Bargaining Updates

May 11, 2012

Settlement Sought Through Factfinding

Bargaining between the Long Beach Unified School District and the Teachers Association of Long Beach has officially been certified by an independent state mediator for factfinding. This is a rare occurrence for the school district, and employees naturally have asked questions about what this means for them.

Factfinding comes after bargaining has reached impasse, with no agreement despite formal mediation conducted by an independent mediator.

The school district has reluctantly pursued this avenue. LBUSD’s bargaining team has for months attempted to negotiate a settlement with TALB leadership but has repeatedly found negotiations at a standstill. TALB leaders have declined to provide any counter-offer that would address long-term rising health care costs.

Factfinding does not mean that the school district has given up on reaching a compromise. On the contrary, as its name suggests, factfinding simply allows both parties to present facts in front of a panel that ultimately provides a recommendation to the board. The three-person panel includes a representative chosen by TALB, a representative chosen by the school district, and one mutually agreed-upon panelist.

The recommendations of the panel will be based upon comparisons of items such as salaries and benefits in similar school districts. The panel’s recommendations will be made public. Though the recommendations are not binding, they often help both parties to reach an agreement.

The following questions and answers provide additional detail on the issue of health benefits in the school district.

1. What is the school district’s proposal to TALB regarding health benefits?

The school district proposes an annual maximum employer contribution (or cap) for medical, dental and vision insurance premiums that is based on 95 percent of the 2012 premium costs of the most expensive plans. The annual maximum contribution would go into effect on Jan. 1, 2013.

2. Why is the school district proposing a cap on employer contributions for the health benefit plans for teachers?

Health benefit costs have consistently increased while funding for schools has decreased. In the past three years, health benefit premiums have increased 26.2 percent, while the school district has received 7.39 percent less funding per pupil (revenue limit) from the state. Over the past five years, health benefit premiums have increased 58.9 percent, while the district has received 6.23 percent less per pupil revenue from the state.

Over the long term, the school district can’t afford to pay health benefit increases that outpace state funding for schools.

3. In the school district’s proposal, how much would TALB members have to pay for health benefit premiums?

An employee who chooses Blue Shield HMO or Kaiser HMO would pay nothing toward premiums at this time, as the cost of those plans is less than the annual maximum district contribution. An employee who chooses the Blue Shield PPO medical plan would pay the insurance premiums that exceed 95 percent of the 2012 rates.

4. Would the cap increase, and would employees have to pay the entire increase in premiums?

Any changes in the annual maximum district contribution would be subject to negotiations on a yearly basis. The employee’s obligation to pay toward future premium increases will be tied to these negotiations.

5. The school district’s initial proposal was for a flat 5 percent employee contribution toward health insurance premiums. Why has this changed?

The school district’s initial proposal also included seven furlough days and the freezing of salary step advancement. Those items were dropped by the district. Instead, the district sought longer-term solutions to reduce expenditures without cutting the number of instructional days. A cap encourages both the school district and TALB to work as true partners in controlling health care costs while continuing to promote employees’ awareness of the cost of their health care choices. And while the original proposal would have affected all TALB members, the latest district proposal would affect only the individuals who choose to remain in the most expensive medical plan. Teachers who choose the Blue Shield HMO or Kaiser HMO plans will currently pay nothing toward their health insurance premiums.

6. Did TALB offer a counter-proposal to the district’s alternative plan?

No. TALB offered no health care counter-proposal. They asked to close contract negotiations with no resolution on health care, instead seeking the creation of an advisory committee to study health care costs later.

7. Why has the school district rejected TALB’s request to delay a deal on health care by sending the issue to a committee later?

The appropriate forum for determining employee compensation and benefits is through formal collective bargaining conducted by negotiation teams that have both the expertise and legal authority to reach recommended decisions. If the school district were to close negotiations now and delay these decisions for another year or longer, it would be ignoring a serious structural weakness in its finances.

8. How much does the school district currently pay per teacher for health benefits?

The school district now pays up to $21,862 per year for medical, dental and vision insurance that covers teachers and their families. The amount the school district pays depends on the type of plan the employee chooses, and whether the employee includes dependents on their insurance. The current annual amount of district-paid benefits for teachers is listed in the following table:

9. The school district’s fund balance is above the minimum required reserve. Why do we need to contain health benefit costs?

The school district’s unrestricted fund balance is projected to be $83 million at the end of the 2011-12 fiscal year. This balance has been accumulated with the assistance of one-time federal stimulus funds, totaling $108 million over the past three years. All of those funds have now been spent, and the school district must address its structural deficit. In 2011-12, without considering federal stimulus funds, the district is projected to spend $33 million more than it receives. In 2012-13, the district is projected to spend $23 million more than it receives, and in 2013-14, the district is projected to spend $39 million more than it receives. The school district is projecting a negative ending balance of $20 million for the 2014-15 school year.

And this is the best case scenario. This assumes that voters will pass one of the tax initiatives that will be on the November 2012 ballot. If no initiative passes, the school district will face even more serious financial difficulties, including a deficit as early as the 2013-14 school year.

10. How do LBUSD’s teacher benefits compare with other districts in Los Angeles County?

Of the 27 unified school districts in Los Angeles County with more than 10,000 students, only three districts do not have a maximum employer contribution (or cap) or employee premium-sharing on health benefits for teachers: Long Beach, Alhambra and Los Angeles. Twenty-one of the 27 districts have a cap on benefits, and three have premium-sharing (a percentage of cost). In other words, about 90 percent of these schools districts require teachers to contribute toward health care premiums, while Long Beach is among the remaining few districts whose teachers do not make such contributions.

11. What’s next?

Once the factfinding panel is appointed, it must begin its work within 10 days, according to state regulations. For now, no factfinding sessions have been scheduled.

April 27, 2012

No Settlement During Mediation

Bargaining teams from the Long Beach Unified School District and the Teachers Association of Long Beach met last Friday, April 20 in formal mediation led by a state mediator. No settlement was reached. Bargaining is now likely to enter the next phase of impasse known as fact-finding, in which both parties present information and rely upon a third party to make a non-binding recommendation.

Head Start

Because no agreement was reached on the length of the work year for Head Start employees, school district staff will recommend to the Board of Education that LBUSD discontinue its Head Start program starting in the 2013-14 school year. However, staff will ask the school board to continue the Head Start program for the 2012-13 school year. As Head Start is discontinued, the school district would work to turn the program over to a local nonprofit provider to ensure that students continue to be served.

Health Care

As with Head Start, no progress was made regarding the school district’s attempt to control rapidly escalating health care costs. TALB has yet to counter the school district’s health care proposal detailed in LBUSD’s Feb. 7 Bargaining Update (see below). The school district continues to seek crucial structural changes needed to control health care costs over the long term. Such changes are vital to the fiscal health of the school district, especially considering the ongoing state budget crisis and steep declines in funding for public schools. The combination of rising costs and declining revenue continues to threaten the school district’s fiscal health over the long term.

No further mediation sessions have been scheduled.

Feb. 7, 2012

School District Seeks Formal State Mediation with TALB

Bargaining teams from the Long Beach Unified School District and the Teachers Association of Long Beach met last Friday, Feb. 3. A mediator from the State Mediation and Conciliation Service attended the session at the invitation of both parties to help facilitate the discussion, but no progress was made during the meeting.

The school district’s primary issue is containment of health benefit costs. The school district has proposed to TALB that beginning Jan. 1, 2013, LBUSD will provide the following maximum annual contributions for medical, dental and vision coverage for bargaining unit members:

These maximums cover the current cost of premiums for the school district’s most expensive health plan, the Blue Shield PPO, minus a 5 percent employee contribution, which is the same as what classified employees and managers already pay toward their benefits.

Link to more information on estimated employee contributions under this proposal.

Under this scenario, employees who choose less expensive plans such as the Blue Shield HMO or Kaiser plans would not currently be required to contribute toward the cost of premiums because those costs are well below LBUSD’s proposed maximum annual contribution. This maximum can be renegotiated with TALB in subsequent years.

If health care costs are left unchecked, LBUSD's ability to meet its fiscal obligations may be jeopardized as early as next school year, when the district’s reserves could fall below the legally required 2 percent mark noted by the horizontal red, dotted line in the chart below.

Click Image to Enlarge

The chart above presents three scenarios that are bad, worse and still even worse: the current projection (in blue), the projection if Gov. Jerry Brown’s proposed November tax initiative to fund schools passes (in dark red), and the projection if the November initiative fails (in green). Either way, the school district fails to meet its fiscal obligations if it does not control costs. Even the passage of the November initiative would still mean significant budget cuts for the school district.

When school districts fall below the required 2 percent reserve, a state team takes away the authority of the local school board and superintendent until the school system becomes solvent again. This scenario has occurred elsewhere in California, and due to ongoing cuts to public education, many school districts continue to face the imminent threat of the state taking away decision-making power from locally elected school boards and the communities they represent.

The school district has benefitted from more than $108 million in federal stimulus funds over the last four years, but this funding has come to an end. Compounding this problem along with the state’s ongoing cuts to public schools is the fact that health care costs are rising rapidly. Like most employers, the school district continues to see significant increases annually in the cost of health care, with no letup in sight.

Click Image to Enlarge

Failure to control these costs would be detrimental to all LBUSD employees, students and their families. Because the school board and superintendent are firmly committed to balancing LBUSD’s budget to avoid bankruptcy and a state takeover, unchecked health care costs would mean significant further cuts elsewhere.

Because the school district and TALB were unable to make progress, the school district will seek a declaration of impasse, which would result in mediation that is conducted formally by a state appointee.

September 30, 2011

No Furlough Days This School Year

In contract negotiations today between the Long Beach Unified School District and the Teachers Association of Long Beach, the school district withdrew its previous proposal to implement seven unpaid furlough days this school year.

The revised proposal means that no LBUSD employees will have furlough days this school year.

The furlough days would have provided one-time savings only. While the school district still faces significant budget challenges, including the possibility of mid-year cuts by the state, LBUSD will seek longer-term solutions to reduce expenditures without cutting the number of instructional days.

All employees took five unpaid furlough days last school year.

May 26, 2010

Teachers OK Contract By 93 Percent Vote

The Teachers Association of Long Beach has ratified a tentative contract with the Long Beach Unified School District.

TALB reports that 2,000 employees, or 93 percent, voted in favor of the deal.

The union and LBUSD reached the tentative agreement on May 7. The agreement includes five unpaid furlough days next school year, along with other contract changes, in exchange for the preservation of 200 teaching jobs.

The contract is now likely to be considered for approval by the Board of Education at its June 1 meeting.

Upon the school board’s final approval, three of the furlough days would occur Monday through Wednesday, Nov. 22 to 24. These dates immediately precede the Nov. 25 and 26 holiday for Thanksgiving. The fourth and fifth furlough days will be taken March 25 and March 28, 2011.

The agreement also calls for cost-saving measures related to health benefits, though none of these measures will result in any increase in employee contributions toward monthly health care costs for full-time teachers. LBUSD employees currently pay zero in monthly payroll deductions for health care, and that will not change under the proposed agreement. See the May 10 Bargaining Update below for details on the tentative agreement, including supporting documents.

Layoff hearings for teachers, meanwhile, continued this week, delaying the issuance of final layoff notices to roughly mid-June for some teachers. The school board has already OK’d 243 final layoff notices for teachers and other certificated employees.

Under the tentative contract agreement, the school district would restore 200 of the positions on the school board’s final layoff list, no later than 30 work days following the board’s action on the final list. The final layoff list may be OK’d by the school board in June.

May 10, 2010

LBUSD, TALB Reach Tentative Agreement

The Long Beach Unified School District and the Teachers Association of Long Beach have reached a tentative contract agreement that includes five unpaid furlough days next school year, along with other contract changes, in exchange for the preservation of 200 teaching jobs.

“We’re pleased that TALB recognizes the severity of the state’s fiscal crisis and is willing to compromise during these tough times for public schools,” said Christopher J. Steinhauser, superintendent of schools for the Long Beach Unified School District. “While the shorter school year is not ideal, it is part of a fair agreement that helps us to save jobs and protect students and teachers from even deeper cuts to the classroom.”

If TALB’s membership votes for the deal, the Board of Education will consider the agreement for final approval.

The furlough days will shorten the 2010-11 school year to 175 instructional days, down from 180 this year. The 175-day school year is the minimum length now allowed by the state.

Three of the furlough days will occur Monday through Wednesday, Nov. 22 to 24. These dates immediately precede the Nov. 25 and 26 holiday for Thanksgiving. The fourth and fifth furlough days will be taken March 25 and March 28, 2011, creating a four-day weekend next spring. The tentative Memorandum of Understanding on furlough days is available here.

An accompanying comprehensive tentative agreement also calls for cost-saving measures related to health benefits. None of these measures will result in any increase in employee contributions toward monthly health care costs for full-time teachers. LBUSD employees currently pay zero in monthly payroll deductions for health care, and that will not change. The Pacificare HMO option, however, will be eliminated as of Jan. 1, and teachers will see dental and pharmacy plan changes designed to save money without reducing benefits to employees. The comprehensive tentative agreement also includes an attachment spelling out language changes related to teacher transfers.

The tentative deal is designed to save the school district $12 million as it copes with ongoing, multi-billion-dollar cuts in state funding for public schools. The draft agreement continues through June 30, 2012, though the compensation portion of the contract would be reopened no later than February 1, 2011 for the 2011-12 school year.

April 16, 2010

Monthly Health Care Contributions Off the Table

In an effort to wrap up negotiations, the school district’s bargaining team presented a revised, comprehensive proposal to TALB in today’s bargaining session.  The revised proposal eliminated the district’s request for a 5 percent employee contribution toward monthly health care costs, instead proposing a total of five furlough days next school year.  The district’s proposal reiterated its commitment to save 200 teaching jobs if TALB agrees to the LBUSD proposal.

The latest district proposal also eliminates a number of other components in LBUSD’s prior proposal regarding leaves, class size and other items in a good faith effort to complete bargaining and save teaching jobs.  The district’s proposal would still save roughly $12 million – the amount of savings originally sought by LBUSD.  The district proposal still included eliminating the Pacificare HMO, switching pharmacy benefit providers, and other items on which LBUSD has reached conceptual agreement with TALB.

In addition to today’s bargaining session, the two teams met April 1, after which TALB issued its own bargaining update. That update, which provided an analysis of TALB’s proposal and the district’s proposal, was misleading.  TALB leadership in its update stated that TALB’s proposal “saved about $11.8 million over two years, vs. their (LBUSD’s) proposal which saved about $12 million over one year.”

An honest analysis would compare the proposals over the same time period.  That type of analysis, which TALB possessed when they issued their update, shows the following.

Annualized Savings (savings if all of each proposal were in place for an entire year)

    

Projected Budget Savings (taking into account that some health benefit components of both proposals don’t take effect until January 1, 2011, when half the first year is over):

Our school district, which faces a budget shortfall of $60 million next year, is seeking $12 million in savings from TALB.

TALB’s communications continue to paint the district’s efforts to save jobs through bargaining as disingenuous, saying LBUSD is “using the economic crisis and layoffs as a smokescreen,” as if Long Beach is the only school district to have proposed furloughs to save jobs.  Teachers in school districts throughout the state have voted to save teaching jobs by implementing furlough days as a temporary measure to help their school districts survive the worst economic crisis in our lifetime.

March 12, 2010

Layoffs, Furloughs and Health Benefit Plans

The Long Beach Unified School District and the Teachers Association of Long Beach met yesterday in contract negotiations. The school district continued to address Article VI (compensation). The district's bargaining team submitted its second proposal on compensation, listing a number of cost reduction options and the amount of savings they would achieve. Among these options were three furlough days, along with health benefits modifications. The school district emphasized that any savings resulting from these cost reduction options would be used to mitigate teacher layoffs, and that at least 200 teaching jobs would be saved.

TALB has not yet submitted a written response to the school district's proposals on compensation but indicated that it would provide a counterproposal at the next negotiation session.

Layoff Notices – Why more than 1,000?

The school district's bargaining team explained that of the more than 1,000 notices issued to certificated employees, 200 were to provide necessary alternatives for the hearing process, while about 100 were for retirements that are anticipated but couldn't be taken for granted. Another 100 are for people on leave who have a right to a job and who we assume won't exercise that right. Education Code provisions require the school district to issue these notices in order to protect the positions of those on leave and those yet to retire, and to avoid the fiscal problems of being overstaffed in an environment of evaporating revenues. The layoff process is complex, and the school district must make sure that a sufficient number of notices are issued to cover the budget shortfall and any technical issues that may arise during layoff hearings.

Additional Efforts to Save Jobs

Regarding the remaining notices that were issued, the school district noted that it is pursuing all options to save jobs, including seeking grants and additional funding sources as well as actively advocating for more funding flexibility at the federal level through the waiver process and at the state level through our own special legislation. We are hopeful these efforts, both the identifying of additional revenue and the increased flexibility of current funding, will result in an ability to reduce the layoffs to a significant degree. In concert with these efforts, the school district's compensation and benefit proposal would allow LBUSD to save more than 200 teaching jobs.

District's Proposal for Health Benefits

The school district's proposal is for health benefit contributions, made on a tenthly basis, that vary from $24.41 for a single person in Kaiser to $87.16 for a family in the Blue Shield PPO. These amounts would be pretax so the actual impact on takehome pay would be significantly less, in that a portion of those earnings would have gone for taxes anyway. The contributions are modest in comparison with other school districts, public agencies and private industry, and lower than those paid by other public employees in Long Beach. These tenthly contributions, along with certain other changes, don't constitute dramatic departures from the tradition in Long Beach schools of providing highly competitive health benefits packages.

The next bargaining session is scheduled for Friday, March 26.

February 24, 2010

The Long Beach Unified School District and the Teachers Association of Long Beach met in contract negotiation sessions on Feb. 11 and Feb. 18.  In those sessions, the school district proposed changes to Articles VI (compensation) and VIII (transfers).

The second of the two negotiating sessions came during the same week that the LBUSD Board of Education approved notices of potential layoffs for 755 positions, 400 of which were elementary teacher notices that produce an estimated savings of $11 million.  Many of the compensation items proposed by the district in bargaining are aimed at reducing the final number of layoffs needed to help balance the budget during the worst financial crisis in recent history.

While layoffs are one of the few actions that a school board can take unilaterally, the compensation and transfer items presented to TALB are subject to negotiations and could reduce expenditures significantly, therefore reducing the number of layoffs needed.
        
The compensation article of the contract also includes health benefits.  The school district proposed that effective Jan. 1, 2011, TALB members would contribute 5 percent of their health insurance costs.  Employee contributions could be collected over 10 months on a pre-tax basis.  Details on how much an employee would have to pay under the current medical plan rates are here.  It is important to remember that because the amount can be contributed before the income is taxed, the actual reduction to take-home pay is significantly less (depending upon the percent of taxes the employee pays).
   
The school district recommended elimination of the Pacificare HMO, along with changes to pharmacy programs, behavioral health plans and dental plans.  Details of these proposed changes are provided here.  The estimated savings from the district’s proposal on health benefits would be $8 million for all employees, with approximately $5 million attributable to TALB.

Among the school district’s compensation proposals was the implementation of three furlough days during the 2010-11 school year.  The implementation of three furlough days, if agreed to, would save LBUSD approximately $8.5 million for all employees, approximately $6 million of which would be savings from TALB members if the union agrees to the proposal.

The district’s proposal on transfers involves vacancies, seniority, employer and employee-initiated transfer requests, returns from leave of absence, various factors used to determine transfers, and other provisions.

The next bargaining session is scheduled for March 11 at the TALB office.