Is it because we are greedy? I think not. It is true that we have a good health insurance program which comes with a high price tag. Still in my meetings with other negotiators from across the state, although ours is certainly one of the better, it is also certainly not the best. It is not the most expensive. Our severance is good, but others have programs which may be different but are equal in total value. Even if our total benefits package was in the top ten in the state, how would this justify 20 year career earnings which rank us 104th in the state? Sometimes we're told we can't compare ourselves to the metro districts because after all the cost of living is so much higher. Is the cost of living that much greater in Elk River, Ely, Delano, Dassel-Cokato, Becker or Albert Lea just to name a handful of the 104 which rank above us, than it is in Duluth? We live in a metropolitan statistical area and are one of the cities of the first class, yet our school board insists that we are non-metro and our salaries would indicate that we are far less than first class. No we are not greedy, we're not rich and if the school district has a financial problem, it certainly isn't due to teacher salaries which are right about average in terms of instructional cost as compared to general fund expenditures.

Our district pleads poverty. This is nothing new. I have worked for the school district for 31 years and been negotiating for 22 and can only remember one time when they were not pleading poverty. That time they were pleading not quite as much poverty. Sure the Legislature shortchanged this school district. Hey, they shortchanged every school district. Sure our taxpayers voted down an excess levy referendum- -they have in many places. Yet when the day is done in terms of negotiations, most every place else the deal has been done--not Duluth. We remain somewhat undone. The. argument is made that if present levels of funding are maintained, the school district will go through its reserve in five, six, seven or so years. Now the fact of the matter if one is to do a reality check is that we have been there and heard that many times in the past. Consider if all future financial planning for a district had been concluded in 7 983 when there was an actual reduction of funding by the state. The prophets of doom announced the demise of public education at that time as I remember. Yet within a couple of years there were major improvements in educational funding. Being a history teacher I like to look at the experience of things. The experience has been similar many times. Other school districts realizing the importance of their teaching staff have sought to recognize this importance by reaching a contract agreement. They have looked at experience and they have looked at necessity and they have reached an accord. Ours hasn't. One can only ask why.

Without belaboring the financial discussion, let me point out that the board's fund balance when last reported to us stated what appears to be the third largest of the 300 school districts. In fact, on February 6, 2002, Greg Hein sent us documentation indicating a net unappropriated fund balance of $18,647,000. Total reserves were listed at $36,802,000. The actual cost of teacher salaries has decreased as programs have been cut and positions eliminated. We have had a number of employees retire from the top. Teacher salaries are not bankrupting the school district. Last year the district budgeted total expenditures at $103.5 million. They were actually just over $97 million. The majority of this difference appears to have come from an overestimation of the cost of teachers. At the same time expenditures for regular instruction decreased by 2.% and vocational instruction by 14%. Costs for administration increased by 4.6%. Enough of the figures, let me summarize. They are offering us 1.25%

and 1 %. That is an insult. To give us this pittance they demand an increase in prescription co-pay to something like $1 5 and a 100% increase in the copay for office visits. This is an outrage. Recently banner headlines stated: "Student Test Scores Soar." I guess the board's offer must be some sort of reverse merit pay. The better you do, the worse we treat you. In the area where we live at least six school districts have settled for 6% in actual salary increases over two years. They are all small school districts. They don't have the resources of Duluth. Yet they were able to do it. Why not here?

I really hate to send people off for Summer on such a sour note. I truly wish it could be otherwise. We now have to look at our options. The strongest option we have is a strike---there, I have said it. If you would like my recommendation and the recommendation of the negotiating team and the Executive Board, we are going to. have to start saying it a lot more often and we are going to have to do it. It might not be the best option. It may be the only option that will work. Of course others will be considered. All night graduation parties are optional and graduation is optional. In the fall open houses are optional. Consider your options. We will keep working for you throughout the Summer. We will do our best to keep you informed. Try your best to have a really, really nice Summer. Come back well rested and ready to go-maybe ready to go out.