ANDERSON — Almost $2.3 million in bonuses approved under a controversial new teachers union contract was transferred to teachers and retirees on Wednesday, one day before a new school board will be sworn in. A judge on Wednesday denied a school board member’s request for an injunction to block the payments.
Madison County Superior Court 3 Judge Thomas Newman Jr. on Wednesday denied Anderson Community Schools board member Irma Hampton Stewart’s request for an injunction to stop the payouts. Stewart said it would mark the end of court action that she filed against five outgoing board members who she argued acted illegally in negotiating the contract.
“The evidence fails to support a finding of harm — irreparable or otherwise — that would result from a collective bargaining agreement that confers the substantial short-term and long-term cost reductions found in the agreement,” Newman wrote in his order a day after an emergency hearing that Stewart requested.
“The dire financial consequences portrayed by Stewart simply do not exist,” he wrote. “The public interest therefore would be disserved by nullifying the nine months of expensive negotiations that went into the current collective bargaining agreement, and by depriving the public of the fruits of a demonstrably beneficial agreement.”
Newman said Anderson Federation of Teachers President Rick Muir, who testified at a hearing earlier this week, had outlined aspects of the contract such as wage cuts and benefit changes that Muir said would save the school corporation millions.
“It is the AFT’s belief — contrary to what we’ve been reading all over the city — this will save the school district $2,860,000,” Muir testified.
In court Tuesday, Stewart asked Muir where the costs of bonuses and buyouts appeared on a document he presented that outlined estimated savings. “It’s not on here,” he said.
Newman’s ruling ran counter to claims by ACS officials that the deal would bankrupt the system.
ACS business manager Kevin Brown, who also testified Tuesday, said Wednesday that $25,000 bonuses for 49 retiring teachers were being moved from the schools’ general fund — a total payout of $1,225,000 for which he said no source of funding had been identified when the board approved the contract.
“That didn’t seem to be a consideration when the decision was made,” Brown said. “It creates a cash-flow nightmare.”
Brown said ACS will have to borrow from other funds and must repay those funds by Dec. 31 while maintaining a positive year-end general fund balance. He said doing so means ACS will delay paying bills toward the end of the year.
As a condition of the contract, each AFT member will get a $1,200 retirement fund deposit. Brown said the initial cost of that bonus is $1.057 million, to be paid from an insurance reserve fund that he said contains about $11 million.
Brown said that the amount of money ACS will save through the retirement buyouts is negligible. The AFT contract requires that teachers with the most seniority are called back first, and after more than 160 teachers were laid off, “we’re going to be calling back teachers who are flirting with the top of the salary scale,” Brown said.
Brown said that because the retiring teachers had been slotted to work next year, nearly all of them will have to be replaced.
He said many teachers had given notice of retirement before the buyout was offered. “If you put a retirement incentive up to people who were going to retire anyway, it’s not an incentive. You’re just allocating money that otherwise would not have to be allocated.”
Stewart on Wednesday said she had no second thoughts about filing suit against outgoing members Teddy Bohnenkamp, Tobi Jones, Keith Millikan, P.T. Morgan and William Riffe, who she claimed violated open door laws and committed official misconduct by negotiating directly with Muir.
“The community has been very supportive of this litigation,” she said, noting the contract that the board approved but which she opposed had been modified more in the school system’s favor compared with versions that had been proposed to the board months earlier.
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