Teachers in the Adams 12-Five Star school district are seeing their salaries cut to help pay for their pensions, and they’re not happy about it.
Pensions are but one of the financial issues bubbling up in Adams 12 and causing an increasingly bitter rift between the teachers’ union and district administration. The head of the District 12 Educators’ Association (DTEA) says morale is as low as he’s ever seen it.
“We are holding resume and interview workshops because our members are asking us to,” DTEA President Dorian De Long said in a recent interview. “Teachers are considering leaving the district. … We were, I felt, a very model district with an excellent reputation, and that’s really beginning to crumble.”
The worm started to turn last fall when teachers took to the streets to protest what they viewed as unnecessary budget cuts and an increasing financial burden on district educators, who hand over 8 percent of their salaries to the Public Employees’ Retirement Association, the state pension system that covers all Colorado teachers.
District officials, though, say they are trying to prepare for the future in light of recent state budget cuts that have come at a time as the cost of salaries, health insurance and retirement pensions are rising.
“With the downturn in the economy and the state budget and reductions, we had to cut over $50 million in the last three or four years,” board President Mark Clark said in a recent interview. “I was just tired of seeing teachers lose their jobs.”
In fact, Clark said his own wife lost her job as a teacher after only two years. Then there are the increasing fees Adams 12 families must pay – an issue both sides agree is a hardship for many.
“What got to me in the last year or so, a parent whose son is in the Legacy High School marching band came up to me – she was a single mom who had lost her job and had three daughters, one in college – and said, ‘I can’t afford to pay these fees.’ She was in tears. At the same time we were increasing salaries for our teaching staff.”
PERA contributions draw attention
While debates over money are common in Colorado’s cash-strapped districts, it’s the supplemental contribution to PERA, known as the SAED (Supplemental Amortization Equalization Disbursement), that sets Adams 12 apart.
The district argues that it can fund its SAED (an additional contribution to PERA designed to help make the retirement system actuarially sound in the future) with money gleaned from cuts to teachers’ salaries. According to PERA, the SAED is “an amount contributed by employers and is, to the extent permitted by law, to be funded by monies otherwise available for employee wage increases.”
Prior to July 2012, the SAED for teachers had been paid for by the district. Effective last July, classified staff and administrative employees started participating in the SAED through a 1.5 percent salary reduction. Last spring, the district began negotiating with teachers on a similar arrangement.
The two sides did not see eye-to-eye at the bargaining table in time to meet the June deadline to adopt a budget for this school year. So, the board approved a budget without teacher buy-in – a budget that included 1.5 percent salary cuts to cover the SAED. The cut went into effect in September.
The school board did agree to defer for five months an additional .5 percent salary reduction to fund the SAED. That was supposed to kick in last month.
The spat moved to mediation, which failed, and then to fact finding in August. The fact finder, Jon Numair, whom was mutually selected by the teachers’ union and the district, issued his report in December. Meantime, the teachers’ union filed a grievance with the Department of Labor. The arbitration on the salary reduction grievance will be held April 23.
The district followed some recommendations from the fact finder and not others, and district officials have made it clear the fact finder’s report is not binding and only “advisory.”
It’s the parts the district is ignoring that have the DTEA up in arms.
“There were some things in the report we (didn’t agree with) but we were willing to accept it as a whole,” De Long said.
The fact finder urged the district not to reduce teacher pay to fund the SAED, for instance, since teachers have already experienced various cuts in terms of furlough days, healthcare cost increases and salary freezes.
“The district shouldn’t do that,” said De Long. “No other school district has done that.”
In a letter published on YourHub, De Long wrote: “This unnecessary action by the school board has hurt all of the hard-working administrators, teachers, and classified staff in our district and damaged a collaborative relationship that has served students and families in our community for 40 years.”
But Clark said there’s good reason for the shift in pension contributions. He explained his rationale for the board’s actions in a community letter issued a day after the board voted 3-2 on resolution about the fact finder’s report.
“Both our classified and administrative employees currently participate in this salary reduction and to exempt one employee group would create inequity,” he wrote.
Board’s perspective on the budget
The board majority and district administrators argued that the hefty budget cuts of recent years have resulted in job cuts, salary and benefit reductions and reduced programming for students – such as the scrapping of outdoor education and middle school sports – and increased fees paid by families.
In his letter, Clark reaffirmed the board’s commitment to the following goals:
- Maintaining the district’s long-term fiscal stability and responsibility
- Valuing education for all of its students
- Increasing student achievement with effective teachers and quality programs
- Saving jobs during the difficult economic conditions in education
- Having all employee groups contribute to the economic stability of the district
Through the budgeting process, Clark said the board and district leadership actually managed to add 17 full-time teachers at a cost of $1.3 million, even after Superintendent Chris Gdowski indicated in his April budget plan there would be heftier cuts this year. But the district also had to freeze pay increases based on years of experience, in addition to making the 1.5 percent cut to cover the SAED.
By taking those two steps, Clark said the district is able “to avoid cutting the equivalent of approximately 120 full-time teaching positions for the 2013-2014 school year.”
In an interview, Clark also pointed out that Adams 12 has one of the highest property tax rates in the state, making asking voters for more money an even greater challenge.
Underlying all these conversations is the premise that the district is in “financial crisis,” De Long said. He argues that’s simply not true and that the cuts in the district have been “discretionary” vs. “necessary.”
The fact finder found that “the district is indeed able to fund some level of economic adjustments.”
“The fact finder struggles with a budget that gains $5 million in increased revenue from the state, plus a gains supplement of $17 million from reserves (leaving still another $4 million in reserves unassigned), totaling around $292 million, being considered a ‘reduced’ budget, when the district projects general fund spending at $269 million and last year spent (about) $260 million,” the fact finder’s report reads.
However, in the December board resolution on the fact finder’s report, the three board members who supported it made it clear there have been tweaks to the budget numbers that the fact finder did not have on hand for his analysis.
The resolution stated, in part, that “… more recent information is now available to the board from the district’s 2011-12 fiscal year final audit, which establishes that the district’s ending fund balance was reduced by approximately $3 million, thus contradicting the fact finder’s conclusion that the district’s reserves have continued to grow.”
The resolution also questioned the fact finder’s analysis.
“The fact finder does not appear to fully comprehend the complexities of the district’s budgeted revenues and expenditures and has not taken into account the difference between ongoing and one-time funding sources.”
For now, the district is caught in a he said/she said battle over the budget and the cuts. And De Long maintains the district has the money it needs to cover employee raises and SAED contributions.
“The district has very much an ability to fund and pay for all of these things. It’s an issue of willingness.”