Legislature(2003 - 2004)
03/02/2004 03:33 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 352-MANAGERS NOT EMPLOYEES UNDER P.E.R.A.
CHAIR GARY STEVENS announced SB 352 to be up for consideration.
He asked Mr. Jardell to continue his presentation that he
started at the last hearing.
KEVIN JARDELL, assistant commissioner, Department of
Administration, noted that at the previous hearing he outlined
why that the administration chose this path and why they believe
it is important to follow through at this time.
He noted that when the administration first came into office,
they had a lot on their plate in terms of agenda items and
policies that Alaskans wanted implemented. We've been doing
that, he said, and "after we've gone through the low-hanging
fruit" and moved some of the more pressing items along, they
found that there is a lack of middle management positions that
the administration can rely on "to get down to the nuts and
bolts of the bureaucracy and really look at how we can do things
better, how we can look at things more efficiently and how we
can change the way state government is run."
That, he said is why they have chosen to make these changes.
They are looking for ways to better manage the people's money
and provide services when you must do more with less money.
"When we're talking about new revenues and we're going to the
people and approaching them with these new ideas, I think we
constantly hear them tell us to manage what you have."
This change affects the managerial and the confidential classes
of employees. Taking the federal definition of confidential
class employees, he described them as having a direct connection
with labor-relations matters because they are the employees that
the state hires to represent it in labor union dealings. For
these same employees to be members of a union while they are
dealing with the union on behalf of the state is illogical and a
direct conflict. This conflict can't be resolved, he asserted,
without excluding them from bargaining.
Although some have argued that confidential employees could be
segregated so that they bargain in a separate unit, he said this
doesn't work because it doesn't really segregate them. He noted
that this year nine of the units have joined together in a
coalition. That means that not a single employee in the division
of labor relations can work on negotiations over wages and
benefits. "They can't work on language, they can't work on
proposals, they can't do analysis, they can't sit at the table."
Because of this conflict the director has to do the work and
although he or she is certainly capable of doing that, they
weren't hired to do it and it takes them away from the job they
were hired to do. He pointed out that this difficulty has
surfaced in past administrations and it's time to do something
about it.
Managerial employees compose the other class under review. While
they are in the supervisory unit, they are managerial employees
rather than supervisory employees. Using the federal definition
of managerial employees, which has between 50 and 60 years of
precedent, there is a well-defined body of law on how to apply
the standards. The line of policy that they want to adopt is
that, "If you are involved in the formulation, then you should
be management. If you are carrying out policy, then you should
be labor." Certainly, he said, the administration supports the
ability and right for labor to collectively bargain. However,
the distinction between labor and management currently falls at
the commissioner level and that is not appropriate.
The line of distinction should be drawn at the policy level,
which is exactly what SB 352 does. Removing both the
confidential and the managerial classes of employees from
collective bargaining and including them in management draws a
logical line and allow those employees to be utilized to
implement the policies the administration was elected to
implement.
He insisted the debate is an honest one and he rejected the idea
that this is cronyism as some have charged. In fact, "We
approached the union that would be most affected by this. We
gave them a heads-up - we offered to negotiate with them - we
discussed this with them and in fact we made changes because of
those discussions. But this is an honest debate as to where the
line between management and labor should be drawn and we think
that's where the appropriate emphasis should be in the debate."
He noted that a number of state employees were present and
waiting to speak. Certainly, he said, the administration
supports their right to testify and speak up on where they
believe the line should be drawn and how this bill might affect
them. "But that's the debate that we should be having and that's
the debate we hope to have."
Contending that the current system provides more ability for
cronyism, he pointed out that now the only way to deal with this
situation is to hire additional partially exempt or exempt
people. Although that doesn't entirely fix the problem because
they still have the right to bargain, most of them don't
bargain. These are political appointees though and with that you
have termination without cause and no merit in hire or promotion
to speak of. "What we're doing here is creating this management
in the classified service. We're not removing them to be
political appointees. They will have constitutional
protections," he assured.
ASSISTANT COMMISSIONER JARDELL noted that this proposal places
management in the classified service. They aren't going to be
political appointees; they will have the constitutional
protection of a merit system. In fact, he said, the employees of
the Alaska Labor Relations Agency (ALRA) are classified but
excluded because it didn't make sense for employees that are
judging conflicts between state management and unions to have
the same type of conflict of interest that this legislation
addresses. "To have those members be in a union - I think we
would all agree and I think that's why it was set up - would be
a conflict. That conflict exists today in our labor relations
staff and our upper level human resource people."
The Murkowski Administration, he insisted, has no desire to
create more political appointees. Rather, they want to take in
the employees who are paid to represent the people of the state
of Alaska and remove their conflict of interest, which results
from belonging to the union that is representing the interests
of its members. "What we want to do is bring in the management
team that we are currently paying higher ranges to because of
the authority - because of their formulation of policy - we want
to bring them into the management team so that we can rely on
their expertise so that they can be a bigger part of moving this
state forward and implementing the policies that the people put
us here to do."
Although he sympathized with the people who have jobs that are
being reclassified, he emphasized that this is appropriate
public policy. "But in the future, from now on, if a person
wants to stay represented they can. They don't have to choose to
move up into management."
He noted that at the previous hearing, 28 state employees signed
up to testify. Of those 28, just two were identified as
managerial employees. He clarified that is from their
perspective, which isn't necessarily the same as ALRA's
perspective. The identified positions include the person in
charge of the McLaughlin Youth Center and the superintendent of
Mat-Su Pretrial. They are management, but they really aren't,
they're labor and that conflict exists. For example:
When we walk in and we ask to look at the finances
of... corrections. We have a superintendent of an
institution. Underneath that superintendent you have
an administrative manager who kind of does the daily
administration activities - keeps up with the budget,
keeps up with the finance and accounting. Then you
have the admin-service director in the commissioner's
office down here in Juneau. The director of
administrative services for corrections - if they want
to get information on the finances of the institution
they don't have a management person to go to. They
contact the administrative manager and the
superintendent of the institution. The administrative
manager can't give them the information - because they
work for the superintendent - without going through
the superintendent. So, you have an administrative
services director that can't get critical information
on the finances of an institution without a
representative person making the decision on whether
to give it to him or what to give to him.
Are they giving misinformation? I have no reason to
believe they are and I'm not making that accusation.
What I'm saying is there ought to be a member of
management in that institution that you can contact
and you can say, 'How do we implement a policy to cut
back on overtime? How do we implement a policy to run
our institutions for less.'
SENATOR LYMAN HOFMAN interjected to ask a question related to
corrections and middle management saying he was informed that
middle management positions are being eliminated in the Yukon
Kuskokwim Correctional Center in particular. Furthermore, he
noted that over the last seven years when government underwent
streamlining and over $250 thousand was cut from the operating
budget, the targeted area was middle management. These
positions, he said, are the low hanging fruit referred to
earlier. He observed that the administration isn't recommending
eliminating middle management in any other place.
ASSISTANT COMMISSIONER JARDELL cautioned "that you want to be
careful when you use middle management in the managerial
definition." That, he said, is particularly true with
corrections. He elaborated:
In our review it would be the superintendent - the
warden if you will - of the institution that we would
say is management and I think that is commonsensical -
that the person in charge of the institution should
represent management's interest in running it in
policy and formulation of those policies and
implementation of those policies. When you talk about
what we've been doing to cut costs and cut middle
management I think what you're referring to - and I'm
not an expert on corrections reorganizations - but
what I believe you're referring to is some upper
supervisory personnel and whatnot where they're trying
to remove the heavy supervisor org-chart and move it
down to less supervisors and more front-line
personnel. But, I'm not well versed in what they're
doing in the Y K area and I apologize for that, but
it's just an example of the org-charts and the
individuals that run the institution. That's the
managerial employee, not - and I don't know of any
superintendents that we've presumed to eliminate.
SENATOR HOFFMAN noted that the assistant commissioner used
correctional institutions as an example at the last hearing and
he took issue with the administration's assumptions.
Furthermore, "by your example, what you're trying to accomplish
isn't going to get accomplished." Once the superintendent of the
facility in Bethel leaves, who's going to make those decisions?
Someone from Anchorage, Fairbanks, or Juneau would have to fly
in, which would take him or her away from the work they were
hired to do.
ASSISTANT COMMISSIONER JARDELL acknowledged that is an excellent
point on corrections specifically, but that is a somewhat unique
circumstance. He clarified that at the previous meeting he was
referring to the divisions that have a second person such as a
deputy director. If they were brought into management, they
could continue to represent management if the director was gone.
But in the instance of corrections, the director of
institutions, who is a political appointee, is over the
superintendents so there wouldn't be a second person at each
institution. It's not a difficult concept though, to have the
warden that is running the institution be a part of management.
CHAIR GARY STEVENS acknowledged that all the members had
questions, but he wanted the assistant commissioner to complete
his presentation.
ASSISTANT COMMISSIONER JARDELL said he had just two more points.
First, he said he misspoke at the previous hearing, but it plays
directly into what they are trying to change. He clarified that
there is one more political appointee in the Division of
Retirement and Benefits than he said there was. A special-
project exempt person was hired to look at reorganizing the
division because no one in the division could do that job. "The
person that ought to be helping us do the reorganization, bring
them into management and let them help us do these policies," he
said.
The last point he emphasized is that this is mainstream rather
than extreme. He noted that supporting documentation in the
packets show that most states agree with this approach. These
are mainstream concepts of organizational structure because they
make sense.
SENATOR GRETCHEN GUESS referred to the example given relating to
the corrections finance employee and asked for clarification of
his assertion that you can't get information from an employee
because they have chosen to be represented. She suggested that
is not logical because it's one professional asking another
professional for information.
ASSISTANT COMMISSIONER JARDELL conceded that he could have found
a better word than can't. Nonetheless, his point is that the
organizational chart suggests that there is a missing link for
the director in Juneau to have access to the financial
information at an institution because there is no management
person at the institution to relay the requested information on
a policy oriented level to the commissioner's office in Juneau.
SENATOR GUESS commented it's either a capital issue or an
information technology (IT) issue because any director of
administrative services should be able to pull up data through
an appropriate IT system. She suggested that there isn't a need
to change the law simply because information isn't flowing from
one place to another.
CHAIR GARY STEVENS asked whether he knew how many people would
be affected in the two classes.
ASSISTANT COMMISSIONER JARDELL said they have tried to come up
with an accurate estimate and believe there might be 450 people
affected in the managerial definition. He opined that number
would shrink after analyses are done on position descriptions
compared with what the employee is actually doing. If they're
not doing policy work, they shouldn't be management.
There are approximately 60 people in the confidential unit,
which includes those people with the direct nexus with
representing the state in labor-relations matters, he said.
CHAIR GARY STEVENS noted that he has received hundreds of emails
from concerned people, 35 people signed up to testify last
hearing and 40 people were signed up today. If just two of the
35 who signed up last time are really management, then there is
a lot of misunderstanding and that is a large part of the
problem. To that end, he asked Mr. Jardell whether he sent a
letter of explanation to state workers.
ASSISTANT COMMISSIONER JARDELL said Commissioner Mike Miller
sent a letter to all state employees last Friday and they hope
that was a better explanation. He added:
And deliberately so we did not include supervisory
personnel - supervisory personnel dealing with
personnel issues - hiring, firing, transferring,
promoting, looking at subordinates work. Carrying out
policy is not included. Only those few very upper
level people who are actually formulating policy, and
that's the crux, and most of the people who have
concerns and fears - and I certainly have some
sympathy for them - will not be affected. As we said
earlier, out of the 28 people that we looked at, only
two would be absolutely managers...
MR. CHANCE interjected that three other positions deserved a
second look because the "org charts don't tell you everything
and the PDs don't tell you everything...but three only warranted
a look."
ASSISTANT COMMISSIONER JARDELL added that he understands that
change is disconcerting, but opined that most of the concerns
wouldn't prove to be legitimate because state workers are
protected by the constitution and the statutes.
SENATOR GUESS asked what process he used to make the rough-cut
estimate on how many positions would be affected and noted that
they are all fairly high ranges.
ART CHANCE, director, Division of Labor Relations, replied,
"Range and anecdote; range doesn't always tell you everything."
CHAIR GARY STEVENS asked if any of the employees that are moved
out of collective bargaining would have the opportunity to move
back into a protected, union job. His concern stemmed from the
fact that these individuals made a choice based on certain
conditions and those conditions may change.
MR. CHANCE said that would have to be negotiated with the unions
but it isn't uncommon for union contracts to have some provision
by which supervisors or managers can retain seniority in the
bargaining unit for some period of time. He continued,
It's been a vexatious problem under our system even as
it currently exists when people leave the general
government or the labor trades and craft unit to
become supervisors how they get back. They have some
merit system rights but there's been quite a bit of
litigation about it. But, we could negotiate a means
by which people could opt back in. Employees can
always voluntarily demote and there are provisions in
both rules and contracts for that. It's very common to
preserve seniority when someone leaves a bargaining
unit job to accept a supervisory manager job.
ASSISTANT COMMISSIONER JARDELL made the point that,
Currently under the Personnel Act, we probably have
the authority to move these people into partially
exempt. We have to go to [the] Personnel Board to make
the case, but there is a definition that allows for
partially exempt status that is very similar to the
definition for management employee so we could
probably do this ... but we just don't think that's
the right thing to do for public policy. We don't
think it's the right thing for long-term state's
interests; and so although I do understand the
transition time with the points you're making, we
think the public policy behind it far outweighs the
benefits to the state and the people.
SENATOR HOFFMAN noted that the fiscal note shows no significant
fiscal impact, but 450 managerial and 60 confidential employees
might be affected. Continuing in that vein, he said:
Then we go to an area where we're talking about the
individuals who would have a significantly higher rate
of pay under the union contract. Geographical
differential pay - it seems as though they would be
higher and I'm just using your numbers now. Say we
have COLA in Chugiak of 15 percent, Fairbanks of 3.5
percent, Bethel 38 percent. Higher pay that you would
have to pay these individuals because they're - the
non-unions are set in statute. Nome is 33.75, Valdez
18 percent so these are substantial percentages. So if
I even take one of the lowest percentages and say -
and all of these people that are in managerial
positions are at the high spectrum - say $80,000 - and
don't even use 38 percent, which is Bethel's - don't
even use 33 percent, which in Nome's - not even
Valdez's at 8 percent, not even Fairbanks at 15
percent. Let's say 5 percent. So you take 5 percent of
$80,000, that's $4,000 per individual times 400
people. That's $1.6 million and that's at the low end
of 5 percent for geographic pay differential. And if
we went to 10 percent, you're talking in excess of $3
million. Even though you say that's the high end, even
if that was reduced, we're talking, from my standpoint
being on the Finance Committee for over ten years - I
would say that has significant financial impact to the
state. So I'm wondering if this fiscal note that we
have that affects all departments, as you're saying,
is actually true.... Can you respond to that?
ASSISTANT COMMISSIONER JARDELL said he did evaluate the numbers
and researched how personnel costs are treated in these
situations. The answer he received is,
We treat these just as we do all personnel costs. If
we transfer a position from Juneau to Nome, we don't
go in for an increment; we don't go in for an
appropriation. These are like steps. If we have step
increases coming up we don't go into the Legislature
and say, 'We need an increase for those step
increases.' They are personnel costs, and they're
based on the individuals and the ranges and so the
differences between the geo-diffs and some of the
union contracts do have geo-diffs - they may be
different so it may not be as bad as what you're
talking about, but the way we treat personnel costs
and the appropriations in the Finance Committee is
that you treat them by the range and by the individual
- and by the individual employee. We do not go in for
specific appropriations because of moving a group of
people from Anchorage to Mat-Su or bringing in - we're
going to shut down an office in ... Fairbanks and
we're going to move those down and we're going to
consolidate them in Anchorage. We don't come in and
provide a decrement because there's a 14 percent less
or 13 percent less geo-diff. We just don't do it that
way. The personnel costs, under the theory, begin to
be a wash with people rotating in and out and steps
changing back and forth and so we think the correct
way to approach this is the same way we approach
personnel costs - that the personnel costs will be the
same range, approximately the same step and we
wouldn't go in for an appropriation for a geo-diff or
anything like that.
SENATOR HOFFMAN said he would agree with that analysis if just
one or two people were involved because the dollar amount
wouldn't be that significant. However, "When we're talking about
500 people at the upper end and we're talking about if we use
the high average of the high end of say 20 percent, you're
talking $6 million and that's significant." He continued to say
that, "You're the one that said we need to have a debate that's
honest and forthright and to me, this fiscal note does not
reflect - come near to reflecting what it may potentially cost
the state and that, I guess, is where I have a problem in that
this does not accurately reflect what the potential outcome of
this legislation would impact the state fiscally if it were
implemented."
ASSISTANT COMMISSIONER JARDELL said he respected that opinion,
but believes that they are in line with the way they handle
personnel costs. Furthermore,
I think it is somewhat insignificant when we look at
it division by division by division level and whether
we're going to come in for an increment at each
division level for these personnel costs - that's not
how we budget, that's not how we go forward to the
Finance Committee, that's not how we propose budgets -
and so we are in line with the way we handle these
matters. We would not be asking for an appropriation
to handle this. The personnel costs would be absorbed
in the way we fund personnel - by range and the number
of employees.
SENATOR GUESS said she too had questions on the fiscal note. She
noted that the appeals process is different because one goes to
arbitration and the other is legal so it is interesting that the
Department of Law submitted no fiscal note. She asked the
assistant commissioner if he was saying that dispute resolution
would cost the same in both systems.
ASSISTANT COMMISSIONER JARDELL replied,
We do not think there that there will be an increase
in costs that amount to a need of an appropriation. We
don't think that there is something that we would even
ask for. The Personnel Board is a three person board -
that's where we'd go to. They meet routinely, we have
a meeting coming up, we call them in for different
things - if an individual had an issue to take to the
Personnel Board they would go to a meeting, they would
present that case and it would be dealt with. We don't
anticipate that it would increase costs. And some of
that is based on our discussions with labor relations
and this level of employee.
TAPE 04-13, SIDE B
4:30 pm
Most of these individuals have been in this system for
a long time. They don't have a lot of grievances; they
don't have a lot of issues that we would foresee
coming forward. Our experience doesn't lead us to
believe there would be an increased cost in Personnel
Board system.
SENATOR GUESS asked if he expects a decrease in funding.
ASSISTANT COMMISSIONER JARDELL said, "Not at this time, no I
would not."
SENATOR GUESS asked about the comment regarding voluntary
demotion and asked what would happen to the pay for those
individuals that stay in the bargaining unit in the short run
and the long run.
ASSISTANT COMMISSIONER JARDELL said that is a product of
classification and doing studies and research. "What we have to
do is pay equal pay for like work and so until we go though and
do those studies and do the analysis, I can't give you an answer
on that. But the people with the same type of level authority
the same type of level of work - you would have an expectation
to pay them similarly or the same."
SENATOR GUESS reasoned that anytime an employee moves from being
represented to being non-represented, the employee takes more
risk and that risk must be compensated through increased wages.
"That's labor econ 101," she suggested.
She understood the answer that there wouldn't be a cost in the
short run, but she questioned whether the new manager employees
wouldn't have to be paid more, which would result in a cost in
the long run.
ASSISTANT COMMISSIONER JARDELL said he didn't know that to be
true and suggested that the employees are already paid for
management level work. "What we're trying to delineate is if you
are earning more wages because you are part of management, then
you should be a full part of management. You shouldn't have that
conflict where we're going to pay you to help formulate the
policy, but we can't utilize you in all of our policy
discussions. We can't utilize you in all of our meetings.... If
we find that similar situated people need to be paid more, and
adjust that, we will. I don't think we'll have a problem in
finding people who are willing to take this work in the
classified but excluded range...I don't think there's a basis
for thinking that there is going to be an increased cost here."
CHAIR GARY STEVENS asked whether there were any further
questions before he opened public testimony.
SENATOR HOFFMAN said he had several questions.
SENATOR GUESS added she had several as well, but she was
concerned about the time.
CHAIR GARY STEVENS assured members, "We will take all the time
we need to get the answers that you wish answers to." He
continued to say that he would like to move on to public
testimony right then however, because the hour was getting late.
He asked the assistant commissioner to stay in the room to be
available to respond to questions or statements and clarify any
misunderstandings. To those waiting to testify, he asked
everyone to limit their comments to no more than two minutes
each.
HAL GEIGER spoke as a private citizen who works for the state.
He said he has been eligible for retirement for some time so the
bill wouldn't affect him. However, he was concerned about the
institution of the Alaska Department of Fish and Game. He
elaborated:
I think if you go back and look at some of the history
that led up to statehood, fisheries issues were a very
big part of statehood considerations. And if you go
back and look at some of the editorials in the
Fairbanks papers and just a whole lot of things that
were written in the 50s, you'll see that political
interference in fisheries management and a very
politicized fisheries management was a major, major
issue leading up to statehood.
At the time of statehood, the total commercial catch
was about 25 million fish and I think a lot of people
in the state of Alaska felt like the fisheries had
been very depleted by over harvest and just
ineffective management. By 1995 we had captured over
217 million fish. That is a level of harvest that was
absolutely unimaginable in the early 60s and 70s. Last
year the commercial harvest was about 174 million
fish.
At the time of statehood, I think a lot of people
wanted a politically independent fishery management
system and to a large extent, we got that. We have the
Board of Fisheries, the Board of Game, which is an
explicitly political body and that is where political
decisions need to be made. And I think if you go look
at how some of the other states in this unit are run,
that's really separates Alaska from a lot of the other
states. That we explicitly take care of the political
job there and then we have a corps of professional
managers that are to carry out that policy.
CHAIR GARY STEVENS told Mr. Geiger that he understood that this
is a difficult issue, but to please sum up quickly because he
had passed the time threshold.
MR. GEIGER concluded saying that management of the fisheries
would be impossible without some level of independence from the
political process.
CHAIR GARY STEVENS apologized for having to rush people through
their testimony, but he wanted to give everyone a chance to
speak.
BOB MURPHY testified from the Kodiak LIO to oppose SB 352. He
said he was representing himself, but he has worked for the
ADF&G since 1986. He said, "I manage a large scale commercial
salmon fishery based on regulations approved by Alaska Board of
Fisheries and sound biological principles that always put the
resources first and foremost. My concern of this bill is that
superior staff with a political agenda will influence the
decisions that are made involving managing resources."
ASSISTANT COMMISSIONER JARDELL responded saying that there is a
philosophical difference and Mr. Murphy's job probably wouldn't
be affected, but:
On the greater scheme of things, the fear of this
monster of political influence - the governor was
elected by the people to implement policies... and the
idea that somehow union protection is going to somehow
keep this boogieman of political influence - the
political influence isn't bad - these are policies
that the people have asked us to do - and implement -
not illegal things, not inappropriate things, but
different changes in direction. It's just a different
philosophy as to whether or not you look at people and
say with union protection we can perhaps distance
ourselves and not implement the policies of the
elected governor. Well that is something we want to
change if that's happening. We do want to implement
the policies of elected officials and if somehow
belonging to an organization that's looking after its
members goals precludes us from doing that then that's
a good change.
M. L. LOUDERMILK, president of the Anchorage Council of
Education, said he was confused because he was hearing something
different than he was reading in the bill. In fact he said, "I
believe the bill is kind of a recipe for confusion and
inefficiency."
Although he is hearing that only a few high-level employees will
be affected, he interprets the bill to say that any public
employer may exclude hundreds of positions. He was concerned
that the definition of manager is vague enough that it could
allow political agendas to control program managers in
workplaces where Alaska and Personnel Board bills don't apply.
KAYE SAXON from Mat-Su testified that she is a state employee
who is unlikely to be impacted, but she is concerned about the
state adding costs to the budget and about political politics
infiltrating important programs and services. She contended that
other employees would be affected because of the instability
that will result with political appointments at the mid-
management level.
JIM FIORENZI testified from the Fairbanks LIO to say that he has
worked for DOT/PF since 1982 so he has had the opportunity to
work under various administrations and has worked for a
partially exempt political appointee for most of his career.
He didn't believe the proposed legislation would impact him one
way or the other, but he did want to comment on what he
perceives to be a serious problem with the existing state
personnel bargaining unit and system of classification and how
the proposed legislation might aggravate the situation.
He described the glass ceiling concept and told members that the
same problem is associated with the state personnel system. He
explained that he is a member of what is referred to as a
supervisory bargaining unit, which probably means that the
members are in the managerial category. He made the point that
the difference in salary between the supervisory bargaining unit
and others with like ranges is just 3.75 percent which isn't
enough when the myriad of additional responsibilities are
considered. He said, "I'm convinced that should this legislation
pass, that all that will be accomplished is the strengthening of
the glass ceiling in which case, the state's ability to attract
or promote the best, brightest most experienced and
knowledgeable will effectively cease to exist."
BRUCE LUDWIG testified from Juneau and said he is the business
manager of the Alaska Public Employees Association and they
represent both the supervisors and the confidential employees.
He commented, "I guess you could call us low hanging fruit."
The concept of creating a managerial class of employees isn't
new he said.
It's been around since the Public Employee Relations
Act was passed and the agency did, in fact, establish
something called the non-covering group. It was three
or four of the higher people in personnel management.
In the late 70s, the labor-relations staff removed
themselves from the bargaining unit and became part of
that group.
Mr. Ludwig said he worked there during the transition to the
Sheffield Administration and that was a similar situation to
this proposal. He explained that he saw employees who had
constitutional rights to their job run out of the division. "I
saw them move down the hall with frozen pay. I saw them demoted
down to range 13 without recourse." He remarked that the
constitution is a nice instrument, but if you want to fight you
must hire an attorney because the constitution doesn't fight for
you.
He suggested that it is less than objective to say that just 500
people would be affected because the way the language reads, it
will be far more. The confidential employee definition is the
same that is currently in regulation. "The agency's found 225
people to be covered under that, not 60 so I think that's
disingenuous also."
SENATOR GUESS asked when the PERA bill was first passed.
MR. LUDWIG replied, "It was passed in 1972, petitions were filed
in 73 to represent employees."
SENATOR HOFFMAN asked Mr. Ludwig whether he thought the fiscal
note that indicates that there would be no significant impact on
state agencies was accurate.
MR. LUDWIG said, "Not at all. I ran just the range 22s and above
in the supervisory unit and to go on the statutory geographic
differential schedule is over $500,000. When you look at the
number of hearings that are going to be required to hear all
these hundreds of cases before the agency, the agency is going
to have to have money, the state's going to have attorneys there
- it's going to cost a lot of money."
SENATOR HOFFMAN then asked whether he thought the studies for
equal pay for like work would be costly.
MR. LUDWIG replied, "Studies aren't cheap and I think the
Division Of Labor Relations spent quite a bit of money that you
gave them last year for negotiations on studies."
CHAIR GARY STEVENS asked about the employees that moved into
positions understanding that they were represented and now find
they may not have that protection. He asked for a comment on how
they might opt back in as was suggested.
MR. LUDWIG said, "If you're at the bottom end of the totem pole
on the supervisors, you're not allowed, right now, to bump down
to general government. There is a fence built around the
bargaining units. The only way that I know that they could do
that is if there was a vacancy that they could say, 'I'll take
that lower job.'"
ASSISTANT COMMISSIONER JARDELL responded:
On the 225 to 60 with the prior ALRA board looking at
225 - we did look at that and there is a difference in
the definition that we have chosen in the precedent
that we referenced with the National Labor Relations
Agency and the body of law that has developed out of
this definition. And there is a difference in the
amount of labor relations that you have to do and
under this definition, we stand by our analysis that
shows that there will probably be about 60 people that
will be affected by this bill in confidential. And
with the classification studies that were raised, and
the study that was mentioned with the bargaining, we
did a salary survey for purposes of determining how we
stood up against other states. For purposes here, we
do a classification study, which is internal. We would
not hire additional people. We do classification
studies as they arise. We do them as a part of doing
business and we do them all the time.
SENATOR GUESS referenced earlier testimony and asked why this
wouldn't include every public school principal in the state.
ASSISTANT COMMISSIONER JARDELL explained, "It would include
people who are doing policy level work...That's the definition
that every state that has statutes relating to labor relations
has, except for two, that's the one that works in these states,
it's the one that we think works here. If you're developing and
formulating policy, you should be management."
SENATOR GUESS asked whether the Murkowski administration
believes that principals fall under SB 352.
ASSISTANT COMMISSIONER JARDELL said he would have to better
understand how principals interact with the superintendents, who
cannot bargain, and how they interact with teachers. "If they
are formulating policy, and they are bargaining under PERA, then
they very well may be included in this legislation."
NICK SAGALKIN testified from the Kodiak LIO and said he is
adamantly opposed to the bill and his objections echo many of
the comments made previously. "It's very unclear how
implementation of this bill will allow us to do our jobs better
without the protection of the union."
CHAIR GARY STEVENS asked whether he is a state employee.
MR. SAGALKIN replied he is employed by the state and he believes
the bill would indirectly affect him.
JAN DEYOUNG, Department of Law, spoke from Anchorage to say that
she was listening and available to respond to specific questions
and assist Assistant Commissioner Jardell.
OLE LARSON testified from Mat-Su to say he is the superintendent
of the Mat-Su Pretrial facility and he would be affected.
Within the Department of Corrections that last year
eliminated all its assistant directors and deputy
directors so I am in direct line with my director of
institution, which is a PX position. There are three
layers of PX position above me, but only in my
institution the next supervisory level is a sergeant
and that's the only supervisor level that's there. We
used to have an assistant superintendent that was
eliminated in '92 - talking about paring down state
government - this facility that I'm in has lost 20
percent of its staff over the last 12 years. Virtually
what would happen is there's nobody ...to take my
place if I became a non-bargaining unit member. The
Department of Corrections also eliminated last year 9
or 10 assistant superintendents out of the institution
so there is no mid-management below me in a majority
of the institutions. They did create some correctional
officer IV positions, but that's about all there is.
So the career track for a 20-year correctional officer
would be a recruit, a correctional officer II, a
sergeant and possibly, if the facility has it, a COIV
and possibly an assistant superintendent.
The point I guess I'm getting at is we're a small
state, we're a very small department comparably to a
lot of departments outside and there is no career
ladder per se for corrections. If I became a partially
exempt or an at large employee that would just take
that much more of the career track out.
I am a career professional, I have never, ever blocked
a request or hidden any money or done anything like
what was suggested and all my finances from my admin
officers is online and available for the state through
Access-Alaska. Matter of fact, they tell us what we
have in our budget.
CRIS TIGNER testified from Fairbanks and said she is in the
supervisory unit of Local 4900. She urged the committee to table
the bill because it would open the door for politicizing
decisions. She noted that there aren't many applicants for a
managerial position that is currently open in her division and
SB 352 doesn't help that situation.
KIM PETERSON testified from Juneau and to say that she is a
senior management consultant who has worked in human resources
for 27 years. She said, "I consider myself a loyal and dedicated
state employee and this legislation would directly impact me....
It infers an inability to be loyal to the employer while being
associated with an employee association." She said she is deeply
offended because this assertion ignores her long record of
demonstrated loyalty and "to now suggest at this time that we
are or can no longer be loyal is completely unfounded."
Although she could see that there might be an issue with labor
relations and at times with collective bargaining, she noted
that "collective bargaining has gone on for years and labor
relations has found a way around that. Folks in labor relations
covered by collective bargaining in the confidential bargaining
unit do not bargain that agreement. They have other people do
it. There is another way around it and it's been done for years
and I would suggest it could continue."
She asked members to table the legislation.
ASSISTANT COMMISSIONER JARDELL maintained there is a conflict
nonetheless. "We don't let our attorneys when they represent the
state represent two different agencies. We draw the line. There
is a direct conflict of interest and the fact that the CEA unit
is bargaining in a coalition - we can't get around it this
year."
SENATOR GUESS told the assistant commissioner that he made the
point that there is a conflict with the confidential employees
but she didn't believe he had validated the conflict with
managers. "I still don't understand why professionals have a
conflict in doing their job."
CHAIR GARY STEVENS asked her to please hold that thought. It was
after 5:00 pm and he was concerned that some people couldn't
stay much later.
SENATOR GUESS agreed.
STEVE SCHROF testified via teleconference from Kodiak to say
that he is a state employee and is opposed to SB 352. He didn't
think this bill would attract many new state workers.
RON COWAN testified via teleconference from Anchorage as a state
employee who would likely be affected, but he was speaking on
his own behalf. He said he would send his full written comments
in a day or so.
The comment that state employees who, by someone's estimation,
don't sufficiently support a policy brought forward by the
governor should not be retained is of great concern. "By
extension of that philosophy, we then have to accept that any
other appointed officials should be followed in like style."
Unfortunately, not all of the people that are appointed come
with a lot of experience and background and sometimes they don't
appreciate the ramifications of certain policy decisions. He
said he is concerned that a manager may be identified as not a
team player when that's not the case at all. They might simply
be trying to point out that there may be problems associated
with a certain action. He said he saw this happen when he worked
for the state of Washington in a management position that wasn't
protected by a bargaining unit. He learned that long time state
employees were unwilling to testify on sensitive issues because
they were afraid of losing their jobs.
CHAIR GARY STEVENS thanked Mr. Cowan and asked him to FAX or
email his comments.
MIKE HARBAUGH testified via teleconference from Mat-Su and said
he has worked for the Department of Corrections for 10 years. He
made the point that department policy changes when an
administration changes, "but the professional managers under the
appointed positions bring some continuity to each and every
department." As an employee he appreciates that fact. Putting
managers in who blindly obey isn't about what is good for state
government, he asserted.
TAPE 04-14, SIDE A
5:15 pm
TIM VIAVANT testified via teleconference from Fairbanks and said
he is a 17-year state employee and was testifying on his own
behalf. Although he didn't believe that he would be impacted
directly, he views the legislation as bad public policy for a
number of reasons.
First, the bill has the potential of politicizing decisions
managers make on resource use issues and protecting the public
trust. It also has the potential of disrupting continuity in
management each time there is a change in administration.
Furthermore, he thought the bill might negatively affect
recruitment and retention of managerial positions. Although it's
unclear how many positions will be affected, it appears as
though school principals, people in borough and city governments
administering contracts, and university department heads would
be included. He urged the committee to oppose the bill.
SAM TRIVETTE testified from Juneau as a retired state employee
who spent 24 years of his career as a manager. He took issue
with page 1, lines 8-10 and said he never found that to be the
case.
I effectively managed one specific program for 18
years in a partially exempt position. I don't think my
effectiveness in implementing numerous policy
initiatives was in any way hampered by not having the
undivided loyalty of the managers working for me...
I've thought a lot about the managers I worked with
over the last few decades in public employment and
there is only one manager whom I think shares the same
belief as this bill and, frankly, he was terminated
from his position, for cause, after serving less than
10 months.
I could give you numerous examples, Mr. Chairman,
about how collective bargaining has helped smooth
thing over in management and how supervisors and
managers have helped save the State of Alaska money,
how an awful lot of litigation has been avoided by the
work of the unions working with the management over
the years.
The current system works, there is no need for a
change. The bill would be detrimental to carrying out
the state's business.
SWITGARD DUESTERHOH testified via teleconference from Kodiak to
say that she is a state employee and was representing herself.
She said, "The bill would not affect me now, but it might affect
my future career choices."
DUANE MORAN testified via teleconference as the first vice
president for the Anchorage Council of Education. The intent of
the bill is to ensure that an employee is loyal to an employer,
but public employee loyalty should be to the citizens of Alaska,
he asserted. "With existing collective bargaining agreements,
managers can have a professional difference of opinion with
their boss with minimal concern for retribution." He summarized
by saying that collective bargaining provides for fair treatment
and it ensures that hiring and promotion are based on principles
of merit and that any disciplinary action is for just cause.
Finally, disputes are settled by arbitration instead of the more
costly court system.
FRED YATES testified from Juneau as a state employee who was
representing himself. He made two points: "Undivided loyalty, to
me, means political appointees. I don't know how you get there
other wise." Second, the bill applies to him and may apply to
his front line supervisor. "I don't think 450 [employees] is
even close to the number of people this would affect if the
language in the bill stays the same."
KEVIN CLARK testified via teleconference from Kodiak as a state
employee who was speaking on his own behalf. He said it is
unclear whether the bill would directly affect him or not, but
he didn't understand how the stated intent of the legislation
could be accomplished as written.
Previous testimony indicated that one intent is to
ease the transition between administrations yet it
binds employees' loyalties to the administration in
power at the time not to the resources we manage.
It also has been stated it only pertains to high level
employees, but the language of this bill suggests that
anyone with emergency order authority could be
reclassified under this proposal - not just the
ambiguous high level employees. How deep would high
level go? Would it include regional supervisors,
regional managers, area managers, down to the
assistant managers? The language is unclear at where
the cutoff would be. It could become a blanket policy
once written to all to anyone who deals with execution
of policy.
An additional intent of this proposal is to bring
Alaska in line with other states. I would suggest that
we do not do this. I am against "48ing" of Alaska. We
should act as an example; we have a system in place
that works for us Alaskans.
The reason given for needing this change is been so
the administration can have better control over policy
and the people who carry out that policy. That is the
point of the bill - control. Disputes and problems
involved in any administration's execution of its
policies should be handled on a case-by-case basis
solely based on merit. We cannot increase protection
by removing it. We cannot stabilize a system by trying
to tie it to political change. We cannot stop the
brain drain by telling managers and supervisors not to
think. It's all too Orwellian. I do not support SB
352.
JIM SAMPSON testified via teleconference from Anchorage as
president of the Alaska AFL/CIO. He stated:
As you know, it's been the policy of the state for
over 30 years that public employees be granted the
statutory right to share in the decision making
process. The Legislature determined in 1972 that the
best way to do that was to grant these employees
bargaining rights. It's worked well for 30 years and
still works well today.
It's interesting to note that the Commissioner of
Administration has put forth this bill along with
Governor Murkowski when the sponsor of the Public
Employee Relations Act was former Governor Terry
Miller of North Pole.
The scope of the bill hasn't really been determined
yet. It's our belief that it will have far reaching
impacts to all kinds of public employees including
state, municipal, school districts including teachers,
non-certificated employees, and university employees.
Mr. Chairman, you and your committee should not be led
down this path. This is a fight you don't want. This
is a union busting bill in its purest form and will be
viewed as union busting by not only public employees
in your district and throughout the state - from
Barrow to Sitka and into Kodiak and Anchorage - it
will be viewed as such by every union in our
federation.
The arguments put forth by the administration to
justify the legislation are not supported by 30 years
of history under PERA. I have a little bit of
experience in labor management relations over the last
25 years in this state. As it relates to public sector
bargaining, I had the responsibility to administer the
Public Employees Relation Act from 1986 to 1990 as
Commissioner of Labor including the time when 52
school districts were brought into the Act itself. I
also had the law applied to me when I served as mayor
of the Fairbanks North Star Borough for two terms in
the 90s. I've also had familiarity with the Act as one
who has represented public employees.
To suggest that public employees who are represented
in the title of collective bargaining cannot be loyal
employees is wrong. I probably have a little more
experience in the public sector managing employees
than some that have testified today in the
administration. I can tell you that over those years I
have worked with hundreds of extremely loyal employees
and loyalty has nothing to do with bargaining rights
or not. It has everything to do with how you treat
people.
Mr. Chairman, the Legislature has too many other
important things to do than spend time on this bill.
In closing I want to tell you what Governor Murkowski
said when he ran for office in 2002.
QUESTION: Do you believe all workers should
have the right to organize for the purpose
of collective bargaining?
ANSWER: Yes I support the current law.
QUESTION: Why?
ANSWER: Because the lives, working
conditions and health care of all Alaskans
are often bettered by the efforts of
organized labor.
VICTOR WINTERS testified from Juneau as a state employee. He
pointed out that "in the findings there is no mention of
managers formulating an effectuating policy, but there is
mention of undivided loyalty to implement policy."
To his knowledge, no one has questioned the administration's
right to define departmental goals and objectives. "Failure to
faithfully implement state policy is obviously grounds for
disciplinary action." He objected strongly to the implication
that state policy would be implemented effectively were it not
for the divided loyalties of unionized state managers. "Union
membership has no impact on implementing state policy."
Another implication is that once employees with divided
loyalties are removed from collective bargaining, they will
effectively implement state policy or be replaced by someone
that is loyal. "This is likely to have a rather chilling affect
on relations between elected officials, appointees and state
managers and will have a paralyzing affect on some management
decisions."
KEVIN BRENNAN testified via teleconference from Kodiak and
identified himself as a state fisheries biologist who was
speaking for himself. He thought he would be directly affected
by the legislation. The assistant commissioner said the Governor
was elected to make policy changes and SB 352 says that managers
must give their undivided loyalty to employers to be able to
make those policy changes. However,
Alaska fisheries have developed over many years from
the days of federal management through early statehood
through the current Board of Fisheries process. It's
been a long and complicated struggle to protect the
rights and livelihoods of the various commercial,
sport and subsistence users of those resources while
maintaining the health of these resources. A key
component in this struggle has been to remove
fisheries managers from the pressures and whims of
public opinion and political change.
As a fisheries manager, I know that my decisions are
to be made in the best interests of the state fishery
resources and the authorized users of those resources.
You can rely on my unbiased expertise. I work within
the allocation plans created by the Board of the
Alaska Fisheries developed after years of
collaboration by user groups with technical support of
local biologists. In most cases, resources are fully
allocated and my actions always seek to maintain that
delicate balance while ensuring the health and future
production of the fisheries.
SB 352 would force this to change. My undivided
loyalty would be to my employer not to ensuring the
health and future production of the fisheries
resources or to the people of the state of Alaska. I
could be summarily dismissed and replaced with
political yes mans that would do the bidding of the
employer. The personal opinions of my supervisors
could replace careful consideration of what is best
for the resource.
ASSISTANT COMMISSIONER JARDELL said he wanted to respond to
comments made about fish and game policy, "which is a very
passionate and very important issue to the state." He continued:
They keep referencing the Board of Fish and Game
created the policy and we implement it and we need the
protection because we're implementing that policy.
This legislation does not affect people that implement
- carry out policy. This legislation affects the
people that formulate policy. Formulate it, not
implement it and that's the distinction. If you're
implementing policy this legislation will not affect
you. If you're formulating the policy, it does affect
you. And we think that is appropriate and we're
talking about loyalties. We're talking about the
divided loyalty between having to be a member of a
group that has interests for the group as opposed to
the loyalty to the state in formulating policy that
may have adverse interests to that group. When you're
formulating policy, that has impacts to the group that
you belong to that is a conflict and we should expect
loyalties to the State of Alaska that are undivided
between the union and the state when we're talking
about the formulation of policy. And that's the way
we're using the term, in the context of the loyalties
between the union and the state - the people.
SENATOR GUESS stated for the record that:
One of the issues - and as you know I work in policy,
I have degrees in policy and I even am a self
proclaimed policy wonk - you don't define policy in
here and so I think - besides that as you know I have
problems with the bill in general and don't support it
- that's a serious problem. I think just from a bill
standpoint of whose going to define what is policy and
when we get into these scientific matters - hatcheries
or some of the fish things that you brought up - is
that policy or is that science. And I think that this
bill is unclear at this point about defining that so I
see that those comments have some validity although I
understand your testimony.
ASSISTANT COMMISSIONER JARDELL responded by saying that "the
precedent has been developed through the application of this
language and we are adopting the precedent that has been
decided. That is where we give the clarity in the application of
the definitions of policy and how it applies. That restrictive
reading of the formulation of policy - and that's where we get
it and that's how we define it - and adopting that is how we get
that precise nature of what we're looking for."
SENATOR GUESS questioned: "Just to clarify, that's the U.S.C.S
[National Labor Relations Act] that you're referring to?"
ASSISTANT COMMISSIONER JARDELL said that is correct.
JERRY GUAY testified via teleconference from Anchorage as a
state worker who was representing himself. He said he is
frustrated with the bill and resents the implication that as a
state worker he can't be trusted to do his job. He has spoken
with his supervisors and directors to find out whether they
believe he and his fellow workers are performing properly or if
there are control problems when a manager must delegate his or
her authority to a union worker. No one felt that problem
existed, he said. "I believe that our role is to support
leadership and we perform regardless of the administration or
what type of leadership exists." The system isn't broken and he
questioned why the governor wanted to fix it.
MARI MEINERS testified from Juneau as a state employee who is a
member of the state supervisory bargaining unit. She clearly
stated that she was representing herself. Although she wasn't
sure that the bill would affect her job because it was so
vaguely worded, she wasn't sure that her opinion would change
regardless. She made the point that,
Commissioner Miller, in an email last Friday, said
that individual employee rights will be protected and
classified employees affected by the legislation will
remain classified employees with all the protections
of the state personnel act. Unfortunately, without the
assistance, short of hiring an attorney, I don't think
that I or many people that I know have the knowledge
of the personnel act, the time, or the expertise
necessary to defend myself against what I consider to
be an unwarranted state disciplinary action....
MS. MEINERS stated that she is surprised and insulted to learn
that the administration doesn't believe that she can't be a
member of a bargaining unit and also a loyal to her employer. "I
don't think the two are mutually exclusive. I would say that
most people derive personal benefit from doing what's wrong and
not doing what's right. In Commissioner Miller's email..."
CHAIR GARY STEVENS asked her to say that again.
MS. MEINERS clarified, "That it's not doing the right thing that
gets you in trouble it's doing the wrong thing." She continued
to comment on the commissioner's email that said, "Our intent is
not to remove protection for employees, but to create a career-
service management position in the classified service." She
said:
There are plenty of current career-service managers in
the state who also participate in collective
bargaining. There are also many, many devoted loyal
state employees who also are members of unions. It is
possible to have both.
DON ETHERIDGE, Juneau Public Employees Local 71 representative,
spoke in opposition to SB 352. He said, "We think it is going to
have far more reaching affect than what is being talked about."
With regard to the loyalty issue, he expressed disappointment
that this is even a question. He described these employees as
tough but fair and that has nothing to do with being union or
non-union. "They know what their job is and that's what they
do."
ALBERT JUDSON testified from Juneau in opposition to SB 352. He
advised that he was testifying as an outsider and simply because
the state is in economic trouble. He outlined the history of the
union movement and brought up the Taft Hartley Act of 1947 and
the National Labor Relations Board.
He made the point that the labor relations board members are
appointed by Congress and this results in a board that is
hostile to labor and friendly to business. He concluded saying,
"Whenever labor unions have suffered, the United States itself
has suffered. If SB 352 passes it will no longer be called the
Last Frontier, it will be called the Lost Frontier."
FRANK ZMUDA said he is a state employee, but he was representing
himself. He made two points:
1. The language is vague and if a certain group is targeted
then the bill should make that clear.
2. The Constitution states that all citizens are to be
represented in government. In addition, unions provide
protection for their members against unforeseen or
unscrupulous activities.
CHAIR GARY STEVENS thanked everyone that testified and noted
that a number of questions were brought up and further study was
needed. He announced that he was holding SB 352 for the time
being and asked the committee if they had any comments.
SENATOR GUESS asked the Chair if he would give the public more
than a days notice when he scheduled the bill for the next
hearing.
CHAIR GARY STEVENS agreed that the request was fair and he would
try to bring the bill up the following Tuesday to address
questions that committee members might have.
There being no further business to come before the committee,
Chair Gary Stevens adjourned the meeting at 6:00 pm.
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