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Union Contract Costs Add to Lowell Schools’ Fiscal Worries

January 7, 2019

LOWELL -- With personnel costs making up over three-quarters of the district’s budget, union leaders are bracing for what the millions-of-dollars deficit identified by the district and a third-party audit could mean for their members.

Mixed in this discussion is the belief by some critics that, while the city has held the line on contracts, the school district has done just the opposite. Councilor Rodney Elliott, chairman of the City Council Finance Subcommittee, voiced his concerns with the budget at a meeting in the fall and pointed to the district’s contract with the city’s largest union, the United Teachers of Lowell.

“Those costs are real, and not going away,” Elliott said.

But is the district’s contract with this union a contributor to the dismal fiscal outlook?

A contract approved by the School Committee in 2017 gives about 1,700 teachers, paraprofessionals, custodians and cafeteria workers represented by the UTL a 9 percent raise over three years, with an important caveat. A one-year contract with no raise or increase in benefits was signed and approved at the same time, effectively meaning the raises are 9 percent over four years.

The one-year contract took effect retroactively for the 2016-17 school year. It preceded the three-year contract, which gives a 2 percent raise in the middle of each of the three years and a 1 percent raise at each year’s end.

Since 2016, the national inflation rate has hovered around 2 percent.

When the contracts were approved, former Superintendent of Schools Salah Khelfaoui said contracted raises in the first year of the three-year contract -- the 2017-18 school year -- would cost about $1 million. The second and current year of the contract would impact the budget by about $3 million, he said. The third and final year, ending in June 2020, would impact the budget by slightly more than $3 million, just less than 2 percent of the budget, according to Khelfaoui.

If the district sees widespread layoffs, this projected impact could change.

Already the district dialed back at least one benefit agreed to in the contract. According to UTL President Paul Georges, the union and district agreed to delay a 10-fold increase in life-insurance coverage last summer.

The increase of this coverage from $2,000 to $20,000 was supposed to take effect the second year of this contract, July 2018. The union agreed to delay this change at least a year in an agreement made before Khelfaoui was placed on paid administrative leave in a 4-3 vote by the School Committee.

“There’s a new School Committee and there’s a need to look at what we can and cannot afford,” Mayor William Samaras said regarding the change last year.

Before the contracted raises took effect, the average teacher salary in the district was $79,969, according to data from the 2016-17 school year, the most recent records from the Department of Elementary and Secondary Education. This is just north of the state average for the same year, $78,708.

Averages across the state range widely from a $45,212 in Gosnold to $101,854 in Burlington.

According to the most recent budget, the highest-paid teacher in Lowell is a special education instructor who will make $96,523 this year. They are one of six teachers in the district who makes over $95,000 annually.

The three-year contract also introduces pay increases to five steps based on education and experience ranging from a $250 to a $1,250 boost.

The exact impact of contractual raises to teacher’s pensions is unclear. However, most veteran teachers will receive a pension based on the average of their last three years in the district. This was slightly modified for employees statewide hired after April 2012, whose pensions are calculated based on their highest five-year average.

The higher their average salary, the higher their pension.

Beyond life insurance and salary increases, the contracts also make a number of other changes.

The one-year contract ends an agreement to educate the children of employees who live outside the district and allows employees covered by the contract to voluntarily defer sick leave buyback until the next year.

The three-year contract for teachers includes a number of provisions.

* Up to three days of paid religious leave each school year.

* The regular work year of a teacher is 182 days. A professional development day was added to Election Day in November and, in return, teachers will receive an additional personal day.

* Both technology lead teachers and STEM lead teachers receive a $3,600 stipend.

* Middle and high school teachers will have at least one preparation period today equivalent to a fifth of the total daily teaching time.

* Teachers who agree to teach more time during the school day will receive 15 percent pro-rated per minute. This is retirement-eligible.

* Teachers who agree to teach more time outside the school day will receive 20 percent pro-rated per minute. This is retirement-eligible.

* Teachers who instruct an additional subject or have additional teaching preparation can receive a salary differential with 7 percent retirement eligible.

City Chief Financial Officer Conor Baldwin said he could not directly comment whether the contract with UTL contributed to the district’s estimated deficit.

“Certainly any increase in salary -- that needs to be planned budgetarily,” he said.

The previous contract between the district and two of its unions -- UTL and the Lowell School Administrators Association -- instituted a 3.75 percent increase over two years. The contract, approved in March 2016, was effective July 2014 to June 2016.

After a long negotiation, the Lowell School Administrators Association, or LSAA, agreed to a contract in early 2018. The agreement includes a similar raise as the UTL contract, 9 percent increase over four years, beginning retroactively in 2017.

Additionally, the union agreed to cap sick time buy-back for current employees at $20,000, with new hires unable to receive payouts for their unused sick time.

The LSAA represents about 200 employees, including guidance counselors, social workers, assistant principals and department chairs, among other positions.

As the district’s budget woes unfolded last fall, Acting Superintendent of School Jeannine Durkin instituted a hiring freeze. Since then, the School Committee finalized Khelfaoui’s dismissal and a third-party audit of the budget found multiple instance of overpayment and poor financial controls.

In early December, Interim Chief Financial Officer Billie Jo Turner said she identified a plan to close the described $2.48 million deficit, but the discovery of an additional $865,000 in dental costs has sent the district back to the drawing board.

At a School Committee Finance Subcommittee meeting on Dec. 19, Turner identified 12 positions that the district could “temporarily not fill or eliminate.”

This includes an assistant human resources director, a database and systems administrator, an accountability clerk, two McHugh teachers, a bridge teacher, an in-house suspension teacher, a coordinator of educational television, a television associate producer, a social worker, a bridge caseworker and an alternative counselor.

Meanwhile, Georges of UTL remains skeptical of the budget review and has requested his own analysis from the American Federation of Teachers, the union’s parent organization. He declined to describe the findings of this analysis, citing ongoing negotiations, but said it confirms his “skepticism.”

As of December, UTL has not agreed to any staffing cuts, he said.

“We have had some discussions, but at this point they are still identifying what the need is,” Georges said.

In November, Lyndsey Killilea, president of the LSAA, said she is concerned by the described deficit and said her union has already seen a number of position cuts over the last four to five years.

“I think everyone is cautious,” she said. “I think everyone is trying to make sure they have the right (numbers).”

Follow Elizabeth Dobbins on Twitter @ElizDobbins.

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