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LAUSD approves expensive health benefits contract but vows to be tougher in negotiations going forward

Mike Szymanski | February 14, 2018

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*Updated Feb. 15

Despite parents’ pleas to deal now with a coming deficit that could require huge cuts, a narrow majority of LA Unified’s school board on Tuesday approved a new contract that commits the district to paying for its employees’ generous health benefits at current levels for the next three years.

The contract passed 4-2, with board members Nick Melvoin and Ref Rodriguez casting no votes. The eight labor unions covered by the contract — representing 60,000 employees — must also approve the deal. United Teachers Los Angeles held their vote last week, but no results will be announced until all unions have voted.

“It’s not the fault of our employees, but we need to secure more funding and also need to start living within our means,” said Melvoin, who said he was haunted by a chart presented at a meeting last fall about the spiraling healthcare costs and showed that by 2030 more than half of the district’s budget will go toward health benefits. “This deal is a baby step in the right direction, but we’re in a dire financial situation that requires at least an adult step.”

Rodriguez, who joined Melvoin in voting against the deal, was concerned about the contract’s length and said he didn’t want the decision to result in skyrocketing costs that could increase class sizes. “It may be a deal we regret three years from now,” he said.

While the majority of board members voted for the contract, they did vow to be tougher in ongoing salary negotiations, responding to criticism from more than a dozen parents who showed up to protest the contract for not addressing a deficit that’s less than three years away.

Although the nation’s second-largest school district does not have the highest salaries, it does have some of the most generous medical benefits. Employees and their families pay no monthly premiums and receive full health benefits after they retire.

“Our employees need health care,” said board President Mónica García, who voted for the deal. But she acknowledged, “We cannot afford our current plan, and the services we provide our students are limited.”

García agreed with the parents who had harsh words about the contract during public comment. “For me, there’s great value in the containment of costs,” she said, adding that she knows the benefits bring good teachers to the district. “Here’s the challenge: I’m supporting this deal, but I also hear the parents who are concerned and believe this action is irresponsible. We need to consider what it looks like if (the district) did go bankrupt. I will count on leaders of the district to deal with our realities.”

Those realities include $13.6 billion in unfunded liabilities for employee benefits, for which only $350 million has been set aside, according to the district’s labor negotiator Najeeb Khoury. He said Tuesday that a new actuary report is expected next week that may show that the district’s Other Post-Employee Benefits (OPEB) obligations will be even higher.

In the deal, the district agreed to continue to pay $1.1 billion per year for health and welfare benefits, which will save the district $190 million over the three years of the contract. In return, the unions will allow a reserve fund that now totals nearly $300 million to cover any increases in costs. Healthcare costs have been rising about 6 percent a year, and in the past the district has covered those increases.

García, Kelly Gonez, George McKenna, and Scott Schmerelson voted for the deal, with Rodriguez and Melvoin against it. Student school board member Benjamin Holtzman voted no, but his vote doesn’t count in the overall tally. Richard Vladovic was not feeling well and left before the vote.

Interim Superintendent Vivian Ekchian also announced that parents will have some input into labor contracts through a new committee that is being formed. It’s not a seat at the negotiating table, which parents have been asking for, but it was a nod toward the importance of parent voice. “I look forward to having parents on the committee who will speak for the students and so we can stabilize the district in the next two years,” Ekchian said.

But Katie Braude, executive director of the parent advocacy group Speak UP, who spoke to the board on Tuesday, said the committee is not enough. “It’s too late for committees,” she said in a statement afterward. “We needed action today that we did not get. The board has failed to uphold its fundamental responsibility to the children of our district by refusing to take the necessary actions to save LAUSD from insolvency before it’s too late. The result will be class size increases, program cuts, and massive teacher layoffs as more money flows outside the classroom every year.”

Braude added, “This deal is bad for kids. It’s bad for teachers, and it’s bad for the future of the district.”

Parent Paul Robak, who has children at Ramón C. Cortines School of Visual and Performing Arts and at Dodson Middle School Magnet, told the board Tuesday, “We have to get deals we can afford as a district. If we go over that fiscal cliff, we will not have that, and the district will be split up or dissolved.”

Malika Mirkasymova, who has two children at Paul Revere Charter Middle School and Magnet Center and was the president and treasurer of the Parent Teacher Organization at Brentwood Science Magnet Elementary, thanked Melvoin and expressed frustration about the vote. “Teachers will not benefit, this is irresponsible, there will be no money left.”

Meanwhile, the school board approved 1,600 Reduction in Force notices for senior management employees and other non-school-based certified administrators. The same number of notices were sent out last year, and in the end, 115 employees lost their administrative jobs but most were reassigned to other positions. The year before, 1,700 notices were given to administrators, but all of them ended up keeping their jobs.

* This article was updated to correct what the health benefits offer.

This is the chart Nick Melvoin cited, from the Health & Benefits report given by the district in November.

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