"Welcome back, we have a settlement!" exclaimed a visibly excited Peg Cornell as she addressed teachers at the Corvallis School District all-staff back-to-school rally Wednesday morning.

As the incoming president of the Corvallis Education Association, Cornell - a Crescent Valley High School science teacher - seemed to relish the chance to be the first to tell the district's 396 teachers that they have the chance to start the new year with a new contract.

After giving Corvallis' 85 new public school teachers time to join the union, CEA will hold a vote on the new contract Sept. 7.

"We need to ratify this puppy," Cornell said.

The tentative agreement is for a four-year contract, with a 3 percent cost-of-living salary increase each year. The pay hike represents concessions on both sides. During negotiations in mid-August, the union had been asking for between 3.75 and 4 percent cost-of-living increases for each year of the contract, and the district had been offering a 2.1 percent increase in the first year and up to 3 percent in subsequent years, contingent on the Consumer Price Index.

In the previous contract, ratified during state budget shortfalls in 2005, teachers accepted cost-of-living increases of 1.25 and 0.80 percent.

Both sides also gave some on pay increases awarded for experience. The teachers union had requested 4 percent, and the district offered what teachers have been getting since 2005 - 3.75 percent. The new contract would raise that a little to 3.80 percent.

The school district offered significant concessions on medical benefits, offering to pay percentages on increases of teachers' insurance premiums at 12 percent, 6 percent, 8 percent and 8 to 10 percent, consecutively over the four years.

While the union had been asking for the district to pay up to 10 percent of increases each year, the district had been proposing paying up to 10 percent of increased costs in the first year, no increase in the second year and up to 5.5 percent of increases in the third year.

Recent legislation requires school districts to enroll teachers in a statewide insurance pool that will go into effect in October 2008. It is unknown how this will affect rates. The current insurance provider for Corvallis teachers projects a 15.7 percent premium increase for 2007-08.

A major change in the tentative agreement is a new three-column salary schedule, with categories for teachers with bachelor's, master's and doctoral degrees (or master's plus 45 college credits).

The salary schedule ratified in 2005 consisted of one column on which people were placed upon hire according to their education and experience. Starting base pay for teachers has been $31,768.

The three-column salary schedule will allow the school district to remain competitive in the marketplace to recruit and retain teachers with higher levels of education, said district spokeswoman Jeanne Holmes.

Details on the new salary schedule will be available if the contract is ratified, Holmes said.

Staying competitive with the pay scales of other school districts is important for hiring and retaining teachers and for maintaining the quality of education parents have come to expect in Corvallis, said school board chairman Blake Rodman.

"We feel we've lost good candidates to neighboring districts," Rodman said.

All involved are breathing a sigh of relief that the process of negotiating a new contract was essentially finished before school starts.

"We're all part of the same team," Rodman said. "To be able to come into the school year with this contract virtually done - we can all focus on what we need to do - on the kids."