The Palo Alto school board has spent months in what we now discover were two alternate realities, one taking place behind closed doors and another in public.
In public, the board and Superintendent Max McGee expressed delight about the rare opportunity to invest millions of dollars in new programs and class-size reductions, thanks to an enormous unbudgeted increase in property-tax revenue and last year's voter approval of an extension and increase to the parcel tax to $758 a year. The district was in the best financial position in decades.
Many meetings over many months were spent discussing everything from implementing foreign-language instruction in the elementary schools to expanding the popular small-learning group programs at both Paly and Gunn. A long list of innovations and improvements was developed and prioritized in anticipation of revenues that would grow by as much as $15 million next year, leaving millions of dollars available after normal expense increases.
But while those conversations were creating excitement and anticipation among parents and teachers across the district, a different story was unfolding in closed meetings of the board. There, without any public input, the board was formulating and directing a negotiating strategy with the district's two labor unions, the Palo Alto Educators Association (PAEA) and the Classified Service Employee Association (CSEA,) that would effectively use up almost all of the discretionary new revenue for employee pay increases.
Two weeks ago, the board announced publicly that it had reached a tentative three-year labor contract with both unions that provided retroactive increases of five percent to July 2015, followed by increases of 5 percent in the coming year and 4 percent in 2017-18, including "off-schedule" bonuses of 1 percent in the latter two years. (Off-schedule bonuses don't increase the base salary from which the next year's increases are calculated.) If increases in property-tax revenue in the next two years exceed the district's budget, then all district employees will receive a second 1 percent bonus both years, and if they fall short, employees will not receive any bonus.
The total cost of the retroactive increases for the current year is $7.3 million, almost completely swallowing up the $8.5 million budget surplus created by the larger-than-expected property tax revenue.
And for the coming school year, the labor agreements have forced the district to project a $1.3 million deficit that must be plugged from reserves. Worse, achieving even that budget hinges on another exceptional year of property-tax growth of more than 9 percent. The budget challenges only loom larger in the out years.
While Palo Alto teachers are among the highest paid in the Bay Area, they face the same economic pressures of high housing costs as other middle class workers and deserve fair increases within the district's ability to pay in the context of its other needs and priorities. We don't fault them for pushing for the highest possible increase.
But these guarantees of three years of substantial raises don't strike the right balance. They reflect a flawed negotiating process that essentially gave "first dibs" to the available money to the unions.
The board's actions are especially an affront to the parents who have painstakingly researched and demonstrated with data that the district's secondary schools have not been properly staffed in order to meet the district's existing class-size policies. Accountability for adhering to these policies shouldn't come from parents analyzing spreadsheets of enrollment information, and adding the needed teachers to bring class sizes down at least to the established targets should have been the first new expenditures from the property-tax windfall.
But perhaps the most egregious element of the board's pending labor contract actions is that non-unionized school district managers -- principals, deans, coordinators and directors -- are all proposed to receive "me-too" increases identical to those proposed for the union employees.
It is bad enough that the district's union contract provides for no performance-based compensation and that great teachers and marginal teachers receive the exact same pay increases. But for the district's most highly paid professional managers to be granted pay raises that mimic that of the union contracts without any regard for their performance is contrary to all good management practices.
We're delighted that the district is moving for the first time to multi-year union contracts, but the community has every reason to feel misled by the board's behavior over the last few months and the false expectations that were created. It's long past time to overhaul and open up the process of union contract negotiations so that the public's voice can be heard while negotiations are underway, not after agreements are reached.