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Costing out the Financial Components During the Negotiations Process

Costing out the Financial Components During the Negotiations Process. IASBO Annual Conference – May 2010 Presented by: Michael Frances, Jennifer Hermes and Jon Hitcho. Agenda. Roles Gathering Material and Data Benchmarking Building a Negotiations Model Use of Model During Bargaining

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Costing out the Financial Components During the Negotiations Process

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  1. Costing out the Financial Components During the Negotiations Process IASBO Annual Conference – May 2010 Presented by: Michael Frances, Jennifer Hermes and Jon Hitcho

  2. Agenda • Roles • Gathering Material and Data • Benchmarking • Building a Negotiations Model • Use of Model During Bargaining • Recent Trends • Tips • Examples 2

  3. Before you Begin • Whose responsibility? • Business Manager • Superintendent • HR Director • Board Members • Attorneys • Facilitator • Clarify Roles • Current Contract • Read it, know it, live it 3

  4. Gather Materials and Data • Current Staff details • Salary schedule • Step Cost • Longevity • Hourly Rates (non-cert) • Annual Hours (non-cert) • Scattergram • Actual and Eligible Retirements • Retirement Enhancements • Pre and post retirement • Extra Duty schedules and scattergram 4

  5. Gather Materials and Data • Benefits • Plan details • Scattergram • Premium schedule • Annual Cost • Trends 5

  6. Benchmarking • Who are they? • Where do you want to be? • Salary Data • Length of Contract • Benefit Analysis • Targets strengths / weaknesses 6

  7. Building a Negotiations Model • The Basics • Vertical Dimension - Steps • Typically one per year • Not always tied to length of service with district • Horizontal Dimension – Lanes • Usually related to amount of education • Format • Block • Staggered / “Step up” 7

  8. Building a Negotiations Model • Format (cont.) • Indexed • Variable • Equal $ • Accurate Scattergram • Apples to apples • Separate schedule for each year of contract 8

  9. Use of Model During Bargaining • Type of Bargaining Process • Interest based, “Win - Win” • Traditional • Trust factor • Sharing - Full • Electronic copy • Agreement on assumptions • Sharing - Comparative • Each team runs numbers and costs are compared • Closed • Management tool only 9

  10. Use of Model During Bargaining • Cost Communication • Staff • Board • Community • Marketing – Union vote • Administrative Communication • Payroll • HR 10

  11. Recent Trends • CPI • Formula • Floor / Ceiling • Re-Opener • Retirement • Multiple Years of 6% Raises • End of Career “Bonus” • Additional Sick Days • Penalties 11

  12. Tips • Have a summary page • Date and Time Stamp all hand outs • Come up with scenario “naming scheme” • Do not use as your budget • Don’t overly complicate things; you have to administer it • Some things take multiple years to correct 12

  13. Tips • Know the Union team • Be ready for the unexpected • Keep eyes and ears open • Communicate in detail with operational staff while information is fresh • Use caucusing to your advantage • Do not take it personally 13

  14. 14

  15. Examples • Indexed Certified Salary Schedule • Salary Benchmarking • Non-Cert Hourly Salary Schedule • Benefit Benchmarking 15

  16. The End Mike Frances, mfrances@pmanetwork.com Jennifer Hermes, jhermes@lfschools.net Jon Hitcho, jhitcho@district96.k12.il.us 16

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