PROVO — Rising costs and increasing legislative oversight are being blamed for the removal of some retirement benefits from the 2005-06 contract being offered to Provo School District employees.

At a Monday meeting held at Timpview High, teachers and classified employees got their first chance to see the proposal and hear the explanations, and their reaction varied from frustrated resignation to appalled outrage.

"I have a problem with the school board being able to change anything it wants," Provo teacher Duane Hill said.

Hill and a number of other veteran teachers gathered in a foyer after the meeting and expressed displeasure with the proposed contract, especially the loss of the Medigap benefit — a supplemental insurance plan to Medicare — from the retirement package. Medigap pays for health expenses not covered by Medicare. It was removed from the employee retirement plan in last year's contract, which caused 34 employees to file a lawsuit against the district last week.

Teachers who are nearing retirement are the most affected by the axing of Medigap; they've paid into the system for their entire careers and now will not receive that benefit.

Those teachers said the district had no reason for taking Medigap away; Provo High teacher Charles Bigo said the district removed the program on a "whim."

But representatives involved in contract negotiations said there was nothing nefarious in their intentions — the rising cost of Medigap had simply made the program too expensive.

"We had hoped at one time to restore those Medigap benefits, but we believe that would have a negative impact on salaries," said Lynda Westover, president of the Provo Education Association.

Westover presented the contract at Wednesday's meeting, and though the proposal was greeted at one point with sarcastic laughter, she said she believed teachers would recognize it was the best deal possible.

"I think teachers feel it's a fair plan," she said. "As I talked with teachers and explained the district's finances, even though it's not as much compensation as they would like, they understand it's a fair offer given the financial restraints."

The proposed contract has already been approved by the PEA board.

Westover said the negotiation process was restricted by an audit conducted this year by the Utah State Legislature. The audit recommended that all districts in the state modify their benefits packages to more "affordable, sustainable" levels and begin setting aside funds to meet anticipated retirement obligations.

The audit also recommended that any school district that fails to make progress in those areas by the 2007 legislative session should be subjected to decreased funding.