With contract negotiations under way, New Canaan Public School teachers are looking at an 8 percent pay increase over the next three years.

The New Canaan Board of Education and the teachers' union signed the three-year contract for the 2013 through 2016 school years and presented it to the Town Council Nov. 1.

The council has the month of November to accept the contract, reject it or do nothing, which would, by default, legalize the contract.

The contract calls for a pay raise of 8.3 percent per teacher in the system. Health benefits have also been changed, moving to a high-deductible health plan with a health savings plan, which the district said will save money on health care costs in the long term.

Additionally, the teachers agreed to add an extra 10 hours per year in professional development training.

The Board of Education makes up about 60 percent of the town's $126 million budget. Labor costs and health care coverage take up more than 77 percent of the BOE's budget, according to former Chairman Hazel Hobbs. Therefore, the teachers' contract amounts to about $57 million, or about 45 percent of the town's total budget.

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Schools Superintendent Dr. Mary Kolek was pleased with the terms.

"The settlement is comparable or better than other settlements reached in similar districts and is lower than that reached three years ago," she said in an email.

"Such a process and product ultimately serves the community both from the perspective of recognizing current conditions while also addressing the community's desire to attract, keep and develop the quality of professional staff that has to proven to be an excellent investment on behalf of our students and community."

The salary structure is broken into a step process. Over the course of a teacher's career, he or she moves up the steps of seniority and salary. There are 17 steps in the contract, and with each comes a change in pay that can be as little as 4 percent or as much as nearly 10 percent. In the previous contract, teachers were automatically entitled to move up one step each year, so long as they did not receive poor performance feedback. In this latest contract, the teachers only move up two steps over three years, but also receive an across the board wage increase to all steps of 1.1 percent in the second and third years of the contract.

BOE lawyer Tom Mooney, who headed the negotiations for management, explained that allowing teachers to march through the steps without an increase would account for about a 7.9 percent pay increase over the three years; however, they bargained for additional minor increases that brought the total to 8.6 percent over the three years, which is less than 3 percent per year.

"The projected cost over three years, if we take a current cohort of teachers and march them through steps and say what would that cost, without any general wage increase, the additional cost would be 7.92 percent. The total cost of this contract as negotiated is 8.63 percent," Mooney said at the meeting.

The teachers will also move to a health care plan that the town has adopted for other of its labor contracts, the HDHP plan. The HDHP plan requires management to pay for half of an employee's deductible, up to $2,000 for a single employee and $4,000 for a family. The board also pays for the great majority of the premiums of the plan, but the employees become responsible for more of the plan each year, paying 16 percent in the first year, 17 percent in the second and 18 percent in the third.

Mooney estimated the plan would lead to some reduction in costs for the district, but conceded that health care costs, which have spiked in recent years, can be difficult to predict in the long term. He explained that this plan attempts to reduce the exposure of the school district.

"All we can do is provide our best estimate," he said at the meeting. "We think with this plan we save about 20 percent. This plan will reduce costs for teachers and for the school board."

Kolek also lauded the health care change as beneficial.

"Our plan is similar to other districts awarded in arbitration. With this plan, teachers are responsible for up-front deductibles," she said in an email.

The Town Council's reaction was mixed. Vice Chairman Steve Karl made the point that although the pay raises seem high in economic times like these, they are less than usual. He also made the point that having a top-performing school district is an economic generator for the town.

"Any time you have an increase, given the economic situation we're in, it gives you pause, but the teachers gave concessions. Increases year over year are relatively small given how these things are done historically," he said.

"We have 400 teachers in one of the best school districts in America, and we all have to share the burden for paying for it. Nobody wants (the pay) increase, and hopefully the Board of Ed will look for ways of trimming in other areas to help with the cost. The town needs a top school system. It drives real estate, local business, and provides a future for a tremendous number of our young citizens," he said.

Councilman Roger Williams, who seemed concerned about the price tag of the contract during the meeting, was circumspect about the possibility of voting the contract down based on the long-standing nature of the step process in an interview later in the week.

"When you're talking about 3 percent a year increases, it's off of the step level. Every year they move up, that step is going to be giving them an increase. I'm not sure there's a whole lot we could do about that since (the steps are) in the current contract. So even if we voted it down, that would probably not get through an arbitration panel," he said.

Town Council Chairman Mark DeWaele said the fact that had the board not negotiated only two step increases over the three years as opposed to one each year, the cost of the contract would have been higher.

"The 8.6 percent, as it was explained to us, is that it's on par with other like districts for a three-year increase. When you look at the steps, which are built into the system, it's actually less than if they had stepped each of the three years, so that's pretty good. The problem is, when you see 8.6 percent, that's almost 3 percent a year, and that's a big number. We need to discuss this at the next meeting to better understand what an 8.6 (percent raise) represents," he said in an interview.

Town Councilman Tom O'Dea said to vote down the contract could be dangerous, in that a town's ability to pay is used as a prime data point by arbitration panels. New Canaan, one of the wealthiest towns in the country, would have to make a difficult case in presenting financial hardship.

"I have to go through it. I know that we had a good team on it. The lawyer who negotiated it was extremely experienced, and he strongly recommends (the contract). That makes me think it's probably pretty good. I'd rather there not be the percentage increases there are, but we have to be careful litigating, because part of the arbitration would take into account the town's ability to pay," he said in an interview.

The Town Council has 30 days from Nov. 1 to take action or choose not to on the contract. There is a meeting scheduled for Nov. 14, but it is unknown whether the council will have had enough time to go through the 52-page contract in detail sufficient to vote on by then. If not, the council will likely schedule a special meeting later in the month.

The contract represents more than $160 million in town expenditures over the next three years. As many at the meeting said, it is the single largest expense the town has, and will have an impact on the shape of nearly all expenditures going forward.

The size and terms of the contract were discussed in public at the meeting, but discussion of the negotiation strategy on the part of the board was discussed in executive session.

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