There has been some debate in the press, district, and in town regarding the recent contract settlement between the Ridgefield Board of Education (BOE) and the Teachers Union representing the teachers in the district.
Some of this debate has been related to post-employment medical benefits, salary, medical benefits for teachers, as well as the length of day that teachers work. In all cases however one of the most important items to note is that we negotiate these items as a “contract” package vs. individual line items.
Contracts must be looked at in their entirety. To look at only one portion would not be fair as it is a package that is negotiated, not one individual item.
This year’s focus was on four main items: (1) post- employment benefit plans; (2) salary; (3) benefit plans (POS vs. HSA); (4) work rules or other work related contract language changes.
It is important to note that the process in Connecticut includes regular contract sessions that must conclude within a finite time from when they start, and then proceed through a mediation process. If at the end of the mediation process the two parties cannot agree, the parties submit to an arbitration process.
If the negotiations process moves to arbitration, the arbitrator goes down the list of requests one by one and makes a decision on each item. The arbitrator does not compromise or reach a middle ground. He or she simply says yes or no to each sides request and then moves on to the next.
It is because of this process that it’s to the advantage of both parties to settle prior to reaching this step.
During this year’s contract negotiations we reached agreement with the teachers union on the following main items:
Post-employment benefits plans: In Ridgefield a policy existed that allowed someone to retire (with 35 years of service or greater with the district) without having to pay for any of the cost of those benefits. With the dramatic increase we have seen over time since this policy was put in place (1975), it was no longer affordable to the district to maintain this benefit. As a result, we worked with the Teachers Union to begin the phase out of this benefit.
In addition we will also introduce new plans, with a similar level of benefit, for both current and future retirees (after July 1, 2013) who will now have to share in their cost. These plans will offer a similar level of benefit at a dramatically reduced cost than in past years. The projected cost of these post-employment benefits were estimated prior to these changes to be approximately $72M over time, which will be substantially reduced, as well as a substantial reduction in current period costs. The amount of the reduction will be determined at the next actuarial valuation report due next summer.
Salary: We negotiate the salary component as one overall increase, versus separate components for Step and a Gross Wage Increase [GWI]. A number of factors are analyzed, one being how other districts are paying their teachers across both our DRG and the state, another being ability to pay. In Ridgefield case, we agreed to overall increases of 2.9%, 2.84% and 2.97% for a three year increase of 8.71% that if there were no changes in personnel, the cost would be $3.1M. We expect teacher turnover to reduce the dollar value of the contract cost.
BOE paid benefits: The cost of providing medical benefits has been increasing at a dramatic rate. This is well known. In Ridgefield four years ago we started down a path to introduce cost saving high deductible medical plans (an HSA) as well as other changes in life insurance, dental and vision care to teachers. This enabled us to start lowering costs, while providing a similar level of benefits to the POS plans that were in place.
We had hoped that more teachers would have moved to the HSA during those years. This year we were able to work with the teachers union to move all the teachers to an HSA as our primary plan as well as introduce a prescription co-pay medicine plan. Teachers can stay in the POS plan they had, but have to pay the difference from the cost of the HSA, which is substantial.
The design point of the HSA is such that it is less costly and many towns and school districts in Connecticut have followed our early lead. The move to the HSA will save the district $2.7M over the life of the new contract versus the previous contract.
Rules and language changes: This year, there were many language items to consider and the administration felt that there was a need for additional time to be added to the schedule for professional development, one of the most important parts in keeping abreast of new ideas which will then help in the education of Ridgefield students. This time addition to the schedule allows the district the ability to reach all of them at once and to help facilitate this process. The cost to make this change is assumed to be included in the overall salary rate for the new contact.
The overall process is time consuming. We started this year in July and concluded in late October. The team doing this work has a lot of experience and has made sure that they have the best legal and benefit consultants to aid in the process. The contract elements must be looked at in their entirety. To look at only one element is not how complete packages are negotiated. To call out one item saying it is too high, does not consider any offsets that exist in other items.
We again have a fair package that benefits the town, the district and the teachers.
This article was written by John Palermo with input from Irene Burgess and on the behalf of the Board of Education Negotiation Committee (Richard Steinhart, chair; Mr. Palermo, Irene Burgess and Austin Drukker).