Cheshire Teacher Arbitration Award

You asked for a summary of the arbitrators’ choices and rationale in the November 23, 2002 arbitration decision on disputed issues in a proposed three-year contract between the Cheshire Board of Education and the Education Association of Cheshire. The contract runs from 2003-04 through 2005-06.

State law requires that, when a local school board and a union representing its teachers or school administrators reach an impasse in negotiations over a collective bargaining agreement, the disputed issues be submitted to a panel of three arbitrators, one representing school boards, one representing unions, and one neutral arbitrator.

In the case of the Cheshire teacher’s contract for 2003-04 through 2005-06, the arbitrators decided three issues. The issues were the salary schedules for each of the contract’s three years. For each year, arbitrators chose between last best offers submitted by the parties. The arbitrators accepted the school board’s salary offer for the first year of the contract and the union’s offers for the contract’s last two years. The overall percentage salary increases awarded were 4. 31% for the contract’s first year, and 5% in each of the last two.

In deciding teacher contract impasses, arbitrators must use criteria specified in state law and must explain their reasoning for each decision based on these criteria. The criteria require arbitrators to consider, among other things, the town’s financial capability, the public interest, and comparable wage increases for other employee groups. In the Cheshire decision, the arbitrators emphasized (1) the inequities of the board’s pre-contract salary schedule, which short-changed teachers in the middle of the pay scale compared to other districts and to Cheshire teachers at the top of the salary schedule; (2) Cheshire’s relative wealth combined with certain financial stresses to which it is subject; and (3) comparisons with pay increases awarded to other teachers in the state in contract settlements for the same years as the proposed Cheshire contract.

The arbitration panel members in the Cheshire case were Susan R. Meredith (neutral), John Romanow (representing school boards), and John Gesmonde (representing unions).

The Teacher Negotiation Act requires arbitrators to consider specified factors in making their decisions (CGS § 10-153f (4)). They must (1) give priority to the public interest and the employer’s financial capability, including other demands on its financial capability; (2) evaluate all other factors in light of the town’s financial capability; and (3) in determining financial capability, disregard budget reserves of 5% or less.

1. the history of negotiations between the parties, including those leading to the arbitration proceeding and offers and discussion of issues;

2. existing employment conditions of the employee group and of similar groups;

3. wages, fringe benefits, and working conditions prevailing in the state labor market, including terms of recent contract settlements or awards in the private sector and for other municipal employee groups; and

4. the interest and welfare of the employees.

The arbitration panel made several findings of fact about how each required decision criterion applied to Cheshire and its teachers.

The arbitrators found that Cheshire is a desirable community with an expanding population and many indications of relative wealth. But the town faces financial strains as a result of its growth. Its school system has added 700 students in the last 10 years. The town also has a high debt burden. Its debt service as a percentage of total expenditures is 12. 7%, third highest in the state. Per capita debt service is the state’s 6^th highest.

The arbitrators found that, like all towns, Cheshire expects its share of state financing to shrink because of state budget problems. The economic recession has slowed its grand list growth to “a trickle” and the town has increased taxes steadily for nearly a decade. At the same time, Cheshire’s fund balance has risen over the same period and the town has a good credit rating

Overall, Cheshire is a moderately wealthy community. It faces the same challenges as all towns in the current economic climate plus the added burden of very high debt service. The town has chosen to improve infrastructure and enhance community life and is feeling the impact of those choices on its financial condition.

In negotiations, the parties agreed to raise the teachers’ share of their health insurance premium by 2. 5% in first year of contract. Teachers’ premium copayments will be 12. 5% by end of contract. The new contract also implements a prescription drug plan that is expected to reduce costs.

On the other side, teacher copayments for dental services were reduced from 20% to zero and their premium contributions for dependent dental coverage decreased 50%. The new contract also reduces teachers’ out-of-network deductibles and out-of-pocket maximums. And teachers with 33 or more years of service will receive longevity payments.

The school board characterized these changes as basically a wash, so they did not greatly affect the arbitrators’ consideration of the disputed salary issues.

Both parties’ offers provided salary increases greater than the changes in the consumer price index (CPI). The arbitrators took CPI into consideration particularly with regard to pay for teachers at the top of the salary schedule.

Interest and Welfare of Employee Group; Existing Conditions of Employment of the Employee Group and Those of Similar Groups; and Salaries, Fringe Benefits, and Other Conditions of Employment Prevailing in the State Labor Market

Since findings for these factors are based on the same evidence, the arbitrators considered them together.

They found that Cheshire teachers’ salaries are above average in almost every category. At the top of scale, Cheshire teachers are well paid. But there is a discrepancy between Cheshire’s wealth rank and its salaries for teachers in middle of its teacher pay scale. For these middle-rank teachers, the arbitrators found, Cheshire is not competitive with similar communities. In their offers, both parties made efforts to increase equity across the pay scale. The arbitrators took this effort into consideration.

In Cheshire, 54. 2% of bargaining unit will be at the top of the salary grid during the contract period.

The parties submitted three issues to the arbitrators. The issues were the salary levels for each year of the proposed contract.

The board’s salary offer would increase the total salary account by 4. 31%. The offer proposed to increase pay for:

1. each salary step by 2. 5%,

2. steps 2-10 by an additional 1. 25%, and

3. steps 11-13 by an additional 0. 75%.

The union offer provided a total salary increase of 4. 93%. It proposed to increase pay for steps 1-10 by 3. 65% and for steps 11-14 by 3. 67%.

Decision and Analysis. The arbitrators chose the board’s offer. Both parties considered it a high priority to attract and retain quality teachers while lessening impact on taxpayers. Both parties expressed concern about the less favorable pay of Cheshire teachers in the middle of salary schedule.

The arbitrators decided that board’s offer addressed the middle-scale equity issue better because it increased the middle steps of the scale by a larger percentage than the union’s offer. To offset this, the board’s offer increased steps 11-13 by 0. 27% less than the union offer.

The arbitrators decided that increasing salaries for the most seriously underfunded salary steps promoted the public interest in attracting and maintaining good teachers. Meanwhile, the highest-paid teachers, who benefit least under the board’s offer, are nevertheless compensated at a reasonable level for a town like Cheshire.

Last Best Offers. The board’s offer resulted in a total increase of 4. 39%. It featured:

1. a 2. 75% increase in each step in the wage schedule,

2. additional increases of 2. 5% for steps 2-10 and 1. 75% for steps 11-13, and

3. an advance of one step for teachers not already at the top step.

1. a one-step advance for teachers not already at top and

2. a 3. 47% increase for each step in the schedule, including the top step.

Decision and Analysis. The arbitrators chose the union’s offer. They noted that the decision to equalize the salary schedule in contract’s first year meant that teachers at all levels are more equally situated in the second year relative to comparison groups.

The arbitrators determined that the board’s offer ranked 23^rd lowest of 24 general wage increases for Connecticut teachers for 2004-05 while the union’s offer ranked 19^th. On the basis of total settlement, the board’s offer was 28^th and the union’ s was 27^th of 29 teacher settlements in the state. The arbitrators considered both offers moderate for Cheshire’s relative wealth ranking.

The board’s offer would adversely affect teachers at maximum pay levels for a second straight year. If it were implemented, Cheshire teachers at the maximum would be paid less than those in comparable towns. The total increase under board’s offer was 4. 39%, which is below average teacher settlements of 5. 11% for 2004-05. The arbitrators decided that Cheshire’s financial capability did not justify a below-average increase.

Last Best Offers. For the final year of the contract, the board offered a total salary increase of 4. 5% with the following parts:

1. an increase of 2. 75% in each step,

2. additional increases of 0. 6% for steps 2-10 and 0. 25% for steps 11-13, and

3. an advance of one step for teachers not already at the top.

1. an advance of one step for teachers not already at the top and

2. an increase of 3. 43% in all steps including the top.

As of the decision date, teacher salary settlements for 2005-06 averaged 5. 07%, making the union’s offer average and the board’s below average.

Choosing board’s offer in the first year and union’s offer in second and third years, gives Cheshire teachers at the maximum salary step a 9. 7% salary increase over the course of the contract compared to a 10. 5% average three-year increase throughout Connecticut for teachers at the maximum step. The arbitrators decided that efforts to equalize the middle of the Cheshire salary structure, financial uncertainties, and town’s high debt service justified deviating from the average in this case.


December 22, 2004		2004-R-0955
2002 CHESHIRE TEACHER ARBITRATION AWARD

By: Judith Lohman, Chief Analyst