december 5, 2013 fact finder recommendations

December 5, 2013Fact Finder Recommendations

1. The Board’s Negotiation Issues/Concerns - Ed Inghrim

2. Salary/Compensation - Ed Inghrim3. Healthcare - Ed Inghrim4. Graduate Study & Tuition Reimbursement

- Ralph Puerta5. Retirement Incentive - Ralph Puerta

Fact Finder Recommendations vs. SVEA Proposal

• PSEA – 182,000 dues paying members (NEA – 3M members)

• PA teachers granted Right-to-Strike

• Schools collect dues for the Union

• Benefit packages established years ago when teachers were substantially underpaid (e.g., their pensions that were negotiated with Harrisburg)

• Salary compensation that is based on time in service & education, not merit.

• Decades of institutionalized negotiation practices1. Mediation2. Binding/Non-binding arbitration3. Fact Finding4. Strike

Negotiation Challenges – School Board

Local $32.6M – 81%

Federal $0.5M – 1%

State $7.2M – 18%

Saucon Valley Revenues – 2012/2013 Budget

Department of Education’s aid formula classifies the District as wealthy so only 18% of our revenues comes from Harrisburg. 92% of PA Public Schools get more aid, as a percentage of their budgets, then the SVSD. 4

* Source: US Census Bureau

SVSD Demographics

Line 1

Line 8

Households %

Total Income

(Millions)Avg.

Income Households %

Total Income

(Millions)Avg.

Income< $40K 971 39% $23.7 $24,369 1,732 27% $40.7 $23,522$40K - $50K 339 14% $15.2 $44,801 590 9% $26.4 $44,712$50K - $75K 598 24% $41.4 $69,193 1,372 21% $90.4 $65,867$75K - $100K 241 10% $21.1 $87,500 867 13% $75.9 $87,500$100K - $150K 241 10% $29.7 $123,081 1,031 16% $127.2 $123,387> $150K 112 4% $21.7 $193,750 873 14% $180.8 $207,073Total 2,502 $152.7 $61,022 6,465 100% $541.3 $83,734

37%1,047Households

Collecting SS or SSI

1,45442%

Hellertown Lower Saucon

Income Range

Year Elementary MiddleHigh

SchoolDistrict

Average

2005 10.1 13.1 7.2 9.92006 9.8 10.7 8.4 9.52007 10 12.4 8 9.92008 8.9 10.4 11.1 102009 10.9 12.2 10 10.92010 15.6 14.7 14.1 14.92011 19.9 13.2 15.7 16.72012 23.2 18.6 16.8 20.12013 26 18.7 17.3 21.6

Single Family Home – Total RETHB - $4,200/Yr. = 17% of Line 1 Avg.LS - $6,100/Yr. = 26% of Line 1 Avg.

SVSD – Major Concern

1. The Public School Employees' Retirement System (PSERS) is seriously under funded and mandated employer contribution rates increase from 4.78% in 2009/10 to 25.8% in 2015/16, or more than 400% , which could drain much of the our fund balance.

2. Currently the State reimburses schools for ½ of their costs for payroll taxes and retirement contributions. Thus, it is possible that the State might change the reimbursement rate or cut Basic Education funding or do both if the PSERS increases strain their budgets.

$1.5B

Independent Fiscal Office

Typical PA Public School Salary Schedule

$44,153-$41,000 = $3,153 or 2.6%/Year

ColumnsContinuing Graduate Level Education

Rows

Yea

rs o

f Ser

vice

Note: This concept is ubiquitous throughout the US Public Education System

Step B B+15 M M+15 M+30 M+45 D123456789101112131415

$41,000$42,025$43,076$44,153$45,256$46,388$47,547$48,736$49,955$51,203$52,483$53,796$55,140$56,519$57,932

(Column Salary Increases)(Step Salary Increases)

$48,247-$41,000 = $7,427 or 5.9%/Year


Rows

Yea

rs o

f Ser

vice

Step B B+15 M M+15 M+30 M+45 D123456789101112131415

$41,000$42,025$43,076$44,153$45,256$46,388$47,547$48,736$49,955$51,203$52,483$53,796$55,140$56,519$57,932

$42,230$43,286$44,368$45,477$46,614$47,779$48,974$50,198$51,453$52,739$54,058$55,409$56,795$58,215$59,670

$43,497$44,584$45,699$46,841$48,012$49,213$50,443$51,704$52,997$54,322$55,680$57,072$58,498$59,961$61,460

$44,802$45,922$47,070$48,247$49,453$50,689$51,956$53,255$54,587$55,951$57,350$58,784$60,253$61,760$63,304

Note: Traditionally Unions expect the value of each cell to increase year over year with a Cost of Living Adjustment (COLA). This is how employees at the highest step get pay increases.

Typical PA Public School Salary Schedule(Step & COLA Salary Increases)

$43,286$41,000

$45,699$48,247

Step B B+15 M M+15 M+30 M+45 D123456789101112131415

$53,484-$41,000 = $12,484 or 10%/Year

$41,000$44,799

$48,949$53,484

Typical PA Public School Salary Schedule(Step, Column & COLA Salary Increases)

Rows

Yea

rs o

f Ser

vice


SVSD Salary Schedule

STEP B B+15 M M+6 M+12 M+18 M+24 M+30 M+45 M+601 $44,232 $46,560 $49,010 $50,481 $51,995 $53,555 $55,162 $56,816 $59,657 $62,6402 $45,600 $48,000 $50,526 $52,042 $53,603 $55,211 $56,868 $58,574 $61,502 $64,5773 $47,010 $49,484 $52,089 $53,651 $55,261 $56,919 $58,626 $60,385 $63,404 $66,5754 $48,464 $51,015 $53,700 $55,311 $56,970 $58,679 $60,440 $62,253 $65,365 $68,6345 $49,963 $52,593 $55,361 $57,021 $58,732 $60,494 $62,309 $64,178 $67,387 $70,7566 $51,508 $54,219 $57,073 $58,785 $60,549 $62,365 $64,236 $66,163 $69,471 $72,9457 $53,101 $55,896 $58,838 $60,603 $62,421 $64,294 $66,223 $68,209 $71,620 $75,2018 $54,744 $57,625 $60,658 $62,477 $64,352 $66,282 $68,271 $70,319 $73,835 $77,5279 $56,437 $59,407 $62,534 $64,410 $66,342 $68,332 $70,382 $72,494 $76,118 $79,92410 $58,182 $61,244 $64,468 $66,402 $68,394 $70,446 $72,559 $74,736 $78,473 $82,39611 $59,982 $63,138 $66,462 $68,455 $70,509 $72,624 $74,803 $77,047 $80,900 $84,94512 $61,837 $65,091 $68,517 $70,573 $72,690 $74,870 $77,117 $79,430 $83,402 $87,57213 $63,749 $67,104 $70,636 $72,755 $74,938 $77,186 $79,502 $81,887 $85,981 $90,28014 $65,721 $69,180 $72,821 $75,005 $77,256 $79,573 $81,960 $84,419 $88,640 $93,072

SVEA Schedule11/12 Salary Schedule

Current SVSD salary schedule has 14 steps and 10 columns.Starting salary at step 1 with a Bachelors Degree - $44,232.Maximum salary at step 14 and a Masters or Masters equivalent plus 60 additional graduate level credits - $93,072.

6 Credit Increments

$58,574-$47,949 = $10,625 or 22% in one year

$47,949$58,574

2012 – 20141. Salary Schedule Frozen at 2011/2012 Values – No COLA

2012-2013 2. Salary freeze

2013-20143. Each employee receives a $1,500 non-recurring stipend

2014-20154. Maximum one step and one column movement on the 2012-2013 schedule.5. Employees who were at Step 14 in 2013-2014 receive a $1,500 stipend6. Remove Columns B+15, M+6 and M+18 and add column B+24

2015-20167. Maximum one step and one column movement.8. Add $950 COLA to each cell in 2012-2013 salary schedule

Similar to Boards except:1. Flip school years 2013-2014 and 2014-2015 & $900 COLA in 2015-20162. Remove Columns B+15, M+6, M+18, M+30 and M+45 and add column B+24, M+36, and M+48.

Board Proposal

Association Proposal

Note: A stipend does not add to base salary & does not require PSERS contribution.

Association – Modified Salary Schedule

STEP B B+15 B+24 M M+6 M+12 M+18 M+24 M+30 M+36 M+45 M+48 M+601 $45,338 $47,724 $47,724 $50,235 $51,743 $53,295 $54,894 $56,541 $58,236 $58,236 $61,148 $61,148 $64,2062 $45,600 $48,000 $48,000 $52,042 $53,603 $55,211 $56,868 $58,574 $61,502 $61,502 $61,502 $61,502 $64,5773 $47,010 $49,484 $49,484 $53,651 $55,261 $56,919 $58,626 $60,385 $63,404 $63,404 $63,404 $63,404 $66,5754 $48,464 $51,015 $51,015 $55,311 $56,970 $58,679 $60,440 $62,253 $65,365 $65,365 $65,365 $65,365 $68,6345 $49,963 $52,593 $52,593 $57,021 $58,732 $60,494 $62,309 $64,178 $67,387 $67,387 $67,387 $67,387 $70,7566 $51,508 $54,219 $54,219 $58,785 $60,549 $62,365 $64,236 $66,163 $69,471 $69,471 $69,471 $69,471 $72,9457 $53,101 $55,896 $55,896 $60,603 $62,421 $64,294 $66,223 $68,209 $71,620 $71,620 $71,620 $71,620 $75,2018 $54,744 $57,625 $57,625 $62,477 $64,352 $66,282 $68,271 $70,319 $73,835 $73,835 $73,835 $73,835 $77,5279 $56,437 $59,407 $59,407 $64,410 $66,342 $68,332 $70,382 $72,494 $76,118 $76,118 $76,118 $76,118 $79,924

10 $58,182 $61,244 $61,244 $66,402 $68,394 $70,446 $72,559 $74,736 $78,473 $78,473 $78,473 $78,473 $82,39611 $59,982 $63,138 $63,138 $68,455 $70,509 $72,624 $74,803 $77,047 $80,900 $80,900 $80,900 $80,900 $84,94512 $61,837 $65,091 $65,091 $70,573 $72,690 $74,870 $77,117 $79,430 $83,402 $83,402 $83,402 $83,402 $87,57213 $63,749 $67,104 $67,104 $72,755 $74,938 $77,186 $79,502 $81,887 $85,981 $85,981 $85,981 $85,981 $90,28014 $65,721 $69,180 $69,180 $75,005 $77,256 $79,573 $81,960 $84,419 $88,640 $88,640 $88,640 $88,640 $93,072

2013 - 2015 Salary Schedule

Note: All Step 1 cell values increased by 2.5% from the 2011/12 schedule. Active columns unshaded; archived columns shaded.

Fact Finder – Recommendation(Adopt the Association’s Proposal with Modifications)

1. 2013-2014 One Step & One Column, on the 14th payday, and $1,500 stipend for employees on step 14 in 2011-2012

2. 2014-2015 - $1,500 stipend for all employees

3. 2015-2016 One Step & One Column, on the 14th payday, and add $950 COLA to each cell in the salary schedule.

The following analysis Includes:*1. Direct Salary2. Stipends3. PSERS Employer Contribution4. Payroll Taxes

* PSEA/SVEA defined baseline parameters (i.e., the staff in 2011/12)

2012/13 2013/14 2014/15 2015/16$13.0M

$13.5M

$14.0M

$14.5M

$15.0M

$15.5M

$16.0M

$16.5M

$17.0M

(1): Savings includes $440K in salary & bonus + $60K in PSERS contributions.* Assumes State reimburses ½ of SS & PSERS costs.

FF SVEA

FF SVEA

FF SVEA

FF SVEA

Salary

SS*

PSERS*

Association Compensation Offer vs. F.F. Recommendation(1)

(Total Spending increases from $4.6M to $5.1M)

Stipend

2011/12

Savings

Savings

OBJECT Description ACTUAL

2010/2011 ACTUAL

2011/2012 2012/13 2013/14 2014/15 2015/16100 SALARIES 19,122,903$ 19,714,002$ 19,714,002$ 19,878,165$ 20,201,744$ 20,590,763$ 200 BENEFITS 6,937,882$ 7,289,800$ 8,770,594$ 9,907,758$ 11,094,323$ 12,056,299$ 300 PROFESSIONAL AND TECHNICAL SERVICES 1,734,394$ 1,704,491$ 1,721,536$ 1,738,751$ 1,756,138$ 1,773,700$ 400 CONTRACTED MAINTENANCE 815,102$ 827,779$ 778,660$ 729,192$ 617,353$ 532,650$ 500 OTHER PURCHASED SERVICES 2,708,126$ 2,970,217$ 3,044,472$ 3,120,584$ 3,198,599$ 3,278,564$ 600 SUPPLIES 2,064,958$ 1,819,929$ 615,283$ 630,665$ 646,432$ 662,592$ 700 PROPERTY 364,951$ 210,801$ 528,367$ 548,526$ 569,455$ 591,182$ 800 OTHER 1,087,737$ 1,019,724$ 1,029,921$ 1,040,220$ 1,050,623$ 1,061,129$ 900 OTHER USES OF FUNDS 3,210,000$ $ 3,357,000* 3,659,250$ 3,842,213$ 4,034,323$ 4,236,039$

Total 38,046,052$ 38,913,743$ 39,862,084$ 41,436,074$ 43,168,989$ 44,782,918$ Increase 948,342$ 2,522,331$ 4,255,246$ 5,869,175$ 13,595,094$

SVSD – Other Cost Objects

Salary & Benefits 68% 73%

• On the average the SVSD spends about $12,000 per year for employee Healthcare.

• The District is self insured and carries catastrophic insurance.

• Under the current contract the employee contribution is:

Healthcare Objectives

Category Individual 2 Person FamilyPremium Share: $45 $85 $95Co-Pay Office Visis:Co-Pay ER:Deductibles $250

$15$35

$500

2011 Data

Saucon ValleyKaiser Average

(Weighted based on actual count for teachers only)Premium/Rates PEPM Employee Contribution PEPM % Contribution

$0

$200

$400

$600

$800

$1,000

$1,200

Premium Rate Employee Contribution

Saucon Valley

Kaiser Average

$1,108 $265 26%$1,120 $78 7%

Elite Group Consulting, Inc.


*

* PEPM – Per Employee Per Month

• Employee should pay about 10% of the plan cost• Raise the deductible to close the gap with private industry

plans (average national in-network for single coverage is $675, SVSD is $250)


Plan Year Deductible Office Visit UC/ER Retail RX Mail RX

Percentage orDollar Premium

Share2012-2013 $250/$500 $15 $35 $5/$15 $10/$30 $45/$85/$95

2013-2014 $500/$1000 $15/$30 $50/$75 $10/$25/$50 $20/$50/$100 $55/$120/$155

2014-2015 $500/$1000 $20/$40 $50/$75 $10/$25/$50 $20/$50/$100 $60/$130/$170

2015-2016 $500/$1000 $20/$40 $50/$75 $10/$25/$50 $20/$50/$100 $60/$130/$170

Board Proposal

Plan Year Deductible Office Visit UC/ER Retail RX Mail RX

Percentage orDollar Premium

Share2012-2013 $250/$500 $15 $35 $5/$15 $10/$30 $45/$85/$95

2013-2014 $275/$550 $20 $25/$75 $0/$20/$30 $20/$50/$100 $55/$120/$130

2014-2015 $275/$550 $20 $30/$100 $0/$20/$30 $20/$50/$100 $60/$125/$135

2015-2016 $300/$600 $20 $30/$100 $0/$25/$35 $20/$50/$100 $65/$135/$155


Plan Year Deductible

Office Visit

UC/ER Retail RX Mail RX Dollar Premium Share

2012-2013

$250/$500

$15 $35 $5/$15 $10/$30 $45/$85/$95

2013-2014*

$275/$550

$15/$30 $25/$75 $10/$20/$40

$20/$40/$80

$55/$120/$135

2014-2015

$500/$700

$20/$40 $50/$75 $10/$25/$50

$20/$50/$100

$60/$130/$155

2015-2016*

$500/$700

$20/$40 $50/$75 $10/$25/$50

$20/$50/$100

$60/$130/$170

Fact Finder Recommendation

* For school years, 2013-2014 and 2015-2016, only, the amounts noted in the columns above are effective on the 14th pay period of the school year.

• Approved the Board’s Premium share request

• Approved the Board’s deductible for single coverage and slightly increased the Association’s proposal for family coverage.

Graduate Study

• Overview• Graduate Study Database - Problems• Graduate Study Database - Examples• The problem is not behind us• Board Proposal

Graduate Study - Overview

• We recognize the value of the teaching profession

• We recognize the importance of professional development over a teacher’s career

• We believe the current graduate study system is not meeting school district objectives for cost, quality, and relevance to district objectives

Graduate Study – Underlying Conflict

• The purpose of graduate study is to achieve career professional development in support of the academic objectives of the school district as defined by the Superintendent.

• Math. Reading. Science.• Graduate study is also a major component of

teacher salary, accounting for 20% of average teaching staff salary, and as high as 30% for senior teaching staff.

Graduate Study - Cost

• $ 12,500,000 annual district salary cost• $ 1,855,200 portion from graduate study• $ 65,000 average annual teacher salary• $ 12,368 portion from graduate study• $ 250,000 annual tuition reimbursement• $ 2 million graduate study salary and tuition

account for almost 5% of the $40 million total school district annual budget.

Graduate Study – Contract negotiation

• The board is not suggesting to eliminate graduate study in order to save this expense.

• Changes in the 2008-12 contract did not solve continuing problems undermining the value of our graduate study program.

• Board proposals in the current contract negotiation would improve the quality and slow the rate of graduate study, but still not prevent the highest salary attainment.

Teaching Staff Profile

Problems of Cost, Quality, and Relevance

• Our analysis of this 2,200 course history over ten years reveals the following problems:– The course and program quality is inadequate– Courses and programs lack progression– Graduate “classes” lack local interaction– Little relationship to district objectives– Little benefit of career professional development

Problem Definitions

• Quality– A level of rigor appropriate for the degree level

• Progression– A logical connection and building between courses

as the degree level increases through three Masters– Instruction. Subject. Professional.

• Career Professional Development– Leading to subject mastery and impact on our

students

Example A – Bachelors to Doctorate (2012)

• Teacher as Inquirer• Teacher as Researcher• Teacher as Evaluator• Research and Professional Development• Learning Sciences & Technologies• Designing Learning Environments• Doctoral Qualifying Research Project• Social Basis of Human Behavior• Social Cognition

Example B – Bachelors to Third Masters (2008)

• Integrating the Internet• Law & Current Issues• High Performing Teacher• How to Get Parents on Your Side • Succeeding with Difficult Students• Classroom Management • Language Arts Activities• Word: The Ultimate Writing Tool• Media Literacy in TV Age

Example C – Bachelors to Third Masters (2012)

• Reading, Writing, Language Arts• Strategic Reading in Content Area• Statistical Methods of Education• Computer Graphics for Teachers• Reducing Classroom Conflict• Intro to Computers• Issues, Laws, and Trends in Education• Integrating Technology into the Curriculum• Meaningful Activities for Interesting Classrooms

Example D – Second to Third Masters (2008)

• Integrating the Internet into Curriculum• Making Sense of Money• Educational Leadership Issues and Answers• Excel - The Ultimate Information Tool• Word - The Ultimate Writing Tool• Access• Computer Graphics• Power Point• Apple Works 6• Ed Leadership: Trends and Issues

Example E – Second to Third Masters (2010)

• How to Get Parents On Your Side• Classroom Diversity• Reducing Classroom Conflict• It's All About You• The High Performing Teacher• Assertive Discipline• Motivating Todays Learner• Differentiated Instruction• Behavioral Social and Academic Interventions• Reading Across the Curriculum

Inadequate course quality history

• In the 2008-12 contract negotiations we confronted sub-standard course selection at two internet institutions - Fresno and Indiana Wesleyan.

• Through 2009 our teachers took 380 courses at these institutions, 309 of which were inappropriate.

• We eliminated both institutions in the 2008-12 contract.

Fresno and Indiana Wesleyan244 courses - 22 at Bachelor level - 88 at 3rd Masters level

SVEA Rebuttals to Board Proposals

• "An abandonment of the concessions and improvements in the last contract”

• "A radical change for problems that have already been solved”

– Elimination of Fresno and Indiana Wesleyan– Creation of Graduate Study Committee

The problem is not behind us

• The elimination of Fresno and Indiana Wesleyan was not a teacher concession. This practice was without justification.

• The problem is by no means behind us. – (a) legacy salary cost– (b) inadequate professional development– (c) continuing practice at other institutions– (d) decline of local interactive classes

(a) The legacy cost of the course quality problem

• Among five institutions, Fresno, Indiana Wesleyan, Gratz, Kutztown, and East Stroudsburg, there are 796 courses that the Board deems of questionable, inadequate, or entirely below graduate level quality.

• This problem remains in our district cost every year going forward.

• The Board estimates a current salary burden in excess of $450,000 per year from hundreds of inadequate courses that should never have been taken, regardless of contract rules.

(b) Professional development legacy cost

• Fresno, Indiana Wesleyan, and their like institutions are lost professional development that did not take place.

• 5 teachers at the M30 level and 14 teachers at the M60 level with four of more Fresno courses.

• 13 teachers at the M30 level and 5 teachers at the M60 level with four or more Indiana Wesleyan courses.

(c) Graduate study courses after Fresno and Indiana Wesleyan

Wilkes history

• 243 of 681 courses (35%) are inappropriate for degree level taken

• Of the 243 inappropriate courses 215 are taken at two or more degree levels

• An additional 209 courses are of instructional focus rather than the preferred subject focus

• Of the 209 courses 189 are taken at multiple degree levels

Wilkes - Not Graduate Level

East Stroudsburg history





Gratz history





(d) Wilkes and the decline of local graduate classes

Wilkes 2008-13

Local 2008-13

The Source of the Problems

• Graduate institution limitations– Quality– Progression

• Blanket program course approval• Contract language• Past Practice

Board proposal would change

• Requirements for course quality and relevance• Requirement for logical course progression• Redefinition of requirements to move to M45

and M60 columns• Control number of courses – 2 per year• Control of tuition reimbursement (a funding

cap for second and third Masters)

Association Rebuttals to Board Proposals

• No Change• The Board did not visit classrooms• The courses are required within programs• The rate of study is required in programs• The option to tailor substance into programs

was not explained


• B to M – Tuition reimbursement 100% of East Stroudsburg rate– Twelve credits per year

• M to M36 and M36 to M60– Tuition reimbursement capped at $2,000 per year– GSC will review closely all courses and programs to

ensure the rigor and professional benefit from each course

– Decisions by the GSC are grievable except that there can be no grievance based upon past practice.

Retirement

• Current contract terms• Board proposal• Association proposal• Fact Finder

Retirement Incentive

• Previous Boards negotiated a retirement incentive clause that paid teachers 45% of their salary on retirement, paid out in $10K annual increments.

• This was not an incentive as it contained no conditions for timing. It was exercised solely at the teacher’s discretion.

Retirement Incentive

• The Board negotiated a compromise in the last contract whereby employees with 20 or more years of service would continue to receive the 45% payment (32 employees) and employees with less than 20 years of service would receive a fixed amount pro-rated to their years of service (about 150 employees).

• Although lower in total cost, this new language also was not an incentive.

Board proposal for this contract

• End the retirement payment with the end of the 2012-16 contract.


• No Change.• “The Board proposal to eliminate the

retirement payment is a breach of contract, as the previous change in the 2008-12 contract was expected to be a separate and irrevocable agreement.”


• The Fact Finder recommended a true “retirement incentive” that would pay $1,750 for every year of service if an employee retired before the expiration of the 2012-16 contract.

• At the end of the contract the retirement clause will be eliminated.

Potential full retirees

Service 08/09 Col Status Service 15/16 Salary 15/16 @ 45% FF Offer

33.74 M45 40.74 $94,022 $42,310 $71,29527.52 M12 34.52 $81,960 $36,882 $60,41026.62 M45 33.62 $89,590 $40,316 $58,83526.53 M30 33.53 $94,022 $42,310 $58,67823.94 M6 30.94 $75,955 $34,180 $54,14523.76 M 30.76 $75,955 $34,180 $53,83022.99 M60 29.99 $94,022 $42,310 $52,48321.36 B15 28.36 $70,130 $31,559 $49,63020.19 M60 27.19 $94,022 $42,310 $47,583

$346,355 $506,888

Potential other retirees

• The next 30 teachers have 18-24 years service• If they were to retire in 2016:

– Fact Finder proposal cost is $1,190,000 now– Board proposal cost is $679.000 now– Association proposal cost is $679.000 anytime

december 5, 2013 fact finder recommendations

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