District: teachers? contract to save millions

The newly approved contract with Lake Orion Education Association (LOEA) is set to save the school district millions of dollars over the next several years.
The board of education voted to approve the contract, 5-1, with the dissenting vote coming from Treasurer Jim Weidman. Weidman said he disapproved of the contract because it included a three percent raise for LOEA members.
‘This is not a reflection on our teachers by any means, but reflective on the financial state of Michigan and the economy in general,? said the treasurer.
But, according to Executive Director of Human Resources Margaret Hazlett, the district was required to give the raise as part of the union’s predetermined salary ‘steps.?
‘In absence of a new agreement, certain provisions from the previous contract continue,? she said. ‘When we didn’t have a contract in place by July 2009, provisions of the labor agreement continue.?
Those provisions include anything to do with wages, benefits and working conditions, according to Hazlett.
‘The steps were already on board for 2009/2010 ? there’s not anything I could do about that,? she said.
But, in looking to the future, Hazlett says the LOEA will forego another automatic step increase this September, saving the district $400,000.
She added, ‘the contract says if we don’t have an agreement by January 2011, the steps will not be implemented, so that, in essence, saves us step costs again.?
But there’s more cost-savings to come, to the tune of $6 million.
The district will offer a $60,000 early retirement incentive, payable over five years, to eligible employees, in addition to laying off 13 to 20 people in the coming year.
‘We’re estimating a savings of $1.3 million dollars for 2010/2011, with approximately $6 million in savings over the next several years,? said Hazlett
School boardmember Janet Wolverton voted for the new contract.
‘Sometimes you have to pay a little bit of money to save more money in the end, and that’s exactly what this contract did for us,? she said.
LOEA President Heather Olsen says the current economy ‘definitely flavored? their bargaining strategy.
‘My dad always said when the rest of the country catches a cold, Michigan gets pneumonia,? she said. ‘Not having stable funding and having our legislators be so inconsistent about regulating funding has made bargaining more challenging and more difficult.?
Olsen noted that she thought the contract was fair, given the economy’s grim outlook.
But, she says administrators should look to the district’s fund balance instead of the LOEA if they need more money.
‘Our district is, because of its conservative nature, is in a very strong financial position to continue to offer outstanding programming without, necessarily, having to take major cuts,? she said.
According to information on the district’s Website, fund balance is projected to be at $12.7 million at the end of the 2010 fiscal year ? down $5 million from 2009’s $17.7 million.
Olsen added, ‘What is the purpose of having a fund balance to begin with if not to help you through more difficult economic times to maintain the highest quality of programming available??
Superintendent Ken Gutman has a different view.
When asked if concessions on the administrator level were on the horizon, he said, ‘Oh, I think so.?
‘A year ago, we froze and saw our administrators freeze, and we saw most of our groups go the same way,? he said. ‘And now should we go forward and say we’re taking concessions, I think you’ll see some of that, too.?
Hazlett says they’ll be ‘back to the table this fall for wage concessions.?