Insurance costs drive teacher negotiations

COEUR d'ALENE - Teacher contract negotiations in Coeur d'Alene haven't hit an impasse, but they may be approaching one.

The latest round of contract talks between the Coeur d'Alene School District Board of Trustees and the Coeur d'Alene Education Association took place Tuesday at Woodland Middle School while a crowd of more than 250 mainly teachers and school district employees watched.

"What you've offered us is quite possibly the lowest offer you could offer ... it's rock bottom. There's almost nothing lower you could offer," said Tim Sanford, the teachers' chief negotiator.

Sanford was referring to the board's proposal for a health insurance plan that would raise the individual deductible from $200 to $2,000; change the co-insurance from 20 percent to 30 percent; and the district would place $1,000 in a health savings account for each participating employee. It is also expected to save the district roughly $2 million.

The board's negotiating team contends the plan is the only way the district can meet a 12 percent hike in the cost of insurance through the Blue Cross Statewide Schools program, and deal with a budget shortfall of $3-4 million, without making drastic cuts elsewhere in the budget.

The state insurance department's rules regarding Health Savings Accounts require that the accompanying insurance plan cannot include prescription benefits before a high deductible is met, so the teachers would have to pay full price for all prescriptions. In addition, nothing would be covered until the full deductible is met, and for a family, that would be $4,000.

Kristi Milan, a member of the teachers negotiating team, said this plan will end up costing teachers significantly more for their insurance and more out of their own pockets.

"At the very minimum, if you are employed with one child, and you have absolutely no reason to go to the doctor, you will see an increase of $1,730," Milan said.

A family that requires hospital care or maternity services could end up having to pay $15,000 out-of-pocket, she said.

"That is a lot of hurt for a lot of people in this district," Milan said.

Before offering their counter-proposal that the district maintain the same health insurance plan and increase the maximum premium amount the district pays for each employee from $707.10 to $784.37, the teachers negotiating team gave a presentation criticizing the board and the district administration for their budgeting methods and other financial moves made since September.

Sanford pointed out that at the start of the school year, although the board knew the district faced a $3 million shortfall, trustees decided against certifying an emergency property tax levy of $260,579, funds the district was entitled to because enrollment grew slightly.

The district started talking about privatizing the district's transportation department last fall, Sanford said, and board members made comments about "rich" health benefits.

The teachers were critical of the district and board's decision to use $643,000 from the general fund toward the lease/purchase of the new district office building.

Sanford said the board set the maintenance and operations levy amount it placed before voters last March at the same amount it had been previously, $12.9 million per year for two years, despite "strong requests" made by teachers union members to the board, asking that they raise the amount to cover the $3 million shortfall.

"At that time, Superintendent Bauman said we would address this in negotiations ... At that time, it became very clear to us that the intent of the board was to move us to this point, that this was a planned event," Sanford said.

He dismissed contentions that the employees' health benefits have become increasingly costly for the district, and presented a listing of district costs for insurance going back to 2007. The cost has fluctuated, he said, and is only $100,000 more this year than it was in 2008-09.

"The costs of benefits in this district have not contributed to this shortfall. That is very, very clear," Sanford said.

Sanford said that the insurance costs have remained static because the employees have agreed to cuts in coverage and other changes that the employees have paid for out of their own pockets.

"We are all making less money now than we were in 2007, every single one of us," Sanford said.

Derek Kohles, another member of the teachers negotiating team, provided slides detailing what the teachers see as "over-budgeting" by the district, going back to 2010. Because the district spends less each year than it budgets for, there are additional dollars left in the fall after all the audits are completed. Last year, it was nearly $3 million, and the teachers believe it could be as much as $6 million this year.

"The result of this is that we can't find a shortfall," Kohles said.

Kelly Ostrom, the board's chief negotiator and the district's human resources director, told the teachers union that the board's team felt the teachers' presentation was critical.

Regarding the board's decision not to seek emergency levy funds last fall, Trustee Tom Hamilton said the board's position is that it will not certify any tax levy that the voters aren't able to weigh in on.

Brent Regan, the other board member on the negotiating team, said the only way the board felt the supplemental maintenance and operations levy would be successful at the polls was if it was not increased.

"If we hadn't done that, we wouldn't be sitting here talking about $3 million. We'd be talking about $15 million," Regan said.

Wendell Wardell, the district's chief operating officer, said the district's budget is always variable, and usually looks better during the year than it is. He said he explained that at every board meeting when he gave a finance report.

"To use that as a tool, to say we have this great balance of money, is rather unjust," Wardell said.

Ostrom warned that the district can't afford for 90 percent of its budget to dedicated to salaries and benefits, that they have to bring it down a few percentage points.

"If we don't cut benefits, we've got to cut staff to get there," Ostrom said.

She said the district doesn't want to privatize its transportation department; that they want to work with the teachers to find a better solution, one that doesn't affect school children.

Sanford said the board's decision to decline the emergency levy money last fall, a mechanism created by the state to meet the needs of children, was "negligent" on the board's part.

Hamilton said the decision was made because the board didn't want to "test the voters' tolerance" by levying the additional tax.

"One of the biggest questions I've gotten recently, one of the things I've had to explain recently, is the continuing tax burden the school imposes on the average citizen," Regan said.

Milan said this may be a philosophical difference between the teachers and the board.

"We don't feel that education is a tax burden," she said.

Regan said he agrees with Milan, but that the tax pain is the same, whether it's viewed as a burden or an investment.

"It's interesting that you talk about the pain cost to the taxpayer, which we are all too ... then you offer an insurance plan that runs the risk of impoverishing people," Sanford said.

The board's negotiating team will likely respond to the teachers union's counter-proposal during the next round of negotiations at Woodland Middle School on May 28 at 4:30 p.m.