December 5, 2013 Fact Finder Recommendations

1. December 5, 2013 Fact Finder Recommendations

2. Fact Finder Recommendations vs. SVEA Proposal The Board’s Negotiation Issues/Concerns - Ed Inghrim Salary/Compensation - Ed Inghrim Healthcare - Ed Inghrim Graduate Study & Tuition Reimbursement - Ralph Puerta Retirement Incentive - Ralph Puerta

3. Negotiation Challenges – School Board • PSEA – 182,000 dues paying members • (NEA – 3M members) • PA teachers granted Right-to-Strike • Schools collect dues for the Union • Benefit packages established years ago when • teachers were substantially underpaid (e.g., their • pensions that were negotiated with Harrisburg) • Salary compensation that is based on time in • service & education, not merit. • Decades of institutionalized negotiation practices • Mediation • Binding/Non-binding arbitration • Fact Finding • Strike

4. Saucon Valley Revenues – 2012/2013 Budget Federal $0.5M – 1% State $7.2M – 18% Local $32.6M – 81% Department of Education’s aid formula classifies the District as wealthy so only 18% of our revenues comes from Harrisburg. 92% of PA Public Schools get more aid, as a percentage of their budgets, then the SVSD.

5. SVSD Demographics Hellertown Lower Saucon Income Range Total Total Income Avg. Income Avg. Households % (Millions) Income Households % (Millions) Income Line 1 < $40K 971 39% $23.7 $24,369 1,732 27% $40.7 $23,522 $40K - $50K 339 14% $15.2 $44,801 590 9% $26.4 $44,712 $50K - $75K 598 24% $41.4 $69,193 1,372 21% $90.4 $65,867 $75K - $100K 241 10% $21.1 $87,500 867 13% $75.9 $87,500 $100K - $150K 241 10% $29.7 $123,081 1,031 16% $127.2 $123,387 > $150K 112 4% $21.7 $193,750 873 14% $180.8 $207,073 Total 2,502 $152.7 $61,022 6,465 100% $541.3 $83,734 Households Line 8 1,047 42% 1,454 37% Collecting SS or SSI * Source: US Census Bureau • Single Family Home – Total RET • HB - $4,200/Yr. = 17% of Line 1 Avg. • LS - $6,100/Yr. = 26% of Line 1 Avg.

6. SVSD – Major Concern • The Public School Employees' Retirement System (PSERS) is seriously • under funded and mandated employer contribution rates increase • from 4.78% in 2009/10 to 25.8% in 2015/16, or more than 400% , which • could drain much of the our fund balance. • Currently the State reimburses schools for ½ of their costs for payroll • taxes and retirement contributions. Thus, it is possible that the State • might change the reimbursement rate or cut Basic Education funding • or do both if the PSERS increases strain their budgets.

7. Independent Fiscal Office $1.5B

8. Typical PA Public School Salary Schedule (Column Salary Increases) (Step Salary Increases) Continuing Graduate Level Education Columns R o w s Step B B+15 M M+15 M+30 M+45 D 1 2 3 4 5 6 7 Years of Service 8 9 10 11 12 13 14 15 $44,153-$41,000 = $3,153 or 2.6%/Year Note: This concept is ubiquitous throughout the US Public Education System

9. Typical PA Public School Salary Schedule (Step & COLA Salary Increases) Continuing Graduate Level Education Columns R o w s Step B B+15 M M+15 M+30 M+45 D $41,000 1 $43,286 2 $45,699 3 $48,247 4 5 6 7 Years of Service 8 9 10 11 12 13 14 15 $48,247-$41,000 = $7,427 or 5.9%/Year Note: Traditionally Unions expect the value of each cell to increase year over year with a Cost of Living Adjustment (COLA). This is how employees at the highest step get pay increases.

10. Typical PA Public School Salary Schedule (Step, Column & COLA Salary Increases) Continuing Graduate Level Education Columns R o w s Step B B+15 M M+15 M+30 M+45 D 1 2 3 4 5 6 7 Years of Service 8 9 10 11 12 13 14 15 $53,484-$41,000 = $12,484 or 10%/Year

11. SVSD Salary Schedule SVEA Schedule 11/12 Salary Schedule STEP B B+15 M M+6 M+12 M+18 M+24 M+30 M+45 M+60 $47,949 1 $44,232 $46,560 $49,010 $50,481 $51,995 $53,555 $55,162 $56,816 $59,657 $62,640 $58,574 2 $45,600 $48,000 $50,526 $52,042 $53,603 $55,211 $56,868 $58,574 $61,502 $64,577 3 $47,010 $49,484 $52,089 $53,651 $55,261 $56,919 $58,626 $60,385 $63,404 $66,575 4 $48,464 $51,015 $53,700 $55,311 $56,970 $58,679 $60,440 $62,253 $65,365 $68,634 5 $49,963 $52,593 $55,361 $57,021 $58,732 $60,494 $62,309 $64,178 $67,387 $70,756 6 $51,508 $54,219 $57,073 $58,785 $60,549 $62,365 $64,236 $66,163 $69,471 $72,945 7 $53,101 $55,896 $58,838 $60,603 $62,421 $64,294 $66,223 $68,209 $71,620 $75,201 8 $54,744 $57,625 $60,658 $62,477 $64,352 $66,282 $68,271 $70,319 $73,835 $77,527 9 $56,437 $59,407 $62,534 $64,410 $66,342 $68,332 $70,382 $72,494 $76,118 $79,924 10 $58,182 $61,244 $64,468 $66,402 $68,394 $70,446 $72,559 $74,736 $78,473 $82,396 11 $59,982 $63,138 $66,462 $68,455 $70,509 $72,624 $74,803 $77,047 $80,900 $84,945 12 $61,837 $65,091 $68,517 $70,573 $72,690 $74,870 $77,117 $79,430 $83,402 $87,572 13 $63,749 $67,104 $70,636 $72,755 $74,938 $77,186 $79,502 $81,887 $85,981 $90,280 6 Credit Increments 14 $65,721 $69,180 $72,821 $75,005 $77,256 $79,573 $81,960 $84,419 $88,640 $93,072 Current SVSD salary schedule has 14 steps and 10 columns. Starting salary at step 1 with a Bachelors Degree - $44,232. Maximum salary at step 14 and a Masters or Masters equivalent plus 60 additional graduate level credits - $93,072. $58,574-$47,949 = $10,625 or 22% in one year

12. Board Proposal • 2012 – 2014 • Salary Schedule Frozen at 2011/2012 Values – No COLA • 2012-2013 • Salary freeze • 2013-2014 • Each employee receives a $1,500 non-recurring stipend • 2014-2015 • Maximum one step and one column movement on the 2012-2013 schedule. • Employees who were at Step 14 in 2013-2014 receive a $1,500 stipend • Remove Columns B+15, M+6 and M+18 and add column B+24 • 2015-2016 • Maximum one step and one column movement. • Add $950 COLA to each cell in 2012-2013 salary schedule Association Proposal • Similar to Boards except: • Flip school years 2013-2014 and 2014-2015 & $900 COLA in 2015-2016 • Remove Columns B+15, M+6, M+18, M+30 and M+45 and add column B+24, M+36, • and M+48. Note: A stipend does not add to base salary & does not require PSERS contribution.

13. Association – Modified Salary Schedule Note: All Step 1 cell values increased by 2.5% from the 2011/12 schedule. Active columns unshaded; archived columns shaded.

14. Fact Finder – Recommendation (Adopt the Association’s Proposal with Modifications) • 2013-2014 One Step & One Column, on the 14th payday, • and $1,500 stipend for employees on step 14 in • 2011-2012 • 2014-2015 - $1,500 stipend for all employees • 2015-2016 One Step & One Column, on the 14th payday, • and add $950 COLA to each cell in the salary schedule. • The following analysis Includes:* • Direct Salary • Stipends • PSERS Employer Contribution • Payroll Taxes * PSEA/SVEA defined baseline parameters (i.e., the staff in 2011/12)

15. Association Compensation Offer vs. F.F. Recommendation(1) (Total Spending increases from $4.6M to $5.1M) $17.0M FF SVEA Savings $16.5M FF SVEA $16.0M FF SVEA Savings Salary $15.5M SS* $15.0M FF SVEA PSERS* $14.5M Stipend $14.0M $13.5M $13.0M 2011/12 2012/13 2013/14 2014/15 2015/16 (1): Savings includes $440K in salary & bonus + $60K in PSERS contributions. * Assumes State reimburses ½ of SS & PSERS costs.

16. SVSD – Other Cost Objects Salary & Benefits 68% 73%

17. Healthcare Objectives • On the average the SVSD spends about $12,000 per year for employee Healthcare. • The District is self insured and carries catastrophic insurance. • Under the current contract the employee contribution is:

18. Healthcare Objectives * $1,120 $78 7% $1,108 $265 26% $1,200 $1,000 $800 Saucon Valley $600 Kaiser Average $400 $200 $0 Premium Rate Employee Contribution * PEPM – Per Employee Per Month Elite Group Consulting, Inc.

19. Healthcare Objectives • Employee should pay about 10% of the plan cost • Raise the deductible to close the gap with private industry plans (average national in-network for single coverage • is $675, SVSD is $250) Board Proposal Percentage or Dollar Premium Plan Year Deductible Office Visit UC/ER Retail RX Mail RX Share 2012-2013 $250/$500 $15 $35 $5/$15 $10/$30 $45/$85/$95 2013-2014 $500/$1000 $15/$30 $50/$75 $10/$25/$50 $20/$50/$100 $55/$120/$155 2014-2015 $500/$1000 $20/$40 $50/$75 $10/$25/$50 $20/$50/$100 $60/$130/$170 2015-2016 $500/$1000 $20/$40 $50/$75 $10/$25/$50 $20/$50/$100 $60/$130/$170 Association Proposal Percentage or Dollar Premium Plan Year Deductible Office Visit UC/ER Retail RX Mail RX Share 2012-2013 $250/$500 $15 $35 $5/$15 $10/$30 $45/$85/$95 2013-2014 $275/$550 $20 $25/$75 $0/$20/$30 $20/$50/$100 $55/$120/$130 2014-2015 $275/$550 $20 $30/$100 $0/$20/$30 $20/$50/$100 $60/$125/$135 2015-2016 $300/$600 $20 $30/$100 $0/$25/$35 $20/$50/$100 $65/$135/$155

20. Fact Finder Recommendation • Approved the Board’s Premium share request • Approved the Board’s deductible for single coverage and • slightly increased the Association’s proposal for family coverage. * For school years, 2013-2014 and 2015-2016, only, the amounts noted in the columns above are effective on the 14th pay period of the school year.

21. Graduate Study • Overview • Graduate Study Database - Problems • Graduate Study Database - Examples • The problem is not behind us • Board Proposal

22. Graduate Study - Overview • We recognize the value of the teaching profession • We recognize the importance of professional development over a teacher’s career • We believe the current graduate study system is not meeting school district objectives for cost, quality, and relevance to district objectives

23. Graduate Study – Underlying Conflict • The purpose of graduate study is to achieve career professional development in support of the academic objectives of the school district as defined by the Superintendent. • Math. Reading. Science. • Graduate study is also a major component of teacher salary, accounting for 20% of average teaching staff salary, and as high as 30% for senior teaching staff.

24. Graduate Study - Cost • $ 12,500,000 annual district salary cost • $ 1,855,200 portion from graduate study • $ 65,000 average annual teacher salary • $ 12,368 portion from graduate study • $ 250,000 annual tuition reimbursement • $ 2 million graduate study salary and tuition account for almost 5% of the $40 million total school district annual budget.

25. Graduate Study – Contract negotiation • The board is not suggesting to eliminate graduate study in order to save this expense. • Changes in the 2008-12 contract did not solve continuing problems undermining the value of our graduate study program. • Board proposals in the current contract negotiation would improve the quality and slow the rate of graduate study, but still not prevent the highest salary attainment.

26. Teaching Staff Profile

27. Problems of Cost, Quality, and Relevance • Our analysis of this 2,200 course history over ten years reveals the following problems: • The course and program quality is inadequate • Courses and programs lack progression • Graduate “classes” lack local interaction • Little relationship to district objectives • Little benefit of career professional development

28. Problem Definitions • Quality • A level of rigor appropriate for the degree level • Progression • A logical connection and building between courses as the degree level increases through three Masters • Instruction. Subject. Professional. • Career Professional Development • Leading to subject mastery and impact on our students

29. Example A – Bachelors to Doctorate (2012) • Teacher as Inquirer • Teacher as Researcher • Teacher as Evaluator • Research and Professional Development • Learning Sciences & Technologies • Designing Learning Environments • Doctoral Qualifying Research Project • Social Basis of Human Behavior • Social Cognition

30. Example B – Bachelors to Third Masters (2008) • Integrating the Internet • Law & Current Issues • High Performing Teacher • How to Get Parents on Your Side • Succeeding with Difficult Students • Classroom Management • Language Arts Activities • Word: The Ultimate Writing Tool • Media Literacy in TV Age

31. Example C – Bachelors to Third Masters (2012) • Reading, Writing, Language Arts • Strategic Reading in Content Area • Statistical Methods of Education • Computer Graphics for Teachers • Reducing Classroom Conflict • Intro to Computers • Issues, Laws, and Trends in Education • Integrating Technology into the Curriculum • Meaningful Activities for Interesting Classrooms

32. Example D – Second to Third Masters (2008) • Integrating the Internet into Curriculum • Making Sense of Money • Educational Leadership Issues and Answers • Excel - The Ultimate Information Tool • Word - The Ultimate Writing Tool • Access • Computer Graphics • Power Point • Apple Works 6 • Ed Leadership: Trends and Issues

33. Example E – Second to Third Masters (2010) • How to Get Parents On Your Side • Classroom Diversity • Reducing Classroom Conflict • It's All About You • The High Performing Teacher • Assertive Discipline • Motivating Todays Learner • Differentiated Instruction • Behavioral Social and Academic Interventions • Reading Across the Curriculum

34. Inadequate course quality history • In the 2008-12 contract negotiations we confronted sub-standard course selection at two internet institutions - Fresno and Indiana Wesleyan. • Through 2009 our teachers took 380 courses at these institutions, 309 of which were inappropriate. • We eliminated both institutions in the 2008-12 contract.

35. Fresno and Indiana Wesleyan244 courses - 22 at Bachelor level - 88 at 3rd Masters level

36. SVEA Rebuttals to Board Proposals • "An abandonment of the concessions and improvements in the last contract” • "A radical change for problems that have already been solved” • Elimination of Fresno and Indiana Wesleyan • Creation of Graduate Study Committee

37. The problem is not behind us • The elimination of Fresno and Indiana Wesleyan was not a teacher concession. This practice was without justification. • The problem is by no means behind us. • (a) legacy salary cost • (b) inadequate professional development • (c) continuing practice at other institutions • (d) decline of local interactive classes

38. (a) The legacy cost of the course quality problem • Among five institutions, Fresno, Indiana Wesleyan, Gratz, Kutztown, and East Stroudsburg, there are 796 courses that the Board deems of questionable, inadequate, or entirely below graduate level quality. • This problem remains in our district cost every year going forward. • The Board estimates a current salary burden in excess of $450,000 per year from hundreds of inadequate courses that should never have been taken, regardless of contract rules.

39. (b) Professional development legacy cost • Fresno, Indiana Wesleyan, and their like institutions are lost professional development that did not take place. • 5 teachers at the M30 level and 14 teachers at the M60 level with four of more Fresno courses. • 13 teachers at the M30 level and 5 teachers at the M60 level with four or more Indiana Wesleyan courses.

40. (c) Graduate study courses after Fresno and Indiana Wesleyan

41. Wilkes history • 243 of 681 courses (35%) are inappropriate for degree level taken • Of the 243 inappropriate courses 215 are taken at two or more degree levels • An additional 209 courses are of instructional focus rather than the preferred subject focus • Of the 209 courses 189 are taken at multiple degree levels

42. Wilkes - Not Graduate Level

43. East Stroudsburg history • 113 of 249 courses (45%) are inappropriate for degree level taken • Of the 113 inappropriate courses 111 are taken at two or more degree levels • An additional 55 courses are of instructional focus rather than the preferred subject focus • Of the 55 courses 499 are taken at multiple degree levels

44. Gratz history • 46 of 194 courses (23%) are inappropriate for degree level taken • Of the 46 inappropriate courses 38 are taken at two or more degree levels • An additional 99 courses are of instructional focus rather than the preferred subject focus • Of the 99 courses 89 are taken at multiple degree levels

45. (d) Wilkes and the decline of local graduate classes Local 2008-13 Wilkes 2008-13

46. The Source of the Problems • Graduate institution limitations • Quality • Progression • Blanket program course approval • Contract language • Past Practice

47. Board proposal would change • Requirements for course quality and relevance • Requirement for logical course progression • Redefinition of requirements to move to M45 and M60 columns • Control number of courses – 2 per year • Control of tuition reimbursement (a funding cap for second and third Masters)

48. Association Rebuttals to Board Proposals • No Change • The Board did not visit classrooms • The courses are required within programs • The rate of study is required in programs • The option to tailor substance into programs was not explained

49. Fact Finder Recommendation • B to M • Tuition reimbursement 100% of East Stroudsburg rate • Twelve credits per year • M to M36 and M36 to M60 • Tuition reimbursement capped at $2,000 per year • GSC will review closely all courses and programs to ensure the rigor and professional benefit from each course • Decisions by the GSC are grievable except that there can be no grievance based upon past practice.

50. Retirement • Current contract terms • Board proposal • Association proposal • Fact Finder