Sacramento City Unified Prevails in Fight to Protect Cost Savings for Students

Press release

SACRAMENTO -  Sacramento City Unified School District prevailed today in an arbitration with Sacramento City Teachers Association (SCTA) over a 2017 contract dispute between the parties regarding the application of health care savings.    

The arbitrator’s decision agrees with the district and found that district did not violate the contract.

The dispute grew out of a 2017 agreement between the district and the union regarding the spending of possible savings dollars that could be achieved by switching SCTA members to a different health care plan. SCTA did not agree to change health benefits as intended under the contract, let alone by the contractual deadline. They argued that savings were achieved through market-driven reductions in health care renewal rates and that the district had to apply those dollars to SCTA members. Under the union’s position, it was entitled to all savings derived from health care costs, regardless of the source, when or how achieved.  In 2019, SCTA filed a grievance which went before an arbitrator for resolution. Today’s decision denied SCTA’s grievance.

“We are committed to continuing to resolve recent labor issues while remaining focused on the path forward and our upcoming school year to meet the needs of our Sac City students and families” said Board President Ryan. “We cannot continue letting disagreements among adults distract us from the urgent needs of our students in these unbelievably challenging times.”

As part of the decision, the arbitrator stated, “SCTA is not entitled to any health benefit savings achieved through a change in health benefit plans or pools because the parties have not agreed to any such changes, either before or after July 1, 2018….” Further, the arbitrator explained that to adopt SCTA’s interpretation would set “up a one-sided bargain whereby the District achieves no lasting, structural, health benefit cost-saving changes but SCTA reaps the benefit of any funds that result from market fluctuations in existing health benefit plan renewal rates. That cannot be what the parties intended or agreed to.”

Tackling expensive health care costs to save the district

The district pays 100 percent of health benefit costs for SCTA members and their dependents and has long sought to achieve savings by making changes to SCTA’s health benefits. Almost ninety percent of the district’s unrestricted budget goes toward employee benefits and salaries.

At the district’s board meeting on August 20, 2020, SCUSD’s Chief Business Officer Rose Ramos presented on the district’s budget, forecasting that if the now nearly $40 million deficit could not be closed by early 2021, the district would become insolvent and enter receivership. Since 2018, the district has attempted to bring SCTA to the bargaining table to negotiate a successor contract to address health care costs and prevent the district from insolvency. The district currently has a separate complaint against SCTA for failing to negotiate on a successor contract and a hearing on that matter is scheduled for next week.

The district continues its efforts to negotiate with SCTA for a benefits solution that maintains fiscal responsibility.

 A copy of the decision can be found here