The Palo Alto school district has reached what it says are its first-ever multi-year contracts with teachers and classified employee unions -- contracts that will provide up to 16 percent pay hikes over three years.
Although board policies require two public meetings be held prior to final approval, Superintendent Max McGee is asking the board to waive this rule and approve it Tuesday, May 10, so that "teachers can receive this year's increase in their June paycheck," he wrote in an executive summary for the board meeting.
The size of the salary increases requires unprecedentedly high assumptions about the rate of increase in secured property tax revenues, which provide about 70 percent of the district's revenue, for the next three years in order to achieve balanced budget projections. For the current school year, the district is projecting an increase of 11.5 percent, followed by 9.4 percent and in 2017-18 an increase of 8.4 percent.
By contrast, past projections have been extremely conservative, generally 2 or 3 percent. Last year, under pressure to be more realistic in light of county estimates, the adopted budget assumed annual increases of between 5 and 6 percent.
The terms of the proposed contracts, which the unions are expected to have ratified by Tuesday's meeting and the school board has already tentatively approved in closed session, were just released to the public on Friday.
McGee is proposing that all non-union managers and supervisors, including senior administrators, receive the same increases as union members, a practice followed in previous years.
The tentative deal calls for a 5 percent increase for the current school year that will be retroactive to July 2015 and will cost the district $7.3 million, according to data provided by the district. This is almost all of the $8 million surplus from the 2015-16 budget.
For the upcoming 2016-17 school year, employees will receive another 5 percent increase, including a 1 percent bonus called an "off-schedule" increase. Off-schedule bonuses don't bump up the salary base from which the next year's increases are calculated.
In the 2017-18 school year salaries will increase 4 percent, including another 1 percent bonus.
The off-schedule bonuses will be bumped up to 2 percent both years if property tax revenues exceed the district's projections by at least 1.5 percent, and they will be eliminated if revenues are below budget by 1.5 percent or more.
The union contracts call for employees to work 187 days, or 8.6 months, during the year.
A veteran teacher with 30 years experience and 90 semester units or more of post-bachelor's degree education will see their pay rise from $116,000 to $131,000 over the contract period. New teachers with no prior experience will start next year at $60,000. Additional pay is earned for having advanced degrees and pursuing professional development opportunities over the summer.
The size of the pay increases raises concerns about how much money from the more than $5 million the board had hoped for will be available for other needs identified over the last several months, sure to upset a variety of constituencies. With a recent parent's analysis showing that board-established middle and high school class size targets are not close to being met, and with the recent increase in the district's parcel tax having promised further reductions in class size, the district may face questions about whether it over-promised.
If the 2016-17 property tax as determined by the County Assessor is either more or less than 1.5 percent of the adopted PAUSD budget, then either party the union or the district can reopen negotiations on the 3 percent increase in the 2017-2018 school year, according to the new contract.
Otherwise, negotiations for the next agreement would begin in the fall of 2017.
McGee, who in a 10-plus year career as superintendent has always worked with teachers' associations who had multi-year contracts, said having to negotiate a new contract each year in Palo Alto was problematic for both retaining and hiring quality teachers. It was also difficult to discuss funding for new programs during the year before teacher compensation had been settled, he said.
"I think it's a great deal for teachers, administrators, taxpayers and kids to have this kind of predictability in a way that can be sustained," McGee said of the new contract.
"Having this kind of labor peace and stability is important," he added.
Marc Igler, longtime Gunn High School English teacher and lead negotiator for the Palo Alto Educators Association (PAEA), told the Weekly that despite teachers being frustrated at the pace of negotiations throughout the year, the new agreement is a "fair deal" and "important milestone" for the district.
Despite the fact that there will be negotiated issues every year, regardless of the multi-year salary increases, one major benefit of the new agreement is that "it frees us up to spend more time next year talking about educational issues that are really of more importance to student and teachers," Igler said.
"It eliminates the financial pressure that can often times influence those issues," he said.
This is the largest base salary bump Palo Alto Unified teachers have received in recent years. In 2014-15, teachers received a retroactive salary increase of 4.5 percent and 0.5 off-schedule payment, up from 4 percent increase and 2 percent off-schedule payment for 2013-14 and 3 percent increase with a 1.5 percent off-schedule payment in 2013-14. There were no salary increases in 2009-10 and 2010-11; 2011-12 only provided a 1 percent off-schedule payment.
Teachers have turned out to school board meetings in recent months to make pleas for higher compensation to help them handle an increasingly prohibitive cost of living in the area. They expressed concern that the district is not offering competitive salaries compared to neighboring school districts, although no data on teachers resigning to take higher paying jobs in other districts has been made public.
Comparing salaries with other districts is difficult since most districts in the immediate area are not comparable unified K-12 districts. The average teacher salary in Palo Alto Unified for the 2014-15 school year was $96,000 according to data collected by CALmatters, an independent Sacramento-based news service, while it was $114,000 in the Mountain View-Los Altos School High School District, $89,000 in the Sequoia Union High School District and $101,000 in the Menlo Park Elementary School District, according to Ed-Data, a partnership between the California Department of Education, EdSource and the Fiscal Crisis and Management Assistance Team/California School Information Services.
School board member Ken Dauber told the Weekly despite his support of unions, he will be voting against the new agreement, calling it "fiscally irresponsible" and a misuse of this year's budget surplus in light of other needs that have been identified throughout the year, such as class-size reduction. He estimated that a "healthy" salary increase of 3 percent each year over the next three years would have freed up an additional $4.2 million -- the equivalent of 35 additional teachers.
"We could have given healthy raises and had money to address really pressing issues in the district, like reducing class sizes to meet our class-size commitments," Dauber said.
"This surplus gave us the opportunity to not have to make a choice between strong pay increases and hitting our class size targets," he added. "It's very disappointing that we're ending up in a situation where we are not getting these benefits."
Dauber noted that the district does, in fact, offer competitive pay compared to other school districts locally and across the state. Out of more than 300 large, unified school districts with more than 5,000 students, Palo Alto Unified offers the highest average teacher salaries, he said.
He also pointed to recent research showing that teachers' working conditions -- the size of their classes, how well their districts are run, the level of influence they have over decisions in the workplace -- are actually more important to teacher retention than compensation.
"I'm a strong advocate of paying competitive, fair wages because that's what we should do and need to do in order to attract good teachers but this level is not necessary in order to do that," he added. "It's really, I think, counterproductive, even in terms of the things that make this a really attractive place for teachers."
School board candidate Todd Collins similarly called the salary increases "out-sized" and expressed concern about the trade-offs they could force with class-size reduction.
"It's a competitive market for teachers, and we need to compete," he wrote in an email to the Weekly. "But the difference between a 3 percent and a 5 percent raise is huge in terms of both short- and long-term implications."
Board President Heidi Emberling, however, said in an interview that teachers are the district's "most important resource in the classroom" and the district must make a compensation investment to match that.
And, in light of a national teacher shortage, offering an "attractive" compensation package to hire new teachers is critical, she said.
"Obviously, we can't invest in everything," she said Monday. "I think we have to decide what our priorities are, and my priority is having and supporting an excellent teacher in every classroom."
Both Emberling and Dauber said they are wary of the proposal to waive the two-meeting rule to approve the new contracts on Tuesday night.
Dauber said, "There is no basis for waiving the two-meeting rule for a decision of this magnitude."
"I'm not a big fan of waiving the two-meeting rule for anything unless we have some sort of legislative mandate because of transparency and communication," Emberling echoed.
While the unions and district have been wary in the past to commit to a multi-year agreement without knowing for certain how much money will be available for compensation in coming years, Igler said the property-tax trigger mechanisms helped provide assurance to both sides that adjustments could be made if revenues fell short or exceeded expectations.
"This is an important milestone," Igler said, "and I think at the end of the this year we'll both kind of look at it and see how it worked out. The devil is in the details on these sort of things."
The school board meets to discuss the new contracts on Tuesday, May 10, at 6:30 p.m. at the district office, 25 Churchill Ave. View the agenda here.