SAUGERTIES CENTRAL SCHOOLS Saugerties, New York 12477

February 1, 2013 To: All Staff From: Seth Turner, Superintendent of Schools Re: Super Conciliation

On January 30, 2013, the Saugerties Central School District (District) and the Saugerties Teachers Association (Union) participated in Super Conciliation, which is essentially the final step in the negotiation process. As you are aware, the parties have been operating under an expired contract since June 30, 2010. For the past two and a half years, the parties have engaged in contract negotiations, including mediation and fact finding, without success. The issues that have been the focus of the negotiations include: salary increases for teachers, adjustments in health insurance contributions, and increases in the Districts contribution to the teacher welfare fund. As you may have heard, after the fact-finder issued his recommendation during the summer of 2012, the parties came relatively close to reaching an agreement. However, the Union ultimately rejected the Boards counteroffer. In the time between the Unions rejection of the Boards counteroffer and Super Conciliation, a number of economic factors have changed in the District. First, the Districts contribution on behalf of teachers to the New York State Teachers Retirement System (TRS) is projected to increase by between approximately $770,000 and $870,000 in the 2013-2014 school year. Second, the Districts health insurance costs

are slated to increase by approximately $400,000. Third, state aid to the District was cut by approximately $210,000. As you will recall, it was only a few years ago that the District had a non-existent fund balance. For several years, the district needed to borrow money and pay upwards of $50,000 per year in interest. As part of a plan to build a fund balance, the District was forced to cut staff positions and education programs, which created a modest fund balance of approximately 4% of the overall budget. Having this fund balance allows for money which otherwise would be lost to interest payments available for student programs. The Board wants to make a fiscally responsible decision without the District having to make more job cuts and cuts to education programs. Under the current contract, the District provides 2.2% of payroll to cover the cost of teacher step increases. The pension increases will cost the District an additional 4% to 5% of payroll. The Districts health insurance premium costs have increased by approximately 6%. Based on these factors alone, under an expired contract, the Districts payroll costs will increase in excess of 7%. In an effort to settle the contract, the Board presented the Union with an offer in excess of what it would have paid under an expired contract. This was done in an attempt to settle the contract even though it meant that additional jobs would be cut and/or the small reserve fund would be further reduced. The Districts offer provided for a .5% increase to the salary schedule effective February 1, 2013, and an additional .5% increase to the salary schedule at the beginning of the next two school years. In addition, the offer provided for a $25 increase to the teachers welfare fund for the next two school years. The offer also provided that all outstanding litigation, including outstanding grievances and improper practice charges, would be withdrawn as part of the settlement. This would avoid unnecessary legal expenses on both sides. The resolution

of the outstanding litigation would also include the health care grievance, in which there is significant exposure for unit members who violated Section 11.4 of the contract by improperly enrolling for family health insurance while their spouse received a buyout from their employer. The only giveback sought by the District was an additional 1% increase to employees contribution to health care premiums effective February 1, 2013, and an additional 1% increase in employee contribution at the beginning of each of the next two school years. This would bring the teacher employee contribution from 10% to 13% of premiums, which is well within the range of contributions paid by teachers in other Ulster County school districts. When this offer was made through the superconciliator, it was rejected outright, and no counteroffer was presented by the Union. The Board negotiated in good faith, and the Union refused to modify the offer they had made months earlier, prior to the changes in the economic picture for the District. It would be fiscally irresponsible to agree to wage increases that would decimate education programs and cause significant layoffs. The District is doing its best to preserve jobs, preserve education programs, and to be fair to its teachers. At a time when the District required the help of the Union leadership, the Union leadership has refused to budge. Both the administration and the Board are extremely disappointed with the Union leaderships response and refusal to recognize the economic realities of the time, and its unwillingness to place the interests of the students ahead of the financial interests of its members.