Teachers at Komarek School District 94 in North Riverside are the latest to ratify a new contract that eliminates automatic annual step raises in favor of a flat percentage-rate pay raise each year.

The four-year deal expires after the 2016-17 school year and calls for teachers to receive salary increases of 2.5 percent in each of the first three years, followed by a 3.5 percent increase in the fourth year.

“It’s pretty big,” said Superintendent Neil Pellicci of the changes to the contract. “The teachers were realistic and understood we can’t have something that guarantees that high of a salary increase every year.”

Previous contracts called for teachers to receive not only a base pay raise, but an annual step raise, which amounted to about a 4.5 percent increase. So even though base pay raises in the prior contract were smaller, combined with the step raise, teachers were receiving annual raises of close to 6 percent.

“It greatly reduces our salary increases every year,” said Pellicci.

A call by the Landmark to Mary Schmit, a Komarek School teacher who was the lead negotiator for the North Riverside Education Association, seeking comment was not returned.

Keeping a lid on expenditures is important, because the district faces a tight financial future for at least the next four years, according to Pellicci. In 2012, the district issued $2.4 million in working cash bonds after its cash reserves fell to an alarming level following the 2011-12 school year.

The financial pressure is expected to ease somewhat in 2017, when the Cermak/17th Avenue TIF district in Broadview expires. The expiration of that TIF is expected to result in hundreds of thousands of dollars being funneled to D94.

Combining the step raise-free contract with the working cash bonds will enable the district to keep its financial ship steady until 2017, said Pellicci.

“This gets us through that time period,” he said.

In addition, the number of salary lanes (which reward teachers with additional pay for advanced degrees and graduate course credit) has been cut in half from eight to four, and teachers have agreed to a health insurance plan that imposes higher deductibles and requires them to pay more in out-of-pocket expenditures.

The new contract also eliminates lump-sum bonuses paid to retiring teachers who have at least 20 years of experience teaching and at least 10 years at Komarek School.

However, the contract did allow a concession to teachers regarding a retirement incentive. The new deal extends the retirement incentive (which guarantees a higher pay raise) for to up to four years instead of the two years provided in the previous contract.

Under the terms of the provision any teacher giving notice of retirement by Dec. 1 can, for up to a period of three and a half years, receive an annual pay increase of 6 percent in lieu of the pay raise in the contract. Such raises bump up the teacher’s final salary figure as it pertains to pension benefits.

Extending the retirement incentive was key in the administration getting teachers to agree to a four-year deal, Pellicci said.