FINAL MOA CONFIRMS: NO INTEREST ON OUR LOAN TO CITY; RETIREES MOVE TO HEAD OF PAYBACK LINE; CITY HAS FINANCIAL INCENTIVE TO GET RID OF US; HEALTHCARE STILL A MYSTERY

In bold below is much of the first two pages of the final Memorandum of Agreement between the UFT and the City/Department of Education that is finally online.  Everything else has been available already but I have several specific concerns after reading the finished document.

It is clear from the MOA that retirees and those who will retire in June are jumping to the head of the line in terms of getting their full 2009-11 pay immediately while active people have to wait up until 2020. This flies in the face of union solidarity.  All should be treated equally.

Active people staying beyond June have to settle for 2%, + a $1,000 bonus and an IOU from the city for 2009-2011. Our loan to the city will be paid back without interest in five installments between 2015 and 2020. On our salary scale, we are looking at four years of 0% increases from May 2009-May 2013.

Keeping this in mind, the new contract seems to provide the city with a financial incentive to get rid of as many of us as possible before we can retire to keep from having to pay off on those significant IOU's. Those who resign before the payout dates get nothing. In the past, we didn't worry because of fairly strong tenure laws but the loan terms and the contract's weaker due process provisions (burden of proof is now on teachers after two ineffective ratings and Absent Teacher Reserves face one day dismissal hearings) are worrisome. 

For newer people, there is also an incentive for the city to throw probationary UFT members overboard so as not to have to pay off the IOU's.  You think it's tough getting tenure now?  Just wait.  Their replacements get a pittance or nothing depending on when they are hired.

Unfortunately, some of those Bloomberg era Leadership Academy principals will know what to do to save the city some real cash.

Also, the healthcare agreement asks us to trust the UFT to make unspecified savings in healthcare costs or we could end up with a new healthcare agreement as part of this contract that costs us more money and/or cuts benefits.

Some of the actual language of the MOA in bold:

B. 2009-2011 Round – Salaries and rates of pay as customarily done:

 i. 5/1/15: 2%

 ii. 5/1/16: 2%

 iii. 5/1/17: 2%

iv. 5/1/18: 2%

 

C. Structured Retiree Claims Settlement Fund

Upon ratification, the City shall establish a Structured Retiree Claims Settlement Fund in the total amount of $180 million to settle all claims by retirees who have retired between Novem- ber 1, 2009 through June 30, 2014 concerning wage increases arising out of the 2009-2011 round of bargaining. The Fund will be distributed based upon an agreed upon formula.

 

D. Retirements after 6/30/14 shall receive lump sum payments based on the same schedule as actives as set forth below in paragraph E.

 

E. Lump Sum Payments stemming from the 2009- 2011 Round and schedule for actives for those continuously employed as of the day of payout.

i. 10/1/15 – 12.5%

ii. 10/1/17 – 12.5%

iii. 10/1/18 – 25%

iv. 10/1/19 – 25%

v. 10/1/20 – 25%

 

F. General Wage Increases Salaries and rates of pay as customarily done:

i. 5/1/13: 1%

ii. 5/1/14: 1%

iii. 5/1/15: 1%

iv. 5/1/16: 1.5%

v. 5/1/17: 2.5%

 

vi. 5/1/18: 3%

Here are some possible questions to ask your friendly Union salesperson in the next two days before most people vote. I Highly doubt most of these questions will make it to Michael Mulgrew's video webcast on Monday, particularly question 5.

1-Since there is no payout of money from 2009-11 for people who resign or are terminated, doesn't that give the city a financial incentive to terminate or force as many of us as they can to resign before the full payouts are made?

• Won't this financial incentive to not keep people from 2018-2020, when the bulk of the 2009-11 payments are made, make getting tenure even harder than it is now?
• Isn't there also a financial incentive for the city to use the weakened due process provisions (one day hearings based on undefined "problematic behavior) to terminate as many Absent Teacher Reserves as possible before we can retire so as not to have to pay us the 2009-11 money or pay us full pensions? 

2-People who retired in the last four years get full back pay now for work done from between November 2009 and the time they retired.

People retiring in June 2014 get full back pay (10%) and a thousand dollar bonus (pensionable).

Those who can't retire now get 2%, a thousand dollars and an IOU from the city.  (If one can't retire in the next three years, the bonus won't matter when counting final average salary for pension.)

Why are June 2014 retirees and those who have retired since November 1, 2009 moving to the head of the line in terms of getting their full arrears from 2009-2011 now? 

3-How is the payout schedule equitable for active members compared to retirees?

4-Didn't the city just move $725 million to the current year's budget to pay for this settlement while the cost to pay off the retirees is only $181 million according to the MOA?  Why aren't all of us getting more than 2% and a $1,000 bonus now? (Even Bloomberg left some money in the labor reserve fund.)

5-Since, retirees are the most loyal constituency for the Unity Caucus (Michael' Mulgrew's political party), could that be why retirees or those leaving in June jump to the head of the payout line?

6-Why is there no interest on our loan to the city?  (In 1976 and 1991 when UFT members lent the city money, they paid us back with interest.)

7-What happens if someone takes a Leave of Absence during this contract?  In section 3E it says, "Lump Sum Payments (notice they don't call it retroactive pay) for actives for those continuously employed as of the day of payout."  I hope someone who takes a childcare leave, for example, still receives the full payouts. This one should be easily answered.

8-Look closely at 3D where it states: "Retirements after 6/30/14 shall receive lump sum payments based on the same schedule as actives as set forth below in paragraph E." Does that mean these retirees would get everything they are owed or only the payments as of the date they retire?  For example if someone retires in 2015, do they only get a lump sum payment for 2015 or are they paid for the 2017, 2018, 2019 and 2020 payments for their past work?  UFT has assured us, both orally and in writing, we would get the full payments for 2009-2011 if we retire after this June but why doesn't it explicitly say that in the MOA?

9-Why are other unions like the SBA and TWU Local 100 criticizing this deal as subpar?

H. Healthcare Savings

 

a.  The UFT and the City/DOE agree the UFT will exercise its best efforts to have the MLC agree to the following:

 i. for fiscal year 2015 (July 1, 2014-June 30, 2015), there shall be $400 million in savings on a city- wide basis in health care costs in the NYC health care program.

ii.  for fiscal year 2016 (July 1, 2015-June 30, 2016), there shall be $700 million in savings on a citywide basis in health care costs in the NYC health care program.

iii.  for fiscal year 2017 (July 1, 2016-June 30, 2017), there shall be $1 billion in savings on a citywide basis in health care costs in the NYC health care program.

iv.  for fiscal year 2018 (July 1, 2017-June 30, 2018), there shall be $1.3 billion in savings on a citywide basis in health care costs in the NYC health care program.

v.  for every fiscal year thereafter, the savings on a citywide basis in health care costs shall continue on a recurring basis.

vi. The parties agree that the above savings to be achieved on a Citywide basis are a material term of this agreement.

vii.  In the event the MLC does not agree to the above citywide targets, the arbitrator shall determine the UFT’s proportional share of the savings tar get and, absent an agreement by these parties, shall implement the process for the satisfaction of these savings targets.

viii.  Stabilization Fund: (1) Effective July 1, 2014, the Stabilization Fund shall convey $1 billion to the City of New York to be used in support of the pro rata funding of this agreement.

(2) Commencing on July 1, 2014, $200 million from the Stabilization Fund shall be made available per year to pay for ongoing programs (such as $65 welfare fund contribution, PICA payments, budget relief). In the event the MLC does not agree to provide the funds specified in this paragraph, the arbitrator shall determine the UFT’s proportional share of the Stabilization Fund monies required to be paid under this paragraph.

 

 I. Dispute resolution regarding paragraph H.

a.  In the event of any dispute, the parties shall meet and confer in an attempt to resolve the dispute. If the par- ties cannot resolve the dispute, such dispute shall be referred to Arbitrator Martin F. Scheinman for resolution.

b.  Such dispute shall be resolved within 90 days.

c.  The arbitrator shall have the authority to impose interim relief that is consistent with the parties’ intent.

d.  The arbitrator shall have the authority to meet with the parties at such times as the arbitrator determines is appropriate to enforce the terms of this agreement.

e.  The parties shall meet and confer to select and retain an impartial health care actuary. If the parties are unable to agree, the arbitrator shall select the impar- tial health care actuary to be retained by the parties.

f.  The parties shall share the costs for the arbitrator and the actuary the arbitrator selects.

10-What are the unspecified healthcare savings we have to come up with?

11-What are the consequences if we don't meet the savings targets?

12-Will the savings mean cuts in benefits at some point?

13-Aren't we leaving too much up in the air here?

14-Why won't the leadership allow open debate on the contract? 

15-Why are you telling Chapter Leaders to push the contract when they are running the vote?  In the current weekly Chapter Leader Update there is a section called "The chapter leader's role in the contract ratification process."  Here are the last two sentences: "As a chapter leader, you represent the voice of the UFT in schools. Please share the message with your members that this contract is a victory not only for UFT members but also for the students and the communities we serve." Shouldn't Chapter Leaders be neutral concerning the vote?  I will do my best not to push a no vote when people are voting. It's their decision.