Who wins with District 15's 10-year contract?
Teachers, district might enjoy long-term contract, but will taxpayers?
Palatine Elementary District 15 won't negotiate another teachers contract until its youngest pupils are halfway through high school.
That's because of an unprecedented 10-year contract -- by far the longest among 92 suburban school districts' contracts -- that school leaders say eliminates the time and cost of frequent negotiations and keeps increases in personnel costs modest.
A taxpayer advocacy group, however, says the contract handcuffs future school boards and fails to account for the unpredictability of Illinois laws and the economy over such a long period.
School administrators and board members so far have refused Freedom of Information requests for the contract approved April 13, claiming what was voted on was only a draft. The details that were released include 2.5 percent to 4 percent annual raises, retirement incentives, and projected 1 percent annual growth in salary costs over the life of the contract.
Ten-year contracts are nearly unheard of. State education officials say they know of no others. Among the 92 suburban districts analyzed by the Daily Herald, more than half have contracts of three years or less.
But contract duration might be growing longer. Three suburban school districts -- Villa Park's Salt Creek Elementary District 48, Elk Grove Township Elementary District 59 and Maine Township High School District 207 -- are working under six-year contracts. Officials in all three note the contracts are longer than the ones that preceded them.
Those who favor longer contracts often see them as a way to try to cope with the same unpredictability that makes some taxpayer groups wary. In District 15, it was the union that suggested 10 years, Superintendent Scott Thompson said.
"Unions have started to push for longer deals to protect against the erosion of previously good deals," said Bob Bruno, professor of labor and employment relations at University of Illinois at Chicago.
But at what cost to taxpayers? Mailee Smith, staff attorney at the Illinois Policy Institute, said the 10-year District 15 contract calls for teacher salaries to outpace the earnings growth of taxpayers footing the bill.
"Taxpayers are saddled with a contract for 10 years when there's no way to forecast the district's financial situation, especially in the midst of the state's current problems," Smith said. "The savings the district has expressed is purely theoretical and if those savings are not seen, it doesn't matter, the taxpayers are still on the hook for paying for it."
Thompson acknowledged the raises in the new contract are greater than what the U.S. inflation rate has been for six of the past seven years. He said retirement incentives are expected to entice 25 percent of the district's most expensive teachers to leave.
By factoring in their cheaper replacements, District 15 can hold salary costs to a 1 percent increase a year, he said.
Those retirement incentives, raising salaries of retiring teachers by 6 percent in each of their final four years, will increase pension obligations to taxpayers statewide since the state covers the employer share of teacher retirement costs, Smith pointed out.
"We're operating within the rules," Thompson said.
Proposals in the Illinois legislature in recent years would have transferred future pension costs to school districts. This year, proposals would change how state funding for schools is allocated across the state. That is caught in the ongoing budget impasse between Gov. Bruce Rauner and Democratic legislative leaders.
Rauner also has made a property tax freeze one of his top priorities. A majority of school funding comes from property taxes.
Outside Illinois, some large urban school districts have approved 10-year contracts, but most of those are retroactive for up to five years because teachers had been working without contracts, according to news reports.
Michigan's Warren Consolidated Schools Board of Education and the teachers union agreed on an eight-year contract in 2013. That was seen by many as an attempt to work around the state's anti-union "right to work" law.
In 1990, a Pennsylvania school district's teachers union signed off on a 10-year contract, but it was ultimately vetoed by district administrators concerned about future economic uncertainties.
In District 207's contract, teacher raises are tied to the inflation rate, spokesman Dave Beery said.
Thompson said there is no language in District 15's 10-year contract that allows either side to reopen negotiations if unforeseen events occur.
"If significant fiscal (or) funding issues were to arise in the future, the district will approach the (union) to renegotiate the contract," he said. "The board has some ways to encourage the (union) to renegotiate the contract, and dramatic financial issues would create a situation where it was in the (union's) best interest to renegotiate."
In District 59, the union sought the six-year contract, but board President Sharon Roberts said it worked to taxpayers' advantage.
Teachers "wanted a longer contract and we got a lower rate on raises," she said.
Roberts and Thompson said there is a modest savings in forgoing the legal costs associated with contract negotiations. However, records show District 15's legal costs during contract negotiating periods in the past were just slightly above the district's average monthly costs of about $20,000.
Others cite less tangible benefits.
"Negotiations are a huge time suck," said Eydie Cohen, president of the District 59 Education Association. "It is exceptionally time consuming even when you have a cordial relationship like we do. To not have to go through that is a huge relief and there's a lot less stress."
District 15 board member Jessica Morrison said the 10-year deal allows employees to zero in on the jobs they were hired to do.
"It's less time at the negotiating table and more time focusing on education," she said.