A Message on Labor Negotiations from the Oakland Unified School District

OUSD has just completed more than two years of negotiations and a state-mandated impasse with its main
teacher’s union, the Oakland Education Association (OEA). This process began in February of 2008.
Unfortunately, after hundreds of hours in negotiating, mediation, and fact-finding, we still failed to reach
agreements on almost all major issues with OEA.

The recent release of a Fact-finding Report—a third-party document that evaluates the claims made by parties in
collective bargaining—did little to bring us together. There are some interesting ideas in the report, but the Fact-
finder’s recommendations would add over $5 million in ongoing annual expenses, which we just can’t afford.

While we dispute some of the arguments made by the Fact-finder, we do concur with his main assessment: the
District has an inability to meet OEA's demands. We also agree with the Fact-finder’s central conclusion that the
District is in desperate financial straits. As the Fact-finder’s report states: “The Chair is convinced the OUSD
needs to cut well over $35 million, plus having to pay down its loan. That the OUSD’s financial state, now and into
the short-term future, is woeful is almost beyond dispute.”

It is for this reason, and this reason only, that we are unable to provide our teachers increased compensation,
much less the 15 percent raise OEA requested in its last proposal. This is a painful admission because we know
that our teachers are underpaid for the challenging work they do. We know that teachers in OUSD make less
than their counterparts in neighboring districts, but we also know that, right now, OUSD lacks the money
to pay our teachers what they deserve.

This is an uncomfortable position and we don’t intend to let it stand. We recognize that high-quality instruction in
every classroom is essential if we are to reach our goals as a District and as a community. We will continue to
explore other ways to increase teacher salaries without jeopardizing OUSD’s financial stability. However, we
cannot commit to a raise for teachers at a time when drastic reductions in state funding have led to $40
million in cuts over the last two years and are forcing us to slash $85 million from the 2010-11 general
fund. That’s just for this year—we anticipate further cuts in 2011-12 and beyond.

The nation, the state of California, and the city of Oakland are facing severe financial distress. The economic
downturn has a profoundly negative impact on OUSD’s present finances and creates a grim fiscal outlook for
years to come. OUSD is not alone in this predicament. The State of California reduced school funding by $22
billion this year, the third consecutive year of deep cuts we’ve had to endure. School districts across California
are eliminating programs and services, implementing furlough days, reducing salaries, increasing class sizes, and
shortening the school year. Outside of education, workers in many fields are taking significant pay cuts, or
struggling to retain their jobs.

Yet, against this backdrop, OUSD offered teachers a contract that maintains salary at current levels and
covers the increased cost of health benefits—a significant expense. Yes, our teachers deserve more, but at
a time when virtually every other major district in California is engaged in massive layoffs or salary rollbacks,
keeping salary and benefits unchanged is as much as we can do without further jeopardizing our financial
stability.

We know that OUSD employees do important, often heroic work, and we wish we could offer them greater
compensation. In service of students, it is our challenge to improve conditions for our employees, including better
compensation. But we do not live in a vacuum and we must deal with the reality around us. That reality includes
massive debt at a national, state, municipal, and district level; spiraling unemployment; major layoffs; and cuts to
education funding on an unprecedented scale.

In this environment, increasing compensation, no matter the reason, jeopardizes the entire organization and our
mission to improve outcomes for students and families. It has been said that settling our labor dispute is simply a
question of priorities. Our priority is creating the conditions necessary for children to achieve. This is something
we cannot do if we make decisions that drive us toward financial collapse and the loss of local control.

It was just eight years ago that insolvency led the State to assume control of Oakland Unified. While District
finances have improved since that time, they are still precarious. The District’s return to full financial health has
been complicated by the largest cutbacks to education funding on record. Taking financial risks now threatens to
plunge the District back into bankruptcy and State Administration, at a time when there are far fewer resources to
assist in recovery than there were eight years ago.

This is not simply a question of what teachers are worth, but what we can afford. Do we believe that strong,
quality teachers in Oakland are worth more than they are currently being paid? Yes, we do. Do we believe that we
can offer teachers a raise knowing the financial crisis the District faces? No, we don’t.

OUSD employs roughly 2,400 teachers and teacher compensation accounts for 56 percent of the District’s
unrestricted budget. Raising teacher salaries by 15 percent would cost OUSD approximately $22 million. Raising
teacher salaries a mere 1 percent costs $1.6 million. The District has a $37 million structural hole that must be
filled—and not through one-time money. We have to find ongoing cost-saving solutions and new revenue
streams, not create additional long-term financial obligations for which we have no funds to pay.

Recognizing this, our second and third largest labor unions have agreed to status quo contracts that maintain
compensation at current levels while covering rising benefit costs. We remain hopeful that a similar solution can
be reached with OEA, but the current gap in both bargaining position and perception of the larger financial
realities is distressingly large. The prospect of a negotiation that drags on indefinitely with little to no progress is
not only disheartening; it’s detrimental to the future of the school district.

That’s why the Board of Education made the difficult decision to implement our last contract offer. If we had
returned to the bargaining table without imposing a contract, the terms from 2007-08 would have
remained in effect, causing OUSD to incur significant, additional expenses we cannot afford.
Implementing the contract frees money to balance the budget and avoid further layoffs and reductions in
service. These are actions we have to take now as we try and finalize our budget for the upcoming fiscal year
(beginning on July 1, 2010). We cannot afford to wait another three, six, nine months, or longer, to negotiate what
we've been trying to negotiate for the last two years.

We want to end the stalemate with our teacher’s union. We are ready to come back to the table. We are
eager to talk. We will work toward a resolution, but we need to do so under terms that will not plunge the
District deeper into debt. With a new fiscal year just around the corner, it’s critical that we move swiftly to
right our finances.

We also have to break with the patterns and behavior of the past. We can’t move backward as a school district or
as a community. We have too far to go in order to meet the needs of children. To get there, we must continually
press onward and we must bring this saga to an end. Repeating the same action over and again expecting a
different result will not bring us closer to an agreement.

One thing both OUSD and OEA can agree on is that teachers should be paid more. A broad-based coalition is
exploring ways to boost teacher pay from outside sources without threatening the District’s financial stability. We
will expand these efforts and struggle to ensure that Oakland teachers receive compensation that is in line with
that of their peers.

We have some work to do before we can have real, meaningful discussions at the bargaining table. We will do
this work because it is the right thing to do for our teachers and the right thing to do for our children, who rely on
the guidance, instruction, strength, and kindness of teachers to fulfill their potential. We invite every member of
this community to join the effort so we can emerge as a stronger, more focused city, centered on the needs of
children and not adults.
Union officials have planned a strike for Thursday, April 29, 2010. Schools will remain open in the
event of a teacher strike. It is expected that many teachers, counselors, and nurses may not
report to work on April 29.

All schools will be open during a teacher strike. All class, bus, and cafeteria schedules will operate
as usual. The District is in the process of hiring emergency personnel to minimize the interruption
in learning for our students. Classrooms will be staffed by regular teachers and approved
substitute teachers. The District also has a contingency plan to staff school nurses in the event of
a strike.

You can listen to recorded strike information by calling the OUSD Strike Hotline at (510)
835-2360. Information is available on the Strike Hotline in English, Spanish, Chinese,
Vietnamese, and Cambodian/Khmer.

Here are some frequently asked questions for our parents and families about the possibility of a
teacher strike:

What will happen if the teachers strike?

School will continue with substitutes, emergency temporary teachers, and nurses where needed.

Should I send my child to school if the teachers go on strike?

Yes, please send your children to school. Students can't learn if they aren't in school. Attendance
is important for every student, every day—including school days during a potential strike. Our
schools will be open and it is important for students to attend classes as usual.

Will the District have additional security on each campus during a strike?

The District will take measures to protect the safety of students and employees who cross the
picket lines.

How much of a disruption in the academic program can I reasonably expect during a
strike?

The District expects some disruption to the academic program and is working proactively to
minimize the disturbance. Lesson plans will be provided to substitutes.

What will happen with the afterschool programs if there is a strike?

Afterschool programs must be open every day that students are in school. Since the regular
school day continues even when there is a strike, afterschool programs must remain open on
strike days, too. Ensuring student safety during after school hours is the primary goal of
afterschool care providers.
It is state law that students who do not attend the regular school day cannot be allowed to
attend the afterschool programs.

Questions regarding afterschool programs should be directed to the Afterschool Programs Office
at (510) 568-1033.

What will happen with the Childhood Development Center (CDC) programs if there is
a strike?

The preschool program will continue as usual. It is state law that school-age students cannot be
accepted at a CDC if they do not attend regular school during the day. Questions regarding CDC
programs and afterschool programs for preschoolers should be directed to the Early Childhood
Education Office at (510) 879-8328.

Where can I find up-to-date information about the possibility of a strike and the
District's labor negotiations?

You can listen to recorded strike information by calling the OUSD Strike Hotline at (510)
835-2360. Information is available on the Strike Hotline in English, Spanish, Chinese,
Vietnamese, and Cambodian/Khmer.

Visit http://www.ousd.k12.ca.us/smithvideo to watch a message from Superintendent Tony Smith

about OUSD's decision to implement an OEA contract.

Visit http://www.ousd.k12.ca.us/tribuneeditorial to read the Oakland Tribune Editorial: Oakland

Unified School District Did the Right Thing Imposing a Contract.

For the most complete and up-to-date strike information, please visit the OUSD website at
www.ousd.k12.ca.us/strikeinfo. For additional information, please contact Troy Flint at
troy.flint@ousd.k12.ca.us, or (510) 473-5832.
Oakland Tribune editorial: Oakland Unified School District did
the right thing imposing a contract
MediaNews editorial
Posted: 04/23/2010 12:01:00 AM PDT
http://origin.insidebayarea.com/ci_14938331

IT WOULD be nice to give Oakland teachers a raise. Most of them work hard in
one of the most challenging school districts in the state. They have been laboring
without a contract for nearly two years. At an average base salary of $53,800 a
year, they are among the lowest paid K-12 instructors in the area. They deserve
more.

But the Oakland Unified School District cannot afford to pay them more. For six
years, the insolvent district operated under the leadership of a state-appointed
administrator. The school trustees were essentially advisory. It was only last year
when the residents' elected representatives were given back control of their
district.

To turn around now and start granting raises the district cannot afford would be
irresponsible. That's why the school board this week, after two years of failed
negotiations, after impasse was declared, after nine mediation sessions, after an
investigation from a fact-finding panel, decided it had to act unilaterally and
impose a contract.

Under the imposed contract, there will be no raises but the district will absorb
rising benefit costs. It's not a pretty picture. But the district can afford no more.

We understand the teachers' frustration. But they have to accept some

responsibility. They successfully fought a November 2008 parcel tax that would
have raised money for the schools because they objected to provisions that
would have directed some of the money to charter schools. They have
threatened to do the same if a similar measure is placed on the ballot this fall.
The teachers have also been unrealistic at the bargaining table, demanding a 15
percent pay hike over three years and small class sizes.

That sort of intransigence led to the state-appointed fact-finder. He noted that the
district must make payments on the $100 million it borrowed from the state
starting in 2003 to climb out of insolvency. That, in addition, it needs to cut well
over $35 million from a general fund budget of about $250 million in the
upcoming fiscal year to balance its books.

"That the OUSD's financial state, now and into the short-term future, is woeful is
almost beyond dispute," wrote fact-finder Christopher Burdick.

What we find incongruent is his recommendation that the district commit to a 2

percent salary increase in 2012 — and a much larger boost for the district's
longest-serving teachers — without any knowledge of what district finances will
look like at that time.

While that's a far cry from the absurd teacher demand of 15 percent, it would still
commit money the district might not have.

Fortunately, district trustees seem to recognize that. They're imposing a contract

that's realistic considering the district's current financial quagmire.
 California School District Budget Cut Summary

Anaheim City
! Increasing kindergarten class sites from 20 to 28 students
! Eliminating 209 jobs, including:

150 classified personnel

9 teachers
11 vice principals
11 psychologists

Capistrano (Orange County)

! $34 million budget deficit

! District offered contract that includes a 10-percent pay cut
! Teachers do not oppose the pay cut, but want it to expire in 2011
! Strike is ongoing

Fresno
! $35 million shortfall
! Expects to eliminate 200 teaching positions

Long Beach
! $90 million in cuts over two years
! Eliminating summer school for middle school students in 2010
! Increase class sizes from 33 to 35 students for fourth and fifth grades
! Potential layoffs of classified staff, teachers and management

Los Angeles Unified School District

! $640 million budget deficit
! 5 furlough days for 2009-10 school year
! 7 furlough days for the 2010-11 school year
! Two-year budget plan cuts include:

5,000 jobs total

1,400 teachers
1,000 custodians and maintenance workers
250 school office workers

Sacramento City
! $30 million in budget cuts
! Raising kindergarten through third grade class sizes
! Laying off 340 teachers
! Laying off 60 counselors, social workers and psychologists
! Laying off 38 school administrators and 5 clerical workers
San Diego
! $93 million deficit
! Considering $98 flat parcel tax

San Francisco
! $113 million budget shortfall over two years
! Eliminate 400 positions
! Eliminate 100 teachers
! Increase kindergarten through third grade class size from 22 to 25
! Tapping $6 million form the city’s rainy day fund
! Two unpaid furlough days a year for every district employee
! A freeze on teacher and other employee pay increases tied to experience
! $7 million in cuts to staff development days
! $6.4 million in cuts to unrestricted general fund expenditures
! $4.3 million in cuts to school programs for underserved students
! $4 million in cuts STAR/Dream School funding for struggling schools
! $2.6 million in cuts to central office spending related to categorical programs
! $1.4 million in cuts to arts and music block grant
! $1.2 million in cuts to P.E. teacher incentive program
! $1 million in safety and violence-prevention cuts

Stockton
! Faces $28.5 million in budget cuts
! Proposal to lay off 192 teachers
! Proposal to increase kindergarten through third grade class sizes from 20 students to 30
students

For articles covering California district budget cuts and cuts to education across the nation,
please visit http://www.ousd.k12.ca.us/CAdistrictcuts.
!
 Collective Bargaining and Contract Implementation Summary

Background

OUSD just completed more than two years of negotiations and a state-mandated impasse with its main teacher’s
union, the Oakland Education Association (OEA). This process began in February of 2008. Unfortunately, after
hundreds of hours in negotiating and mediation and fact-finding, we still failed to reach agreements on almost all
major issues with OEA.

The recent release of a Fact-finder Report—a third-party document that evaluates the claims made by parties in
collective bargaining—did little to bring us together. There are some interesting ideas in the report, but the Fact-
finder’s recommendations would add over $5 million in ongoing annual expenses, which we just can’t afford.
While we dispute some of the arguments made by the Fact-finder, we do concur with his main assessment: the
District has an inability to meet OEA's demands. We also agree with the Fact-finder’s central conclusion that the
District is in desperate financial straits.

We know that teachers in OUSD make less than their counterparts. But we also know that OUSD lacks the money
at this time to pay our teachers what they deserve.

Highlights

! We recognize that high-quality instruction in every classroom is crucial to reaching our goals as a District.
So we’ll continue to explore other ways to increase teacher salaries without jeopardizing OUSD’s financial
stability.

! We cannot commit to a raise for teachers at a time when reductions in state funding have led to $40
million in cuts over the last two years and are forcing us to slash $85 million from the 2010-11 budget.

! More cuts are likely in the future given state budget projections. The nation, the state of California, and
the city of Oakland are facing severe financial distress.

! Outside of education, workers in many fields are taking significant pay cuts or struggling to retain their
jobs.

! California reduced school funding by $22 billion this year, and districts across the state are eliminating
services, implementing furlough days, reducing salaries, increasing class sizes and shortening the school
year (LAUSD, SFUSD, etc.).

! Despite this, OUSD offered teachers a contract that maintains salary at current levels and covers the
increased cost of health benefits—a significant expense.

! When virtually every other major district in California is engaged in massive layoffs or salary rollbacks,
keeping salary and benefits unchanged is all we can do without further jeopardizing our financial stability.

! It was just eight years ago that insolvency led the State to assume control of Oakland Unified. While
District finances have improved dramatically since that time, they are still precarious. Taking financial
risks now threatens to plunge the District back into bankruptcy and State Administration.
! Do we believe that quality teachers in Oakland are worth more than they are currently being paid? Yes,
we do. Do we believe that we can offer teachers a raise knowing the financial crisis the District faces?
No, we don’t.

! We have to find ongoing cost-saving solutions and new revenue streams, not create additional long-term
financial obligations for which we have no funds.

! Recognizing this, our second and third largest labor unions have agreed to status quo contracts that
maintain compensation at current levels while covering rising benefit costs.

! We remain hopeful that a similar solution can be reached with OEA, but the gap between the two sides is
large and has barely closed in two years. A negotiation that drags on indefinitely with little to no progress
is extremely detrimental.

! If the District had returned to the bargaining table without imposing a contract, the terms from 2007-08
would have remained in effect, causing OUSD to incur significant, additional expenses we cannot afford.
Implementing the contract frees money to balance the budget and avoid further layoffs and reductions in
service. These are actions we have to take now as we try and finalize our budget for the upcoming fiscal
year (beginning on July 1, 2010).

! We want to end the stalemate with our teacher’s union. We are ready to come back to the table. We are
eager to talk. We will work toward a resolution, but we need to do so under terms that will not plunge
the District deeper into debt. With a new fiscal year just around the corner, it’s critical that we move
swiftly to right our finances.

! One thing both OUSD and OEA can agree on is that teachers should be paid more. A broad-based
coalition is exploring ways to boost teacher pay from outside sources without threatening the District’s
financial stability.

! We will expand these efforts and work to ensure that Oakland teachers receive compensation that is in
line with that of their peers. We invite the entire community to join us in this effort.