Reference no: EM131372221
The annual contract negotiations between the Pleasant Ridge Board of Education and the Pleasant Ridge Classroom Teachers Association (PRCTA) are due to begin July 1, one week from now. Under state law, the new contract must be signed by September 1 or an impasse will be declared. Following an impasse, state law requires simultaneous mediation and fact-finding. the fact finder's report must be published no later than September 20. Under the law, the parties could arbitrate unresolved contract issues using a total-package final-offer selection if both agree that arbitration would be binding. The state law prohibits teacher strikes, but about 10 short strikes occurred in the state last year at the time the school opened.
The contract at Pleasant Ridge was not signed until November 10 last year, even though mediation and fact-finding occurred. The PRCTA repeatedly requested arbitration, but the board refused. Although no strike occurred, two "sickouts" took place in October when teacher absence rates exceeded 90 percent and schools had to be closed. For the upcoming contract, considerable sentiment exists for "hitting the bricks" if negotiations are unsatisfactory.
About 5,000 students are enrolled at Pleasant Ridge in kindergarten through 12th grade. There are 200 teachers, of whom 190 are PRCTA members. Student populations are growing at about 5 percent per year at the secondary level and at 10 percent at the elementary level.
The school system's operating budget is funded from two sources: state school aid, based on student enrollments, and local property taxes. The legislature has maintained per-student funding at the current level for the upcoming school year even though the overall budget was cut by 2 percent to avoid a deficit. Local property taxes presently provide the other 60 percent, based on 22-mill levy against assessed market value, which is updated annually. Fifteen mills are permanently required by state law. The other 7 supplemental and are periodically reconsidered by local voters. Five of the 7 mills expire this November and will be subject to reapproval by the voters in the general election. Residential property values increased last year by 4 percent, while commercial properties increased by 1 percent.
School costs are approximately equally divided between salaries and plant, equipment, supplies, lighting and heating, and reduction of bonded indebtness. Of the 50 percent allocated to salaries, 80 percent is paid to the instructional staff represented by the PRCTA. costs for equipment and supplies are increasing at an annual rate of 2 percent, while utility costs are increasing by 8 percent. Of the 50 percent not allocated to salaries, about 20 percent was paid for utilities last year.
The teacher contract includes a defined benefit plan. Pension benefits are based on the average total pay that teachers earn during their last three years of employment, times 1.5 percent, times number of full school years of service in the district. The pension plan is fully funded under the assumption that all accrued and vested benefits would be paid out if all active teachers "retired" during the current year. Since 1990, the contract has contained a "rule of 85" clause. Under that clause, a teacher whose age and years of service in the district equal or exceed 85, and who is under the age of 65, may retire and continue to have the district provide benefits at the same level as if he or she were employed full-time until becoming Medicare-eligible at age 65. The district currently has 50 retired teachers, with 15 of those between the ages of 55 and 65 who met "rule of 85" criteria when retiring. During the next five years, about 30 teachers will meet "rule of 85" requirements.
The PRCTA bargaining committee has just completed its contract demands. Major areas in which it demands changes include a 2 percent salary increase, a reduction in maximum class size from 30 to 25in the elementary grades (K-6), and the granting of tenure after the second year of teaching, instead of fourth. Because about 2,700 students are in the K-6 program, a reduction in class would boost teacher employment. The tenure change would affect 25 second-year and 25 third-year teachers who are now not covered. In case of staff reductions (which are based on seniority in the district), tenured employees who are terminated are entitled to one year's pay under the contract. As part of its preparations for negotiations, the PRCTA surveyed comparable schools and found its members' pay is about 5 percent below the market rate, tenure is normally granted after three years, and the median elementary class size (by contract) is 27.
As the school's governing body, the Pleasant Board of Education must ultimately approve the contract if arbitration is not used. The district's superintendent, personnel director, high school principal, and two elementary principals form the management bargaining team. The school board consists of five persons. Two of these are union members, and three (including these two) were endorsed by the Pleasant Ridge Central Labor Union (PRCLU) at the last election. Two other candidates endorsed by the PRCLU lost to the other present board members. At that last election, two mills of the supplementary tax were added, but the margin was only 500 out of 10,000 votes cast.
1. What should be the initial bargaining position of the school board? What data justify this position?
2. What should the PRCTA consider a reasonable settlement?
3. If fact-finding occurs, what should the fact-finder use as criteria in recommending a settlement? What should the recommendation be?
4. Should the board go to arbitration if an agreement cannot be negotiated?
5. What strategies should the management and union negotiators use to win their demands?
6. If the negotiations go to arbitration as a final-offer package, what should each party's offer by for the arbitrator?