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Social contract or sweetheart deal: Cleveland Heights-University Heights school health care package draws scrutiny

The Plain Dealer  Cleveland logo The Plain Dealer Cleveland 7/6/2020 By Thomas Jewell, cleveland.com

UNIVERSITY HEIGHTS, Ohio -- Wedged between ongoing teacher contract talks and the possibility of another operating levy going back on the ballot, some residents want the Cleveland Heights-University Heights City School District to reconsider its current funding formula for employee health care.

In the previous one-year contract that expired last month, CH-UH teachers paid about 6 percent of the total cost of their health care packages -- $700 for single coverage on an $11,506 policy and $1,850 for family coverage that costs the district $31,065 annually.

An unofficial survey shows that this rate remains significantly lower than surrounding districts, although numbers from the Cleveland Metropolitan and East Cleveland City schools were not immediately available.

And while the previous CH-UH contract covers more than 500 teachers, school counselors, school psychologists, related service providers, school nurses, school social workers, and ancillaries, there are roughly 300 additional full-time district employees who receive the same package, including administrators.

This has drawn criticism from Cleveland Heights accountant Charles Drake, who pointed out that the administrative staff negotiates the contract with teachers’ union, then winds up getting the same health care benefits.

CH-UH Chief Financial Officer and Treasurer Scott Gainer, part of the administration's negotiating team, noted that the district has always been represented by legal counsel at all bargaining sessions, and over the last decade or so a federal mediator has been involved throughout as well.

Although they are not officially part of the collective bargaining team, "members of the CH-UH board of education are now personally observing every session of negotiations," a practice started last year, Gainer added.

Critics also point out that CH-UH school district employees pay no deductibles other than the recent additions of dental, vision care, prescription drug, hearing and skilled nursing that were negotiated into last year's contract.

Negotiations on a new contract remain ongoing, with several bargaining sessions tentatively scheduled throughout the rest of July.

Other districts

An unofficial rundown of some comparable school districts' health coverage in respective collective bargaining agreements include:

-- Beachwood: 15 percent plan participation pay rate by employees, with grandfathered deductibles of $1,500-$3,000 and $3,000-$6,000

-- Lakewood: 15 percent plan participation pay rate, with non-grandfathered deductibles of $6,350-$12,700 and $12,700-$25,400

-- Shaker Heights: 13 percent plan participation rate; with grandfathered deductibles of $500 and $1,000; no vision coverage

-- Solon: 14 percent plan participation rate, deductibles not found

-- South Euclid-Lyndhurst: 10 percent plan participation and no deductible

In the CH-UH schools, there are roughly 575 district employees enrolled in the family health plan and 225 with single policies.

"Over the years we have sacrificed salary to ensure that we have good medical benefits," said Ari Klein, Cleveland Heights Teachers Union immediate past president and current first vice president, describing those CH-UH salaries as being "middle of the pack."

After eight years as president, Klein switched places at the union's helm on July 1 with Karen Rego, who had been serving as first vice president.

"We do not negotiate the contracts of surrounding districts, so we cannot speak to what they have traded off over the years or what they currently have in their contracts," Klein added.

Sustainable alternatives?

Drake believes that additional contributions from CH-UH school district employees may be an idea whose time has come. In a recent Heights Observer column, Drake argued that if school employees started paying 16 percent of their health care premiums, it could save the district over $3 million a year.

Gainer and Klein questioned those figures, pointing out that the CH-UH district is self-insured, so the costs fluctuate.

"(Because) the district is self-funded, the costs are a moving target based on claims paid," Klein said.

It should also be noted that Drake's 16 percent "premium" calculations -- roughly $5,000 a year for family coverage and $1,844 for the single plan -- would come in higher than the neighboring district's surveyed above.

On a side note and at face value, a doubling of the current CH-UH district employee pay-in on health care to 12 percent -- $3,700 total for families and $1,400 for single coverage -- could preliminarily add up to over $1.2 million in annual deferred cost savings for the district.

But the prospect of additional contributions could remain an issue, based on a question to Gainer and Klein about whether the current health care funding formula is sustainable.

"As far as sustainability of our plan and contributions, we believe it is sustainable without employees being forced to subsidize the district," Klein said.

He added that the union maintains an ongoing insurance committee that looks at cost savings, plan designs, and claims.

Gainer took a look at the bigger funding picture as well.

"Regarding sustainability, I would suggest that given the way public education is currently funded in Ohio, the entire enterprise is not sustainable," Gainer said.

Cost containment continues to be a top priority for the district, Gainer said, “particularly given the recent significant state cuts to school funding and the rampant growth of EdChoice vouchers.

“We also continue our advocacy efforts with legislators for EdChoice reform and a sustainable funding model.” Gainer added.

Deciding against retirement

Cleveland Heights resident Garry Kanter believes that district officials know that benefits are "way out of line," citing a discussion at the July 1 meeting of the Lay Finance Committee, tasked with cutting overall costs.

Committee member Katherine Petrey asked if the district's "generous benefits system" was enticing enough to delay veteran employees' decision to retire.

Gainer agreed that the health care package could be a "deciding factor" for some to keep working, rather than switch over to health coverage plans offered in retirement.

Gainer also noted that older employees also have more health claims in the district's self-insured system and at the same time remain at the higher end of the pay scale, delaying new hires at lower salaries.

“The cost is the cost,” Kanter said. “If the school district got the employee health care and extra pension benefits in line with the rest of the working world, they wouldn’t need to rush to put a levy on the November 2020 ballot.”

It remained to be seen whether the CH-UH school board will decide to place another levey on the ballot at that time, after Issue 26, a 7.9-mill operating levy, lost by 600 votes in the ill-fated March 17 primary that was postponed until April 28 due to the coronavirus health emergency,

The Lay Finance Committee was also scheduled to make a presentation to the CH-UH school board this week.

Read more from the Sun Press.

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