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Bemidji teachers, district working on pay deal; Mediator plans to help sides reach deal

Insurance benefits, annual salary and the number of days in the school year are some of what remains unsettled between the Bemidji Education Association and Bemidji School District.

Every two years Bemidji School District teachers have the opportunity to renegotiate the terms of their contract. So far, selected teachers with the BEA have met with school district officials 10 times to discuss possible changes to the current and 2012-13 school year contracts.

Today a mediator from the state's Bureau of Mediation Services will meet with both sides in an effort to resolve issues so a tentative agreement can be reached.

Currently, teachers are working on the pay scale from the 2010-11 school year.

In past years, much of the discussions around the bargaining table have revolved around determining base salary increases. This year could be no exception.

According to Jordan Hickman, the school district's director of human services, the district's negotiations team will need to take into consideration what the school district can afford to pay and where its revenue sources are coming from when deciding whether to increase pay.

The district's negotiations team includes board members John Pugleasa and Bill Faver, as well as Hickman, Chris Leinen, the district's director of business services, and Superintendent James Hess.

The BEA's negotiations team includes three appointed members from the association.

Eighty percent of the school district's expenses come from employee salaries and benefits, Hickman said.

"If you don't have revenue sources, how do you get additional revenue?" Hickman asked. "You have to start cutting staff, increasing class sizes and eliminating programs."

At a recent school board meeting, Leinen said the school district saw an increase of 87 students at the elementary grade levels this year.

More students means the school district could receive more revenue from the state, which could give BEA negotiators ammunition to ask for salary adjustments.

The teacher contract signed in 2010 included a 0.2 percent increase in base salary pay for 2008-09 with a full time salary range of $31,574 to $64,100, and a 0.1 percent increase for 2010-11 with a full time salary range of $31,606 to $64,164.

Salary increases and adjustments were agreed to be provided each year and maximum sick leave accumulation increased from 125 days to 150 days.

'Air of uncertainty'

Tom Dooher, president of Education Minnesota, stopped in Bemidji last week. He said when it comes to negotiating employee contracts one of the biggest obstacles facing school districts is unpredictable funding from the state.

"School districts are very hesitant," he said. "They are asking, 'How much of our reserve do we spend?' The state's shifts (in aid payments to school districts) have created some short-term borrowing problems. There is an air of uncertainty."

Leinen said the school board would not likely use its reserve fund to pay for reoccurring salary increases.

Currently, 11.4 percent of the district's total operating budget is in reserve fund, according to the 2011 independent auditors' report of the school district.

The school board has enacted a policy requiring 10 percent of its general operating budget be placed in a combination of committed, assigned and unassigned reserve funds.

If the fund balance drops below 10 percent, the district's policy states the board must make budget cuts or increase fees to gain more revenue.

While the district has more in its fund balance than required, some funds cannot be used by the district, Leinen said. For instance, the school district has an irrevocable trust set aside by the state to pay for retiree health insurance, he said.

"We cannot use them except for exactly what the state says we can use them for," Leinen said. "There's a line between certain reserved dollars and what's available to the school board."

Leinen said the fund balance represents one-time dollars and can't be used to pay for reoccurring expenses, such as salary increases. Also, he added, the fund balance helps smooth out the payment schedule from the state.

"We don't get money in the same increments as our payroll happens," he said. "Sometimes we're short."

At a recent school board meeting, a representative with Miller McDonald Inc accounting firm in Bemidji suggested the school board have a fund balance of 40 percent in order to not have to borrow money when state delays payments to schools.

However, Leinen said, having such a high fund balance is unreasonable.

"There comes a point in time when you simply cannot have that much cash on hand," he said. "We'll use our fund balance as best we can to match that payroll, but it won't be enough. We needed to borrow $3 million this past year in order to meet our cash flow requirements."

BEA President Paul Goodwin could not be reached for comment.

Time and money

Hickman said negotiators from the school district must find a way to provide employees and staff with "an equitable and fair compensation package" while allowing the school district to provide students with choices.

"When we've seen a situation of stagnant funding, it becomes a lot more complicated for a school board to determine where they can get reoccurring funding to support a salary and benefit adjustment and do so while maintaining the quality of the experience for your students," he said. "That's the challenge every school board has."

Two years ago, district and BEA officials struck a deal hours before the school district would have incurred a state-imposed, one-time penalty fee of roughly $130,000 for failing to meet the state-mandated Jan. 15 bargaining deadline.

The 2011 Legislature repealed this deadline so this was not an issue this year.

Dooher said with the bargaining deadline gone, more than half the state's districts are without a teacher contract.

"When (legislators) put this into law they said 'it is important work we need to get done so we can focus on educating kids instead of prolonging the contract talk,'" Dooher said.

From gathering information to preparing or reviewing proposals, Hickman said contract negotiations can be time consuming, particularly if it involves complex issues like how to fund retiree health insurance benefits.

Leinen said across the state public school employees spend a significant amount of time on renegotiating contracts.

"When you think about the 350 school districts, you start getting the picture of how much time it takes for this process to evolve," he said. "Plus, (members of the bargaining groups) also put in a significant amount of time and effort, and all that time does not go into the classroom."

Teaching contracts operate on a two-year term, beginning July 1 of each odd-numbered year. When a contract gets close to expiring, the BEA and school district officials can let the other party know of its intentions of renegotiating teachers' contract.

If no one decides to enter into negotiations, the teachers' current contract continues for another two years, according to Hickman.

Often a bargaining group chooses to negotiate contracts because of an issue regarding money, Hickman, said. Health insurance, leave time and salary are most commonly debated in contracts between a public employer and public employees, he said.

While Hickman did not know how many more negotiations sessions will be necessary before an agreement is reached, he said the district and BEA have reached resolutions in the past after having a representative from the Bureau of Mediation Services come to Bemidji.