A school district that had stealthily diverted millions of dollars from employee health and welfare funds to cover educational programs will have to repay the money by providing large salary increases to teachers.
Members of the 730-member Monterey Bay Teachers Association are elated at the news of the $15.6 million settlement of a lawsuit that requires the Monterey Peninsula Unified School District to bring their salaries up to the level of other teachers in the county. According to chapter leaders, the much-needed salary increases will help the Monterey Bay teachers reverse recent years of decline that saw both layoffs and flight by teachers to better-paid jobs in surrounding districts.
"We've stopped the bleeding and now we're going to go back and heal the wounds," says Marilynn Whitcomb, president of the Monterey Bay Teachers Association.
Financial troubles in Monterey go back to the mid-1990s when nearby Fort Ord was closed, resulting in the loss of lucrative federal funds. At the time, an assistant superintendent - who has since died - began playing a financial shell game with employee health and welfare funds to cover school programs. It took more than two years before CTA auditors were able to unravel the financial shenanigans. The Monterey Bay Teachers Association followed up the investigation with a lawsuit against the district.
"What the district had done was inflate the health and welfare fund and allocate excessive amounts to it," says Michelle Welsh, an attorney with CTA's Group Legal Services who represented the local association. "All this resulted in lower salaries to teachers over the years. Then, the district did not protect that money in the fund."
At the time the lawsuit was filed, the chapter contended that the district had violated the state's Education Code, which says that health and welfare funds can only be used for that purpose - regardless of how inflated the funds are.
An arbitrator's opinion that favored the teachers was referred to Superior Court Judge Richard Silver, who hammered out a settlement last month that has been well received by both sides. The $15.6 million settlement will guarantee future pay raises to teachers while allowing the district to avoid bankruptcy. Instead of telling the district to pay back the money in a lump sum, the judge has ordered the district to put all cost-of-living adjustment (COLA) funds it gets from the state into teacher compensation until the money is paid back. Because the teachers' health and welfare fund is solvent, the district will be able to use the surplus money to make reparations to the teachers' salary.
As a result of the settlement, teachers also won their demand to establish a trust for their health and welfare funds.
The settlement will allow the teachers to put more than $2 million on the salary schedule retroactive to last year. This new salary schedule will immediately impact veteran teachers and reach the CTA-recommended 2-to-1 ratio for experienced teachers and beginning teachers. Top salaries will go up to $68,000 while beginning salaries will reach $34,000. In ensuing years, mid-level teacher salaries will also be brought up.
Members of the Monterey Bay Teachers Association overwhelmingly approved their contract proposal by a vote of 606 to 60.
"I think the vote reflects a newfound trust in both our association and the district as we head back to the bargaining table this summer to buff out the middle of our schedule," says Whitcomb.
Whitcomb predicts that the new money will make a difference for teachers. Last year, 50 teachers were laid off while 100 others left the district for more lucrative jobs elsewhere.
"We're very excited," Whitcomb said. "We see this as a situation where both sides win."
Dale Martin
