NEW JERSEY PUBLIC EMPLOYMENT RELATIONS COMMISSION
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
)
)
)
)
HAMILTON TOWNSHIP BO...
BACKGROUND AND PROCEDURAL HISTORY
The Hamilton Township Board of Education, hereinafter referred to as the Board/District ...
captivating. There is no question that I will visit and examine each outstanding issue, but all issues
are not joined at t...
2.

Article 11 (new) Insurance Short-term replacement employees not
covered if period of actual coverage is less than 90 d...
applied to teacher base for 2014-15.
2015-16

Increase total 2014-15 base by % applied
to 2015-16 teacher base.

$2000 add...
Only one district in the NJEA report reached a 4% settlement (Passaic City) and did so in only
one year of a three year ag...
over the first three years; 4) allows those teachers scheduled for very large increases under
the 2011-12 guide to still r...
relationship to a 2% budget cap, a state-wide settlement rate of under 3% and a cost of living
under 2%.
The District also...
Therefore, the fact-finder cannot minimize or discount the mountain of facts which support the
Association’s position.
The...
The Association strongly argues that the above analysis shows without reservation that the
Board can fund its salary propo...
Guide Cost
Step
1
2
3
4
5
6
7
8
9
10
11
12
13

BA
745,557
267,348
430,630
224,850
361,408
544,584
319,116
233,735
398,696
...
BASE YEAR
2011-12
Category

#

# on Max

Total Cost

Increment Cost

Teacher

282.43

84

16,682,557

546,759

Professiona...
HAMILTON TOWNSHIP
BASE YEAR
2011-12

PARAPROFESSIONALS

Salary Guide
Step
1
2
3
4
5
6
7
8
9

BA
16,728
16,936
17,144
17,35...
BASE YEAR
2011-12

PARAPROFESSIONALS

Increment Dollars
Step
1
208
2
208
3
207
4
208
5
1,009
6
533
7
756
8
1,157
9
-

Incr...
3.

The banked cap for 2014-15 is $1,657,215. The Board did not use any banked cap for
the 2013-13 budget.

4.

The Board ...
2.

2 secretaries retired and 1 was terminated

3.

4 custodians resigned and 1 was terminated

4.

14 paraprofessionals r...
TEACHER BASES AND AVERAGE SALARIES

YEAR
2012-13
Average Salary
2013-14
Average Salary
2014-15
Average Salary
2015-16
Aver...
The Board increased the average paraprofessional salary by $4430 and the maximum salary by
$4752 while the Association inc...
140.1 or 49.8% of teachers receive a salary less than $50,000. It certainly means to me that the
money was put towards the...
Both parties have acknowledged that the current guide for paraprofessionals must be
improved. Additionally, many paraprofe...
BA MAXIMUM
$74,371

$76,230

-$1859

18/24

Additionally, that research information shows that Hamilton Township has 13 st...
Nevertheless, I am also convinced that there is funding available with the additional use of
breakage and surplus to fund ...
Three Year Agreement July 1, 2013, - June 30, 2016
2013-14
Increase 2012-13 teacher base by 4.0% including increment
New B...
2015-16
Increase 2014-15 teacher base by 4.00% including increment
New base $19,563,169 average salary $69,269
Adjust each...
The top step (maximum) increase for support staff from 2009-10 to 2011-12 agreements
shows the following:
$1592 increase f...
Adjust each step of the 2011-12 paraprofessionals’ guide by $1200.00 and increase that
amount by 4.25%
Increase 2011-12 ba...
Longevity--pay at rates set forth on pages 19/20 of the Agreement
Summer Curriculum to be paid at $39.00 per hour
Extra-Cu...
approach than the Board. This is understandable because the Association has consistently argued
that the Board has the mon...
Hamilton Twp. Board of Education / Hamilton Twp. Education Association fact finders report 10/23/13
Hamilton Twp. Board of Education / Hamilton Twp. Education Association fact finders report 10/23/13
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Hamilton Twp. Board of Education / Hamilton Twp. Education Association fact finders report 10/23/13

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The Hamilton Township Board of Education and the Hamilton Township Education Association are signatories to a collective bargaining agreement dated July 1, 2009, through June 30, 2012. The parties reached an impasse in bargaining and the New Jersey Public Employment Relations Commission (NJ PERC) appointed a mediator to assist the parties in reaching an agreement. Mediation was not successful and on May 7, NJ PERC appointed Gerard G. Restaino, arbitrator, as fact-finder. After meetings of June 24, July 25, Aug. 7, and Aug. 27 it became apparent that a fact-finder’s report would be necessary....

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Hamilton Twp. Board of Education / Hamilton Twp. Education Association fact finders report 10/23/13

  1. 1. NEW JERSEY PUBLIC EMPLOYMENT RELATIONS COMMISSION xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ) ) ) ) HAMILTON TOWNSHIP BOARD OF ) EDUCATION, ) ) EMPLOYER ) ) AND ) ) HAMILTON TOWNSHIP EDUCATION ) ASSOCIATION, ) ) ASSOCIATION ) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx) In the Matter of the Fact-Finding Between FINDINGS AND RECOMMENDATIONS DOCKET NO.: FF-2013-0041 FACT-FINDER: GERARD G. RESTAINO, MUTUALLY CHOSEN BY THE PARTIES PURSUANT TO THE PROCEDURES OF THE NEW JERSEY PUBLIC EMPLOYMENT RELATIONS COMMISSION APPEARANCES: FOR THE EMPLOYER BRUCE TAYLOR ERIC AIKEN JOHN SACCHINELLI GEORGE HASSA ANNE ERICKSON DAN SMITH FOR THE ASSOCIATION VINCENT PERNA ROBERT WILLOUGHBY PATRICIA FLEMING JEFF GILDINER THIRTEEN TEAM MEMBERS LABOR CONSULTANT CHAIRMAN BOARD NEGOTIATING COMMITTEE BOARD MEMBER BOARD MEMBER BOARD PRESIDENT BUSINESS ADMINISTRATOR NJEA UNISERV REPRESENTATIVE NJEA ASSOCIATE DIRECTOR OF RESEARCH PAST ASSOCIATION PRESIDENT PRESIDENT/CHIEF NEGOTIATOR
  2. 2. BACKGROUND AND PROCEDURAL HISTORY The Hamilton Township Board of Education, hereinafter referred to as the Board/District and the Hamilton Township Education Association, hereinafter referred to as the Association, are signatories to a collective bargaining agreement dated July 1, 2009, through June 30, 2012. The parties reached an impasse in bargaining and the New Jersey Public Employment Relations Commission (NJ PERC) appointed a mediator to assist the parties in reaching an agreement. Mediation was not successful and on May 7, 3012, NJ PERC appointed the undersigned as the FactFinder. I had meetings with the parties on June 24, July 25, August 7, 27, 2013. At the end of the August 27th session it became apparent that a Fact-Finder’s report would be necessary. It was agreed that the parties would have an opportunity to submit additional documentation to me as well as to enumerate their final offers. We also agreed that the information would be submitted to me via email no later than September 13, 2013. Both parties submitted comprehensive documentation to support the issues in dispute. The voluminous documentation submitted by both parties was carefully reviewed and analyzed by the Fact-Finder to reach a fair and equitable determination. My role as a Fact-Finder is in two parts: (1) review all documents submitted to me and make a reasoned, rational recommendation based upon those documents; and (2) help the parties bridge the gap and bring them together. Having conducted informal sessions, I was able to determine if either party was pliable or rigid with the varied proposals that were on the bargaining table. It is a credit to the cleverness of both parties that they were able to adroitly move through an adversary’s argument and not waiver from a particular position. It is of critical importance that my recommendation be considered as a whole and that the parties refrain from picking and choosing those individual components they deem interesting or 1
  3. 3. captivating. There is no question that I will visit and examine each outstanding issue, but all issues are not joined at the hip. While all positions have been cogently argued for, some proposals may not be included within the totality of my recommendations since they may be beyond what is obtainable in this specific fact-finding process. More importantly, as I reviewed the inter-relationship of each issue to the total package, some issues may have exceeded the standard of reasonableness. I stress to the Board and the Association that the concessionary discussions and proposals which took place during the informal sessions may not necessarily be incorporated herein. ISSUES The parties submitted the following open issues to the Fact-Finder: A. Duration Both parties have proposed a one year (2012-13) agreement and a three year (2013-2016) agreement. B. Salaries During the informal discussions both parties presented extensive documentation in support of their positions. The Board proposed adding three steps to the teacher guides while the Association proposed adding one step. Additionally, both sides proposed a starting salary of at least $50,000 beginning with the 2014-2015 year. Moreover, both parties acknowledged the low salaries in the beginning of the teacher guides and proposed corrections to same. The parties also addressed the low salary of paraprofessionals. However, they differed on how to increase those particular salaries. C. Longevity D. Language issues 1. Article 10, C Death in immediate family… change grandparent-in-law leave from 5 days to one day. 2
  4. 4. 2. Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days. TEACHER GUIDE YEAR BOARD ASSOCIATION 2012-13 2012-13 Agreement 4% Base Increase 5.25% Base Increase 2013-14 2014-15 2015-16 2013-16 Agreement 4% Base Increase 4% Base Increase 2% Base Increase Add three steps to guide. New monies subject to mutual distribution. Effective 7/1/14, $50,000 starting salary. PARAPROFESSIONAL GUIDE YEAR BOARD 2012-13 2013-14 2014-15 5.25% Base Increase 5.25% Base Increase $1200 added to each step Add one step to guide Normal step movement each year Effective 7/1/14, at least $50,000 starting salary. ASSOCIATION 2012-13 Agreement $500 across-the-board increase to each step of the 2011-12 guide. This increases scattergram by $500 times the number of paraprofessionals on agreed upon scattergram. Use new scattergram and increase base by % applied to teacher base for 2012-13. 2013-2016 Agreement $500 across-the-board increase to each step of the 2012-13 guide. This increases scattergram by $500 times the number of paraprofessionals on agreed upon scattergram. Use new scattergram and increase base by % applied to teacher base for 2013-14. $500 across-the-board increase to each step of the 2013-14 guide. This increases scattergram by $500 times the number of paraprofessionals on agreed upon scattergram. Use new scattergram and increase base by % 3 $2000 added to each step of the 2011-12 guide. Add to each step % applied to 2012-13 teacher base. Normal step advancement. $2000 added to each step of the 2012-13 guide. Add to each step % applied to 2013-14 teacher base. Normal step advancement. $2000 added to each step of the 2013-14 guide. Add to each step % applied to 2014-15 teacher base. Normal step advancement.
  5. 5. applied to teacher base for 2014-15. 2015-16 Increase total 2014-15 base by % applied to 2015-16 teacher base. $2000 added to each step the 2014-15 guide. Add to each step % applied to 201516 teacher base. Normal step advancement. Except for the first 3 years’ adjustments (which are across-the-board), new monies are subject to mutual distribution by the parties OTHER SUPPORT STAFF GUIDES BOARD Unlike with the teacher and paraprofessional sub-group, the Association has made no claim that other support salaries warrant a higher settlement that what would be normal. Therefore, the Board offers a salary settlement for these sub-groups that somewhat exceeds its budget cap under law for each of the four years. EXTRACURRICULAR, HOURLY RATES BOARD Freeze at current rate for four years. ASSOCIATION same % as applied to teacher base for each year of agreements. ASSOCIATION Same % as applied to teacher guides for each year of agreements. POSITIONS OF THE PARTIES FOR THE BOARD The Board contends that the Association seeks one of the highest settlements in New Jersey School districts. The Association’s proposal of 5.25% a year for each of four years is irrational and not justified. The Board offers comparable data from the NJEA (Trend Setter # 7) in support of its salary offer. That document shows the two most recent settlements reported in Atlantic County at 2.7%/2.6%/2.5% (Folsom), and 2.3%/2.2%/2.1% (Ventnor). That document also reports State-Wide settlements averaging 2.4% for 2012-13, 2,27% for 2013-14, and 2.81% for 2014-15. 4
  6. 6. Only one district in the NJEA report reached a 4% settlement (Passaic City) and did so in only one year of a three year agreement. Therefore, in only 1 of 374 NJEA reported settlements was a 4% increase achieved. Conversely, the Board’s offer in three of the four years equals 4%. The Board strongly argues that its final offer would have been accepted by every other unsettled agreement and questions why it is not acceptable to the Association. Furthermore, the Board rejects the Association’s assertion that the difference between the parties on the teacher salary guides is only in the range of a few hundred thousand dollars. When, in fact, the difference over four years is $2,667,201 for the teacher guides alone. It does not factor in the paraprofessional guide increases as well as other support staff guide increases. Additionally, the Board’s offer addresses some of the Association’s key concerns vis-a-vis the structure of the current teacher guide. Nevertheless, the Association refuses to acknowledge its own responsibility for some of the challenges that the guide produces. In fact, the Board has alerted the Association over the years that the guide favored by the Association would cause serious problems in future negotiations. Two major factors created the current dilemma: 1) a 13 step guide, shorter-thannormal In the County and in the State; 2) the Association’s insistence in prior rounds of negotiations to place substantially more money at the maximum step than could sustain a sensible guide. In the past the parties actually went to Fact-Finding over guide construction because the Association’s distribution of monies led to some of the problems inherent with the teacher salary guide. On the 2011-12 teacher guide one third of the staff will receive $200 increments each for the first three years of the agreement, and one third will receive $15,000 each for those same three years. However, the Board recognizes those teacher guide problems and has proposed a settlement far above the County and State average with a new guide that establishes the following: 1) a normal 16 step guide, 2) raises the BA starting salary in the third year to $50,000; 3) gives the lowest paid teachers ( a third of the teacher sub-group) over a $7000 raise on average 5
  7. 7. over the first three years; 4) allows those teachers scheduled for very large increases under the 2011-12 guide to still receive far larger salary increases than lower-paid teachers; 5) more fairly distributes available money; and 6) lowers the projected out-year increment load to the lowest in decades. The Board acknowledges the existence of “breakage money” and recognizes that they will need to use that money to fund the settlement. The prior settlement with the Association far exceeded the cap then in place, and with insurance costs skyrocketing and outstripping revenue growth, a combination of “breakage” and hard personnel and programmatic decisions by the District allowed for those salary increases. The District agrees that the Association is accurate about the new State-mandated health insurance premium sharing but the Association fails to recognize or accept that premium sharing is a way of life for most private sector employees. Moreover, the new employee share will not cover the increase in insurance premiums and will continue to put pressure on limited school budgets. The Board argues that its paraprofessional salary increases raises each paraprofessional’s salary by $1,500 over and above what the teacher/support staff settlement would be. Coupled with the assumed teacher/support staff raises over the four years, the Board’s salary increases will exceed 21.7%. The adjustment alone will give paraprofessionals $4,500 in gross salary over the four years more than he/she would have received if there were no adjustment. The Association’s paraprofessional position is uncertain because its $30,000 top salary in 2015-16 amounts to a 43% raise over three years. In fact, the Association’s proposal to retain a nine step guide means the 43% increase is actually much higher. The Board strenuously objects to such an absurd increase and suggests the bargaining positions of parties should have some 6
  8. 8. relationship to a 2% budget cap, a state-wide settlement rate of under 3% and a cost of living under 2%. The District also contends that extending the teacher and paraprofessional salary settlements beyond the norm creates budgetary shortfalls that make automatic parity salary settlements difficult, possibly requiring staffing decisions within the 2013-14 year and in the next two years. The Board believes that maintaining positions is in the best interest of all involved. The District strenuously argues that under its salary offer hundreds of thousands of dollars over and above the budget cap will be expended directly on salaries. To that end the Board asserts that all available monies should be directed to these overall salaries and not to activities which may be eliminated if their value, vis-à-vis other budgetary priorities, actually decreases because of increase salary costs. In conclusion the Board argues that they have gone far beyond what other school boards are willing to do in this budgetary environment. The Board has offered a fair settlement which meets the stated goals of the Association, and the Board’s positions should be the basis of the FactFinder’s recommendations. For the Association The Association contends that the fact-finder’s recommendations must be derived from the facts presented, documented and argued by the parties to this dispute. The fact-finder’s recommendations cannot be reduced to a report which simply reports on the average of what other employers and their employees agreed to do. A legitimate fact-finding report must recommend that the parties agree to a settlement that is significantly above or below the mathematical average when the proven facts warrant it. The facts elicited and documented in this dispute warrant such a drastic departure form the norm. The facts documented in this dispute support a settlement well above the “going rate.” 7
  9. 9. Therefore, the fact-finder cannot minimize or discount the mountain of facts which support the Association’s position. There is no question that by any standard, it was proved that the teachers and paraprofessionals are significantly underpaid given the results they provide and their comparable worth on the competitive market. The certificated salary guide structure fails to provide an equitable reward for the service provided. The failure to correct these obvious deficiencies has led to a significant decline in morale and an inconceivable exodus from the district. Unless these issues are addressed, it can only lead to a worsened condition that will make it impossible to provide the service and results desired by the employer. The obligation to assess the ability to pay is an absolute requirement for any fact-finder. It is the criterion which is often argued, successfully, to limit the award made relative to the deserved increase in compensation for specific groups of employees. No such argument has been advanced by the Board. Here, we have the exact opposite. The Board has argued that they are unwilling to provide that which is necessary to correct the documented deficiencies. Based upon the documented budget surpluses, staff retirements/resignations, and Chapter 78 insurance contributions, the District clearly has the ability to pay all that the Association asks—and more. The focal point of the Association’s financial arguments is based upon the July 9, 2013, meeting with Dan Smith, BA and Bob Willoughby, NJEA Associate Director of Research. The results of those discussions revealed the following: 1. 2. 3. 4. 5. Retirement/Resignation “breakage” Extraordinary aid Banked Cap for 2014-15 Surplus Chapter 78 Premium Sharing contributions (2012-13) $229,359, (2013-14) $353,965, (2014-15) $642,546 8 $ 540,000 $ 122,652 $1,657,215 $1,147,723 $1,225,870 $4,693,460
  10. 10. The Association strongly argues that the above analysis shows without reservation that the Board can fund its salary proposals without impacting upon the budget or taxpayers. HAMILTON TOWNSHIP BASE YEAR 2011-12 CERTIFIED STAFF Salary Guide Step BA BA+15 BA+30 MA MA+15 MA+30 1 2 3 4 44,352 44,558 44,764 44,970 45,305 45,516 45,726 45,937 46,281 46,496 46,711 46,926 47,257 47,476 47,696 47,915 48,233 48,457 48,651 48,905 49,275 49,504 49,733 49,961 5 6 7 8 9 10 11 12 13 45,176 45,382 45,588 46,747 49,837 54,884 60,549 67,244 74,371 46,147 46,358 46,568 47,752 50,908 56,064 61,850 68,689 75,970 47,141 47,356 47,571 48,780 52,004 57,271 63,182 70,169 77,606 48,135 48,354 48,574 49,808 53,101 58,478 64,514 71,648 79,242 49,129 49,353 49,577 50,837 54,197 59,686 65,847 73,127 80,879 50,190 50,419 50,648 51,935 55,368 60,976 67,269 74,708 82,626 BA+15 1.0 2.0 1.0 1.0 5.0 2.0 1.0 1.0 1.0 4.0 19.0 BA+30 2.0 1.0 1.0 2.0 1.0 1.0 2.0 10.0 MA+15 1.0 1.0 1.0 3.0 3.0 1.0 6.0 16.0 MA+30 1.0 2.0 1.0 1.0 4.0 1.0 16.0 26.0 Staff Step 1 2 3 4 5 6 7 8 9 10 11 12 13 Totals BA 16.81 6.0 9.62 5.0 8.0 12.0 7.0 5.0 8.0 5.0 8.0 4.0 35.0 129.43 MA 1.0 3.0 1.0 7.0 1.0 6.0 1.0 14.0 8.0 7.0 9.0 3.0 21.0 82.0 9 Total 19.81 13.0 13.62 13.0 11.0 20.0 17.0 23.0 20.0 12.0 26.0 10.0 84.0 282.43
  11. 11. Guide Cost Step 1 2 3 4 5 6 7 8 9 10 11 12 13 BA 745,557 267,348 430,630 224,850 361,408 544,584 319,116 233,735 398,696 274,420 484,392 268,976 2,602,985 BA+15 45,305 91,032 46,147 46,358 232,840 95,504 50,908 61,850 68,689 330,880 BA+30 92,992 46,711 47,141 95,142 48,780 63,182 155,212 MA 47,257 142,428 47,696 335,405 48,135 290,124 48,754 697,312 424,808 409,346 580,626 214,944 1,644,082 MA+15 49,353 49,577 50,837 162,591 197,541 73,127 485,274 Total Average 1% MA+30 49,275 99,466 49,461 50,648 269,076 74,708 1,322,016 16,682,557 59,068 166,826 BA+15 211 210 211 210 211 211 1,184 3,156 5,156 5,786 6,839 7,281 - BA+30 215 215 215 215 215 215 1,209 3,224 5,267 5,911 6,987 7,437 - MA 219 220 219 220 219 220 1,234 3,293 5,377 6,036 7,134 7,594 - MA+15 224 224 224 224 224 224 1,260 3,360 5,489 6,161 7,280 7,752 - MA+30 229 229 228 229 229 229 1,287 3,433 5,608 6,293 7,439 7,918 - BA+15 211 420 211 210 5,920 6,312 5,156 6,839 7,281 - BA+30 430 215 215 2,418 3,224 6,987 - MA 219 660 219 1,540 219 1,320 1,234 46,102 43,016 42,252 64,206 22,782 - MA+15 224 1,260 3,360 16,467 21,840 7,752 Total % of Base MA+30 229 456 229 1,287 29,756 7,918 546,759 3.28% BASE YEAR 2011-12 Increment Dollars Step BA 1 2 3 4 5 6 7 8 9 10 11 12 13 206 206 206 206 206 206 1,159 3,090 5,047 5,665 6,695 7,127 - BASE YEAR 2011-12 Increment Dollars Step BA 1 2 3 4 5 6 7 8 9 10 11 12 13 3,463 1,236 1,982 1,030 1,648 2,472 8,113 15,450 40,376 28,325 53,560 28,508 - 10
  12. 12. BASE YEAR 2011-12 Category # # on Max Total Cost Increment Cost Teacher 282.43 84 16,682,557 546,759 Professionals 70.0 25.20 1,317,907 18,642 Secretarial 20.19 11.0 736,086 18,900 Custodial 26.71 15.48 986,359 7,092 Maintenance 8.0 4.0 361,756 2,407 Data 1.0 CT 3.0 NS 1.0 Para- - 48,801 2.0 - 126,554 823 57,256 1,170 Currently, there are at least 27 full-time paraprofessionals and the rest are part-time. Teacher Guide Specifics 282.43 Staff 129.43 or 45.83% are on the BA Column 82 or 29.03% are on the MA Column 84 or 29.74% are on the maximum step BA – MA+30 90.43 or 32.02% are on steps 1-6 BA – MA+30 108 or 38.2% are on steps 7-12 BA – MA+30 153 or 54.17% have a degree beyond a BA (BA+15 – MA+30) 90.43 or 32.02% have increments that range from $206 to $229 The cost of the teacher guide for the previous settlement was $ 17,516,742, but the actual cost to the Board was $16,682,557. Apparently the difference of $844,185 is due to the use of breakage money to help fund the settlement. 11
  13. 13. HAMILTON TOWNSHIP BASE YEAR 2011-12 PARAPROFESSIONALS Salary Guide Step 1 2 3 4 5 6 7 8 9 BA 16,728 16,936 17,144 17,351 17,559 18,568 19,101 19,857 21,014 Staff Step 1 2 3 4 5 6 7 8 9 Totals 8.00 9.60 8.00 6.40 2.40 2.40 2.40 5.60 25.20 70.00 BASE YEAR 2011-12 Guide Cost Step 1 2 3 4 5 6 7 8 9 PARAPROFESSIONALS 133,824 162,586 137,152 111,046 42,142 44,653 45,842 111,199 529,553 Total $1,317,907 Average 18,827 1% 13,179 12
  14. 14. BASE YEAR 2011-12 PARAPROFESSIONALS Increment Dollars Step 1 208 2 208 3 207 4 208 5 1,009 6 533 7 756 8 1,157 9 - Increment Cost Step 1 1,664 2 1,997 3 1,656 4 1,331 5 2,422 6 1,279 7 1,814 8 6,479 9 Total % of base 18,642 1.41% FINDINGS AND RECOMMENDATIONS At the recommendation of the Fact-Finder, Dan Smith, Board BA, and Robert Willoughby, NJEA Associate Director of Research met to review the District’s finances. The results of those discussions were provided to the Board and Association negotiating teams as well as the Fact-Finder. The breakdown of those discussions is as follows: 1. Total fund balance as of 6/31/12 is $7,176,721 with $1,147,723 unassigned. 2. $549,690 was used to balance the 2012-13 budget, lowering the unassigned amount to $598,033. 13
  15. 15. 3. The banked cap for 2014-15 is $1,657,215. The Board did not use any banked cap for the 2013-13 budget. 4. The Board did not budget any extraordinary aid for the 2012-13 budget but did budget $50,000 for the 2013-14 budget. 5. Association members contributed to health insurance premiums as per Chapter 78 in the amount of $353,965 for 2013-14, which is an increase of $124,606. It is estimated that for 2014-15 that amount will increase to $642,546, and for 2015-16 it is estimated the amount will increase to $971,431. The two estimated amounts are 81 and 51% over the previous years. 6. 140.91 of 282.43 teachers receive less than a $50,000 salary. 7. Since December 2011 there have been 18 retirements. Using $30,000 as an approximate savings per teacher creates an amount of $540,000 or about 2.5% of the agreed upon base. Further analysis is needed to determine how many of the retirements were actually incorporated into the budget. 8. The average value of a home in Hamilton Township is $191,000, and the average tax bill for all services is just over $5000. A penny increase of the tax rate equals $236,000. Additional retirement/resignation information for Association members was received which shows the following for the 2011-12 school year: 1. 31 teachers retired/resigned and 2 were non-renewed 2. 3 secretaries retired and 1 was terminated 3. 1 custodian retired 4. 17 paraprofessionals resigned/retired and 3 were terminated 2012-13 1. 36 teachers retired/resigned and 1 was terminated 14
  16. 16. 2. 2 secretaries retired and 1 was terminated 3. 4 custodians resigned and 1 was terminated 4. 14 paraprofessionals resigned/retired and 2 were terminated. SALARY BASE FOR 2011-12 Teacher Guide Base $16, 682,557 Average Salary $59,068 Number of steps on guide 13 Paraprofessional Guide Base $1,317,908 Average Salary $18,827 Number of steps on guide 9 Board Final Position Teacher 2012-13 4% added to base Association Final Position Teacher 2012-13 5.25% added to base 2013-15 4% added to base each year 2015-16 2% added to base 2013-15 5.25% added to base each year 2015-16 $1200 added to each step plus increment Paraprofessionals* 2012-13 $500 added to each step plus % applied to teacher base Paraprofessionals ◊ 2012-13 $2000 added to each step plus % applied to teacher base 2013-15 $500 added to each step, each year 2013-15 $2000 added to each step, each plus % applied to teacher base each year year plus % applied to teacher base each year 2015-16 % applied to teacher base 2015-16 $2000 added to each step plus % applied to teacher base Both parties are proposing 2 separate agreements with terms of July 1, 2012, through June 30, 2013, for a one year agreement, and July 1, 2013, through June 30, 2016, for a three year agreement. * For purposes of paraprofessional’s calculations, I will use the Board’s proposed teacher base increases. ◊ For purposes of paraprofessional’s calculations, I will use the Association’s proposed teacher base increases. 15
  17. 17. TEACHER BASES AND AVERAGE SALARIES YEAR 2012-13 Average Salary 2013-14 Average Salary 2014-15 Average Salary 2015-16 Average Salary BOARD $17,349,859 $61,430 $18,043,853 $63,888 $18,765,607 $66,443 $19,140,919 $67,772 ASSOCIATION $17,558,391 $62,169 $18,480,206 $65,433 $19,450,418 $68,868 $20,325,686 $71,967 (@4.5%)* The Board’s offer increases the average teacher salary by $8704 over the life of both agreements while the Association increases the average salary by $12,899 for the same time period. *I interpreted the Association’s offer to be 4.5% for 2015-16. That % might not be accurate but for purposes of this report it will suffice. PARAPROFESSIONAL BASES, AVERAGE AND MAXIMUM SALARIES YEAR 2012-13 Average Salary Maximum Salary 2013-14 Average Salary Maximum Salary 2014-15 Average Salary Maximum Salary 2015-16 Average Salary Maximum Salary BOARD $1,407,024 $20,100 $22,375 $1,499,705 $21,424 $23,790 $1,596,094 $22,801 $25,261 $1,663,716 $23,257 $25,766 ASSOCIATION $1,534,481 $21,920 $24,222 $1,762,356 $25,175 $27,599 $2,002,227 $28,601 $31,153 $2,238,630 $31,978 $34,644 16
  18. 18. The Board increased the average paraprofessional salary by $4430 and the maximum salary by $4752 while the Association increased the average salary by $13,151 and the maximum salary by $13,630 over the life of both agreements. The unique facts of each impasse matter can and does control how a particular disputed situation might be adjudicated if it is submitted to Fact-Finding. Under any set of facts, however, I am limited to and must draw any conclusions from the exhibits presented and post hearing documentation. It is uncommon for a school board in the State of New Jersey to make a final offer as the Board did in the instant matter. Without doing any further research the Board is probably correct that its offer is the highest in Atlantic County and possibly in the State. The Association’s economic weapons are based upon an analysis of the Board’s budgets and finances. Nevertheless, it is critical to review the current salary guides for teachers and paraprofessionals. That is not to minimize salary increase for other support personnel but the thrust of both parties focused on teachers and paraprofessionals. In fact, both parties acknowledge and concede that those two guides have major problems. The current teacher guide shows increments for steps 1-6, BA – MA+30 of $206 to $229. Not only is that absurd but it clearly reveals contributory negligence. The Board argued that in 1999 the parties submitted an impasse to Fact-Finding and the only issue was the structure of the teacher salary guides. Furthermore, the District strongly asserted that they told the Association of the perils of adopting the guide created in Fact-Finding and raised the same concerns in subsequent contract negotiations. However, all salary guides are mutually agreeable; therefore, even though the Board had doubts about the viability of those teacher guides, they accepted and passed resolutions to approve them. In fact, the 2011-12 guide has increments for steps 7-12 ranging from $1,159 to $7,918, and 17
  19. 19. 140.1 or 49.8% of teachers receive a salary less than $50,000. It certainly means to me that the money was put towards the top of the guide, and it became a ”wait to get competitive raises” type of guide. It is commendable that both sides are moving in the same direction; however, they are traveling on different routes. They both want a starting salary of at least $50,000 by the beginning of the 2014-15 school year, but getting there is the difficulty. The Board wants to implement its offer by adding three steps to the teacher guides, while the Association is adamant that they will agree to only one step being added. Whether the Association’s final offer is 21% (5.25 x 4 years) or 20.25 % (5.25 for three years and 4.5 for 2015-16) is of no moment because neither final offer is obtainable in this process. On page 2 of this report at the end of the first paragraph I stated: “More importantly, as I reviewed the inter-relationship of each issue to the total package, some issues may have exceeded the standard of reasonableness.” The standard of reasonableness will be my barometer for this Report. Infused within the Association’s economic arsenal is the Chapter 78, health insurance contributions that all bargaining unit members are required to pay. Chapter 78 contributions are a non-starter for me, and I am rejecting those contributions as part of the economic means the District can employ to fund the settlement. All public employees in the State of New Jersey are required to pay those contributions based upon their base salary. The statute requires a minimum contribution of 1.5% and some teachers may be paying as much as $6000 for family coverage. I have no authority to modify, delete or amend any provisions of Chapter 78. Chapter 78 was established, rightly or wrongly, for health insurance contributions, NOT to enhance salary increases. The Chapter 78 economic gun that the Association is carrying has no firing pin and consequently cannot be used to fund this settlement. To advance such an argument and expect the Fact-Finder to accept it expands the boundaries of believability beyond any recognizable limit. 18
  20. 20. Both parties have acknowledged that the current guide for paraprofessionals must be improved. Additionally, many paraprofessionals have left the District for a higher paying position in another school system. Some resigned and became substitute teachers in the District. The standards of reasonableness apply here as they do with the teacher guides. The 2011-12 paraprofessional guide shows the following: Steps 1-4 increments of $207 - $208 Step 5 $1,009 increment Step 6 $533 increment Step 7 $756 increment Step 9 $1,157 increment It also shows that 30.8 or 44% are on maximum, and 25.6 or 36.57% are on steps 1-3. Applying the same % applied to the teacher guides to the paraprofessionals guide does not help them because of their low salaries. Moreover, a guide for paraprofessionals cannot be priced out of the competitive market. Furthermore, many of the paraprofessionals are part-time and that is probably determined by the District’s needs. The Association consistently argued that the Board has at least $540,000 in breakage and that must be used in this settlement. However, that breakage argument is not as completely controlling as the Association would have me believe. The Board budgeted 2% for salary increases, which means they put $333,652 (1% is $166,826) in the budget. The other 2% for the Board’s final offer was taken from breakage, surplus or a combination of other accounts. For some reason the Association fails to recognize that of the $540,000 they found in breakage, the Board already used some of that amount. For purposes of this report I will assume all of the $333,652 is from breakage leaving a breakage balance of $206,348. The 2011-12 Atlantic County rankings from the NJEA Research Division show the following: BA MINIMUM COUNTY AVERAGE DIFFERENCE RANKING $44,352 $47,295 -$2943 212/24 19
  21. 21. BA MAXIMUM $74,371 $76,230 -$1859 18/24 Additionally, that research information shows that Hamilton Township has 13 steps on the teacher guide and the County average is 14. Moreover, 11 of the 24 districts compared have 15 or more steps on their guides. That exhibit shows a range of steps from 12 -20. The Board’s 2012-13 budget has a school tax rate of $0.808 with a school tax levy of $19, 290,197, and to increase that amount by 2% an additional $0.017 increase in the tax rate was necessary. The 2013-14 school rate is $0.833 for a school tax levy of $19,676,001. That 2% tax levy increases taxes on a home assessed at $100,000 by $25.00, one assessed at $200,000 a $50.00 increase and one assessed at $250,000 a $62.50 increase. The amount raised by $.01 for 2012-13 is $238,839.66 and for 2013-14 the amount is $236,306.52. Furthermore, the Board’s Capital Outlay Budget for 2013-14 is $1,189,737 of which $951,155 is funded by the Capital Reserve Fund and $238,582 from the General Fund. The Board’s $500.00 per step increase plus % applied to teacher base for the paraprofessionals guide is not high enough to correct the long-standing errors on that guide. On the other hand, the Association’s $2000.00 per step increase plus the % applied to the teacher base is candidly unreasonable. After spending hours with the Board’s negotiating team, I am convinced that the increase proposed by the Association will result in a reduction of paraprofessionals as well as many positions becoming part-time. Of the 70 paraprofessionals 27 are full-time and 43 are parttime. An increase such as being proposed by the Association will in all likelihood result in the number of 27 being reduced and the number of 43 being increased. 20
  22. 22. Nevertheless, I am also convinced that there is funding available with the additional use of breakage and surplus to fund the multi-year settlement that will begin to make both salary guides competitive and attractive. My recommended settlement is more than the Board has offered and less than the Association has offered. The breakage amount may be increased if there are retirements/resignations or terminations during the 2013-14 school year. I am only using the amount of $540,000 that was created at the July meeting between Messrs. Smith and Willoughby. Furthermore, the Board’s documentation accepts and recognizes that breakage money will be needed to fund the multi-year settlement. My salary recommendations are as follows: All salary increases, stipends, extra-pay, coaching positions are retroactive to July 1, 2012. Add two steps to the teacher guides. I doubt that will occur during the 2012-13 school year, but that is up to the parties. I will not create any salary guides; I will leave that to the parties and their experts. I do not recommend adding steps to the paraprofessional’s guides. One Year Agreement July 1, 2012, - June 30, 2013 2012-13 Increase 2011-12 teacher base by 4.25% including increment New base $17,391,586 average salary $61,578 Adjust each step of the 2011-12 paraprofessionals’ guide by $7500.00 and increase that amount by 4.25% New base $1,428,649 average salary $20,409 maximum salary $22,689 Increase 2011-12 base of other support personnel by 4.25% Longevity unfreeze and pay at rates set forth on pages 19/20 of the Agreement Increase summer curriculum to $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.25%. Article 10 C, Death in immediate family change five days to three days Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days. Change to 75 days. 21
  23. 23. Three Year Agreement July 1, 2013, - June 30, 2016 2013-14 Increase 2012-13 teacher base by 4.0% including increment New Base $18,087,249 average salary $64,041 Adjust each step of the 2012-13 paraprofessionals’ guide by $750.00 and increase that amount by 4.0% New base $1,540,395 average salary $22,005 maximum salary $24,377 Increase 2012-13 base of other support personnel by 4.0% Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates. 2014-15 BA starting salary of at least $50,000 Increase 2013-14 teacher base by 4.00% including increment New base $18,810,739 average salary $66,603 Adjust each step of the 2013-14 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% New Base $1,656,611 average salary $23,666 maximum salary $26,132 Increase 2013-14 base of other support personnel by 4.00% Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates. 22
  24. 24. 2015-16 Increase 2014-15 teacher base by 4.00% including increment New base $19,563,169 average salary $69,269 Adjust each step of the 2014-15 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% New Base $1,777,475 average salary $25,392 maximum salary $27,957 Longevity pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.0% Average increase for teacher guide from 2011-12 $10,201 or $2550 per year Average increase for paraprofessional guide from 2011-12 $6565 or $1641 per year Maximum step increase for paraprofessional guide from 2011-12 $6943 or $1735 per year % increase for paraprofessional maximum step from 2011-12 over 30% My recommendations for teacher salary increases are 2.25% higher than the Board’s final offer and 4.5% lower than the Association’s final offer. My recommendations for adjusting each step on the paraprofessionals guides is $2191 higher than the Board’s (which did not include any step adjustment for the 2015-16 year) and $6687 lower than the Association’s final offer. A definitive cost for each guide can be developed once an accurate scattergram is created. My recommendations are based upon the 2013-14 bases and scattergrams and only addressed personnel changes for the 2013-14 school year. Certainly with additional changes in personnel since September 2013 and beyond, a lower cost to the Board will be established. 23
  25. 25. The top step (maximum) increase for support staff from 2009-10 to 2011-12 agreements shows the following: $1592 increase for secretaries $1487 increase for custodians $1819 increase for maintenance $774 for paraprofessionals Teacher guides BA step 10, 2009-10 to step 12, 2011-12 MA step 11, 2009-10 to step 13 (maximum) 2011-12 $15,619 or 30% $18,375 or 30% My recommendation for paraprofessionals for 2012-13 to 2013-14 increases the maximum salary by $3363, which is significantly higher than they have received in the past. The Board’s offer for paraprofessionals for 2012-13 to 2013-14 increases the maximum salary by $2775. The Associations final offer for paraprofessionals for 2012-13 to 2013-14 on step adjustment alone increases the maximum salary by $4000.00. A major goal of any public sector negotiations is to keep the cost of increments low. By adding 2 steps to the teacher guides, the 2015-16 increment cost will be significantly lower than the current 3.28%. RECOMMENDATIONS FOR SETTLEMENT All tentative agreements remain in effect. Any items not addressed herein are rejected. Add two steps to the teacher guides. It is up to the parties to determine what years they want to add a step or steps. One Year Agreement July 1, 2012, - June 30, 2013 2012-13 Increase 2011-12 teacher base by 4.25% including increment 24
  26. 26. Adjust each step of the 2011-12 paraprofessionals’ guide by $1200.00 and increase that amount by 4.25% Increase 2011-12 base of other support personnel by 4.25% Longevity--unfreeze and pay at rates set forth on pages 19/20 of the Agreement Increase summer curriculum to $39.00 per hour Increase Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.25%. Article 10, C Death in immediate family, change five days to three days Article 11 (new) Insurance Short-term replacement employees not covered if period of actual coverage is less than 90 days. Change to 75 days. Three Year Agreement July 1, 2013, - June 30, 2016 2013-14 Increase 2012-13 teacher base by 4.0% including increment Adjust each step of the 2012-13 paraprofessionals’ guide by $750.00 and increase that amount by 4.0% Increase 2012-13 base of other support personnel by 4.0% Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates. 2014-15 BA starting salary of at least $50,000 Increase 2013-14 teacher base by 4.00% including increment Adjust each step of the 2013-14 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% Increase 2013-14 base of other support personnel by 4.00% 25
  27. 27. Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work to be paid at 2012-13 rates. 2015-16 Increase 2014-15 teacher base by 4.00% including increment Adjust each step of the 2014-15 paraprofessionals’ guide by $750.00 and increase that amount by 4.00% Increase 2014-15 base of other support personnel by 4.00% Longevity--pay at rates set forth on pages 19/20 of the Agreement Summer Curriculum to be paid at $39.00 per hour Increase 2012-13 Extra-Curricular Activities, Interscholastic Sports, Co-Curricular Activities, Home Instruction, Administrative Detentions, Paraprofessional Summer Work by 4.0% I stress to the parties that negotiation is the art of compromise. You may not be happy with what I recommended, but ultimately each party can live with those recommendations. Major gains were achieved on salary guide enhancement. During the 2011-2013 school years 66 teachers retired/resigned, 5 secretaries retired/resigned, 5 custodians retired and 31 paraprofessionals retired/resigned. Based upon the comments I heard from both parties salary was the reason why most resigned. Most importantly, this Fact-Finding is unique because the Board’s final offer is higher than any Board offer in Atlantic County. In today’s economic climate and with a 2% levy increase, creating a final offer of 14% is an acknowledgement by the Board that they are aware of and concerned about the salary guides. Furthermore, in my opinion a 14% Board offer shows without reservation that the Board was seriously attempting to solve salary guide problems. The Association also was also serious about trying to achieve economic gain for its members, but with a much higher 26
  28. 28. approach than the Board. This is understandable because the Association has consistently argued that the Board has the money to fund its final offer. I shall retain jurisdiction. Respectfully submitted Dated: October 14, 2013 ________________________ Gerard G. Restaino, Arbitrator State of Pennsylvania ) County of Wayne ) ss: On this 14th day of October, 2013, before me personally came and appeared GERARD G. RESTAINO to me known to be the person who executed the foregoing document and he duly acknowledged to me that he executed the same. ___________________________ Notary Public Lake Twp., Wayne County My commission expires on November 10, 2013 27

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