The special meeting of the Town of Prospect was held on March 28th. It was attended by 75 residents. The paper ballot vote on a motion to reject the arbitration award resulted in:
43 Yes votes and 32 No votes.
Under state law, the vote to reject must be by a 2/3 majority (In this case, it would have required a 50 to 25 vote), so the motion did not pass. As a result, no further action on this contract is permitted. The contact will go into effect for the 3 year term beginning with the 1998-99 school year. The severance pay article will stand as submitted below by the teachers' union, and awarded by the first arbitration panel.
To consider a vote to reject the February 19, 1998 arbitration award
involving Region 16 Board of Education and
Region 16 Education Association.
A copy of the arbitration award is on file in the Office of the Town Clerk.
To transact any other business proper to come before the meeting.
Dated at Prospect, Connecticut this 5th day of March, 1998
JOYCE K. JONES Vice Chairman Town Council
Summary:
This fall, the Region 16 Board of Education and the Region 16 Education Association negotiated a new contract for the period August, 1998 to August, 2001. Unable to agree on terms for the article on retirement severance pay, the contract was submitted to arbitration on this issue. The arbitration panel returned their decision on February 19th, awarding in favor of the offer presented by the Education Association. By state law, the new contract goes into effect, unless rejected by the legislative body of either Prospect or Beacon Falls. The Prospect Town Council, under advice of their attorney, did not vote on this issue due to possible conflict of interest. Instead, a town meeting will be called on Thursday, March 12, 1998, at which time, residents may vote whether to reject the arbitration award. Under Connecticut law, only the arbitration award can be be rejected, not any other part of the contract. If rejected, a new arbitration panel will consider the issue and award their decision.
The following is the award of the three member Arbitration panel as submitted to the Region 16 Board of Education on February 19, 1998. It includes the offer made by the Region 16 Board of Education, the offer made by the Region 16 Education Association (Union), the award of the arbitration panel, and the dissenting opinion of the arbitrator who did not vote in favor of the award. A copy of this award which is on file at Town Hall, and may be viewed at the office of the Town Clerk.
I. Any teacher who is eligible for a retirement benefit in accordance with Connecticut General Statutes Section 10-183f, who has at least ten years of continuous service to the Region 16 school district, and who was employed by Region 16 as of December 31, 1997, shall be eligible to receive one of the following benefits upon retirement:
II. Payment of the retirement severance benefit shall be made as follows:
A. When a teacher retires. as defined by the State Retirement Board, after at least fifteen (15) years of continuous service to the school district, the Board shall pay him/her an amount as follows:
The parties in this matter have completed negotiations for a labor agreement between them for three years commencing July 1, 1998 and terminating June 30, 2001. All elements of the contract were agreed to with the exception of a retirement benefit payable to teachers in the regional school district as set forth in Article 38, Section A. The language in the existing contract provides that a teacher with at least 10 years of continuous service to the school district shall be entitled to receive a payment equal to 35% of the average of their annual salary for the last three years. The payment will be made for one year and it will be paid in the fiscal year following the last day of service by the retiring teacher. This benefit has been existed for approximately 30 years. The Board's representative pointed out that the origination of the benefit pre-dated the Educational Enhancement Act, which was passed by the State Legislature so as to have an effect on teachers and school boards beginning with the fiscal year July 1, 1986 to June 30, 1987. With the change created by the State Legislature, salaries to teachers throughout the State of Connecticut were greatly enhanced and have been from that date to the present time. It was argued by Attorney Connon that the retirement benefit created by the regional district possibly was needed prior to the passage of the Enhancement Act but was not needed thereafter. He argued that the retirement benefits payable to teachers under the State Retirement Act, as they are presently based on increased salaries, make the additional retirement benefit contained in the existing contract unneeded and a cost that the taxpayers of the school district should not have to pay. Based on this, the Board presented their Last Best Offer which continues the current benefit for any teacher who retires having given notice of retirement prior to April 1, 1999, but substantially reduces the benefit to such an extent that it will only apply to teachers who have been employed by the Region effective December 31, 1997 and reduces the amount of the benefit to those teachers who were employed as December 31, 1997 and have not retired by giving their notice prior to April 1, 1999 as follows: those teachers who have at least 10 years of continuous service to the Region on July 1, 1986 shall receive on their retirement the amount of $10,000.00 and those teachers who were employed prior to July 1, 1986 but did not have ten years of continuous service on said date shall receive $5,000.00 and all other teachers who were employed as of December 31, 1997 shall receive $1,000.00 as of their retirement. The Association acquiescing to the fact that the current retirement benefit payable by the Region should be modified to some extent filed a Last Best Offer, which although continuing the benefit for those teachers who give their notice of retirement prior to April 1, 2000 did increase the continuous service time requirement from 10 years to 15 years for said teachers. In addition, the Association's Last Best Offer although providing for a continuation of the retirement benefit modifies the benefit payable from the Regional Board of Education on the following basis: those teachers hired prior to July 1, 1989 would receive a payment equal to 35% of the average of their annual salary for the last three years or $18,500.00 whichever is less; for teachers hired July 1, 1989 but before July 1, 1998, they would receive a payment of 35% of their average annual salary for the last three years or $15,000.00 whichever is less; for those teachers hired after July 1, 1998, they would receive a payment of 35% of the average of their annual salary for the last three years or $7,500.00 or whichever is less. As can be seen immediately. one of the substantial differences between the offers of two parties is that the Board's offer has a sunset provision namely being employed as of December 31, 1997 whereas the Association's proposal has no sunset provision. The Panel notes that there is a minute financial effect on the parties, namely, the taxpayers of the Region and the teachers who are members of the Association, during the duration of the just negotiated labor agreement which is affected by this arbitration award. The Association ascribes a difference in value in the vicinity of $9,000.00. The actual costs, however. to the Region and the financial benefit to the teachers is substantial and will be felt during the future years coming subsequent to the time period of the aforesaid labor contract. The question is, should a benefit as substantial as the one in existence be terminated? If it is not to be terminated, should it be modified and to what extent should it be modified? There are many boards of education throughout the State of Connecticut that have a retirement benefit for their teachers similar to the one before this Panel. Modifications to a retirement such as this have been recently made in many contracts throughout the State of Connecticut; some of the modified contracts even containing sunset provisions such as proposed by the Regional District in this case. The Regional Board was able to negotiate with their school administrators a termination of the retirement benefit which was contained within their contract while negotiating a new labor agreement with the administrators which is effective July 1, 1998. It is pointed out that the negotiations between the Regional Board and the administrators concluded a complete contract. The parties to this arbitration process reviewed with the Panel the changes which were affected through negotiations in their current contract such as increased salaries and an increased school day but agreed that they were unable to resolve the future of this retirement benefit. Although the Panel reviewed all of the statutory requirements as set forth in the General Statutes of the State of Connecticut, it is not felt that a detailed comment has to be made on them. Suffice it to say that the financial capability of the towns making up the region have been able to afford this benefit over the past number of years and will be able to afford same during the life of the new contract. The public interest which must be found to favor a good educational system for the youngsters of the district may also be found in favor of continuing a benefit which has been in existence for approximately 30 years or may be found to be in favor of the termination of the benefit because of tile substantial cost of the benefit in future years, however, it is not felt that the public interest would be affected substantially in either direction during the life of this contract.
The negotiating history between the parties shows a benefit that had been increased for a number of years culminating on the date of the passage of the Educational Enhancement Act and although it has not been modified upward or downward since that date has, because of the increase in wages which were created by said Act, resulted in an increase benefit to the teachers.
The effect of the average of the cost of living over the last three years had a minor, if any, impact in assisting the Panel in making the decision on this issue.
It is true that the interest and welfare of the employee group will be substantially affected by the Panel's award on this issue. The benefit that the Board is seeking to eliminate amounts to a payment, at this time, of over $18,000.00 to a retiring teacher.
By losing the retirement benefit of the existing contract, a teacher would be losing the sum of approximately $18,500.00, a total sum of money no one would willingly absorb. It is obvious from reviewing the evidence supplied by both parties in reference to agreements other boards of education have with their teachers that the retirement benefit discussed in this arbitration is found in varying degrees in many of the other contracts. In some contracts, the benefit is greater than that contained in the labor contract between the parties in this matter and in some, the benefit is less. In some contracts, the benefit has a sunset provision but, in most contracts, there is no sunset provision. There was no evidence presented by either side as to whether or not the benefit being discussed in this award was ever removed or, in fact, included in any contract as a result of arbitration. It is found by the majority of the Panel that most modifications to a provision such as being discussed in this matter. at least over the last few years, has been to reduce the benefit, not to increase same. It is further found by the Panel that both parties to this arbitration process agree that the benefit should be modified with the result that the benefits are reduced. In its Last Best Offer, the Association effectively reduces the benefit but does not eliminate same. For those teachers who retire other than during the life of the new contract, the Association has addressed one of the Board's concerns, which is the fact that the amount of the retirement continues to increase with the increase in wages. by capping the amount to be paid to the retiree. The Board concern, as expressed at the hearing, was that the salaries of teachers continue to rise, therefore, the retirement benefit is without limit. Under the Association's Last Best Offer, three particular caps have been made mandatory on the individual groups of teachers established, said groups being based on their date of hire with the Board. The Panel notes that the Board's offer, not only has a sunset provision. but also substantially reduces the amount of retirement benefit for teachers who were hired by the Board subsequent to July 1, 1986, some who could have compiled in excess of 10 years of service with the Board. The benefit to the aforesaid group was reduced to a payment to these teachers of only $1,000.00. It is found by the majority of the Panel that the Board's reduction in this area is much too aggressive. Further, it is found by the majority of the Panel that the reduction in benefits to those teachers hired before July 1, 1986 but ones that did not have 10 years of continuous service as of July 1, 1986 is too severe. In finding that the Association's offer in establishing a cap in computing the amount of the retirement benefit for those retiring teachers who retire after the duration of the new contract to answers one of the problems raised by the Board, it is also found that the Association's figures are not a substantial enough reduction in the benefit. While the increase in service from 10 years to 15 years is of some help, it is not of sufficient assistance to justify the figures put forth by the Association. The protection afforded existing employees who retire during the life of the new contract with the only modification being the increase in service as set forth the Association's proposal. same is found to be more acceptable than the change made in the Board's proposal in this area. It is noted by this Panel that the only more difficult task any labor negotiator has than introducing a new benefit or proposal into a labor contract or removing an existing benefit or existing work rule from a labor contract is the Herculean task of replacing a removed and/or discontinued benefit or work rule back into a labor contract. Some things are difficult; this would be impossible. The Panel in this arbitration process does not find either proposal of the parties completely acceptable but has awarded the Association's Last Best Offer on this issue because it continues the benefit in existence during the life of the new contract. By continuing the benefit in existence, it will give the parties more opportunity in time to negotiate a settlement to a very sticky problem. which it is obvious, both feel should be addressed and modified. There are many individual threads which go into creating the blanket referred to as a labor contract. The benefits contained in the issue before this Panel is only one of such individual threads. If this Panel was to adopt and award the Board's Last Best Offer in this matter the date of the sun setting on this benefit would be established. The likelihood of negotiating the benefit back into the contract, at any price, would be nil. It is the finding of this Panel that, although the benefit presented in this arbitration might be one that should expire, its expiration should be slower than as set forth in the Board's proposal but quicker than as set forth in the Association's proposal but more importantly should be accomplished through the negotiations of the parties, when they are jointly performing the needlework required to create the entire blanket known as a labor contract.
Based on all of the evidence when viewed in the light of the statutory criteria, this Panel awards this issue to the Association.
In Re:
Binding Arbitration Proceedings Under C.G.S. P 10-153f
Region No. 16 Board of Education
and
Region No. 16 Education Association
February 18, 1998
Although my dissent is noted at the end of the majority opinion. I find it necessary to express my concern with, and state the reasons for my dissent from the majority in this single-issue arbitration.
As noted by the majority, an analysis of the statutory factors vis-à-vis the retirement severance pay issue is inconclusive, with the exception of the very first statutory factor, "the public interest and financial capability of the municipal employer" which. by its terms, is to be given priority consideration. The majority has not done this.
The public interest is served when public funds are spent for good and valuable purposes, such as raising teacher salaries to competitive levels, providing adequate health insurance and other fringe benefits and generally spending public funds on those aspects of the employment relationship that maintain the ability of a public employer successfully to (a) compete for the best and the brightest teaching candidates; and (b) maintain its existing staff without an inordinately high turnover rate. The perpetuation of a costly retirement severance benefit accomplishes neither goal.
It cannot credibly be argued, in the current job market, that an entry level teacher will select his/her employer', on the basis of a retirement severance benefit for which he/she may not become eligible for 30 years. And there was no evidence submitted that any teacher might seek alternative employment if the severance benefit were eliminated. Moreover, the Board's Last Best Offer ensured that those teachers who are now within "striking distance" of this benefit would receive a substantial severance package. while those who are less likely to have made retirement plans would be the on1v teachers for whom the Board's proposed changes would have any significant impact. I
The public interest is served when the expenditure of funds achieves beneficial results. When public funds are spent to build schools, purchase books and supplies and to positively affect the behavior of its employees, either by enticing talented job applicants or by instilling a sense of security and employer allegiance in those who already are employed, the public receives a benefit in return for its tax dollars. It is difficult to perceive how the expenditure of public funds for a bonanza severance feature will alter the behavior of any job applicant or incumbent employee. The limited public fund resource should be reserved for those expenditures which will produce results that are likely to improve public education, rather than this expenditure, which simply rewards people for doing what they would have done anyway - retire at the end of their careers.
The majority correctly points out that there has been a trend in recent years to reduce or eliminate the severance pay benefit in public employment contracts and in fact, the Region No. 16 administrators unit - the only other group of certified employees of the same employer - agreed through negotiations to sunset its retirement severance benefit. The Association submitted evidence that approximately 24 school districts in Connecticut provide a retirement severance benefit that is equal to or greater than the benefit enjoyed by Region No. 16 teachers. On closer scrutiny, it is found that the vast majority of those districts providing a richer benefit than Region No. 16 reward accumulated sick leave - a factor that is totally absent from the Region No. 16 retirement severance plan. By incorporating accumulated sick leave into a severance pay plan', the employer hopes to achieve a wholly separate goal, that of improved employee attendance. Moreover, many of the examples of "richer" retirement benefits that were submitted by the Association incorporate an early retirement incentive plan. which is designed to replace highly paid employees with relatively low paid employees. Both types of plans (payment for accrued sick leave and early retirement incentive) are designed to influence employee behavior in a way that will benefit the employer, thus serving the public interests The Region No. 16 plan is devoid of any such incentives and stands nearly alone in that regard. It should be, and should have been discarded for that reason.
The Association's Last Best Offer eliminates the April 1 notice requirement after the 2000- 2001 school year. Thus, in its present form, the collective bargaining agreement will allow teachers, beginning four years from now, to announce their immediate retirement on the opening day of school and wait around the office for their $18,500 checks. The School Board will lose its ability to anticipate its personnel needs or its budgetary needs after June 30, 2001.
It is apparent to this arbitrator that the mere fact that both parties presented this single issue to the arbitration process is a strong indication that both parties consider the retirement severance issue to be an important one, which merits more than the illusory "window dressing" changes offered by the Association. The Board's Last Best Offer fairly protects those teachers who may have begun thinking about retirement and continues a modest benefit for those who have not. I join the majority in recommending that the parties should continue their negotiations over this issue in the successor contract. Those teachers who have not begun to plan for their retirement are fairly warned now of the Board's intentions and will not be able to convincingly claim in the next contract that their retirement severance benefits were eliminated without adequate notice,
Respectfully Submitted,
Loren Lettick, Esq. Arbitrator Representing the Interests of Local and Regional Boards of Education