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Flaws in District 15 10-Year Teacher Contract

Palatine District 15′s new 10-year teacher contract is deeply flawed.

Following below is a detailed critique of the contract I emailed to the District 15 Board on May 29th after the new contract was signed and released on May 26, 2016.

Click for a full-sized image

Some of the issues mentioned in the email:

1. Inequitable teacher salaries

2. Inadequate starting teacher salaries due to inflation

3. Healthcare costs that will grow 7% per year according to District 15 forecasts

4. Misleading information communicated by District 15 about the contract – for example, costs are far higher than claimed

5. Significant differences between the actual contract and the summary that the board approved April 13th

For an explanation of the inequitable teacher salaries problem see my Facebook post Explanation of Inequitable Teacher Salaries.

Inflation over ten years will cause District 15 to offer below-market starting salaries. For an explanation of this flaw see my Facebook post District 15 Teacher Contract Inflation Problem

There have also been numerous newspaper articles and editorials about the new contract. For links see my Facebook page Scott Herr / District 15 Board Member 2011-2015.


Date: Sun, May 29, 2016 at 3:08 PM

From: Scott Herr

To: Peggy Babcock, James Ekeberg, David Seiffert, Gerald Chapman, David Gurion, Zubair Kahn, Jessica Morrison

Subject: District 15 Teacher Contract Approval and Issues

Dear District 15 Board Members:

Although this email is lengthy I sincerely hope you will keep an open mind and take time to thoughtfully consider the issues listed here and your options going forward to fix these problems.

One clarification: I am confused about the documents the board relied on when it took final action on April 13th to “approve the Classroom Teachers’ Council Professional Agreement 2016–2026, as presented.”

In yesterday’s Daily Herald article “Dist. 15 board: We didn’t see the full 10-year contract before approving it” there’s a paragraph that says “‘What we had before us for the April vote was the three-page summary of contract highlights that was shared with you, other reporters, and our full community,’ Babcock wrote in an email.”

What three-page summary is this referring to? The 3-page FAQ, which I understand wasn’t created until April 20th, or the 2-page Thompson memo dated March 9th and 1-page Talking Points included in the April 13th board packet? By the way, I wasn’t able to find the FAQ again on the District 15 website – it’s attached in case you’re looking for it [see April 20th District 15 FAQ; also see the 2-Page CTC Agreement Summary and 1-Page Talking Points referred to in the April 13th Superintendent's Report Memo as published in the board packet for the April 13th Board Meeting].

The article also says “It is unknown what teachers saw before voting to ratify the contract on April 11.” And now today the Daily Herald said in an editorial: “How is anyone to know whether the teachers thought the contract was going to be one thing and the school board members thought it was going to be another and the public thought it was going to be another?”

I had been wondering whether the district was pushing forward to sign the contract without addressing significant flaws because of concerns about an unfair labor practices charge. But from what I’m hearing now it may be possible for both parties to mutually agree to come back to the bargaining table, fix the problems with the agreement and approve/ratify again.

At the bottom of this email are notes based on my first review of the contract. There are several problems that will cause significant issues in the future if not fixed now. Most importantly, there are material differences between the contract and the March 9th memo plus talking points in the April board packet; the changes are deceptively presented; and there are other contract flaws as well.

Also, I want to share as background the dramatic differences in approach in 2016 vs. 2012. The April 20th FAQ says “This is the same process that was used in the past.” This is false and misleading.

In 2012 we had multiple closed session meetings to obtain direction from the board. Three board members were appointed to the negotiating team (Millar, Herr and Bokor) and we reached tentative agreement with the CTC on 5/31. Then the board received a near-final draft contract with changes highlighted including a complete set of final salary schedules on 6/8 prior to our 7-0 vote to approve it on 6/13. Board attorneys were actively involved from the beginning.

By contrast in 2016 the process was as follows (please correct me if I’m wrong):

1. Superintendent Thompson sent email(s) to the board last fall asking if there were any objections to the administration setting up an “exploratory committee to discuss possible contract components” with the CTC. There was no board discussion of negotiation parameters.

2. There was only one closed session board discussion on March 9th where the administration “exploratory committee” (Thompson, Nuss, Adamczyk) presented the March 9th Thompson memo summarizing the agreement:
– Exec session started 6:02 PM
– Mr. Khan entered 6:16 PM
– Mr. Gurion was absent
– No attorneys were present
– Exec session ended 6:41 PM

3. On April 13th the contract (actually the summary) was approved 7-0 with almost no discussion.

Also FYI, attached is a redlined copy of the contract in case you haven’t yet been provided with a document showing differences between the 2012-2016 and 2016-2026 contracts. Although I believe this is largely accurate any differences you have particular interest in should be verified by referring back to the original contracts [see PDFs 2012-2016 contract and 2016-2016 contract].

Feel free to contact me by email or phone if you’d like to discuss any of this.

Best Regards,
Scott Herr

2016-2026 CTC AGREEMENT TALKING POINTS (included in April 13 board packet)

*** “A ten-year agreement offers stability on many fronts, including the ability to project actual costs in creating budgets well into the future.”

The agreement clearly fails on this point. About the only thing that is stable about costs are the salaries for particular steps and lanes. Just a few examples that will continue to make cost projections subject to changes, assumptions and calculation errors:

- Inflation isn’t addressed in the contract. If the board wants to hire quality teachers, the starting salaries will need to be competitive. District 15 starting salaries will go from $39,944 now to only $42,401 in 2025-26, which is an annual average increase of only 0.6%. Inflation is almost certain to be higher than this. On May 11 Superintendent Thompson wrote “If we find it difficult to attract quality teachers in the future, we can place them higher on the schedule.” This will add significant costs for new teachers, and almost certainly for current teachers as well when new teachers are paid above-scale salaries.

- The Tier 2 to Tier 1 Teacher Salary Inequity issue is a known problem and will likely require significant additional costs to resolve. Superintendent Thompson stated “Both sides are aware of the issues related to transitioning from Tier 2 to Tier 1.” However, no information was provided about what the district will do to solve this problem and the associated costs. See attached chart that illustrates this problem.

- Many assumptions subject to change are used in a forecast including turnover, lane increases, retirements, number of teachers needed, etc.

- The health insurance benefit plan was unchanged from 2015-16. These costs continue to outpace inflation. See below for more information about this.

*** “The costs associated with the contract will be an average of less than 1% a year over the course of the 10 years.”

This is clearly misleading and deceptive.

The contract determines, among other things, salaries for CTC employees plus healthcare benefits for nearly all full-time District 15 employees.

The additional costs mentioned above are not included. Also, District 15 has rejected all requests from the public (and from board members as well?) for any supporting details about this claim making it impossible to understand the assumptions and independently verify the accuracy of the analysis.

Here is just one specific example that proves the district’s claim is false. The major controllable factor in healthcare costs is the insurance benefits definition as shown in Article XIX Benefit Plans and Appendix F of the contract (“PPO Benefits Summary” and “HMO Benefits Summary”). There are no changes to these benefits from the previous contract over the 10-year term of the new contract. In 2012, some changes were phased in; however, we knew then that healthcare costs would continue to be a problem and that additional changes would be needed in the next contract. But in 2016, not only were there no changes, now these plan definitions are locked in for the next ten years.

All collective bargaining agreements (DTU, ESPA, SEIU and TIE) and other contracts refer back to the CTC contract in defining the health benefit plan. For example, the ESPA agreement states: “Benefits for Employees will be the same as those negotiated by CTC, including any increases in premiums, deductibles or co-payments that are the result of negotiations with the CTC.”

District 15′s last forecast dated November, 2015, projects healthcare costs will go up 7% annually from $17.9 million in 2015-16 to $23.5 million in 2019-20 (see the Health expenditure line in the forecast for Education, Operations & Maintenance, and Transportation funds). Continuing these increases forward results in a 2025-26 health expenditure of $35.2 million, nearly double current health expenditures.

The roughly $6 million increase in annual CTC salaries forecast by the administration pales in comparison to this $17.3 million increase in annual health expenditures. This was deceptively omitted from the district’s “less than 1% a year” cost increase claim.

*** “Teachers will receive reasonable increases that will help the District attract and retain quality teachers.”

As mentioned above the $42,401 salary District 15 will be offering in 2025-26 will make it impossible to attract well-qualified new teachers for nearly all inflation scenarios as mentioned above.

The top end of the salary scale for teachers in 2025-26 will be $121,265 compared to the top Tier 2 salary of $94,613. This is an increase of 28% and clearly is not a “reasonable increase” – on the contrary, it is an unnecessarily large increase to retain quality teachers. It would be interesting to know the percentage of teachers on the Tier 2 salary schedule who leave the district primarily because of salary, and to which districts they are going.

*** “The Tier 2 schedule remains intact to continue the savings achieved in the previous agreement, while allowing for teachers to move to the Tier 1 schedule after six years of service.”

The Tier 2 schedule obviously doesn’t remain intact and no longer applies after six years of service. Also, depending on how the Tier 2 to Tier 1 Teacher Salary Inequity problem is solved, it’s possible there will be almost no remaining Tier 2 savings. The transition to Tier 1 also significantly increases top-of-scale salaries, and the new Longevity salaries increase top salaries even further as noted below.

*** “There are other cost saving measures included in the contract, which will further reduce the annual cost of the contract (i.e. PA allocation efficiencies, increased workload for art, music and PE teachers to match their regular education peers’ workload, increases in the number of steps to obtain the highest salary on the schedule)”

What is the estimate (or at least magnitude) of each of these savings and are they significant in comparison with total salaries and benefits negotiated in the CTC contract?

*** “RIOP – While the end-of-career increases are challenging for the general public to live with, the benefit has been changed to a retirement incentive, which will encourage the highest paid teachers to retire from the organization and allow the District to replace these teachers (at the earliest possible date) with teachers making less than half the salary as the exiting teachers.”

This appears to imply there will be savings to taxpayers; however, total costs actually go up as local and state taxpayers become responsible both for the retiree’s TRS pension, which is about 87% of the top end of the salary schedule (after factoring in four 6% salary increases), plus the full salary and benefits for the new teacher.


*** “Ten-year contract (2016-2026): The length of this contract provides stability on many fronts; foremost is the strong financial position that it would provide for the District.”

As noted above there are significant costs that a 10-year contract does not stabilize. On the contrary, locking in the salary schedule (which could turn out to be minimum salaries depending on what District 15 does in response to inflation above 0.6% and the salary inequity problem) makes it more difficult to respond to the as-yet-unknown solution to Illinois’ budget crisis and the potentially large state funding reduction for District 15 if some variation on the new school funding formula is passed.

*** “It also avoids protracted negotiations and legal costs multiple times in the next ten years if the contracts were shorter in length. I believe the length of the contract allowed for significant concessions by the CTC that would not have been available for a shorter contract.”

It reduces but doesn’t completely avoid protracted negotiations and legal costs. There will be changes during the 10-year term that will necessitate renegotiations of at least some sections of the agreement. Also, this is penny wise and pound foolish: spending some time and money for periodic negotiations is small in comparison to the tens of millions of dollars of cost increases due to the Tier 2 phase-out and other additional costs that are in this agreement.

Also, what are each of the “significant concessions by the CTC” and what are the estimates (or at least magnitudes) for each?

*** “Reasonable increases for individual teachers, desirable cost to the District: Individual teachers will receive reasonable raises, while the increase in cost to the District over the 10 years is .9% per year (without factoring in additional savings most likely to be realized).”

This false claim was refuted above.

*** “Resolving the problem of Tier 2 salary schedule: Our Tier 2 salary schedule is creating a growing problem for the District and the Union. (Although this item was raised by the CTC, the administration wanted to address it as well.) Tier 2 employees view their salary schedule as inferior to the Tier 1 counterparts, creating an unhealthy culture in the District. We are finding it increasingly difficult to attract high-quality candidates in our most challenging-to-fill positions. And we are losing experienced teachers in those positions to other districts that pay higher salaries. And eventually, when the majority of teachers are on the Tier 2 salary schedule, there is bound to be tough negotiations and a correction.”

Superintendent Thompson hasn’t yet responded to my May 11 follow-up comment and question about this: “There are at least three other nearby elementary districts that have 2-tier salary schedules. Did you reach out to them to see how they are addressing 2-tier concerns? I believe a solution could have been found without creating significant new problems.” FYI the incremental cost of the Tier 2 to Tier 1 transition is at least in the tens of millions of dollars.

Also, if District 15 is “finding it increasingly difficult to attract high-quality candidates in our most challenging-to-fill positions,” why is the $39,944 starting salary next year the same as this year? What are the “most challenging-to-fill positions” and was a premium considered for those types of positions?

*** “We attempted to resolve these issues by creating a path from Tier 2 to Tier 1. After six years of service, teachers would be moved to Tier 1 at the salary just higher than their Tier 2 salary. The year of transition creates usually modest raises, some as low as .5%. And the Tier 1 schedule has salaries decreasing in cells for the first four years and Tier 2 for three years. Consequently, when teachers move from Tier 2 at step 6, they are likely to move to a lower step on Tier 1. This makes the path to higher salaries require more years of service, saving the District money.”

District 15 needs to share its analysis. It is far from obvious that making “the path to higher salaries require more years of service” can offset increasing the top end of the scale from $94,613 to $121,265.

*** “Savings through new program assistant (PA) allocation: A long-standing allocation formula has required the District to provide PA hours to every school. The last negotiation allowed the administration to reduce the general education PA hours up to 25% of the formula allocation. This new formula increases the savings to the District, estimated to save more than $500,000 annually.”

Savings calculations?

*** “Tuition Reimbursement Guidelines: The committee is proposing an increase in the number of on-line graduate credit hours that may be applied for lane advancement. Previously, on-line coursework was limited to 15 semester hours. The committee recognized that on-line courses have developed into quality alternatives to brick-and-mortar classroom experiences. The administration does not feel this increase will be in any way detrimental when compared to the current structure.”

Is it generally accepted that online courses are equivalent to classroom courses in improving educational results thus justifying the costs of lane changes? The difference in Step 10 for Tier 2 next year is 16% for going from a BA to MA+30 ($8,200 higher salary) and for Tier 1 the difference is 35% ($19,477 higher salary).

*** “Teacher Work Day: The CTC desired to have teachers working together on their instructional practices more frequently than is currently occurring. The group proposed using two Friday Early Release times for the purpose of teamwork. The administration felt that there are enough controls and benefits from this change to agree to the change. In reality, it gives teachers an extra 10 sessions a year to meet together to collectively improve their craft.”

Further explanation of this would be helpful.

*** “Elementary Specials Teachers (art, music and PE) have progressively increased workloads to match their general education colleagues: This will increase the number of students these teachers service and reduce the number of specials teachers the District will need to employ (saving money).”

Estimated savings (or magnitude)?

*** “Leaves: Employees are granted 12 sick days per year, with no limit to the number accumulated. After the accumulation of 89 sick days, the annual allotment increases to 15. The CTC requested that the District grant 24 days annually to those who have accumulated 170 days. (Teachers work 183 days annually.) The administration believes this is an incentive for teachers to not use their sick days unless absolutely necessary, decreasing the costs for substitute teachers. Also, the effectiveness of substitute teachers is minimal. The best instruction occurs when the permanent teacher is in the classroom. The administration also calculated the risk of employees using these days (which is a cost to the district), and it felt that the benefits outweighed the risks.”

It is far from obvious how increasing the number of sick days available would reduce the number used. On the contrary, it seems this would make it easier to reach the TRS maximum allowable use of 340 sick days toward service credit thus increasing the likelihood that there will be extra sick days available to be used.

There is also the obvious question about the wisdom of “an incentive for teachers to not use their sick days unless absolutely necessary” thus increasing the risk of more sick students.

*** “Retirement Incentives: In our efforts to decrease the overall cost of the contract, the administration proposed the retirement incentive (RIOP) had to be accessed at the earliest opportunity – four years prior to the year the teacher was eligible for retirement. Encouraging teachers to retire at the earliest occasion positions the District to eliminate the highest paid teachers and replace them with teachers at the lowest paid positions on the salary schedule. It also reverts the offer to an incentive instead of a benefit. We will propose to the CTC to add language to eliminate the risk of paying a penalty if legislation prohibits these kinds of increases.”

As mentioned above, this doesn’t take into account that total taxpayer obligations are higher to pay both a retiree and a replacement teacher. Also, what does the analysis show about the savings? Is this significantly different than the previous program? More specifically, how long have past retirees typically worked beyond their eligibility for full retirement benefits?

*** “Increase in number of steps to the end of the schedule: We proposed (and the CTC accepted) to increase the number of steps at the top of the schedule. Consequently, it takes one additional year to attain the highest salary. This was accomplished by removing step 20 on the regular schedule and creating two longevity steps.”

This is a significant increase in salary costs. The ratios of the top-of-scale salary to starting salary is far higher under the new contract:

- 2015-16 Tier 2: $91,111 top, $39,944 starting (2.28 ratio)

- 2015-16 Tier 1: $108,701 top, $39,944 starting (2.72 ratio)

- 2019-20 Tier 1 with longevity: $114,237 top, $39,944 starting (2.86 ratio)

*** “Conclusion. Contracts between two parties are never perfect. In fact, most of the time both sides feel a bit dissatisfied given the compromises that move from their ideal to somewhere in the middle. This contract is not perfect, but given all the financial aspects and the organizational aspects, the administration feels it is worth serious consideration. In our efforts to move forward in the next ten years, this contract could position our organization to make some significant strides.”

As noted in the preceding comments, this contract unfortunately is deeply flawed and clearly is not a reasonable compromise.

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