With Westport schools having to tighten up spending, a new three-year contract for the approximately 450 teachers of the Westport Education Association will offer significantly lower wage increases than past contracts.

The negotiators on both sides settled the contract a short while before it would have been out of their hands and to an arbitrator. The Board of Education (BOE) approved the contract on Monday

In the first year of the contract, which will go into effect on July 1 with Representative Town Meeting's (RTM) approval, there will be a 2 percent wage increase, but no step increase.

A step increase is an annual bump in pay -- usually about 2 percent -- based on a teacher's longevity. Not having the step increase in 2010-11 will result in approximately $1.2 million in savings, according to Nancy Harris, assistant superintendent for business.

In the second year of the contract, step increases will return and there will be a wage increase only for employees at the highest step, which equates to an average raise of .79 percent. The final year will bring another step increase and a wage increase for all employees of 1.17 percent.

Each year, the new contract also calls for a gradual increase in the amount of pay that employees need to contribute to health insurance. Prescriptions and co-pays also went up. Teachers will work the same amount of hours as they did in the last contract.

Superintendent of schools Elliott Landon, who has been a superintendent for 30 years, with 10 of those years spent in Westport, said he had never seen a freeze in the step increases or such a low wage increase.

Landon said, "Everybody on our side recognized that these are unique times ... and therefore negotiations had to be fair to the teachers and fair to the taxpayers, but above all, maintaining the best [for the students]."

According to the 2009-2010 contract in effect this year, teachers make $46,092 to a maximum of $102,195 based on how long they've worked for the school and whether they have a master's or bachelor's degree.

"I know that there will be people ... who go to me and say, `How come it's not zero?" said James Marpe, one of three BOE members who were involved in the negotiations. "We have to continue to attract and reward those teachers."

The latest negotiating session went to approximately 2 a.m. In the contract settled three years prior, one session went to 4 a.m.

If the contract dispute went to an arbitrator, the decision would have left Westport's purview. During arbitration, a third party looks at contracts presented by both the teachers' union and the BOE and then picks one with no middle ground achieved. The RTM would also not be able to vote on the contract if an arbitrator already picked one.

"I'm glad it didn't go to arbitration," said Don O'Day, who worked with Marpe and Faith Taylor as representatives from the BOE.

Ed Huydic, president of the Westport Education Association, agreed with Landon's comments that the contract was fair for everyone involved. He was also glad that the contract didn't go to arbitration. The negotiators were just a few hours away from that happening.

"We had a meeting of the minds. Things really kicked into gear the week or two prior to the arbitration," said Huydic.

Landon speculated that if the contract wasn't settled before arbitration, the ruling likely would have gone against the BOE and in favor of the Westport Education Association. The reason for this, he said, is that Westport is among the highest in the state in terms of value per pupil, which is determined by property value and the tax rate.

"If we go to arbitration, we are in a very bad place," said Landon.

When determining the contract, the negotiations that other school districts were going through was used for reference. New Canaan, Greenwich and Fairfield all came up with contracts around the same time that Westport did.

According to school officials, the contract for New Canaan was most similar. In the three-year New Canaan contract, there was also a 2 percent wage increase and step freeze in the first year. The details of the following two years differed from Westport with one of the key changes being that teachers now have to serve as hall monitors and overseeing children during recess, and in the cafeteria.

A representative from the Board of Finance, Charlie Haberstroth, was involved in the negations. Looking ahead to the upcoming budget cycle, he said this contract, which keeps spending under control, will aid in the process.

"This coming year's budget will not be easy, so every bit helps," he said.