High conflict is again on the menu at the bargaining table this year, according to OSBA Associate Executive Director Ron Wilson, thanks to financial emergencies, supplemental retirement programs and rising health insurance costs.

“Two school boards have already reached impasse,” he said, noting Corvallis and Harney County (Burns-Hines), plus Salem-Keizer’s teacher union recently voted by a 2-to-1 margin to reject a tentative contract agreement, forcing the parties back to the bargaining table.

A declaration of impasse triggers both parties to make their final offers within seven days which then starts a 30-day cooling off period. At the end of the cooling off period, implementation, strike or a settlement can happen. 

In Burns, the district declared impasse after failing to reach settlement on a funding clause which would allow the board to re-open negotiations in case of a financial emergency. Salary and insurance contributions are also in dispute, but the parties appear to be close in these areas.

Early retirement

One of the major reasons behind school district cost increases, according to Oregon Secretary of State Bill Bradbury, is early retirement incentives (ERIs) also known as supplemental retirement programs (SRPs). These costs are included in support service budgets. A recent secretary of state audit noted that school districts could save $162 million per year if they spent the state average on support services.

To reduce financial impacts of SRPs, boards are using phase-outs, adding cost controls, or a combination. SRPs are phased out in two ways: a gradual phasing out of the entire program, or replacing it with a less-costly contribution program, such as tax-sheltered annuities (TSAs) and/or Voluntary Employees Beneficiary Association (VEBA) accounts.

Cost control methods include lowering stipends, reducing number of years benefits are paid, limiting the district’s maximum contribution toward insurance and/or requiring a specific number of days of substitute service in return for the SRP benefits.

The Corvallis SRP placed the biggest wedge between the board and teachers’ union. “The board hates the idea of reducing the early retirement benefit for teachers who give their hearts and souls to our students, but we see no other choice,” said Board Chair Cyrel Gable in a recent email to all district staff. “Painful as it is, the board is compelled to face the fact that early retirement benefits are no longer sustainable. As a long-term strategy, we need to begin moving this money back into classrooms.”

These benefits are 233 percent above the average for nine comparable districts. Under the current agreement, retired teachers would receive about $106,000 in stipend and insurance premium contributions in addition to their PERS retirement pensions.

The Salem-Keizer board and union are still disputing the proposed sunset of its early retirement incentive. Recent settlements in Rainier and Vale also incorporated sun-setting those programs. Last spring, an OSBA study showed that out of 122 boards with SRPs, 37 have been terminated.

To learn more about supplemental retirement program costs, plus more information on bargaining retirement programs, check out Bargaining Resources, Early Retirement Program Resources and the Bargaining Insurance Workshop. Questions regarding strategies and techniques can be answered by contacting Ron Wilson, OSBA.