What Is the Cost of 18 Additional Paid Holidays for Twelve-Month Staff?

As we recently discussed, APS changed its staff leave guideline for twelve-month staff in November 2021 to provide for 31 paid holidays, or 18 additional days than they previously received. This operational change occurred via an email from Dr. Durán without public input nor a vote from the School Board. 

Furthermore, this change has had a number of negative impacts:

• It prioritized additional vacation time for mostly central office/administrative staff over the needs of our teachers. Teachers and other ten-month staff are not paid for any of those days and they also accrue less leave than twelve-month employees.  

• It reduced Syphax’s responsiveness to requests from staff and has created delays for critical services, like hiring substitute teachers.  

• To cover the additional time that twelve-month employees are now allowed to be away from the office on paid leave, we estimate that APS will need to hire 77 FTEs at an annual cost of  $8 - $9 million. 

• APS also increased its future financial liability for accrued leave, some of which can be paid out at retirement. 

These impacts justify the Board reviewing and reversing this decision.

Further, as we have noted previously, choosing to prioritize additional holidays for 992 employees poses an opportunity cost on a variety of other priorities:

• For example, an additional 1% COLA for all employees would cost $5.1 million, as discussed in budget work session #4; 

• reinstating parental leave would cost about $1.4  million for four weeks and $2 million for six weeks (budget question #24-72); 

• reducing elementary classes by a planning factor of two would cost about $2.2 million, per the 2023 budget. 

APS could potentially fund all of these priorities for the equivalent cost of these additional paid holidays which have been established for only a subset of staff.

APS and the School Board Should Take Action

The School Board should act promptly to reverse this approach to holidays which disproportionately benefits 992 twelve-month employees. The policy is inherently unfair to teachers and other ten-month employees, it impedes operations, and it hurts morale across APS’ remaining employees. While we welcome an estimate from APS, our good-faith effort estimate of the cost of backfilling employees and the costs associated with future financial liability from vacation banking is an annual cost of $8-$9 million. These costs are not only unfair in how they are disparately applied to different groups of APS employees, they are unsustainable given APS’ long-term structural deficit. We also call for greater transparency going forward on the budgetary impacts of operational changes like this policy change.

Further, the Board should consider a short-term freeze on the hiring of additional twelve-month employees, consistent with prior recommendations from the Budget Advisory Council. After APS has returned to its prior leave policy, which was consistent with leave policies for most state and federal employees, it can more accurately evaluate whether these requests are necessary to maintain APS service and operations.

Finally, APS should move promptly towards establishing an independent auditor who reports to a committee that is independent of the APS administration. If an independent auditor had been involved in the adoption of the new holiday policy, he or she may have identified the hidden costs associated with it as well as highlighted that it created a two-tier system for twelve- and ten-month employees. 

How did we arrive at our cost estimate?

In our earlier discussion we noted there is a calculable cost associated with this change in paid leave policy. We called on APS to provide an estimate of the cost of that policy change. It is budget season right now and APS’ schedule of work sessions and public hearings, including public budget questions, should have provided ample opportunity to address this question. Yet there has been no public discussion of this issue.

To fill that gap, we made a FOIA request to identify the number of twelve-month employees who benefitted from this policy change. The reported 992 twelve-month employees is a higher number than what we expected. These 992 employees now receive 18 additional paid holidays, which amounts to the elimination of 17,856 work days per year across APS. These are days that central and administrative staff could use to fill the backlog of teacher and substitute hiring, respond to HR issues, or develop curriculum (to help reduce teacher time on those tasks), among many other items.

APS will have to add additional employees to maintain a similar level of operations as it did under the prior leave policy. We assume that APS is not willing to permit service-level degradation by simply cutting back the amount of work each employee conducts. Longer term, those lost work days must be replaced by additional full-time equivalents (FTE). There is already evidence of repercussions; for example, in the proposed budget (pp 63-64) the Procurement Office noted, “The amount of work the Procurement Office is expected to manage is unrealistic. Staff regularly work long hours so by having the extra staff member will help improve the work-life balance.” Based on the standard days worked previously by twelve-month employees, we estimate that 77 full-time equivalents are likely to be needed to fill the gap. This translates to between $8 and $9 million annually. Based on the increase in staff from 2021 to 2024, it appears likely that some of those costs have already been added to APS’ structural budget.

A second more modest financial impact is that twelve-month employees are able to “bank” leave. The new leave policy allows them to take leave by using the newly provided holidays and more quickly bank the regular leave, some of which can be paid out when they leave or retire. Given the interaction of APS’ leave and retirement policies, we do not have sufficient data to estimate the future financial liability that APS has incurred since it added these 18 additional paid holidays. 

Salary and Benefits Costs for Twelve-Month Employees

In the absence of an estimate from APS, we have derived our estimate based on data from the budget and other documents. For the sake of transparency we set forth our methodology below. Of course, we welcome APS to provide its own estimate of the cost.

A starting point for this analysis is to first estimate the total costs of the salary and benefits of twelve-month employees. Although we tend to think of twelve-month employees as constituting principals and administrators (APS Scale E and P), APS policy also provides that some G-scale (office support staff), D-scale (transportation) and M-scale (Maintenance) employees may be twelve-month employees. APS has not provided the exact breakdown, which might affect the estimate.

Based on the 2024 Budget, APS budgets $474.3 million in salaries (pg. 31) and $164.4 million in benefits across 5,244 positions (pg. 72), for an average salary cost of $90,442 per position and $31,348 in benefits per position, or a total of $121,790 per position. Another useful data point comes from the 2024 budget, which proposes to convert eighteen Welcome Center employees who are currently 10-month employees to twelve-month status, at an estimated cost of $230,000 (pg. 49). We assume $230,000 is related to direct salary costs and use that data point to calculate a per-employee cost as shown below. The estimate equates to $12,777 in salary costs per employee, which is a monthly salary of $6,389 per month, or an annual salary of $76,666.

Based on that data, we estimate that an average twelve-month employee salary may be in the range of $75,000 to $90,000, with additional benefits of approximately $30,000 per employee, for a total cost of $105,000 to $120,000 per employee. To replace 992 employees’ additional 18 days of holiday – or 17,856 work days, it would take 77 new FTE. We get this number by dividing 17,856 by 232 days, which is the “new” total of twelve-month employees’ annual work days. At $105,000-$120,000 per year, this is $8.0-$9.2 million in annual costs.

It is likely that some of the supplemental hiring of those 77 positions has already begun. Between FY 2021 and FY 2024, the 2024 budget (pg. 72) reflects that the number of administrators has increased by 26 (a 10.5% increase), and the number of assistants, custodial and maintenance staff has increased by 17, for a total of 43 positions.