Bargaining teams from the Southern Oregon Education Service District and its union failed to reach a contract agreement during a mediation session Tuesday that would decide salary, benefits and working conditions for more than 100 special-education teachers.

Bargaining teams from the Southern Oregon Education Service District and its union failed to reach a contract agreement during a mediation session Tuesday that would decide salary, benefits and working conditions for more than 100 special-education teachers.

The groups exchanged new offers during the seven-hour mediation, but no settlement was made.

"We were optimistic and then, disappointed at the lack of movement on dollars," said Jessica Knieling, ESD spokeswoman and a human resources development specialist with the Oregon School Boards Association.

Another mediation session is set for 4 p.m. March 3.

Negotiations between the ESD and the teachers, whose contract ended June 30, stalled in October. The ESD initiated mediation to try to bring a resolution to the standoff over pay and benefits.

About 65 percent of the highly specialized teachers are itinerant, traveling among more than a dozen school districts primarily in Jackson, Josephine and Klamath counties.

A first-year ESD teacher with a bachelor's degree, about 10 percent of teachers, now earns $37,116. The highest paid ESD teachers with 17 years of experience or more receive $70,208.

Currently, the ESD pays 92 percent of health insurance premiums, while teachers pick up 8 percent.

On Tuesday, the ESD enhanced its last offer for salary and benefits. It proposed a three-year contract with a 2 percent annual raise and another 6.7 percent salary boost in 2007-08 for teachers with 16 years or less of experience.

In 2008-09 and 2009-10, the same teachers would receive a 2 percent annual raise and a 3.35 percent increase for experience.

The offer set a cap of $890 for insurance benefits in 2007-08, $925 in 2008-09 and $935 in 2009-10.

Teachers with more than 16 years of experience who are not eligible for 6.7 percent salary increase, about 25 percent of all teachers, would receive an additional $500 toward their health insurance benefits.

The offer would be retroactive to fall 2007.

After four hours of considering the ESD proposal, the union returned with a counter offer.

The exclusion of 25 percent of teachers from the 6.7 percent pay hike for experience was unacceptable, said Michael Friedl, union co-president.

Instead, the union proposed a two-year contract with a 2.75 percent annual pay increase for all teachers plus the 3.35 percent boost for experience.

The union also asked for a guaranteed contribution of $945 on monthly insurance premiums in 2007-08, rising to $1,022 in 2008-09.

The ESD bargaining team adjourned the mediation because it said it needed more time to estimate how much the union's offer would cost.

Reach reporter Paris Achen at 541-776-4459 or pachen@mailtribune.com.