SWS Exchange with Councilor Flaherty #2: "I don't think you are thinking about the cost of the step increases properly"


Editor’s note: Below are 7 emails exchanged between Save Westfield Schools and Councilor David Flaherty. The subject of the email was “I don't think you are thinking about the cost of the step increases properly.”

EMAIL 1

From: Steve Dondley
To: David Flaherty
Sun, Sep 5, 2010 at 6:21 PM

Councilor Flaherty,

This year, there was no increase in the negotiated step increases in
teacher salaries. Yes, teachers will still receive step increases and
track increases but there was no increase to the step increases. What
I think what you are not realizing is that this when there is no
increase in the step increases, there will be *no additional to the
taxpayers for the overall contract package from year to year.*

To see what I mean, let's presume, for the sake of argument, the cost
of the teacher's labor contract is $25 million for FY2011. In thirty
years (FY2041), even with the step increases, assuming the contract
stays precisely the same as this year, then the total cost of the
contract will *still be $25 million.* That's because even though many
teachers (but not all) receive step increases over the next 30 years,
many of the older teachers at higher salaries with more credentials
will retire and get replaced with younger teachers receiving lower
salaries with fewer credentials. While the amount of the total package
will fluctuate from year to year based on how many teachers retire and
how many teachers have advanced degrees, the total labor costs will
remain about the same indefinitely so long as there are no COLA
increases and no increases to the existing step increase.

In other words, you don't just compound 4% step increases
indefinitely. It sounds like that is what you are doing and that's why
I think you think the contracts are so unsustainable when in reality
they are not.

Sincerely,
Steve Dondley


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EMAIL 2

From: David Flaherty
To: Steve Dondley
Sun, Sep 5, 2010 at 6:30 PM

It can't stay the same for level services. Just look back over the last
few years for examples. The only way the total gross salaries have
been what they were is because they layed-off about 100 teachers.

You should ask the custodians, clerks, admins, and other support
staff what they think "no salary increase" means. They know from
experience. They are not happy to see the teachers making more
and more money while they take pay freezes.

Dave

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EMAIL 3

From: Steve Dondley
To: David Flaherty
Sun, Sep 5, 2010 at 6:40 PM

You have changed the argument and threw me a red herring.

The important point is that your logic seems flawed when it comes to
determining the future costs of the contract. It costs the taxpayer
absolutely nothing extra if you do not increase the step increases or
increase COLA. Will you concede this point? I'm not trying to one up
you here. I'm trying to find consensus. I'm asking you, do you think
my argument flawed?

Sincerely,
Steve Dondley

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EMAIL 4

From: David Flaherty
To: Steve Dondley
Sun, Sep 5, 2010 at 6:47 PM

Sure, makes sense, but they did increase them for 14+. That's what I'm talking about when I calculate the 8900.
Dave

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EMAIL 5

From: Steve Dondley
To: David Flaherty
Sun, Sep 5, 2010 at 6:57 PM

Right, $8900 (or so) extra for each teacher in longevity benefits
*spread out over the next 30 or 40 years* (but only if they work more
than 15 years); not $8900 per teacher this year.

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EMAIL 6

From: David Flaherty
To: Steve Dondley
Sun, Sep 5, 2010 at 7:15 PM

I'm pretty sure I said "if they stay in system long enough". It's not paid in one year, but the commitment is now there and it wasn't before - just like that 1000, 600, 400 example I gave you.
CPAs can calculate the net present value of this future obligation.
Dave

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EMAIL 7

From: Steve Dondley
To: David Flaherty
Sun, Sep 5, 2010 at 7:55 PM

On Sun, Sep 5, 2010 at 7:15 PM, David Flaherty
<flaherty.westfield@gmail.com> wrote:
> I'm pretty sure I said "if they stay in system long enough". It's not paid
> in one year, but the commitment is now there and it wasn't before - just
> like that 1000, 600, 400 example I gave you.

As I pointed out, in your statement at the City Council, you clearly
stated they would receive $8400 over the length of the contract. The
length of this contract is one year. The $8400 will be absorbed over
the course of 30 or 40 years, not one. Therefore, your statement was
not accurate and you should issue a correction.

And at the risk of repeating myself I'll say again that the contract
is a one year commitment, not a 30 year one. Even if you do
extrapolate, the increase in the overall package size is not huge. $5
million extra (assuming the number is accurate, we dont' know for sure
how much it is) for a longevity benefit over 30 or 40 years is not
unreasonable.

And my understanding, though I might be entirely wrong on this, is
that the increase in longevity pay was crucial because so many
retirees are hurting so badly (I seem to remember Ms. Hovey mentioning
this to me). I clearly remember the mayor stressing the importance of
the longevity pay benefit at the special school committee finance
meeting. There was special urgency around this benefit. We'll want to
find this out.

And an extra $10K per year (according to the WEA's statement) for the
furlough buyback program does not seem particularly onerous, either.

And as I look at the teacher salaries in the contract, I don't see
that any teacher is getting extraordinarily wealthy, especially
considering that these are highly trained professionals, many with
Masters and Doctorate degrees. They are living comfortable middle
class lifestyles at best. Many other teachers are probably living
paycheck to paycheck. Many of them shell money out of their own pocket
for schools supplies. And my understanding is that very often they
must pay for a lot of their own professional development (even when
the PD money is in the contract). So, I don't see that the taxpayer is
getting taken advantage of or getting raked over the coals.

Thus, I don't think things are quite as dire as you might perceive
them to be. Though I'm glad you are asking questions and doing your
best to ensure money is not wasted, I wish you would do so in a more
productive fashion, in a manner that would help bring people together
in a cooperative way.

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