State of Ohio. State Employment Relations Board
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1 SERB Case #2015-MED Page 1 of 10 State of Ohio State Employment Relations Board In the Matter of Fact Finding Between Toledo Board of Education, Toledo, Ohio Employer And Toledo Association of Administrative Personnel, UAW, Local 5242 Union SERB Case Number 2015-MED Date of Hearing June 25, 2015 Date of Report July 09, 2015 Felicia Bernardini, Fact Finder Fact Finder Report and Recommendation Appearances For Toledo Board of Education, Employer Margaret Lockhart, Attorney, Fact Finding Spokesperson S. Diane Irving, Consultant Brian A. Murphy, Executive Transformational Leader of Operations Matt Cleland, Treasurer For Toledo Association of Administrative Personnel, Union Joan Torzewsky, Attorney, Fact Finding Spokesperson Emilio Ramirez, Vice President, UAW Local 5242 Don Yates, President, UAW Local 5242
2 SERB Case #2015-MED Page 2 of 10 Introduction Felicia Bernardini was selected by the parties from an FMCS list to serve as fact finder in the above referenced case. The case concerns a fact finding proceeding between the Toledo Board of Education (hereafter referred to as the Employer or the Board ) and the Toledo Association of Administrative Personnel (hereafter referred to as the Union or TAAP ). The dispute concerns a wage reopener for the third year of a three-year collective bargaining agreement (CBA), effective dates July 1, 2013 to June 30, Prior to the hearing, the parties engaged in negotiations on multiple dates beginning on April 20, 2015 through May 20, The parties also met with FMCS mediator Kevin Moyer on May 27, The parties were unable to reach an agreement on how compensation is to be handled in 2016 and thus referred the matter to the statutory fact finding process. The fact finding hearing was scheduled for June 25, Both parties timely filed the required pre-hearing statements. The Board of Education of Toledo Public Schools (TPS) enrolls approximately 21,000 students and employs approximately 3900 people. The Toledo Association of Administrative Personnel (TAAP) represents the districts academic administrators, including Principals and Program Directors, and administrative employees in the District s Business Division, Treasurer s Division, and Human Resources Department. The unit includes approximately 300 employees. TAAP employees are referred to as matrix personnel. 1 Background and Current Positions Like most public jurisdictions, the Toledo Public Schools was hit hard financially by the Great Recession of In this same timeframe the proliferation of charter schools and voucher programs resulted in declining enrollment and significant reductions in funding for TPS. In 2010, to avoid a fiscal emergency, the Board negotiated a number of concessions with all of its bargaining units. TAAP agreed to concessions including A reduction in funding for the Leadership Program. The elimination of bargaining unit positions. 1 Toledo Board of Education Pre-Hearing Statement
3 SERB Case #2015-MED Page 3 of 10 1% reduction in all compensation including salaries, hourly rates, supplemental contracts and longevity pay. 2 In 2011 the parties agreed to the following concessions Elimination of 34 bargaining unit positions. $2M reductions in supplemental contracts. Suspension of the Leadership Program, Property Lose Fund and Professional Conference Fund through the school year. A salary freeze in current class and level, as well as longevity years and steps, through the CBA ending in A 2.5% reduction in all pay. 3 In the current contract, the parties agreed to a 1% salary increase effective 1/1/14 and a second 1% salary increase effective 1/1/15. Rather than follow the wage settlement of other TPS bargaining units and restart step movement in 2014, TAAP opted to take an equivalent payroll percentage increase for its unit and apply it to select job titles (class/level) for which current pay was adversely impacting recruitment and retention (i.e., high school principals, elementary principals and SAC supervisors). In this wage reopener, TAAP seeks to restart salary schedule movement for all unit members advancing eligible personnel up to three salary levels and restore unit members to their current years of services for purposes of longevity pay. In addition, TAAP proposes to restore supplemental pay to the 2009 level plus the 1% increases of 2014 and 2015, restore other hourly wages and degree/license pay to 2009 levels plus the 1% increases of 2014 and 2015, receive a general wage increase of 2% for all pay, and a me too provision that would allow TAAP to receive the equivalent of any greater general wage increase granted to either the TFT or AFSCME bargaining units. 4 In this wage reopener, the Board has offered to advance all eligible unit personnel up to three salary levels, and advance all eligible unit personnel longevity payments to current years of service effective August 1, This offer by the Employer is the equivalent of a 3.66% increase in payroll for the bargaining unit as a whole. The level movement is equal to approximately 2.23% of 2 Union Exhibit 2 3 Union Exhibit 3 4 Union Exhibit 6 5 Employer Exhibit 3
4 SERB Case #2015-MED Page 4 of 10 the unit s payroll; whereas the longevity proposal is the equivalent of approximately 1.43% of the unit s payroll. The Employer has calculated TAAP s full proposal to cost approximately 6.2% of the unit s payroll. TAAP s proposed 2% general wage increase is the largest portion of the difference in cost between the Employer s and the Union s proposals. Discussion and Recommendation In analyzing the proposals of the parties and making a recommendation the fact finder is guided by available, relevant evidence and the criteria set forth in ORC (G)(7)(a) to (f) (a). Past collective bargaining agreements, if any between the parties; (b). Comparison of the unresolved issues relative to the employees in the bargaining unit with those issues related to other public and private employees doing comparable work, giving consideration to factors peculiar to the area and classification involved; (c). The interests and welfare of the public, the ability of the public employer to finance and administer the issues proposed, and the effect of the adjustments on the normal standard of public service; (d). The lawful authority of the public employer; (e). Any stipulations of the parties; (f). Such other factors, not confined to those listed above, which are normally or traditionally taken into consideration in the determination of the issues submitted to mutually agreed-upon dispute settlement procedures in the public service or in private employment. The extent of the disagreement between the parties is limited. There is much common ground regarding both the parties perspectives on key issues and in their proposals. For instance, the Union indicated that it does not disagree fundamentally with the Employer s budget numbers. There was no challenge from the Union regarding the budget forecasts or the underlying assumptions. It is noted that the Union testified, but did not introduce evidence, that TPS enrollment is no longer trending down. In the Union s opinion the Employer s five-year projection of a $2.3M annual loss in funds to charter schools is not consistent with the most recent two-year enrollment data (up by 100 students in this most recent school year, and flat in the prior school year). According to the Union, with the passage of the new levy and the community impact of the new Superintendent, the momentum in enrollment is in favor of TPS. There is also agreement
5 SERB Case #2015-MED Page 5 of 10 between the parties that there are pay gaps and inequities in the TAAP unit. It was acknowledged by the Employer that while not all of the job titles in the unit are out of sync with the local labor market, some positions those at the level of the school building are recognized as below market. On the other hand, Employer representatives also stated that some job titles in TAAP are believed to be above the local labor market. The expectations of both parties (expressed in testimony) is that the comprehensive compensation and classification study currently underway will provide needed data to address these compensation disparities. The results from this study are expected to be available to the parties in time for the next round of collective bargaining which will start in 2016 for a successor agreement. The other key area of agreement between the parties is in their respective proposals. The Employer has offered to advance all eligible unit personnel up to three salary levels, and advance all eligible unit personnel longevity payments to current years of service effective August 1, TAAP has accepted these two proposals for its unit and incorporated them into their own proposal. On these two points of the compensation package there is no disagreement. Therefore the fact finder accepts them as mutually agreeable to the parties and therefore recommends adoption of them without modification. What remains is to determine whether any of the additional elements of TAAP s wage proposal should be adopted. Those elements are restoration of pay for supplemental contracts, restoration of hourly pay and for degree/license attainment, the 2% general wage increase, and the me too provision. For this analysis, the fact finder looks to the evidentiary record and the statutory criteria for guidance. The comparable data provide by the parties is of limited value. The Employer offers the most recent SERB Annual Wage Settlement Report. The SERB Report documents average acrossthe-board general wage increases for bargaining units in Ohio. Averages are arranged by geographic region, type of unit, type of public jurisdiction, and CBA contract year. The Report shows that TPS general wage settlements of 1% in 2014 and 1% in 2015 are somewhat below average for the Toledo region, for school districts and for teacher units. However, it is important to note that the TPS wage settlements were negotiated by the parties and were part of a larger compensation package that, at the behest of the Union, targeted particular job titles for class and level adjustments rather than across-the-board increases or step (i.e. level) movement. For its part, TAAP has provided statewide salary information from the Ohio Department of Education pertaining to principals, assistant principals and ESC supervisors (three benchmark job titles). However, it is not clear whether the dollar amounts referenced in the ODE document are base salary figures or if they are total
6 SERB Case #2015-MED Page 6 of 10 compensation figures (base salary would seem most likely). There is also the question as to whether the statewide data for city school districts is an appropriate comparison given the acknowledged pay disparities between suburban city schools and large urban city schools. Regardless, the data show that even with the targeted salary adjustments of 2014 and 2015 assistant principals, elementary school principals and high school principals in TPS remain considerably below statewide averages. As mentioned above, the fact that a pay gap exists for these particular job titles has been acknowledged by both parties. No doubt this ODE salary data will be incorporated into the class and comp study currently underway and will be an integral part of negotiations in the upcoming successor agreement. None of the elements of the wage proposals are designed to address pay disparities within the unit, nor are they designed to address the issue of salary compression between teachers and administrators. All of the proposals are aimed at raising income, with the intention of making up for negotiated wage concessions in prior years. For the fact finder, such an intention is not among the guiding statutory criteria upon which recommendations are based. Rather, satisfying such an intention might be a side effect, or consequence, of a recommendation based on the statutory criteria. The Union has proposed a 2% general wage increase. A general wage increase serves the purpose of counteracting the effects of inflation. Over time all wage rates are eroded by inflation. General wage increases help to keep established pay ranges moving in tandem with the cost of living. After two years of wage concessions and no general wage increase until the 1% in 2014 followed by a second 1% in 2015, a third small general wage increase is appropriate. Inflation, as measured by the CPI-U has increased as follows 1.6% in 2010, 3.2% in 2011, 2.1% in 2012, 1.5% in 2013, and 1.6% in This is an average of 2% per year over the last five years. Over the past ten years the average annual CPI trend has been 2.3% and over the past 20 years the trend has been 2.5%. 7 Rather than adopt the Union s proposal of a 2% general wage increase, which would be consistent with the CPI trend, the fact finder takes into consideration mitigating factors and recommends a 1% general wage increase. First, the Employer has already offered, and the Union has accepted, pay adjustments in levels and longevity that are equivalent to 3.66% of the unit s payroll. This is a significant financial investment from the Employer and cannot be detached from funding for other aspects of the compensation package. Second, CBA wage settlements (as documented in 6 US Bureau of Labor Statistics, Consumer Price Index,12-month percent change data tables 7 Ibid
7 SERB Case #2015-MED Page 7 of 10 the SERB Report Employer Exhibit 16) show that Toledo area wage settlements and school district wage settlements statewide have been consistently below the inflation trend of 2%. Therefore, a general wage increase below the CPI trend is reasonable and aligned with relevant public sector data. Third, the Employer s ability to pay for, and sustain, payroll increases must be given significant weight. Five-year forecasts by the Employer (uncontested by the Union) for all proposals, including the Employer s own proposal, show deficit spending as soon as 2016 and negative fund balances by Every added percentage of payroll costs over the costs of restarting level and longevity movement exacerbates TPS financial outlook. Fourth, the uncertainty of school funding that relies heavily on the goodwill of the public to pass levies three of which will be before voters within the next five years demands that the parties adhere to spending commitments made to the public during levy campaigns (i.e., raising fund balances and providing continuity in services). Fifth, the opportunity for the parties to negotiate a successor agreement within a year s time when data from the compensation and classification study will be available, as well as state funding information and more enrollment trend figures; thereby allowing the parties to more fully consider issues of internal and external labor market parity. TAAP has proposed that pay for supplemental contracts, as well as other hourly rates and degree/license rates, be restored to 2009 rates plus increased by the 1% pay raises of 2014 and Restoration of these additional compensation elements are projected to cost a further 0.55% of the unit s payroll. Restoration of supplement contract rates is projected to cost $118,183 or 0.5% of payroll, and restoration of hourly pay and degree/license pay is projected to cost $11,288 or 0.05% of payroll. There are 314 unit members and 307 supplemental contracts distributed among them. Some unit members may not have a supplemental contract whereas other unit members may have multiple supplemental contracts. Although the projected costs for restoration of these supplemental pay components is projected to cost less than the 1% general wage increase recommended by the fact finder, these two proposals are rejected by the fact finder for the following reasons. First and foremost, the use and structure of supplemental contracts in TPS has been the subject of a finding in a recent performance audit. The audit concluded that there is a lack of accountability regarding supplemental contracts and that some supplemental contracts are duplicative of each other, some are duplicative of work assigned via job descriptions, most are not monitored for performance, and they are rife with a variety of other oversight problems. To put even 0.5% of the unit s payroll costs into supplemental contracts given these administrative concerns would not be consistent with the fact finding criteria to consider the interests of the public. Second, there is insufficient evidence in
8 SERB Case #2015-MED Page 8 of 10 the hearing record to determine what the current rates are for supplemental contracts, additional hourly compensation, and degree/license compensation. Furthermore, there is also no information in the record to evaluate whether the current rates for these components of the TAAP pay package are comparable to industry standards or if they are currently below industry standard and therefore warrant an upward adjustment. As stated above, TAAP s intention in proposing these rate changes is to make up for prior concessions, which is not a compelling basis, on its own, for a fact finder to recommend adoption of an economic proposal. Finally, the Union has proposed the inclusion of a me too clause pertaining to any general wage increase negotiated by TFT or AFSCME. This proposal is contrary to TAAP s negotiated contract language that expressly eliminated the contractual me too language in Having negotiated its independence with respect to the distribution of compensation within its unit the fact finder should not unilaterally reinstate such language at the behest of one party. The ramifications of a me too provision can have far reaching effects on the Employer as well as the bargaining landscape. The reintroduction of such a provision is best done mutually by the parties via negotiations. In deference to the bargaining history of the parties, the fact finder recommends against including a me too provision pertaining to wages. Recommendation The statutory criteria require that the fact finder consider the Employer s ability to pay, the interests and welfare of the public, and the collective bargaining history of the parties. In light of these criteria the fact finder recommends the following wage settlement Advance all eligible Matrix personnel up to three salary levels Advance all eligible Matrix personnel longevity payments to current years of service effective August 1, Increase all pay levels on the Matrix Salary Schedules by 1% effective January 1, 2016 (in keeping with the effective dates of prior general wage increases). Conclusion In this report I have attempted to make a reasonable recommendation that both parties will find acceptable. If errors are discovered or if the parties believe they can improve upon the recommendation, the parties by mutual agreement may adopt alternative language.
9 SERB Case #2015-MED Page 9 of 10 After giving due consideration to the positions and arguments of the parties and to the criteria enumerated in ORC (G)(7)(a) to (f) the fact finder recommends the provisions as enumerated herein. These recommendations are incorporated into the existing collective bargaining agreement between the parties with the effective dates of July 1, 2013 to June 30, Respectfully submitted and issued at Columbus, Ohio this 9 th day of July, Felicia Bernardini, Fact Finder
10 SERB Case #2015-MED Page 10 of 10 CERTIFICATE OF SERVICE The undersigned certifies that a true copy of this Fact Finder Report was sent by on July 9, 2015 to State Employment Relations Board Mary E. Laurent 65 E. State Street Columbus, Ohio med@serb.state.oh.us Joan Torzewski, Attorney Toledo Association of Administrative Personnel, UAW, Local 5242 toledolaw@aol.com Margaret Lockhart, Attorney Toledo Board of Education lockhart@marshall-melhorn.com Felicia Bernardini
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