Legislature(1999 - 2000)

03/11/1999 08:05 AM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                    
                 STANDING COMMITTEE                                                                                             
                   March 11, 1999                                                                                               
                     8:05 a.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Andrew Halcro, Co-Chairman                                                                                       
Representative Carl Morgan                                                                                                      
Representative Fred Dyson                                                                                                       
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative John Harris, Co-Chairman                                                                                         
Representative Lisa Murkowski                                                                                                   
Representative Reggie Joule                                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 1                                                                                                                
"An Act relating to collective bargaining agreements and                                                                        
arbitration awards of class (a)(1) municipal employees."                                                                        
                                                                                                                                
     - MOVED CSHB 1(CRA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
                                                                                                                                
BILL: HB   1                                                                                                                    
SHORT TITLE: MUNICIPAL COLLECTIVE BARGAINING CONTRACTS                                                                          
SPONSOR(S): REPRESENTATIVES(S) BRICE                                                                                            
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/19/99        18     (H)  PREFILE RELEASED 1/8/99                                                                             
 1/19/99        18     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/19/99        18     (H)  CRA, LABOR & COMMERCE                                                                               
 2/25/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 2/25/99               (H)  HEARD AND HELD                                                                                      
 3/11/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
BONNIE CARROLL, Legislative Secretary                                                                                           
     for Representative Brice                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 426                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-3466                                                                                                      
POSITION STATEMENT:  Discussed changes encompassed in the proposed                                                              
                     CS for HB 1.                                                                                               
                                                                                                                                
GAVIN CHARRIER, Firefighter                                                                                                     
Ketchikan International Airport                                                                                                 
PO Box 8692                                                                                                                     
Ketchikan, Alaska 99901                                                                                                         
Telephone:  (907) 225-3377                                                                                                      
POSITION STATEMENT:  Discussed binding arbitration and the right to                                                             
                    strike.                                                                                                     
                                                                                                                                
JERRY CLEWORTH, Member                                                                                                          
Fairbanks City Council                                                                                                          
907 Park Drive                                                                                                                  
Fairbanks, Alaska 99701                                                                                                         
Telephone:  (907) 452-5551                                                                                                      
POSITION STATEMENT:  Opposed HB 1.                                                                                              
                                                                                                                                
DAVE MAITLEN, Police Officer                                                                                                    
Fairbanks Police Department                                                                                                     
656 7th Avenue                                                                                                                  
Fairbanks, Alaska 99701                                                                                                         
Telephone:  (907) 459-6500                                                                                                      
POSITION STATEMENT:  Supported HB 1.                                                                                            
                                                                                                                                
MARK DRYGAS, Business Agent                                                                                                     
Fairbanks Firefighters Association                                                                                              
Captain, Fairbanks Fire Department                                                                                              
PO Box 71739                                                                                                                    
Fairbanks, Alaska 99707                                                                                                         
Telephone:  (907) 488-6001                                                                                                      
POSITION STATEMENT:  Supported HB 1.                                                                                            
                                                                                                                                
KEVIN RITCHIE                                                                                                                   
Alaska Municipal League                                                                                                         
217 2nd Street                                                                                                                  
Juneau, Alaska                                                                                                                  
Telephone:  (907) 586-1325                                                                                                      
POSITION STATEMENT:  Opposed HB 1.                                                                                              
                                                                                                                                
DON ETHERIDGE                                                                                                                   
Alaska State District Council of Laborers                                                                                       
Lobbyist, American Federation of Labor and Congress of Industrial                                                               
Organizations                                                                                                                   
710 West 9th Street                                                                                                             
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 586-3707                                                                                                      
POSITION STATEMENT:  Discussed arbitration.                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-14, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN called the House Community and Regional Affairs                                                                     
Standing Committee meeting to order at 8:05 a.m.  Members present                                                               
at the call to order were Representatives Halcro, Morgan, Dyson and                                                             
Kookesh.  Representatives Harris, Murkowski and Joule were absent.                                                              
                                                                                                                                
HB   1-MUNICIPAL COLLECTIVE BARGAINING CONTRACTS                                                                                
                                                                                                                                
Number 0006                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO announced that the only order of business before                                                             
the committee was HOUSE BILL NO. 1, "An Act relating to collective                                                              
bargaining agreements and arbitration awards of class (a)(1)                                                                    
municipal employees."                                                                                                           
                                                                                                                                
[Due to a tape malfunction, a few seconds of the meeting was not                                                                
recorded.]                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOOKESH moved to adopt the proposed CS, Version                                                                  
LS0020\H, Cramer, 3/10/99, as the working document before the                                                                   
committee.  There being no objection, it was so ordered.                                                                        
                                                                                                                                
Number 0070                                                                                                                     
                                                                                                                                
BONNIE CARROLL, Legislative Secretary for Representative Brice,                                                                 
Alaska State Legislature, informed the committee that                                                                           
Representative Brice supported the proposed CS.  The proposed CS                                                                
changes the language from Class (a)(1) employees to refer to only                                                               
police and fire employees.  She mentioned that Mark Drygas from the                                                             
Fairbanks Firefighters Association and Matt Soden of the Fairbanks                                                              
Police Department Employees Association were present to testify.                                                                
                                                                                                                                
                                                                                                                                
GAVIN CHARRIER, Firefighter, Ketchikan International Airport,                                                                   
testified via teleconference from Ketchikan.  He expressed concern                                                              
with getting to arbitration for Class(a)(1) employees although that                                                             
has not been achieved because his contract included Class 1, 2, and                                                             
3 employees.  If the point is reached where the employee and the                                                                
employer cannot agree on wages and Class(a)(1) employees do not                                                                 
have the right to strike, then the deciding factor should be the                                                                
arbitrator's decision.  Mr. Charrier felt that Class(a)(1) and                                                                  
Class 2 employees should have the right to strike if the                                                                        
arbitrator's decision does not have any weight.                                                                                 
                                                                                                                                
Number 0376                                                                                                                     
                                                                                                                                
JERRY CLEWORTH, Member, Fairbanks City Council, testified via                                                                   
teleconference from Fairbanks.  He informed the committee that he                                                               
had been a city councilmen for the last 11 years.  Mr. Cleworth                                                                 
opposed HB 1.  The committee should have received a resolution from                                                             
the Fairbanks City Council which states unanimous opposition to                                                                 
HB 1.                                                                                                                           
                                                                                                                                
CO-CHAIRMAN HALCRO noted that the Fairbanks City Council's                                                                      
resolution is in the committee packet.                                                                                          
                                                                                                                                
MR. CLEWORTH said that there is another side to this story.  Back                                                               
in the early 1980s, the City of Fairbanks received a lot of oil                                                                 
money and not much effort was placed in labor contracts.  The city                                                              
did not really do its job negotiating and the city joined the                                                                   
Public Employees Relations Act (PERA) under which the Class(a)(1)                                                               
employees exchanged the right to strike for binding arbitration.                                                                
In the late 1980s when the oil money ran low, the city was left                                                                 
scrambling to meet its budget.  The community became upset with the                                                             
Class(a)(1) employees and instituted a tax cap on the city.                                                                     
Therefore, the council tried to regain some fiscal credibility by                                                               
producing a more palatable package for the community.  The city                                                                 
negotiated with the Class(a)(1) employees and asked for reductions                                                              
in the benefits and some wages while the union wanted cost of                                                                   
living increases.  At the impasse, an arbitrator would come to                                                                  
town.  Mr. Cleworth commented that he had never known an arbitrator                                                             
to roll back anything.  The city is left to pay whatever the                                                                    
arbitrator decides which leaves the council to determine how to pay                                                             
such when there is a tax cap.  The council reviewed cutting staff                                                               
in the police and fire departments.  The unions then took the city                                                              
to court demanding minimum staffing levels with which the judge                                                                 
agreed.  Mr. Cleworth summarized that the judge was determining the                                                             
staffing, an arbitrator determining the wage, and the taxpayers                                                                 
speaking through the tax cap.  The only option was to take from                                                                 
other city departments to pay for Class(a)(1) employees which                                                                   
created animosity within the city.  A few years later, it was                                                                   
discovered that the city council did not have to fund an                                                                        
arbitrator's award.  "Now this bill doesn't give us a tool to roll                                                              
back salaries and wages, but it did give us a tool to hold status                                                               
quo."                                                                                                                           
                                                                                                                                
Number 0670                                                                                                                     
                                                                                                                                
MR. CLEWORTH informed the committee that in 1997 the average cost                                                               
of a police department employee, including all benefits, is $95,053                                                             
and for a fire department employee it is $94,907.  Mr. Cleworth                                                                 
said that was the highest in the nation from the research.  The                                                                 
average salary in the North Star Borough including government                                                                   
employees is only $29,196 while the average base salary in the City                                                             
of Fairbanks is $52,768.  Mr. Cleworth stated that the benefits are                                                             
extremely high and the city council is attempting to control                                                                    
medical costs now.                                                                                                              
                                                                                                                                
MR. CLEWORTH expressed the hope that HB 1 would be defeated and                                                                 
provide municipalities the right to leave PERA.  He emphasized that                                                             
every city manager and mayor he had worked with had gone to Juneau                                                              
requesting a change in the law allowing municipalities to have                                                                  
their own personnel code and leave PERA.  Mr. Cleworth requested                                                                
that the Public Employees Retirement System(PERS) be investigated.                                                              
Mr. Cleworth said, "This is a killer for us, is that when the                                                                   
overtime is pumped in on base time to compute retirement pay we                                                                 
really get hammered with Class[(a)](1) employees because there is                                                               
a lot of overtime in those departments.  And the contracts set up                                                               
a situation for that overtime to be created, that we don't have the                                                             
tools to change."  Mr. Cleworth requested that the committee                                                                    
contact Representative Whitaker, a former city councilman,                                                                      
regarding this issue.  Further, Mr. Cleworth informed the committee                                                             
that the starting fireman recruit earns a wage of $11.69 which is                                                               
increased to $12.90 after six months, increased to $14.18 after 18                                                              
months, and after three years longevity pay begins at three percent                                                             
and one percent every year thereafter.                                                                                          
                                                                                                                                
Number 0907                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO understood that there was a window of                                                                        
opportunity for cities to opt out of PERA; when was that?                                                                       
                                                                                                                                
MR. CLEWORTH said that he understood the window was within a year                                                               
or so of the institution of PERA.  At that time, the council did                                                                
not opt out.  The wall was not hit until the late 1980s.                                                                        
                                                                                                                                
CO-CHAIRMAN HALCRO asked if the statements, at the February 25,                                                                 
1999 meeting, that the Fairbanks Police Department had not received                                                             
a pay increase for six years was correct.                                                                                       
                                                                                                                                
MR. CLEWORTH reiterated that those employees would receive                                                                      
longevity in the amount of three percent after three years and one                                                              
percent each year thereafter up to 10 years.  He stated, "The long-                                                             
timers that have been there have been at the salary levels that                                                                 
that they are at.  But as I testified before you earlier, they are                                                              
hardly poverty wages."  Mr. Cleworth said that these wages, in his                                                              
comparisons, are the highest wages to be found in the nation.                                                                   
                                                                                                                                
CO-CHAIRMAN HALCRO asked if the City of Fairbanks could opt out of                                                              
PERA would it still embrace binding arbitration for police and fire                                                             
employees.                                                                                                                      
                                                                                                                                
MR. CLEWORTH said binding arbitration was used for Class (2) and                                                                
Class (3) in the past.  The council wants the option of whether to                                                              
approve or disapprove a contract.  The only time an arbitrator                                                                  
should be utilized is when both parties feel that would be in their                                                             
best interest.                                                                                                                  
                                                                                                                                
CO-CHAIRMAN HALCRO asked if the city would continue to offer                                                                    
binding arbitration for police and fire employees.                                                                              
                                                                                                                                
MR. CLEWORTH explained that the city would have its own personnel                                                               
code.  He indicated that the right to strike would probably be                                                                  
available.  The Class(a)(1) employees should have the right to                                                                  
strike and the city should have the right not to use binding                                                                    
arbitration.  Mr. Cleworth said that the city would return to its                                                               
personnel code that was utilized until the city joined PERA.                                                                    
                                                                                                                                
Number 1119                                                                                                                     
                                                                                                                                
DAVE MAITLEN, Police Officer, Fairbanks Police Department,                                                                      
testified via teleconference from Fairbanks.  He informed the                                                                   
committee that he had been a police officer in Fairbanks for 18                                                                 
years.  Mr. Maitlen supported HB 1.  Collective bargaining means to                                                             
negotiate in good faith, then mediate if an agreement cannot be                                                                 
obtained, and finally use arbitration as a last resort.  In the 18                                                              
years Mr. Maitlen has worked for the Fairbanks Police Department,                                                               
only three times has the police union went to contract arbitration.                                                             
On two of those occasions, the arbitrator ruled in favor the police                                                             
union and on one occasion the arbitrator ruled in the city's favor.                                                             
The rulings in favor of the police department were regarding wages;                                                             
the ruling in 1990 allowed for a cost of living raise over a two                                                                
year period after a wage freeze the first year.  Prior to that, the                                                             
police union gave back 10 percent of their salary in order to avoid                                                             
lay offs, in the early 1980s, and when the city did not have the                                                                
money for wages, in the mid 1980s.  The second ruling in 1995 was                                                               
not funded by the Fairbanks City Council and the starting salary of                                                             
a police officer was not increased.  A two-year officer gained four                                                             
cents an hour, a three-year officer gained four cents an hour, a                                                                
four-year officer gained 48 cents an hour, and a five-year officer                                                              
gained nine cents an hour.  Two pay steps were added to the top end                                                             
of this contract, keeping salaries for starting officers low.  Mr.                                                              
Maitlen did not believe that sounded like a massive pay increase.                                                               
The rulings in the city's favor have been not to incur additional                                                               
costs, keep starting wages at the status quo.  Mr. Maitlen informed                                                             
the committee that all the provisions, except the wage provision of                                                             
the 1995 contract, have been tentatively agreed to by the city and                                                              
the union.  When the city failed to fund the arbitrated wage scale,                                                             
the time and money spent in collective bargaining was wasted.  The                                                              
police officers were left without a new contract because one                                                                    
provision was not funded.  The subsequent lawsuit cost even more.                                                               
                                                                                                                                
MR. MAITLEN acknowledged that the City of Fairbanks does have a tax                                                             
cap, but pointed out that the framers of the tax cap allow six                                                                  
exceptions.  One of those exceptions, allows the city to raise                                                                  
taxes to fund court judgements and arbitrators' awards.  No one                                                                 
wants to go to arbitration during a labor dispute, but on occasion                                                              
an impartial expert needs to hear all the facts and make a                                                                      
determination.  Class(a)(1) employees are told that they are                                                                    
essential employees who cannot strike, but have binding                                                                         
arbitration.  If the city does not have fund a binding award,                                                                   
binding arbitration does not truly exist which would be corrected                                                               
with HB 1.  Mr. Maitlen asked for the committee's support of HB 1.                                                              
                                                                                                                                
Number 1380                                                                                                                     
                                                                                                                                
MARK DRYGAS, Business Agent, Fairbanks Firefighters Association and                                                             
Captain, Fairbanks Fire Department.  Mr. Drygas supported HB 1.  He                                                             
said that he wanted to address some of Mr. Cleworth's comments.                                                                 
During the time before PERA under the personnel code which allowed                                                              
the right to strike, the Fairbanks firefighters did strike in the                                                               
late 1970s.  A court injunction required the firefighters to return                                                             
to work.  Mr. Drygas believed the court injunction would be a tool                                                              
the city would use in order to protect the public.  He said that                                                                
binding arbitration is available in order to avoid the interruption                                                             
in service and is beneficial with the relationship between the                                                                  
employees and the city.  Binding arbitration was intended to be a                                                               
manner in which to solve an impasse in bargaining.  Mr. Drygas said                                                             
that binding arbitration makes both parties want to agree to a                                                                  
contract and brings finality to bargaining.  Without binding                                                                    
arbitration there is no way to have finality.                                                                                   
                                                                                                                                
MR. DRYGAS said that this issue will effect other communities.  In                                                              
the situation in Fairbanks, the firefighters contract expired in                                                                
1995 and negotiations have occurred for the last three-and-a-half                                                               
years.  If binding arbitration were binding on both parties, good                                                               
faith bargaining would take place.  Under PERA, the firefighters do                                                             
not have the right to strike to which Mr. Drygas agreed.  Further,                                                              
PERA called for binding arbitration.  Therefore, the firefighters                                                               
are subject by law to binding arbitration and the arbitrator's                                                                  
decision.  Mr. Drygas noted that the arguments in Mr. Cleworth's                                                                
testimony such as the tax cap, the socioeconomic view of the city,                                                              
and comparable wages could all be brought before the arbitrator.                                                                
Although the firefighters are bound by the arbitrator's decision,                                                               
the city has an option since the decision is subject to legislative                                                             
approval.  Both sides should be playing by the same rules.  In                                                                  
conclusion, Mr. Drygas mentioned that the Fairbanks firefighters                                                                
have not received a wage increase in nine years and the Fairbanks                                                               
police officers have not received a wage increase in six years.                                                                 
                                                                                                                                
Number 1660                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON asked if the firefighters union is involved in                                                             
local elections and has the union raised and contributed money to                                                               
municipal candidates.                                                                                                           
                                                                                                                                
MR. DRYGAS replied yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE DYSON asked Mr. Drygas if Mr. Cleworth's figures for                                                             
the wages and benefits of Fairbanks' firefighters was accurate.                                                                 
                                                                                                                                
MR. DRYGAS was not sure what figures Mr. Cleworth was using, but                                                                
pointed out that Mr. Cleworth's figures included overtime.  If the                                                              
fire department was staffed properly much of the overtime would be                                                              
eliminated.  Mr. Drygas said that he would not dispute Mr.                                                                      
Cleworth's figures, but without the overtime the figures would be                                                               
considerably less.                                                                                                              
                                                                                                                                
REPRESENTATIVE DYSON said that at one point he could say the                                                                    
Anchorage Police Department was the highest paid police department                                                              
in the world.  Are there any fire departments that have a better                                                                
package than the Fairbanks Fire Department?                                                                                     
                                                                                                                                
MR. DRYGAS informed the committee that a recent study places the                                                                
Anchorage Fire Department as number four in the nation and the                                                                  
Fairbanks Fire Department is below Anchorage.  Mr. Drygas                                                                       
reiterated that these are arguments that can be brought out during                                                              
the arbitration proceedings.                                                                                                    
                                                                                                                                
REPRESENTATIVE DYSON asked if Fairbanks has had difficulties in                                                                 
attracting qualified people.                                                                                                    
                                                                                                                                
MR. DRYGAS replied no, but noted that there have been recent                                                                    
problems in retaining employees.  For example, in Mr. Drygas'                                                                   
department of 36 firefighters, six members are either on hiring                                                                 
lists or seeking employment elsewhere.  In further response to                                                                  
Representative Dyson, Mr. Drygas said those employees were not                                                                  
approaching early retirement age.  Mr. Drygas clarified that the                                                                
employees that are being lost are those that have been employed by                                                              
the fire department for less than six years.                                                                                    
                                                                                                                                
Number 1841                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOOKESH requested Mr. Drygas' interpretation of                                                                  
HB 1 since he does not see anything in the bill regarding the right                                                             
to strike.                                                                                                                      
                                                                                                                                
MR. DRYGAS pointed out that Alaska is the only state that does not                                                              
allow Class(a)(1) employees to strike and binding arbitration is                                                                
not binding.  Binding arbitration and not having the right to                                                                   
strike go hand-in-hand.  Mr. Drygas noted that Mr. Cleworth had                                                                 
indicated he would prefer the city to be under its old rules and                                                                
allow Class(a)(1) employees the right to strike and not have                                                                    
binding arbitration.  Mr. Drygas reiterated the situation when the                                                              
Fairbanks firefighters did have the right to strike and did strike;                                                             
a court injunction required them to return to work which he felt                                                                
would be the case again.  He also felt it unfair to place the                                                                   
firefighters in a position that would allow them to strike; it                                                                  
would be a tough decision personally.                                                                                           
                                                                                                                                
REPRESENTATIVE KOOKESH interpreted HB 1 as merely making binding                                                                
arbitration truly binding.  The legislation does not have anything                                                              
to do with salaries, wage increases, or striking.                                                                               
                                                                                                                                
MR. DRYGAS agreed with Representative Kookesh.  By law, binding                                                                 
arbitration is an option.  By law, the bargaining units are bound                                                               
by the arbitrator's decision while due to the law the municipality                                                              
is not bound by the arbitrator's decision.                                                                                      
                                                                                                                                
REPRESENTATIVE KOOKESH said, "My interpretation would be then, if                                                               
we can't make binding arbitration binding, then at least give us                                                                
the right to strike."                                                                                                           
                                                                                                                                
MR. DRYGAS agreed and reiterated placing public safety providers in                                                             
that position would be unfair.  Further, allowing the right to                                                                  
strike would be unfair to the public.                                                                                           
                                                                                                                                
Number 2029                                                                                                                     
                                                                                                                                
MR. DRYGAS, in response to Co-Chairman Halcro, informed the                                                                     
committee that he had been with the Fairbanks Fire Department for                                                               
eight years.                                                                                                                    
                                                                                                                                
CO-CHAIRMAN HALCRO inquired as to the reason behind the court                                                                   
injunction during the Fairbanks firefighters' strike before PERA.                                                               
                                                                                                                                
MR. DRYGAS noted that strike was before his time.  However, in                                                                  
discussions regarding that strike Mr. Drygas had determined the                                                                 
court injunction was due to the public safety issue.                                                                            
                                                                                                                                
CO-CHAIRMAN HALCRO surmised then that before PERA in Fairbanks, the                                                             
courts recognized that the fire department is a life, safety                                                                    
department and the city cannot afford for those employees to                                                                    
strike.                                                                                                                         
                                                                                                                                
MR. DRYGAS agreed.  In further response to Co-Chairman Halcro, Mr.                                                              
Drygas offered the following explanation of how an arbitrator is                                                                
chosen.  The fire department would write to the Federal Mediation                                                               
and Conciliation Service which would provide a list of seven                                                                    
registered arbitrators and their biographies.  The department and                                                               
the city would then do research on these arbitrators.  Then a coin                                                              
would be flipped and whoever loses the flip would strike a name                                                                 
from the list first and then the other party would strike a name                                                                
from the list and so on until only one name is left.                                                                            
                                                                                                                                
CO-CHAIRMAN HALCRO echoed Representative Kookesh's statement that                                                               
this is not about the wages, but rather the basic premise of the                                                                
law.  The law takes away the right to strike and offers binding                                                                 
arbitration in lieu of that and the binding arbitration should be                                                               
binding.                                                                                                                        
                                                                                                                                
Number 2151                                                                                                                     
                                                                                                                                
KEVIN RITCHIE, Alaska Municipal League, thanked the committee for                                                               
allowing time to discuss the issue with the legislative committee                                                               
and others.  There was a meeting of the Educational Government                                                                  
Committee which discussed this issue at great length on March 5th                                                               
during which the committee voted to oppose HB 1.  The primary                                                                   
reason for the opposition is because there are two separate                                                                     
processes at hand one being labor negotiations and the other is the                                                             
appropriation powers of a legislative body.  The process must stop                                                              
at the state or local level regarding what the community will fund.                                                             
The power to appropriate is very basic to the legislative process.                                                              
                                                                                                                                
MR. RITCHIE said that binding arbitration is similar to a judicial                                                              
proceeding in terms of making a decision that is binding.  However,                                                             
all court decisions have an appeal process to higher courts.  If                                                                
one views binding arbitration as an appeal process, "...you've got                                                              
the binding arbitrator's decision, which I think both sides, labor                                                              
and management, would agree is not a perfect solution, you know,                                                                
it's a solution that was chosen.  There's an appeal really to the                                                               
legislative body for that decision and then ultimately the decision                                                             
has to lay with the voters."                                                                                                    
                                                                                                                                
MR. RITCHIE, in response to Co-Chairman Halcro's earlier question,                                                              
believed that the PERA window closed in 1976.  Juneau is a                                                                      
community that opted out of PERA.  During Mr. Ritchie's time as a                                                               
city manager in Juneau, Juneau had good relationships with the                                                                  
police and fire unions under the locally developed ordinance.  The                                                              
Alaska Municipal League does support, as a policy matter, allowing                                                              
municipalities to opt out of PERA.                                                                                              
                                                                                                                                
Number 2315                                                                                                                     
                                                                                                                                
MR. RITCHIE informed the committee that there have been discussions                                                             
regarding how to reduce the number of times that a city council                                                                 
reaches the point where it feels it must not fund a decision of a                                                               
labor arbitrator or a portion of that decision by improving the                                                                 
process.  From his discussions with the attorney general's office                                                               
and recollections of the processes in general, Mr. Ritchie believed                                                             
that Alaska does not have strong standards for what labor                                                                       
arbitrators do.  There is not a state statute or standard that                                                                  
specifies what the arbitrator has to consider.  Certainly, local                                                                
financial conditions are very important to the public.  Mr. Ritchie                                                             
said it would be a good avenue to work on through the state,                                                                    
municipal governments, and labor organizations in order to                                                                      
strengthen the language in that statute.                                                                                        
                                                                                                                                
REPRESENTATIVE KOOKESH was not surprised with Mr. Ritchie's                                                                     
position.  He asked Mr. Ritchie if he believed that binding                                                                     
arbitration is currently binding in Alaska.                                                                                     
                                                                                                                                
MR. RITCHIE replied no.                                                                                                         
                                                                                                                                
REPRESENTATIVE KOOKESH inquired as to how binding arbitration could                                                             
be fixed.                                                                                                                       
                                                                                                                                
MR. RITCHIE recognized that binding arbitration does attempt to                                                                 
arrive at a goal.  When going through the court the court's                                                                     
decision is expected to be binding, but there are appeal processes.                                                             
Very few things are ultimately binding.  Mr. Ritchie acknowledged                                                               
the importance of finality, but pointed out such finality conflicts                                                             
with the constitutional and practical duty of the assembly or                                                                   
council to be the place where the money stops regarding taxes,                                                                  
services, etcetera.                                                                                                             
                                                                                                                                
Number 2454                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOOKESH stated that binding arbitration should be                                                                
binding and if Mr. Ritchie does not have another solution, HB 1 is                                                              
the solution before the committee.  Representative Kookesh was                                                                  
uncomfortable with comparing binding arbitration to a court case                                                                
with an appeal process.  Even within the courts, there is a U.S.                                                                
Supreme Court where there is a final appeal.  If binding                                                                        
arbitration is not truly binding, Representative Kookesh would be                                                               
more comfortable with the Alaska Municipal League recognizing the                                                               
problem and offering a solution.                                                                                                
                                                                                                                                
CO-CHAIRMAN HALCRO asked when Juneau opted out of PERA, did the                                                                 
city give fire and police employees the right to strike.                                                                        
                                                                                                                                
MR. RITCHIE did not recall.  Mr. Ritchie did not know of any                                                                    
binding arbitration taking place in the City and Borough of Juneau.                                                             
In further response to Co-Chairman Halcro, Mr. Ritchie recalled                                                                 
that municipalities were in PERA unless action was taken to opt                                                                 
out.                                                                                                                            
                                                                                                                                
CO-CHAIRMAN HALCRO noted that Mr. Ritchie's letter identified some                                                              
constitutional questions regarding the ability to tax out regarding                                                             
Section 1, Taxing Power, and Section 9, Local Debt.  He asked if                                                                
Mr. Ritchie had received a legal opinion on those.                                                                              
                                                                                                                                
MR. RITCHIE said he had talked with the attorney general's office.                                                              
The Fairbanks issue and the police and fire issue in Anchorage went                                                             
to court.  Although those questions were raised during the suits,                                                               
the court did not rule on those issues.  The courts did not reach                                                               
those decisions.  Mr. Ritchie thought that the attorney general's                                                               
office felt that it was an issue that could be decided.                                                                         
                                                                                                                                
Number 2602                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO expressed concern with Mr. Cleworth's testimony                                                              
regarding the city's preference to opt out of PERA and develop its                                                              
own rules.  The concept of binding arbitration is that in exchange                                                              
for giving up the right to strike, mediation with a third party                                                                 
will occur taking into consideration local economies.  Police and                                                               
fire employees are expected to protect citizens every day.  Just as                                                             
the court ruled 20 years ago in Fairbanks, firefighters cannot be                                                               
striking.  Co-Chairman Halcro understood the fiscal concerns of the                                                             
Alaska Municipal League, but there was a window to opt out of PERA.                                                             
Why has it taken so long to reach this point?                                                                                   
                                                                                                                                
MR. RITCHIE stated that conditions were different during the time                                                               
to opt out of PERA.  Mr. Ritchie indicated that a number of                                                                     
communities might take the initiative to create a local ordinance,                                                              
if the ability to opt out of PERA was available.  The question of                                                               
how to weigh an employee's wage with what a taxpayer can pay or the                                                             
level of service desired is a question that local communities and                                                               
legislative bodies are designed to handle.  This is a difficult                                                                 
decision that is made community by community.  Funding a contract                                                               
can result in a reduction in service, especially when there is a                                                                
tax cap.  Both decisions are terrible decisions.                                                                                
                                                                                                                                
Number 2764                                                                                                                     
                                                                                                                                
DON ETHERIDGE, Alaska State District Council of Laborers, Lobbyist                                                              
for the American Federation of Labor and Congress of Industrial                                                                 
Organizations (AFL-CIO), informed the committee that recently there                                                             
was a conference at which Representative Porter spoke highly of                                                                 
HB 1.  Mr. Etheridge pointed out that many areas of arbitration are                                                             
negotiable, rules for the arbitrator can be established.  He                                                                    
mentioned that the Juneau Fire Department does not have the right                                                               
to strike, and he did not recall the Juneau Fire Department ever                                                                
going to binding arbitration.   This issue has not come before the                                                              
city personnel board.  He reviewed the various duties of fire and                                                               
police employees.  Mr. Etheridge believed that everyone in the                                                                  
community believes that fire and police employees should be treated                                                             
fairly.                                                                                                                         
                                                                                                                                
REPRESENTATIVE DYSON inquired of Co-Chairman Halcro's intention                                                                 
with HB 1.                                                                                                                      
                                                                                                                                
CO-CHAIRMAN HALCRO noted that the next committee of referral is the                                                             
House Labor & Commerce Committee.  Co-Chairman Halcro said that he                                                              
intended to move HB 1 out of committee today.                                                                                   
                                                                                                                                
REPRESENTATIVE DYSON directed the committee's attention to the                                                                  
letter from Tim Rogers with the Municipality of Anchorage.                                                                      
Representative Dyson informed the committee that he had spent six                                                               
years on the Municipal Assembly in Anchorage.  There are some                                                                   
hidden issues.  He identified binding arbitration as a politician's                                                             
dream because the politician is taken out of the position of making                                                             
the hard decision.  Representative Dyson said that when the                                                                     
arbitrator's decisions and the subsequent court decisions took away                                                             
some of the local legislative bodies' ability to make decisions                                                                 
about taxing and appropriations, many of the local governments                                                                  
began waking up to the situation.                                                                                               
                                                                                                                                
REPRESENTATIVE DYSON pointed out that Anchorage has had a long-                                                                 
standing love affair with its police and fire departments.  He                                                                  
would argue that Anchorage not only has amongst the highest paid                                                                
police and  fire employees, but also the highest quality in the                                                                 
world.  There have been virtually no cases of police brutality,                                                                 
cops on the take, and firefighters are cross trained.  Those                                                                    
employees do not want the ability to strike because they do no want                                                             
to end the love affair with the citizens of Anchorage.  This bill,                                                              
HB 1, would take away the legislative body's authority to                                                                       
appropriate.                                                                                                                    
                                                                                                                                
TAPE 99-14, SIDE B                                                                                                              
                                                                                                                                
Number 3000                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON discussed the situation in Anchorage where                                                                 
overtime is assigned on the basis of seniority.  The highest paid                                                               
employees in the city and probably the state are the senior                                                                     
officers who receive the first cut at overtime which feeds into                                                                 
their retirement rates.  Representative Dyson said, "And it's 20                                                                
years and out, and the retirement benefits that accumulate."                                                                    
Representative Dyson stated that he would not vote in favor of                                                                  
moving HB 1 out of the House Community & Regional Affairs                                                                       
Committee.  Further, he said he would strenuously argue against                                                                 
HB 1 because of what the legislation does to the constitutional                                                                 
responsibilities of the elected representative.  When an                                                                        
arbitration takes place there is someone missing from the table,                                                                
the people of the area are not present.  There is no accountability                                                             
between the arbitrator and the people of the area whose the                                                                     
decision would feel the effect of the arbitrator's decision in                                                                  
their taxes, lives and services.  A fundamental principle of our                                                                
government is aggregated because it is close to appropriation                                                                   
without representation and arguably taxation without                                                                            
representation.  Representative Dyson said that the system does                                                                 
work.  Police officers and firefighters in Fairbanks and Anchorage                                                              
are not receiving welfare which was the case 20 to 25 years ago in                                                              
Anchorage.  Therefore, police officers and firefighters are not                                                                 
underpaid and the rate of applications received illustrates that                                                                
the remuneration package appears to be attractive.  Representative                                                              
Dyson encouraged the committee to not take away the constitutional                                                              
powers of the local governments to make appropriations for local                                                                
services.                                                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO understood Representative Dyson's comments                                                                   
regarding binding arbitration being a politician's dream, but the                                                               
people elect the politicians.  Throughout history, bad decisions of                                                             
prior administrations have had to be lived with.  In Anchorage, one                                                             
such example is the Performing Arts Center.  Co-Chairman Halcro                                                                 
asked why does binding arbitration exist.                                                                                       
                                                                                                                                
Number 2811                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON explained that part of the original deal was                                                               
if the right to strike was given up, then arbitration is provided.                                                              
Subsequent tactics and financial conditions exposed weaknesses in                                                               
arbitration.  Furthermore, the court decisions which said, "When                                                                
you have greatly diminishing--or significantly diminishing income                                                               
due to recession and a tax cap, then the money goes down and you                                                                
have to live by the arbitrator's decision and you do not have the                                                               
option of reducing the number employees.  Therefore, you've taken                                                               
away a portion of the local legislative body's authority and                                                                    
responsibility to make appropriations.  So, then you're going to                                                                
take the money away from something else."  That was when people                                                                 
began to have reservations about the arbitration process.  He                                                                   
guessed that people had learned through the process.  He reminded                                                               
everyone that public employees have been very active in local                                                                   
elections and have as good or better opportunity than most citizens                                                             
to elect local assembly members sympathetic to the arbitration                                                                  
process.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KOOKESH said that the question is not regarding                                                                  
salaries of police officers and firemen, but whether Class(a)(1)                                                                
employees are given the right to strike or arbitration.  This bill,                                                             
HB 1, does not address the right to strike; HB 1 merely makes                                                                   
binding arbitration binding.  This legislation does not speak to                                                                
municipal rights. He believed that the House Labor & Commerce                                                                   
Committee will have a more in depth review of HB 1.  Representative                                                             
Kookesh said HB 1 should move to the next committee of referral.                                                                
Representative Kookesh supported HB 1 because it provided teeth to                                                              
binding arbitration which is currently lacking.                                                                                 
                                                                                                                                
Number  2632                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOOKESH moved that HB 1 be reported to the next                                                                  
committee of referral with attached fiscal notes and individual                                                                 
recommendations.                                                                                                                
                                                                                                                                
REPRESENTATIVE DYSON objected.                                                                                                  
                                                                                                                                
Upon a roll call vote, Representatives Kookesh, Morgan and Co-                                                                  
Chairman Halcro voted in favor of reporting HB 1 out of committee.                                                              
Representative Dyson voted in opposition to reporting HB 1 out of                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOOKESH clarified that he was referring CSHB 1,                                                                  
Version LS0020\H, Cramer, 3/10/99.                                                                                              
                                                                                                                                
Therefore, CSHB 1(CRA), Version LS0020\H, Cramer, 3/10/99, was                                                                  
reported out of the House Community & Regional Affairs Standing                                                                 
Committee.                                                                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community & Regional Affairs Standing Committee meeting was                                                                     
adjourned at 9:03 a.m.                                                                                                          

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