Legislature(1995 - 1996)
03/05/1996 01:38 PM House FIN
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CONTRACT LABOR AGREEMENTS & COMPENSATION INCREASES:
SUPERVISORY UNIT (SU)
PUBLIC SAFETY EMPLOYMENT ASSOCIATION (PSEA)
ALYESKA CORRESPONDENCE SCHOOL EDUCATION ASSOCIATION
(ACSEA)
UNIVERSITY OF ALASKA CONTRACT LABOR AGREEMENTS &
COMPENSATION INCREASES:
1
ALASKA COMMUNITY COLLEGE FEDERATION OF TEACHERS
CLASSIFIED EMPLOYEES ASSOCIATION
NON-COVERED EMPLOYEES
MARK BOYER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION noted
that the General Government Unit contract was negotiated in
the spring of 1995. He pointed out that this contract
formed the blue print of further contract negotiations. He
emphasized the absence of Legislative action regarding the
GGU contract. He noted that absent an indication that the
terms and conditions of the GGU contract were not acceptable
that the Administration assumed that they were on the right
track in contract negotiations. Six subsequent contracts
were negotiated along the same terms. He observed that the
GGU contract provides a one year zero wage increase and a
subsequent increase of one-half of the Anchorage Consumer
Price Index (CPI) capped at 1.5 percent for each year of the
contract, limited to 4.5 percent over the life of the
contract. He stressed that the Legislature acts as a Board
in respect to negotiations between the Administration and
employee groups. He observed that negotiations are
occurring with 7 of 11 bargaining units.
Commissioner Boyer noted that AS 23.40.215 requires the
Department of Administration to submit the monetary terms
and conditions of contracts by the 10th legislative day.
The Legislature can reject the monetary terms by passage of
a current resolution. The reasons for rejection would be
stated in the current resolution. He maintained that the
Legislature had opportunities within the 60 day time frame
to send a signal if the Legislature did not accept the terms
and conditions of the GGU contract negotiations by the
Administration.
SUPERVISORY UNIT (SU)
Commissioner Boyer discussed the terms of the SU contract.
He noted that the contract calls for a one year zero wage
increase with a subsequent yearly increase of one-half of
CPI, not to exceed 1.5 percent, capped at 4.5 percent. He
observed that 90 percent of the employees in this group are
not overtime eligible. These persons would receive a flat
1.5 percent increase after the first year. He stressed that
this is the professional management group. He noted that
the contract allows $50.0 thousand dollars for training each
year. In addition, a flexible benefit plan would be
adopted. He maintained that flexible benefit plans will
save the employer money. He added that the Administration
will propose a flexible benefit plan to cover all non-
covered employees.
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BOB STALNAKER, DIRECTOR, DIVISION OF RETIREMENT AND
BENEFITS, DEPARTMENT OF ADMINISTRATION discussed flexible
benefit plans. He explained that a flexible benefit plan
provides a defined employer cost and allows employees to
select from an array of benefits. Employees could pay less
than the current insurance premium of $423.50 dollars. The
difference between the allowed state health insurance
premium and the cost of the plan selected by the employee
would go into a flexible spending account that could be
applied to deductibles. Employees that want more expensive
options could select further coverage. Employees would be
responsible for additional costs. He noted that labor
management groups can assure that the right options are
being offered and that the appropriate costs are charged for
each option. Commissioner Boyer asserted that the flexible
benefit plan is a major cost containment initiative that the
Administration hopes to expand.
BRUCE LUDWIG, ALASKA PUBLIC EMPLOYEES ASSOCIATION explained
that SU employees are above a foreman and below a political
appointee. He observed that the average longevity in this
unit is 13 years. The majority of this unit work overtime
hours without compensation.
Mr. Ludwig noted that labor management committees attempt to
find efficiencies in government and reduce travel costs.
Mr. Ludwig discussed issues of concern. He maintained that
the loss of jobs through outside contracting should
represent real savings to the State after accounting for
actual costs. He discussed geographic pay differentials.
He noted that the Legislature contracted for a study in
1984. He asserted that the 1984 study resulted in real
geographical pay cost differentials. He urged the Committee
to change geographical differentials to reflect the 1984
study. He observed that there is a perception that state
employees are overpaid. He noted that employees can only
bargain the state pay schedule. The Alaska Personnel Act
provides that the employer place positions on the pay
schedule depending on the market. He noted that the
Department of Administration is required by statute to do an
annual salary survey. He questioned if the salary survey
had been completed since 1984. He noted that positions have
been down graded along the schedule.
Mr. Stalnaker stated that the impact of contract salary
changes to PERS and SBS will be provided to the Committee.
Commissioner Boyer noted that SBS and PERS are set in
statute.
DIANE CORSO, LABOR RELATIONS MANAGER, DEPARTMENT OF
ADMINISTRATION explained that the SU contract changes
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standby pay from .75 hours per day to 1.25 hours per day for
overtime ineligible employees. She pointed out that
overtime ineligible employees recalled to work do not
receive additional compensation.
Commissioner Boyer noted that the monthly health insurance
premium provided by the State would be raised to $450
dollars as an inducement to adopt a flexible benefit plan.
Mr. Stalnaker explained that an employee could elect a
minimal benefit plan at $385 dollars or a plan for maximum
coverage at $500 dollars. Any benefits over $450 dollars
would be paid one hundred percent by the employee.
PUBLIC SAFETY EMPLOYMENT ASSOCIATION (PSEA)
Commissioner Boyer noted that this contract was not
negotiated until December, 1995. The contract lapsed at the
end of December and was extended until June 30, 1996. The
salary schedule would include a 1.5 percent increase
effective January 1, 1996 to December 31, 1998. He observed
that this group has a health trust. The State's
contribution to the Trust would be increased to $495 dollars
effective July 1, 1996 and to $520 dollars effective July 1,
1997. A lump sum payment to the Trust was eliminated.
Commissioner Boyer provided members with a spreadsheet of
the approximate cost of bargaining unit contracts and other
non-covered employee compensation (Attachment 1). He noted
that merit increases and longevity increases are not covered
in Attachment 1. He stressed that TRS, PRS, longevity and
merit increases are internally financed by the personal
services line in every department.
In response to a question by Co-Chair Hanley, Commissioner
Boyer noted that there are geographical cost differentials
and merit and longevity steps in the PSEA agreement. He
observed that PSEA has binding arbitration.
Co-Chair Hanley noted that it would be helpful to see area
cost differentials for the different bargaining groups.
Commissioner Boyer observed that non-covered classified
employees have a 14 percent area cost differential in
Fairbanks. He noted that the Administration is proposing
legislation which would return the area cost differential to
zero and allow this to be part of future contract
negotiations.
ALYESKA CORRESPONDENCE SCHOOL EDUCATION ASSOCIATION (ACSEA)
MILA DOYLE, LABOR RELATIONS, DEPARTMENT OF ADMINISTRATION
noted that ACSEA recently reached a contract agreement with
the Administration. She characterized negotiations as quick
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and friendly. She stated that the contract would be
provided for annual wage increases of half of the CPI,
capped at 1.5 percent for each year of the contract. The
contract was changed to run along the fiscal year. There
will be six months without a pay increase. Increases in
health insurance premiums will be split 50/50 between the
State and employees for up to $50 dollars. The leave
schedule was internally adjusted with no overall gain.
Commissioner Boyer noted that some employees will receive
less leave accrual and some will receive more. He added
that the entire contract will be financed through the school
education foundation formula. He pointed out that this unit
previously had a $75.0 thousand dollar general fund
component. He clarified that the previous general fund
portion will not be deducted from school districts. The
Department made some internal shifts within the BRU to
accommodate the increased cost of $10 - $20 thousand dollars
and the previous $75.0 thousand dollar genearl fund
component. Ms. Doyle added that ACSEA employees are in the
TRS system. They are not eligible to participate in SBS or
PERS.
MARGARET MACKINNON, BARGAINING TEAM MEMBER, ALYESKA
CORRESPONDENCE SCHOOL EDUCATION ASSOCIATION spoke in support
of the ACSEA agreement. She pointed out that these teachers
accepted less leave than other employees in order to keep
the work flow going. She noted that there are 24 teachers
in the unit. Ms. Doyle noted that movement across a
teacher's salary schedule pay columns is based on education
qualification. Co-Chair Hanley summarized that there is
some movement for longevity.
(Tape Change, HFC 96-60, Side 2)
Commissioner Boyer noted that negotiations are in progress
with the Confidential and Alaska Vocation Technical Center
units. The Mt. Edgecumbe Teacher unit will begin
negotiations in Spring 1996. He noted negotiations will be
based on similar packages.
In response to a question by Representative Martin,
Commissioner Boyer emphasized that there are approximately
2,000 employee movements each year. This results in new
hires at lower levels and movement between steps. He
summarized that there is a mature work force that is
approaching the end of the longevity scale. He stressed
that it would be difficult to define future costs associated
with merit increases.
Representative Martin asserted that employees' wages are
increasing every year through merit and longevity increases.
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Commissioner Boyer acknowledged that there is a merit and
longevity system. Co-Chair Hanley questioned if merit and
longevity increases could be averaged for the different
units to compare increases against the Anchorage Consumer
Price Index. Commissioner Boyer asserted that PSEA is the
only unit that has actually kept pace with the CPI due to
binding arbitration.
Co-Chair Hanley observed that some units have negotiated
increases in health benefits in lieu of salary increases.
He noted that merit increases are covered by retiring
employees that are replaced by employees that are not as far
on the merit scale.
Representative Therriault questioned if the CPI overstates
inflation. Commissioner Boyer noted that the value of the
Consumer Price Index is being debated. He observed that the
federal Department of Commerce uses a chain weighted price
index that better reflects consumer spending.
EXEMPT EMPLOYEES
Commissioner Boyer referred to the 1994, Salary Survey
Report, by the Department of Administration (copy on file).
He noted the Department is requesting that the statutory
requirement for salary surveys be changed to every five
years due their expense. He noted that the 1994 survey
findings focused on external comparison and internal
consistency. He noted that the statutes require like pay
for like work. There are approximately 3,000 employees that
are not covered by bargaining agreements, including 600
legislative employees. These employees are covered by the
statutory salary schedule. The Report observes that this
group is currently behind by 3.6 percent. If GGU contracts
are adopted they could be behind by 6.2 percent. He noted
that this class of employees is not keeping up with
employees in bargaining units. He asserted that employees
will seek representation if disparity continues. He noted
that the Department of Administration recommends that non-
covered employees be treated similarly to other groups. He
anticipated a proposal to include non-covers under a
flexible benefit plan.
UNIVERSITY OF ALASKA
Commissioner Boyer noted that $1,750.0 million dollars was
front loaded in the University's budget request to include
non-covered employees. The contract costs of covered units
were not included.
Co-Chair Hanley noted that the spreadsheet shows $1,750.0
for all university employees. Commissioner Boyer restated
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that covered employees are not on the spreadsheet.
WENDY REDMAN, VICE PRESIDENT, UNIVERSITY OF ALASKA clarified
that the Governor included 1.5 percent for all permanent
full time employees at the University. She observed that
bargaining unit and non-bargaining unit employees were
included with a 1.5 percent wage increase.
ALASKA COMMUNITY COLLEGE FEDERATION OF TEACHERS (ACCFT)
Ms. Redman reviewed the ACCFT contract. She noted that all
faculty at extended campuses, vocational and technical
faculty and all faculty that teach without a research
component are included in this unit. The contract was
negotiated in 1992 and expired in 1994. A successor
agreement has not been negotiated. Contract provisions
require that these faculty be treated similar or identical
to other non-organized faculty. The contract refers back to
the Board of Regents' policy for promotion, tenure, faculty
rank, compensation and leave time. The contract states that
the Board policy will be the policy that was in place at the
time of the contract. She emphasized that the issue before
the Legislature is an arbitration of an existing contract.
She noted that the contract states that the ACCFT will get a
salary increase consistent with the Board policy that was in
place at that time. At that time the Board policy required
a 3 percent annual increase. Under the terms of the
contract the University is required to present the
Legislature with a request for an annual 3 percent pay
increase. The Board subsequently suspended this policy for
all other faculty in 1994. The Arbitrator ruled that the
University must maintain this provision.
In response to a question by Co-Chair Hanley, Ms. Redman
explained that the ACCFT is under the same provisions for
pay increases as other faculty with the exception of COLA.
There are no annual increases. Pay follows rank promotions
which take place between 3 to 7 years. There is a 10
percent pay increase when a faculty member moves between
ranks. This cost is funded internally. She noted that the
health care premium was reduced in 1993 for non-organized
employees. Non-organized employees are under a co-pay plan.
She observed that ACCFT employees are not under a co-pay
plan. She added that $370.00 dollars is the average health
insurance premium for university employees.
RALPH MCGRATH, PRESIDENT, ALASKA COMMUNITY COLLEGE
FEDERATION OF TEACHERS (ACCFT) testified via the
teleconference network. He provided members with written
testimony (Attachment 2). He clarified that most faculty
are hired at an assistant professor position. Most faculty
receive 2 promotions to associate professor and full
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professor. Faculty increases over the life of their career
would be 20 to 30 percent. He observed that the contract
has been in dispute for 4 years. The contract was approved
by the Legislature in May 1992. The Board of Regents'
policy was put in place calling for a 3 percent annual
compensation increase. The University of Alaska decided to
suspend the policy a year and a half ago. The issue was
taken to arbitration. The Arbitrator decided this issue in
favor of ACCFT. He noted that the University holds that the
Legislature rejected the FY 95 and FY 96 requests. He
stressed that ACCFT does not agree with the University's
position. He pointed out that the Governor's budget
submission should contain the ACCFT's negotiated increase
for FY 97.
Ms. Redman agreed that most faculty receive two 10 percent
increases during their career, absent any COLA increase.
She observed that the ACCFT moved from an annual step
increase to a tenure and rank system which applies to other
university faculty members.
Representative Brown referred to a spreadsheet provided to
members regarding FY 95 - FY 96 costs of UA\ACCFT COLA
adjustments (Attachment 3). Ms. Redman noted that the
Governor's budget includes a 1.5 percent increase for all
full-time permanent employees, bargaining and non-
bargaining, at a cost of $1,750.0 million dollars. The
University of Alaska submitted a budget amendment to include
the ACCFT and CEA contracts. Attachment 3 shows the cost of
including the ACCFT negotiated increase. She explained that
the University was under negotiation with ACCFT when the
budget was submitted. The total FY 97 request for a 3
percent increase to fund the ACCFT contract is $499,108.0
thousand dollars. The Governor's budget submission included
$215.5 thousand dollars.
(Tape Change, HFC 96-61, Side 1)
Ms. Redman noted that the University of Alaska's budget
amendment includes an additional $80.0 thousand dollars for
CEA and $280.0 thousand dollars for ACCFT. Co-Chair Hanley
noted that this would be in addition to the $1,750.0
thousand dollars requested in the Governor's original
submission.
Representative Brown asked how funding for ACCFT's FY 95 and
FY 96 increase would be addressed. Co-Chair Hanley stated
that if the Legislature decided to fund these increases that
they would be appropriately included in a supplemental.
They could be added into HB 468 in the Senate or into a new
a new supplemental bill.
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In response to a question by Representative Brown, Co-Chair
Hanley explained that if ACCFT wins the lawsuit the
University would have to pay for the increase within their
budget, since the Legislature did not specifically address
the issue. If the Court rules that the University is not
obligated to pay the increase it would not be paid. Ms.
Redman observed that the lawsuit is not anticipated to
settle until after the current legislative session.
CLASSIFIED EMPLOYEES ASSOCIATION (CEA)
Ms. Redman noted that the CEA contract is new. Negotiations
were finished in December of 1994. The contract covers
system wide employees in the trades and craft unions. She
observed that the provisions are consistent with
renegotiated state contracts. Increases are one half of
CPI. The Legislature did not fund this contract in the
prior year. She stressed that the contract represents the
best that can be negotiated. She pointed out that this is
the only group in the University that has not received any
pay increase since FY 93. In January of 1994 all other
employees received a 3 percent salary increase. She
explained that salaries of CEA employees were frozen during
negotiations when the FY 94 increase became effective. She
noted that new CEA employees are hired at higher wages than
employees currently employed. The contract is a step and
lane grid. Many provisions mirror provisions in other
groups. University employees do not receive an area pay
differential in Fairbanks. She observed that the University
is moving toward a new flexible benefit program.
Mr. Ludwig added that when compared to other state workers
this group is paid substantially less. He noted that
custodial employee pay was reduced in an effort to prevent
contracting out. He observed that new employees are hired
at a higher rate under the negotiated salary schedule.
Health care benefits are not co-paid. A flexible benefits
plan would be implemented. He clarified that this group is
composed of maintenance, trade, craft and custodial workers.
The contract would implement a 2 percent annual step
increase. Ms. Redman emphasized that the step increase has
not been implemented. This group's pay has been frozen for
2 years. The step plan if implemented would allow increases
from 0 - 3 percent. Co-Chair Hanley clarified that the
increase would be annual. Ms. Redman observed that this
would be the same increase schedule as non-organized
classified employees.
Mr. Redman noted that the University has not had a longevity
or merit system in place for over 10 years. There have only
been COLA raises. She explained that the University will
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implemente a new lane and step provision that will provide
some longevity increases on July 1, 1996.
Representative Brown observed that the CEA contract creates
a retroactive adjustment to January 1, 1995. Ms. Redman
noted that the contract is new. She observed that this
provision was front loaded. She observed that the
University assumes that HB 305 will appropriate $864.0
thousand dollars to cover the cost of implementation. She
acknowledged that this may be optimistic.
NON-COVERED EMPLOYEES
Ms. Redman noted that 85 percent of university employees are
non-covered. These employees had a total increase of 24
percent over 10 years. This includes merit, COLA and
longevity increases. During the same period of time
increases for state employees have been close to 47 percent.
She observed that classified employees are moving to a lane
and step program modeled on the State's plan. Non-organized
faculty are in an organizing drive. She maintained that
faculty salaries are not keeping up with the national
average. The Board of Regents is committed to funding
increases. She observed that there is concern that the
University's best faculty are leaving for outside jobs. The
cost to cover pay increases for non-organized faculty would
be an additional $2,041.4 million dollars.
Representative Martin pointed out that the Governor's
submission includes a 1.5 percent wage increase but provides
an overall decrement of over $2.0 million dollars.
Co-Chair Hanley asked if there is language in any of the
contracts that prohibits contracting out. Ms. Redman
observed that the CEA contract allows the State to pursue
contracting out if it saves the State money. Mr. Ludwig
clarified that the contract requires notice and does not
require a savings. He stated that this is a problem. He
emphasized that the State is contracting out work and laying
off employees without a savings. Ms. Redman noted that
contracting out in the area of building maintenance has not
been successful.
In response to a question by Co-Chair Hanley, Ms. Redman
explained that the Board of Regents' request included
funding for non-organized employees to implement the new pay
scale for classified employees and a faculty pay raise. She
observed that the University is implementing a new faculty
pay raise for non-organized employees. It will be a
traditional real merit system based on objective criteria.
Performance will be reviewed and there will be a limit on
how many faculty can receive the increase. The Governor's
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submission did not fully fund this request. The budget
amendment includes an additional $2,041.4 million dollars
for this request.
MARY LOU BURTON, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA
explained that the University's budget amendment was based
on 2 percent movement across the wage scale. Step increases
would be from 0 to 3 percent. Ms. Redman added that the
increase is for all University faculty and classified and
professional staff. Ms. Burton clarified that $1.1 million
dollars of this number would cover the difference of a 2.6
percent faculty increase.
Representative Brown referred to the tripartite system. She
noted that the time of a tripartite faculty member is
divided into five parts; 2 parts teaching, one part research
and one part public service. Ms. Redman observed that the
five part workload is still the norm in higher education.
She explained that ACCFT members do not perform research.
These employees have four parts teaching and one part public
service. She observed that some faculty at the higher
divisions and graduate level perform 2 parts research, 2
parts teaching, and one part public service. She noted that
the University is moving to balance tripartite and bipartite
faculty.
Representative Brown questioned if there has been discussion
regarding substituting an additional teaching part for
public service. Ms. Redman discussed public service time.
She noted that service on university committees has been
included as public service. She observed that faculty are
involved in the running of the University. She pointed out
that it would be difficult for the University to cover the
costs associated with work performed by faculty. She
maintained that five classes for a faculty member would be
excessive. Bipartite faculty do not perform research.
Representative Martin referred to public service. He
maintained that public service have been abused. Ms. Redman
emphasized that union activities are not claimed as public
service. She asserted that faculty are significantly
engaged with the communities that they serve in their
academic studies.
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