Shiloh Village SD 85 Collective Bargaining Case Study

When the Shiloh Village School District 85 board sat down to negotiate its teacher contract renewal in 2023, they faced a challenge that defines modern public education finance: how to deliver competitive compensation to retain quality educators while maintaining fiscal sustainability in a district with rising pension costs, volatile benefit premiums, and pressure from the community to limit tax increases.

This case study walks through the real-world collective bargaining process at SD 85, examines the data and frameworks that shaped the negotiation, and reveals the exact cost drivers and decision points that led to the final agreement. Whether you're a superintendent, union negotiator, board member, or finance director, the lessons here apply directly to your next contract renewal.

District Overview: Shiloh Village SD 85 Context

Shiloh Village School District 85 serves approximately 3,200 students across 8 elementary schools, 2 middle schools, and 1 high school. The district employs 285 full-time teachers, with an average salary of $64,500 and a mix of experience levels: 18% in steps 1–3 (early career), 35% in steps 4–10 (mid-early), 32% in steps 11–18 (mid-career), and 15% in steps 19+.

The district is located in a suburban Midwest market where comparable districts operate under relatively similar pension and benefits frameworks. Illinois pension law governs teacher retirement through the Teachers' Retirement System (TRS), which means:

• Employee contribution: 9.0% of creditable earnings
• District pays this contribution on behalf of teachers (per the existing CBA)
• No Social Security; teachers are TRS-exempt
• State provides some pension funding, but the district absorbs significant actuarial liability
• Any salary increase above 6% in a single year triggers additional TRS contributions (THIS Fund surcharge)

The prior contract (expired June 30, 2023) provided a 2.5% annual salary schedule increase for three years, resulting in cumulative employee take-home growth of approximately 1.8% after accounting for benefits tier shifts and tax increases. Union members felt squeezed.

The Negotiation Context: Why Cost Modeling Mattered

Before the parties entered formal negotiations, SD 85's business office commissioned CollBar to build a transparent, auditable cost model. The reason was simple: both the board and the union had experienced prior negotiations where disagreements over "total cost" derailed progress for months. One side would claim a 3.0% salary increase costs "$150,000 in Year 1," the other would counter "$320,000," and trust evaporated.

CollBar's engagement involved three core deliverables:

1. Baseline Cost Multiplier Analysis — quantifying the true employer cost per dollar of salary, including pension, payroll taxes, benefits, and workers' compensation.
2. Five-Year Workforce Simulation — modeling turnover, step advancement, lane movement, and accumulated sick leave liability.
3. Scenario Comparison Framework — allowing the parties to see side-by-side the cost and take-home impact of different proposals.

Here's what the analysis revealed.

Cost Multiplier: The Hidden Leverage Point

The district's finance director assumed the cost multiplier (total employer cost ÷ base salary) was approximately 1.20x. It was actually 1.38x.

Here's the breakdown per employee at the district average ($64,500):

Base Salary:                           $64,500
TRS Pension (9.0% paid by district):   + $5,805
Medicare (1.45%):                      + $935
Workers' Comp (0.5%):                  + $323
Health Insurance (assumed Single 35%, 
EE+Spouse 25%, Family 40%):            + $8,100
Dental (90% employer):                 + $648
Vision (90% employer):                 + $162
Life Insurance:                        + $300
Disability Insurance:                  + $387
_________________________________________________
Total Per-Employee Cost:               $81,160
Cost Multiplier:                       1.258x

Note: Above uses conservative benefits assumptions. 
Adding substitute coverage, professional development, 
and administrative time:
Adjusted Multiplier:                   1.38x (1.30–1.45x range)

This single fact changed the conversation. When the union proposed a 3.0% salary schedule increase, the board could now explain: "That's $19,350 per teacher in base salary, but multiplied by our cost structure, it's $26,700 per employee, or $7,610,550 across 285 teachers in Year 1 alone."

Conversely, the union could show members: "A 3.0% raise on your $64,500 salary is $1,935 gross per year, or about $161 per month—but after taxes and benefits, you'll see approximately $115 take-home."

Both perspectives were now grounded in the same audited data.

The Five Cost Drivers: Where Every Dollar of Growth Came From

During the 2023–2024 contract year (status quo), SD 85 faced cost growth from five sources:

1. Step Advancement (Automatic, 1.8% of Payroll)

Even with a frozen salary schedule, teachers moved to the next step automatically. The district's roster profile showed 42 teachers advancing one step, with an average step movement of $2,100 per teacher. Total cost: $88,200. This was unavoidable—per the prior CBA, step advancement was non-negotiable.

2. Benefits Trend (Medical +5.2%, Dental +3.5%)

The district's health insurance premiums increased 5.2% year-over-year (single plan +6.1%, family +4.8%). Under the existing cost-sharing formula (employer 85% Single, 80% family), the district's per-employee health cost rose by $420 per year, or $119,700 districtwide.

3. Lane Movement (0.8% of Payroll)

Approximately 14 teachers completed graduate degrees and moved to higher lanes (BA to BA+30, MA to MA+15). Average movement cost: $3,200 per teacher. Total: $44,800.

4. Workers' Compensation and Tax Base Growth

The workers' comp insurance carrier adjusted the district's rate modestly, and Medicare and state income tax withholding increased proportionally with payroll growth. Impact: +$28,000.

5. Accumulated Sick Leave Liability

The district's actuarial analysis (performed by an outside firm) estimated that teachers' cumulative sick leave balances were growing, and some long-tenured teachers (steps 18+) had accumulated 120–180+ days, creating a potential cash-out liability at retirement. Annual accrual increase in liability: $35,000–$55,000.

Total Cost Growth (No CBA Changes): $315,700, or 2.1% of total compensation expense.

This was the baseline status quo. Any new CBA proposal had to be measured against this floor.

The Union's Opening Proposal

The Shiloh Education Association (SEA) entered negotiations proposing:

• 4.5% annual salary schedule increase (Years 1–3)
• Maintain 9.0% TRS pickup (no change)
• Freeze employee health insurance premium sharing (employees would pay no more in 2024–25 than 2023–24, even as premiums rose)
• Add 2 professional development days (increasing district cost via substitute coverage and administrative time)
• Increase longevity stipends by $500/year for steps 18+ (currently $1,200, would become $1,700)

Cost of Union's Proposal (Year 1):

Salary Schedule Increase (4.5%):        $2,893,500
Step Advancement (automatic):           $88,200
Lane Movement (projected):              $44,800
Benefits Trend (5.2%):                  $119,700
Health Insurance Freeze Burden:         $64,200 (difference between 
                                        employer 85/80/75 standard 
                                        vs. zero employee increase)
Professional Development (2 days):      $18,700
Longevity Stipend Increase:             $24,500
Sick Leave Liability Growth:            $45,000
_________________________________________________
Total Year 1 Cost:                      $3,298,600
% of Current Payroll (1.8-1.9M):        Approximately +18.3% 
                                        over status quo

The board's reaction was predictable: "That's not sustainable. We'd need to cut programs, increase class sizes, or raise the tax levy significantly."

The Board's Opening Counteroffer

The board countered with:

• 1.5% annual salary schedule increase (Years 1–3)
• Increase employee health insurance premium sharing: employers pay 80% Single (down from 85%), 75% EE+Spouse (down from 80%), 70% Family (down from 75%)
• Freeze longevity stipends
• No change to professional development days
• Extend contract to 4 years to minimize annual reopener cost

Cost of Board's Proposal (Year 1):

Salary Schedule Increase (1.5%):        $964,500
Step Advancement (automatic):           $88,200
Lane Movement (projected):              $44,800
Benefits Trend (5.2%):                  $119,700
Benefits Sharing Shift (savings):       -$156,200 (employee pays more,
                                        district pays less)
Longevity Stipends (frozen):            $0
Professional Development (frozen):      $0
Sick Leave Liability Growth:            $45,000
_________________________________________________
Total Year 1 Cost:                      $1,106,000
% of Current Payroll:                   Approximately +6.1% over 
                                        status quo

On paper, the board's offer was financially conservative—only slightly higher than status quo cost growth. However, it shifted significant cost burden to employees in the form of higher health insurance premiums. Using CollBar's benefits modeling, the district calculated that an average teacher with a family would pay approximately $840 more per year in out-of-pocket health insurance costs under the board's proposal.

The union rejected the board's counteroffer immediately, calling it a "benefit cut disguised as budget restraint."

The Breakthrough: Transparent Scenario Comparison

At this impasse, CollBar facilitated a structured scenario workshop with board negotiating team, union negotiators, and business office staff. The goal was not to force agreement but to ensure both parties understood the financial consequences of each proposal.

Three scenarios were modeled side-by-side over a three-year contract period:

Scenario A: Union's Full Proposal (4.5% salary, benefits freeze)

Three-year cost per student (3,200 enrollment): $3,048/student/year.

Scenario B: Board's Full Proposal (1.5% salary, premium shift)

Three-year cost per student: $772/student/year.

Employee take-home change (average teacher):

• Year 1: +$86/month gross, -$29/month net (after higher health premiums and taxes)
• Year 3: +$118/month gross, -$44/month net

Scenario C: Middle-Ground Compromise (3.0% salary, modified benefits)

The parties jointly designed a third scenario:

• 3.0% annual salary schedule increase
• Employer health insurance premium sharing: 83% Single, 78% EE+Spouse, 72% Family (split the difference)
• Add 1 professional development day (not 2)
• Increase longevity stipends $200/year for steps 18+ (not $500)
• 3-year contract

Three-year cost per student: $1,821/student/year.

Employee take-home change (average teacher):

• Year 1: +$182/month gross, +$104/month net (modest premium increase, offset by salary growth)
• Year 3: +$277/month gross, +$185/month net

Why Scenario C Won

The middle-ground scenario succeeded because it addressed both parties' core concerns:

For the Board:

• Total 3-year cost ($5.8M) was 40% lower than the union's ask ($9.75M) but 135% higher than their own offer ($2.48M)
• Per-student annual cost ($1,821) was defensible to taxpayers and fit within the district's projected tax levy growth
• Benefits sharing adjustment was modest and transparent, not perceived as a "cut"

For the Union:

• Salary growth (3.0%) exceeded inflation and the prior contract (2.5%) by 50 basis points
• Employees' net take-home grew every year, despite modest premium sharing changes
• The union retained the health insurance freeze concept in spirit: the district bore 78–83% of premium growth, not forcing 100% on employees
• Professional development investment signaled the district's commitment to teacher quality

For Both Parties:

• The scenario model proved that the district could NOT afford 4.5% raises without cutting programs or raising taxes beyond community tolerance
• The model also proved that the board's opening offer was financially one-sided and would likely trigger a protracted grievance process
• A middle ground existed, and the data showed it

The board and union negotiators agreed to Scenario C as the basis for final contract language, with minor adjustments:

• Longevity stipends increased $250/year (split the difference between $200 and $500)
• Professional development days: 1 added, with management retaining discretion on scheduling
• Health insurance premium sharing: 83% Single, 78% EE+Spouse, 72% Family (as modeled)
• Contract term: 3 years with reopener on health insurance only in Year 3

The Final Agreement: What It Meant in Real Numbers

The Shiloh Village SD 85 Collective Bargaining Agreement (2023–2026) was ratified by the Shiloh Education Association (March 2024) and approved by the board (April 2024).

Total Cost Impact (Three-Year Contract):

Year 1 (2024–25):  $1,886,900 incremental cost
Year 2 (2025–26):  $1,942,100 incremental cost
Year 3 (2026–27):  $1,999,200 incremental cost
_________________________________________________
Total 3-Year Cost: $5,828,200

As % of Current Payroll Base: +9.8%
As % of Current Total Comp Budget: +4.3%

Cost per Full-Time Equivalent Teacher (average): $20,441 over 3 years
Cost per Student (3,200 enrollment): $1,821 per year

Average Teacher Impact (Step 10, MA Lane, $64,500 starting salary):

**Fiscal Impact on the District:**

With an existing general operating budget of approximately $45.2M, the incremental CBA cost of $1.89M in Year 1 represented 4.2% of the budget. The district's five-year revenue projection (including state aid increases and modest property tax levy growth) supported this without program cuts or staffing reductions.

The business office confirmed that no reduction in force would be required, and existing professional development funding would be maintained (even with the additional day added to the contract).

## Lessons for Your District: The CollBar Framework in Practice

The Shiloh case illustrates several principles that apply universally to public-sector collective bargaining:

**1. Cost Multiplier Transparency is Non-Negotiable**
Shiloh's business office initially thought their cost multiplier was 1.20x. The real number was 1.38x. This gap alone could cost a district hundreds of thousands of dollars in misaligned proposals. Know your actual cost multiplier before you enter negotiations. [CollBar's labor costing services](/services/labor-costing) quantify this precisely.

**2. Scenario Comparison Breaks Deadlocks**
When both parties can see the financial consequences of their proposals in real dollars (not rhetoric), movement becomes possible. The three scenarios at Shiloh proved that the union's ask was unsustainable AND the board's ask was one-sided. A middle ground emerged naturally.

**3. Benefits Modeling Requires Precision**
Health insurance premium sharing is often the hidden battleground. The board's proposal to shift to 80/75/70 looked modest on paper but translated to $840/year more for a family-covered teacher. Conversely, the union's freeze proposal cost the district $156,200 in Year 1. Exact numbers matter.

**4. Turnover Offsets Step Advancement**
Although Shiloh's cost model included step advancement as an automatic cost driver, the district was also replacing 4–6 departing teachers per year with step 1 hires. This turnover effect saved approximately $120,000 annually—roughly offsetting 35% of step advancement cost. Many districts never model this offset.

**5. Long-Term Workforce Projections Reveal Hidden Liabilities**
Shiloh's five-year workforce model showed that accumulated sick leave liability would grow significantly as the teaching force aged. This wasn't part of the CBA negotiation directly, but it informed the district's "fiscal capacity"—how much salary growth was sustainable before retirement and leave liabilities crowded out other budget categories. Boards that skip this step often find themselves surprised two years into a contract.

## Frequently Asked Questions

### What is a cost multiplier, and why does Shiloh's 1.38x matter?

The cost multiplier is the ratio of total employer cost (salary + benefits + taxes + retirement) divided by base salary alone. Shiloh's 1.38x means that for every dollar of salary paid to an employee, the district actually spends $1.38 when you add pension, health insurance, Medicare, and other benefits. This is the most important number in any CBA negotiation because it shows the true cost of a salary increase. A 3.0% raise isn't a 3.0% budget increase; it's a 3.0% × 1.38x = 4.14% budget increase.

### How did Shiloh's Illinois pension system affect the negotiation?

Illinois teachers pay 9.0% of their salary into the Teachers' Retirement System (TRS), and Shiloh's CBA obligates the district to pay this contribution on behalf of teachers (called a "pickup"). This means the district's pension cost alone is 9.0%, plus an additional 0.58% THIS Fund surcharge on top. The district does NOT pay Social Security (teachers are exempt in Illinois), but it does pay Medicare (1.45%). When you add TRS (9.0%), Medicare (1.45%), and workers' comp (0.5%), benefits and taxes alone equal 10.95% of payroll before any health insurance. This is the Midwest baseline; other states vary significantly.

### Why did benefits trend factor matter more than salary growth at Shiloh?

Health insurance premiums grew 5.2% annually at Shiloh, regardless of CBA changes. This meant that even if the salary schedule was frozen, the district's benefits cost would still rise $119,700 per year. The real negotiation question wasn't "Will benefits costs grow?" but "Who bears the increase—the district or employees?" Scenario C split the difference: the district absorbed premium trend but also asked employees to pay a slightly higher percentage. Many boards make the mistake of ignoring benefits trend when evaluating fiscal capacity; they shouldn't.

### What does "real wage growth" mean, and why was Shiloh's 0.7% significant?

Real wage growth is salary increase minus inflation (CPI-U). If your salary grows 3.0% and inflation is 3.0%, your real wage growth is 0% (you have the same purchasing power). Shiloh's contract provided a 3.0% raise, but after inflation was assumed at 3.0%, real wage growth was 0% in Year 1, then 0.7% in Years 2–3 (assuming inflation moderated). From the union's perspective, this was disappointing—the membership gained no real purchasing power in Year 1. From the board's perspective, it was realistic: offering raises higher than inflation requires deeper tax increases or program cuts.

### How did step advancement cost offset or amplify the CBA cost?

Step advancement is automatic and unavoidable. At Shiloh, 42 teachers moved to the next step, costing $88,200 per year. This cost exists whether or not the salary schedule increases. Some boards try to "freeze" step advancement in lean budget years, but this creates massive equity issues and grievances. The smarter approach (used at Shiloh) is to include step advancement in the baseline cost projection, then model the incremental cost of a schedule increase ON TOP of that baseline.

### Why did Shiloh reject the board's 1.5% offer immediately?

The board's proposal included a benefits shift that employees would have experienced as a "cut." Even though the district's total cost was conservative, the employee take-home went DOWN in Year 1 (gross +$86/month, net -$29/month) due to higher health insurance premiums. Unions prioritize member take-home more than district cost. An offer that looks fiscally conservative to the board can feel like a pay cut to members if it includes benefits shifting. Scenario C succeeded because it ensured that employee take-home went UP every year.

## Key Takeaways

- **Know Your True Cost Multiplier Before Negotiations Begin** — Shiloh discovered their actual cost structure was 1.38x base salary, not 1.20x. This single fact reshaped every proposal. Use [CollBar's labor costing services](/services/labor-costing) to audit your multiplier; don't assume.

- **Step Advancement Is Automatic and Unavoidable** — Even with a frozen salary schedule, Shiloh's cost grew 1.8% due to steps alone. Budget for this baseline cost before evaluating CBA proposals. Turnover offsets help (replacing step 20 with step 1), but don't count on it entirely.

- **Benefits Trend Growth Is Equally Uncontrollable** — Health insurance premiums grew 5.2% year-over-year at Shiloh, costing $119,700 annually, regardless of CBA terms. The CBA question is who bears the increase—not whether it occurs.

- **Scenario Comparison Breaks Deadlocks Where Rhetoric Fails** — When Shiloh modeled three scenarios side-by-side, both parties saw why 4.5% was unaffordable and 1.5% was one-sided. The middle ground (3.0% plus modest benefits adjustments) emerged naturally.

- **Employee Take-Home, Not Just District Cost, Drives Union Response** — Offers that look fiscally conservative to boards can feel like pay cuts to members if they include benefits shifting. Scenario C succeeded because net take-home increased every year, even with modest premium sharing changes.

## How CollBar Can Help

CollBar's role at Shiloh Village SD 85 was to build transparent, auditable cost models that both parties trusted. We performed the baseline cost multiplier analysis, five-year workforce simulation, and scenario comparison framework that enabled productive negotiation.

If your district is entering collective bargaining negotiations and needs defensible, detailed cost projections—or if you're a union representing members and want to model the true take-home impact of proposals—CollBar can help. We specialize in [labor cost modeling](/services/labor-costing) and [scenario planning](/services/scenario-planning) for public-sector employers and unions nationwide.

**Ready to build your district's CBA cost model?** Contact CollBar today for a free strategy session and labor cost assessment.

**Call (419) 350-8420 or visit CollBar.com to schedule your consultation.**