Andover teachers will vote on a tentative contract agreement Thursday, March 27 that would save $300,000 annually in health insurance but potentially require service cuts or a tax hike in future years for the town to afford the pay raises.
The Andover Education Association, which represents the town's teachers, came to the tentative deal with the School Committee on Feb. 18 after a "marathon session" of bargaining, according to union President Tom Meyers.
Teachers had been working under an expired contract since September.
The proposed pact includes an 8.5 percent wage increase doled out over three years, including a 1.5 percent bump this year that will be covered by a surplus in special education money from the state.
"It was the best agreement we could get under the circumstances," said Meyers, a social studies teacher at Andover High School. "We agreed to it because we thought it was in the overall best interest of our teachers."
The terms of the contract were posted March 6 in all school buildings for the union's approximately 600 members to review. Meetings are currently being held by union leadership to explain proposed changes from the previous contract, which allotted a 9.1 percent cost-of-living increase over three years.
"We're very happy with it," said School Committee member David Samuels of the tentative settlement. "It's very fair, conservative. I think the teachers realized because of the looming budget crisis that we couldn't give them everything they deserved. It was a very modest increase, given the financial backdrop."
If the contract is accepted by the union, teachers would receive 3.5 percent bumps in salary during both the 2008-2009 and 2009-2010 school years.
"A lot of it is actually being paid for by savings in health insurance," said Samuels.
Samuels said the new contract would have minimal effect on the fiscal 2009 budget and provide both the school department and town with "predictability and stability" as officials continue long-term financial planning.
In the past, other Andover employee unions have used the AEA's contract as a benchmark for their own, said Samuels. "Historically, that's played out," he said. "I think it sets a good precedent."
While the contract shouldn't alter budget planning this spring, Samuels said the town must find $755,000 to pay for the pact in fiscal year 2010 if the deal is ratified by the teachers' union.
"Hopefully new growth will help us out. That's where we're worried," said Samuels.
Multiple calls to members of the Finance Committee were not returned earlier this week seeking comment about the tentative agreement with Andover teachers.
Looking to 2010
The contract's long-term outlook drew criticism from Selectmen Chairman Brian Major.
"With those sets of numbers we're going to have serious cuts (next) year and on top of that we'll have serious cuts in 2010," he said, noting the town would need to pass an override to afford the contract's terms. "With our current revenue capabilities, we don't have the funding to maintain the personnel and pay out that kind of money.
"It's not a pretty picture and that's why it was absolutely critical that when we looked at the contracts we considered fairness and affordability," said Major. "For 2010 it becomes even more unaffordable. Fairness, that's in the eye of the beholder."
Samuels said the anticipated $755,000 gap created by the tentative agreement in fiscal 2010 would be much larger if the pact didn't offer significant savings on employee health insurance.
"It took a lot of creative effort to sort of redesign the plan," said Samuels. "The change in plan amounts to big savings."
Health-cost savings
Under the settlement, overall employee health-insurance premiums are expected to increase between 3 to 5 percent annually. That would offer $300,000 in savings each year when compared to the teachers' current health plan, which was expected to jump by more than 10 percent in FY09, Samuels said.
"By negotiating a less expensive health plan, the rate of increase will be slower," he said. "This is kind of a gift that keeps giving."
The settlement also proposes that $250 deductibles for outpatient surgery and $500 deductibles for hospital admissions be billed directly to the town.
"We're going to self-insure that piece," said Samuels. "That's what brought the premiums way down."
Co-payments for office visits would increase from $15 to $20, and emergency room visits from $75 to $100. Prescription drug co-payments would range from $10 to $45, with increase ranging from zero to $10 depending on the prescription.
A new optional flexible spending plan would allow teachers to withhold up to $4,000, pre-tax, from their pay checks for health expenses.
"I really hope that everyone in the AEA takes advantage of the flexible spending plan, because that is a potential windfall if you use it correctly," said Samuels.
"Other communities have done this," said Meyers. "We're asking our members to vote for it. We thought it was the best deal we could obtain at this time, given the circumstances nationally and in the community."
The proposed changes to the teachers' health plan drew praise from Major and Town Manager Buzz Stapczynski.
"I'm very excited about those changes," said Major. "They were very well thought out."
Stapczynski said the new increases in health-plan premiums would likely be reduced to 5 percent rather than 3.
"To get it down to the 5- or 6-percent range is huge because it really frees up resources, available funds that can go back to employee wages, that kind of thing, or go back into some of our budget deficiencies," said Stapczynski. "It's a big step. It's certainly the right step. I think it's a positive sign."
