Phoenix's Isaac School District, which plans to shutter schools and lay off employees because of money problems, will let Superintendent Carlos Bejarano retire June 30 and return to his same job - with the same compensation and perks - the next day.

Bejarano, 58, will retain his $130,000 annual salary, an $8,400 car allowance, an $8,000 annual tax-deferred annuity, and a $3,000 community-affairs allowance to use at his discretion. The district also will give him $11,238 so he can buy health-insurance coverage, according to district officials.

Pensions in Arizona a soaring burden

Bejarano will receive an annual pension estimated at $104,650 after retiring with 35 years of service, records reviewed by The Arizona Republic show, bringing his total annual compensation to roughly $265,000.

The retirement agreement comes at a time when the district plans to close Lela Alston Elementary and Carl T. Smith Middle schools, eliminate roughly 75 positions including 20 teachers, and possibly ask remaining employees to take unpaid furlough days because of declining enrollment and less state aid when the new school year starts July 1.

The district must cut as much as $5.7 million from its estimated $41 million fiscal 2011-12 budget. More cuts would be made if the Legislature further reduces money allotted to public schools.

The school board's decision to let Bejarano retire and keep the same job comes despite what one former school-board member said were attempts by Bejarano to make it difficult for teachers and classified employees to do the same thing: draw a retirement and salary in a practice that critics call double-dipping.

Currently, the 900-employee district has nine workers who have retired and returned to work. Just one is a classroom teacher.

"It seems like people who needed a job and were earning low pay couldn't return to their same position, but the people at high-ranking positions can double dip," said Andrew Sandoval, a high-school Spanish teacher who left the board in 2008. "What's taking place is he is setting himself up for a great position."

Bejarano declined to answer questions.

District spokesman Abed�n Fimbres said the superintendent was busy and did not have time until next week to discuss his employment. Fimbres said the district hires retirees in positions that are difficult to fill, and he said that since Bejarano took over July 1, 2008, student-achievement scores had increased and the district wanted to keep him.

The retirement system is one of six public pensions in Arizona. A 2010 Arizona Republic investigation found the pension systems are costing taxpayers at least $1.39 billion a year and that taxpayer contributions are rising even as retirees' benefits are continually increased.

The practice of double-dipping is common in Maricopa County. It involves hundreds of administrators and teachers who use a legal loophole to collect a full pension from the Arizona State Retirement System plus a paycheck.

But most employees who return to the same job do so at a reduced rate of roughly 80 percent of their ending salary to save money for their employers. Most districts also do not provide health-insurance coverage to retirees who come back to work, resulting in additional savings.

Bejarano is not taking a reduction in pay and the district is covering health-insurance costs for him and his dependents. The district also will pay a fee of nearly $6,700 to Educational Services Inc., a third-party contractor for whom Bejarano technically will work.

Working for a third-party contractor allows Bejarano to stay on the job yet remain in compliance with a state law requiring ASRS members to wait a year after retiring before returning to work to collect full benefits.

The practice of using third-party contractors to get around the state law has drawn the ire of some lawmakers who believe it is unfair. They are looking at reforming the financially troubled ASRS and other pension systems in Arizona. House and Senate leaders are negotiating a comprehensive reform bill that likely will make it more difficult for retirees to return to work by imposing new financial requirements on districts that hire them.

Currently, when educators retire and return to work, neither they nor their employers continue to contribute to the ASRS trust from which pensions are paid. Those costs are shifted to other ASRS members and their public employers. The result has been a drain on the pension trust, and many taxpayer-funded government agencies will see their contribution rates to the trust increase again July 1 in a bid to keep the trust healthy.

Because he no longer will have to contribute to the ASRS trust, Bejarano also will keep an extra $13,650 a year in salary. Jeff Gadd, assistant superintendent for business services, said the Isaac School District expected to have a net savings of roughly $7,000 from not making an ASRS contribution.

Gadd said the district has a policy that it does not reduce the compensation of employees who retire and return to the district, and it would not be fair to treat the superintendent differently.

"Obviously, his salary and number of years of experience is exceedingly high, so he will have a nice retirement," Gadd said. "The numbers get fairly large, but superintendents across the state have done this. They all wind up in this ballpark."