By Alan Frey, CCA staff consultant
SOUNDING OFF
Just once it would be nice to hear a management representative say to the Association, “Ya know, it’s been a pretty good year and we would like to start out negotiations with a COLA plus 2 percent raise and if you want more we are open to suggestions.” I’ve been doing this work now for more than 30 years and I have yet to hear that phrase.
Money for bargaining
The reality is that management has never had a good year. We live in a perpetual state where the glass is not only half empty it is full empty.
All of this of course would make sense if indeed the finances of Community Colleges were precipitous. But, I assure you this is not the case. For example at the beginning of the 2006-07 fiscal year the 72 community colleges had an aggregate general fund beginning balance of almost three-quarters of a billion dollars. For the uninitiated, a beginning balance is money unspent from prior years. And yet this was not the total of their assets. The general fund is only one of a number of accounts a district maintains and the sum of all other accounts, cafeteria, bookstore capital outlay and a host of others dwarfs the money in the general fund.
Couple all of this with the undisputed fact that in 2005-06 and 2006-07 community colleges received the largest increases in funding of all time. To justify this point, one only has to look at the history of the Cost of Living Adjustments (COLA) granted to the community colleges. In the 10 years from the 1994-95 year to 2004-05, the average COLA was 2.62 percent. In 2005-06 to 2007-08 the COLA averaged 4.88 percent. Now a two percent difference may not seem to be a lot but, when you consider the colleges are a $6 billion dollar operation, we are talking real money. Additionally in the past two years, districts received numerous other increases in funding including equalization and a host of one-time increases.
All in all Community Colleges, with a few local exceptions, have more money than they have ever had. The glass is not half empty and the sky is not falling.
GASB 45
Just once it would be nice to hear a management representative tell the truth about GASB (Government Accounting Standards Board) 45. Again, for the uninitiated, GASB 45 is a set of guidelines published by the Government Accounting Standards Board dealing with the cost of retiree benefits and the accounting thereof. Many of you will remember the horrors of World.com and Enron where upper management left with platinum parachutes while stockholders and indeed employees were ravaged by the excesses of corporate greed. Well this triggered the Federal Accounting Standards Board (FASB) to require the private sector to amortize the platinum parachutes over the employment tenure of the management employees. GASB for a number of years contemplated the relevance of the FASB rules as they applied to the public sector of employment. Finally GASB 45 was issued and despite the dire predictions of management and their consultants, the guidelines for accounting for public sector retirement benefits was issued and were not as stringent as FASB. The first requirement is that public entities including Community Colleges were to conduct actuary studies of the future liability of granting retiree benefits to prior and current employees and include them in their financial reports.
Lo and behold, actuarial firms leaped into the breach and began selling their wares to uninformed districts, thereby making tons of money. These predators, many of whom were unfamiliar with public entities, issued report after report about the massive amounts of future liability. In one report done early on in the process, the actuaries told a district that by the year 2050 the cost of retiree benefits would exceed the entire district budget.
Unfortunately this firm did not factor in mortality tables and every current and future retiree was still alive in 2050 and still collecting full benefits. To add insult to the flawed report, the actuaries, apparently innocently, did not realize that every faculty member hired after 1986 was required to enroll in Medicare which would provide a substantial savings to the costs of retiree benefits. Even today actuarial reports issued in the colleges do not factor in the impact of Medicare and will only do so for an additional fee.
The second recommendation of GASB 45 has to do with funding the benefits. Many districts misled by consultants believed that they had to put aside money to cover the liability. This is not true. A district may continue to pay as you go the costs of retiree benefits and in many districts this is not considered a problem. There is no requirement to prefund retiree benefits. Yet across the state we hear management claiming they cannot afford faculty raises because they are required to put aside massive amounts of money.
Accreditation vs. bargaining
Just once it would be nice to see an accreditation report that did not stick its nose into issues for which it has no standing. Since 1976 the California Community Colleges have been engaged in collective bargaining over wages, hours and working conditions and panoply of other issues. This law gave districts and faculty bargaining agents the sole ability to deal with employment related issues, and disputes are handled in state by the Public Employment Relations Board (PERB). The law insures that districts and faculty can enter into binding contracts without outside interference.
But now under a new regime and the shadow of “No Child Left Behind,” accrediting agencies are threatening districts with new requirements for accreditation that encroach on collective bargaining agreements reached in good faith by the parties. Never has accreditation broached the areas of tenure attainment, evaluation, and with Student Learning Outcomes (SLOs), the area of workload. Districts intimidated by the accrediting agencies are now at the bargaining table raising changes to agreements that have stood the test of time, in fear of being placed on probation.
All of a sudden there is a third party at the bargaining table that has no business in being there. Third party agreements are not proper. We cannot negotiate in our contracts provisions which impact management, the trustees or students. Well its time to tell the accrediting agencies that they need to stay out of our contracts and our negotiations and get back to the business for which they were created.
Just once......
