Board of Education Approves Health and Welfare Deal

LOS ANGELES (Feb. 13, 2018) - The Board of Education today voted 4-2 to approve a health and welfare agreement with its eight labor partners. The agreement represents the District’s 12 bargaining units and covers calendar years 2018, 2019 and 2020.

“We do not question the need for health benefits for each of our valued employees. We must do more, united with urgency, to create a long-term solution that balances compensation for employees and the transformation of our schools to achieve our bold vision of 100 percent graduation,” said Board President Mónica García. “Today’s action with our labor partners marks forward progress on the question of finances, cost monitoring, and bargaining in good faith. We once again call on Sacramento to help every child in this great state by making California the highest per-pupil funded state in the nation.”

"We are grateful to the District’s team and to our labor partners for their hard work in reaching this three-year agreement," said Interim Superintendent Vivian Ekchian. "It provides stability and is good for our students, employees and the community."

“I voted no on this deal because it hurts our kids and our teachers,” said Board Vice President Nick Melvoin. “We can do better. By side-stepping many of the recommendations for innovative reform, we could soon face massive layoffs, class-size increases, and the cutting of art, music and even science classes, as more of our healthcare liabilities crowd out the funding that rightfully belongs in our classrooms.”

“I applaud the commitment to providing stable and continuous benefits to our employees in this dynamic healthcare landscape,” said Board Member George J. McKenna III.

“I thank the L.A. Unified staff and our labor partners for their much appreciated work on this agreement,” said Board Member Scott M. Schmerelson. “This is a testament to our District's ability to honor promises to employees, while also continuing to provide a quality, public education for all children.”

“While I am deeply supportive of our employees and believe that their health and welfare benefits are critical, I voted against this agreement because of the implications it has on L.A. Unified’s long-term fiscal stability,” said Board Member Dr. Ref Rodriguez. “Given that this agreement locks us in for the next three years, I remain concerned that we have not done enough to address our long-term liabilities. Approving this agreement will force the Board to make difficult decisions in the near future instead of aggressively tackling our problems now.”

“This agreement strikes a balance between supporting our hard-working employees while helping to ensure greater fiscal stability for the school district,” said Board Member Kelly Gonez. “This is a first step to getting our finances in order, but I maintain a sense of urgency to do more. It will take acknowledging the real financial challenges we face and working together to put our institution back on track.”

“I believe the empowerment of the Health Benefits Committee is critical as we strive to provide proper benefits to our employees while making sure we do not bankrupt ourselves in the process,” said Board Member Dr. Richard Vladovic. “We cannot support our core mission of educating our students if we do not ensure we protect our ability to survive financially.”

Key points of the tentative agreement include:

 

  • The District’s contribution will remain at 2017 levels for each of the three years of the agreement.

 

  • Any amount in excess of $100 million in the health care reserves as of Dec. 31, 2020, will be returned to the District's General Fund.

 

  • If the health care reserves are below $100 million on Dec. 31, 2020, the District will replenish to the $100 million level if the unions, through the Health Benefits Committee, achieve a $200 million reduction in unfunded retiree medical care liability during the life of the agreement and do not make the health plans more expensive. Projections indicate that there should be more than a $100 million reserve level on Dec. 31, 2020.
 
  • A committee will be formed to study ways to reduce the District's unfunded retiree medical care liability, as well as reduce spending on health care as a percentage of the District's total budget. 

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 Contact: Shannon Haber (213) 241-6766