Melissa Bailey File Photo
In a labor agreement City Hall hopes will set a precedent, Peggy Moore and fellow principals at the helm of the New Haven’s school reform drive have to agreed to health care givebacks estimated to save taxpayers nearly $1 million over the next three years.
The deal between the Board of Education and the School Administrators Association of New Haven met with unanimous approval from the school board Monday night. The three-year contract covers 110 school administrators including all the principals and assistant principals at the city’s 47 schools. If approved by the Board of Aldermen, it would take effect on July 1.
Moore (pictured), the principal at Wilbur Cross and the president of her union, said administrators agreed to the changes based on the burden health care costs present to the city during hard economic times.
“The city will save considerable money on this,” Moore said Tuesday morning. “People complain about administrators all the time, but I think that we’re one of the more giving unions.”
The contract was struck without being sent to binding arbitration — a sign of harmony between the two sides. The contract calls for a “hard zero” wage freeze in the first year (with no step increase), followed by two 2.5 percent wage hikes in addition to step increases.
Most principals make between $110,000 and $125,000, according to schools Chief Operating Officer Will Clark. Their pensions are paid for by the state.
Mayor John DeStefano said the city would not have agreed to the contract based on the wage hikes alone. He said it sets a new standard for a different reason: it is the first to cap the city’s contribution to health care costs.
“That is a big deal in this contract,” DeStefano said. He said the pact defies a trend: While the city saw a 44 percent increase in health care costs over the past five years, “this contract will actually drive our health care costs down.”
The contract is projected to save $948,000 in health costs over three years, compared with administrators’ current plan, school officials calculated.
How would that happen?
The city is self-insured and offers several health care plans administered by Anthem. Under the current system, the city splits the cost with employees by each paying a percentage of the premiums and the medical care.
Under the proposed deal, the city would no longer share costs on a percentage basis. It would cover the costs for a basic plan, and employees would be on the hook for the rest.
Here’s how it works: The city agrees to pay 100 percent of a high-deductible, health-savings account-eligible plan (called an HDHP). That type of plan is more commonly offered in the private sector, said Clark. The plan offers free preventive care, such as mammograms or annual checkups for kids. Employees pay nothing unless they get sick. Then they pay high deductibles and co-pays.
Melissa Bailey Photo
If employees make good use of the plan, they could end up saving money compared to current health costs, said Clark (pictured).
Employees who don’t want to carry that level of risk — costs can be very high if they need expensive procedures — can choose between three other health plans. Those plans, Century Preferred CompMix, Blue Care POE, and Century Preferred PPO, cost more than the basic HDHP. The city would pay the cost only up to the level of the basic HDHP plan; the employee would pay the difference if he or she chooses the more expensive plan..
The plan effectively caps the city’s health costs for the contract, Clark explained.
What’s more, the burden of rising health costs would be born by the employee, not by the city. Under the contract, the city agrees to pay 100 percent of the cost of the HDHP plan in 2011-12. If Anthem hikes up the premiums on the HDHP for the following two years, the employee will pay for the cost of the increase over the 2011-12 HDHP plan, up to 8 percent.
So in each year, the city is committing to pay an amount equal to the 2011-12 HDHP plan, unless costs rise more than 8 percent above that level, in which case the city would pay the portion that exceeds an 8 percent increase.
The result is a contract that pins the Board of Education’s financial commitment to the 2011-12 level for the basic HDHP plan. The new plan would be 17 percent cheaper than the current plan, according to Clark.
Moore said her union was willing to sign up for the new plan to help the city drive down health care costs.
“It really is a giveback on our part,” she said.
She said 83 of her 110 members attended a presentation of the labor contract and the proposed benefits.
“I’m not going to tell you that everybody was happy with them,” Moore said, “but we accepted the agreement that we arrived at with the city.”
The members voted 70 to 13 to approve the contract, she said.
Mayor DeStefano said he hopes it will set a precedent for a wave of labor contracts that are due to be negotiated in coming months.
Like the landmark teachers contract signed last year, the administrators contract includes a special side agreement that addresses changes in work rules due to the city’s school reform effort. As part of the reform drive, the city is grading all its schools into three tiers and allowing for each to be run differently.
In their labor pact, teachers agreed to waive work rules under certain conditions in Tier I, II and III schools. For example, teachers at “turnaround” schools agree to work a longer day, in exchange for more pay—click here to read how it works.
Along the same lines, the district designated part of administrators’ pay hike to pay for their cooperation in the planned reforms. In exchange for a 1 percent wage increase in years two and three, administrators agree to administer the teachers’ contract, including grading teachers based on student performance and changing work rules as called for by reforms.
Moore said principals didn’t have to be convinced in the new contract to agree to take on the reforms — “We all accept reform, we all understand the importance of it. We’ve been actively involved in reform since day one.” Though they’ve kept a low profile, principals have sat on every committee that has been guiding the reform effort, she said.
Like many municipal workers, administrators get step increases in addition to wage hikes: For each year of experience, they move up a step on a pay scale ladder. Since there are only three steps, however, most administrators are maxed out in the third step, according to Clark. Step three of the current salary schedule ranges from $98,602 for a beginning assistant principal to $138,291 for a school administrator in central office. Principals are paid more at high schools versus elementary schools. The proposed contract offers no step increase the first year, followed by step increases in the two subsequent years.
Under the contract, all administrators would get a wage freeze the first year, then a 2.5 wage increase the next two years (including the 1 percent allotted for administering the reforms).
Moore noted that the pay hikes are smaller than those granted in the most recent teachers contract. Teachers got an average 3 percent pay raise over four years.
“All we hear is that we’re the highest paid group in the city,” said Moore. But she said noted that principals often get to school at 6:30 a.m. and don’t leave until 6:30 p.m., and don’t get any overtime.
“Administrators are the most giving, and the hardest working,” she said. “We get no additional pay for any of the extras that we have to give. We are the most dedicated group of people at the Board of Education.”
The salary package — a 5 percent general wage increase over three years — is in keeping with other districts across the state, according to Floyd Dugas, a lawyer who worked on the contract. He said the changes in health care, however, stand out.
“This is a fairly extraordinary contract,” in the way it caps city health costs, Dugas told the board.
Board member Ferdinand Risco, who works in the industry (as a manager in the Labor Relations Department for Metro North Railroad), called the contract “fantastic.”
Board member Alex Johnston added his accolades. He said when the contract is examined before the Board of Aldermen, he hopes it will be seen not just in terms of the wage hikes, but in context of the health care savings and school reform plans.
The contract “accomplish the ends of this reform movement in a cost-effective manner,” he said.
Will Clark discussed the contract with Board of Ed members Ferdinand Risco and Liz Torres