District leaders outline 2025–26 budget priorities: pay study, 2% raise proposal, benefits RFP, and retention plans

District finance and human-resources leaders gave a detailed preview Feb. 4 of proposals and priorities for the fiscal year 2025–26 budget. The presentation covered a compensation study, benefits procurement work, proposed changes to performance pay and evaluation, and retention strategies intended to address experienced-employee turnover.

Chief financial officer Michael Vaughan and Executive Director Sandy Satterfield said the district plans a 2% increase for all employee categories in the coming year and expects to use $1–2 million of reserves for ongoing operations while remaining within the Government Finance Officers Association recommendations. "Our hope with this budget is to address strategic needs and provide stability," Vaughan said.

Compensation study and benefits

The district shared results of an independent compensation study comparing entry-level pay with 11 neighboring districts and said teachers’ entry-level pay remained, on average, $4,300 above the comparison group. The district identified 35 positions for additional review and proposed a 2% increase to all employee categories. Satterfield said administrators will report the anticipated cost to fund the final recommendations at the next board meeting.

Leaders also described a request-for-proposal for medical and ancillary benefits. The district’s incumbent insurer, a trust commonly referenced as AzBate during the presentation, responded to the RFP along with other vendors. The benefits-selection committee includes certified, classified and administrative employees as well as finance and HR representatives; the committee will evaluate best-and-final offers when renewal rates are published around March 1.

Performance pay and evaluation

Officials said they are studying how to redesign the district’s performance-pay structure so it supports a cascading evaluation system and avoids discouraging candid, developmental conversations between evaluators and employees. The district will explore shifting some dollars from year-end performance pay into base pay to give employees an option to receive more in biweekly paychecks or in the year-end payment.

Retention proposals

Administration proposed a three-part retention approach addressing pay compression, longevity and a return-to-work program. Key proposals discussed:

- Compression fix: The district identified 61 employees on teacher pay scales who are paid below where a newly hired employee with similar education and experience would be placed; staff recommended bringing those employees to placement-chart levels at a projected immediate cost noted in the presentation as about $91,000.

- Longevity stipend: The administration proposed a stipend of $1,000 for employees with 10–19 years of service to Litchfield and $2,500 for those with 20+ years, funded from classroom-site funds and other eligible sources; leaders said the stipend is designed to improve retention at the 10-year mark when turnover increases.

- Return-to-work option: The district outlined a model to facilitate retirees’ temporary rehiring through a contracted agency so retirees can draw ASRS pension benefits and also continue working under contract, then return as district employees after the required year without rejoining the retirement pool; staff presented cost-comparison examples showing potential near-term savings during the contracted year.

Position changes

District staff proposed several position adjustments and additions identified through school-site feedback and budget work: converting attendance-clerk positions from 5.5 to 7 hours per day, creating a benefits-and-wellness manager position, a district driver trainer and a child-in-transit driver in transportation, and a curriculum data analyst to replace an existing curriculum-and-assessment assistant role. Some positions were proposed to be offset by specific funds (for example, community education or impact-aid); administrators said the net additional cost to the general M&O fund would be modest.

Board discussion and next steps

Board members asked detailed implementation questions about funding sources, timelines for benefits RFP results, the statute-driven individual compensation statements issued to employees, and how changes would be communicated to staff. Officials said they will return to the board at the next meeting with cost estimates and recommended actions for approval. No final budget vote occurred at this meeting.

Ending

Administration described the presentation as an early-stage plan that will return to the board with firm numbers; members said they appreciated the committee work and asked staff to continue refining financial impacts and communications to employees.