Concluding negotiations that had been underway since last spring, the La Cañada Unified School District's Governing Board on Tuesday voted unanimously to approve a 2011-12 contract with the La Cañada Teachers Association. Several elements of the agreement stand to save the district money.
The new contract introduces an early-retirement incentive plan for veteran teachers and no longer requires the district to meet statutory Cost of Living Adjustments to its health-and-welfare benefits.
It’s impossible to know exactly how much the district will save from these two changes, but they’ll be significant in the long term, school-board member Joel Peterson said.
“A combination of both (the early retirement plan and changes to the Cost of Living Adjustment) will save the district tens of thousands initially, and over time, we think it will save hundreds of thousands of dollars — potentially more. These savings will incur over the long term. We have structurally changed the cost structure of the district,” said Peterson, adding that teacher salaries make up about 83% of the district’s budget.
In the previous contract, La Cañada Unified was responsible for paying the increasing Cost of Living Adjustment in district-funded health-and-welfare benefits, even if the state government didn’t come through. The change agreed to this week requires LCUSD to meet only what the California government actually funds, which has been nothing at all in recent years, Peterson said.
The elimination of a third training day for teachers will save the district up to $42,000 annually.
The possible win-win situation in the new contract is the early-retirement incentive plan, said Wendy Sinnette, the district’s assistant superintendent of human resources. Sinnette will take over as superintendent following the June retirement of Supt. Jim Stratton.
“In this economic crisis, it was one of the few creative things we could design where the district could save some money and the teachers could get a nice bonus,” Sinnette said.
Teachers who were employed by the district as of Feb. 8, 2011 and are at least 55 years old with five years of district service, or are 50 and have been employed by the district for at least 30 years as of June 30, 2011, will receive a bonus to retire early under the new retirement-incentive plan outlined in the contract.
The program gives the highest-paid, tenured teachers a bonus to retire and replaces most of them with new teachers that are paid less, school board member Cindy Wilcox said.
The average beginning-teacher salary in the district is $42,991 and the district’s average highest-teacher salary is $82,231, according to the board’s School Accountability Report Cards for the 2009-2010 school year. An average of $39,340 is saved by replacing a top-tier teacher with a new one. The saving could prevent difficult cuts from being made as district enrollment declines, Wilcox said.
“It may prevent us from laying off other younger teachers,” she said.
La Cañada Unified could save up to $700,000 if 18 teachers choose to retire early and are replaced by beginning teachers. But it is not impossible to know exactly how much the district will save in the end because it depends on what teachers retire, who is hired to replace them and their individual salaries, Peterson said.
“We actually won’t see a huge savings initially — it happens over time — because we have to pay the teachers this money up front for taking the early-retirement package,” Peterson said. “This fundamentally changes our cost structure going forward.”
Eighteen qualified teachers must enroll in the program in order for the plan to be beneficial for the district. Information packets on the early-retirement incentive plan were mailed to eligible employees on Wednesday. They must submit a letter of resignation by March 25, Sinnette said.
The Teacher’s Association ratified the contract on Jan. 14. The entire negotiation process was smooth but long, said Rick Jordan, president of the La Cañada Teacher’s Association.
“The whole process generated harmony,” Jordan said. “We had good chemistry and a lot of good people around the table that made it a good process.”