Update, June 17; Editor’s Note: The Tahoe Truckee Education Association has accepted a salary offer from the Tahoe Truckee Unified School District. Moonshine Ink was notified of the agreement in a June 16 email from TTEA president Jess DeLallo.

“We have reached a settlement with TTUSD,” DeLallo wrote. “It is not what we’ve hoped for, but we felt it was important to accept a settlement now for the sake of our teachers, their families, and our school community, who have been through one of the most challenging years of their lives because of this pandemic.”

A teachers’ strike remained a looming possibility as late as last week, as educators and officials sustained the impasse in their negotiations discussed in this article. That has now been averted.

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“This buys some time for our educators to regroup for the work ahead next year, while ensuring that teachers do not have to take a second job this summer to make ends meet,” she said. 

Educators with TTEA overwhelmingly ratified the agreement, which was set to go before the school board for ratification at last night’s meeting. The agreement gives TTEA members a 2% ongoing salary increase on schedule retroactive to July 1, 2020, as well as a one-time, $2,500, off-salary schedule payment.

DeLallo noted that the impasse — the first between the union and TTUSD in decades — made TTEA’s relationship with the district even more of a challenge in a year that was already stressed due to the pandemic.

“This is a two-year bargaining battle for our teachers. Our students deserve the best teachers, and the deserve a stable school community where teachers come and can afford to stay,” she wrote. “It remains a fact that our district is benefiting from a pandemic surge in property values. The year ahead for us represents an opportunity to achieve a substantial settlement and reinvest in our teachers, students and schools. Our work continues.”

The Tahoe Truckee Unified School District and its union are out of sync for the first time in a long time, and the friction could lead to a strike.

The two parties’ lack of cohesion centers on salary negotiations for the current 2020/21 school year and what Tahoe Truckee Education Association members see as an ever-widening gap between their income and the Truckee/North Tahoe cost of living.

With the TTUSD being basic aid, which means its budget is based on property taxes and thus receives more per pupil than most in the state, the TTEA says the district can afford the salary increases it is demanding.

“As the property values have really surged, the revenue for the district has surged,” said Jess DeLallo, president of the TTEA. “But a lot of teachers have been driven out of town because they haven’t been able to afford rental housing, or they haven’t been able to find a place to live.”

School district staff, however, say it’s not that simple. The basic aid status allows the TTUSD to take advantage of the housing boom, but also puts it at the mercy of the market’s ebb and flow. And right now, there is uncertainty in that market.

“Can you imagine us overspending in the longer term and then having to lay people off because of that?” posed Kim Szczurek, president of TTUSD’s board of education, which defines negotiating parameters for the school district. “It’s such a passionate, heartfelt thing for our union, for the TTEA, but my passion is the kids’ education and keeping that going over the long-term.”

The inability to find common ground has pulled in the state. In mid-May, a mediator with California’s Public Employment Relations Board held two virtual meetings with the parties, trying to seek an agreement. The move was unsuccessful.

Jon Halvorsen is a staff member with the California Teachers Association who represents the TTEA. While he has no vote, Halvorsen is sitting at the table with the TTEA’s negotiating team. He’s overseen 82 different school districts and charter schools across 10 counties over his seven years with the CTA, and said that reaching an impasse out of negotiations, even before state mediation, is uncommon. He’s only seen it a handful of times.

“When you do get to impasse, it’s a sign of a serious breakdown and inability to reach an agreement that doesn’t normally take place,” Halvorsen told Moonshine.

“We’re asking for a fair and reasonable cost of living adjustment, and we think that the district can easily absorb it. We think it’s a matter of fairness, and we really don’t want our teachers leaving the area.”

~ Jess Delallo

Yet the breakdown in Tahoe/Truckee continues. Now, the parties are participating in what’s called a factfinding process, where a state-selected, third-party individual can investigate and make inquiries on each side’s proposal. The process, which has on average taken four to six months, will likely still be underway come the start of the 2021/22 school year. The decision ultimately made by the factfinder is not binding; if disagreements continue after the factfinding report is released, the union becomes certified legally to go on strike.

“That is the legal process under which we are operating,” said David Steakley, lead negotiator for the TTEA and a science teacher at North Tahoe High School. “… Our hope is to reach an agreement in a way that values the essential work that our teachers are doing and makes it so we can continue to live here given the increasing cost of living, all that stuff; not to try and get to a strike. That’s not what we’re aiming for.”

A bird in the hand

On the surface, the district and the union (which represents about 280 educators) aren’t far apart in their current proposals. TTUSD calls for a 2% ongoing salary increase, retroactive to July 1, 2020, as well as a one-time payment of $2,500. This proposal is also being pursued with the district’s non-union management staff and the California School Employees Association, which represents TTUSD’s classified employees.

After initially asking for a 5% increase, then a 3% increase, and being denied both times, the TTEA said it’ll accept the 2% amount as long as there’s a conditional, and retroactive, rise come the new school year if there’s a surge in property tax .

“Say, for example, the district was planning for a 5% [increase in] property tax,” said DeLallo, who is a member of the TTEA negotiating team. “If they receive 6%, we would receive a 1% raise and that would get us to 3%. If they’re planning on 5% and they only get 3%, we wouldn’t get anything additional. We’d get the 2% they said they could afford, and it would be done.”

Property tax income is expected to be released in July by local county auditor offices. Because the school district covers such a large swath of land (723 square miles), Nevada, Placer, and El Dorado county property taxes are each considered. The average percentage tax increase for the past 5 years is roughly 5.9% (see table below). At this time, despite the sizzling real estate market, the district projects a 3.25% property tax increase, based on the most current information from the state.

Regardless, Szczurek doesn’t want to count any eggs before they’ve hatched, pointing out the danger in relying on numbers that haven’t yet been released. The board in general, she said, does not spend or approve money that is not yet in hand.

“We are betting on the outcome of next year’s revenue to pay last year’s pay,” she said. “That’s a silly business model. What we want to do is, we would love to get this settled right now, and then right at the beginning of the [2021/22] school year start talking about what can we do in the current year with the current money.”

She continued: “What [the TTEA is] saying is, say you get 5%, pay us retroactively back to 20/21. The challenge is then, what do we do for that year? What do we do for 21/22? Because now we’ve used up all our … money, so what do we do?”

DeLallo said the union, too, would like to settle the negotiations and begin planning for the new school year. She said the TTEA already plans to begin 2021/22 conversations in September like it does each year. However, accepting the district’s proposal as it stands is not amenable because the union believes TTUSD can afford to give more than the 2%.

“We don’t want to have to wait until next year to get it,” DeLallo shared. “We already settled contract negotiations last year taking no increase to our salary schedule in the interest of making sure TTUSD could have the money it needed to get through the Covid-19 crisis — especially when there was so much uncertainty at the end of the 2019/20 school year. We can’t continue to take less than the increase in inflation and [fall] further and further behind. We can’t keep waiting for next year to get a fair cost of living adjustment.”

Paula Bossler, a Kings Beach elementary school teacher, says her personal budget can’t be squeezed any further. While she said she’s not seeking sympathy, Bossler shared the situation she’s faced over the past three years: a Roma-tomato-sized tumor was discovered in the center of her husband’s brain; she had a second pregnancy while parenting a 4-year-old; her husband left his job; and the cost of living in Kings Beach continues to climb.

“A [cost of living adjustment] means to me stability in that I will not forego my own medical appointments and treatments,” Bossler said, adding that she’ll also be able to afford occupational therapy for her son and start a college fund for her daughter. “… I’ll be able to put myself first again, having a cushion financially.”

Bossler, who is part of the TTEA’s negotiating team, isn’t alone in her want of stability. She said that at Kings Beach Elementary, where she works, there are three or four staff members who are renters and face the possibility of being asked to leave their homes. She also knows of teachers who are living in their cars, couch surfing in Reno, and paying double the rent they used to.

“I would say every teacher is struggling right now in a different capacity,” Bossler said. “… Our teachers are in this position where they make too much to qualify for low income and they make too little [to afford] housing.”

Probable uncertainties

The school year in question is almost over, but the district and union established this process of bargaining in arrears years ago so the administration can know exactly how much money the district has on hand to negotiate with.

To complicate matters further, regardless of which way or how far the needle moves in terms of property taxes, the money won’t be seen for a while. Todd Rivera, executive director of business services at the TTUSD and a member of its negotiating team, said the district is constantly working across three budget years at any given time because money coming in is from 18 months prior.

“The property taxes that we received this year in 2020/21 are based on the [tax] roles that capture Jan. 2, 2019 to Jan. 1, 2020,” Rivera said. “The property taxes that we’ll receive next year will be based on assessed valuations from Jan. 2, 2020 to Jan. 1, 2021.”

Because the district encompasses multiple counties, it is in a unique situation when it comes to the calculations. When Rivera receives the finalized assessed values, normally by the end of July, he’ll do his own math: “I’ll get the assessed valuation and I’ll compare it to the prior year’s assessed valuation. Based on what we received in actual property taxes, I do a comparative (the assessed valuation equaled this much in property taxes) and calculate a ratio, and then I apply that to the new assessed value.”

The district’s previous year-over-year percent changes, as well as the 21/22 projection, in property taxes are as follows:

“The 5.06[%] increase is the year-over-year estimated increase from 2019 to the current fiscal year,” Rivera explained. “The 3.25[%] that I’m projecting is the increase for next year’s budget. I’m taking basically everything that we have right now as far as a property tax estimate — which, for us, equated to a 5% increase over last year — I’m taking the total dollar amount that we have in the budget this year for property taxes and increasing that by 3.25%. For us, the increase in property taxes in value is over $1.7 million in next year’s budget.”

The perks of being “basic”

As a basic aid district, TTUSD receives its general-purpose funds through a formula based on property tax changes. Districts not in that category receive funding according to a Local Control Funding Formula (or LCFF), which is calculated combining property taxes and state aid. The TTUSD has been a basic aid district for over 16 years.

Szczurek, who guessed about 10%, or 100, of California districts are basic aid, described the breakdown: “If you reach a level where you would get more from your property tax that’s allocated by the county than you would get under the state’s formula, at a per pupil amount, then yes, you’re a basic aid district. Generally, yes, we would be receiving more than a LCFF district per pupil based on our property tax revenues.”

Basic aid districts tend to have larger budgets than their counterparts because their property tax revenues are from homes that are of higher value. Such a classification for the rural TTUSD allows property tax funding to be spread across fewer students, yielding higher wages to staff, more programs and positions, and smaller class sizes. Halvorsen said TTUSD receives substantially more funding per student than any of the 17 districts he currently works with across the Sierra Nevada region. None of the other 16 are basic aid districts.

“Yes, we do have a higher per pupil revenue like basic aid districts,” Szczurek said. “We also have a higher per pupil expenditure, which I’m proud of. That’s our job.”

Because there is the possibility of tax revenue fluctuation, the district keeps a higher reserve than LCFF districts handy in case of potential downturns. Downsides of being a basic aid district include a lack of state funding and no additional money if enrollment grows — essentially, no safety net.

Kelli Twomey, who oversees district communications, pointed out that while an annual increase in property tax could translate to record revenues to TTUSD, it doesn’t mean the district is flush with money in those years: The district also would have record expenditures.

“What is often not communicated is that a portion of any new property tax revenue is already absorbed by annual cost increases such as increases in the STRS and PERS [both retirement funds] contribution for employees, step and column increases, payroll tax increases, additional staffing needs for instructional programs, and operational needs,” Twomey wrote in an email.

Rivera shared that at the closing of fiscal year 2019/20, “the [TTUSD’s] reserve for economic uncertainty was $8,130,243, which equates to 11.33% of total general fund expenditures. Our board policy requires the district to maintain a reserve at a minimum of 10% and up to 16%.”

The TTUSD’s current annual budget is $74 million. The district does not allot a specific amount or percentage of property tax funding annually to its reserve. When a budget is decided upon, any unrestricted, excess money will fall into the reserve, preliminary until negotiations between unions and administration are finalized.

What’s driving the property tax estimation down for the district is a state metric that is coming in uncharacteristically low for 2021. In California, yearly increases in the assessed values of properties are capped at either 2% or the Consumer Price Index percentage growth, whichever number is smaller. County assessors across the state have been asked to use CPI 1.036% for their 2021 assessments. 2020’s state CPI was 2.98% (capped at 2%).

Though the CPI is not a cost-of-living index, it is often used to provide cost-of-living wage adjustments — in this case, for TTUSD employees.

“What the state is telling us through the CPI is that it was 1% for the last year, that actual increase of cost of living, which is lower than we usually see,” Szczurek said.

The CPI is one of three different factors feeding the property tax percentage that comes out in July; housing turnover and new development also play roles, potentially significant ones for our region’s hot real estate market, both in residential sales and up-and-coming developments.

Szczurek said that at this point in time the only number TTUSD knows for sure is the 1.036%.

“I think we’re being hopefully realistically optimistic thinking that on top of that 1%, [construction and property sales] will give us another 2%,” she said. “We won’t know until July.”

Szczurek, by the way, separates cost of living from Truckee/North Tahoe’s housing crisis. She said she believes the district to have kept up with cost of living, but not the change in housing prices brought about by the pandemic.

“We are concerned about [housing], we are working on it, we do know that that is a challenge,” she said. “But we can’t pay our way out of that today, realistically. We have to work on it in a different way. We have to figure out how to make a supply that’s affordable available. That’s really the tactic. Does it help today for the person who’s in the uncertain housing situation? No. But is it something that we realize is a big priority? Absolutely.”

There’s another lingering asterisk.

“We all have this perception [of the housing market surge],” Szczurek elaborated. “What we don’t know is how the houses that are sold, what their base value was, because we’re only getting benefit from the difference between the base value and the new sell price.”

Money from sales will come, yes, but spreading out the amount over the area — will it actually impact the overall property tax increase? Szczurek questioned. “The preponderance of properties did not sell,” she said. “If 95% of the properties did not sell, how does that 5% that’s sold … affect that [property tax] percentage? We know this year we are getting 1%, so maybe next year we’ll know we get 2%, back to normal. How much is selling, turning over 5% of the total real estate in town, going to affect that … That’s the unknown.”

Keeping up with the neighborhood

Through a variety of sources and independent confirmation, Moonshine compiled a list of neighboring school districts and charters and their standing agreements with their respective teacher unions.

• Alpine County Unified School District: A 3% salary increase settlement for 2020/21 (though this was decided upon a couple years ago, prior to Covid-19), and a 4.5% settlement for 2021/22. This latter settlement has not yet been ratified by the district board, which should discuss the settlement at its June 24 meeting.
• Colfax Elementary School District: 3% salary increase for 2020/21, retroactive to the start of the year, plus an additional $2,000 one-time payment
• Dry Creek Joint Elementary School District: 2.75% retroactive for 2020/21 and a $2,000 one-time payment
• Eureka Union School District: $2,000 one-time payment
• Loomis Union School District: $1,000 one-time payment and a 3% ongoing salary increase for 2021/22
• Newcastle Elementary School District: 2.5% salary increase
• Placer County Office of Education: 3% salary increase retroactive for 2020/21
• Placer Hills Union Elementary School: 3% salary increase retroactive for 2020/21 and a $2,000 one-time payment
• Placer Union High School District: $1,500 one-time payment this year, plus a 6% salary schedule for 2021/22, and a 2% increase for 2022/23. The district board will consider and possibly ratify the offer at its June 15 meeting.
• Roseville City School District: Zero increase or one-time payment
• Roseville Joint Union High School District: 1% increase and a $2,000 one-time payment
• Western Placer Unified School District: A two-year agreement for the 2020/21 and 21/22 school years for an equivalent cost of 3% (roughly 2% in 20/21, 1% in 21/22), plus a $2,500 added to each salary schedule for the current year. Additional compensation is expected for next year.

These districts are all LCFF districts and the large majority show a higher salary increase percentage than that proposed by TTUSD.

Rivera addressed the differences in these other negotiation outcomes, bringing up the variability of circumstances and financial conditions: “There are times where districts make an agreement, but under the knowledge that they’re going to have to make some significant reductions in the future. Or there are some decisions where they do spend down the reserve to accommodate. I would say it’s not an apples-to-apples comparison; you need to look at everything on the table. Not just salaries but everything from what our benefit contributions are to class sizes, etc.”

Still, Halvorsen stood firm in the union’s decision to ask for more money.

“That’s why the [TTEA] members are hands down, like, how can we, as this wealthy, basic-aid district that’s only getting wealthier off this surge in real estate because of the pandemic, not be able to afford a cost of living for our employees when other districts are doing it that are flat funded?” he said. “That’s why they’re not agreeing to settle, and requested to go to impasse.”

Halvorsen shared through his CTA network what basic aid districts in Sonoma County have come to in terms of union/district agreements:

• Healdsburg Unified School District: One-year deal of 7.5%, plus potential for more if some contingencies are met.
• Kenwood Elementary School District: Two one-year deals of 4%, plus a 2% bonus (for 2020/21); 7% for 2019/20
• West Side Union School District: Three-year deal with a 3.5% wage increase for 2020/21; 5% for 2021/22; and 4.5% for 2022/23, plus significant healthcare increases
• Geyersville Unified School District: One-year deal with a 5% wage increase

“We are betting on the outcome of next year’s revenue to pay last year’s pay. That’s a silly business model. What we want to do is, we would love to get this settled right now and then right at the beginning of the [2021/22] school year start talking about what can we do in the current year with the current money.”

~ Kim Szczurek

Grand finale

Though the decision made through the factfinding process isn’t expected until this fall, there’s already anticipation.

“We feel that the factfinding report is going to be telling, and that it is going to support our fair and fiscally responsible offer that values our teachers,” said Steakley, TTEA’s lead negotiator. “We think that property tax projection that the district currently has of 3.25% is dramatically lower than what’s going to come in.”

It is possible for a solution to be found outside of factfinding, and the July revelation of property taxes will likely add clarity in the form of tangible numbers. It could also, though, add fuel to the fire.

Once the factfinder publicizes a decision, TTUSD is on deck to make its last, best, and final offer. TTEA doesn’t get the same opportunity because it’s not the one that ultimately makes the decision, but the union does get to say yes or no.

“If we accept it, it’s done,” Steakley explained. “If we reject it, then … we can take a strike authorization vote and after a strike authorization vote, the state will deem us legal to strike. You have authorized all the things in order to now become legal to strike. If we were to strike, it wouldn’t be an illegal labor act.”

But nobody the Ink spoke with wants things to get that far. The process currently underway is set up in collective bargaining states like California to fully flesh out disagreements before anyone starts refusing to work.

Halvorsen was involved in the 2016 Yuba City teachers strike, and said it was the first strike in the CTA’s region two (encompassing the Central Valley up to the Oregon border) in 26 years.

“Strikes, you hear a lot about them, but they rarely ever happen,” he said. “… A lot of times it’s just about a strike vote they’re taking. It’s not all about organizing; it’s about saying enough is enough, and districts usually respond by settling a fair contract agreement before a strike actually takes place. Administration can no longer let ideology get in the way of educating the students.

“It’s not that [a strike] wouldn’t happen, but [a vote] makes districts go oh, they’re for real, they just took a vote and 98% of their members said ‘yeah, I’ll strike.’ But strikes actually happen very rarely in collective bargaining states.”

TTEA itself hasn’t discussed taking a strike vote. DeLallo and Steakley both said they are committed to seeking an agreement with the TTUSD.

“We definitely want to get this taken care of as soon as possible,” DeLallo said. “Our teachers have been working really hard and the last thing they want to do is start a new year without a firm contract … TTEA has had historically a very good relationship with TTUSD. I hope that we can get back to that.”