Sass's incentives include life insurance, $333,000

NEW LENOX -- The New Lenox School Board dangled incentives in front of Superintendent Mike Sass to keep him from moving on. And, it worked.

As a way the to keep Sass in the district, the board offered him a couple of incentives: a $747,000 life insurance policy and other compensation of $333,000, plus interest, over six years.

The perks were highly unusual.

The life insurance policy and the $333,000 plus interest do not count as earnings toward Sass' pension under the Teachers' Retirement System. Sass will not receive a pension based on the incentives.

Out of the 41 superintendents in Will and Grundy counties, Sass is the only one in recent years to receive such a large life insurance policy and deferred compensation, shows a Herald-News investigation.

To pay for the life insurance policy, Sass borrowed a total of $78,000 from the school district in 2004 and 2005. The policy names his wife as beneficiary.

When he dies, the district will receive the $78,000 plus interest with proceeds received from the insurance policy.

To get the policy, Sass had to agree to take out a payroll deduction of at least $13,000 in 2005 and 2006 and put it into his own retirement plan.

"The board wanted to induce me to do savings myself like they do with a 401(k)," Sass said.

In another contract, the board found another way to compensate Sass without affecting his pension under the state retirement system.

The board contributed lump sums on behalf of Sass to 457(f) plan.

The board kicked in $39,000 each year in 2007, 2008 and 2009. For the next four years, the district will contribute $54,000 each year.

After staying in the district for two years, Sass became eligible to receive some of that money.

In 2008, he got $75,273. This year, he received $40,477.

"Our board does not want me to get that as pension. That's why they tried doing something like this because they were so concerned about the pension system. This is not a pension obligation to taxpayers of Illinois or the taxpayers of New Lenox schools," Sass said.

"If this was put on my salary, it would be significantly better for Mike Sass, personally," Sass said. "But it wouldn't be best for the board. ... Would I prefer to have this on my pension? Absolutely."

Board members Sue Smith and Maureen Broderick voted against Sass' five-year contract in May 2006.

"You want to be able to retain your superintendent especially if he's doing a good job," said Smith. "But you have to know you're protecting the taxpayers in the district. We are supposed to be stewards of our taxpayers' dollars, but also making sure our children get a quality education."

Now Smith is hoping to change school board policy to allow the board to hire a separate attorney to negotiate superintendents' contracts.

Broderick agrees there needs to be more separation between the school board attorney who negotiates a superintendent's contract and the school district's law firm that deals with administration on a regular basis.

Broderick doesn't think she had enough information to get the best contract for the taxpayers. For example, board members were told by the lawyer it was standard and normal for superintendents to be able to buy back unused vacation days.

"A lot of people don't question when you have an authoritative statement like that," she said. "If it's common and normal -- we'll go along with that."

However, Herald-News research shows only 14 out of the 41 local superintendents receive that perk. When it comes to meeting stipends, only two superintendents, including Sass, receive money for attending meetings. At one time, Larry Wyllie, superintendent of Lincoln-Way High School District, received a meeting stipend, but it is no longer in his contract.

If Broderick could vote all over again, she'd vote against the life insurance policy and the other compensation. She was new to the board at the time and said she was not familiar with how superintendents are paid.

After comparing this compensation to other school leaders, "That's a lot of money," she said.

School board President Kathy Markus wasn't on the board when Sass received the life insurance and compensation, but believes the contract is fair.

"This is the type of contract that a superintendent with many (17) years of experience in a very large (5,700 students) suburban Chicago school district has," wrote Markus in an e-mail. "Dr. Sass has led this district during a very critical stage in this district's history. Since Dr. Sass joined our district we have doubled the size of our schools and dealt with exploding growth, balanced the budget, improved the longevity and quality of our teaching staff, and maintained our high student achievement. We believe we are getting a great value."