Teachers union rejects CPS contract offer

CHICAGO (STMW) - The Chicago Teachers Union’s “Big Bargaining Team” voted unanimously on Monday to reject a four-year contract offer, the union announced Monday afternoon.

CTU President Karen Lewis said at a news conference Monday, “This speaks to the lack of trust,” between the union and Chicago Public Schools, the Chicago Sun-Times is reporting.

With the rejection, Lewis said she could not rule out a teachers’ strike – but, she added, it could not occur before May 23. The last day of classes is June 21.

Lewis says proposed cuts will “not solve” the district’s problems, and that the union is looking for “sustainable funding.”

Union representative Monique Redeaux-Smith said the union rejected the offer in part because they were “not convinced” the CPS board would approve “vague and unclear” proposals. The CTU bargaining team also was concerned about what they called “undue pressure” being put on veteran teachers to retire.

As the team of 40 negotiators — made up of teachers, social workers and other school staffers — discussed the proposal, it also became clear there was a lack of trust in Mayor Rahm Emanuel to follow through on commitments on charter schools, as well as promises about school funding, a source told the Sun-Times.

In the rejected offer, teachers would have received raises of 2.75 percent next school year and then 3 percent for each of the next two years, the Sun-Times has learned. They’ll also continue to receive “step and lane” raises for experience and added education through June 2019.

But CPS wants teachers to pay their entire 9 percent pension contribution, including the 7 percent the district agreed decades ago to fund, so veteran teachers will start paying 3.5 percent more toward their pension starting in July and then the whole 7 percent as of July 2017. CPS is also asking the CTU’s 27,000 members to pay part of their health insurance premium, beginning with 0.8 percent next year and another 0.7 percent the next year.

The school district is also looking for at least 1,500 teachers to retire, offering a $1,500 bonus per year of service, according to a written summary of the offer. If fewer teachers retire, the contract gets reopened on July 1 for 30 days of negotiations and mediations before proceeding to fact-finding.

In the offer rejected Monday, CPS said it could open new charter schools only after closing existing ones.

With the team voting against that latest proposal, that contract agreement will not go before the House of Delegates, as the union’s governing body is known.

The rejection means that CPS and the CTU will enter a final legal stage of negotiations that starts a 105-day clock ticking toward a strike.

Despite her comments, Lewis said she still was surprised members didn’t like the deal.

The CTU’s decision to reject the tentative agreement is likely to have a chilling effect on Emanuel’s attempts to salvage an $875 million borrowing abruptly put off last week.

Richard Ciccarone, president and CEO of Merritt Research Services, said investors scared off by Gov. Bruce Rauner’s plan for a state takeover of CPS that could pave the way for bankruptcy were looking for a sign of stability that new teachers contract would have provided.

Instead, contract talks are back to Square One.

“If it was hard before, it will be even harder now without providing some additional enhancement,” Ciccarone said.

“The bond market was looking for political consensus and some level of concession from the unions to show that CPS was making headway in their ability to provide sound finances.”

CPS was planning to use the borrowed money to: stave off classroom cuts for the rest of the school year; reimburse its general operating fund for $393 million in already completed capital projects, refinance more than $340 million in debt and use $90 million to terminate complex interest rate swap arrangements.
CPS had to terminate the swap deals because its bond rating fell below the threshold that the district had to maintain under those contracts.

If the $875 million borrowing cannot be salvaged at an interest rate the cash-strapped school district can afford to pay, CPS faces a series of difficult choices.

The school system could make classroom cuts it was trying desperately to avoid to meet its Feb. 15 debt service payments. It could raise property taxes for the express purpose of meeting those debt service payments. Or it could default on the bonds, which Ciccarone called a “last resort.”

“They’re already having trouble accessing the market. Defaulting on the bonds pretty much closes the door. They’re not far away from that now. That makes it an absolute. That’s not what you want to do. It would increase the likelihood of a third-party bail-out,” Ciccarone said.

He added, “We need to stop the bleeding. We need to stabilize the financial condition of the Chicago Public Schools. We’re faced with some pretty adverse results here: Either shut down the schools, r don’t make debt service if you can’t find the lenders or enact a property tax increase for the purpose of keeping the schools open.”

With the rejection, the talks now enter a fact-finding phase that will be conducted by a professional arbitrator who has already settled high-profile disputes between the city and the police union, and between the state and prison employees.

The parties have jointly chosen Steven M. Bierig as a fact-finder. He’s been tasked with listening to both sides and, after two months’ consideration, issuing a ruling that could, in theory, become the new teacher contract.

He will not hear from the two sides Monday, but has been retained in case his services are needed.

If either side rejects his findings, the state-required process ends, allowing teachers to walk off the job about a month later — or mid-May. In 2012, CPS immediately shot down the proposal by fact-finder Edwin Benn, and a contract wasn’t reached until after teachers had walked picket lines for seven school days.

In 2013, Bierig, a former management labor lawyer, agreed with Chicago Police that the city owed $1 million in disputed overtime to the 3,100 police officers who worked at the 2012 NATO summit. In 2012, he also ruled in favor of Lake County Sheriff’s officers who balked at intensifying their existing fitness and drug testing, and for Illinois prison workers who complained facilities were closed by former Gov. Pat Quinn without negotiations.

A graduate of Chicago Kent College of Law, Bierig was admitted to the Illinois bar in 1984. He practices in north suburban Highland Park and charges $1,350 per day, according to the Illinois Labor Relations Board.

He did not respond to requests for an interview.

The parties had reached enough of an agreement Thursday on what union president Karen Lewis called a “serious offer” to seek approval from the next layer of management Monday.

CTU’s House of Delegates meets Wednesday; union vice president Jesse Sharkey had said it was unlikely that they would be asked to vote on that day, had the deal been endorsed on Monday, but that becomes a moot point now.

The parties have been trying for well over a year to work out a new contract to replace the one that expired last June, a process that reset after CEO Forrest Claypool was installed in late July.

The CTU has published a timeline on its web site identifying May 16 as the first possible strike day but hinting that it might wait for the start of the new school year to take any action.

State law requires several steps from the teachers before they can walk out. At least 75 percent of membership must agree to strike — a vote taken in December far surpassed that threshold.

They must seek help from a mediator for a “reasonable period,” help that’s been at the bargaining table since August. If mediation fails, they must go through 105 days of fact-finding: 60 days to hear and review the facts, 15 days to consider the findings, then a 30-day cooling-off period.

How long that “reasonable period” lasts can be disputed. Initially the CTU wanted to start fact-funding in late November, but ultimately both sides agreed it would start Feb. 1.

The CTU’s decision to reject the contract also is a major blow to Mayor Rahm Emanuel’s efforts to chart a new and more cooperative course with the teachers union four years after the 2012 teachers strike that was Chicago’s first in 25 years.

It happened while Emanuel, the city’s Chief Financial Officer Carole Brown and Deputy Mayor Steve Koch were in New York for previously-scheduled meetings with all four Wall Street rating agencies.

The meeting was scheduled months ago to update rating agencies on city finances and on Emanuel’s efforts to “phase-out of the unsustainable financial practices of the past,” the mayor’s office said.

City Hall denied that the New York trip had anything at all to do with the mayor’s ongoing efforts to salvage the CPS borrowing. The mayor’s office had no immediate comment on Monday’s vote.

Schools CEO Forrest Claypool did not return repeated phone calls.

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