Fiscal Aspects of Negotiations Under the LCFF ACSA Personnel Institute October 5 - 7, 2016 Fiscal Aspects of Negotiations Under the LCFF Presented by Ron Bennett, CEO John Gray, President

Fiscal Negotiations

Financial Management and Collective Bargaining 1 Right or wrong – no single step in budget decision making can: Impact as much as collective bargaining Recast priorities Make or break a long-range plan Lead to deficits, bankruptcy, early retirements, and recalls Superintendents must be able to lead in an area probably foreign to their training and sometimes foreign to their natural instincts The chief human resources officer may or may not be the lead negotiator, but it is their responsibility to provide the superintendent with the information they need to effectively lead negotiations and work with the board

Educational Delivery 2 Remember that the whole purpose of the collective bargaining agreement is: From the district’s point of view, to facilitate delivery of educational programs From the union’s point of view, to protect employee and union rights and to promote delivery of educational programs Both parties need to focus on any change through the lens of educational delivery Don’t get caught up in other agendas Some parts of the agreement may favor the needs of one side or the other, but unless the overall effect is to facilitate educational delivery, the students lose Appearances to the contrary; it really isn’t only about money

Negotiation Considerations 3 Local Control Funding Formula (LCFF) and Local Control and Accountability Plan (LCAP) Pressure to give any increases on the schedule What part of LCFF can be put on the schedule What should not be put on the schedule Proposition 30 dollars are temporary Sales tax portion ends in 2016 Income tax portion ends in 2018 California State Teachers’ Retirement System and California Public Employees’ Retirement System employer contributions on the rise MIG: Collective Bargaining rev. 5/7/13

Can Targeted Dollars Be Used for Compensation? 4 Targeted funds can be used for increased compensation if services to students are “increased or improved,” for example: More teachers for lower class sizes or remedial programs A longer school day or year More time for parent involvement or student intervention Other uses that directly benefit students Targeted funds cannot be used to support activities that do not increase or improve services to students

Increased Revenues Have Automatic Increased Obligations (Average LEA) 5 $600 $300 $200 $100 $500 $400 2016-17 Revenues Expenditures 2017-18 2018-19 $0 $ Per ADA S/C Grant $252 Base Grant $254 Special Education Contribution ? CalSTRS $115 CalPERS $36 Step & Column $102 S/C Grant $168 Base Grant $221 Special Education Contribution ? CalSTRS $116 CalPERS $48 Step & Column $103 Special Education Contribution ? CalSTRS $117 CalPERS $30 Step & Column $104 S/C Grant $40 Base Grant $111 © 2016 School Services of California, Inc.

Percent of Budget – Statewide Unified Data 6 We are less of a priority! 2011-12 2014-15 Difference Certificated Nonmanagement Salaries 48.46% 45.87% -2.59% Certificated Nonmanagement Salaries $11,408,990,878 $13,017,044,441 $1,968,053,563 17.8% Increase

Percent of Budget – Statewide Unified Data 7 We are less of a priority! 2011-12 2014-15 Difference All Compensation 90.56% 87.38% -3.18% All Compensation $20,275,467,479 $24,305,945,667 $4,030,478,188 19.9% Increase

Budget Priorities 8 2011-12 2014-15 Difference Percent Change Certificated Nonmanagement Percent of Budget 48.46% 45.87% -2.59% Dollar Increase $11,408,990,878 $13,017,044,441 $1,968,053,563 17.8% Classified 12.93% 13.64% 0.71% $2,938,949,978 $3,869,667,778 $930,717,800 31.7% All Compensation 90.56% 87.38% -3.18% $20,275,467,479 $24,305,945,667 $4,030,478,188 19.9% Books and Supplies 1.88% 2.92% 1.04% $102,046,883 $200,757,009 $98,710,126 96.7% Services 6.44% 7.81% 1.37% $354,418,994 $536,121,516 $181,702,522 51.3%

Preparing for Factfinding 9 Factfinders shall consider (EERA 2548.2): State and federal laws applicable to the employer. Stipulation of the parties. Interest and welfare of the public and the financial ability of the public school employer. Comparison of the wages, hours, and condition of employment with other employees generally in public school employment in comparable communities. The CPI for goods and services, commonly known as the cost of living. Overall compensation, including wages, vacations, holidays, insurance, pension, medical, and hospitalization benefits received. Any other facts not included in 1 to 6 above, which normally are taken into consideration in making findings and recommendations. © 2016 School Services of California, Inc.

Negotiations Process 10

Negotiations Process Timelines 11

Thank you!