Contract decision to come soon

The next contract between Jay Schools and the Jay Classroom Teachers Association is likely to be decided by a state-appointed fact-finder.
Probably by Monday.
Only a last-minute compromise between the two parties could forestall a winner-take-all decision by James E. Hoehne, a LaPorte-based arbitrator and mediator appointed by the Indiana Education Employment Relations Board to resolve the contract dispute.
A gap of about $312,000 separates the two sides in the stalled negotiations.
Hoehne, who has 41 years of experience on both sides of the table in labor relations as an attorney, and school finance expert Glenn Krueger of Lafayette conducted a fact-finding hearing on the dispute Tuesday, beginning at 9 a.m. and adjourning about 2:45 p.m.
It was, in many ways, historic.
Only two other fact-finding hearings have been conducted in school labor disputes under new Indiana law, one in Nettle Creek Schools (Hagerstown) and one in Carmel.
For both Hoehne and Krueger this was new territory.
“It’s my first fact-finding,” said Hoehne.
There are few precedents, and any decisions by the fact-finder could set new ones with far-reaching implications.
“We’re tredding on mud,” said Krueger, describing the process.
The hearing allowed each side to make the case for its “last best offer” for a contract settlement, then provided time to make rebuttal arguments.
“You folks are helping to fill in the cracks of the framework … by your experience, precedents, determinations … and by court rulings,” said Hoehne.
Central to the dispute between the teachers’ union and the school corporation is whether Jay Schools can afford to offer additional compensation to local teachers to make up for benefits they have lost as a result of changes in health insurance coverage.
Those changes were mandated by House Enrolled Act 1260, which says teachers’ health insurance premium support cannot exceed 112 percent of the same support provided to state employees.
Because JCTA had been successful over the years in negotiating a better health insurance benefit, coming into compliance with HEA 1260 meant the burden for health insurance coverage had to be shifted to teachers. JCTA has argued that giving up that benefit should result in additional compensation elsewhere.
Jay Schools, for its part, has argued that changes in state funding have reduced the available funds and that boosting compensation as proposed by the JCTA would mean signing onto a “deficit financing” position not allowed by law.
But the two sides can’t even agree on the amount of money available.
Indianapolis attorney Eric M. Hylton, appearing on behalf of the JCTA, said the Jay Schools’ numbers are “a moving target.”
“Indiana law requires you to use the number certified by the state,” said Hylton. “There is no statutory or legal authority to use a lesser number.”
But Noblesville attorney Amy A. Matthews, negotiation counsel for Jay Schools, responded: “We are using the DOE (Department of Education) certified numbers as a basis. … There’s nothing in the statute that says the DOE certified number is the only number the fact-finder looks at.”
“There has to be a number,” shot back Hylton, or it’s impossible to determine whether a contract would result in deficit financing. He added, “It’s critical to know which number will be used in order to know what number the last best offer has to be under.”
Matthews argued that changes by the state have reduced the general fund dollars available from the amount that had previously been certified by the DOE.
“We object to these other things being considered,” countered Hylton. “It seems like an impossible task (to draft a last best offer) without that number.”
The DOE certified number for money available in the general fund was $24,242,548. But Jay Schools business manager Brad DeRome said actual revenue available in the general fund for bargaining purposes amounts to $23,521,665.
Jay Schools superintendent Tim Long told the fact-finder that in mid-August several decisions were handed down from the Indiana Department of Education that had a direct impact on the dollars available to pay teachers.
“This was a change in mid-stream,” said Long.
Those changes included a shift by the state in offering less funding full-day kindergarten, reductions in expected funding for vocational and special education programs and a new emphasis on having funding follow the student.
In the past, school funding was based upon average daily attendance on a specific day. And if there were declines in student enrollment, the reductions in funding happened in the future.
Under the new system, there are multiple days when daily attendance is measured and the funding changes can be retroactive by several months.
Long said the reductions in state funding included about $325,000 less for full-time kindergarten, about $160,000 less for vocation education, about $200,000 less for special education and a reduction because enrollment was down by eight students. In addition, he said, there had been a rise in health insurance claims by about $500,000. He also noted that private school vouchers had resulted in about $300,000 less available for the general fund.
“Any more than what we have offered would put us in a distress situation,” said Long.
But JCTA attorney Hylton wasn’t buying that characterization.
“All I heard is ‘financial peril,’” he said. “That’s not deficit financing. … We don’t see how there could be a deficit financing situation.”
“Teachers are not asking for a raise,” said Bim Phelps, a UniServ district director for the Indiana State Teachers Association. “They have had nearly a million dollars taken away from their total compensation package (as a result of bringing the health insurance program into compliance with HEA 1260). Of that, they are asking $600,000 of that million be returned.”
Phelps argued changes in the insurance program have resulted in significant savings to Jay Schools and there are other funds to be found in the school corporation’s budget, saying he had “discovered additional money.”
Jay Schools attorney Matthews countered that any potential savings as a result of changes in health insurance coverage lie in the future and may not come to fruition.
Krueger, a former superintendent and PhD who has published articles about changes in Indiana school finance, appeared skeptical about some of funds Phelps was targeting.
“Most of these savings are personnel who retired or left,” he said.
In all, Phelps said he believed there is $970,000 available. Of that, he said, JCTA was asking that a maximum of $600,000 be tapped.
Jay Schools has offered $200,000 in total compensation increase to JCTA members. The union is asking for $512,000. When retirement benefits tied to compensation are factored in, the amount rises to $597,000, with the total package capped at $600,000.
But, asked fact-finder Hoehne, what if that sort of commitment pushes Jay Schools into deficit financing?
Indiana law, said Hylton, just rules out signing contracts that are certain to result in deficit financing. Should a situation occur where a contract led to unforeseen deficit financing, it would not be a legal problem, he said.
“I don’t think you have to look down the road,” said Hylton.
Hoehne seemed unconvinced.
“Put yourself in my seat,” he said. “When I pick an LBO (last best offer), I’m telling (the Indiana Education Employment Relations Board) that it’s the best fit. … Part of my responsibility … is to pick the LBO that finishes your contract.”
Phelps also took aim at Jay School Board’s attempt last month to approve an additional appropriation from the general fund to pay year-end health insurance claims.
“When the association became aware that the school corporation wanted to give the business manager authority” to spend up to $900,000 on insurance claims, the association believed “it was an attempt to encumber those funds” in order to remove them from consideration by the fact-finder, said Phelps.
DeRome denied that accusation.
 “That was not done to divert money or hide money from the teachers,” he said.
“The appropriation issue has nothing to do with taking money off the table. It’s just a way to pay the bills,” said Matthews.
Phelps had argued that having teachers shift to higher deductible plans in the health insurance program, coupled with the fact they’ll have to meet the deductible once during the last quarter of 2013 and start again in January of 2014, would result in lower claims over the next few months.
DeRome and Matthews countered that a trend toward higher claims made the additional appropriation necessary.
“It’s not pleasant for teachers,” said financial consultant Krueger. “But then you’ve got high claims, and you can’t control claims.”
The Jay Schools health insurance program is self-insured, but there is re-insurance coverage when certain stop-loss or aggregate limits are reached. Phelps said he believed those were sufficient to cover year-end claims.
Hylton, with an eye on precedents that might be set by a fact-finder decision in the case, suggested more than once that a decision in favor of the school corporation’s last best offer would be contrary to state law.
In addition to questions over whether the DOE-certified numbers must be used, Hylton also raised the fact that the last best offer by Jay Schools did not include a salary schedule as required by law and suggested there were problems with provisions in language regarding job sharing, new teacher pay levels and removing assistant coaches from the bargaining unit.
For her part, Matthews said, “There is nothing illegal in the school corporation’s last best offer,” adding “They may not like what our proposal was, but there was absolutely nothing illegal about it.”
Though the hearing was at times contentious, it was always civil. And both sides went out of their way to praise the teaching staff at Jay Schools.
“If the motivation of the state of Indiana is to reward good teachers, I believe they deserve this payback,” said Phelps of the ISTEP, citing the best ISTEP scores in east central Indiana.
Matthews said, “We have nothing but pride and respect for all our teachers. This has nothing to do with that.”
Hoehne told both parties he was impressed by their presentations and noted at one point that the winner-take-all nature of his decision was difficult.
“I realize,” he said, “some of you are not going to be happy with me. That’s the nature of the beast.”[[In-content Ad]]