Last fall, Governor Tim Pawlenty held a press conference at Edgewood Middle School to hail our district as "a leader and a lighthouse." What prompted his praise? Mounds View Public Schools had just become only the fourth district in the state to reform teachers' salaries by joining the governor's Q Comp program.

Why is this achievement important? In a service industry like education, people are our greatest assets - and our greatest expenses. In Mounds View, about 70% of our General Fund goes to salaries and benefits. So when the community hears that our district is experiencing financial challenges like many metro school districts, it comes as no surprise that some ask the question, "Is employee compensation overly generous?" I think that's a fair question that deserves an answer.

COMPETITIVE COMPENSATION
To remain a Top 10 district in the metro, Mounds View needs to stay competitive by retaining and attracting talented teachers and staff. That means we have to balance our financial constraints with the challenges of providing employee compensation in a competitive marketplace. How do we fare? Mounds View teacher salaries and benefits are slightly lower than metro averages. When comparing teacher salaries among the Metro 50 districts, Mounds View ranks in 32nd place. For employee benefits, Mounds View ranks in 29th place. (Source = Minnesota State Auditor, 2006, Financial Trends of Minnesota School Districts and Charter Schools.)

Some have argued that the District's healthcare benefits aren't in line with the benefit packages most residents have themselves. Yes, from employer to employer, compensation packages will differ greatly. But the percent of money Mounds View spends on benefits is very similar to the percent spent by other employers:

EMPLOYER                  % SPENT ON BENEFITS
Private industry                         20%
Civilian workers                         20%
Mounds View Public Schools        22%
All Minnesota schools                  23%
State/local governments             24%
(Source = Bureau of Labor Statistics, 2006.)

What about our retiree benefits? Post-employment benefits are health, dental and life insurance benefits that are paid for by the District after an employee retires. These perks have existed in employee contracts for many years, but the District has been actively working to change these in existing contracts. Currently only two of our seven employee contracts continue to offer these benefits to new employees. About 26% of our active workforce has these as options, and only 16% are vested. The remaining 74% of employees have either never had these benefits, have opted out or were hired after the benefits changed in the contract. (Source = Mounds View Public Schools, 2006.)

RUNNING SCHOOLS LIKE BUSINESSES
We often hear schools need to be run more like businesses. But when it comes to issues of compensation, most similarities between corporate America and the non-profit world quickly end. Like private industry, all school districts struggle with the rising costs of health care. But school boards can't determine employee compensation unilaterally. Public schools like Mounds View are mandated by the state to participate in a collective bargaining process with the teachers' union. In addition, public school employees don't reap many benefits often associated with the business world like stock options, profit sharing, corporate expense accounts or standard severance packages.

Solving the District's financial puzzle requires many pieces: continued downsizing, legislative support, levy approval and finding ways to continue to provide competitive compensation. Although all of these challenges require significant work, be assured that Mounds View will not only rise to the challenge, but we'll continue to rank among the leaders and the lighthouses illuminating the way.