Frequently Asked Questions regarding bargaining between BHEA and BHUSD THE SALARY FORMULA

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1 Frequently Asked Questions regarding bargaining between BHEA and BHUSD Topics: The Salary Formula Negotiations Work-to-rule How to support BHEA How did the salary formula come about? THE SALARY FORMULA The salary formula was developed through a collaborative effort by the Board of Education and BHEA at the end of the school year. During that school year, BHEA was finally able to get the district to agree to salary increases after many years in which salaries remained the same. The salary formula was added to the tentative agreement for and was ratified by BHEA and approved by the BHUSD Board of Education in August Since then, it has become part of BHEA's collective bargaining agreement with the district. What exactly is the formula? How does it work? The salary formula calls for a certain percentage of new property tax revenue BHUSD receives from Los Angeles County to go towards salary increases. In , the percentage was 70%. In , the percentage was 65%. For and every year thereafter, the percentage is 55%. What happens if property tax revenues decrease? Will teacher salaries decrease as well? If property tax revenues in Los Angeles County decrease, teacher salaries will not decrease. Even before we had the salary formula, when there was an economic downturn, salaries were not expected to decrease. The chances of property tax revenue decreasing significantly are very low. In the last 35 years, property tax revenues have only decreased 4 years for a cumulative and uncompounded 5%. On the other hand, property tax revenues have increased 29 years for a cumulative and uncompounded 208%. Property tax revenues are projected to increase for at least the next three years as well. This sounds great for the educators. What's in it for the district? The salary formula allows for automatic pay increases when property tax revenues in Los

2 Angeles County go up. This means the district gets additional money as well. Having the formula means the district and BHEA don't have to spend time deciding how to split up this money - it's automatically settled. This means that time in bargaining meetings can be used to work on other aspects of our collective bargaining agreement - something that is in the interests of both the district and BHEA. In addition, this salary formula helps to attract and retain high-quality educators. Currently, we are 21st in the county in the category of highest teacher salary and our health and welfare benefits are more than $6000 below the average in the county. This means that many educators in our district, especially those with young families, have to pay $10,000 out of pocket each year for health coverage. When this is taken into account, actual take-home pay is significantly lower than it appears. The salary formula will help raise our rankings in each salary category and will help make up for our low health and welfare benefits package. Despite recent gains, our health and welfare benefits package is still so low that new hires are advised by the district to look carefully at it before signing their employment contract. If the salary formula is so great, why are certain Board members blaming it for their problems? District officials have publicly and repeatedly stated that the salary formula is NOT the cause of financial problems in the district. Even the Los Angeles County of Education stated the formula is not to blame for any financial problems for BHUSD. We believe that the reason certain Board members are targeting the salary formula is that they do not wish to fairly compensate their employees. They do not like that 55% of new property tax revenue automatically has to go to salary increases even though these automatic increases allow teachers' salaries to keep up with the cost of living and will help the district attract and retain high-quality educators. Instead, Board members want to use this extra money for other areas. For instance, some Board members approved of pet projects such as an outside security agency that cost the district hundreds of thousands of dollars and did not complete the terms of their contract with the district. As a whole, the Board has hired more and more district administration at higher and higher compensation packages even as student enrollment has declined year after year. Aren't health & welfare benefits and retirement funds tied to the formula as well? Absolutely not. These two areas are separate items and are not tied to the salary formula. But speaking of health & welfare benefits, the $8500 we receive annually is $6000 below the county average and many of our members, especially those with young children, routinely have to pay more than $1000 a month out of pocket for basic insurance plans. As mentioned before, our health and welfare benefits package is still so low that new hires are advised by the district to look carefully at it before signing their employment contract.

3 What about the fact that the district's contribution to STRS (State Retirement System) is going up significantly and the salary formula won't let districts divert money to pay for these increases? It is true that the district's contribution to STRS will increase significantly in the next years from 12.58% now to approximately 19.1% in However, these costs can be easily mitigated by natural attrition in which educators who retire or voluntary resign are not replaced. The argument that the salary formula is causing the district financial problems implies that the district believes it cannot afford a 2.5% salary increase when secured property tax revenues in the county are expected to increase in at least the next four years. This argument is wrong and the district can easily afford such pay increases. In addition, surrounding school districts have agreed to raises higher than 2.5% and they are shouldering the same increases in contributions to STRS retirement increases as our district is. The bottom line is our district has a spending problem that has nothing to do with salaries. Keep in mind our health benefits cap is among the lowest in the county. Many of our neighboring districts are able to provide thousands of dollars more per employee per year or offer full family coverage with no out-of-pocket costs. Since the district says it is having financial difficulties, shouldn't teachers forgo the salary formula for the good of the district? No. First of all, the district has the reserves to avoid issuing any layoffs. Secondly, any financial difficulty the district is facing is caused by a lack of long-term strategic planning and poor decision-making. Here are some examples: - Since 2009, student enrollment in the district has decreased from 4900 to about Yet, the district, despite our advice, has kept staffing levels the same. In fact, there are more teachers at each K-8 school now than there were in Allowing staffing levels to gradually decrease would have saved the district millions of dollars in the last eight years. Since 2011, an average of 19 teachers has retired or resigned each year. The district has replaced each person. - In 2017, BHUSD issued layoff notices to 24 teachers while increasing the number of administrators. The district claimed financial difficulties but only looked to make reductions from teacher salaries and nowhere else in the budget. During this time and after, the district has expanded the administrative staff at the district office, administrative salaries have seen significant pay increases, and the superintendent is guaranteed a 3% raise each year of his contract. What if the district has less money in the future due to a loss in revenue streams? Won't they still be obligated to pay these higher salaries? This is a possible, but unlikely, scenario. The Los Angeles County already projects that property tax revenue will increase for at least the next four years. BHEA has worked with the district in the past to implement many measures that will help the district save money. A gradual and natural reduction in staffing to reflect declining enrollment from this point forward will address any potential financial issues the district might have in the years to come. As long as the district

4 works with its educators and other community members and does not fall under the temptation to overspend and spend unnecessarily, we are in good shape financially. NEGOTIATIONS Is it true that both BHUSD and BHEA have been working hard to try to reach an agreement? Only one party, BHEA, has been working very hard to find a compromise. BHUSD recoiled from true negotiating as of last summer and has instead insisted on a my way or the highway approach, thereby wasting everyone s time. The district is saying that it is offering BHEA a generous deal. Is this true? BHUSD s only offer since 2017 is a 6.8% (not 9%) salary increase compared to what we have already received via the salary formula. This 2017 offer includes a 3% increase for and 3% for with the reasoning that these 3% increases will be more than what educators are projected to receive from the salary formula in and It is now August 2018, and the district now projects that the salary formula will yield a 4.29% salary increase. This also means the district will receive more money. Time has proven that the district s offer is unfair and unreasonable. Is it true that the salary formula obligates a majority of the district s property tax revenue growth for annual salary increases for teachers? Would this leave little remaining property tax revenue growth for the district to cover increased costs in retirement benefits, inflation on materials and services, funding new projects, and growing much-needed financial reserves? Absolutely not. The salary formula directs 38.5% (not a majority ) of the property tax revenue growth to the certificated bargaining unit (referenced as teachers above). Why only 38.5%? The formula directs 55% of property tax growth to increase the salaries of all employees in the District, not just certificated unit members. The certificated unit only represents about 70% of all salary outlays, so 70% of 55 = The remaining 16.5% (55 minus 38.5) goes to increase the salaries of our classified bargaining units, unrepresented employees, and administrators. Furthermore, it is not true that the formula leaves very little for the District. The District spends roughly 73% of its budget on all salaries and statutory benefits like retirement contributions. Since the formula only directs 55% of new revenue, it actually leaves an 18% surplus (73 minus 55) of new revenue that can be used for the costs described above. Is it true that BHEA is making unreasonable demands in the areas of salary and health benefits? Not at all. BHEA has, throughout this process, been open to dozens of options to settle negotiations. We continue to be open. Some of the options consider keeping the formula and

5 others eliminating it. BHUSD first threatened BHEA with an impasse in early March The district said it would agree to withdraw its impasse declaration if BHEA gave them a proposal to eliminate the formula. The district gave us one week to respond. The proposal we gave them was a 15.8% raise (not 18% ) compared to what we ve already received via the formula, but it also included many, many other items with favorable terms toward our members, including improvements to class size language, transfer language, flexibility on use of health benefits, and increases to extra pay (please see below for the rationale). The district, within days of receiving this proposal, rejected it and then moved ahead with formally declaring an impasse. Give me the bottom line. Which will save the district money the district s last best offer or maintaining the salary formula? The best, last, and final offer from the Board of Education is: Remove the current salary formula o 3% salary increase o $1,250 additional (over current $8.5K) Health & Welfare Benefits o 3% Salary Increase o $500 additional Health & Welfare Benefits o 3% Salary Increase o $500 additional Health & Welfare Benefits This above offer has been the only offer from BHUSD since August 2017 (not just the best, last, and final) during multiple rounds of negotiations. Also, the increase to is 0.8% (not 3% ) since employees have already received a 2.2% raise this school year). BHEA s response regarding salary and benefits o 6% Salary Increase o 6% Salary Increase o $500 additional Health & Welfare Benefits o 6% Salary Increase o $500 additional Health & Welfare Benefits As explained earlier, the above was a proposal that BHEA offered only after being threatened with impasse by the district in March 2018, but it is only one of many, many options under consideration with our preferred option being proposals that do not eliminate the salary formula and save the district money compared to its one and only offer. Also, the increase to is 3.8% (not 6% ) since employees have already received a 2.2% raise this school year. Another reason for these percentages is because BHEA cannot assume that there will be any salary increase when and if the salary formula is eliminated. During many of the years

6 immediately preceding the start of the salary formula in 2014, educators did not see any pay increase. We have to assume the same when and if the formula is eliminated. When viewed from that lens, along with the fact that many neighboring districts have seen similar salary increases and the secured property tax revenues have been higher than projected, the above is an extremely reasonable offer. There are always two sides to every story. Why is the district doing this? That is a great question. BHEA is not entirely sure why the district would put their educators through this unnecessary position of defending the salary formula, fair health benefits, and fair class size. The most likely reason the district would want to impose on its educators is that they want to take back control of all new secured property tax revenue that comes to the district instead of working as partners with their educators. Another reason might be an unfounded concern that small and automatic annual salary increases will mean educators will not need to bargain with the district. This is ludicrous. There are many areas in our collective bargaining agreement that can be changed and improved for the benefit of all parties. How do BHUSD teacher salaries and class sizes compare to other school districts? Is it true that we are in the top 10? Please see the last pages of this document for a table from the County that show that 11 other unified districts increased maximum salaries by a greater percentage than Beverly Hills over the last three years (years during which our salary formula was in place). These other 11 districts face the same pressures on retirement benefits as Beverly Hills, yet BHUSD argues that our salary formula is not leaving it enough money? Do you believe that? Also, take a look at the health benefits chart. We are currently #42 out of 47 unified school districts. This means that for years - decades really, BHUSD has saved itself countless millions of dollars on spending on health benefits by shifting those costs to employees and forcing them to pay out of pocket to cover their families. Do you really believe the district when it says the salary formula is breaking the bank? Even if the parties end up agreeing to raise the benefits cap up to $10,750, this would put us at #35 in the Los Angeles County and nearly $4000 below the county average. This would be an improvement but still nowhere near the median for the county. The district would still be saving lots of money on health benefits compared to neighboring districts and employees would still be shouldering a significant financial burden for their families. WORK-TO-RULE I heard the teachers did something on BHUSD Opening Day. What happened? During the BHUSD Opening Day on Friday, August 10, teachers and staff wore their BHEA shirts in solidarity to indicate their dissatisfaction with the district and their actions at the bargaining table. BHEA members expressed civil silence and held up signs asking for fair bargaining, fair

7 wages, and fair class sizes when district administrators and Board members were introduced to speak. What is work-to-rule? Work-to-rule is an action taken by labor organizations to motivate employers to reach a fair settlement with their employees during negotiations. In this particular situation, educators who support BHEA s position in negotiations would do their jobs as they are defined in their contract, district policies, and regulations. Educators would not fulfill non-mandatory and extra duties for which they normally volunteer for without pay. If the effects of this action are noticeable, then it highlights just how much educators go above and beyond their contractual duties on a daily basis. Until this situation is resolved, parents, students, and other community members will see educators distributing informational flyers, attending Board of Education meetings, posting on social media, and continuing to educate the public about this matter during non-work hours at appropriate settings. How did it get to this point in negotiations? Let s start in November Two people, Isabel Hacker and Mel Spitz, were elected to the Board of Education. Both had spoken against the teacher salary formula during their campaigns. The other three, Howard Goldstein, Lisa Korbatov, and Noah Margo, had voted in support of the formula in August Over time, it appears that the Board as a whole wanted to regain control of 100% of all new revenue from secured property taxes the district received. To do so, different reasons were given. Some claimed the district had financial difficulties while simultaneously voting for increased administrative salaries and additional programs. Others conceded that the district was doing well financially but argued that the formula gave teachers too much leverage. In Spring 2017, the Board of Education issued 24 layoff notices to teachers and tried to convince BHEA to give up the formula in exchange for saving their jobs. BHEA saw past the scheme and successfully campaigned to save nearly every position. In Fall 2017, negotiations between BHEA and BHUSD began and the district made it known from the beginning that it intended to eliminate the salary formula one way or another and it stated its terms to make this happen. From August to now, the district s position has stayed the same while evidence of their positive financial status has grown. This is not bargaining in good faith. In March 2018, after several informal mediation sessions, BHUSD unilaterally imposed impasse on BHEA. Isn t all this a little dramatic? Unfortunately, due to BHUSD s unwillingness to bargain fairly with its educators, it has become necessary to take measures that increase awareness among students, parents, and other

8 community members regarding what is going on. Every action BHEA has taken has been civil and legal. Will this hurt students? Absolutely not. We are as committed as ever to the academic and social well-being of our children. Colleges and universities have been notified of our work-to-rule situation and students will not be penalized for not having recommendation letters from teachers. At all times, educators will be doing their job to the best of their ability. But educators will now decline to perform voluntary duties. If a significant impact is felt, parents, students, and community members should not perceive this as educators trying to hurt students but rather realize the extent to which educators regularly go above and beyond their contractual obligations every single day and just how reliant the district has become on educators doing so. Parents, students, and community members should understand that educators are doing this to take a stand for all stakeholders we want fair bargaining, fair wages, and most importantly, fair class sizes. We all have a stake in this and if we work together and support each other, we will prevail very quickly. Is this really necessary? Unfortunately, yes. For the entire school year, we tried to reason with BHUSD and convince them to bargain with us in good faith. After the district unilaterally imposed impasse on us in March 2018, educators wore badges, passed out flyers, communicated with Board members, and attend Board meetings all to try to get the district to reach a fair settlement with their educators. BHUSD decided to continue with impasse, leaving us with no choice but to work-to-rule to show the district that their educators are unified in the belief that their actions are unfair to educators, students, and the community. HOW TO SUPPORT BHEA How can the community, parents, and students support educators? The most effective way that community members, parents, and students can support its educators is to communicate your feelings to Board of Education members and the superintendent. You can do so on social media, by phone, , or by attending School Board meetings. The next one is on Tuesday, August 28, 2018 at 5 pm in Cherney Lecture Hall at BHHS. You can also subscribe to the BHEA Community Mailing list to stay updated on what is going on with educators in and out of their classrooms.

9 What materials can I share with others? The BHEA website, located at has information and resources you can use and share with others, including the following: Flyer (downloadable in.jpeg or.pdf (color and black & white) format Letter to the community explaining the current bargaining situation Recent Beverly Hills Courier articles about bargaining and the BHUSD Opening Day A link to subscribe to the BHEA Community Mailing List This Frequently Asked Questions document Who can I contact for more information about this situation? - Join the BHEA Mailing List at and forward our updates to your friends - Attend the August 28th Board of Education meeting and demand that the district reach a fair settlement with BHEA now - Contact board members and the superintendent by and phone and express your concerns. Their contact information is here: Lisa Korbatov, Board President Isabel Hacker korbatov@mindspring.com ibhacker@pacbell.net lkorbatov@bhusd.org ihacker@bhusd.org Noah Margo, Board Vice President Mel Spitz melspitz@att.net noahthebuilder@roadrunner.com mspitz@bhusd.org nmargo@bhusd.org Howard Goldstein Dr. Michael Bregy BHUSD Superintendent cyberesqlaw@me.com x2210 hgoldstein@bhusd.org mbregy@bhusd.org Thank you for all you do. Together, we will help support our educators, maintain small class sizes, and help our children grow and flourish. Sincerely, The Beverly Hills Education Association