1. Presented by Ron Bennett Chief Executive Officer School Services of California, Inc. CSBA Orientation for New Trustees Preparation for the First 100 Days Collective Bargaining: Preparation and Effectiveness Bob Caine Governance Consultant CSBA

2. Ensure Accountability Ensure that all legal requirements are met and that the proposed agreement is consistent with the district’s vision and goals Ratify the agreement Monitor the implementation and administration of the contract as well as plan for future negotiations Set Direction Create a framework for negotiations and clarify roles for the board, board members, superintendent and negotiating team Establish Structure Establish specific collective bargaining goals, priorities, positions or interests Sunshine proposals Prepare a leadership team communications plan specifically for negotiations Prepare a district communications plan specifically for negotiations Ensure district has tools in place to make negotiations and the contract successful (e.g., position control systems) Create Supportive Environment Monitor contract negotiations and provide policy direction throughout the process Provide leadership if there is hostility, an impasse or strike Provide Community Leadership Throughout Keep the community and the media informed as negotiations progress The BOARD needs to come prepared by... Becoming informed about the operational, programmatic and fiscal implications of collective bargaining contracts The BOARD needs to come prepared by... Becoming informed about the operational, programmatic and fiscal implications of collective bargaining contracts 12 3 6 9 10 Action Plans Progress Reports Actual Results Intended Results Operations The Board’s Responsibility in Collective Bargaining 2

3. Current Events

4. The State Budget The Legislature passed and Governor Jerry Brown signed an on-time Budget for 2015-16, the fifth time in as many years – Passage of Proposition 30 in November of 2012 provides stability for the State Budget – but only temporarily – the taxes are temporary – The majority party Democrats control the entire Budget process and the Budget was passed without much drama Temporary taxes and additional revenue from a slightly stronger economy provided more money The Local Control Funding Formula (LCFF) was the Governor’s win for education – LCFF is evolving, but will have a huge impact on negotiations This year, the Governor’s big win is Proposition 2, the “Rainy Day Fund” © 2015 School Services of California, Inc. 4

5. Economics The economic cycle is still the key to long-term recovery in California – The “recovery” is still very fragile and could easily be derailed – Unemployment is still high but falling – The stock market has recovered – The housing market is improving, as is the construction industry – Consumers are gaining more confidence and beginning to spend more – Expectations are higher than in past years The Budget assumes an improving economy over the next several years – There are no cuts or threats of cuts for the first time in five years – But revenues vary widely between districts © 2015 School Services of California, Inc. 5

6. Proposition 30 – The Schools and Local Public Safety Protection Act of 2012 Proposition 30, the Schools and Local Public Safety Protection Act was sponsored by Governor Brown Education organizations that supported the measure include: California Teachers Association, California Federation of Teachers, California School Boards Association, and Association of California School Administrators Temporarily increases the state sales tax and personal income tax for high- income earners – Sales tax increase of 0.25% will expire in 2016 – Personal income tax increase will expire in 2018 Generates $6.8 billion to $8.5 billion in 2012-13 and $5.4 billion to $7.6 billion each year thereafter Revenues from tax increases will fund the Education Protection Account, which will offset state aid toward school district funding © 2015 School Services of California, Inc. 6

7. Future Economic Events The worst of the last recession is behind us – But we know there will be future downturns Many risks remain – The Feds could create the next economic disaster Trillion dollar federal budget deficits place continuing pressure to reduce federal outlays The annual conflict over the debt ceiling could lead the U.S. to default That would likely create a global recession – Reversing prior Budget actions – including cash deferrals, have consumed funds from the recovery as well Conclusion: Stay the course and stay positive. Things are getting better. © 2015 School Services of California, Inc. 7

8. Notes

9. Local Control Funding Formula

10. The Legacy of Past Budget Cuts © 2015 School Services of California, Inc. 10

11. Long-Term Revenue Forecast From 2014-15 through 2018-19, the Administration’s DOF forecasts moderate growth in General Fund revenues, reflecting an improving overall economy © 2015 School Services of California, Inc. 11 Source: Governor’s May Revision, Page 101 * Personal income tax, sales and use tax, and corporation tax

12. The Effect of the Supplemental and Concentration Grants © 2015 School Services of California, Inc. 12

13. Differential Risks – An Example © 2015 School Services of California, Inc. *June 2015 DOF gap closure percentage for 2015-16 13

14. High LCFF Districts Are Particularly Vulnerable Because of the variability in rates of increase, a district with a high number of students who qualify for supplementary funding will be especially vulnerable – The district that has few LCFF supplementary dollars will plan to get nearly nothing, and if it gets nothing, its planning is still close – But the district that has high supplemental and concentration grants will plan for much higher increases, and in a bad year has much further to fall © 2015 School Services of California, Inc. 2012-132020-21 Low LCFF Average LCFF High LCFF Base Grant Total Funding Base Grant 14

15. Differential Risks – An Example © 2015 School Services of California, Inc. 15

16. LCFF Accountability The State Board of Education (SBE) adopted regulations governing the expenditure of supplemental and concentration grants – Require a school district, county office of education (COE), or charter school “to increase or improve services for unduplicated pupils in proportion to its increase in funds apportioned on the basis of the number and concentration of unduplicated pupils” – Create authorization for the use of funds for schoolwide or districtwide purposes in a manner that is no more restrictive than federal No Child Left Behind Act of 2001 Title I funds (poor and needy pupils) Each local educational agency (LEA) must adopt a Local Control Accountability Plan (LCAP) based on a template adopted by the SBE © 2015 School Services of California, Inc. 16

17. LCFF Accountability The LCAP describes goals, as well as actions to be taken to achieve those goals, related to specified state priorities for all students and for subgroups The LCAP must be linked to the LEA budget and updated annually New California Collaborative for Educational Excellence will advise and assist LEAs © 2015 School Services of California, Inc. 17

18. Notes

19. Becoming Informed

20. Overview of Collective Bargaining Collective bargaining is: – Required by law – Difficult to accomplish – Critical to the operation of your district In the larger scheme of things, employee relations must be: – Positive and productive – Stable and predictable – An integral part of the student achievement equation © 2015 School Services of California, Inc. 20

21. Collective Bargaining: Its Impact on School Finance Collective bargaining is a primary responsibility/task of school board and management Finances and where district spends its money tied to bargaining process Average district spends about 85% of the total General Fund on salaries and benefits For unrestricted only, most districts are now above 90% Nearly all of the resources of the district are subject to collective bargaining © 2015 School Services of California, Inc. 21

22. Collective Bargaining: The Rodda Act The Rodda Act of 1975 by Senator Albert Rodda was originally cast as a legislative deal For a limited scope of issues, teachers and classified personnel would have collective bargaining rights and abilities Most issues limited to wages, benefits, and employment (seniority, transfers, etc.) A modest step up from “meet and confer” under the Winton Act © 2015 School Services of California, Inc. 22

23. Bargaining: Expanding Scope The “Anaheim” test The Public Employment Relations Board (PERB) rules “subjects not enumerated as mandatory subjects of bargaining” are negotiable if: – Logically and reasonably relates to an enumerated subject – Is of sufficient concern to the parties that conflict is likely and bargaining is appropriate to resolve conflict – Negotiations will not significantly abridge management prerogatives © 2015 School Services of California, Inc. Collective bargaining became a fixed component of school operations 23

24. Collective Bargaining: Assembly Bill 1200 and Assembly Bill 2756 The law now requires that all bargaining agreements must be certified as to “affordability” by the district superintendent and chief business official (CBO) District must be able to afford the agreement for its term COEs will review this certification to see if districts can afford the agreement over a three-year period Remember, it is the board that is the final signatory to the agreement © 2015 School Services of California, Inc. 24

25. Negotiations Process © 2015 School Services of California, Inc. 25

26. Report Issued – What Does That Mean? This is when things often turn ugly! By this time, the parties have often been negotiating for more than a year – They have had months of unsuccessful mediation – And more months of unsuccessful factfinding Disputes that remain after all that are usually very “hardcore” disagreements Once the report has been made public: – The district may unilaterally implement its last, best, and final offer – The union may take job actions, including a strike © 2015 School Services of California, Inc. 26

27. Setting Direction

28. Things That Make a Difference Attitude – yours and theirs Approach Foundation building Preparation Respect Principled discussions and conclusions © 2015 School Services of California, Inc. 28

29. Attitude Attitude counts – Are we going to the table to “make things better”? – Or to “punish the other side”? – Or to “take our punishment”? A constructive approach is a problem-solving approach Get what you want by helping them get what they want © 2015 School Services of California, Inc. 29

30. Approach Do you use a “legalistic” approach? Do you spend time deciding what you want? – Contract analysis – Priority setting – Development of bargaining parameters What does the board want? – How much support do you have? – Has it approved the parameters? © 2015 School Services of California, Inc. 30

31. Preparation Prepare for the first session as you would for factfinding – The other side is entitled to accurate information from you – Present facts as facts, priorities as priorities, and opinions as opinions – Don’t confuse things Many of the “money issues” don’t appear in the budget – They are buried in articles and class sizes, release time, stipends, etc. – Get all the information out Districts that prepare thoroughly rarely go to impasse © 2015 School Services of California, Inc. 31

32. Respect “I will feel respect only if you pay me more” is bogus – People don’t respond just to money – But if respect is shown in no other way, money will assume a larger role Respect is not just a word – With respect, there is a duty to listen, to consider in good faith, and to treat proposals as legitimate ideas Mutual respect fosters communication – Without respect and communication, there will be no agreement © 2015 School Services of California, Inc. 32

33. Principled Discussion What are our overriding principles? – This year we will have the LCAP to guide us – Our goals are broader than “how much salary this year” What form will program improvement take? – Expenditures must “increase and improve” services to students – Higher compensation to attract better qualified people? – Lower compensation so we can afford more staff and lower class sizes? – Maintenance of the status quo? Linkage of overarching goals of the LCAP to bargaining outcomes © 2015 School Services of California, Inc. 33

34. Reminders for District Negotiators You are the public. You are not a neutral. The bargaining table is unequal. The district has all the marbles. Management can also “demand.” It is not a one-way street. Recognize that anything you say can and will be used against you. Language is forever. Public pressure is often a deciding factor. Honesty and openness need not compromise your position. © 2015 School Services of California, Inc. 34

35. Establishing the Structure

36. The Board Ultimately, the board is responsible for the bargaining process – Sets bargaining parameters – Selects the district bargaining team – Sets goals going into the negotiation – The board can meet in closed session to discuss negotiations We recommend that board members individually not be present at the “at the table” bargaining sessions – The parameters set by the board communicate to the superintendent and the bargaining team the board’s expectations – In the end, the board makes the final decision on approving or disapproving the agreement © 2015 School Services of California, Inc. 36

37. The Governing Board Signs the Contract Governing board decisions are made as a board... not individually – Confidentiality is essential and shows respect for the board as a whole Build negotiating guidelines, called “parameters,” with the entire board – Put them in writing There is no role in the “at the table” process for an individual board member – The board acts together by consensus or by majority vote Ensure that the governing board has high respect for the chief negotiator The board must be informed on the pros and cons of each significant item © 2015 School Services of California, Inc. 37

38. Make Sure Management Is on the Same Page Build negotiations on the governing board parameters – The board signs the contract – Educate management on your goals so they can communicate accurately with the unions – Management needs to understand the “why” and not just the position the board has decided to take – Management recommends; the board decides Your team – The management team – the cabinet – must be together Expand your negotiating team to include principals – And include them in the executive sessions © 2015 School Services of California, Inc. 38

39. Ensuring Accountability

40. All Contract Agreements Undergo Major Outside Checks Outside checks can prevent runaway agreements – County superintendent must be given opportunity to comment on negotiated agreements – Superintendent and CBO must certify to contract’s affordability – All major provisions and all cost must be disclosed at public meeting – Board must adopt all required budget revisions or county superintendent shall issue a qualified or negative report Don’t go around state law – It can provide positive protections © 2015 School Services of California, Inc. See Government Code Sections 3540.2 and 3547.5 40

41. The Superintendent – The Conductor of Settlement The superintendent must be the negotiation director – Negotiations can make or break careers – The superintendent knows the board best – A negotiation conflict will require the superintendent’s leadership With certification, the superintendent needs to know the budget – A wrong certification can end a career – A right certification can build a positive school climate – Now, especially, there is nowhere to hide © 2015 School Services of California, Inc. 41

42. CBO – Certification Demands Direct Participation With certification, the district budget is central to negotiation settlement – Certification decisions should never be a surprise The CBO must be a participant in negotiations – And be part of the negotiation strategy team Package your financial proposals Link proposals to necessary budget changes Make sure the numbers “tie out” – Be prepared for public explanation of conclusions © 2015 School Services of California, Inc. 42

43. Community Leadership

44. Don’t Be Afraid to Communicate – But Do It Wisely Unless you have agreed to a blackout, you have not given up your right to send information to the unit membership An explanation of your position – and the evidence – is a valuable management tool – Keep it short, keep it accurate, do not exaggerate, do not propose what you have not proposed at the table – Provide back-up data to support your position – And yes, you can respond to the demonstration at the board meeting – a factual measured response is not unfair The public needs to hear the consequences of the choices made by the board or demanded by the unions © 2015 School Services of California, Inc. 44

45. Thank you