of the reason, those of us who work for companies and get W-2’s or 1009’s are hard pressed to “shelter” our income. However, the thousands if not millions of people who work for cash in the State of NJ pay far less than their fair share I’m sorry to say.

Whether it’s an illegal alien who does not pay taxes, the landscaper who only reports a portion of their income or the business owner who uses their company van to pull their jet ski’s to the shore on weekends, they are all cheating on their taxes and making it harder on those who don’t.
Furthermore, the abuse that exists in the sales tax system is likewise causing the loss of millions if not billions in revenue.

Very few people realize that on the NJ Income Tax Return is a line to report “Use Tax”. Use Tax is due when you purchase something from an out of state vendor that would have been subject to sales tax if it were purchased from an in-state vendor. Someone who purchases a computer through the mail, for example, owes the equivalent of the NJ Sales Tax on that purchase and should remit it with their Income Tax Return.

If we could tighten up these two simple areas of taxation we would have so much revenue coming in that we might even be able to cut taxes for once.
Also, giving towns and cities the ability to have a local sales tax, on top of the state sales tax, would give local municipalities a new way to raise revenue, one that is based upon consumption and not income or the value of your home. NJ is rather unique in that most other states have some local sales tax rate.
Regarding the issue of Superintendent Contracts, I think that it is unfortunate that the system allows for such abuse. There are lots of ways that the formulae can be modified to reduce the cost to the public but if these are the terms of the contracts that were negotiated, shame on the people who negotiated them. I can only suspect that cronyism is to blame for such lucrative terms.

Regarding unfunded pensions, if the State has the obligation, it needs to make good on it. However, coming back to the taxpayers, who were paying their fair share all along, seems rather unfair. If poor management of the fund is to blame, than the institutions that managed the money need to be forced to pay. The heady days of the last few years when pension funds were getting fantastic returns based on investments in sub-prime debt are over now and the individuals and institutions that failed to see the risk inherent in those types of investments need to be held responsible. The party is over and the punch bowl has been taken away.

Regarding lifetime medical benefits for teachers, although this is a very touchy subject, I simply don’t think that any one class of people deserves lifetime medical benefits born on the backs of the taxpayers. If they negotiate them then they need to pay for them and have the money be paid into a fund in real time with the benefits determined based upon the money in the fund, similar to a self funded insurance policy. The only real solution to this problem is for the federal government to give everyone some level of subsidized medical benefits. I think that people would support that.

Keep up the good work.

John Skowronski, Westfield

Director, True Partners Consulting LLC
225 West Wacker Drive Suite 1600
Chicago, IL 60606
July 2, 2008 Public Feedback

(goleader, see this from Austin, Texas TV news) - Superintendent Salaries

I came across this story idea ( when fishing for data on the Texas Education Agency's Web site ( It has all kinds of data available. One of the databases listed the salaries of superintendents for each district. I had done a story about a couple of local district superintendents and noticed that the amount reported by those districts was different from the amount reflected on the employment contracts. I learned the state only required districts to report the base salaries, not the total compensation package.

I sent open records requests to every school district in our viewing area and was shocked to see exactly what some of the superintendents were being paid. In addition to the base six-figure salaries, many are getting perks such as housing, car allowances, whole life insurance policies, annuities and additional retirement accounts, membership fees for health clubs, country clubs and private dining clubs. They were also getting bonuses and automatic pay increases. Some superintendents had salary increases of 30 to 40 percent over the past few years.

At the same time, teachers and the other staff were being laid off or were not getting any pay raises. Some superintendents, while being paid exorbitant salaries, were also allowed to hold outside jobs, such as consulting for companies doing businesses with the district. The legislature enacted a new law that now requires superintendents to discuss any outside contracts in an open meeting with the school board.

The employment contracts themselves were unusual as well. The contracts were usually for a three-year commitment period. However, instead of waiting until the three years were up, each year the school board would vote to extend the contract an additional year, so it was essentially a rolling three-year commitment. The commitment was very much one-sided, though. The superintendent was allowed to get out of the contract with a 45-day notice to the school board. If the district wished to fire the superintendent, the district would have to buy out the rest of the contract.

Teachers and other staff were only offered yearly contracts. This is a story that should be done in every market. We all have done countless stories about low teacher pay and the lack of funds for education. Seeing the disparity of the salaries of the top educators and their pay increases really provoked a response from our viewers. Even lawmakers were surprised to see how much superintendents were really earning. We posted a copy of the contract ( for each district's superintendent on our Web site so that viewers could see exactly how their tax dollars were being spent.

Questionable Credentials I came across this story ( when I was looking through court papers filed in a lawsuit against a school district and its superintendent. One of the exhibits was the transcript for the superintendent. I remembered the name of the university from a past story I'd seen at an Investigative Reporters and Editors conference. It was a story about diploma mills and how easy it is to get a "college degree" online. I started doing research and found a number of online colleges and universities that were unaccredited. I found the State of Texas had enacted a new law that made it illegal to use such degrees to get a job or advertise a business in Texas. I found that the Texas Higher Education Coordinating Board posted a list ( of many institutions that were unaccredited or were known as "diploma mills." The list made the research much easier because I just Googled the name of the institution and Texas.

It was amazing to see how many people were claiming post graduate degrees from these schools. I expected to see people in the private sector, but it was shocking to see how many people were working in education. There were school district superintendents, principals, coaches and other administrators. There were also many who worked for legitimate colleges and universities, some among the top in the state. There were even a couple of deans who claimed masters and/or doctorate degrees from institutions that were never accredited. We ended up doing a number of stories. The first two focused on school superintendents and then college administrators and professors. We weren't surprised when the stories provoked strong reaction in our community, but we were outright stunned when some of the anger was directed at us.

There were many students and parents who were angry to learn that their district's top educator had questionable credentials. But, there were those who were intensely loyal and stood behind the superintendents. The president of one local school district told us they didn't care if the degree was no good. They liked the superintendent anyway and continued to refer to him as "doctor." During a school board meeting at another district, we were accused of being on a "McCarthyist witchhunt" after exposing that the superintendent had gotten his doctorate in three days. That superintendent ended up resigning at the end of the school year. The other is still on the job.

Keep in mind that not all states have laws prohibiting the use of such diplomas, but it still makes for an interesting story when you see that the people who are educating our children didn't do the work required to earn their masters and doctorate degrees. The U.S. Congress held hearings on the issue of diploma mills. The transcript will explain how little work is required to earn a post graduate degree at some of these schools. Some require no work at all. Here are a list of resources to get you started: The Texas Higher Education Coordinating Board's list ( of institutions whose degrees are illegal to use in Texas. Oregon's list of unaccredited institutions ( Hawaii-based lawsuits ( Information on the Council of Higher Education Accreditation ( Senate hearing transcripts and reports: "Bogus Degrees and Unmet Expectations: Are Taxpayer Dollars Subsidizing Diploma Mills?" ( [PDF] "Purchases of Degrees from Diploma Bills" (

You can contact me with questions at


June 30, 2008 Public Feedback Are you aware of this site?

Executive County Superintendent Review of Administrator Contracts

Updated 7/1/08

This Q&A is to be used for the Executive County Superintendent and Acting Executive County Superintendent required review and approval of administrator contracts pursuant to N.J.S.A. 18A:7-8(j) and the standards promulgated by the Commissioner for this review pursuant to N.J.A.C. 6A:23A-3.1.

General | Annuities | Sick and Vacation | Beneficiary Provisions | Travel Requirements | Buyout Provisions | Provisions for Salary Increases
Disability Insurance | Life Insurance and TPAF/FICA | Longevity Payments | Core Hours | Total Cost of the Contract
Required Provision for revocation of a Certificate


Q1. Which contracts must the executive county superintendent or acting executive county superintendent review?

A1. The executive or acting executive county superintendent (ECS or Acting ECS) must review and approve, prior to BOE approval, all employment contracts for the superintendent, deputy superintendent, assistant superintendent(s) and business administrator. This includes review and approval of the following:

1. all new employment contracts, including contracts that replace an expired contract for that employee (tenured and non-tenured);
2. all renegotiations, amendment and other alterations of terms of existing contracts that have been approved by the executive or acting executive county superintendent; and
3. all contract extensions where such term was not included in the original employment contract or is different from the term contained in the original contract. 

The statute permits only Superintendent contracts to exceed one year. Therefore, the executive county superintendent must review and approve assistant superintendent, deputy superintendent and business administrator contracts (tenured and non-tenured) at least annually consistent with N.J.A.C. 6A:23A-3.1, and cannot approve such contracts for a term greater than one year. 

Q2. Is the ECS or Acting ECS required to review all renegotiations, amendment and other alterations of terms in existing contracts?

A2. No. The ECS or Acting ECS must review and approve all new contracts, including contracts that replace expired contracts. In addition, the ECS or Acting ECS must review all renegotiations, amendment and other alterations of terms of existing contracts that have been previously approved by the executive or acting executive county superintendent. The ECS does not have the authority to review renegotiations, amendments and other alternations of terms to existing contracts not previously required to be approved by the ECS or Acting ECS. 

Q3. What happens if the BOE approved a new contract, including a contract that replaces an expired contract for a tenured and non-tenured employee, or renegotiated, amended, or altered terms of existing contracts that the ECS or Acting ECS had previously approved without submitting to the executive county superintendent for approval as required?

A3. If the executive or acting executive county superintendent was in place when the BOE took this action, then the contract is considered unenforceable until the district submits the contract for review and receives approval from the executive or acting executive county superintendent.

Q4. Is the executive or acting executive county superintendent required to review and approve existing contracts?

A4. No, unless the contract should have been submitted for review/approval when the executive county superintendent was in place and it was not, or if there is a renegotiation, amendment, or other alteration of terms to an existing contract which was previously approved by the executive or acting executive county superintendent. The ECS or Acting ECS is not required to review existing contracts nor do they have authority to disapprove existing contracts that they were not required to review.

Therefore, the ECS cannot request modifications to existing contracts if such contracts were entered into prior to the appointment of the ECS or Acting ECS. The executive county superintendent can certainly review existing contracts or modifications to existing contracts (such as salary adjustments) if requested by the district as well as request copies of existing contracts for analysis and/or other purposes, such as the current survey of existing Superintendent contract provisions. 

The ECS or Acting ECS should advise districts to consult with their local attorney regarding whether existing contract provisions should be revised based on changes to law and regulation. 

Q5. Who approves contracts required to be reviewed in a county without an executive or acting executive county superintendent?

A5 The Assistant Commissioner for Field Services will approve contracts for districts in counties without an executive or acting executive county superintendent based on review and recommendation by the applicable county office.

Q6. Can the ECS approve a new contract that replaces an expired contract for that employee which includes benefits that the regulations/standards no longer permit (e.g. supplemental life insurance, reimbursement for FICA or health co-pays) for non-tenured and tenured employees (deputy superintendent, assistant superintendents and SBAs)?

Q6. No. The ECS or Acting ECS cannot approve a contract that includes benefits that the regulations/standards no longer permit. The ECS or Acting ECS must disapprove all new contracts, including new contracts that replace an expired contract for that employee, that do not meet the benefit limitations and other standards in the regulations.

Q7 Is a board of education subject to the public notice and public hearing requirement pursuant to N.J.S.A. 18A:11-11 for new contracts, including contracts that replace expired contracts for tenured or non-tenured employees?

A7. No. Only renegotiations, amendments, or other alternations of terms of existing contracts are subject to the public notice and public hearing requirements pursuant to N.J.S.A. 18A:11-11. However, nothing precludes a board of education from holding public hearings on new contracts, including contracts that replace expired contracts, and the department encourages districts to do so in the spirit of disclosure and transparency. 


Q8. Can the executive or acting executive county superintendent approve annuities in a contract?

A8. No, except for new contracts that replace expired contracts for which an annuity was included in the expired contract for that administrator in that district. An annuity for this purpose refers to a financial instrument in which the board of education invests funds on a tax-deferred basis in the name of an employee to be distributed back to the employee in the future.

Sick and Vacation

Q9. Are the P.L. 2007, chapter 92 (pensions law) caps on unused sick leave and vacation leave applicable to superintendents, assistant superintendents, deputy superintendent and business administrator?

A9. Yes. The contractual provisions regarding accumulated unused sick and vacation leave and supplemental compensation for such leave must be consistent with N.J.S.A. 18A:30-3.5 and 18A:30-9.

Q10. Can contracts include payment of unused sick leave prior to retirement?

A10. No. Pursuant to the law, contracts can only include supplemental compensation for accrued, unused sick leave payable upon retirement (not annually or as part of any separation clause, only upon retirement) for which the amount cannot exceed the higher of the individuals accrued sick leave as of June 8, 2007 (date of the law) or the sick leave accrued by the individual after June 8, 2007, capped at $15,000. 

Q11. Can contracts include payment for unused vacation leave?

A11. Yes, but only for vacation leave accrued prior to enactment of P.L. 2007, chapter 92. Under chapter 92, employees may accumulate vacation leave accrued as of the effective date of the law (June 8, 2007). Vacation leave accrued after June 8, 2007 can be carried over for up to one year, where required by business demands. Contracts must provide that annual payments of accrued vacation can occur only for leave accrued prior to the effective date of the act; annual payout of vacation leave accrued after the effective date of the act is not permitted. Payment of vacation leave accrued subsequent to the passage of P.L. 2007, chapter 92 occurs upon separation or retirement. 

Q12. What happens to unused sick leave upon employee separation from a district before the employee retires?

A12. It is not the previous district’s responsibility to make payment upon retirement of any accrued sick time after the affected employee has separated from that district prior to retirement. Pursuant to NJSA 18A:30-3.2, the new board of education may credit the employee for unused sick time based on the new board of education’s policy on sick leave credit for all employees. The ECS or Acting ECS should request a copy of the board policy and certificate of accrued leave if such provision is included in the new contract. 

Q13. Can the payment of unused sick or vacation be based on a number of days other than 260 if a different denominator was applicable when the unused sick or vacation was accrued?

A13. The applicable denominator for new contracts and payment of sick and vacation under new contracts is 260. 

The calculation of an employee’s sick leave benefit as of June 8, 2007, should be calculated using the methodology under the existing contract unless the contract does not include a per diem amount or method of calculation. If no method was included, the calculation cannot exceed the salary as of June 8, 2007 using a denominator of 260 days.

Note, the applicable salary to use in any payout is negotiable and ECS and Acting ECS should encourage payout of grandfathered leave at different amounts as long as the salary used does not exceed the current salary of the employee at the time of the payout.

Beneficiary Provisions

Q14 What beneficiary provisions can be included for unused sick or vacation leave?

A14 Contracts may name a beneficiary for accumulated unused vacation leave
(consistent with the caps under P.L. 2007, chapter 92) but may not include a beneficiary of unused sick leave which is only payable to the employee upon retirement.

Travel Requirements

Q15 Should contracts include a provision that requires travel consistent with the OMB circular and regulations?

A15 Yes, the contract should include such a provision. Note that any contractual provision that is inconsistent with law is superseded by the law. Therefore, new contracts cannot include provisions inconsistent with the circular such as mileage reimbursement at a higher rate than the state rate or reimbursement for overnights in NJ (unless it is for a conference which has received a waiver) or reimbursement for meals inconsistent with the circular. 

Q16. Can new contracts allow for mileage reimbursement at the federal rate or some other rate higher than the state mileage rate?

A16. No. The OMB circular specifically states that the state mileage rate applies. This applies to all employees and board of education members in the district. The state rate is set annually in the appropriations act. It is currently 31 cents per mile. (Note: Existing negotiated agreements, which have not expired, that include a mileage reimbursement at a different rate may be honored pursuant to section I.B.6 of the NJOMB travel circular.)

Q17. Can contracts include a monthly travel allowance?

A17 No. The only allowable monthly allowance is a reasonable car allowance that replaces the provision of a car. A reasonable car allowance cannot exceed the monthly cost of the average monthly miles traveled for business purposes for that employee multiplied by the allowable mileage reimbursement pursuant to applicable law and regulation and NJOMB circular (currently 31 cents per mile). If such allowance is included, the employee cannot be reimbursed for business travel mileage nor permanently assigned a car for official district business. 

Q18 Can contracts provide an employee a car for business travel? What about personal travel? Can the contract include a dedicated driver or chauffeur?

A18. Contracts can include a car consistent with the proposed vehicle use regulations. Such regulations do not allow the cost of the car to exceed $30,000 and only allow incidental personal travel. The ECS or Acting ECS, however, should request and review justification for any dedicated car provision. The contract cannot include a provision for a dedicated driver or chauffeur. 

Buyout Provisions

Q19 Can contracts include a separate provision to buy out the superintendent if a shared service or a consolidation of the district occurs?

A19 No. Contracts can include a general provision for payment as a condition of separation from service if it is not deemed by the executive or acting executive county superintendent to be prohibitive or excessive in nature. This general provision would cover the circumstance of a consolidation or shared services. 

Q20 How should the ECS review a provision for payment as a condition of separation from service?

A20 The ECS or Acting ECS should review the provision for a determination that it is neither prohibitive nor excessive in nature and to confirm the payment does not exceed the lesser of the calculation of three months pay for every year remaining on the contract with proration for partial years, not to exceed 12 months, or the remaining salary amount due under the contract.

Provisions for Salary Increases

Q21. Can contracts include provisions that provide that the administrator receive all benefits and emoluments provided to a specified bargaining unit?

A21. No. Contracts cannot include such a provision. Only superintendent contracts can exceed one year and therefore include an annual salary increase provision, but such provision must include a specific percentage or dollar amount that is reasonable. Benefits should also be specified for all contracts and not tied generally to a specified bargaining unit or set of employees, to the greatest extent possible to enable disclosure, transparency, and ability for the ECS and Acting ECS to conduct a fair comparability analysis. A provision for health benefits consistent with other employees in the district is acceptable. However, a provision that states that the employees will receive all benefits consistent with other administrators, for example, is not acceptable. Allowable benefits should be specific to enable disclosure and transparency. Note, there is a School Ethics Commission opinion that prohibits an administrator from participating in the negotiations where his contract is tied to the contract of the bargaining unit.

Q22 Can contracts include provisions for a minimum salary increase (e.g. 2%) with a provision that any increase above that is based on the achievement of goals to be annually set by the board (outside the contract)?

A22 Yes, but any increase over the minimum salary increase set would require ECS or Acting ECS review as it would be an amendment to a contract the ECS or Acting ECS had reviewed/approved.

Q23 Can contracts include simple provisions that the salary increase for subsequent years will be based on some formula (e.g. fixed %).

A23 As stated in Q&A #21, contracts cannot contain a provision that bases increases on other staff or bargaining unit increases, but it can contain a fixed percentage increase or other reasonable formulaic increase.

Disability Insurance

Q24. Can contracts include provisions that pay for disability insurance in contracts if the district offers it to all employees at the employees’ expense?

A24. No. The regulations (3.1(e)(3)) specifically state that contracts cannot include payment for employee contributions that are either required by law (e.g. FICA) or by a contract in effect in the district with other employees.

Q25 Can contracts include provisions for payment of disability insurance if the district only offers it to specific employees (at the district’s expense)?

A25. Yes. The regulations allow for benefits to be included that do not supplement or duplicate other benefits that are otherwise available to the employee by operation of law or existing group plan (3.1(e)(5)) or do not reimburse or pay for employee contributions that are either required by law or by a contract in effect in the district with other employees (3.1(e)(3)). 

Life Insurance and TPAF/FICA

Q26. Can contracts include payment for the additional TPAF optional life insurance coverage of up to 3 ½ times salary?

A26. No. The regulations specifically state that contracts cannot include reimbursement or payment of employee contributions that are either required by law or by a contract in effect in the district with other employees (3.1(e)(3)). 

Q27. Can contracts include a supplemental life insurance payment (supplemental to the TPAF provision)?

A27 No. The regulations specifically state that contracts cannot include payment for benefits that supplement or duplicate existing benefits that are otherwise available to the employee by operation of law or existing group plan (e.g. life insurance supplements the TPAF benefit) (3.1(e)(5)). 

Q28 Can contracts include payment for the employee share of FICA or pensions requirement? 

A28. No. The regulations specifically state that contracts cannot include reimbursement or payment of employee contributions that are either required by law or by a contract in effect in the district with other employees (3.1(e)(3)). 

Q29 Can contracts include a separate payment or salary increase to replace the lost payment for optional life insurance, FICA or TPAF?

A29. No. Contracts should not include a corresponding salary increase to replace such lost benefit payment. The contracts review should ensure the salary, benefits and other emoluments are comparable with similarly credentialed and experienced administrators in other school districts in the region and with similar enrollment, academic achievement levels and challenges, and grade spans.

Longevity Payments

Q30 Can contracts include a longevity payment?

A30. Yes. The longevity payment should be reviewed with the salary, benefits and other emoluments for comparability with similarly credentialed and experienced administrators in other school districts in the region and with similar enrollment, academic achievement levels and challenges, and grade spans.

Core Hours

Q31 Do contracts need to include core hours of the administrator?

A31. No. The final regulations do not include that requirement; however, the ECS or Acting ECS should request the schedule for summer, vacation and other applicable periods with the submission of the contract for review to enable the ECS or Acting ECS to conduct a fair and appropriate comparability analysis.

Total Cost of the Contract

Q32 Do contracts need to include a total cost of the contract for each applicable year which will include salary, longevity (if applicable), benefits and all other emoluments?

A32. No, the total cost does not need to be included in the contract, however, the district must provide the ECS or Acting ECS with a detailed statement setting forth the total cost of the contract for each applicable year, including salary, longevity (if applicable), benefits and all other emoluments.

Required Provision for revocation of a Certificate

Q33. What contracts must include the required provision pursuant to 18A:17-15.1 that in the event that the administrator’s certificate is revoked, the contract is null and void.

A33. This provision is required for Superintendent contracts only. However, the department recommends that all contracts include such a provision given the requirement for all teaching staff members under N.J.S.A. 18A:27-2.

Cash Flow Calculator

Periods (integer) Interest (%) Amount ($)
SPFV Future Value of $1 paid now = (1+x)^n
SPPV Present Value of $1 paid in future = 1/(1+x)^n
USFV Future Value of uniform future payments of $1 = ((1+x)^n)-1)/x
SFFV Payment required each period to achieve Future Value of $1 = x/((1+x)^n)-1)
CRPV Payment required each period to achieve Present Value of $1 = (x*(1+x)^n)/((1+x)^n)-1)
USPV Present Value of uniform future payments of $1 = ((1+x)^n)-1)/(x*(1+x)^n)
n=number of periods, x=interest rate for a period.
Time note: if periods are in months and interest rate is per year, then x = [interest rate yearly/12].
SPFV example: (Future value of $100 in 7 years at 10% interest = $194.87)
SPPV example: (Present value of $500 received six years from now at 8% interest = $315)
USFV example: (Future value of $1,000 each year for 7 years at 9% interest = $9,200)
SFFV example: (Deposit required each month for 10 years at 15% interest to accumulate $200,000 = $603)
CRPV example: (Monthly payment on $300,000 mortgage for 20 years at 6% interest = $2,149)
USPV example: (Present value of $50,000 per year for 20 years at 7% interest = $529,700)

Sci-Math Calcs by JavaScript Kit

Most often, cash flow problems are multi-part. Cash flows must be broken down into components and brought to same point in time. More than one iteration may be required.

Example Problem: At 8.2% interest, what is the present value of this cash flow? [$Y] = Uniform payments of $1500 each year for 5 years but the payments start 3 years from now. Also, [$Z] a final payment of $25000 will be made in the tenth year.
Part A: Three years from now, [$Y] present value:
USPV = 3.972 factor; $1500, 5 periods at 8.2% per period = $5957
but today, present value $5958
SPPV = 0.789 factor; $5958, 3 periods at 8.2% per period = $4703 (answer part A)
Part B: Present value of [$Z] ten years from now:
SPPV = 0.455 factor; $25000, 10 periods at 8.2% per period = $11367 (answer part B)
Answer: (add the two results) $4703 + $11367 = $16,070 Present Value.

Solutions to problems may be subjective based on the assumptions used. Interest rate must be established by the evaluator. Risk and taxes are other considerations. 'What ifs' and 'trial and error' calculations may be required.
Caveat Emptor: How interest rates are stated by lenders can be tricky, leading one to believe the rate is lower than it is. That problem and other considerations are left to the evaluator.

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