Month: November 2011

The Role of the Joint Committee under Senate Bill 7

Every District’s Joint Committee must hold its first meeting to discuss RIF issues by December 1, 2011

By Robert B. McCoy

The Education Reform Act (commonly known as Senate Bill 7) created new rules for the reduction in force (RIF) and recall of honorably discharged teachers.  In a nutshell, the old seniority system is abolished, and the new rules require teachers to be placed in one of four groups, with group one to be the first to be dismissed, and group four the last to be dismissed (and the first to be recalled).  Group one consists of non-tenured teachers who have not yet been evaluated; a teacher’s placement within group two, three or four depends on his or her performance evaluations, with the highest evaluated teachers being placed in group four.

These new rules for dismissals and recalls are effective immediately and apply where the notice of dismissal is given during the current (2011-2012) or future school years. However, many, if not most, school districts will continue to operate under RIF procedures mandated by their collective bargaining agreements. Collective bargaining agreements that were entered into by January 1, 2011, and which have not yet expired, will continue to govern RIF issues until June 30, 2013.  After June 30, 2013, the Education Reform Act takes precedence over conflicting contract provisions.  The Act does not state whether unwritten contract provisions, such as past practices or informal agreements regarding teacher seniority, have any role in RIF decisions through June 30, 2013; arguably, they do not.

Regardless of whether a collective bargaining agreement currently addresses RIF issues, the Act mandates that a joint committee be formed and hold its first meeting no later than December 1, 2011. The joint committee (hereinafter, “JC”) is to consist of an equal number of school board and teacher representatives, selected by the school board and the teachers (or the teachers’ union), with each member to have one vote.   The Act does not require any specific number of JC members (only equal representation at the table), nor does it state whether the members are to receive any compensation or reduction in duties for their service.  The school district may be required to bargain these issues, but if impasse occurs, the school district should implement its plan for establishing and running the joint committee.

The Act lists five duties of the joint committee

  1. The JC must consider whether to modify the Act’s default rules regarding the placement of certain teachers in either group two or three.
  2. The JC must consider whether to adopt alternative rules regarding the placement of teachers in group four (the highest performing group) based on factors outside of evaluations that relate to the school district’s or program’s educational objectives.
  3. The JC may consider whether performance evaluations prepared by another school district are to be used in the sorting of teachers into the four ranked groups.
  4. If a school district’s current evaluation plan is inconsistent with the Performance Evaluation Reform Act’s rating system, the school district must consult with the JC on how to assign compatible ratings for purposes of determining the order of teacher dismissal.
  5. The JC has limited authority to investigate whether experienced teachers are receiving disproportionately lower performance evaluations than they received in the past. After a school district prepares an annual sequence of honorable dismissal list, a JC member can demand that the school district provide information regarding the prior and most recent evaluation of its teachers, with each teacher identified only by the length of his or her service. If the review of this list reveals a troubling trend, the JC can submit a report to both the school board and the union.

Except for its five duties under the Act, the JC has no authority to modify the sequence of teacher dismissal.  Where the JC has authority to act, it must reach an agreement, by majority vote, no later than February 1 of any given school year for that agreement to affect the sequence of teacher dismissals during that school year.  If no agreement is reached by February 1, the Act’s default rules control the sequence of teacher dismissal.   Subject to the February 1 deadline, the JC’s agreement shall continue to apply to the sequence of teacher dismissals until the agreement is amended or modified by majority vote of the committee.

Does your CBA already address RIF?

For school districts with an existing collective bargaining agreement that addresses RIF issues, it may seem unnecessary and premature to form a JC now, where the collective bargaining agreement will continue to govern the sequence of teacher dismissals until it expires, or until June 30, 2013, whichever comes first.   However, the Act provides, without exception, that all school districts’ JCs must hold a first meeting no later than December 1, 2011.  The committee is not required to accomplish anything at this first meeting, but neither is it prohibited from reaching agreements prior to the expiration of existing contracts.  For those school districts with teacher rating systems that are inconsistent with the Act, there is no reason not to decide now how the ratings will transition to the new system.  And because a teacher’s position in the coveted group four may depend on that teacher’s last three evaluations, decisions made now by the JC may affect the sequence of teacher dismissals in the 2013-2014 school year.

Unanticipated Consequences of Talking to the Media

Recent case illustrates need for caution

By: Patrick A. Murphey

The Illinois Public Labor Relations Act provides it is an unfair labor practice to interfere with, restrain or coerce public employees in exercises of their rights under that Act.  5 ILCS 315/10(a)(1).

Recently, in New Lenox Fire Protection District, 28 Public Employee Reports Illinois 35 (7/20/11), the Employer was enjoined to cease and desist coercing its employees based upon a local newspaper report on a dispute between the District and the Union representing the District’s part-time firefighters.  The District’s Board of Trustees contracted with an outside provider to staff its fire service, eliminating its part time firefighter program shortly after the Union was certified.  Some of the part time firefighters also participated as “paid on call volunteer” firefighters, who continued to be used to supplement the contract fire service.  To protest the reorganization eliminating the part time service, the Union organized a demonstration at a Board meeting, showing up with a giant inflatable rat, and picket signs protesting the elimination of the part time fire service by contracting.

A local newspaper reporter covered the demonstration, and wrote an article which attributed several statements to the President of the Board of Trustees, including a contested statement which the Union asserted as a threat, to wit: “that the FPD would not start using paid on call firefighters again until the issue is resolved.”  Despite evidence the reporter did not understand the distinction between part time employees and paid on call volunteers, the ILRB held the statements resulted in a threat because the Board President allegedly failed to clarify her question or correct her mistake.  Ignoring the law, which provides trustees have no authority to act on behalf of the District in their individual capacity, the ILRB looked solely at the “effect” of the published statements on the paid on call firefighters to find it was an unlawful threat, to be attributed to the public employer, subject to a broadly worded “cease and desist” order.

The case illustrates several cautionary points members of public bodies need to consider in any statements to media representatives concerning any labor dispute.  First, if you agree to discuss an ongoing labor problem with a news representative, if possible, do so only on background, not for attribution, and make clear that you are not authorized to speak on behalf of the public body, and comment only as a private citizen.  Second, where it is necessary to communicate the Employer’s position through the media to insure another side is presented to the public, respond only from a prepared statement, and do not go “off script”.  Such prepared statement needs to be vetted to insure nothing stated therein constitutes any unlawful threat of adverse action, or promise of benefit, to employees involved in the labor dispute.  The middle of a labor dispute is not the time to shoot from the hip or to make off-the-cuff remarks.

Pending Legislation could have devastating impact on Municipalities subject to Tax Caps

HB3793 would eliminate inflationary increases if EAV has declined

By Richard M. Joseph

HB3793 affects taxing districts in counties subject to PTELL (tax caps). Under current law, increases in the extension of real estate taxes levied by a tax capped district are limited to the rate of inflation or 5%, whichever is  less. (The extension is the total amount of a real estate tax levy actually billed to the taxpayers).

HB3793 would amend PTELL to provide that if the total EAV of all taxable property in a taxing district for the current levy year (after excluding new property, recovered TIF property and annexed or disconnected property) is less than the total EAV for all taxable property in the district for the previous levy year, then the authorized increase in the extension is 0%.

One might argue that if the assessed value of property is not increasing, then property owners should not pay a higher real estate tax. Unfortunately, even in a mild inflationary economy such as we are now experiencing, the cost of labor, material and services purchased by taxing districts continues to increase. PTELL in its current form recognizes that reality and makes a reasonable accommodation for the effect of inflation. However, if HB3793 becomes law, a decrease in EAV of even $1 would deprive an affected taxing district of the authority to receive a necessary inflation based increase in the extension of its real estate tax levy.

There is some concern that this legislation may be presented during the fall 2011 veto session.  If your municipality is subject to PTELL, you may wish to contact your state elected representatives and alert other units of local government within your municipality.  The impact of this legislation is much too severe for it to become law without substantial input from affected taxing districts and their constituents.

Municipal Electric Aggregation

Law allows voters to grant Municipalities the right to choose who supplies residential electricity

By Richard M. Joseph

How would you like to offer the benefit of lower utility rates for the citizens and small commercial establishments in your municipality?  Many Illinois municipalities have recently responded yes to this question and are in the process of investigating and implementing procedures for Municipal Electric Aggregation for their residents and small commercial electric users.

Municipal Electric Aggregation is the process of pooling residential and small business electric users to take advantage of the resulting economy of scale in order to help facilitate lower rates.  For a number of years, businesses and governmental bodies have, through various pooling arrangements, sought to purchase electricity from a retail electric supplier for themselves at a cost savings.  Individuals residing in Illinois have had the same ability, but have not been fully able to take advantage of the cost benefits of deregulation due to lack of negotiating power.  Simply put, one individual lacks the “buying power” to effectively negotiate a lesser rate, much less effectively analyze and compare the costs and alternatives from retail electric suppliers.

Recently, however, the Illinois Power Agency Act was amended to give municipalities and counties the right to solicit bids and enter into service agreements to facilitate the purchase of electricity for their residents and small commercial retail electric users.  If the existing energy supplier is not chosen, the local utility (ComEd or Ameren for most in our area) remains the distributor of the electricity, but the new supplier sells the electric power.

There are two methods allowed by the Act:  the “opt-in” method and the “opt-out” method.  Under the “opt-in” method, residential users and small commercial users must contact the municipality and “opt in” by signing up for the program.  Under the “opt out” method, the matter is first presented to the voters at referendum and, if passed, the municipality has the authority to negotiate electric service agreements for all residential and small commercial users within the municipality, except for those individuals who “opt out” by notifying the municipality that they have chosen not to participate.  While both the “opt-in” and “opt-out” methods give the municipality authority to accomplish electric aggregation, we recommend the “opt-out” method as that provides a larger group; which gives the municipality more bargaining power.

The “opt-in” method is commenced by the municipality adopting an ordinance under which the municipality may aggregate residential and small commercial retail electric loads located within the municipality and, for that purpose, solicit bids and enter into service agreements to facilitate the purchase of electricity for those residences and small commercial users who have opted in as part of the program.

The procedure for the “opt-out” method is started by the municipality first adopting an ordinance providing for a referendum to allow voters to decide if the municipality should have authority to arrange for the supply of electricity for its residential and small commercial retail customers.  If the referendum passes, the municipality can then adopt an ordinance providing for the aggregation of residential and small commercial retail electric loads within the municipality, soliciting bids and entering into service agreements to facilitate the purchase of electricity for all residences and small commercial users (other than those that have provided an “opt-out” notice to the municipality).

The first opportunity for this referendum question to be submitted is at the general primary election to be held on March 20, 2012.  In order for the municipality to have that referendum question presented to the voters on March 20, 2012, the municipality must adopt the ordinance and the municipal clerk must certify the question to the County no later than January 12, 2012.

Approval of the question at referendum merely vests the municipality with authority to negotiate and enter into service agreements for electric providers on behalf of its residents – it does not provide the obligation.  Thus, there is no downside to the municipality.

Regardless of the method (“opt-in” or “opt-out”) if the municipality wishes to utilize electric aggregation, it must adopt a plan of operation and governance for the aggregation program.  The Act specifies that this is done with assistance from the Illinois Power Agency.  Before adopting such a plan, the municipality is required to hold at least two public hearings on the plan.  Any aggregation plan must (i) provide for universal access to all applicable residential customers (no discrimination); (ii) describe demand management and energy efficiency services to be provided; and (iii) meet such other requirements as are established by law.  With that plan in place, the municipality then can solicit bids for electricity and other related services.

If the municipality is utilizing the “opt-in” method, then, within 60 days after receiving the bids, the municipality must allow residential and small commercial users to commit to the terms and conditions of the bid selected by the municipality.

If the municipality is utilizing the “opt-out” method, then it is the duty of the chosen electric supplier to notify the residential and small commercial users that they have the right to “opt-out.”  This notification must state all charges and include a full disclosure of the cost to obtain electric service.

Many municipalities lack the expertise or staff to handle the aggregation process on their own.  Additionally, the bigger the “pool” the greater bargaining power.  Accordingly, it may be prudent for the municipality to consider retaining a consultant.  The consultant should work closely with the municipal staff and legal counsel to provide assistance in analyzing load data, facilitating the bidding process, negotiating agreements with suppliers and, if chosen prior to the referendum question, educating the voters on the referendum.

Municipal Electric Aggregation provides an opportunity to benefit the residents and small commercial users of your municipality by providing an opportunity for savings with little cost to the municipality (assuming the right consultant).