Contract Negotiation FAQs

Negotiating a new contract can be very emotional, however, the actual process of negotiations is a very defined set of rules that involves representatives of an employer and representatives of a bargaining unit meeting to engage in the collective bargaining process, presenting proposals, and counter proposals. As we have all seen with the auto industry, contract negotiations are no longer, and cannot be, a battle between "us and them," rather a process that is followed until a proposal, mutually beneficial to the organization, is agreed upon.

During the current negotiation process with Dearborn Federation of Teachers (DFT) the Dearborn Board of Education has continued to commend and celebrate the accomplishments, hard work, and dedication of the teachers in our schools. Teachers are the frontline in the education system and are truly making a difference in the lives of children in our classrooms. Their dedication to this district and the profession of teaching is admirable.

The Board has and will continue to work within the legal parameters of contract negotiations while at the same time balancing the need to share information and answer questions from the community. The Board will not engage in any discussions, in an open forum, that may corrupt the integrity of negotiations or violate laws governing the process. The ongoing contract negotiations with the DFT have prompted the community to ask questions of the Board of Education and administration. In an effort to respond to the community, the district has put together the following Q & A document. Periodically additional questions and answers will be added to this document.

Questions and Answers

1. What is Fact Finding?

If, after prolonged negotiations, an agreement between the two bargaining parties is not reached, then one or both of the parties can request a mediator from the Michigan Employment Relations Commission (MERC) to help reach an agreement. If, after continued mediation, an agreement is not reached, one or both of the parties may request that MERC assign a Fact Finder to examine the facts of the unresolved disputed issues and make a public recommendation regarding resolution of those issues.

2. Is it true that the Board of Education refused to negotiate with the Dearborn Federation of Teachers (DFT)?

No, this is not true. Below is a general timeline:

April 2009 – April 2010: Negotiating teams from the Board and DFT met several
times without reaching an agreement.

April 2010: Board requests mediator, negotiations continue; still no agreement

June 28, 2010: Board files a petition for Fact Finding with MERC. Board team
and DFT team continues negotiation with mediator.

October 28, 2010: Original date for Fact Finder hearing. DFT requested
postponement.

November 22, 2010: DFT and Board present their position to Fact Finder in a
hearing.

December 2010: Negotiating teams from both sides continue to meet.

3. What is meant by the term "Steps"?

When a person is hired by the district they are placed at a certain pay level or "Step." Most employees start at Step 1 but sometimes a person can start at a higher Step based on experience and other factors. Each year, staff members move up one Step, receiving more pay, until they reach the top Step unless the Board of Education and the DFT agree otherwise.

4. Why does the Board want to add more steps in the teachers' salary schedule?

The extended step schedule allows for a 3%-5% wage increase between steps as opposed to the current 3%-9% increase between steps. With almost 1,200 teachers the district knows that a certain number will retire each year. The step structure proposed by the Board is designed so that the difference between the higher pay of retiring veteran teachers and the entry level pay of new teachers is about the same amount that is needed to cover the cost of the step increases for all teachers. This formula does not work under the current step structure.

5. Why were so many teachers laid off in February 2010?

In 2009 the state cut funding to the district by 4.8%. The district had to reduce spending by the same amount. About half of the staff chose to have their pay reduced by 4.8% in order to avoid lay-offs. The Board was unable to negotiate a reduction in salary with the DFT; therefore, a number of teachers, equal to 4.8% of the funding allotted to pay teachers, were laid off. Most of those teachers have been recalled because retirements created openings. However, several positions still remain eliminated.

6. Why is the district seeking a percentage decrease in salary for all teachers?

The Board is asking teachers to take the same aggregate percentage decrease in salary as the percentage decrease in funding that the district receives from the state. The percentage decrease in salary the district is requesting from the teachers is the same amount that the Board, Superintendent, Cabinet, Non-Classified/Non Instructional, Administrative Secretaries, Engineers, and Non-Instructional staff members (about 1,200 people) have already agreed to take. In 2009-2010 that percentage decrease was finalized at 4.8%. As of December 3, 2010 the decrease in funding allotted to the district from the state has been identified at 6.1% for 2010-11 compared to the amount allotted the district in 2008-09 the last year there was no decrease in the funding allotment. The state has received federal funds that will subsidize the district for the 2010-11 year only. This will allow the district to pay employees an additional percentage reducing the impact of the 6.1% reduction to 2.9% for the 2010-11 fiscal year only.

7. How can eliminated positions be restored?

The Board would be able to restore positions if funding from the state is restored or if the teachers agree to a percentage reduction in salary equal to the percentage reduction in funding allotted from the state.

8. Why is the district asking teachers to take a health care concession?

The District is proposing that the teachers either contribute to the premium costs if electing the more expensive PPO coverage or move to the more competitively priced HMO coverage for which they would not have to contribute to the premium costs. The teachers are being asked to take the same health care plans other employees have agreed to.

Currently for Teachers:
Choose one of the following
- Blue Cross Blue Shield PPO Plan I (BCBS PPO)*
- Blue Care Network HMO (BCN HMO)*
- Health Alliance Plan HMO (HAP HMO)*
*(monthly premium paid in full by district)

Proposed for Teachers and already agreed to by other staff members
Choose one of the following-
- Blue Care Network HMO (BCN HMO)*
- Health Alliance Plan HMO (HAP HMO)*
*(monthly premium paid in full by district)

- Blue Cross Blue Shield PPO Plan I (BCBS PPO) **
** (employee pays the difference between the cost of the
BCN HMO and the BCBS PPO)

Many teachers, (53%) currently have one of the HMO plans offering full health coverage.

If a teacher chooses to enroll in the BCBS-PPO the annual employee cost is:
- $1,932/year for one person
- $5,148/year for two people
- $7,812/year for a family.

9. Do these concessions represent the same percentage decrease in total compensation for all teachers?

No. The most recent salary proposals from the Board of Education would specify a pay freeze from the 2008-09 salary schedule to the 2009-10 salary schedule. The change in total compensation, not salary but total compensation, proposed by the Board of Education for 2010-11 from the effective date of a new contract forward will affect the membership differently based on their current individual salary schedule step status and their insurance choice. The effect on various DFT members falls into one of four categories:

1. DFT members not currently enrolled in the PPO and at the top step.
This group comprises 13% of the membership. These individuals will experience a 6.1% reduction in their salary schedule from their 2009-10 salary. The amount of pay they would actually receive would be changed by the federal subsidy with a resultant overall 3.0% reduction in salary paid for 2010-11 compared to the salary they received in 2009-10. Their pay would return to the 6.1% unsubsidized reduction in salary schedule beginning July 1, 2011 assuming no additional funding changes.

2. DFT members not currently enrolled in the PPO and eligible to receive a step. This group comprises 40% of the membership. These individuals will receive a change in salary schedule ranging from a .3% increase to a 3.3% decrease from what they received in 2009-10. Their change in salary schedule will depend on where they fall on the current step schedule and the resulting placement on the new step schedule. The new placement on the salary schedule would be determined by initially moving them to a step on the new salary schedule that is at least 3% higher than their current salary and then that amount will be reduced by 6.1%. The amount of pay they would actually receive for 2010-11 would be changed by the federal subsidy with a resultant overall change in pay ranging from a 3.3% increase to a .3% decrease in salary compared to the salary they received in 2009-10. Their pay would return to the 6.1% reduced salary schedule beginning July 1, 2011 assuming no additional funding changes.

3. DFT members currently enrolled in the PPO and at the top step.
This group comprises 21% of the membership. They will experience a 6.1% reduction in their salary schedule and, if they choose to take the PPO, they will have to pay $1,932 for one person; $5,148 for two people and $7,812 for a family or an amount equal to approximately 3% to 11% of their salary. This represents a total compensation minimum reduction of 9.1% to a maximum total compensation reduction of approximately 17.1% from what they received in 2009-10 to maintain the PPO depending on the number of dependents covered by insurance. The amount of total compensation they would actually receive for 2010-11 would be changed by the federal subsidy with a resultant overall change in total compensation ranging from a 6.1% reduction to a 14.1% reduction compared to the total compensation they received in 2009-10. This would return to the unsubsidized change in total compensation ranging from a 9.1% to a 17.1% reduction in total compensation on July 1, 2011 assuming no additional funding changes.

4. DFT members currently enrolled in the PPO and eligible to receive a step. This group comprises 25% of the membership. This group will receive between a .3% increase to a 3.3% decrease in their salary schedule. In addition, if they choose to take the PPO, they will have to pay $1,932 for one person; $5,148 for two people and $7,812 for a family. This would represent an amount from 3% to 16.4% of the member's salary depending on the step and the number of dependents covered by insurance. In total, this could be anywhere from a 2.7% to a 19.7% decrease in total compensation from what they received in 2009-10 depending on their step placement and the number of dependents covered by insurance. The amount of total compensation they would actually receive for 2010-11 would be changed by the federal subsidy with a resultant overall change in total compensation ranging from a .3% increase to a 16.7% reduction compared to the total compensation they received in 2009-10. This would return to the unsubsidized change in total compensation ranging from a 2.7% to a 19.7% reduction in total compensation on July 1, 2011 assuming no additional funding changes.

10. Can you give an illustration as to how these proposals could be applied?

At such time during the 2010-11 school year that a new contract took effect there would be a change in salary forward. Accordingly, no change in what DFT members have been paid up to the date the contract takes effect would be made. Therefore if a DFT member's salary would be reduced under the new contract, they would not be expected to pay any monies back to the district. Conversely, if the employee would receive an increase in salary under the provisions of the new contract there would be no retroactive pay owed the employee by the district for pay received in 2010-11 up to that point. All changes would be prospective from that point forward. As an illustration, the salary adjustment of an employee on MA+30 Step 9, the mid-range of the teacher's salary schedule, would be as indicated below. The example provided below is intended to demonstrate how the district's proposal would modify the employee's step placement and salary levels since the date that the last contract with DFT was to originally expire, up to the present, and through the balance of the new contract term.

1. A DFT member currently on MA+30, Step 9 of the 2008-09 salary schedule would remain at that salary for the 2009-10 contract year experiencing
a pay freeze. $67,865

2. At such time as a new contract took effect, a DFT member on MA +30, Step
9 would be placed on MA+30 Step 15 of the 22 step schedule for 2010-11
providing no less than a 3% increase from the amount listed in #1 above
on the old step schedule. $71,114

3. The amount listed in #2 above would then be reduced by 6.1%. $66,776

4. Thereafter a 3.1% increase from the federal government would be assessed
for the remainder of the 2010-11 contract year. The DFT member would
remain on MA+30, Step 15 of the 2010-11 step schedule representing 6.1%
reduction, but would be paid a salary adjusted by the federal government
subsidy by 3.1%, thereby reducing the amount listed in #2 above by 3.0%
instead of 6.1%. That subsidy funding from the federal government would
end on June 30, 2010. $68,980

This would represent a +1.6% change from the 2009-10 salary.
5. On July 1, 2011 that DFT member would move to MA+30, Step 16 on the
22 step salary schedule for 2011-12 that represents a 6.1% reduction $68,779

This would represent a +1.3% change from the 2009-10 salary.

The salary proposals presented by the Board of Education are based on the district's ability to pay for total compensation to our employees as a result of funding changes to the district from the state. The salary adjustments cited above are based on approved legislation as of December 2010. Changes in salaries would have to be developed if new legislation were to be approved by the state which would either increase or decrease per pupil foundation funding to the district extending through June 30, 2012. Legislation that increases funding for any entire fiscal year would be applied to all salaries paid during the period the funding is effective. Legislation that decreases the funding to the district would result in a reduction of all salaries paid from that point forward through June 30, 2012 or until new legislation resulted in additional changes in funding.

11. How would this example be affected by the changes in health insurance?

If this hypothetical DFT member is currently enrolled in either BCN HMO or HAP HMO, no further change in total compensation would occur except for increased co-pays for Rx ( From $5/$15 to $10/$20), office visits (From $10 to$20) and emergency room visits (From $50 to $75).

If this hypothetical DFT member wished to enroll in the BCBS PPO Plan I, then the annual buy-up cost to do so would be $1,932/yr for one person; $5,148/year for two people; and $7,812/year for a family.

The reductions represented by choosing the PPO could however, be avoided if the member chooses one of the two HMOs, which many of their fellow members have already chosen, and receive excellent high quality health care. This would result in a change in salary as indicated in groups 1 and 2 above.

* * *
As the district contemplates changes that will allow the district to operate a premium service school district in the face of continued funding reductions we believe that these changes need to take place to maintain adequate service to our students and community at controlled costs.

This letter describing the application of current Board proposals does not represent finality in the negotiations process. The Board and the DFT continue to negotiate while they await the recommendation of the fact finder. Thereafter good faith negotiations will continue between the Board and the DFT.