Litchfield School District

Article 2Teacher’s Contract

Tentative Agreement

The School Board and the Litchfield Education Association have reached a tentative agreement on a new three-year contract.• It covers: school years 2014/15, 2015/16, 2016/17

It contains:• More competitive salaries• More cost effective health care• Reduced time off benefits• More attractive language for School District Administration

Reduce health insurance costs to the District:o Maintains high quality health care while still accruing significant

decrease in employer health care costs due to moving to a plan where employees pay higher deductibles and co-pays (including prescriptions).

o New health care provider/plan has a history of lower annual increases than existing coverage.

o Existing Plan Average Annual Increase = 8.4%o Proposed Plan Average Annual Increase = 4.3%

o New plan starts at a lower base price and increases much slower.

o Significant savings as time goes on.

o The employee premium costs of the HMO plan increase from 15% in 2014 to 17% in 2016.

School Board Negotiation Objectives

2009 2010 2011 2012 2013 2014 2015 2016 2017$1,000,000.00

$1,100,000.00

$1,200,000.00

$1,300,000.00

$1,400,000.00

$1,500,000.00

$1,600,000.00

$1,700,000.00

$1,800,000.00

$1,900,000.00

Healthcare Costs - Historic and Projected

Current Plan Proposed Plan

Co

st

(Millio

ns)

School Board Negotiation Objectives

Maintain competitive salaries, recruit, and retain high quality teachers:• No contract for 2 years.• No contract for 3 out of last 5 years.

o 2009-10 – No contracto 2010-11 – Steps (no increase for top)o 2011-12 – Steps + 1% schedule adjustmento 2012-13 – No contracto 2013-14 – No contract

• Our most experienced teachers have received a 1% raise since 2008-2009.• Overall, Gross teacher salaries are DOWN since 2009.

• Increases have all been in health care.• Need to flip this trend.

Litchfield 2013-14 Teacher Salary Scale

St.\Gr. B B+15 B+30 M M+15 M+301 33,623 34,765 35,907 37,051 38,194 39,3372 35,070 36,282 37,494 38,710 39,876 41,0413 36,517 37,799 39,083 40,370 41,557 42,7444 37,963 39,317 40,671 42,029 43,239 44,4485 39,410 40,834 42,259 43,689 44,920 46,1526 40,857 42,352 43,847 45,348 46,601 47,8557 42,303 43,869 45,436 47,007 48,283 49,5598 43,750 45,386 47,024 48,667 49,965 51,2629 45,195 46,904 48,612 50,325 51,645 52,965

10 46,644 48,421 50,201 51,985 53,327 54,66811 48,090 49,939 51,789 53,644 55,009 56,37212 49,536 51,456 53,377 55,304 56,690 58,07513 50,984 52,973 54,965 56,963 58,371 59,77914 52,430 54,492 56,554 58,622 60,053 61,48215 53,876 56,010 58,142 60,281 61,733 63,186

33,623 Meets 2013-14 Federal eligibility requirements for Free or Reduced Meals for a family of 3. ($36,131)

40,671 Meets 2013-14 Federal eligibility requirements for Free or Reduced Meals for a family of 4. ($43,568)

45,436 Salary between $43,569-$50,00055,304 Salary between $50,001-$60,00061,733 Salary over $60,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-175,600,000.00

5,800,000.00

6,000,000.00

6,200,000.00

6,400,000.00

6,600,000.00

6,800,000.00

7,000,000.00

7,200,000.00

7,400,000.00Historical Wages

Quality of teaching is primary factor impacting future Reduction In Force (RIF) decisions:o When layoffs are required, it will be based on quality and not

tenure. Keep Teachers in front of students

• Existing teachers move from 15 sick days/year to 12 days (2016)

• New teachers move to 10 sick days/year and can accrue a maximum of 110 days (vs. 125)• Fewer sick days used• Decreased liability from accrued sick time

• Supervisory periods can include instructional time w\ students

School Board Negotiation Objectives

What are Salary Schedules?

Teaching staff is paid based upon the salary schedule approved in the collective bargaining agreement. When hired, an educator is placed on a “LADDER” or “Grade-Level” based upon their degree status.

• Bachelors• Bachelors + 15 credits• Bachelors + 30 credits• Masters• Masters + 15 credits• Masters + 30 credits

Within that ladder, they are placed on a STEP based upon their years of experience.

How Do Salary Schedules Work?

• Each school year with a contract, teachers move up one step on the experience scale.

• When there is no contract, there is no step movement.• Teachers at top step no longer move steps.• Occasionally, the contract will also include step

modifications to keep the salary schedule competitive and to provide raises for members at the top step.

Current ScheduleSTEP B B+15 B+30 M M+15 M+30

1 33,623 34,765 35,907 37,051 38,194 39,337 2 35,070 36,282 37,494 38,710 39,876 41,041 3 36,517 37,799 39,083 40,370 41,557 42,744 4 37,963 39,317 40,671 42,029 43,239 44,448 5 39,410 40,834 42,259 43,689 44,920 46,152 6 40,857 42,352 43,847 45,348 46,601 47,855 7 42,303 43,869 45,436 47,007 48,283 49,559 8 43,750 45,386 47,024 48,667 49,965 51,262 9 45,195 46,904 48,612 50,325 51,645 52,965

10 46,644 48,421 50,201 51,985 53,327 54,668 11 48,090 49,939 51,789 53,644 55,009 56,372 12 49,536 51,456 53,377 55,304 56,690 58,075 13 50,984 52,973 54,965 56,963 58,371 59,779 14 52,430 54,492 56,554 58,622 60,053 61,482 15 53,876 56,010 58,142 60,281 61,733 63,186

Step Size 1,446 1,518 1,588 1,659 1,680 1,704

Proposed Contract: Year 1 2014-2015

Schedule Modification – slide schedule 1 Step Up• Remove 1st step (old Step 2 becomes Step 1)• Add new 15th Step

Each teacher receives a step

End result• Staff members “On the schedule” (not top) receive an increase

equal to two steps.

• Staff Members on top step receive an increase equal to 1 step.

Benefits• Schedule\starting salary is more competitive.• Staff on the schedule have a more competitive wage.

2014-2015 Modified Schedule

STEP B B+15 B+30 M M+15 M+301 33,623 34,765 35,907 37,051 38,194 39,337 1 35,070 36,282 37,494 38,710 39,876 41,041 2 36,517 37,799 39,083 40,370 41,557 42,744 3 37,963 39,317 40,671 42,029 43,239 44,448 4 39,410 40,834 42,259 43,689 44,920 46,152 5 40,857 42,352 43,847 45,348 46,601 47,855 6 42,303 43,869 45,436 47,007 48,283 49,559 7 43,750 45,386 47,024 48,667 49,965 51,262 8 45,195 46,904 48,612 50,325 51,645 52,965 9 46,644 48,421 50,201 51,985 53,327 54,668

10 48,090 49,939 51,789 53,644 55,009 56,372 11 49,536 51,456 53,377 55,304 56,690 58,075 12 50,984 52,973 54,965 56,963 58,371 59,779 13 52,430 54,492 56,554 58,622 60,053 61,482 14 53,876 56,010 58,142 60,281 61,733 63,186 15 55,320 57,524 59,726 61,937 63,408 64,888

Year 2: 2015-2016

• On Schedule: Move up 1 Step• Top Step Modification:

o ½ a step increase + $300

• NOTE:o In year 16-17, top step will receive second half of step.

2015-2016 Modified Schedule

STEP B B+15 B+30 M M+15 M+301 35,070 36,282 37,494 38,710 39,876 41,041 2 36,517 37,799 39,083 40,370 41,557 42,744 3 37,963 39,317 40,671 42,029 43,239 44,448 4 39,410 40,834 42,259 43,689 44,920 46,152 5 40,857 42,352 43,847 45,348 46,601 47,855 6 42,303 43,869 45,436 47,007 48,283 49,559 7 43,750 45,386 47,024 48,667 49,965 51,262 8 45,195 46,904 48,612 50,325 51,645 52,965 9 46,644 48,421 50,201 51,985 53,327 54,668

10 48,090 49,939 51,789 53,644 55,009 56,372 11 49,536 51,456 53,377 55,304 56,690 58,075 12 50,984 52,973 54,965 56,963 58,371 59,779 13 52,430 54,492 56,554 58,622 60,053 61,482 14 53,876 56,010 58,142 60,281 61,733 63,186

Old 15 55,320 57,524 59,726 61,937 63,408 64,888 New 15 56,345 58,587 60,824 63,070 64,555 66,042

Year 3: 2016-2017

• Schedule Modification - Similar to year 1• Slide schedule 1 Step Up• Remove 1st step (old Step 2 becomes Step 1)

• Add new 15th Step + $300• This is only half a step + 300• Second half from year 2015-2016• Top step receives (1 step + $600) over years 2 and 3

• Teachers do NOT move a step• Increase is equal to 1 step for teachers on the schedule.

2016-2017 Modified Schedule

STEP B B+15 B+30 M M+15 M+301 35,070 36,282 37,494 38,710 39,876 41,041 1 36,517 37,799 39,083 40,370 41,557 42,744 2 37,963 39,317 40,671 42,029 43,239 44,448 3 39,410 40,834 42,259 43,689 44,920 46,152 4 40,857 42,352 43,847 45,348 46,601 47,855 5 42,303 43,869 45,436 47,007 48,283 49,559 6 43,750 45,386 47,024 48,667 49,965 51,262 7 45,195 46,904 48,612 50,325 51,645 52,965 8 46,644 48,421 50,201 51,985 53,327 54,668 9 48,090 49,939 51,789 53,644 55,009 56,372

10 49,536 51,456 53,377 55,304 56,690 58,075 11 50,984 52,973 54,965 56,963 58,371 59,779 12 52,430 54,492 56,554 58,622 60,053 61,482 13 53,876 56,010 58,142 60,281 61,733 63,186 14 55,320 57,524 59,726 61,937 63,408 64,888 15 57,366 59,641 61,914 64,196 65,689 67,191

Proposed Contract: Total Salary ChangesStep 1-13:• 4 Steps in 3 years

Step 14• 3 Steps in 3 years

Step 15• 2 Steps + $600

Costs to the Taxpayer

When calculating the “cost” of the contract, we have to:• Assume all employees take most expensive healthcare

plan.• Assume there is no additional health care savings in

future years.• And we can’t factor in additional health care savings for

all non-teaching staff.

• Is must be budgeted out as the Worst Case Scenario….

“Official” Contract Costs

2014-

152015-

16 2016-

17 Total

Total Salary Increases$421,48

9 $212,73

7 $192,64

5 $826,87

1

LEA HealthCare Savings $208,10

6 $17,100 $17,100 $242,30

6

Total Difference$213,3

83 $195,6

37 $175,5

45 $584,5

65

A More Comprehensive Costing…

• Would calculate future healthcare savings against current plan.

• Would calculate savings for ALL employees.

• This shows the contract costing mush less in the long term because our healthcare savings will build on itself each year…

A Projected Cost Analysis…

LEA Agreement - Historical Averages Projected in 2015-2016

2014-15 2015-16 2016-17 Total

Projected Salary Increases $

421,489 $

212,737 $

203,121 $

837,347

Projected HealthCare Savings $208,10

6 $87,191 $95,168 $

390,465

Difference $

213,383 $

125,546 $

107,953 $

446,882 Projected Non-LEA HealthCare Savings $68,000 $10,940 $11,815

$ 90,755

Total HealthCare Savings $276,106 $98,131 $106,983 $481,220

Total Difference $

145,383 $

114,606 $

96,138 $

356,127

Cost to the Taxpayer

ESTIMATED ANNUAL TAX IMPACT Article 2 - Contract

Home Value (Thousands) 200K 250K 300K 350K 400K 450K

 Cost Per Year $52 $65 $78 $91 $104 $117

Thank You