LORP Program Cut in Halifax Co., Teachers Upset

Halifax Co., VA - A retired Halifax County teacher and her husband are speaking out after they say a retirement incentive program they were a part of, the Local Option Retirement Plan, was terminated.

Many teachers were working part time and even got health benefits, and now they've lost both.

Superintendent Merle Herndon says it was necessary to save money, but some of those retired teachers are not happy.

"It just pulled the rug out from under them and some are hurting more than we are," said Strom.

Dave Strom's wife Peggy was one of the teachers in Halifax County that chose to retire under the LORP incentive plan.

Strom says had she known the program would not last, she probably would not have stopped working.

"I don't think any of the LORP participants were planning to retire. LORP was an incentive to get the higher priced more expensive employees to retire to save the school system money because they could hire less expensive people."

But Superintendent Merle Herndon said it wasn't working. The plan actually cost the school system money that should be going to the students. Herndon gave a lengthy response to question Strom posed at a recent school board meeting, but he's not satisfied.

"It is factually accurate but incomplete and quite misleading," said Strom.

The superintendent says participants knew before signing up for LORP that the program could be terminated at anytime.

Strom and his wife said they feel for retired teachers who relied on LORP wages to get by, and they will not rest until they have a clear understanding of why the program failed.

"The truth and all of the facts about this were not being shared and still aren't," said Strom.

Strom feels the school system mishandled the termination of the program by making the decision to end it after the budget had already been adopted.

The Superintendent's office released this list of the questions Stromposed at the October 11 school board meeting and her answers:

1. With what you know now, did LORP savethe Halifax School system money?


Number of Essential LORP days saved (2011-12)

-- 1515 Teacher Substitute Days ($65each) $98,475.00

-- 120 Paraprofessional Days ($55 each) $6,600.00

-- 118.5 Secretary Days ($55each) $6,517.50

-- 580 Hours Cafeteria ($7.25 perhour) $4,205.00

TOTAL SAVINGS $115,797.50

Pay out for LORP in2011-12 $1,851,902.03

(This figure includes FICA & Insurance.)


ACTUAL cost of LORP for2011-12 $1,736,104.53

PLEASE NOTE: Even though the LORP program is terminated, Halifax CountyPublic Schools is still paying an individual health insurance benefit of $6,090for sixty-eight retirees which totals $414,120 for the 2012-13 school year.

2. What was the reason(s) LORP was terminated?

As more and more people were added to the program over the years and morebenefits were added (health insurance), LORP collapsed under its ownweight. LORP total costs from its beginning in July 2006 to the plannedadditional seven years (June 2019) would have had a payout of $12,870,723, withthe majority of the money ($8,933,226) to be paid out from July 2012-June2019. The bottomline was that this money was being taken away from theneeds of students and teachers/programs.

There was a disproportionate amount of money being provided to "end ofcareer" benefits (LORP) as opposed to "beginning ofcareer" ( e.g., lower beginning salaries/no signing bonuses) and allother employee salary benefits (e.g., no raises, lower salaries).

Further study of the actual savings for essential positions(substitutes for teachers, bus drivers, paraprofessionals, secretaries,custodians, and food service) showed that many LORP participants were beingpaid on a per diem basis for non-essential work (e.g., consulting,"projects").

Fifty-nine cities and counties responded to a survey sent out from VASS(Virginia Association of School Superintendents). Forty-seven had no formof LORP/ERIP. (NOTE: A number of the divisions had ERIP but discontinued theprograms.) Twelve had some form of LORP/ERIP. (NOTE: The only countyoffering a program similar to Halifax is Pittsylvania County which does NOTprovide insurance.)

The retirement data from a sample of school systems similar in size that doNOT have LORP/ERIP are as follows:

COUNTY OR CITY No. of Students No. of people (with NO LORP/ERIP) who retired last year

Mecklenburg 4,791 26 people

Dinwiddie 4,453 40 people

Henry 7,463 30 people

(Note: These were divisions noted in Prismatic study who were considered"peer divisions.")

HCPS had twenty-nine people retire last year. The data abovedelineates that people will retire without incentives.

3. Terminating LORP supposedly saved $1.4million. Where did that money go?

Money was needed for essential staff, programs and benefits which included,but is not limited to the following. The original budget for 2012-13 hada principal paired for Meadville/Sinai and another paired at ClaysMill/Scottsburg. Thus, the budget did not reflect replacing two retiring principals.Additional special education paraprofessionals and teachers needed to behired. Several teachers needed to be hired due to the K-3 initiative tokeep lower pupil/teacher ratios. The coordinator for food services hadbeen cut from the budget and was an essential position. There was noconsideration for a person to coordinate instructional technology. Thetesting coordinator needed to work during the summer months when testing dataneeded to be compiled. LAN managers needed to continue to work with students. Insurance costs needed to be considered and over $174,000 needed to be paid forretirees who elected to have their vacation/sick days paid out over July andAugust 2012.

4. $360,000 was allocated to rehire the school LANmanagers that wasn't included in the budget. Where did that money comefrom?

See response to question 3.

5. There was a $1.1 million "unanticipatedexpense" in increased health care insurance costs that was given as partof the rationale for the termination of LORP. Later it was said that theadministration "found" $900,000 plus to cover that expense. Where and how was it "found?" Where was that money originallyincluded in the budget? Where did the other $200,000 for the insurancecome from?

LORP was being discussed at the beginning of the school year and weeks laterhealth care costs were discussed. The termination of LORP was not discussed as"part of the rationale" for paying increased health care costs. Upon discovering the health insurance cost increase, Mr. Covington assisted infinding excess actual revenues received over budgeted revenues. Also, asupplemental county appropriation of $250,000 will be used to defray a portionof the insurance increase. Mr. Covington further assisted Mr. Camp in showinghim some of the more fluid categories such as the Rural Schools Grant andsalary savings.

6. Is there anything being done to determine if thereare other unallocated monies in the budget or school system to be"found?"

With Mr. Covington's assistance alluded to in question 5 above, excessrevenues from the county board of supervisors are in the process of beingreallocated.

7. It appears that the budget is being largelyignored. Certainly many of the expenditures are not in line withit. What are both the school administration's and the school board'sresponsibilities with regards to operation within the approved budget?

The 2012-13 budget is not being ignoredhowever it is flawed. Thebudget under the supervision of the previous administration did not reflect theincrease in insurance, supplied inaccurate information regarding LAN managersand the actual impact of financing LORP. Once these issues were clarifiedin July, the board made a fiscally responsible decision to terminate LORP.

Monthly financial statements and budget comparisons are currently producedand distributed to board members for their monthly school board meetings.School board members review them and are subsequently approved.