2010-2011 VOLUNTARY SEVERANCE PROGRAM POLICY
The purpose of this Voluntary Severance Program (“VSP”) is to encourage eligible certificated employees of Mitchell Public Schools (“School District”) who are considering an early-leaving decision to accelerate their retirement plans effective at the end of the 2010-2011 school year. Objectives include, but are not limited to, the following:
1. To offer financial incentives that will assist long-term employees considering early retirement or early-leaving decisions to complete such decisions.
2. To reduce costs to the School District by replacing employees with lesser salaried employees or by eliminating positions.
3. To buy-out the tenure rights (i.e., continuing contract rights) of certificated staff, and in effect, make payments to secure the release of unexpired contracts of employment in exchange for permanent certificated employees giving up their constitutional and contractual rights to tenure and relinquishing such tenure rights.
4. To provide a better balance of staff experience.
1. Certificated Employee: To be a participant a person must be employed by the School District (Mitchell Public Schools) as of the date of acceptance of the person's application in the position of a fully certified employee (a) covered by the negotiated agreement between the Mitchell Public Schools and the Mitchell Education Association (hereinafter sometimes referred to as "Eligible Employee" or "Employee" or "Teacher"). On or before February 15 of each fiscal year the School District shall provide all certificated employees of the school district with a list of all certificated employees with the ages and salary schedule placement for the current fiscal year of those eligible and of those not eligible, by position.
2. Full-Time Equivalency – Eligibility and Benefits: Eligible Employees, both full-time and part-time, may participate in the VSP, provided that the part-time Employees must have a full time equivalency (FTE) of .50 FTE or more. For part-time employees, the benefits under this plan shall be prorated as provided in paragraph “D. Benefits” below. Part-time Employees who are on a leave of absence in part and work part-time as of December 1 of the Employee's final contract year shall be eligible to participate in the VSP to the extent of their on-duty FTE. Employees who are on a sabbatical leave, leave of absence, or other Board approved leave except long term disability as of December 1 of the Employee's final contract year shall not be eligible to participate in this VSP.
3. Twenty (20) Years of Service Eligibility: In order for an employee to be eligible for this program, the Employee must have at least twenty (20) creditable years of continuous service (regardless of annual FTE) in the Mitchell Public School District system (or assimilated Class I districts) including their final year of employment.
4. Limitation on Number of Participants: The Board of Education of the School District, in its sole and absolute discretion, reserves the right to limit the number of participants in this VSP in any fiscal year based on financial exigencies, availability of funds, budget, expenses, revenue, and other school finance issues, including but not limited to the repeal or amendment of the exemption to the property tax levy limitations set forth at Neb. Rev. Stat. § 77-3442(2)(d) (Laws of 2008). The Board of Education shall limit the number of participants in the VSP to ten (10) Eligible Employees for the 2010-2011 fiscal year.
5. Criteria for Selection: In the event the total number of employees making application for participation for the 2010-2011 fiscal year exceeds the maximum number of employees to be allowed to participate as determined by the Board of Education for such fiscal year, the selection of the employees allowed to participate in the VSP shall be based upon the following criteria in descending order of priority:
a. Highest salary: The first priority for participation shall be granted to the individual employee with the highest scheduled salary for the school fiscal year in effect during the employees’ last year of employment. For purposes of this paragraph:
(1) Eligible Employees' salaries will be compared only to other teachers' salaries making application for participation in this VSP program during the fiscal year for which the application is submitted.
(2) “Scheduled salary” shall be defined as the 1.0 FTE salary listed on the negotiated salary schedule for the Employee's lane/step in his/her final contract year adjusted for the Employee’s FTE plus salary paid for extended contract days based upon such salary schedule placement. This definition excludes salary paid for extra duties or responsibilities, reimbursement of expenses, or fringe benefits. In the case of an Administrator, the scheduled salary shall be the last regular salary at the 1.0 FTE level agreed to in the Administrator's individual employment contract.
b. Number of Years of Service: The second priority for participation shall be granted on the basis of those employees having the greatest number of years of service to the Mitchell Public School District regardless of FTE; such service need not be uninterrupted or consecutive years of service.
c. Tiebreaker: If two (2) or more individuals tie on criteria a, b, and c, the names of those persons who are tied shall be placed in a container and names will be drawn blindly from the container for each opening in the VSP.
6. Terminated Employee’s Ineligibility: An employee who has received written notice of possible cancellation, termination or non-renewal for reasons other than reduction in force shall not be eligible and may not participate in this program, unless after a hearing before the Board of Education it is determined that the employee’s contract should not be cancelled, non-renewed or terminated. An employee who has received written notice of possible termination for reason of a reduction in force shall be eligible and may participate in this program if, but only if, said employee expressly waives all rights to which he or she may be entitled under the reduction in force law including, without limitation, substantive and procedural rights, staff development assistance and retirement incentive plan benefits, and recall rights.
7. Notice of Plan: The superintendent or the Superintendent’s designee shall notify all Eligible Employees of the school district of the VSP, and shall provide the VSP Application and Agreement forms, on or before February 15 of each fiscal year the VSP is in effect. A copy of said VSP and VSP Application and agreement as it now exists or as it may from time-to-time amended can be obtained form the school office.
C. ENROLLMENT REQUIREMENTS AND BOARD ACTION
1. Application Date: Each employee who wishes to participate in the VSP must properly complete, execute, and submit the VSP Application and Agreement forms to the Superintendent on or after February 15, 2011 and on or before the April 4, 2011. FAILURE TO SUBMIT THE APPLICATION WITHIN THE TIME FRAME SPECIFIED SHALL RESULT IN THE REJECTION OF SUCH APPLICATION.
2. Board Action on Application and Agreement: The Board of Education shall review the employee’s record to determine if the employee is qualified to participate under section B above. If the eligible employee is qualified and is selected for participation, the Board of Education may take action to approve the employee’s Application and Agreement forms at such time as deemed appropriate.
3. Resignation: In the event that the employee’s completed Application and Agreement forms have been approved by the Board of Education, the employee’s resignation set forth in the Application and Agreement forms for the program shall be effective at the close of the 2010-2011 school year.
1. Calculation of VSP Benefit: A qualified certificated employee who has requested and been accepted for participation in the VSP shall receive a benefit calculated as follows: ONE THOUSAND DOLLARS ($1,000.00) multiplied by the Teacher's total consecutive years of creditable service up to a maximum TWENTY-FIVE THOUSAND ($25,000). The Teacher shall be paid the severance pay amount and benefit in three equal installments; the first installment to be paid on or before September 20, 2011, and the second installment to be paid on or before September 20, 2012, third installment to be paid on or before September 20, 2013.
2. Source of Funds: The School District shall pay the entire cost of the plan.
3. Administration: This Plan shall be administered by the Board of Education by and through the administration of the School District.
4. Income Tax Consequences: It is understood and agreed that there currently exists an issue with the Internal Revenue Service (IRS) as to whether (1) a lump sum payment paid by an employer in exchange for the relinquishment of continuing contract and tenure rights by the Teacher constitutes “wages” paid to the Teacher for purposes of the payment of FICA taxes; and, as such, (2) whether the employer and Teacher are liable for payment of FICA taxes on monies paid for total relinquishment of continuing contract and tenure rights. It is therefore understood and agreed with regard to the lump sum payment benefit election that:
(1) State and federal withholding, FICA, FUTA, including employer and employee share thereof have been, or will be, withheld from or contributed in relation to all of the lump sum payment amounts under paragraph provided herein.
(2) State employee's retirement will not be withheld from such amounts.
(3) In the event the School District determines to seek a refund of the employer and employee share of the FICA tax payments made, the lump sum payment to the Teacher under paragraph A above through the filing of IRS forms 941 and 843, or other applicable forms, process or procedures, the Teacher will cooperate to the fullest extent possible in pursuing such refunds as are allowed by law.
E. WAIVER AND RELEASE OF CLAIMS
Employees who participate in the VSP shall be required to waive and release the School District from claims and rights as provided in a Release and Agreement adopted as a part of this VSP policy. The Administration shall give the requisite notices to eligible employees as required by law in order for the Release and Agreement to be fully enforceable.
All eligible certificated employees shall be provided a copy of this VSP Policy and the Application at least forty-five (45) days prior to the application deadline and provide eligible employees any additional information required by law.
A copy of the Application shall also be made available at the Superintendent’s office.
F. TERM OF PROGRAM
The VSP program and policy, and all benefits provided herein, shall expire and be of no force and effect with regard to eligibility under this VSP as of August 31, 2011, and as to participation in this VSP as of August 31, 2011.
 Neb. Rev. Stat. § 77-3442((2)(d), excluding from the property tax levy limitations “sums agreed to be paid by a school district to certificated employees in exchange for a voluntary termination of employment.”