NEW JERSEY PUBLIC EMPLOYMENT RELATIONS COMMISSION

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ) In the Matter of the Fact-Finding ) Between ) ) HAMILTON TOWNSHIP BOARD OF ) EDUCATION, ) ) FINDINGS EMPLOYER ) ) AND AND ) ) RECOMMENDATIONS HAMILTON TOWNSHIP EDUCATION ) ASSOCIATION, ) ) ASSOCIATION ) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx) DOCKET NO.: FF-2013-0041 FACT-FINDER: GERARD G. RESTAINO, MUTUALLY CHOSEN BY THE PARTIES PURSUANT TO

THE PROCEDURES OF THE NEW JERSEY PUBLIC EMPLOYMENT RELATIONS COMMISSION APPEARANCES: FOR THE EMPLOYER BRUCE TAYLOR LABOR CONSULTANT ERIC AIKEN CHAIRMAN BOARD NEGOTIATING COMMITTEE JOHN SACCHINELLI BOARD MEMBER GEORGE HASSA BOARD MEMBER ANNE ERICKSON BOARD PRESIDENT DAN SMITH BUSINESS ADMINISTRATOR FOR THE ASSOCIATION VINCENT PERNA NJEA UNISERV REPRESENTATIVE ROBERT WILLOUGHBY NJEA ASSOCIATE DIRECTOR OF RESEARCH PATRICIA FLEMING PAST ASSOCIATION PRESIDENT JEFF GILDINER PRESIDENT/CHIEF NEGOTIATOR THIRTEEN TEAM MEMBERS

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BACKGROUND AND PROCEDURAL HISTORY The Hamilton Township Board of Education, hereinafter referred to as the Board/District and

the Hamilton Township Education Association, hereinafter referred to as the Association, are

signatories to a collective bargaining agreement dated July 1, 2009, through June 30, 2012. The

parties reached an impasse in bargaining and the New Jersey Public Employment Relations

Commission (NJ PERC) appointed a mediator to assist the parties in reaching an agreement.

Mediation was not successful and on May 7, 3012, NJ PERC appointed the undersigned as the Fact-

Finder. I had meetings with the parties on June 24, July 25, August 7, 27, 2013. At the end of the

August 27th session it became apparent that a Fact-Finder’s report would be necessary.

It was agreed that the parties would have an opportunity to submit additional documentation to

me as well as to enumerate their final offers. We also agreed that the information would be submitted

to me via email no later than September 13, 2013.

Both parties submitted comprehensive documentation to support the issues in dispute. The

voluminous documentation submitted by both parties was carefully reviewed and analyzed by the

Fact-Finder to reach a fair and equitable determination.

My role as a Fact-Finder is in two parts: (1) review all documents submitted to me and make a

reasoned, rational recommendation based upon those documents; and (2) help the parties bridge the

gap and bring them together.

Having conducted informal sessions, I was able to determine if either party was pliable or rigid

with the varied proposals that were on the bargaining table. It is a credit to the cleverness of both

parties that they were able to adroitly move through an adversary’s argument and not waiver from a

particular position.

It is of critical importance that my recommendation be considered as a whole and that the

parties refrain from picking and choosing those individual components they deem interesting or

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captivating. There is no question that I will visit and examine each outstanding issue, but all issues

are not joined at the hip. While all positions have been cogently argued for, some proposals may not

be included within the totality of my recommendations since they may be beyond what is obtainable in

this specific fact-finding process. More importantly, as I reviewed the inter-relationship of each issue

to the total package, some issues may have exceeded the standard of reasonableness.

I stress to the Board and the Association that the concessionary discussions and proposals

which took place during the informal sessions may not necessarily be incorporated herein.

ISSUES

The parties submitted the following open issues to the Fact-Finder:

A. Duration

Both parties have proposed a one year (2012-13) agreement and a three year

(2013-2016) agreement.

B. Salaries

During the informal discussions both parties presented extensive documentation

in support of their positions. The Board proposed adding three steps to the teacher

guides while the Association proposed adding one step. Additionally, both sides

proposed a starting salary of at least $50,000 beginning with the 2014-2015 year.

Moreover, both parties acknowledged the low salaries in the beginning of the teacher

guides and proposed corrections to same. The parties also addressed the low salary of

paraprofessionals. However, they differed on how to increase those particular salaries.

C. Longevity

D. Language issues

1. Article 10, C Death in immediate family… change grandparent-in-law leave from 5 days to one day.

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2. Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days.

TEACHER GUIDE

YEAR BOARD ASSOCIATION

2012-13 Agreement 2012-13 4% Base Increase 5.25% Base Increase

2013-16 Agreement

2013-14 4% Base Increase 5.25% Base Increase 2014-15 4% Base Increase 5.25% Base Increase 2015-16 2% Base Increase $1200 added to each step Add three steps to guide. Add one step to guide New monies subject to mutual Normal step movement each year

distribution. Effective 7/1/14, $50,000 Effective 7/1/14, at least $50,000 starting salary. starting salary.

PARAPROFESSIONAL GUIDE YEAR BOARD ASSOCIATION

2012-13 Agreement 2012-13 $500 across-the-board increase $2000 added to each step to each step of the 2011-12 guide. of the 2011-12 guide. Add

This increases scattergram by $500 to each step % applied to times the number of paraprofessionals 2012-13 teacher base. on agreed upon scattergram. Use new Normal step advancement. scattergram and increase base by % applied to teacher base for 2012-13.

2013-2016 Agreement

2013-14 $500 across-the-board increase $2000 added to each step to each step of the 2012-13 guide. of the 2012-13 guide. Add

This increases scattergram by $500 to each step % applied to times the number of paraprofessionals 2013-14 teacher base. on agreed upon scattergram. Use new Normal step advancement. scattergram and increase base by % applied to teacher base for 2013-14.

2014-15 $500 across-the-board increase $2000 added to each step to each step of the 2013-14 guide. of the 2013-14 guide. Add

This increases scattergram by $500 to each step % applied to times the number of paraprofessionals 2014-15 teacher base. on agreed upon scattergram. Use new Normal step advancement. scattergram and increase base by %

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applied to teacher base for 2014-15.

2015-16 Increase total 2014-15 base by % applied $2000 added to each step to 2015-16 teacher base. the 2014-15 guide. Add

to each step % applied to 2015-16 teacher base. Normal step advancement.

Except for the first 3 years’ adjustments (which are across-the-board), new monies are subject to mutual distribution by the parties

OTHER SUPPORT STAFF GUIDES BOARD ASSOCIATION Unlike with the teacher and paraprofessional same % as applied to teacher sub-group, the Association has made no base for each year of claim that other support salaries warrant agreements. a higher settlement that what would be normal. Therefore, the Board offers a salary settlement for these sub-groups that somewhat exceeds its budget cap under law for each of the four years.

EXTRACURRICULAR, HOURLY RATES

BOARD ASSOCIATION Freeze at current rate for four years. Same % as applied to teacher

guides for each year of agreements.

POSITIONS OF THE PARTIES

FOR THE BOARD

The Board contends that the Association seeks one of the highest settlements in New Jersey

School districts. The Association’s proposal of 5.25% a year for each of four years is irrational

and not justified.

The Board offers comparable data from the NJEA (Trend Setter # 7) in support of its salary

offer. That document shows the two most recent settlements reported in Atlantic County at

2.7%/2.6%/2.5% (Folsom), and 2.3%/2.2%/2.1% (Ventnor). That document also reports State-Wide

settlements averaging 2.4% for 2012-13, 2,27% for 2013-14, and 2.81% for 2014-15.

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Only one district in the NJEA report reached a 4% settlement (Passaic City) and did so in only

one year of a three year agreement. Therefore, in only 1 of 374 NJEA reported settlements was a

4% increase achieved. Conversely, the Board’s offer in three of the four years equals 4%.

The Board strongly argues that its final offer would have been accepted by every other

unsettled agreement and questions why it is not acceptable to the Association.

Furthermore, the Board rejects the Association’s assertion that the difference between the

parties on the teacher salary guides is only in the range of a few hundred thousand dollars. When, in

fact, the difference over four years is $2,667,201 for the teacher guides alone. It does not factor in

the paraprofessional guide increases as well as other support staff guide increases.

Additionally, the Board’s offer addresses some of the Association’s key concerns vis-a-vis the

structure of the current teacher guide. Nevertheless, the Association refuses to acknowledge its own

responsibility for some of the challenges that the guide produces. In fact, the Board has alerted the

Association over the years that the guide favored by the Association would cause serious problems in

future negotiations. Two major factors created the current dilemma: 1) a 13 step guide, shorter-than-

normal In the County and in the State; 2) the Association’s insistence in prior rounds of negotiations

to place substantially more money at the maximum step than could sustain a sensible guide. In the

past the parties actually went to Fact-Finding over guide construction because the Association’s

distribution of monies led to some of the problems inherent with the teacher salary guide. On the

2011-12 teacher guide one third of the staff will receive $200 increments each for the first three years

of the agreement, and one third will receive $15,000 each for those same three years.

However, the Board recognizes those teacher guide problems and has proposed a settlement

far above the County and State average with a new guide that establishes the following:

1) a normal 16 step guide, 2) raises the BA starting salary in the third year to $50,000; 3) gives

the lowest paid teachers ( a third of the teacher sub-group) over a $7000 raise on average

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over the first three years; 4) allows those teachers scheduled for very large increases under

the 2011-12 guide to still receive far larger salary increases than lower-paid teachers; 5) more

fairly distributes available money; and 6) lowers the projected out-year increment load to the

lowest in decades.

The Board acknowledges the existence of “breakage money” and recognizes that they will

need to use that money to fund the settlement. The prior settlement with the Association far

exceeded the cap then in place, and with insurance costs skyrocketing and outstripping revenue

growth, a combination of “breakage” and hard personnel and programmatic decisions by the

District allowed for those salary increases.

The District agrees that the Association is accurate about the new State-mandated health

insurance premium sharing but the Association fails to recognize or accept that premium sharing

is a way of life for most private sector employees. Moreover, the new employee share will not

cover the increase in insurance premiums and will continue to put pressure on limited school

budgets.

The Board argues that its paraprofessional salary increases raises each paraprofessional’s

salary by $1,500 over and above what the teacher/support staff settlement would be. Coupled

with the assumed teacher/support staff raises over the four years, the Board’s salary increases

will exceed 21.7%. The adjustment alone will give paraprofessionals $4,500 in gross salary over

the four years more than he/she would have received if there were no adjustment.

The Association’s paraprofessional position is uncertain because its $30,000 top salary in

2015-16 amounts to a 43% raise over three years. In fact, the Association’s proposal to retain a

nine step guide means the 43% increase is actually much higher. The Board strenuously objects

to such an absurd increase and suggests the bargaining positions of parties should have some

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relationship to a 2% budget cap, a state-wide settlement rate of under 3% and a cost of living

under 2%.

The District also contends that extending the teacher and paraprofessional salary settlements

beyond the norm creates budgetary shortfalls that make automatic parity salary settlements

difficult, possibly requiring staffing decisions within the 2013-14 year and in the next two years.

The Board believes that maintaining positions is in the best interest of all involved.

The District strenuously argues that under its salary offer hundreds of thousands of dollars

over and above the budget cap will be expended directly on salaries. To that end the Board

asserts that all available monies should be directed to these overall salaries and not to activities

which may be eliminated if their value, vis-à-vis other budgetary priorities, actually decreases

because of increase salary costs.

In conclusion the Board argues that they have gone far beyond what other school boards are

willing to do in this budgetary environment. The Board has offered a fair settlement which meets

the stated goals of the Association, and the Board’s positions should be the basis of the Fact-

Finder’s recommendations.

For the Association

The Association contends that the fact-finder’s recommendations must be derived from the

facts presented, documented and argued by the parties to this dispute. The fact-finder’s

recommendations cannot be reduced to a report which simply reports on the average of what other

employers and their employees agreed to do. A legitimate fact-finding report must recommend that

the parties agree to a settlement that is significantly above or below the mathematical average when

the proven facts warrant it.

The facts elicited and documented in this dispute warrant such a drastic departure form the

norm. The facts documented in this dispute support a settlement well above the “going rate.”

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Therefore, the fact-finder cannot minimize or discount the mountain of facts which support the

Association’s position.

There is no question that by any standard, it was proved that the teachers and

paraprofessionals are significantly underpaid given the results they provide and their comparable

worth on the competitive market. The certificated salary guide structure fails to provide an equitable

reward for the service provided. The failure to correct these obvious deficiencies has led to a

significant decline in morale and an inconceivable exodus from the district. Unless these issues are

addressed, it can only lead to a worsened condition that will make it impossible to provide the service

and results desired by the employer.

The obligation to assess the ability to pay is an absolute requirement for any fact-finder. It is

the criterion which is often argued, successfully, to limit the award made relative to the deserved

increase in compensation for specific groups of employees. No such argument has been advanced

by the Board. Here, we have the exact opposite. The Board has argued that they are unwilling

to provide that which is necessary to correct the documented deficiencies.

Based upon the documented budget surpluses, staff retirements/resignations, and Chapter 78

insurance contributions, the District clearly has the ability to pay all that the Association asks—and

more.

The focal point of the Association’s financial arguments is based upon the July 9, 2013,

meeting with Dan Smith, BA and Bob Willoughby, NJEA Associate Director of Research. The results

of those discussions revealed the following:

1. Retirement/Resignation “breakage” $ 540,000 2. Extraordinary aid $ 122,652 3. Banked Cap for 2014-15 $1,657,215 4. Surplus $1,147,723 5. Chapter 78 Premium Sharing contributions

(2012-13) $229,359, (2013-14) $353,965, (2014-15) $642,546 $1,225,870 $4,693,460

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The Association strongly argues that the above analysis shows without reservation that the

Board can fund its salary proposals without impacting upon the budget or taxpayers.

HAMILTON TOWNSHIP BASE YEAR 2011-12 CERTIFIED STAFF Salary Guide Step BA BA+15 BA+30 MA MA+15 MA+30 1 44,352 45,305 46,281 47,257 48,233 49,275 2 44,558 45,516 46,496 47,476 48,457 49,504

3 44,764 45,726 46,711 47,696 48,651 49,733 4 44,970 45,937 46,926 47,915 48,905 49,961 5 45,176 46,147 47,141 48,135 49,129 50,190 6 45,382 46,358 47,356 48,354 49,353 50,419 7 45,588 46,568 47,571 48,574 49,577 50,648 8 46,747 47,752 48,780 49,808 50,837 51,935 9 49,837 50,908 52,004 53,101 54,197 55,368 10 54,884 56,064 57,271 58,478 59,686 60,976 11 60,549 61,850 63,182 64,514 65,847 67,269 12 67,244 68,689 70,169 71,648 73,127 74,708 13 74,371 75,970 77,606 79,242 80,879 82,626

Staff Step BA BA+15 BA+30 MA MA+15 MA+30 Total 1 16.81 1.0 - 1.0 - 1.0 19.81 2 6.0 2.0 2.0 3.0 - - 13.0 3 9.62 - 1.0 1.0 - 2.0 13.62 4 5.0 - - 7.0 - 1.0 13.0 5 8.0 1.0 1.0 1.0 - - 11.0 6 12.0 1.0 - 6.0 1.0 - 20.0 7 7.0 5.0 2.0 1.0 1.0 1.0 17.0 8 5.0 2.0 1.0 14.0 1.0 - 23.0 9 8.0 1.0 - 8.0 3.0 - 20.0 10 5.0 - - 7.0 - - 12.0 11 8.0 1.0 1.0 9.0 3.0 4.0 26.0 12 4.0 1.0 - 3.0 1.0 1.0 10.0 13 35.0 4.0 2.0 21.0 6.0 16.0 84.0 Totals 129.43 19.0 10.0 82.0 16.0 26.0 282.43

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Guide Cost Step BA BA+15 BA+30 MA MA+15 MA+30

1 745,557 45,305 - 47,257 - 49,275 2 267,348 91,032 92,992 142,428 - - 3 430,630 - 46,711 47,696 - 99,466 4 224,850 - - 335,405 - 49,461 5 361,408 46,147 47,141 48,135 - - 6 544,584 46,358 - 290,124 49,353 - 7 319,116 232,840 95,142 48,754 49,577 50,648 8 233,735 95,504 48,780 697,312 50,837 - 9 398,696 50,908 - 424,808 162,591 -

10 274,420 - - 409,346 - - 11 484,392 61,850 63,182 580,626 197,541 269,076 12 268,976 68,689 - 214,944 73,127 74,708 13 2,602,985 330,880 155,212 1,644,082 485,274 1,322,016 Total 16,682,557 Average 59,068 1% 166,826

BASE YEAR 2011-12 Increment Dollars Step BA BA+15 BA+30 MA MA+15 MA+30

1 206 211 215 219 224 229 2 206 210 215 220 224 229 3 206 211 215 219 224 228 4 206 210 215 220 224 229 5 206 211 215 219 224 229 6 206 211 215 220 224 229 7 1,159 1,184 1,209 1,234 1,260 1,287 8 3,090 3,156 3,224 3,293 3,360 3,433 9 5,047 5,156 5,267 5,377 5,489 5,608 10 5,665 5,786 5,911 6,036 6,161 6,293 11 6,695 6,839 6,987 7,134 7,280 7,439 12 7,127 7,281 7,437 7,594 7,752 7,918 13 - - - - - -

BASE YEAR 2011-12 Increment Dollars

Step BA BA+15 BA+30 MA MA+15 MA+30 1 3,463 211 - 219 - 229

2 1,236 420 430 660 - - 3 1,982 - 215 219 - 456 4 1,030 - - 1,540 - 229 5 1,648 211 215 219 - - 6 2,472 210 - 1,320 224 - 7 8,113 5,920 2,418 1,234 1,260 1,287 8 15,450 6,312 3,224 46,102 3,360 - 9 40,376 5,156 - 43,016 16,467 - 10 28,325 - - 42,252 - - 11 53,560 6,839 6,987 64,206 21,840 29,756 12 28,508 7,281 - 22,782 7,752 7,918 13 - - - - - - Total 546,759 % of Base 3.28%

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BASE YEAR 2011-12 Category # # on Max Total Cost Increment Cost

Teacher 282.43 84 16,682,557 546,759

Para-

Professionals 70.0 25.20 1,317,907 18,642

Secretarial 20.19 11.0 736,086 18,900

Custodial 26.71 15.48 986,359 7,092

Maintenance 8.0 4.0 361,756 2,407

Data 1.0 - 48,801 -

CT 3.0 2.0 126,554 823

NS 1.0 57,256 1,170

Currently, there are at least 27 full-time paraprofessionals and the rest are part-time. Teacher Guide Specifics 282.43 Staff 129.43 or 45.83% are on the BA Column 82 or 29.03% are on the MA Column 84 or 29.74% are on the maximum step BA – MA+30 90.43 or 32.02% are on steps 1-6 BA – MA+30 108 or 38.2% are on steps 7-12 BA – MA+30 153 or 54.17% have a degree beyond a BA (BA+15 – MA+30) 90.43 or 32.02% have increments that range from $206 to $229 The cost of the teacher guide for the previous settlement was $ 17,516,742, but the actual cost to the Board was $16,682,557. Apparently the difference of $844,185 is due to the use of breakage money to help fund the settlement.

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HAMILTON TOWNSHIP BASE YEAR 2011-12 PARAPROFESSIONALS Salary Guide Step BA 1 16,728

2 16,936 3 17,144 4 17,351 5 17,559 6 18,568 7 19,101 8 19,857 9 21,014

Staff Step 1 8.00 2 9.60 3 8.00 4 6.40 5 2.40 6 2.40 7 2.40 8 5.60 9 25.20 Totals 70.00 BASE YEAR 2011-12 PARAPROFESSIONALS Guide Cost Step 1 133,824

2 162,586 3 137,152 4 111,046 5 42,142 6 44,653 7 45,842 8 111,199 9 529,553

Total $1,317,907 Average 18,827 1% 13,179

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BASE YEAR 2011-12 PARAPROFESSIONALS Increment Dollars Step 1 208

2 208 3 207 4 208 5 1,009 6 533 7 756 8 1,157 9 -

Increment Cost Step 1 1,664 2 1,997 3 1,656 4 1,331 5 2,422 6 1,279 7 1,814 8 6,479 9 -

Total 18,642 % of base 1.41% FINDINGS AND RECOMMENDATIONS At the recommendation of the Fact-Finder, Dan Smith, Board BA, and Robert Willoughby,

NJEA Associate Director of Research met to review the District’s finances. The results of those

discussions were provided to the Board and Association negotiating teams as well as the Fact-Finder.

The breakdown of those discussions is as follows:

1. Total fund balance as of 6/31/12 is $7,176,721 with $1,147,723 unassigned.

2. $549,690 was used to balance the 2012-13 budget, lowering the unassigned amount to

$598,033.

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3. The banked cap for 2014-15 is $1,657,215. The Board did not use any banked cap for

the 2013-13 budget.

4. The Board did not budget any extraordinary aid for the 2012-13 budget but did budget

$50,000 for the 2013-14 budget.

5. Association members contributed to health insurance premiums as per Chapter 78 in

the amount of $353,965 for 2013-14, which is an increase of $124,606. It is estimated

that for 2014-15 that amount will increase to $642,546, and for 2015-16 it is estimated

the amount will increase to $971,431. The two estimated amounts are 81 and 51% over

the previous years.

6. 140.91 of 282.43 teachers receive less than a $50,000 salary.

7. Since December 2011 there have been 18 retirements. Using $30,000 as an

approximate savings per teacher creates an amount of $540,000 or about 2.5% of the

agreed upon base. Further analysis is needed to determine how many of the

retirements were actually incorporated into the budget.

8. The average value of a home in Hamilton Township is $191,000, and the average tax

bill for all services is just over $5000. A penny increase of the tax rate equals $236,000.

Additional retirement/resignation information for Association members was received which

shows the following for the 2011-12 school year:

1. 31 teachers retired/resigned and 2 were non-renewed

2. 3 secretaries retired and 1 was terminated

3. 1 custodian retired

4. 17 paraprofessionals resigned/retired and 3 were terminated

2012-13

1. 36 teachers retired/resigned and 1 was terminated

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2. 2 secretaries retired and 1 was terminated

3. 4 custodians resigned and 1 was terminated

4. 14 paraprofessionals resigned/retired and 2 were terminated.

SALARY BASE FOR 2011-12

Teacher Guide Paraprofessional Guide

Base $16, 682,557 Base $1,317,908 Average Salary $59,068 Average Salary $18,827 Number of steps on guide 13 Number of steps on guide 9 Board Final Position Association Final Position Teacher Teacher 2012-13 4% added to base 2012-13 5.25% added to base 2013-15 4% added to base each year 2013-15 5.25% added to base each year 2015-16 2% added to base 2015-16 $1200 added to each step plus increment

Paraprofessionals* Paraprofessionals ◊

2012-13 $500 added to each step plus % 2012-13 $2000 added to each step plus applied to teacher base % applied to teacher base 2013-15 $500 added to each step, each year 2013-15 $2000 added to each step, each plus % applied to teacher base each year year plus % applied to teacher base each year 2015-16 % applied to teacher base 2015-16 $2000 added to each step plus %

applied to teacher base

Both parties are proposing 2 separate agreements with terms of July 1, 2012, through June 30, 2013, for a one year agreement, and July 1, 2013, through June 30, 2016, for a three year agreement. * For purposes of paraprofessional’s calculations, I will use the Board’s proposed teacher base increases.

◊ For purposes of paraprofessional’s calculations, I will use the Association’s proposed teacher base increases.

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TEACHER BASES AND AVERAGE SALARIES YEAR BOARD ASSOCIATION 2012-13 $17,349,859 $17,558,391 Average Salary $61,430 $62,169 2013-14 $18,043,853 $18,480,206 Average Salary $63,888 $65,433 2014-15 $18,765,607 $19,450,418 Average Salary $66,443 $68,868 2015-16 $19,140,919 $20,325,686 Average Salary $67,772 $71,967 (@4.5%)* The Board’s offer increases the average teacher salary by $8704 over the life of both agreements

while the Association increases the average salary by $12,899 for the same time period.

*I interpreted the Association’s offer to be 4.5% for 2015-16. That % might not be accurate but for purposes of this report it will suffice. PARAPROFESSIONAL BASES, AVERAGE AND MAXIMUM SALARIES

YEAR BOARD ASSOCIATION 2012-13 $1,407,024 $1,534,481 Average Salary $20,100 $21,920 Maximum Salary $22,375 $24,222 2013-14 $1,499,705 $1,762,356 Average Salary $21,424 $25,175 Maximum Salary $23,790 $27,599 2014-15 $1,596,094 $2,002,227 Average Salary $22,801 $28,601 Maximum Salary $25,261 $31,153 2015-16 $1,663,716 $2,238,630 Average Salary $23,257 $31,978 Maximum Salary $25,766 $34,644

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The Board increased the average paraprofessional salary by $4430 and the maximum salary by

$4752 while the Association increased the average salary by $13,151 and the maximum salary by

$13,630 over the life of both agreements.

The unique facts of each impasse matter can and does control how a particular disputed

situation might be adjudicated if it is submitted to Fact-Finding. Under any set of facts, however, I am

limited to and must draw any conclusions from the exhibits presented and post hearing

documentation.

It is uncommon for a school board in the State of New Jersey to make a final offer as the

Board did in the instant matter. Without doing any further research the Board is probably correct that

its offer is the highest in Atlantic County and possibly in the State. The Association’s economic

weapons are based upon an analysis of the Board’s budgets and finances. Nevertheless, it is critical

to review the current salary guides for teachers and paraprofessionals. That is not to minimize salary

increase for other support personnel but the thrust of both parties focused on teachers and

paraprofessionals. In fact, both parties acknowledge and concede that those two guides have major

problems.

The current teacher guide shows increments for steps 1-6, BA – MA+30 of $206 to $229. Not

only is that absurd but it clearly reveals contributory negligence. The Board argued that in 1999 the

parties submitted an impasse to Fact-Finding and the only issue was the structure of the teacher

salary guides. Furthermore, the District strongly asserted that they told the Association of the perils

of adopting the guide created in Fact-Finding and raised the same concerns in subsequent contract

negotiations.

However, all salary guides are mutually agreeable; therefore, even though the Board had

doubts about the viability of those teacher guides, they accepted and passed resolutions to approve

them. In fact, the 2011-12 guide has increments for steps 7-12 ranging from $1,159 to $7,918, and

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140.1 or 49.8% of teachers receive a salary less than $50,000. It certainly means to me that the

money was put towards the top of the guide, and it became a ”wait to get competitive raises”

type of guide. It is commendable that both sides are moving in the same direction; however, they are

traveling on different routes. They both want a starting salary of at least $50,000 by the beginning of

the 2014-15 school year, but getting there is the difficulty. The Board wants to implement its offer by

adding three steps to the teacher guides, while the Association is adamant that they will agree to only

one step being added. Whether the Association’s final offer is 21% (5.25 x 4 years) or 20.25 % (5.25

for three years and 4.5 for 2015-16) is of no moment because neither final offer is obtainable in this

process. On page 2 of this report at the end of the first paragraph I stated: “More importantly, as I

reviewed the inter-relationship of each issue to the total package, some issues may have exceeded

the standard of reasonableness.”

The standard of reasonableness will be my barometer for this Report.

Infused within the Association’s economic arsenal is the Chapter 78, health insurance

contributions that all bargaining unit members are required to pay. Chapter 78 contributions are a

non-starter for me, and I am rejecting those contributions as part of the economic means the District

can employ to fund the settlement. All public employees in the State of New Jersey are required to

pay those contributions based upon their base salary. The statute requires a minimum contribution of

1.5% and some teachers may be paying as much as $6000 for family coverage. I have no authority

to modify, delete or amend any provisions of Chapter 78.

Chapter 78 was established, rightly or wrongly, for health insurance contributions, NOT to

enhance salary increases. The Chapter 78 economic gun that the Association is carrying has no

firing pin and consequently cannot be used to fund this settlement. To advance such an argument

and expect the Fact-Finder to accept it expands the boundaries of believability beyond any

recognizable limit.

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Both parties have acknowledged that the current guide for paraprofessionals must be

improved. Additionally, many paraprofessionals have left the District for a higher paying position in

another school system. Some resigned and became substitute teachers in the District. The

standards of reasonableness apply here as they do with the teacher guides.

The 2011-12 paraprofessional guide shows the following:

Steps 1-4 increments of $207 - $208 Step 5 $1,009 increment Step 6 $533 increment Step 7 $756 increment Step 9 $1,157 increment It also shows that 30.8 or 44% are on maximum, and 25.6 or 36.57% are on steps 1-3.

Applying the same % applied to the teacher guides to the paraprofessionals guide does not help them

because of their low salaries. Moreover, a guide for paraprofessionals cannot be priced out of the

competitive market. Furthermore, many of the paraprofessionals are part-time and that is probably

determined by the District’s needs.

The Association consistently argued that the Board has at least $540,000 in breakage and that

must be used in this settlement. However, that breakage argument is not as completely controlling as

the Association would have me believe. The Board budgeted 2% for salary increases, which means

they put $333,652 (1% is $166,826) in the budget. The other 2% for the Board’s final offer was taken

from breakage, surplus or a combination of other accounts. For some reason the Association fails to

recognize that of the $540,000 they found in breakage, the Board already used some of that amount.

For purposes of this report I will assume all of the $333,652 is from breakage leaving a breakage

balance of $206,348.

The 2011-12 Atlantic County rankings from the NJEA Research Division show the following:

BA MINIMUM COUNTY AVERAGE DIFFERENCE RANKING

$44,352 $47,295 -$2943 212/24

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BA MAXIMUM

$74,371 $76,230 -$1859 18/24

Additionally, that research information shows that Hamilton Township has 13 steps on the

teacher guide and the County average is 14. Moreover, 11 of the 24 districts compared have 15 or

more steps on their guides. That exhibit shows a range of steps from 12 -20.

The Board’s 2012-13 budget has a school tax rate of $0.808 with a school tax levy of

$19, 290,197, and to increase that amount by 2% an additional $0.017 increase in the tax rate was

necessary. The 2013-14 school rate is $0.833 for a school tax levy of $19,676,001. That 2% tax levy

increases taxes on a home assessed at $100,000 by $25.00, one assessed at $200,000 a $50.00

increase and one assessed at $250,000 a $62.50 increase. The amount raised by $.01 for 2012-13

is $238,839.66 and for 2013-14 the amount is $236,306.52.

Furthermore, the Board’s Capital Outlay Budget for 2013-14 is $1,189,737 of which $951,155

is funded by the Capital Reserve Fund and $238,582 from the General Fund.

The Board’s $500.00 per step increase plus % applied to teacher base for the

paraprofessionals guide is not high enough to correct the long-standing errors on that guide. On the

other hand, the Association’s $2000.00 per step increase plus the % applied to the teacher base is

candidly unreasonable. After spending hours with the Board’s negotiating team, I am convinced that

the increase proposed by the Association will result in a reduction of paraprofessionals as well as

many positions becoming part-time. Of the 70 paraprofessionals 27 are full-time and 43 are part-

time.

An increase such as being proposed by the Association will in all likelihood result in the

number of 27 being reduced and the number of 43 being increased.

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Nevertheless, I am also convinced that there is funding available with the additional use of

breakage and surplus to fund the multi-year settlement that will begin to make both salary guides

competitive and attractive. My recommended settlement is more than the Board has offered and less

than the Association has offered. The breakage amount may be increased if there are

retirements/resignations or terminations during the 2013-14 school year. I am only using the amount

of $540,000 that was created at the July meeting between Messrs. Smith and Willoughby.

Furthermore, the Board’s documentation accepts and recognizes that breakage money will be

needed to fund the multi-year settlement.

My salary recommendations are as follows:

All salary increases, stipends, extra-pay, coaching positions are retroactive to July 1, 2012. Add two steps to the teacher guides. I doubt that will occur during the 2012-13 school year, but that is up to the parties. I will not create any salary guides; I will leave that to the parties and their experts. I do not recommend adding steps to the paraprofessional’s guides. One Year Agreement July 1, 2012, - June 30, 2013 2012-13

Increase 2011-12 teacher base by 4.25% including increment New base $17,391,586 average salary $61,578 Adjust each step of the 2011-12 paraprofessionals’ guide by $7500.00 and increase that amount by 4.25% New base $1,428,649 average salary $20,409 maximum salary $22,689 Increase 2011-12 base of other support personnel by 4.25% Longevity unfreeze and pay at rates set forth on pages 19/20 of the Agreement Increase summer curriculum to $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.25%. Article 10 C, Death in immediate family change five days to three days

Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days. Change to 75 days.

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Three Year Agreement July 1, 2013, - June 30, 2016

2013-14 Increase 2012-13 teacher base by 4.0% including increment New Base $18,087,249 average salary $64,041

Adjust each step of the 2012-13 paraprofessionals’ guide by $750.00 and increase that amount by 4.0% New base $1,540,395 average salary $22,005 maximum salary $24,377 Increase 2012-13 base of other support personnel by 4.0% Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates.

2014-15 BA starting salary of at least $50,000 Increase 2013-14 teacher base by 4.00% including increment New base $18,810,739 average salary $66,603

Adjust each step of the 2013-14 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% New Base $1,656,611 average salary $23,666 maximum salary $26,132

Increase 2013-14 base of other support personnel by 4.00% Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates.

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2015-16

Increase 2014-15 teacher base by 4.00% including increment New base $19,563,169 average salary $69,269

Adjust each step of the 2014-15 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% New Base $1,777,475 average salary $25,392 maximum salary $27,957

Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.0%

Average increase for teacher guide from 2011-12 $10,201 or $2550 per year Average increase for paraprofessional guide from 2011-12 $6565 or $1641 per year Maximum step increase for paraprofessional guide from 2011-12 $6943 or $1735 per year % increase for paraprofessional maximum step from 2011-12 over 30% My recommendations for teacher salary increases are 2.25% higher than the Board’s final offer

and 4.5% lower than the Association’s final offer. My recommendations for adjusting each step on

the paraprofessionals guides is $2191 higher than the Board’s (which did not include any step

adjustment for the 2015-16 year) and $6687 lower than the Association’s final offer.

A definitive cost for each guide can be developed once an accurate scattergram is created.

My recommendations are based upon the 2013-14 bases and scattergrams and only addressed

personnel changes for the 2013-14 school year. Certainly with additional changes in personnel since

September 2013 and beyond, a lower cost to the Board will be established.

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The top step (maximum) increase for support staff from 2009-10 to 2011-12 agreements

shows the following:

$1592 increase for secretaries $1487 increase for custodians $1819 increase for maintenance $774 for paraprofessionals Teacher guides

BA step 10, 2009-10 to step 12, 2011-12 $15,619 or 30% MA step 11, 2009-10 to step 13 (maximum) 2011-12 $18,375 or 30%

My recommendation for paraprofessionals for 2012-13 to 2013-14 increases the maximum

salary by $3363, which is significantly higher than they have received in the past. The Board’s offer

for paraprofessionals for 2012-13 to 2013-14 increases the maximum salary by $2775. The

Associations final offer for paraprofessionals for 2012-13 to 2013-14 on step adjustment alone

increases the maximum salary by $4000.00.

A major goal of any public sector negotiations is to keep the cost of increments low. By adding

2 steps to the teacher guides, the 2015-16 increment cost will be significantly lower than the current

3.28%.

RECOMMENDATIONS FOR SETTLEMENT

All tentative agreements remain in effect. Any items not addressed herein are rejected.

Add two steps to the teacher guides. It is up to the parties to determine what years they want

to add a step or steps.

One Year Agreement July 1, 2012, - June 30, 2013 2012-13

Increase 2011-12 teacher base by 4.25% including increment

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Adjust each step of the 2011-12 paraprofessionals’ guide by $1200.00 and increase that amount by 4.25% Increase 2011-12 base of other support personnel by 4.25% Longevity--unfreeze and pay at rates set forth on pages 19/20 of the Agreement Increase summer curriculum to $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.25%. Article 10, C Death in immediate family, change five days to three days

Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days. Change to 75 days.

Three Year Agreement July 1, 2013, - June 30, 2016

2013-14 Increase 2012-13 teacher base by 4.0% including increment

Adjust each step of the 2012-13 paraprofessionals’ guide by $750.00 and increase that amount by 4.0% Increase 2012-13 base of other support personnel by 4.0% Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates.

2014-15 BA starting salary of at least $50,000 Increase 2013-14 teacher base by 4.00% including increment

Adjust each step of the 2013-14 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% Increase 2013-14 base of other support personnel by 4.00%

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Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates.

2015-16

Increase 2014-15 teacher base by 4.00% including increment

Adjust each step of the 2014-15 paraprofessionals’ guide by $750.00 and increase that amount by 4.00%

Increase 2014-15 base of other support personnel by 4.00% Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Increase 2012-13 Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.0%

I stress to the parties that negotiation is the art of compromise. You may not be happy with

what I recommended, but ultimately each party can live with those recommendations. Major gains

were achieved on salary guide enhancement. During the 2011-2013 school years 66 teachers

retired/resigned, 5 secretaries retired/resigned, 5 custodians retired and 31 paraprofessionals

retired/resigned. Based upon the comments I heard from both parties salary was the reason why

most resigned. Most importantly, this Fact-Finding is unique because the Board’s final offer is higher

than any Board offer in Atlantic County. In today’s economic climate and with a 2% levy increase,

creating a final offer of 14% is an acknowledgement by the Board that they are aware of and

concerned about the salary guides. Furthermore, in my opinion a 14% Board offer shows without

reservation that the Board was seriously attempting to solve salary guide problems. The Association

also was also serious about trying to achieve economic gain for its members, but with a much higher

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approach than the Board. This is understandable because the Association has consistently argued

that the Board has the money to fund its final offer.

I shall retain jurisdiction.

Respectfully submitted

Dated: October 14, 2013 ________________________ Gerard G. Restaino, Arbitrator State of Pennsylvania ) County of Wayne ) ss: On this 14th day of October, 2013, before me personally came and appeared GERARD G. RESTAINO to me known to be the person who executed the foregoing document and he duly acknowledged to me that he executed the same.

___________________________ Notary Public Lake Twp., Wayne County My commission expires on November 10, 2013