A new teachers' contract will take effect June 30 after the New Albany-Plain Local school board approved it June 22.

A new teachers' contract will take effect June 30 after the New Albany-Plain Local school board approved it June 22.

The district is expected to save a total of $3.8 million over the next three years after the Plain Local Education Association (PLEA) asked to renegotiate the agreement a year before it expired, which would have been June 30, 2012.

"This is what education looks like," said Joe Armpriester, vice president of PLEA. "We want to be leaders, not followers. We wanted to be partners in dealing with the fiscal deficit and continue to move forward, adding programs and continuing to have the same class sizes. We knew we had to take an active role in reducing costs."

During the June 22 meeting, a report by superintendent April Domine and financial review and reporting committee member Parag Patel said that the new contract is anticipated to save more money than Ohio Senate Bill 5 would have through fiscal year 2014.

S.B. 5, which was signed into law by Gov. John Kasich but is not yet in effect, places limits on collective bargaining for Ohio's public employees. In the time since its passage last spring, opponents of the legislation mounted a campaign to place the issue before voters as a referendum on the November ballot.

With the new contract in place, the district is projected to end fiscal year 2013 with a $2.1-million cash balance. According to the report by Domine and Patel, if S.B. 5 were approved by voters in November and teachers were working under the former contract, the district would have had to pay a 3-percent increase on base salaries as previously negotiated and would have finished fiscal year 2013 with $967,858. If voters were to reject S.B. 5 and the district were to pay out the 3-percent increase for 2011, it would end fiscal year 2013 with a balance of $9,644.

By fiscal year 2014, according to the report, the district would have a negative cash balance. But Domine and Patel estimated the negative balance would be less with the new contract, regardless of the fate of S.B. 5. They estimated the district would have a negative cash balance of $6.67 million in fiscal year 2014 under the terms of the new contract.

However, they estimated that if S.B. 5 were to receive voter approval and teachers were working under the former contract, assuming no increases in base salary or step increases in fiscal years 2013 and 2014, the district would end fiscal year 2014 with a negative balance of $7.4 million. If S.B. 5 were to fail, assuming a 1-percent increase on base salary and full step increases in fiscal years 2013 and 2014, the district would end fiscal year 2014 with a negative cash balance of $10.49 million.

Armpriester said PLEA officials decided they should renegotiate the contract early after previously hearing the potential for lost revenue in the next three years. The district anticipates losing $8.89 million in revenue over the next two years due to the elimination of federal stimulus money and state tangible personal-property taxes, a reduction in state aid and reductions in property values due to reappraisals.

PLEA leaders had to convince their membership to give up a 3-percent increase for 2011 and be willing to give concessions in other areas, such as health-care costs, he said.

"There are too many unknowns now," Armpriester said. "The board wanted to support the staff and we wanted to support the community."

The new contract reduces the increase on teachers' base salaries from 3 percent to 1 percent for the next three years.

When negotiations begin again in three years, the two sides plan to start by using the salaries and benefits from the previous, not the recently negotiated reduction. According to the revised agreement with PLEA that the district provided, "when negotiations for the next contract (begin) in the 2013-2014 school year, the salary index will revert to the index in place during the 2010-2011 school year unless modified by mutual agreement of the parties through the negotiation process."

"It was negotiated as a starting point with no guarantees of anything," said PLEA president Mike Covey. "Please remember this new contract was a PLEA-initiated action with the board and an unprecedented financial giveback by the association due to the very poor economy, a major downturn in the property value and the need to cut $8 million over the next two years. Hopefully, in three years, the economy will have made some positive recovery."

The new contract also decreases step increases by nearly half. Step increases are given to teachers based on seniority and education.

Armpriester said the step increases are decreasing by 20 percent in the contract's first year, 40 percent in the second year and 60 percent in the third year. Domine the average step increases ranged from 4 percent and 5.4 percent and are being reduced to 2 percent to 3.4 percent.

During negotiations, Armpriester said, the teachers came to the board with a reduction in base-salary increases, but the board said it wasn't enough, which is how the reduction in step increases came about.

Teachers also agreed to change the percentage they pay for health-care coverage, agreeing to pay 15 percent of their health-care costs for single coverage. A provision of S.B. 5 would cap employers' payment of their workers' health insurance at 85 percent. Under the former contract, teachers paid 10 percent for single coverage.

The contract also increases employee co-pays, deductibles for family coverage and out-of-pocket expenses.

Another provision of the new teachers' contract will keep health-care costs from increasing by more than 9 percent annually. Domine said the teachers union and administration will have to figure out how to prevent increases over 9 percent. Any changes on what PLEA members already voted on would require another vote, she said.

Salaries and benefits were the only pieces of the contract up for negotiations.

Communications director Jeff Warner said when the PLEA asked for negotiations to be opened early, it asked to renegotiate salaries and benefits only.

Armpriester said the agreement was "in the best interest of the community, the students and the teachers."

"I hope the other labor organizations in the district will follow suit," he told the district's financial review and reporting committee June 22.

Domine said the district cut more than $5.5 million out of the five-year financial forecast before it was approved by the school board in May.

Administrators were able to save $608,000 before the end of the school year, and the board decided in May to eliminate permanent substitute positions and not hire any additional teachers for the 2011-12 school year, thus saving $2.5 million.