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March 5: Chelsea Board of Education/teachers fact finding hearing planned

By Crystal Hayduk

The Chelsea School District Board of Education and the Chelsea Education Association (CEA) are expected to meet for a fact finding hearing on March 5 at 10 a.m. at the Washington Street Education Center, 500 Washington St. It is expected that this will be a hearing held in public; however, the fact finder has the right to choose otherwise.

The hearing is a result of difficulty negotiating a contract agreement between the board and the teachers’ union, especially concerning the issues of health insurance and wages. Following subcommittee work to review possible health insurance options, lead negotiators met on March 26, 2014.

The first formal meeting was held on April 30. The previous contract expired on June 30; the teachers have been working under the terms of the expired contract since July 1. According to Superintendent Andy Ingall, until a new agreement is reached, all parties live with the “status quo” of the previous contract.

Due to the impasse in negotiations, mediation sessions occurred on Sept. 30 and Oct. 17. When no agreement was reached in October, the CEA requested fact finding, which is the next step to resolve the dispute.

“The role of the fact finder is to review information presented by both parties and provide an opinion regarding where the settlement should lie,” Ingall said. “The fact finder’s opinion is non-binding.” This means that the fact finder gives a recommendation, but neither party is forced to accept it.

The last time that the full negotiating teams met was Oct.17; but team leaders have continued to meet. Their last meeting was Feb. 25.

Here is some information that may be part of the fact finding hearing.

Deficit school district defined: http://www.michigan.gov/mde/0,1607,7-140-6530_6605-106599–,00.html

Although Chelsea School District is not a “deficit district,” it has a “structural deficit,” which means that expenses exceed revenues in the current budget year. This is the fourth consecutive year with a structural deficit. The amount of expenditures over revenues, with use of fund equity to compensate, is listed in the table.

School year Structural deficit
2011-12 -$550,938
2012-13 -$325,056
2013-14 -$291,605
2014-15 -$551,494 (projected)

 

Michigan School Business Officials’ recommendations regarding district fund balances:   http://www.msbo.org/sites/default/files/msbo_fb_guidelines.pdf. Note that Chelsea is a 100 percent winter tax collection district.

Schools receive a foundation allowance, or per pupil funding, to pay for district operating costs. “The Basics of School Funding”: http://www.senate.michigan.gov/sfa/Departments/DataCharts/DCk12_SchoolFundingBasics.pdf.

The Chelsea School District’s history of per pupil funding since 2007 is in the table below. In the governor’s proposed budget for 2015-16, Performance is eliminated, and Best Practices is reduced to $20.

School year Per pupil Performance(categorical – “one-time”;changes each year; based onMEAP and MME performance;data lags two years) Best Practices(categorical based onmeeting criteria. CSDreceived the max.) Total
07-08 $7,547 $7,547
08-09 $7,650 $7,650
09-10 $7,650 $7,650
10-11 $7,650 $7,650
11-12 $7,180 $100 $7,280
12-13 $7,180 $52 $7,232
13-14 $7,237 $100 $52 $7,389
14-15 $7,287 $30 $50 $7,367

 

Chelsea School District hired 10 teachers over the course of three years. The number of applicants ranged from as low as 8 for a split World Language/ELL job to as high as 471 for an elementary job, with an average of 113 applicants.

Superintendent Ingall said that new hires were placed on the step scale at a range of Step 0 for those who had no prior experience to as high as Step 8. “We are often not able to place based on total experience, but have been able to bring people in at equivalent or just above their current level,” he said in a written statement.

Two people were hired from nearby districts after being laid off. In the summer of 2013, one teacher decided to stay in Chelsea when given the option to return to a previous job.

Health insurance: In 2009-10, the Chelsea School District switched from Blue Cross/Blue Shield (BC/BS) to a self-funded insurance plan, using Core Source as the third-party administrator. A switch to BAS was effective July 1, 2014. Prescription coverage is through EHIM.

There are pros and cons to being self-insured. According to Ingall, positive elements include multiple methods of cost savings through such means as reduced overhead from insurance carriers, reduced state premium taxes, flexibility in plan designs, and the ability to customize stop-loss coverage. “The current plans are enhanced versions of the BC/BS PPO plan we had prior to becoming self-insured,” Ingall said in a written statement. “Finally, if the total claims paid are lower than premiums collected, the excess funds stay with the organization.”

Ingall also noted that the negative elements of a self-insured program include risk assumption (employer is responsible for costs below the $125,000 maximum stop-loss protection); asset exposure (employer assets are exposed to liability created by legal action taken against the plan); and fiduciary responsibility (employer bears responsibility instead of the insurance company). The liability of the district is the same whether the insurance plan is fully insured or self-insured. Claims are approved or denied according to the medical plan document, and the third party administrator is responsible for processing plans correctly. A third party administrator who does not follow the plan is subject to litigation.

Most of the current BAS medical plan is at https://sites.google.com/a/chelsea.k12.mi.us/business/district-financial-information (choose “Health Insurance Summary” under section 5 for downloads).

Year End Balances in Health Care Fund

School year Balance in health care fund Info
2010-11 $548,769 Low claim year, 1st year self-funded
2011-12 $582,572 Fund grew little, rates well-predicted
2012-13 $750,779 Another light claims year, but not aslight as first year
2013-14 $14,979 Used $250,000 toward budget to payfor raises, 1st year with high claims.

 

The dollar amount that teachers pay annually toward their health insurance depends upon which plan they choose. All options charge $30 office and urgent care co-pay and $100 ER co-pay; $12 generic and $40 name brand prescription coverage. Cost differences between plans include deductible and co-insurance charges and maximum out-of-pocket costs. Option 1 = $250/$500 deductible, 20% co-insurance, max $1,000/$2,000; Option 2 = $100/$250 deductible, 10% co-insurance, max $500/$1,000; Option 3 = $0 deductible/co-insurance.

Option 1 Total Annual Cost Annual Employer Cost Annual Employee Cost
Single $6,475.20 $5,425.00 $1,050.20
Couple $12,590.04 $10,750.00 $1,840.04
Family $16,470.12 $14,500.00 $1.970.12
Option 2
Single $6,993.36 $5,425.00 $1,568.36
Couple $13,605.36 $10,750.00 $2,855.36
Family $17,920.80 $14,500.00 $3,420.80
Option 3
Single $7,511.40 $5,425.00 $2,086.40
Couple $14,620.80 $10,750.00 $3,870.80
Family $19,371.48 $14,500.00 $4,871.48

 

The CEA would prefer the district use MESSA for their health insurance. According to www.messa.org, “MESSA was chartered as a not-for-profit membership association in 1960.” The association is a third-party administrator for health insurance benefits through BC/BS. See the MESSA website for more information.

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2 thoughts on “March 5: Chelsea Board of Education/teachers fact finding hearing planned”

  1. The Fact Finding is absolutely a public meeting and will NOT be decided otherwise. It has ALREADY been decided and no matter how many times the administration says otherwise, and no matter how many different ways; IT IS PUBLIC.
    This Board and Administration has accused the CEA of negotiating in public. Printing the above information in such a biased way, is doing just that.

  2. The information about the public nature of the fact finding meeting was obtained directly from the “Labor Negotiations Handbook for Municipal Officials,” page 20, which states, “The hearing is open to the public, but the fact finder can close it for good cause, such as disruption by persons attending.” Both sides in this negotiation expect it to be a meeting that is open to the public.

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