District 65 School Board members and administrators walk to their Nov. 14 meeting amid teachers rallying for a “fair contract” after nine months of negotiations.

The timeline for a possible strike is ticking down. On Oct. 26, the District Educators Council (DEC, the teachers union) activated the timeline for a strike at School District 65. The parties then filed their most recent offers with the Illinois Education Labor Relations Board, and the offers were posted on the IELRB’s website on Nov. 14.

DEC is required to wait 14 days after the offers were posted before it can strike. In addition, it must provide a written 10-day notice of intent to strike.

District 65 and DEC are scheduled to meet again with a federal mediator on Nov. 17, 18, 28, and 30, and Paul Goren, Superintendent of District 65, told the RoundTable that the District’s bargaining team has reserved Nov. 19 and 20. He added, “We are committed to being at the table as long as it takes.”

DEC President Paula Zelinski said that although District 65 and DEC have had six bargaining sessions with the federal mediator, “the teachers have not seen movement that is sufficient to our needs and to the needs of our students.”

When asked if DEC will strike, Ms. Zelinski said, “We’re doing everything we can to avoid it.” She said, though, DEC plans to issue a 10-day notice so they will be prepared to go on strike on Nov. 29, but added, “Just because you issue the 10-day notice doesn’t mean you have to strike.

“The next two bargaining sessions are extremely important,” she said.

Shortly before the District 65 School Board meeting on Nov. 14, more than 200 teachers gathered in the lobby to demonstrate, saying they want a fair contract.

Background

The District’s collective bargaining agreement with DEC expired on Aug. 23, and teachers are teaching without a contract in place. Dr. Goren said, though, teachers are being compensated based on the prior four-year agreement and their benefits remain in place.

The parties started negotiating in February and held 15 negotiating sessions through August. They agreed in September to use a federal mediator and have met six times with the federal mediator.

Mounting Deficits

The negotiations are taking place in the context of projected deficits and uncertainty about what the State legislature may throw at school districts.

The District projects it will operate at a surplus of $73,167 for this fiscal year ending June 30, 2017 (FY’16), and then at deficits of $4.6 million in FY’18, $7.1 million in FY’19, $6.7 million in FY’20, and $10.7 million in FY’21.

The main driver of these projected deficits is that salaries and benefits, which account for 84% of the District’s operating expenses, are projected to increase at a faster pace than property tax revenues, which account for about 76% of the District’s operating revenues.

Property taxes are subject to tax caps, which limit the amount by which the District may increase property taxes to the lower of the Consumer Price Index (CPI) or 5%.

In the last eight years, the average CPI has been 1.5%. The CPI governing FY’17 is 0.8%. In its projections, the District assumes that the CPI in future years will be 1.5%.

In its projections, the District assumes that salaries will increase at rates consistent with the rates of salary growth under the prior contract with DEC. The District projects that salaries will increase, on average, about 3.5% each year over the next four years. 

In other words, if salaries continue to grow at the rate they have in the past, they will grow at a faster rate than the District’s revenues.

Under the prior DEC contract, the average salary increase was 14% if a teacher had no track movement, and 21% for a teacher who had a track movement, said District 65. Forty-five percent of teachers moved up a track.

“That level of salary growth is unsustainable,” said Candance Chow, President of the School Board.

 “Our projected deficits reflect the unsustainable nature of our previous agreements, and our goal is to more closely tie our future expense to our projected revenues,” said Dr. Goren.

On another front, the State legislature has been considering ways to revamp the way the State funds education, including shifting pension costs from the State to school districts and freezing property taxes. The impact of these measures on District 65 could be devastating. See story, page 24.

District 65’s Offer as of Nov. 2

District 65’s offer on the table as of Nov. 2 says the School Board and administrators “acknowledge the dedication and excellent work of teachers,” but adds the District is limited by “financial reality.”

 Dr. Goren told the RoundTable the District has three significant goals in the negotiations. First, the District wants “to provide teachers fair and competitive compensation.” Second, “We also want to address a wide range of working conditions so that we can continue the excellent work that goes on in our schools, to continue the commitment we have to improving the performance of all kids, to continue to address the opportunity gaps that we have in the District, and to really continue the quality of education life for kids, families, and teachers and staff.” The third, which he said is as important as the other two “is to do this within very real financial constraints.”

Ms. Chow told the RoundTable, “I want to emphasize that as a Board we really share DEC leadership’s concern for preserving working conditions for educators and our staff across the Board.” She referred to a statement made by Ms. Zelinski, “Teacher working conditions are student learning conditions,” and added, “That’s precisely why our overarching goal is to preserve jobs and minimize layoffs across the District by addressing our pending deficits.

“We believe that preserving jobs is the most critical aspect of preserving working conditions for our teachers, our staff, and the best way of serving our students and families. The outlook the Board has taken in these negotiations is that working conditions and fiscal constraints work hand in hand.”

Ms. Chow referred to the $10 million in reductions taken to balance the budgets since FY’11 (See story, page 24), and said “At this point our options are severely limited in terms of how we can cut without impacting the classroom. That is just the fact. Our educators comprise 75% of our total personnel cost. While we will have to make reductions across the board, it would be impossible for me to say that we can address our deficits without some impact on teachers, and we’re trying to mitigate that as much as possible through a competitive package that rewards teachers fairly, yet slows the growth of salaries to be in line with our revenues. That in a nutshell is the Board’s position on how we have to go forward to insure financial stability and to preserve jobs.

“We really need to begin to align our revenues and our expense growth. We can’t kick the can any longer because there won’t be a can to kick if we go much further with this,” said Ms. Chow.

If the $4.6 million deficit projected for FY’18 is not addressed by bringing in substantial new revenues or by bringing salaries in line with revenues, the District says it “would require reductions and layoffs of teachers and other District staff unprecedented in the last decade. … This outlook could be significantly worse, based on pending legislation to change state funding formulas.”

“We believe that preserving jobs is the most critical aspect of preserving working conditions for our teachers, our staff, and the best way of serving our students and families.”

Contract Duration:  District 65 has proposed that the new contract with DEC last for four years (2016-17 through 2019-20) to allow for longer-term financial planning to address significant projected deficits and uncertainty over State funding.

Dr. Goren told the RoundTable, “We see paying attention to this over time as being really essential to financial sustainability. … He added that with a one-year contract, the parties would be back at the negotiating table in March with a $4.6 million deficit facing them. He said he would need to have a set of reduction-in-force notices ready to address the deficit. “We would rather address this in a collaborative way so that we can sustain jobs.”

Ms. Chow said a multi-year contract is essential to improve the District’s long-term financial state, but it was also important to provide teachers and staff more certainty.

DEC’s offer as of Nov. 2 was for a one-year contract, but  Ms. Zelinski told the RoundTable that DEC changed its position. At the Nov. 14 Board meeting, it became public that DEC is seeking a two-year contract. In the context of a one-year deal, Ms. Zelinski said, “We’re looking at enormous uncertainty. We don’t want to lock our teachers into a long-term deal with little or no compensation.”

Compensation: Last year, the starting salary for a teacher with a bachelor’s degree was $47,161, and the highest salary was $106,583. The average salary was $78,906.

An individual teacher’s salary may increase in three ways: a cost-of-living increase; a “step” increase, based on years of experience or service; and a “track” movement, based on a combination of criteria including continuing education, participation on school or District committees, and/or leadership projects during the contract term.

The salary increase offered by District 65 is as follows:

• In years one and two of the contract, teachers would be given bonuses equal to 1.25% of salary, but no cost-of-living increase or step increase.

• In years three and four, teachers would be given both 1) a cost-of-living increase tied to the CPI, but it would be a minimum of 1% and a maximum of 2.5% annually. If the CPI goes up from its historical lows, teachers would thus benefit; and 2) a “step increase” ranging from 0.9% of salary to 4.8%, depending on years of service. The average step increase would be 2%.

 • Teachers would also be eligible for “track” movement at any time during the contract. Track movement increases would range from 5% to 15%, depending on the step and track of a teacher. The average track movement results in a 7% increase in salary. During the last four-year contract, 45% of the teachers earned a track increase.

Under this offer, District 65 says a teacher earning the average salary would receive a minimum cumulative salary increase of 7.5% over the four years of the contract if they did not move a track, and if they earned a track movement, the average salary increase would be 15.4%.

The District says these increases assume a 1% cost-of-living increase. If the CPI was 2.5% or higher in the third and fourth years of the contract, teachers would benefit from the higher CPI. The RoundTable estimates that teachers earning the average salary would receive a cumulative salary increase of 10.5% over the four years of the contract if they did not receive a track increase, and 18.4% if they earned a track increase.

In addition to these increases, teachers would also receive bonuses of about 2.5% of their salary.

Healthcare Contribution: The District says it will accept DEC’s proposal to decrease employee contributions by 1% for HMO health insurance coverage during the first year; and for the remaining three years the District has proposed that the Board and DEC share any additional health care insurance increases equally on a 50/50 basis.

Currently, the District pays for 87% of the cost of an employee’s coverage under an HMO plan, and 65% under a PPO. The District pays an average of $7,700 per employee for health care insurance, which is not included in salary.

Compared with Peers: Dr. Goren said the proposed compensation package is competitive. In FY’16, the average teacher’s salary in District 65 was $78,906, or 24% higher than the Statewide average of $63,450. He added that the average salary in peer districts with similar student demographics and budgets is $76,165; and the starting salaries in District 65 are in the top 10% statewide.

DEC’s Offer as of Nov. 2

“Teachers have seen an increase in workload and expectations in the last four years,” Ms. Zelinski told the RoundTable. “In order to meet the needs of a diverse student population, teachers need to continuously collaborate and plan in order to implement innovative, quality, and rigorous instruction.

 “Teachers tell us that they are overscheduled, over-managed, that they are not getting the time they need during the school day to accomplish the many, many tasks that they are asked to perform. One of the biggest priorities is getting the planning time they need.

 “I think the teachers are willing to work with the District on the finances,” Ms. Zelinski continued. “However, we need the working conditions to be addressed and the issues with the meetings, the issues of planning time, the issues of who’s leading the meetings. Those things don’t cost anything. From our position, if you can’t offer good salary increases, then you’ve got to offer some of those non-financial things.”

Compensation: DEC’s compensation offer as of Nov. 2 is based on a one-year deal. DEC proposes that the District increase the base salary (i.e., cost of living) by 1%, that it provide all eligible teachers a “step” increase, and provide all eligible teachers “track” movement.

Ms. Zelinski told the that DEC estimates that the average step increase would be 1.7%, so teachers would see a 2.7% increase if they did not have a track movement.

District 65 says under DEC’s proposal, a teacher earning an average salary would receive a 4.0% raise if they did not earn a track movement; if they qualified for a track movement their salary would increase by 11.3% in FY’17.

Ms. Zelinski told the RoundTable, “Our thinking is we have to remain competitive. We have to be a destination school district. We want teachers to move here and stay here and work here throughout their entire career. We don’t want them to start out here and then leave to go elsewhere.”

DEC also proposes a change in the criteria used to determine whether a teacher qualifies for a track movement, which it says reflects current practice and agreements with the District’s Joint Evaluation Committee. The criteria currently require that a teacher receive a rating of “excellent” in two or three school years as one requirement to qualify for a track movement. DEC proposes that the requirement be changed from requiring a rating of “excellent” to requiring a rating of “proficient” or higher. In some prior school years, 97% of all teachers were rated proficient.

DEC also proposes that stipends be increased for athletic coaches, department leaders, and other positions. It asks that teachers who monitor students when the students’ ride home is more than 15 minutes late be paid.

Working Conditions: DEC’s offer contains many proposals dealing with working conditions.

One proposal is to provide K-5 teachers with five, rather than four, days of continuous planning time of 40 minutes. Ms. Zelewski says this time is essential for teachers to jointly review student data, plan differentiated instruction, engage in joint planning, and engage in other activities. DEC estimates that the cost to do this would amount to 1.1% of the overall cost of teacher salaries, or about $597,990 per year.  

District 65 says it has offered to add this additional planning time for K-5 classroom teachers in the third year of the contract. The District says it would need to add eight teachers to implement the change, at a cost of about $640,000 per year. The District adds that this change will “likely result in additional staff layoffs throughout the District, including DEC members.”

The District has also offered to increase the planning time of non-classroom special education teachers who provide direct services to students with IEPs in an effort to better serve these children. 

DEC has also requested that team meetings be planned and led by the teachers, not by administrators or supervisors; that four early-release days per year be set aside for professional planning; that faculty meetings be scheduled no more than twice a month, that they start no later than 15 minutes after the school day, and that the meetings be scheduled at the beginning of the year.

DEC’s offer proposes numerous other changes to the prior contract, including that the teacher workday end 15 minutes after the end of the student day; that teachers who are unable to participate in school events that occur beyond the regular work day, other than Curriculum Night, not be disciplined or downgraded in their evaluations; that the recommendations of the District 65 Joint Reduction in Force Committee be adopted; that certain practices be adopted in connection with the evaluation of teachers.

District 65’s offer responds to these proposals, and at times offers counterproposals.

Impact of D65’s Offer on the Projected Deficits

District 65 provided estimates to the RoundTable that show that if its offer were accepted, the District could balance the budgets for FY’17 and FY’18, and reduce the projected deficits in FY’19 and FY’20 to about $1.8 and $1.9 million respectively. The table below shows how its offer would affect the projected deficits ($ in ‘000s).

DEC estimates that its offer will increase DEC salaries and benefits by about 4.4% in FY’17.

District 65 estimates that DEC’s offer would produce a deficit of about $656,179 this year, FY’17, rather than the budgeted surplus of $73,167.

Contingency Planning for a Strike

Dr. Goren told the RoundTable that the District has begun “some contingency planning” in the event there is a strike, but nothing has been “solidified.” He said he is deeply concerned about the safety of children, but if teachers are on strike, the District’s ability to provide space for children is going to be “rather small.”

He said staff are considering setting up food hubs where children who depend on breakfast or lunch at District 65 schools could pick up a sack breakfast or lunch. They are having discussions with Northwestern University, the McGaw YMCA, Y.O.U., Family Focus, the Evanston Public Library, and the City’s Parks and Recreation Department to help out.

DEC’s Claims About the Process

Paula Zelinski, President of the District Educators Council (DEC, the teachers union), said when talks began in February, neither Paul Goren, Superintendent, nor any member of the School Board were on the District’s bargaining team. “Our teachers saw their failure to actively engage and operate in a collaborative manner to be lacking in respect for the teachers’ working conditions and the students’ learning conditions,” says DEC in its offer filed with IELRB.

“It is common practice for the Board and Superintendent to appoint and work alongside bargaining team members in negotiations,” said Candance Chow, President of the School Board. Dr. Goren joined the negotiation table in June, as the conversation shifted to economic issues, and Ms. Chow joined the negotiations table in September. 

Ms. Chow added that Dr. Goren and School Board members have been actively involved since the start of the bargaining process.

 

Administrators’ Salary Raises/Freezes

DEC has presented information showing that three District 65 administrators were given raises of 20%, 21%, and 25% in FY’15, which increased their salaries to $207,869, $169,017, and $185,397. These raises were approved by the Board before Paul Goren was retained as Superintendent, said Candance Chow, President of the School Board.

Ms. Chow said the Board conducted an analysis and concluded that the raises given for FY’15 brought the administrators’ salaries in line with those paid by peer school districts. She added that the raises were also given in recognition that the administrators had taken on increased responsibilities during a time when the District was in transition. 

In FY’15, Dr. Goren brought in an assistant superintendent of schools and a chief strategy officer. Their combined salaries were about $36,000 less than two assistant superintendents of schools who retired after the 2013-2014 school year.

At the request of Dr. Goren, the Board froze his salary in FY’16, but provided a stipend in the amount of $4,500. This year, FY’17, Dr. Goren again asked that his salary be frozen and asked that he not be given a stipend.

Dr. Goren said he has frozen the salaries of his senior leadership team for this year, FY’ 17, and tied future raises of his senior leadership team to the CPI.

 Ms. Chow said administrative costs in the central office have declined from 5% of budget to 4% of budget in the last three years.

 

Teachers Retirement Benefits

Under the teachers’ pension plan, teachers are entitled to a pension subject to various requirements. Tier I teachers are those who contributed to the Teachers Retirement System before Jan. 1. 2011. Teachers pay about 8.7% of their salary toward their pensions. The State is supposed to make a payment to adequately fund pension payments.

The formula for determining the amount of a pension payment is generally to multiply a teacher’s average salary (i.e., the average of the four highest salaries in the last 10 years) by 2.2% multiplied by years of service, up to a maximum of 75%. A teacher who has taught for 35 years is entitled to 75% of the average salary.

 The highest teacher salary at District 65 is $106,583. Assuming that is the average salary for the last four years, a teacher would receive a retirement payment of $79,937.25 at retirement, with a cost of living increase of 3.0% per year, compounded.

If one assumes the initial payment is $80,000, the payment in year 25 would be $162,624, and the retired teacher would receive a total of $2,917,232 though the 25th year. The payment would be $188,525 in year 30, and the teacher would receive a total of $3,806,523 through the 30th year.

The pension benefits for teachers who joined the TRS system after Jan. 1, 2011, are more limited.