Contents of this issue:

  • Board votes for higher-priced union labor
  • Superintendent gets $100,000-plus separation deal
  • Promise Zone bills signed
  • Board implements health plan; union may sue
  • Customers question Blue Cross surcharge proposal


YPSILANTI, Mich. - Against the recommendations of its consultant, the Ypsilanti Public Schools Board of Education agreed to use union contractors for renovations at three elementary schools, increasing the cost by 5 percent, according to media reports.

Officials with Plante Moran presented a $3.76 million plan to the board based on choosing the lowest bidders, the Ypsilanti Citizen reported. After switching to union companies for several contracts per school, the price estimate rose to $3.95 million and a Plante Moran spokesman said there could be contingency costs, according to the Citizen.

"It's great," Ypsilanti resident and union electrician Jay Tafini said after the board's decision, according to the Citizen. The board awarded a contract to union employer Metro- Electric rather than Great Lakes Power and Lighting, the Citizen reported.

Union representatives pointed out that their members supported the bond issue that paid for the work and also referred to future votes, according to The Ann Arbor News.

"As we look toward an enhancement millage in the future, be sure (to remember) that union workers vote," teacher's union President Kelly Powers told the board.

The only non-union company selected by the board was Steel Equipment Company, which will install new lockers, the Citizen reported.

Board member Floyd Brumfield voted in favor of the changes, but also said, "The public doesn't trust us to spend wisely. Some of these changes draw questions to mind," the Citizen reported.

The Ypsilanti Citizen, "Ypsilanti schools go with union labor, despite higher cost," Jan. 13, 2009

The Ann Arbor News, "Ypsilanti school board OKs $200,000 added cost to use unionized companies for renovation work," Jan. 13, 2009

Michigan Education Report, "Michigan's prevailing wage law forces schools to waste money," Dec. 13, 2001


WYOMING, Mich. - Under the terms of a separation agreement, Godwin Heights Superintendent Valdis Gailitis will receive $118,442 in salary in 2009 before his resignation takes effect Aug. 2, according to The Grand Rapids Press. Gailitis will not be allowed on school grounds without permission while he continues to receive his salary, an additional $1,000 per month, three weeks of vacation pay and a $40,000 lump sum payment, The Press reported.

Gailitis has been on paid leave since Oct. 28, according to The Press. A school investigation found no wrongdoing by Gailitis related to an alleged inflated-enrollment scam at the district's alternative high school, but he and school officials agreed he should resign, The Press reported. The agreement stipulates that "nothing of an adverse nature" will be added to the superintendent's personnel file.

"It sounds like he can sit home and get paid for eight months, but it seems like a small price to pay to get us going forward," said Nick Harrison, a parent, according to The Press.

Gailitis did not attend the board meeting when the agreement was approved and did not return calls seeking comment, The Press said.

A criminal investigation of the alleged enrollment fraud at Godwin Learning Center by the state attorney general's office continues, as does a whistleblower lawsuit filed by a secretary who notified the state that attendance records were doctored or fabricated in order to obtain more state aid, The Press reported.

Interim Superintendent Pat Murphy said he will continue with the district for now, but may work part-time because working too many days could affect his retirement benefits, according to The Press.

The Grand Rapids Press, "Godwin Heights superintendent, board agree on his leaving," Jan. 13, 2009

Michigan Education Digest, "Saginaw pays to get rid of teacher," Aug. 27, 2008


LANSING, Mich. - Up to 10 "Promise Zone" authorities, designed to pay for college for students in high-poverty locales, could be created under legislation newly signed by Gov. Jennifer Granholm, according to The Grand Rapids Press.

The program requires an upfront contribution by donors in a given zone equal to the amount required to send all eligible students to community college for two years, an estimated $4,800 per child, The Press reported. After that, local officials could capture half the annual growth in state education tax revenue generated by any increased property values in the zone, according to The Press.

The program is modeled after the privately funded Kalamazoo Promise, which offers free tuition to Kalamazoo Public Schools graduates to attend a Michigan public university or community college.

"We want to attack the cost of going to college, we want to make sure that all children have access and this is a creative financing way we can ensure that the business community partners with the education community to provide opportunity for all of our children," Granholm said, according to The Press.

Eligible students would have to live within the zone but do not have to attend a public school, according to The Press.

Chuck Wilbur, Granholm's policy advisor, said as real estate values begin to grow again, the state's financial share in the program will increase, the Press reported. Legislative estimates peg the eventual state cost at nearly $16 million annually.

The Grand Rapids Press, "Granholm signs tuition grant zones," Jan. 13, 2009

Michigan Education Report, "Following the lead of the Kalamazoo Promise," Nov. 14, 2007


THREE RIVERS, Mich. - Three Rivers school board members have voted to switch teachers to a different health insurance plan as a way to save money, but the teachers union may go to court to block the move, according to The Kalamazoo Gazette.

The district and its teachers have been in contract negotiations since August 2007, The Gazette reported. Considering the sides to be at impasse, the board voted to implement contract provisions that would shift teachers to a less-expensive plan than the Michigan Education Special Services Association policy that teachers now have, according to The Gazette.

"We have to control our costs," Superintendent Roger Rathburn told The Gazette. He said the district could save hundreds of thousands of dollars by switching to comparable insurance at a lower rate.

But Denise Munoz-Pyle, an employee of the Michigan Education Association, says the union thinks the vote could be considered an unfair labor practice and the MEA may ask a judge to block it.

"We should at least keep the status quo through the fact-finding process," Munoz-Pyle told The Gazette. She said union members are committed to MESSA and that they have not been provided adequate information about alternatives.

Three Rivers pays $14,704 per teacher for insurance, regardless of family size, The Gazette reported, including medical, dental, life and disability coverage. Teachers contribute $24 per month toward the premium.

Rathburn says the district offered to continue buying MESSA if teachers would pay 8 percent of the premium out of pocket, switch to a higher-deductible drug plan and agree to a 1 percent raise.

The Kalamazoo Gazette, "Three Rivers school board switches teachers' insurance; Union may try to block change," Jan. 15, 2009

Michigan Education Report, "Health insurance: Reformed, but not resolved," Sept. 16, 2008


LANSING, Mich. - A group of customers is concerned that Blue Cross Blue Shield of Michigan might begin charging more for a health plan that has saved public schools hundreds of thousands of dollars over the years.

The group of school districts, labor unions and insurance administrators in December asked for details about a recent Blue Cross proposal to add a surcharge to the cost of certain High Deductible Health Plans, or HDHPs. School districts say those plans save them money because, as with auto or home insurance, the premium goes down when the customer pays a higher deductible up front.

In November, however, Blue Cross informed Michigan's Office of Financial and Insurance Regulation that it intended to charge an additional 8 percent to 32 percent for high-deductible plans in cases when new customers also self-fund the deductible or provides deductible coverage through a wrap, according to a letter from the corporation to Joan Moiles, OFIR deputy commissioner.

Blue Cross has since withdrawn that proposal and the future cost of high-deductible plans remains a question. The corporation told Michigan Education Report it is discussing its high- deductible plans. An insurance consultant said a surcharge would weaken Public Act 106, legislation intended to help schools find lower-cost health care.

Michigan Education Report, "Customers ask for details on potential Blue Cross hike," Jan. 20, 2009

Michigan Education Report, "Health insurance: Reformed, but not resolved," Sept. 16, 2008

MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (, an online newspaper published by the Mackinac Center for Public Policy (, a private, nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Lorie Shane at

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