Three-year deal calls for status quo, then 3% raises, givebacks on health care in next two years
By Mike McGann, Editor, UnionvilleTimes.com
EAST MARLBOROUGH — It’s all over, even the shouting, although there was a bit of that at the end.
The Unionville-Chadds Ford Board of Education and its teachers union formally ratified a new three-year contract through the 2012-13 school year, Monday night, ending some 16 months of difficult, often contentious negotiations.
The deal calls for a salary freeze during the first year of the deal, which covers the 2010-11 school year — essentially codifying the status quo that existed during negotiations after the previous contract expired June 30, 2010. The final two years of the deal call for modest raises and continuation of traditional seniority and education increases coupled with givebacks on health insurance by the teachers.
“I think doubt you’ll find anyone jumping up and down about this deal,” said board Vice President Frank Murphy, the board’s lead negotiator, moments before the board voted 6-2, to accept the deal. “This is a compromise.”
His counterpart across the table, Pat Clark, president of the Unionville-Chadds Ford Education Association, the teachers’ union, agreed.
“There were sacrifices on both sides,” said Clark, whose union approved the deal by a large margin in a pair of votes Monday. “That’s what a negotiation is.”
The gross compensation number for the three years of the contract is $103.6 million, $500,000 higher than the proposed deal offered by fact-finder Mariann E. Schick, which the board accepted in Janaury, but the teachers rejected. It calls for a 1% salary increase, along with seniority and education increases. The second year calls for a .4% increase, again with seniority and education increases, plus a $700 bonus that doesn’t count toward pension compensation. The net is about a 3% yearly increase in the second and third years — or a net 2% increase over the entire term of the deal.
The teachers agreed to change from a Personal Choice plan to a Keystone health care plan (although teachers can opt to buy in to the same plan they had in 2010-11, or a somewhat less expensive plan that sits between the previous plan and the Keystone plan). The teachers will contribute 7.5% to premiums in the first year and 10% in the second year. There were some increases in out-of-pocket costs on prescriptions, but some dental benefits were increased. The district is expected to save both from reduced costs of premiums as well as larger employee contributions.
Although board members admit they weren’t thrilled with the final numbers, most said they felt that the deal would be fiscally sustainable and allow the district to keep tax increase to or below the Act 1 state tax increase limits.
“If things stay the way they are,” board finance chair Keith Knauss said, “it (any tax increase caused by the new contract) will be within the Act I index.”
But board support wasn’t unanimous. Board member Eileen Bushelow objected to the health care plans — suggesting that as they were out of synch with deals given to other district employees, and she said she couldn’t support the deal.
Paul Price was much more vehement, however, saying the deal was financially irresponsible and that the district would be better off maintaining the status quo. He read a lengthy statement during the meeting, explaining his objections, noting that the deal would lead to large district fiscal deficits in the coming years.
“This is a terrible agreement, it’s not sustainable,” he said.
Price’s colleagues were quick to dispute his numbers.
“It’s interesting how Dr. Price and I can look at the same information and come up with different conclusions,” Knauss said, suggesting that Price was resorting to “scary rhetoric” in his opposition of the deal. Knauss cited reductions in head count, and improvements in efficiency as rendering some of the projections unfairly pessimistic.
Board member Jeff Hellrung noted that the first year of the deal is already paid for and because some of the board’s fiscal assumptions turned out to be conservative, the district finished the 2010-11 school year with a surplus, making it somewhat easier to absorb cost increases. He also noted that the deal represents a .9% increase in the budget over keeping the status quo.
“Is it worth .9% for labor peace?” he asked. “That’s an easy decision. Yes.”
Dr. Price: I have a question about your statement: “UCFSD Business manager Bob Cochran’s numbers indicate almost a $6,000,000 operating deficit in the first four years immediately following the conclusion of the contract.”
If I read this correctly, what you are saying is that in the four years following the 2014-2015 school year will operate at a deficit of $1.25 million per year, as projected. I understand Mr. Knauss’s position that these projections were conservative, but let’s assume that they are completely accurate. Does the model assume no tax increase, an “Act 1 only” tax increase or an “Act 1 with exceptions” tax increase and if so, how does it project Act 1 numbers and exception numbers 3, 4 and 5 years out?
Act 1 Index only.
.
2012-13 1.4% (we know now it is 1.7%)
2013-14 1.4%
2014-15 1.6%
2015-16 1.75%
2016-17 2.0%
Thank you for that information, Mr. Knauss. Those projections do appear to be very conservative.
I am happy that this is resolved. Paul Price needs to let this go. It is better that way.
The difference in total dollars over the three-year contract period is almost $1.9 milllion more than the Status Quo which we operated under (quite successfully) in school year 2010-2011.
That was the true benchmark – not a difference of $500,000.
UCFSD Business manager Bob Cochran’s numbers indicate almost a $6,000,000 operating deficit in the first four years immediately following the conclusion of the contract.
These are not MY numbers. They come directly from our own -very high paid employee- using a software program the District paid $5,000 for not too long ago. That other Board members dismissed the projected deficits as ‘no problem’ or ‘not accurate’ says that they don’t trust the work of the person who handles our business affairs to be correct.
At the end of the 2016-17 school year we will be have virtually a ZERO savings fund for contingencies which is contrary to a recently revised Board policy statement to keep about 5% in reserve at all times. This policy statement is ironically treated as a ‘mission accomplished’ in Ken Batchelor’s evaluation of the District’s goals from last year – even as we now plan to obliterate the fund in the near future.
Salary and benefits creep ever higher as a percentage of the total expenditures and show no signs of being linked to our revenue stream. This is a truly unsustainable path that commits UCFSD to huge property tax increases, large numbers of layoffs, and / or the previously disavowed restructuring of the elementary schools.
Taxpayers should watch their wallets as this new contract is a prelude to more taxpayer pain simply to give raises to those who already earn much more in total compensation than a huge portion of the populace that pays them.
It’s interesting how Dr. Price and I can look at the same information and come to two completely different conclusions.
Dr. Price is correct in stating that the 5 year projection results in an almost zero fund balance and a $2M per year operating deficit. The projection tells us that the conservative assumptions used in the model won’t work and there is a problem. We both agree on that.
But here’s where Dr. Price and I differ. Dr. Price would solve the problem by rejecting this tentative agreement and put us on the path to continued labor strife – work to rule, a strike, TV cameras, the negative effect on our children’s education, and loss of UCFSD’s reputation resulting in lower property values.
Alternatively, I would accept the current agreement, enjoy labor harmony and solve the projected deficit in exactly the same way we managed through the last two years. Not by raising taxes above the Act 1 Index, but by carefully managing our finances. Let’s remember the 5 year projection, by design, used conservative assumptions. We wanted to model something close to a worst case situation. So let’s change some of the assumptions. Any combination of efficiency gains (similar to what we did with the transportation study and the B&G study), employee head count reduction (we employ 3% fewer teachers today than we did 20 months ago), or modest terms for the next contract starting in 2013 (a one-year wage freeze with health care concessions similar to what is found in our current contract) would balance the budget for the next 5 years. In other words, we can approve this tentative agreement, enjoy labor harmony, have everyone focus on education and balance the future budget by just by continuing the practices of the last two years.