SETTING THE TABLE WHERE ARE WE?

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1 BARGAINING IN THE TAX CAP ERA More of the Same or Something New? NEW YORK STATE SCHOOL BOARDS ASSOCIATION PRE-CONVENTION LAW CONFERENCE Presented by: Gregory J. Guercio, Esq. Guercio & Guercio, LLP John H. Gross, Esq. Ingerman Smith, LLP Edward A. Trevvett, Esq. Harris Beach Pllc 2 SETTING THE TABLE WHERE ARE WE? THE TAX LEVY CAP HAS FUNDAMENTALLY CHANGED THE BARGAINING LANDSCAPE Few exceptions to the new reality Introduction of private sector concept there is only so much money! Bargaining by TOTAL DOLLAR COST Spend no more than Increment costs or lower! 3 1

2 ALONG WITH THE REVENUE CEILING, COSTS CONTINUE TO RISE Health Care annual percentage increases Cadillac Penalty NYSHIP now self insured Retirement Contributions Still at over 13% Utilities Transportation Triborough Costs Special education mandates 4 Growth in Teacher Pension Contributions percent of salary 16.40% 17.53% 18.00% 16.00% 14.00% 11.50% 13.50% 12.00% 10.00% 8.60% 8.00% 6.00% 4.00% 2.00% 0.36% 0.00% REDUCTION OF REVENUE UNDER THE TAX CAP AND DEPLETION OF FUND BALANCES Depleted reserve funds Comptroller Bias against Unassigned Fund Balance WILL THE TAX CAP FORMULA YIELD A 0% PERMISSIBLE INCREASE BY JANAUARY? MUNICIPALITIES FACING A.73% CAP 6 2

3 THE ECONOMIC UNCERTAINTY FACING DISTRICTS 7 Sluggish Recovery the FED agrees! Delayed increase in short term interest rates Upstate New York still at recession levels Job growth slow Housing market still recovering Private sector jobs full-time/part-time Flight of youth from New York Siphoning off of funds By Charter Schools Since the national economic meltdown cumulative effect of double digit reductions in State Aid THE MYSTERY OF THE CONTINUED EXISTENCE OF A STATUTORY BASIS FOR TRIBOROUGH SECTION 209-a (1)(e) IS PURELY STATUTORY AND BE CAN BE REPEALED! 8 What s in a Wage Increase? Old Teacher Union slang X% Plus Wages are comprised of three elements: Salary Matrix Increase Step (vertical movement) Lane movement (horizontal movement) 3

4 Example of Typical Salary Schedule BA BA+15 BA+30 MA MA+15 MA+30 MA+45 MA+60 MA+75/ PH 1 $48,693 $51,312 $53,930 $56,545 $59,163 $61,780 $64,396 $67,013 $69,632 2 $52,339 $54,955 $57,572 $60,189 $62,805 $65,422 $68,041 $70,658 $73,274 3 $54,432 $57,047 $59,666 $62,805 $65,422 $68,041 $70,658 $73,274 $75,891 4 $56,525 $59,142 $61,758 $65,422 $68,041 $70,658 $73,274 $75,891 $78,506 5 $59,142 $61,758 $64,376 $68,041 $70,658 $73,274 $75,891 $78,506 $81,123 6 $61,758 $64,376 $66,992 $70,658 $73,274 $75,891 $78,506 $81,123 $83,740 7 $64,376 $66,992 $69,609 $73,274 $75,891 $78,506 $81,123 $83,740 $86,357 8 $66,992 $69,609 $72,226 $75,891 $78,506 $81,123 $83,740 $86,357 $88,974 9 $69,609 $72,226 $74,843 $78,506 $81,123 $83,740 $86,357 $88,974 $91, $72,226 $74,843 $77,461 $81,123 $83,740 $86,357 $88,974 $91,592 $94, $75,891 $77,461 $80,078 $83,740 $86,357 $88,974 $91,592 $94,208 $96, $77,461 $80,078 $82,694 $86,881 $89,496 $92,114 $94,731 $97,348 $99, $80,601 $83,218 $85,835 $90,022 $92,638 $95,255 $97,871 $100,488 $103, $83,740 $86,357 $88,974 $93,162 $95,779 $98,395 $101,013 $103,629 $106, $86,881 $89,496 $92,114 $96,301 $98,918 $101,537 $104,152 $106,771 $109, $90,022 $92,638 $95,255 $99,444 $102,058 $104,675 $107,294 $109,909 $112, $90,022 $95,779 $98,395 $103,105 $105,721 $108,339 $110,955 $113,574 $116, $95,779 $98,395 $106,771 $109,387 $112,005 $114,620 $117,237 $119, $110,431 $113,049 $115,665 $118,283 $120,901 $123, WHAT ARE TRIBOROUGH COSTS? Increment ranging from 1% to upwards of 4% of base payroll May consume nearly all of tax levy increase permitted under the cap Lane movement Class size staffing costs All other contractual items driving costs Health and other Insurance costs Declination payments Increment, lane costs and staffing costs at the center of districts financial distress No relief from Triborough costs from our Legislature or Governor Historical Source of Increment Minimum Salary Schedules enacted by the New York State Legislature in the early 1900 s Local School Districts required to adopt by-laws establishing teacher salary schedules no lower than prescribed minimums including step and horizontal (lane). By steps and 4 columns 4

5 Duty Under Section 209-a(1)(e) of the Taylor Law to Pay Increment Upon Contract Expiration Cobleskill Increment part of the wage system and must be continued Waterford - no duty to continue across the board wage increase; duty to continue Deer Park Case Union must prove the existence of a practice or intent of the parties - that must be paid after contract expiration ACROSS THE BOARD SALARY INCREASES - YOU RE KIDDING, RIGHT? 5

6 16 SALARY GOAL IN NEGOTIATIONS Settlement at or below the cost of step. BUT - Will they buy it a second time around? Reduction in TRS and ERS rates Some limited growth in state aid Complaints of savings on the backs of the teachers WHAT IS HAPPENING IN BARGAINING WITH INCREMENT AND WAGE INCREASES? LONG TERM COST CONTAINMENT - In few districts, entirely new schedules, current/future employees SHORT TERM COST CONTAINMENT: Freeze step, across board increases, or both Gates Cash awards not on step ½ steps Delayed steps Credit upon entry Pre-steps Examples of Recent Settlements Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Freeport - settled: June 15 - term: % (7 th 0% +.33% + yr) 1% + ½ 0.5% + ½ 1.25% + ½ 0.75% + ½ Northport-East Northport - settled: June 15 - term: % increase % increase + 1.2% + ½ 2018 no no - FOLLOWS 4 year wage freeze with one year hard freeze! Kings Park - settled: June 14 - term: % + 0% + 0% Yrs 3/4: If LIPA 1.25% + ½ tax base reduction no increase or step; re-opener 1.75% + no 1.5% + no (+ new schedule for new hires) 1.75 % + no 6

7 19 Examples of Recent Settlements Farmingdale - settled May 15 - term: % + + $750 cash 2% + no 0% + + $750 cash Babylon - settled April 15 - term: % + 0% + 0% + 2% + no 2% + no 1% + no East Williston - settled: April 15 - term: % + no.6% + 0.7% + BEWARE OF SPIKES AND CARRY OVER Importance of levy to levy increases sometimes a freeze hurts if new hires drive up the cost of in the following year Unwelcome surprise at end of each contract year resulting from use of delays in the payment of a wage increase or step 20 WHAT IS HAPPENING IN BARGAINING? LANE MOVEMENT Credit upon entry Be careful to avoid longevity credit upon hire Control of content increased graduate component Control of quantity - 30 credit columns Control of frequency: One every two years Freeze (delays payment) Payable only once each year 21 7

8 22 HEALTH INSURANCE 23 HEALTH INSURANCE Active employees increase contribution Future employees - greater percentage contribution Retirees Contribution at least at the level of contribution as an active employee in last year of service reduce OPEB Costs NYSHIP Rule on declination Reduce declination award Negotiate a less expensive option of an Alternate Health Care Plan NYSHIP approval 24 WHY OFFER AN ALTERNATE PLAN Agencies participating in NYSHIP may only offer one indemnity plan, the Empire Plan, to any class of employees covered by NYSHIP. For example: High deductible plan into which the employer/employee may make contributions to the savings account; gated plan with exclusive participating provider network; decreased benefits Permits the negotiation of optional alternate, less expensive option for all unit members and the district Must meet ACA affordability, minimum value, and minimum essential coverage requirements 8

9 25 Impact on Collective Bargaining from Affordable Care Act 26 ACA Versus Your CBA Who is eligible for coverage? Your contract standards likely differ from ACA standards. Who must be offered coverage and when Changes to the insurance offering process Ability to limit hours of work to avoid full-time status under the ACA ERS limitations Adjunct rule affect K-12 institutions? How much you pay for insurance affordability rule 27 The Importance of a Re-Opener Attempt to bargain re-opener language Re-openers are specific CBA provisions that call for the opening of contracts midterm (may be limited or full) Why? Management needs to have the flexibility to make immediate changes to benefits in order to avoid ACA penalties Examine your zipper clause which may allow a union to refuse to bargain over changes required by a new circumstance 9

10 28 Cadillac Taxes Starting in 2018, employers in self insured plans will be subject to an excise tax on their sponsored health insurance coverage if the value of that coverage exceeds $10,200 for individual coverage and $27,500 for family coverage. The tax is equal to 40% of the aggregate value of coverage in excess of these threshold amounts. You must note this when negotiating contracts that cover 2018 and beyond When you are bargaining you will not know what will happen with health insurance costs in the future another reason for a re-opener NYSHIP now self insured. District is responsible 29 AGREEMENTS HAVE TO BE AGREED UPON BY THE UNION! UNION PROPOSALS I NEED SOMETHING TO SELL THE MEMBERSHIP Be careful not to give up power, transfers/staff development/meetings Time give backs personal leave, sick leave, work year etc. What is the value of settlement using the Triborough costs as a benchmark against concessions? 30 10

11 31 HOW DO YOU SETTLE FOR VERY A LOW WAGE PACKAGE WHEN THEY CAN SIT BACK, DO NOTHING AND COLLECT INCREMENT AFTER CONTRACT EXPIRATIONS? 32 ANSWER: TOP STEP TEACHERS AND THE CHOPPED LIVER THEORY! PASSAGE OF TIME WITH NO MONEY THREAT OF LAYOFF NO ONE LIKES THE ABSENCE OF A CONTRACT! 33 APPR - THE IMPACT OF SECTION 3012-d OF THE EDUCATION LAW ON NEGOTIATIONS 11

12 PERB AND THE NEGOTIABILITY OF EVALUATION PROCEDURE VS. CRITERIA ELWOOD UFSD 10 PERB 3107, (1977): The criteria and standards for teacher evaluation are a management prerogative. IN THE MATTER OF THE APPLICATION OF THE BOARD OF EDUCATION OF THE NEWBURGH ENLARGED CITY SCHOOL DISTRICT 22 PERB 7009, (1989) If he [the Commissioner] wishes to remove the procedures for the annual evaluation of teacher performance from mandated collective bargaining, his remedy is to convince the Legislature and the Governor of this State that amendment of the statute is in the best interests of our educational system. Section 3012-c Incorporated a Broad Overall Statutory Duty to Bargain Evaluative Procedure Furthermore, nothing in this section or in any rule or regulation promulgated hereunder shall in any way, alter, impair or diminish the rights of a local collective bargaining representative to negotiate evaluation procedures in accordance with... [the Taylor Law] sic... with the school district or board of cooperative educational services. Education law Sec c (8) NOT Repealed by Section 3012-d d NEGOTIABILITY HOW FAR WILL PERB GO? Will PERB find the duty to bargain under 3012-d broader than the limitations in Section 3012-d, relying upon the broad statutory duty to bargain, or even just under the duty to bargain over implementation? Many items made expressly bargainable Implementation of the provisions and regulations relating to the Classroom Observations Category Impact Bargaining even if not mandatorily bargainable? 36 12

13 37 SPECIFIC ITEMS REQUIRED TO BE BARGAINED IN A NEW APPR PLAN UNDER SECTION 3012-D d Negotiability - Teacher Observation Category How many observations total (provided there must be at least two)? o Different for tenured vs. probationary? How many observations will be unannounced (above the required 1)? How many of each type of observation (above the required 1 each for principal and independent evaluator)? What will be the frequency and duration of observations (e.g., use of walkthroughs)? Whether to utilize a peer evaluator? What is the rubric selection, to the extent a party seeks to change the current rubric? Use of artifacts within the observation cycle?- Evaluator can select subcomponents for focus in a particular observation so long as all observable teaching standards/ domains are addressed in the total observations. Ex. Lesson plans, professional development, academic research; prior student work or data; communication with parents Recorded? Does not explicitly state that the appeals process for existing plans rolls over bargaining implications if a union seeks to modify the existing process? Adds ground for appeal based on an anomaly when a teacher receives an Ineffective rating in Student Performance Category and a Highly Effective rating in the Observations Category d Negotiability Student Performance Category Whether to use an optional subcomponent in the student performance category? If an optional subcomponent is agreed upon, what measure/assessment will be used (second SPGS vs. supplemental assessment)? If an optional subcomponent is agreed upon, what is the weighting that will apply to that subcomponent (SPGS/SLO 50%)? 39 13

14 APPR Requirements for Tenure Conform Contract Provisions Statute only requires consideration of the APPR ratings as a significant factor for tenure determinations. Tenure can still be denied for other factors. Ensure any non-observable factors (attendance, getting along with peers, etc) are considered separate and apart from APPR to provide non-appr bases for termination (outside of misconduct/ non-performance issues). Ensure that labor contract does not inhibit evaluation of non-appr performance. Negotiate out just cause provisions HOW TO AVOID LOSING STATE AID IN ONE EASY LESSON IF A NEW 3012-d APPR PLAN IS NOT AGREED UPON BY NOVEMBER 15th? 42 State Aid Hammer - Timeline Receipt of State Aid increases dependent upon having new APPR Plan approved and in place by Nov. 15, Regardless of whether a district has a bargaining agreement in effect that would otherwise provide a safe harbor status from the deadline. Must submit plan by Oct. 1 to ensure Nov. 15 approval d Review Room now open: 14

15 Hardship Waiver 43 While not in the regulations, availability of a hardship waiver from SED was approved conceptually by the Board of Regents and established administratively by the Commissioner WILL THE GOVERNOR OBJECT? Evidence of Hardship: Bargaining and Training Districts must provide evidence of their good faith efforts to collectively bargain a 3012-d APPR plan. Acceptable evidence could include: minutes of meetings, records of dates and times when meetings were held, a signed attestation from all parties that attempts were made to meet with unions Staff Reduction as a Solution? 15

16 Considerations when laying off staff Statutory and Regulatory Limitations and Rules Labor Contract Restrictions - Johnson City Firefighters, 18 N.Y.3d 32 (2011) Court of Appeals held: a purported job security clause that is not explicit in its terms is violative of public policy, rendering it invalid and unenforceable. The parties intent to waive employer s right to terminate workers for budgetary, economic, or other reasons must be evident in the language of the provision. The simple language of the clause in the Johnson City case, shall not lay off any member was not explicit, unambiguous and comprehensive enough to be subject to arbitration enforcement. Taylor Law Limitations the duty to bargain impact HIDDEN CONTRACT JOB SECURITY Other Job Security Clauses Student to Teacher Ratios Mandatory Staffing Limitation of Student Contact Hours Class Size Clauses Variations Firm Caps Ranges Goals Budget Planning Tool Premium Pay approach OTHER CONTRACT COSTS ARISING FROM LAYOFF IMPACT BARGAINING Severance Provisions Notice Requirements Severance Payments Health Insurance continuation at District expense Retraining Benefits Contract clauses that mirror Education Law layoff provisions 16