Sac City Unified, teachers union reach $97M deal to help with budget crisis

The Sacramento City Teachers Association and Sacramento City Unified School District have ratified a new labor agreement expected to provide more than $97 million in financial relief and help the district avoid insolvency.

Read more Sac City Unified, teachers union reach $97M deal to help with budget crisis

The agreement, announced by California Teachers Association on Monday, follows months of efforts to identify long-term savings as the district works to close an unprecedented $170 million budget deficit and avoid a state takeover.

“We are committed to protecting public education in our community from the chopping block of state receivership,” said Nikki Davis Milevsky, president of Sacramento City Teachers Association, in a statement on Monday.

“This agreement is an opportunity for us to protect the gains we’ve made students in our district while taking significant steps to help the district avoid insolvency.”

Under the agreement, first signed by union leaders on July 13 and later ratified by SCTA members, about $67 million in financial relief would come from temporarily changing how the district pays for retiree health benefits, according to Davis Milevsky.

A separate retiree-benefits trust was established in 2010 and received contributions from SCTA members, other district unions and the district, building a reserve of about $160 million, Davis Milevsk explained. Under the new agreement, the district could use that reserve to cover retiree health costs for three years.

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With the district historically paying about $21 million to $23 million a year in retiree health costs from its general fund, using the reserve instead would free up roughly $67 million over three years.

The rest of the relief — roughly $30 million — would come from Medi-Cal revenue and savings from vacant positions the district was unable to fill, Davis Milevsky added.

“This was really just set-aside that had been sitting there, not being used, so this gives us an opportunity to continue our retiree health benefits,” Davis Milevsky said

“If we’re having some challenges with our general fund right now, we believe that we should dip into that account and free up some money to focus on our students.”

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