KARNS CITY — Karns City schools will open as scheduled on Wednesday.

Thursday night, the Karns City teachers and the school board agreed to submit remaining contract issues to nonbinding arbitration.

Extracurricular activities and sporting events also will remain on schedule.

The district's 123 teachers had set a strike date for Wednesday.

Early retirement incentives have been a sticking point, but the two sides agreed upon a substantial increase in starting pay for new teachers and an increase in the amount teachers will pay each month for health insurance.

Retroactive pay, including pay increases at a rate of 3.6 percent annually, had been agreed upon by both sides, provided a contract was accepted by Wednesday. It was unclear this morning how Thursday's development affects that agreement.

Officials involved in the negotiations could not be reached for comment this morning.

Teachers were lobbying for an annual wage increase of 3.95 percent.

Under the board's plan, a teacher making the average salary would make $54,713 for the school year that ended in June, $56,713 in 2010-11, $58,723 in 2011-12, $60,837 in 2012-13 and $63,027 in the final year.

Another concession by the board would boost a new teacher's starting salary to $38,000 initially and to $42,000 by the fifth year of the contract.

The teachers' previous contract set a base salary of $35,250 for new teachers with a bachelor's degree.

Teachers also agreed to a monthly contribution at $30 per member per month for health care with no additional payment for family coverage, an increase over the $10 per month they currently pay.

For the 2010-11 school year, husband and wife health care coverage costs the district $12,420 per year.