Though both agree that little give has occurred from either side, the school district and teachers union for now will continue talking rather than sending the labor negotiations to mediation.

During contract negotiations at the district headquarters Monday, United Teachers of Monroe President Leon Fowler continued to insist on step pay but lowered the union's salary increase demand from 2 percent to 1.5 percent. Fowler also wants the full step pay and increase to be paid to teachers and non-instructional personnel retroactively to July 1.

The district, on the other hand, stuck to its offer of a $600 bonus for teachers and $350 for non-instructional personnel and a half step, both payable on Jan. 1. But it was the possibility that the district would give teachers a three-year contract instead of a one-year contract this year that gave Burke something to offer the union.

After some tense debate over how much money the district has for salary increases and a complaint by Fowler that the board had approved the hiring of three administrators, each for more than $100,000 in salary, the two found common ground on a possible three-year contract. Annual contracts give teachers less financial stability, Fowler has said.

Burke told Fowler he'd take the union's latest demand for the full step pay and 1.5 percent salary increase to the board and see whether board members would be willing to sign a three-year contract this year too. He also hinted that the district might find money for salary increases by cutting the budget.

"I understand your comment about the fiscal position," Burke told Fowler. "But they do want to negotiate a three-year agreement going forward. The board is looking at reductions in other areas, things we can do. They are in agreement that we can have some escalating compensation opportunities over the next three years."

Burke and Fowler plan to meet again before Nov. 17, the date of the next School Board meeting.

Earlier in the meeting, Burke and Fowler spoke in calm terms about how each side could not move any further.

Fowler insisted the district can afford to give teachers a full step in pay and a salary increase, pointing to $6.87 million in reserves; money from the federal American Recovery and Reconstruction Act, or federal stimulus program, which gave states money for schools and infrastructure projects; and the half-mill shift from capital funds to operations funds voters approved in 2008 for teachers' salaries. The district will again ask voters to approve another half-mill next year.

Fowler also said Burke wasn't taking into account money freed up each spring by retiring teachers and those who leave their jobs for other reasons. He argued that money can go for raises.

"There are savings every year from turnover and retirement," Fowler said.

Burke countered that the district has less money than Fowler thinks, that the reserve funds should be left untouched because if they're reduced, the district's bond rating would suffer and lessen the district's ability to borrow money for construction and other needs.

The School Board isn't confident that voters will approve another half-mill transfer from the capital budget to operating fund next year, Burke told Fowler. The half-mill put $6.9 million in the district's coffers last time it passed, so the board wants to put $3.7 million aside just in case.

Saying the board wants "economic security for the school district," and "I'm not painting a picture of absolute financial demise," Burke said," next year is going to be very, very difficult, with shrinking property taxes; this is the financial picture they're looking at."

The stimulus money, which paid the salaries for 45 teachers last year, also ends next year, Burke said.

Fowler accused Burke and the board of using a possible half-mill rejection by voters as a bargaining tool.

"That's a defeatist attitude by the board," Fowler said. "The way the board is characterizing it, they anticipate the public voting it down, they keep saying the public won't pass it. This is a way to take $3.7 million off the [bargaining] table for the next three years."

Fowler and Burke, however, found room to maneuver in the issue of determining a three-year contract this year instead of waiting until next year, which the School Board initially proposed.

"If the School Board wants to talk about the future and they have just a few more dollars, we're willing to work with the board," Fowler said.

Fowler also hinted that he'd like to avoid an impasse and the injection of an arbiter, which has been declared only five times in 35 years, said Debra Grove, a union negotiator and teacher at Key Largo School. In Florida, when talks between a school district and a union collapse, the dispute moves to mediation or to an administrative law judge; if that fails, the two sides take their arguments before a legislative hearing. The panel that decides the dispute at a legislative hearing is that county's School Board.

The union never has won a legislative hearing in Monroe County, Grove said. If the board doesn't relent, the teachers continue to teach; they can't strike in Florida. All they can do is attempt to win ground back when negotiating the next year's labor contract, Grove said.

jguerra@keysnews.com