With 300 furious teachers, parents, and students filling Skyline High School’s auditorium, the June Ann Arbor school board meeting inevitably turned ugly.

During the meeting’s public comment period, fourteen speakers gave the seven board members plus school superintendent Jeanice Swift all sorts of hell: for hiring an “anti-union” Grand Rapids attorney; for not repaying teachers $4.5 million they believe they’re owed for past concessions; for forcing 150 teachers at three schools to reapply for their jobs; and especially for terminating the teachers’ contract at the end of June with only sixty days’ notice.

The audience, most wearing “Support Our Teachers” T-shirts, cheered the speakers wildly and gave each a standing ovation. When comments ended and board president Deb Mexicotte tried to get on with an agenda that included next year’s budget, several audience members shouted at her to change the agenda. When she wouldn’t, a dozen stood and faced the back of the hall in protest. Most eventually sat down, but one remained standing with hand raised for another hour.

Ann Arbor Education Association president Linda Carter shares the audience’s anger. “I was shocked,” she said in an interview before the meeting. “They said our contract was null and void. We had no idea [it] was about to end!”

That wasn’t all that had shocked Carter, a school district employee for forty years and a union president for twenty-seven. “We started working on the IB [International Baccalaureate] program in September. Then they declared the IB program a pilot an hour and a half [before] the meeting!” That meant that “the union [gets] no say on who gets hired [for the 150 IB positions] and who won’t.” With the board’s votes to terminate the contract and launch the IB program, Carter says, “the ability to collaborate went down the toilet.”

In interviews before and after the meeting, Mexicotte explained the board’s position. “We’ve had consultation with legal experts, and we believe we are within our rights to have the contract expire.”

As Swift explains it, “When a contract is a continuing contract, which is what we have in the 2010 agreement [as opposed to one with an end date], either party can send the other a notice saying we’re going to end this. We didn’t want to do it this way. We preferred to negotiate [a new contract]. We’ve had off-the-record meetings and monthly problem-solving meetings [with the union], but our invitation to negotiate in March was declined.”

Mexicotte says the district’s desire to negotiate a new contract shouldn’t have surprised the union: “We’ve had interactions with the union throughout the year, and we have been speaking with union leadership. We had every expectation last year that we would come back together [to negotiate] this year.”

In a town that loves its teachers, what prompted the district to terminate the agreement and confront the teachers’ union after more than twenty years of peace? “The contract needs to change,” Mexicotte replies.

“We have been able to sustain the contract in its current form for several years, but we no longer can, because we continue to have financial difficulties. It’s what we need to do in a time of declining state funding.” Terminating the contract doesn’t change anything immediately–its terms will remain in force–but what the board likes, and the teachers hate, is that one of those terms is a pay freeze.

The union doesn’t believe the district can unilaterally end the agreement. “The way they say a continuing contract can be terminated is not our understanding,” says Carter. “In June of 2010 we agreed to a pay cut that saved the district $4.5 million. That agreement remains in effect until money is repaid. We’ve been frozen since 2010!”

Mexicotte agrees that the teachers took pay cuts and that their wages are frozen but disagrees with Carter about whether the district is obliged to repay the money. “We bargained a contingency clause [into the agreement] that said if certain conditions were met we will restore the cuts. Those conditions have never been met.”

Swift says one condition was that the schools have 10 percent of their annual budget in fund equity, the district’s savings account. “The 10 percent has never been met. We’re now at 4.5 percent, and we think we’ll come out at the end of this year with 6.5 percent.”

Marios Demetriou, the district’s chief financial officer, adds that the clause “also says the $4.5 million can be made up in salary and health care increases. We estimate we’ve paid $4.3 million in additional health care costs since the 2010 agreement.”

Asked about that estimate, Carter replies, “I don’t agree with their math.” She acknowledges “fund equity does have to be above 10 percent” but says that doesn’t mean the district shouldn’t restore the concessions: “We have to be creative just like we have previously.”

Because the union believes the district can’t terminate the 2010 contract, it refuses to negotiate a new one. What happens if a new contract isn’t approved by June 30? “The urban legend is we’ll be in chaos,” says Swift. “In fact, it’s a ‘stay put’: you stay with what you’ve got.”

This means “compensation stays the same, health care continues, retirement continues through state law, and other benefits like dental will continue,” Demetriou says. “Everything is spelled out in the law.”

Carter agrees that if the contract expires, “we’ll all still be around. Nobody’s going anywhere.” But at that point, she adds, the $4.5 million the union wants repaid “becomes table talk” –that is, something to be debated at negotiations along with everything else in the contract.

Carter’s other shock was the adoption of the International Baccalaureate program–which some say means all 150 teachers at Huron High, Scarlett Middle, and Mitchell Elementary schools have to reapply for their jobs.

“It’s not applying for a job,” says Mexicotte. “It’s applying for IB. We did the same thing at Northside for the STEAM program, where we worked very hard with the union to get an agreement. A specialized program needs specialized training. They are not being forced out. They might be teaching at a different school, but of course they’ll have a job.”

“If your desire is to continue to teach in a more traditional environment, we want to give you a pathway to another position in the district,” Swift adds. “We feel the most respectful way is to have every teacher make their choice. About 85 percent said they’d like to go with IB, [and] 10 or 15 percent say they’d like to continue traditional practice. We’re a large district, so we’re able to move those folks over to a traditional setting.”

Demetriou says they’ll have room to accommodate them. “We have thirty-five retirements annually from teachers. For other reasons, probably sixty more [leave].”

What will all this mean for the IB program? Mexicotte believes it “should not impede progress towards certification in two years.” Carter is dubious, but says, “There’s nothing we can do about it anyways. It’s ‘Hands off, union!'”

The union may not be able to do anything about the IB program, but it did file an unfair labor practices complaint–and so did the administration.

“We hoped to come to the table,” Swift says. “When someone refuses, that is the next step.”

“We want to achieve clarity,” says Carter. “Anything is possible, but things have got to be reasonable.”

Is a judge likely to hear either complaint before the sixty-day deadline? “I don’t think so,” Swift replies.

While the teachers have had their pay frozen and class sizes increased, Swift notes, other district employees have suffered much more. Custodians, food and nutrition workers, and bus drivers lost their jobs when those services were privatized. Those who were rehired by the contractors took pay cuts.

Demetriou says the district had no choice. “The money we got for students [from the state] was $9,723 [per pupil] and is now $9,100. Eighty-five percent of our costs are salaries and benefits. We can’t have a compensation package based on $9,700 when we’re receiving $9,100.”

The state’s 2015-16 budget barely improves that number. “We’re getting less than $25 per pupil more,” says Demetriou. “That’s $427,000 [added to our] $210 million budget. But our health care cost is going up by more than a million.”

Faced with shrinking revenue and rising costs, the CFO says “we have created programs to increase the number of students so we can bring additional money into the school district.” The STEAM program is one such magnet, and the board hopes IB will be another. “Last year student count went up 353, the biggest increase in a decade,” says Swift. “This year we got 567 applications from the first enrollment period, mostly in-district transfers, and over 800 applications altogether.”

“We are hopeful with new programs and growth we’ll be able to do more,” says Mexicotte. “But we will get past this and be good partners with the union in the future.”

Mexicotte says emphatically that neither the administration nor the board is trying to bust the teachers’ union. “We work with all our bargaining units and have no intention of not bargaining with the teachers’ union now and in the future. Just because people say it over and over again does not make it so.”