In It Together in California

Faculty unions and the Los Rios and San Diego Community College Districts find labor harmony by basing contracts on shared revenue agreements.
March 17, 2011

Los Rios Community College District is, like other colleges and universities in California, bracing for its share of the $1.4 billion -- or more -- in projected state budget cuts to higher education next year. But, unlike many of their peers, the administrators, faculty and staff at Los Rios will be able to draw on decades of experience in jointly making decisions and sharing money.

Since the 1990s, the people who work at Los Rios have embraced a philosophy of communication and negotiation that they call an “interest-based approach.” Before that, they adopted a method by which the various groups in the college -- administrators, faculty and staff members -- split new revenue. Both the philosophy and the method have helped the college build a reserve of labor-management trust (not to mention money) that managers and labor officials hope will allow the institution to weather the worsening financial storm. While the district's philosophy and method are neither new nor particularly widespread, Los Rios does offer a notable counterpoint to the accounts of labor strife in Wisconsin, Ohio and beyond that continue to make headlines.

“The concept of labor and management working together is the only way we can go forward,” said Dennis Smith, professor of accounting at Sacramento City College and past president of the Los Rios College Federation of Teachers (which is an affiliate of the American Federation of Teachers), who has years of experience working under the conditions at Los Rios. “It kind of makes everyone own responsibility for the management of the district’s resources.”

Though the interest-based approach provides a wider philosophical framework for relationships and negotiations on campus, the practice of sharing revenue actually has been in operation at Los Rios for longer -- since the mid-1980s. The president, Marc Hall, and chief business officer, Louise Davatz, who were then in place at Cosumnes River College (which is in the Los Rios district), are credited with hatching the idea. The method (often called, simply, “the bucket” by those in the district) begins with the premise that a bucket of money gets allocated each year by the state to the community college system, which is then apportioned to each district.

At Los Rios, any increases in general operating support from the state are ladled out according to an agreed-upon formula, which is based on the traditional patterns by which expenses are paid at the institution. For example, about 80 percent of expenses at Los Rios are historically dedicated to personnel (of this amount, 65 percent goes to faculty), said Smith. In the past, when new general operating money from the state came into the college, about 20 percent went to operations and administration, while 80 percent was allocated to each bargaining unit, including both faculty and support staff unions according to this formula. Much of the money going to each unit has been earmarked for such predetermined costs as funding the salary schedule. But the bargaining units also have some discretion over how to use the remaining revenue. For example, faculty members who have used the "bucket" method have chosen -- via a vote of union members -- to dedicate some of that remaining money to funding new steps on the salary scale, helping pay for health care for part-time members or underwriting sabbaticals for support staff to get better training.

Sharing the new money that arrives in the bucket appears in Los Rios to head off disputes that are common to negotiations on other campuses. Typically, administrators accuse unions of expecting more money than the state will provide, and union leaders accuse administrators of invoking "sky is falling" rhetoric while parceling out incomplete financial information as a way of avoiding pay increases or placing money in areas outside of faculty. Both union leaders and administrators at Los Rios and elsewhere say these kinds of fights are less likely with this approach.

The revenue-sharing process relies on transparency and trust, said labor and management leaders, so that faculty and staff members and administrators can collectively see how much money is coming in and where it is going -- and then act accordingly. The method shares certain similarities with collaborative budgeting, a practice that the American Association of University Professors has described as another productive way to involve faculty in financial decisions. “It makes us recognize the long-term interests of the institution as a whole,” Ryan Cox, associate vice chancellor of human resources at Los Rios, said of the revenue-sharing method there. “Not management, faculty or staff interests -- but of the district as a whole.”

The revenue sharing program at Los Rios overlaps in some respects with the interest-based approach, which is typically described as negotiating, making decisions, and solving problems in a way that emphasizes common interests and values instead of staking out adversarial positions. In the early 1990s, Los Rios began adopting this approach with a certain fervor. Today, about 20 percent of the 4,000 employees at Los Rios have taken three- or five-day workshops to learn its techniques, said Cox. An in-house steering committee of 15 people from various groups on campus volunteers its time to coordinate the interest-based work. Another 200 people are able to run workshops -- for new and untrained employees at Los Rios, and for those at other campuses who want to adopt the method.

“We’ve tried to infuse this culture where relationships are highly valued,” said Cox. “Our big thing is there’s always tomorrow. If you and I have a huge disagreement today and blow out our relationship, what are we going to do tomorrow?”

Cox acknowledged that the interest-based approach can consume lots of time and effort, and it only really works if people buy into it. But it has improved the culture and finances of the college, he said. When he and others were asked to define how the approach works, the same words tended to be invoked: listening, honesty, respect and openness.

The ideas are based, in part, on the management and negotiation ideas of Roger Fisher and William L. Ury (authors of the book Getting to Yes), said Maureen McEnnerney, director of program services and finance at the Center for Collaborative Solutions in Sacramento. That nonprofit grew out of another organization that sought to improve labor-management relations and helped set the stage for much of the work at Los Rios.

And yet, despite the popularity of the root ideas, neither the interest-based approach nor the revenue-sharing model seems to have caught on widely. If anything, economic factors have led colleges and universities to cut their training budgets, said McEnnerney. And even some of those who have tried the interest-based approach have scuttled it after experiencing a change in leadership or a contentious negotiation. "Now is the time it could be used the most," she said.

The utility of the approach and of the revenue-sharing program at Los Rios may well be tested as the budget proposed by Democratic Gov. Jerry Brown cuts $400 million from community colleges (a hole that may grow larger if voters shoot down a tax extension slated for June, or if the measure never reaches the ballot). The revenue-sharing program has a provision for unspecified cutbacks to be made, or what is referred to as the "trombone clause" (it is meant to conjure the image of the slide of a trombone being drawn inward). Under this provision, faculty and staff members are compelled to reopen the contract and return to the bargaining table. If no agreement is forthcoming after about three months, management can impose a solution.

The trombone clause was nearly invoked in 2002, said Cox. But managers met with union representatives and said they saw positive trends on the horizon and could draw on a cushion -- financial reserves that managers, staff and faculty members jointly put in place earlier. Managers fronted the faculty and staff a small raise, about 0.5 percent, at the start of the year, said Cox. At the end of the year, when the books were balanced, the college found itself deeper in the black. The faculty and staff members, he said, received a 2.5 percent raise at the end of the year.

The decision to build up reserves had been made together during flush years. Managers, faculty and staff members opted to forgo the highest possible salary increases in favor of more modest ones, paired with bolstering the reserves. When times got tough, the college could tap the reserves rather than laying people off or cutting salaries. At the negotiating table, the parties referred to their shared interests, said Cox. “All of us recognize the only reason we’re here is to take care of students,” he said. “If we’re talking layoffs and furloughs, how are we helping students?”

While Los Rios has trained other campuses in its interest-based approach, its revenue-sharing model has had relatively few adherents. Most recently, the San Diego Community College District and its faculty union renewed their revenue-sharing plan last week; it is modeled on the one at Los Rios.

Constance M. Carroll, chancellor of the San Diego district, said she was drawn to the revenue-sharing method because Los Rios has long been considered among the best-managed districts in the state. She praised the method's predictability and equity, and the way it requires her to be transparent. "In this day and age, an administrator should be accountable for the types and amounts of expenditures there are in an organization," she said. "That seems only prudent to me."

She said that the approach fosters a climate of labor peace and respect. "I don’t understand why more organizations don’t do this," Carroll said. She added that the demands inherent in the revenue-sharing method had been helpful even during increasingly difficult budgetary times -- when pain was the only thing the sides were going to share. Managers and labor leaders at San Diego already have agreed to a three-year hiring freeze, which has meant hundreds of vacant positions, stretched faculty and larger class sizes. But no salary rollbacks or position cuts -- at least not yet.

The darkening budget clouds are likely to make it impossible to preserve every job in the foreseeable future, said Jim Mahler, professor of engineering, mathematics and physics at San Diego City College and president of the American Federation of Teachers Guild 1931. He acknowledged that the forced reopening of the contract -- through the trombone clause -- meant that union leaders had to take a very different approach to the one commonly employed on other campuses. In many cases, union leaders might be more likely to play hardball and resist efforts to come back to the table.

“If we take that hard line and we have big cuts, then all we’re telling the district to do is to lay our people off,” Mahler said. “We’d rather be part of the discussion than be on the sidelines.”


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