As chief school administrators, school district superintendents are the leaders of our educational communities. Teachers, administrators, staff, parents, and students look up to them for guidance and direction. Hiring the superintendent of schools is the single most important, and perhaps the most difficult, obligation of a board of education.

For years, superintendents were able to achieve tenure in their jobs. With no restrictions, this eventually led to a series of contract buy-outs that spurred the state to enact legislation that eliminated tenure for superintendents and required that they be employed on a contractual basis.

The fiscal realities of New Jersey led to the 2011 adoption of regulations capping salaries for superintendents. As the only school district employee with a salary cap, anecdotal evidence exists that many superintendents with salaries higher than the cap retired to work in other adjoining states where there was no cap. Others retired only to become interim superintendents paid on a per diem basis while still collecting their pensions. The field of possible experienced candidates for the superintendent’s position became smaller and smaller. People with central office experience often earned as much, or close to as much, as the salary cap for superintendents. Who would want to work for almost the same amount of pay, yet carry the responsibility of leading the district on one’s shoulders, not to mention participate in a greater number of evening duties?

As the field of candidates shrank, the Legislature heard the needs of school districts and passed a law that removed salary caps for superintendents of schools. On July 19, 2019, Gov. Phil Murphy signed the legislation, which took effect immediately. The law stated:

“The Department of Education shall not regulate the maximum salary amount a board of education may provide to a superintendent of schools pursuant to an employment contract.” The Executive County Superintendent of Schools is still required to approve an employment contract for a Superintendent. N.J.S.A. 18A:17-19.2

N.J.S.A. 18A:7-8(j) sets forth that [t]he review and approval [by the Executive County Superintendent] of the employment contracts shall be according to standards adopted by the commissioner, provided that the standards shall not include maximum salary amounts for superintendents of schools.

Regulations have not yet been finalized for the administration of the new superintendent salary law. The executive county superintendents (ECS) continue, however, to review proposed contracts with an eye towards fairness and comparability with other superintendent salaries. Those regulations have not been revised.

N.J.A.C. 6A:23A-3.1 regulates the review of employment contracts for superintendents, assistant superintendents and school business administrators. Specifically, the ECS is required to review and approve the following:

  1. New employment contracts, including contracts that replace expired contracts…
  2. Renegotiations, extensions, amendments, or other alterations of the terms of existing employment contracts that have been previously approved by the executive county superintendent; and
  3. Provisions for contract extensions where such terms were not included in the original employment contract or are different from the provisions contained in the original approved employment contract.

Executive county superintendent approval is therefore required whenever a board of education decides to amend the existing contract with its superintendent in order to raise his or her salary. Of course, ECS approval is also needed to enter into a new contract.

Limits Still Exist If there is a fear that with the removal of salary caps, superintendent salaries will now skyrocket, further squeezing taxpayer pockets, those fears can be assuaged with the knowledge that all limits were not removed. Although salaries can no longer be capped, the ECS still has tools to review and maintain some type of lid on their unbounded growth. Two ways of containing costs exist.

First, the ECS is still bound by regulation to review salaries for administrative positions to ensure that they will be…“comparable with the salary, benefits, and other emoluments contained in the contracts of similarly credentialed and experienced administrators in other school districts in the region with similar enrollment, academic achievement levels and challenges, and grade span.” N.J.A.C. 6A:23A-3.1(e)(1).

This regulation is being used by ECSs throughout the state to ensure that salaries in one district do not jump so high as to be out of proportion with other salaries in similar districts. The intention and the effect is to slow the growth of salaries so that one school district is not strapped with an excessive salary for its chief school administrator.

The second tool in the ECS’s kit is the approval of school district budgets. The 2% tax levy regulation still exists. And, of note, the limit on the administrative costs in every budget, as detailed in N.J.A.C. 6A:23A-8.3, has also not been changed.

These regulations will help the ECS to maintain a slow growth in superintendent salaries while conforming to the new law that removed the salary cap.

But how does an ECS assess comparability of one superintendent’s proposed salary with other superintendent salaries in the region when salaries have been capped for years? If a proposed salary is compared with other salaries that were capped, then this regulation requiring that salaries be comparable would act as an invisible limit.

The question of comparability was difficult to answer just after the governor signed the law in July 2019. As this article goes to press, it is still too early to know how the ECSs throughout the state will implement the comparability regulation. It appears that at least one county office is using merit pay to review comparability. The process appears to be that the proposed salary is added to the amount of dollars that would be earned as merit pay to create the new “comparable” salary that will be used to review other salaries. While this adds more fairness to the process, it still works to ensure that superintendent salaries are not raised to such high levels that they become out of reach, especially for smaller districts that cannot reasonably afford high salaries and administrative costs.

Hearings for Review of Contracts Even with the removal of salary caps, boards of education are still required to conduct hearings whenever they amend or alter the terms of an existing contract. The public must be notified at least 30 days before the board acts to approve a contract. And the public must be given at least 10 days’ notice of a public hearing, according to N.J.S.A. 18A:11-11. The public notice and public hearing requirements do not apply to brand new contracts of employment or contracts that replace expiring contracts.

It is very important to remember that executive county superintendent approval must be received prior to conducting the hearing and taking action on a contract, as per N.J.A.C. 6A:23A-3.1(c)(1). While some school districts have approved superintendent contracts with a resolution that states “pending County Superintendent approval,” the ECS frowns upon such resolutions. It is much more efficient, and in strict compliance with regulation, to obtain written county approval prior to the board meeting where action will be taken.

From a practical perspective, a board of education can issue a notice at least 30 days prior to the board meeting where the contract will be reviewed for approval and also include in that notice that a public hearing will be conducted on the same night prior to the board meeting. This does provide more notice of the hearing than is required, but it eliminates the need to conduct the hearing on another night. Boards are cautioned, however, to make clear that the public hearing is separate from the board meeting. We would counsel boards to open the meeting with the hearing, hold public comment on the proposed superintendent contract only, and, once all who wish to speak have been heard, and once all board members have also been given an opportunity to speak about the contract, close the public hearing. After that, the board can commence its public meeting and adopt a resolution approving the new contract. This process is in accordance with N.J.A.C. 6A:23A-3.1(c)(1).

There have been instances where superintendent contracts have been rescinded prior to their expiration date in order to allow the board to enter into a new agreement with the superintendent. Although the statutes and regulations do not specifically address rescissions, the courts have interpreted the law to mean that rescissions of contracts prior to their expiration and entering into a new contract is the equivalent of an amendment. Therefore, the public hearing and notification rules apply to rescissions. [Wall Township Education Association v. Board of Education, 2019 N.J. Super. Unpub. LEXIS 575 (App. Div. March 14, 2019)].

Other Contract Provisions Besides salaries, other provisions in superintendent contracts have not changed. They must still be no less than 3 years and no more than 5 years in length. They must still expire on July 1. They still cannot have provisions for long-term care insurance or life insurance, and the board is still not authorized to pay for the superintendent’s share of Social Security (FICA) payments or pension payments.

Superintendents are still permitted to have car allowances, cell phones, laptops and other items that are needed for them to perform their duties. Boards are cautioned, however, that these amenities need to be provided in consideration of the budget, of the needs of the district, and of the perception of the public. Lastly, with respect to sick days, vacation days, personal days and contribution towards health insurance premiums, a prudent board would be cautious to provide benefits that conform to those provided to other employees in the district. The wise school leader will want to lead by example and not take benefits that are not otherwise afforded to those he or she leads.

While the elimination of salary caps has been seen to be the answer to the conundrum of hiring the most experienced and well qualified individuals to lead our schools, boards now have yet one more interesting and difficult challenge. In order to stay competitive with rising superintendent salaries, how does a school district raise its leader’s salary while staying within budget cap and administrative cost regulations? The answer, as always, lies in very careful budgeting and the ability to make tough decisions. The road to those answers is the same, however. What is best for students? Therein lies the answer to all school district questions.

Derlys Maria Gutierrez and John E. Croot are attorneys with Adams Gutierrez & Lattiboudere, LLC.