Performance Compensation

Rewarding Excellence in
Instruction and Leadership
Performance Compensation
Governing Board Symposium
August 25, 2012

Presenter:
Jeff Powell, M.B.A.
REIL Financial/Business Systems Specialist
Developing Talent • Enhancing Careers • Improving Student Learning

Outcomes for today’s presentation
By the end of this presentation, you will be able to:

•Communicate legislative and REIL timeline for moving to a
performance-based compensation (PBC) system
•Describe REIL and District expectations for investing in PBC
•Identify increased revenues available in FY13 for PBC through
Classroom Site Fund and other funding sources
•Identify strategies for ensuring district investment in FY14, FY15,
and beyond


Why is a PBC system important?
The state of Arizona has made a commitment to ensuring that all
students benefit from effective instruction, year after year, in every
grade, in every course, in every school, and in every area across the
state.

REIL’s performance-based compensation (PBC) system and career paths
reward the greatest contributors, promote differentiated roles, and
attract top talent to challenging schools.

The REIL PBC system will allow REIL School Districts to recruit, retain,
and reward high performing educators.


Strategic Funding Transition Plan


Classroom Site Fund (Prop. 301):
3 Funds
• Fu
Accounts for 20% of CSF revenues nd
01
• Fund 012 – CSF Performance Pay 1–
Accounts for 40% of CSF revenues CS
F
• Fund 013 – CSF Other Instruction (Function 1000) Uses Te
Accounts for 40% of CSF revenues ac
he
r
Developing Talent • Enhancing Careers • Improving Student Learning Ba

Legislative Timeline – HB2823



Four performance classifications:
Highly Effective, Effective, Developing, and Ineffective

The REIL Score:
100-500, corresponding to the four performance classifications



Classroom Site Fund (Prop. 301):
Individual teacher performance, as measured by the teacher’s
performance classification (e.g., highly effective) must be a component of
Fund 012 performance pay-outs


Implementing the REIL performance-based compensation
system allows a district to adhere to 15-977 by including:

School performance (e.g., school growth)

Individual teacher performance as measured by the teacher’s
performance classification (e.g., individual growth)

Measures of academic progress (MAP) toward the academic standards
adopted by the State Board of Education (SBE) (e.g., AIMS and SAT-10
scores)


Implementing the REIL performance-based compensation
system allows a district to adhere to 15-977 by including:

(Continued…)

Other measures of academic progress (e.g., team growth)

Regular evaluation for effectiveness (e.g., LOI)

A PBC system that includes teacher PD programs aligned with the
elements of the PBC system (e.g., REIL PD)


Classroom Site Fund Projected Revenues
Fiscal Year Per Weighted Student Count*
The CSF allocation per weighted student
2010-2011 $120 count is forecasted to increase at a rate of
2011-2012 $125 approximately 12.5% for the remaining years
2012-2013 $220
of the REIL grant (FY13 to FY15).
2013-2014 $250
2014-2015 $280
2015-2016 $300 The JLBC’s projected CSF allocation for FY13
2016-2017 $320
2017-2018 $350
is $227 per weighted student count,
2018-2019 $370 approximately 3% higher than this forecast.
2019-2020 $390

*All funds (011, 012, 013)
The FY13 projected CSF allocation is $107
Source: Chuck Essigs, Director of more per weighted student count than the
Governmental Relations, Arizona
Association of School Business Officials
FY12 CSF allocation.


Classroom Site Fund Projected Revenues
Fiscal Year Per Weighted Student Count* This means a district’s FY13 Prop.
2010-2011 $120 301 plan could remain consistent
2011-2012 $125
2012-2013 $220 with the per teacher dollar amount
2013-2014 $250 of FY12 CSF Fund 012 pay-outs,
2014-2015 $280
2015-2016 $300
while allowing a district to allocate
2016-2017 $320 the increased revenues in Fund 012
2017-2018 $350
to REIL PBC investments.
2018-2019 $370
2019-2020 $390

*All funds (011, 012, 013)

Source: Chuck Essigs, Director of
Governmental Relations, Arizona
Association of School Business Officials


Classroom Site Fund Revenue FY12 / FY13 Comparison: Sample District

FY Weighted CSF # of CSF Total Total 012 per 013 per
Student Allocation Eligible Fund 012 Fund 013 Teacher Teacher
Count per WSC Teachers
FY12 8000 $120 500 $384,000 $384,000 $768 $768
FY13 8000 $227 500 $726,400 $726,400 $1,453 $1,453
$342,400 $342,400 $685 $685
This sample district has the opportunity to make FY13 Fund 012 CSF pay-outs
in the amount of $768 per teacher, which is consistent with the dollar amount
of FY12 Fund 012 CSF pay-outs, while allowing the district to allocate the
unexpended Fund 012 budget balance to REIL PBC investments.



FY12 8000 $120 500 $384,000 $384,000 $768 $768
FY13 8000 $227 500 $726,400 $726,400 $1,453 $1,453
$342,400 $342,400 $685 $685
Assuming this district expended its entire FY12 Fund 013 CSF allocation on
teacher pay-outs in the amount of $768 per teacher, for FY13, this district has
the opportunity to be consistent with the dollar amount of its FY12 Fund 013
CSF pay-outs, while allowing the district to allocate the unexpended Fund 013
budget balance to REIL PBC investments.


FY12 8000 $120 500 $384,000 $384,000 $768 $768
FY13 8000 $227 500 $726,400 $726,400 $1,453 $1,453
$342,400 $342,400 $685 $685

Assuming this district did not expend its entire FY12 Fund 013 CSF allocation on
teacher pay-outs, for FY13, this district has the opportunity to allocate a more
substantial unexpended Fund 013 budget balance to REIL PBC investments – in
this fiscal year or beyond.


REIL Performance Stipends
Funding for Performance-Based Compensation
Component Group Grant Year Potential Annual Award Budget Source
TIF District
Year 3 (FY13) $3,000 80% 20%
Teachers (and Master
Year 4 (FY14) $5,000 40% 60%
Educators)
Year 5 (FY15) $5,000 20% 80%
Hard-to-Staff Year 3 (FY13) $4,500 80% 20%
Individual, Team,
Assignments (In- Year 4 (FY14) $7,500 40% 60%
& School Awards
Demand) Year 5 (FY15) $7,500 20% 80%
Year 3 (FY13) $2,750 75% 25%
Principal Year 4 (FY14) $5,000 50% 50%
Year 5 (FY15) $5,000 25% 75%

During this school year – FY13 and Year 3 of the REIL grant – TIF funds will be
used to make up to a $2,400 investment in Teachers and Master Educators,
while each REIL School District will make up to a $600 investment in Teachers
and Master Educators.

REIL Salary Augmentation
Funding for Salary Augmentation
Component Group Grant Year Annual Salary Augmentation Budget Source
TIF District
Year 3 (FY13) $5,000 100% 0%
Master Educator Year 4 (FY14) 100% 0%
Year 5 (FY15) 50% 50%
Year 3 (FY13) $5,000 80% 20%
Salary
Turnaround Teacher Year 4 (FY14) 40% 60%
Augmentation
Year 5 (FY15) 20% 80%
Year 3 (FY13) $10,000 75% 25%
Turnaround Principal Year 4 (FY14) 50% 50%
Year 5 (FY15) 25% 75%

During this school year, TIF funds will be used to make a $5,000 investment in
Master Educators by augmenting their base salary.

TIF funds will cover this investment in full.

TIF District
Year 3 (FY13) $5,000 100% 0%
Year 5 (FY15) 50% 50%
Year 3 (FY13) $5,000 80% 20%
Salary
Augmentation
Year 5 (FY15) 20% 80%
Year 3 (FY13) $10,000 75% 25%
Year 5 (FY15) 25% 75%

Turnaround Teachers by augmenting their base salary, while each participating
REIL School District makes a $1,000 investment in these teachers.


TIF District
Year 3 (FY13) $5,000 100% 0%
Year 5 (FY15) 50% 50%
Year 3 (FY13) $5,000 80% 20%
Salary
Augmentation
Year 5 (FY15) 20% 80%
Year 3 (FY13) $10,000 75% 25%
Year 5 (FY15) 25% 75%

Turnaround Principals by augmenting their base salary, while each participating
REIL School District makes a $2,500 investment in these principals.


REIL Spotlight Schools
Only REIL Spotlight Schools have Turnaround
Principals and Turnaround Teachers.
District Name School Name
Alhambra ESD Cordova Middle School
Barcelona Middle School

Gila Bend USD Gila Bend Elementary and Jr. High / Gila Bend High School

Isaac ESD Butler Elementary School

Nadaburg USD Desert Oasis Elementary
Nadaburg Elementary


REIL PBC Timeline
TIF District
Year 3 (FY13) $3,000 80% 20%
Year 4 (FY14) $5,000 40% 60%
Educators)
Year 5 (FY15) $5,000 20% 80%
Individual, Team,
& School Awards
Demand) Year 5 (FY15) $7,500 20% 80%
Year 3 (FY13) $2,750 75% 25%
Year 5 (FY15) $5,000 25% 75%

REIL’s strategic phase-in and phase-out plan includes a gradual shift of reliance
upon grant funds to reliance upon district funds to ensure sustainability beyond
the grant period.


REIL PBC Timeline
TIF District
Year 3 (FY13) $3,000 80% 20%
Year 4 (FY14) $5,000 40% 60%
Educators)
Year 5 (FY15) $5,000 20% 80%
Individual, Team,
& School Awards
Demand) Year 5 (FY15) $7,500 20% 80%
Year 3 (FY13) $2,750 75% 25%
Year 5 (FY15) $5,000 25% 75%

REIL’s phase-in and phase-out plan allows districts to strategically repurpose and
reallocate current and future funding sources – most notably Classroom Site
Fund – to ensure the sustainability of the REIL performance-based
compensation system.

Instructional Improvement Fund Revenues FY10 - FY13

FY Alhambra Isaac Nadaburg Gila Bend Tolleson
FY10 $600,000 $351,000 $132,000 $0 $165,000
FY11 $600,000 $351,000 $125,000 $0 $185,000
FY12 $600,000 $340,000 $95,000 $0 $339,553
FY13 $600,000 $365,000 $95,000 $23,051 $280,168

The other existing funding possibility is the Instructional Improvement Fund
(also known as Fund 020 and/or Indian Gaming).


Instructional Improvement Fund Budgeting FY13

Allocations Alhambra Isaac Nadaburg Gila Bend Tolleson
Teacher Compensation Increases $180,000 $185,000 $50,000 $0 $0
Class Size Reductions $0 $0 $0 $0 $140,084
Dropout Prevention Programs $0 $0 $0 $23,051 $0
Instructional Improvement Programs $420,000 $180,000 $45,000 $0 $140,084
Total Instructional Improvement Fund $600,000 $365,000 $95,000 $23,051 $280,168

An opportunity exists for REIL School Districts to repurpose and reallocate
Instructional Improvement Fund revenues to support the investment in REIL
performance-based compensation.


TIF District
Year 3 (FY13) $5,000 100% 0%
Year 5 (FY15) 50% 50%
Year 3 (FY13) $5,000 80% 20%
Salary
Augmentation
Year 5 (FY15) 20% 80%
Year 3 (FY13) $10,000 75% 25%
Year 5 (FY15) 25% 75%

Federal Title I and II monies will also allow REIL School Districts to provide
financial support for the implementation and sustainability of REIL performance-
based compensation.
For example, Title I and II monies can be invested in REIL salary augmentation.


Ensuring REIL PBC sustainability
There are many opportunities for REIL School Districts to strategically utilize
revenues in a manner that ensures the sustainability of REIL performance-based
compensation by:
Allocating FY13 CSF Fund 012 and 013 dollars so as to fund teacher
performance pay-outs at FY12 levels, which will allow for the unexpended
budget balance to either
a) fund FY13 REIL PBC investments
b) be held in escrow to fund future REIL PBC investments.


compensation by:

Allocating FY13 CSF (Fund 013) dollars so that a more substantial portion
remains unexpended, making it available to fund REIL PBC investments in future
years.


compensation by:

Allocating Instructional Improvement Fund (Fund 020 and/or Indian Gaming)
dollars so that a more substantial portion
a) is budgeted to fund teacher compensation increases in any given fiscal year

b) remains unexpended, making it available to fund REIL PBC investments in
future years.


compensation by:

Allocating Federal Title I and Title II monies to provide financial support for the
implementation and sustainability of REIL performance-based compensation
(e.g., salary augmentation).


There are also opportunities for the REIL Alliance Membership of Stakeholders
to pursue a rigorous legislative agenda.

Select components of this legislative agenda might include:

 Change TEI to Teacher Effectiveness Index

 Indefinite, but restricted M&O carryforward for special PBC line item

 Small District Adjustment for PBC


Moving Forward from Here
First, an electronic copy of this presentation will be made available to all REIL
School Districts.

Second, the REIL Cross-District Finance Team will resume regularly scheduled
meetings in September.

Third, please feel free to be in touch with me, as I will be happy to offer any
support that I can to REIL School Districts throughout the continued
implementation of the REIL PBC system.

Lastly, thank you for being here today; and thank you for supporting the REIL
initiative.


Moving Forward from Here
Contact Information:

Jeff Powell
REIL Financial/Business Systems Specialist

Jeff.Powell@mcesa.maricopa.gov
Office: (602) 506-0307
Mobile: (602) 499-6604


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