Vague contracts leave districts at risk

The Pittston+Area+School+District%22>Pittston Area School District faced a potentially expensive dilemma when its top executive was ensnared in the federal corruption probe of Luzerne County school districts five months ago.

Board members wanted to fire Superintendent Ross Scarantino, but they had to be careful because ambiguities in his employment contract suggested he could receive a severance package worth an estimated $310,296. Scarantino’s contract did not contain a clause specifying what the school district was legally required to provide to him if he was fired. Ultimately, Scarantino was paid $22,158 for accrued vacation time and accumulated sick days in an agreement both sides worked out through negotiation.

A Times Leader review of Luzerne County school superintendent contracts reveals some districts could face the same predicament.

Contracts for Crestwood, Dallas, Hanover Area, Hazleton Area, Lake-Lehman, Northwest Area, Pittston Area, Wilkes-Barre Area, Wyoming Area and Wyoming Valley West were reviewed to see if they contained specific termination clauses and whether superintendents would be entitled to a severance package if they were fired for cause.

Greater Nanticoke Area was not reviewed because Superintendent Tony Perrone has been working without a contract since the summer of 2003, when he retired. He continues to serve for free in the only district where he’s ever been employed.

Contracts vary in length from three pages to 16 pages. Some are very detailed in what is expected of a district’s leader and what the repercussions would be if the superintendent does not do his or her job effectively or is found to be guilty of wrongdoing. Other contracts contain less direction on those issues or do not address them at all.

Some of the contracts include clauses stating only that the superintendent can be fired if he or she violates stipulations in the Pennsylvania School Code.

School code not enough

While it is the third-largest district in Luzerne County, Wyoming Valley West has the smallest, least detailed superintendent’s contract. It does not mention termination.

WVW board member Jack Gill said he and other board members did not feel the need to explicitly address termination because that issue was already covered by state law.

“Pennsylvania School Code is so explicit the district didn’t think it needed to detail it in the contract,” Gill said. He explained that he and his colleagues never imagined that someone, especially a superintendent, would misuse funds or engage in other illegal activity.

While the state code briefly lists valid causes for termination, it does not mandate or suggest how to handle outstanding pay or benefits.

Scarantino was fired after he pleaded guilty to accepting a kickback in return for the awarding of a district purchase contract.

Pennsylvania Association of School Administrators Executive Director Stinson Stroup offers templates to school districts and superintendents as a starting point to help both sides work together to devise a fair contract that satisfies the needs of the district and superintendent. But he doesn’t think that is good enough.

“It is important to have a detailed job description so the board members, community and superintendent know what all the duties are,” Stroup said.

Charles Suppon was sworn in as superintendent in August, after Michael Garzella resigned with a year left in his contract. Suppon’s contract is being drawn up by district solicitor Michael J. Hudacek Sr. Until it is approved by the board, Suppon is operating under the terms of Garzella’s old contract.

Hudacek said that over the past 40 years he’s worked with the district, they have kept similar contract wording, simply changing the superintendent’s name, employment dates and salary.

WVW plans to make Suppon’s contract more explicit, detailing what rights the district has to terminate Suppon and end his benefits should he not live up to the district’s standards or is found guilty of a crime, Gill said.

“We are being more cautious. We are just trying to cover all the bases that other districts have,” Hudacek said.

Hanover leads the way

The problems at Pittston Area have other school districts looking to tighten the terms in their contracts, but none has plans to open the contracts early.

Crestwood Superintendent Dave McLaughlin-Smith’s contract expires on June 30, 2010. As detailed as the contract is in defining his benefits, performance assessment and what is expected of him, it does not address whether the district would be required to pay McLaughlin-Smith for any health care costs, unused vacation or sick days, life insurance or other benefits if he is fired for cause.

Crestwood board President Jerry Orloski said the board would consider adding a clause to protect the district’s financial interest if the board is allowed to do so under state law.

“We have tremendous faith in our superintendent; however, the events at Pittston Area have required us to remain vigilant. We realize we have to do our job to govern the district, and he has to do his job to run the district on a day-to-day basis,” Orloski said.

Lake-Lehman’s contract with Superintendent James McGovern relies on the Pennsylvania State School Code for its termination clause. The contract does not state if McGovern would receive a severance package if he is fired.

McGovern’s contract expires on June 30, 2011, and the district has not discussed opening negotiations early to detail its termination clause or add a severance package clause, according to Lake-Lehman School Board member John Oliver III.

Hanover Area and Superintendent Anthony Podczasy signed a detailed contract that includes termination terms in February, two months before Scarantino was accused by the FBI of accepting money to help steer contracts.

Podczasy’s contract specifically lists four ways he can be dismissed – mutual agreement between himself and the district, termination by the board with his consent, unilateral termination with the district ending his contract or discharge for cause if he violates the law. Wilkes-Barre Area and Pittston Area are the only other districts with similar language.

Podczasy is not entitled to receive his salary or any other benefits if he is fired for cause, the contract states.

Hanover Area School District President Tony Gagliardi believes it’s fair not to pay Podczasy if he is terminated.“Our number one priority is to protect the taxpayers and students. We need to protect our integrity,” Gagliardi said.

Gagliardi didn’t claim any particular clairvoyance in structuring the contract just before the problems in Pittston Area came to light.

“We just thought if he was not doing his job, we just wanted to be protected. We never foresaw the things happening that have occurred throughout the county,” Gagliardi said.

If Podczasy is released from his duties by unilateral action of the board or by mutual agreement for reasons other than cause he is entitled to his severance package that includes payment of all remaining salary through the contract term.

Two other districts – Pittston Area and Hazleton Area – also will not pay their superintendent if he or she is terminated for cause.

Pittston Area used stricter wording in its contract for current Superintendent George Cosgrove, approved in late June after dealing with the Scarantino incident. Cosgrove’s contract is the only one in Luzerne County that states the district can put him on unpaid leave if he is formally charged with a crime related to his employment at the district.

In contrast, the Wyoming Area and Wilkes-Barre Area contracts allow superintendents to receive compensation if they are fired.

Wyoming Area could terminate Superintendent Ray Bernardi only through mutual agreement or unilateral termination by the school board.

If the district decides to terminate Bernardi without his approval, he must be notified in writing at least 90 days before his termination and would be entitled to his aggregate salary and full monetary costs of his benefits.

The Wilkes-Barre Area contract for Superintendent Jeff Namey states that he would receive his salary if the board decides to fire him for cause, terminate him with his approval, unilaterally terminate him or if there is a mutual agreement between the Namey and the board.

Wyoming Area and Wilkes-Barre Area board members did not return calls seeking comment.

Under the state school code, school districts must provide a hearing for a superintendent before he or she can be fired for cause or in a unilateral decision by the school board. If the superintendent retires or mutually agrees to resign, a hearing is not necessary.

Pension separate

It is possible for a superintendent to receive his state pension if he or she is fired from the school district because district officials do not make the decision whether a pension is granted. Educators’ pensions are paid by the Pennsylvania Public School Employees Retirement System. If the retirement system’s legal team determines the superintendent violated the Public Employee Pension Forfeiture Act, the superintendent can lose his or her retirement pension. Ross Scarantino was denied his estimated $115,415-a year pension in July after the retirement system found him guilty of violating the forfeiture act.