PHILLIPS — Teachers’ union officials and school board members in RSU 58 have moved closer to resolving their nearly three-year contract dispute by tentatively agreeing to retroactive pay increases.

Officials of the Teachers Association agreed to offer members just over $150,000, about $25,000 less than the board’s last offer, to settle the issue of lost income since September 2012, when step pay raises ceased.

The board agreed to let that amount be distributed to teachers, retroactively, as long as it stayed within the arbitration team’s recommendation of 4.5 percent of the total increases.

Teachers began working without a contract in September 2012. Since then, union and school board representatives have spent hours talking but reaching no decisions, according to Teachers Association President Sally Bean.

After a fact-finding panel released recommendations in January 2014, the board and union could not agree on a settlement. They agreed to meet with an arbitration team in July, and the panel released its recommendations in December.

The Thursday night meeting was the first opportunity to discuss the next steps in the negotiation process.

The Phillips Elementary School gymnasium on Thursday night was filled with dozens of teachers, administrators and residents who listened intently for two and a half hours, as the board and union representatives discussed the arbitration board’s recommendations and related concerns and disagreements.

Union members said morale had dipped so low that a majority of teachers were actively seeking other jobs.

“The evolution of why teachers have not been able to negotiate a contract has changed,” teacher Stephan Mitman said. “Over the past year, the board has shifted its attention from students to money.”

The arbitration panel also recommended using a teacher-developed salary scale with a 4½ percent pay increase, applied retroactively over the past three years.

Teachers are paid an annual salary increase based on their experience. That step allows teachers to match their pay competitively with other teachers in the state and allows teachers coming into the district to have some assurance that they will be paid based on that experience, union representatives said.

Union representative Adam Masterman argued that teachers had agreed to a salary cut and a greater share of insurance costs. A statewide base salary scale guarantees new teachers an equal start, allowing less affluent communities to compete with wealthier communities for qualified candidates, he said.

The board also should consider the economic investment and long-term benefits of hiring and retaining those teachers who come to the district for jobs and stay for careers. They buy homes, pay taxes and raise families in that district, union members said.

Board Chairman Dan Worcester of Phillips asked Masterman for an explanation of what he considered unfair salary increases for teachers who had more years of experience.

“We don’t give a better rate to more experienced teachers,” Masterman said. “Everyone gets the same 2½ percent increase, so teachers who have higher salaries will see more of a proportionate increase.”

The percentage increase every year is not a raise, union representative Maggie Adams said. Contracts guarantee that a teacher receives a 2½ percent increase, or a step, for each year of experience in the district.

“You don’t lose your experience, because you take it with you,” Kingfield Director Julie Talmage said. “Experience and steps aren’t necessarily the same.”

The board and union spent much of the meeting discussing health benefits and the increased cost of them. The district pays a percentage of the teachers’ premiums, including those of the employees’ dependents.

Directors agreed to consider the arbitration board’s suggestion for an 85/15 percent split for the employees’ health insurance premium payment, with the district paying 85 percent, and a 75/25 percent premium split for dependents.

Currently, the split is 90/10 for teachers and 80/20 for dependents.

Directors expressed frustration at the inability of the union to assign a dollar figure, rather than a percentage, to increased costs of coverage. They also asked teachers to review other plans, rather than accepting the rates charged by the Maine Education Association Benefits Trust.

RSU 58 includes the towns of Strong, Kingfield, Avon and Phillips.