Legislature(2013 - 2014)SENATE FINANCE 532
02/20/2013 09:00 AM Senate FINANCE
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| Presentation: Department of Administration on Contract Negotiations | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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| += | SB 18 | TELECONFERENCED | |
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SENATE FINANCE COMMITTEE
February 20, 2013
9:05 a.m.
9:05:16 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:05 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Curtis Thayer, Deputy Commissioner, Department of
Administration; Nicki Neal, Director, Division of
Personnel, Department of Administration; Former Senator Jim
Duncan.
SUMMARY
^PRESENTATION: DEPARTMENT OF ADMINISTRATION ON CONTRACT
NEGOTIATIONS
9:05:46 AM
CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, introduced department staff. He recognized
former Senator Jim Duncan and the General Government
Bargaining Unit (GGU) team in the audience. He provided a
disclaimer that any discussion on previously bargained
state contracts was not an indictment of past practices. He
stressed that all contracts had been bargained with and
agreed to by the state and parties. He added that historic
bargaining priorities may have been different than current
priorities.
9:08:13 AM
Mr. Thayer provided a PowerPoint presentation titled
"Alaska Department of Administration: Understanding Labor
Contracts" dated February 20, 2013 (copy on file). He moved
to slide 2 titled "Bargaining 101." He read from the slide:
· Negotiations are mandated by the Public Employment
Relations Act (AS 23.40.070-23.40.250).
· Bargaining begins in accordance with the terms set
forth in the collective bargaining agreements but
generally commences between the months of October
and December.
· The State must negotiate and enter into written
agreements on matters of wages, hours and other
terms and conditions of employment. These are
considered mandatory subjects of bargaining.
o For example: cost of living increases, merit
increases, pay increments, leave accrual,
health insurance
· The State may, but is not required, to negotiate
permissive subjects of bargaining.
o For example: classification, benefits for
retirees, representation of non-permanent
employees
· Monetary terms of the agreement must be submitted to
the Legislature no later than the 60th day of the
legislative session to receive consideration during
that calendar year (AS 23.40.215).
Mr. Thayer elaborated that current contract negotiations
had commenced in October 2012 for one union and in January
2013 for another. The department and unions were working
together to submit their monetary agreements to the
legislature by the March 15, 2013 deadline.
Mr. Thayer read from slide 3 titled "Bargaining 101":
· If negotiations do not lead to agreement and
mediation fails, employees (except protective
service personnel) have the right to strike.
· Employees who are on strike do not get paid, but may
not be terminated because they choose to lawfully
strike.
· Striking employees may be replaced - either
temporarily for the duration of the strike, or
permanently under certain circumstances.
· Our goal is to reach a fair and balanced agreement.
Contracts are…
· three years in duration
· typically bargained by the State on a cycle of 3-5
separate agreements each year (see next slide for
detail
Mr. Thayer expounded that contracts were required to be
negotiated at least every three years.
9:10:00 AM
Mr. Thayer turned to slide 4 titled "Bargaining Units
(BU)":
Contracts That Expire on June 30, 2013 Number of
Employees
ASEA Alaska State Employees Association
(GGU) 8,231
APEA Alaska Public Employees Association
(Supervisory Unit (SU)) 2,219
CEA Confidential Employees Association 192
Contracts That Expire on June 30, 2014
AVTECTA Alaska Vocational Technical Center
Teachers 39
IBU Inlandboatmens' Union of the Pacific 654
MEBA Marine Engineers Beneficial
Association 99
MMP Masters, Mates and Pilots 97
PSEA Public Safety Employees Association 487
Contracts That Expire on June 30, 2015
ACOA Alaska Correctional Officers
Association 777
LTC Public Employees, Local 71 1,675
TEAME Teachers' Education Association
of Mt. Edgecumbe 29
Non-Covered Exempt, Partially Exempt
and Excluded 1,359
Mr. Thayer explained that the non-covered exempt positions
included commissioners, deputy commissioners, directors,
and the majority of the Department of Law.
9:11:34 AM
Mr. Thayer discussed the average yearly base salary on
slide 5. Salaries varied broadly depending on the
association; average annual pay was $55,000 for GGU members
$80,000 for SU members, $55,000 for the Confidential
Employees Association (CEA), and $96,000 for non-covered
employees. He relayed that the total personal services cost
was close to $1.7 billion. The average employee benefit
percentage was 49 percent (the percentage varied slightly
per union and included benefits on top of salary). The
slide also included the geographic differential received by
unions.
Mr. Thayer directed attention to slides 6 through 8 titled
"Contract Negotiations Now Underway." Slide 6 provided
detail on the Alaska State Employees Association (ASEA),
which had 8,941 budgeted positions (the 8,231 number listed
on slide 4 represented a snapshot of the number of
employees on payroll at a certain time). Other ASEA
statistics included an average member age of 44, an average
service of 7.87 years, a $55,000 average annual salary for
full-time employees, and a total FY 12 gross pay for all
members of $414 million. Slide 7 included the information
for the Alaska Public Employees Association (APEA).
Statistics included a membership total of 2,240, an average
member age of 49, an average service of 13.69 years, an
average annual salary for full-time employees of $76,638,
and $173 million in total FY 12 gross pay for all members
(the gross pay included premium pays, but excluded
benefits). Shown on slide 8, the CEA included a membership
total of 201, an average member age of 42, an average
service of 8.26 years, a $55,000 average annual salary for
full-time employees, and a total FY 12 gross pay for all
members of slightly under $10 million. He added that the
majority of the CEA employees worked in the Personnel and
Labor Relations Division of the Department of
Administration (DOA).
9:14:16 AM
Mr. Thayer looked at slide 9 titled "Monetary Terms." One
portion of the monetary terms found in collective
bargaining agreements was the cost of living increase. He
detailed that a general wage increase was provided to all
bargaining unit members typically effective on July 1 of
every year of the agreement. Merit increases and pay
increments also fell under the monetary terms category. He
explained that pay scale merit steps went from "A" to "F";
employees received a 3.5 percent raise on an annual basis
during state service. Once an employee reached the "F" step
they received a 3.75 percent pay increase every two years;
the statutory requirement had been a new contract addition
in 2008/2009. He noted that the merit increases were
provided in addition to the cost of living increases.
Mr. Thayer discussed how merit increases and pay increments
factored into overall costs (slide 10). He used GGU as an
example and explained that granting a 1 percent increase in
FY 14 would cost approximately $6.6 million; however,
cumulatively over three years the increase would cost
approximately $46.7 million. Merit increases and pay
increments were valued at approximately $15 million in FY
14, with a cumulative total over three years of
approximately $105 million. The slide also included the
detailed information for the SU and CEA. He explained that
the costs and percentages were used during bargaining
agreements. He turned to slide 11 related to understanding
increases over time. The slide provided a snapshot of a
state employee's salary. He detailed that if the employee
had been hired in 2006 they would have received a 38
percent pay increase by 2012 due to cost of living
increases and merit/longevity steps. He explained that an
employee with a "G" step in 2006 would have received a
28.25 percent pay increase by 2012 with pay increment
increases occurring every other year. The slide also showed
the Consumer Price Index increase from 2006 to 2012; the
increase averaged 18.3 percent. The cost of living increase
average over the same time period was 17 percent. He
relayed that Alaska was one of the only states that granted
raises every year for state employees during the 2008
recession. He elaborated that Florida had not provided pay
raises for six years and the federal government had not
provided raises for its employees for four years.
Mr. Thayer addressed slide 12 titled "Leave." He described
leave currently as the "800-pound gorilla in the room." He
detailed that employees with zero to two years of state
service received 24 days of leave per year, employees with
two to five years received 27 days, employees with five to
ten years received 30 days, and employees with over ten
years received 36 days. He noted that leave included
personal and sick time; in 2000 the bargaining units had
combined separate sick leave and vacation time systems into
one leave system. He detailed that previously there had
been a cap on leave accrual; however, the cap had been
removed in 2000. Currently employees were required to use
one week of leave per year. Additionally, employees could
cash-in unlimited leave providing they maintained a balance
of 37.5 hours. Leave was valued at an employee's current
rate of pay with the exception of non-covered employees. He
expounded that if an employee had worked for the state for
10 years any accrued leave would be valued at their current
rate of pay. However, leave for non-covered and exempt
employees was valued at the rate of pay at the time it was
accrued.
9:19:56 AM
Mr. Thayer continued to discuss leave on slide 12. He
explained that there was a working reserves account in
statute that was used for funding the payment of leave
cash-ins and accrued leave upon separation from employment.
He relayed that there were currently employees with 3,000
and 4,000 hours of leave accrued. He communicated that in
some of the bargaining units if three employees left state
employment they would be paid over $500,000 in excess
leave. He directed attention to a bar graph on slide 13
titled "Growing Leave Liability." The increasing leave
liability was currently $164 million and the state had paid
out $36 million in leave during the prior year. The leave
liability was valued at $140 million in FY 09 and had grown
by approximately $10 million per year through FY 12. The
state had expressed its concern over the liability to its
bargaining units and was working to address the issue. He
shared that the state had discussed putting a cap on leave
and raising the number of hours an employee would be
required to use in a given year. He stated that the leave
was "better than the bank"; merit and cost of living
increases caused leave to grow over time. He noted that
many employees viewed their leave as a savings account.
9:21:49 AM
Mr. Thayer addressed a health insurance graph on slide 14.
The red bars showed the state's contributions to the active
employees' health plans (the list of health plans were
shown on the right of the slide). He relayed that the state
did not directly insure all state employees. He detailed
that some bargaining units used a health trust (the state's
contribution to the trust were based on the economy plan
premium for AlaskaCare). He pointed out that the state's
healthcare contribution was growing significantly. He
discussed the importance of letting the provider community
know that the cost increases could not be sustained. He
relayed that Alaska was one of four states that covered
full premium for employees; most state's required an 80
percent/20 percent copay. The health insurance contribution
per employee was approximately $15,900 in FY 13.
Mr. Thayer directed attention to "National Trends" shown on
slide 15:
· Little to no pay increases since 2007
· Extensive furlough of employees
· Extensive layoffs
· Freezing of longevity pay
· Increase in subcontracting -"managed competition"
· Limitations on "legacy" costs such as pensions,
sick or vacation "buyback" upon retirement, and
other such long-term costs.
· Greater operational flexibility, to provide more
service at the same or lesser cost to taxpayers
and citizens.
Mr. Thayer noted that Alaska did not include the furlough
of state employees in its bargaining language.
9:24:19 AM
Mr. Thayer turned to slide 16 titled "Department of
Administration's Bargaining Priorities and Concerns":
· Fiscally prudent cost of living increases
· Reducing the cost of longevity steps (i.e. pay
increments)
· Reducing the legacy costs of leave liability
· Operational productivity improvements
· Obtain voluntary, balanced agreements
· If a strike occurs, continue to provide essential
services to citizens
Mr. Thayer relayed that a strike situation was a last
resort to the state.
9:25:20 AM
NICKI NEAL, DIRECTOR, DIVISION OF PERSONNEL, DEPARTMENT OF
ADMINISTRATION, addressed slide 17 titled "Next Steps." She
discussed that once monetary terms were agreed to DOA
submitted them to the legislature for appropriation. She
explained that if the legislature failed to fund the
monetary terms of an agreement the next steps varied by
bargaining unit and the action taken could be affected by
whether or not the terms were submitted in a timely manner
(by the 60th day of legislative session; March 15 in the
current year). She communicated that if the legislature
failed to fund the agreement, an impasse was considered to
exist for some units and others had 10 days to reach an
agreement. She stressed that each situation was evaluated
and was fact specific; contract language varied between
units. She stated that the fact that the monetary terms of
the parties' agreement could potentially be submitted to
the legislature after the 60th day of session did not
prevent the legislature from either considering or funding
them. Additionally, the appropriation was subject to the
ratification of the collective bargaining agreement by the
union's membership.
Co-Chair Kelly asked members to read through slide 17 as it
related specifically to the legislature's duties.
9:27:04 AM
AT EASE
9:28:01 AM
RECONVENED
Ms. Neal continued to address slide 17. She communicated
that when monetary terms of an agreement were submitted to
the legislature the union membership had typically not yet
ratified the agreement. She detailed that appropriated
funding was proportionately reduced if the unions did not
ratify the agreement. A flow chart on slide 18 provided a
bargaining "road map." She relayed that the ideal process
began with negotiation, which was followed by a voluntary
agreement, the submittal of monetary terms to the
legislature, and the funding of monetary terms through
legislative appropriation.
Ms. Neal reiterated her earlier testimony that if the
legislature failed to fund the monetary terms, some
contracts specified that an impasse existed; whereas others
required the state to return to negotiations. In the case
of an impasse, the state often entered into mediation;
interest arbitration for Class I employees (i.e. troopers,
correctional officers, and other) was entered into if
mediation was not successful. It was the state's position
that it was not required to go to interest arbitration with
units with a mixed membership (i.e. units that were not
solely Class I) until the membership voted to strike. In
the event of an impasse a couple of options existed: (1)
the state could choose to implement its "last best offer";
however, any monetary terms were subject to appropriation;
and (2) the state could choose to continue under the terms
of the current collective bargaining agreement. She relayed
that in either situation the state and unions would
continue to negotiate.
9:30:31 AM
Senator Dunleavy asked for verification that the
legislature did not set a cap on increases (e.g. 1 percent,
3 percent, or other) or items agreed to in the state's
negotiations with unions. He asked for confirmation that
the state bargained with unions and subsequently asked the
legislature to fund the agreements. Ms. Neal responded in
the affirmative.
Co-Chair Kelly asked the department to provide further
detail on how Alaska's contracts compared with those in
other states. He asked Vice-Chair Fairclough to elaborate
on the question.
Vice-Chair Fairclough referred to AS 23.40.210 related to
cost of living differentials. She pointed to a specific
comparison between the state and Seattle, WA. She asked the
department to expand on the comparison.
Ms. Neal asked for clarification on the statute.
Vice-Chair Fairclough pointed to AS 23.40.210(a) related to
the cost of living differentials. She read from the
statute:
...the plan shall provide that salaries paid as of
August 26, 1977, to employees residing outside the
state shall remain unchanged until the difference
between those salaries and the salaries paid employees
residing in the state reflect the difference between
the cost of living in Alaska and living in Seattle,
Washington.
Ms. Neal replied that the department would get back to the
committee with a response.
Co-Chair Kelly spoke to the department's testimony that
Florida and the federal government had not provided step
increases for employees [in relatively recent years]. He
asked whether there were other states in the same
situation.
9:33:28 AM
AT EASE
9:35:20 AM
RECONVENED
Mr. Thayer answered that 22 states had been present at the
recent National Association of State Personnel Executives
meeting and 20 of the states had not provided pay
increments or salary increases; only two states had given
raises in the past two years. He added that Ms. Neal could
provide more detail on the issue.
Co-Chair Kelly asked Mr. Thayer to repeat the name of the
organization. Ms. Neal replied that the organization was
the National Association of State Personnel Executives. She
relayed that Alaska was one of two states out of the 22 in
attendance that had continued to provide pay increases.
Delaware had provided increases in the past several years.
She elaborated that the other states had not provided cost
of living increases and very few had provided merit steps.
She expounded that Louisiana and one other state had
planned to provide increases in the current year for the
first time in several years.
Co-Chair Kelly extended an invitation for former Senator
Duncan to address the committee if he desired. Mr. Duncan
declined.
Senator Dunleavy referred to step and column increases
provided to teachers. He wondered whether there were steps
and columns in the state employee contracts.
9:37:23 AM
Ms. Neal replied that the teachers' salary structure was
slightly different. She expounded that state employees were
assigned a salary range when hired and received advanced
steps based on years of service and performance.
Senator Dunleavy surmised that there did not appear to be
complete agreement on what constituted a raise. He asked
whether a cost of living increase raised an employee's
columns or steps. Ms. Neal answered that the negotiated
cost of living increase caused the entire salary schedule
to increase (e.g. a 2 percent salary increase would cause
the salary schedule to rise by 2 percent). She explained
that merit steps were raises provided to employees within
their salary range. She elaborated that a typical employee
was eligible for one increase per year for the first five
years; after five years the employee advanced to pay
increments, which was a 3.75 percent increase every two
years thereafter.
Senator Dunleavy wondered about specifics related to what
was considered a raise. He asked whether in the absence of
a cost of living increase an employee could say that they
did not receive a raise. He thought that in some instances
even though employees moved columns or steps they were not
considered to have received a raise.
Ms. Neal responded that employees were still eligible for
merit increases or pay increments in the absence of a cost
of living increase. She believed the increases constituted
a raise.
9:39:32 AM
Co-Chair Kelly asked at what point in an individual's
employment they began receiving merit increases every other
year. Mr. Thayer replied that employees moved to the every
other year schedule after approximately five years.
Co-Chair Kelly asked whether there were any employees who
did not receive step or merit increases (aside from those
employees receiving the increases every other year).
Mr. Thayer replied that some marine highway employees did
not receive merit and step increases; however, only about
1000 employees fell under the category. He elaborated that
most of the 16,000 state employees received merit and pay
increments. The department had worked hard to communicate
to unions that merit and pay increments constituted an
increase in salary; cost of living increases were in
addition to the other increases. He pointed to slide 11
that represented how an employee's salary had increased by
28 percent to 38 percent over the past 7 years (increases
shown were a combination of merit pay increments and cost
of living allowances).
9:41:13 AM
Vice-Chair Fairclough surmised that the cost to the state
had increased more than the 38 percent due to health
benefit costs. She asked for an overall cost increase to
the state. Mr. Thayer replied that the department would
follow up on the question at a later time. He confirmed
that the state's liability continued to grow as it
continued to pay health care premiums at 100 percent and
leave value increased. He stated that 23 years earlier
there had not been an issue; however, currently the
liability was significant and continued to grow. The
department had talked with unions during negotiations about
how to arrest the liability through a leave cap, different
leave accrual for new employees, or other.
Vice-Chair Fairclough returned to her earlier question
related to how the state determined cost of living
increases. She wondered how the state compared to the other
49 states. Ms. Neal answered that the specific statute [AS
23.40.210] was applied to the Alaska Marine Highway System;
employees received a cost of living differential for living
in Alaska. She did not know why the differential was only
applied to marine highway employees and would follow up
with detail at a later time.
Vice-Chair Fairclough asked the department to follow up on
how often cost of living was established and what location
the state compared itself to in order to establish the
amount. She believed the cost of living in different states
varied and was interested to know where Alaska fell on the
spectrum.
9:44:19 AM
Ms. Neal responded that the specific statute [AS 23.40.210]
was not applied during the state's contract negotiations
for non-covered employees. She believed the statute
pertained to a geographic differential as opposed to a cost
of living increase. She reiterated the department's intent
to follow up on the issue.
Co-Chair Kelly asked if the current leave accrual liability
was $163 million. Mr. Thayer replied that the current
liability was $164 million. Co-Chair Kelly wondered whether
leave accrual included benefits in addition to time and
salary. Mr. Thayer replied that the leave accrual related
strictly to time and salary.
Co-Chair Kelly was concerned about an apocalyptic scenario
that could potentially cause the price of oil to
dramatically drop and the impact it would have on the
state. He wondered if the state had a furlough system in
place to deal with the potential problem and whether unions
had money set aside to take care of employees during such
an event.
Mr. Thayer answered that the state did not have furlough
language in its contracts; contracts did include layoff
language. He believed individual unions and bargaining
units would be able to better answer the question regarding
any funds set aside.
9:46:52 AM
AT EASE
9:49:12 AM
RECONVENED
Senator Hoffman pointed to an increase in accrued leave
over time. He asked whether individuals were moving to
higher cost of living areas when they neared retirement.
Ms. Neal replied that the state did not monitor it, but
there was rumor of the occurrence, especially with Tier I
employees; all other tiers were required to spend 50
percent of their career in a location with a geographic
differential.
Senator Olson asked why binding arbitration was not
included in the state's process in the event of an impasse.
Ms. Neal answered that interest arbitration was binding.
Co-Chair Kelly asked for verification that the binding
interest arbitration was statutory. Ms. Neal replied in the
affirmative.
Senator Olson asked about funding that would be reduced
proportionately [if a union failed to ratify the bargaining
agreement] (slide 17). Ms. Neal replied that when the
monetary terms were brought to the legislature for
appropriation the agreement had not yet been ratified. She
explained that when a membership failed to ratify an
agreement typically the legislature had already funded the
monetary terms; therefore, funding was reduced
appropriately.
Vice-Chair Fairclough asked whether the state had conducted
an analysis on the effectiveness of a 37.5-hour versus a
40-hour workweek. She wondered whether the issue was
discussed during labor negotiations. She had heard that the
37.5-hour workweek had been implemented to remove a
potential liability of overtime payments.
9:52:34 AM
Ms. Neal answered that she was not aware that any analysis
had been done and did not know how the state had arrived at
a 37.5-hour workweek. The workweek hours were negotiated
and in order to increase the hours the state would need to
negotiate it with each union. She stated that perhaps the
working to avoid overtime payments was initially an issue.
The Fair Labor Standards Act did not require overtime until
after 40 hours per week; however, under most of the state's
collective bargaining units the state paid overtime after
37.5 hours.
Co-Chair Kelly asked whether the 37.5-hour workweek went
back to statehood. Ms. Neal replied that the workweek had
been 37.5 hours throughout her 30 years of service. She
recalled a couple of attempts to switch to 40 hours, which
had been unsuccessful.
Co-Chair Kelly asked whether the 37.5-hour workweek had
been negotiated versus set in statute. Ms. Neal answered
that she did not know how the 37.5-hour workweek initially
began, but it was currently in the state's collective
bargaining agreements.
Co-Chair Kelly noted that he would not be surprised that
the workweek was outlined in statute; he believed the 37.5
hours went back to statehood. He discussed that when he had
worked for the University of Alaska, the university would
have paid $300,000 to $400,000 per year in overtime if it
had moved from its 40-hour workweek to a 37.5-hour
workweek. He discussed that there were currently $25
million in automatic increases paid to state agencies
regardless of contracts. He surmised that contracts would
likely be for an additional $10 million to $20 million in
the current year. He wondered whether an analysis had been
done on the number of layoffs that may be required or
services that may need to be cut as a result of pay
increases during a time of declining revenues. He discussed
that legislators working on the operating budget had an eye
on savings; the goal was to avoid eating into the state's
savings or to tap them in a managed way.
9:56:37 AM
Mr. Thayer answered that DOA had not done an analysis on
the issue. He discussed state government and pointed to the
employees, programs, and space. The department had been
looking at the state's current leased space to determine
whether it was possible to reduce its footprint in order to
save money; preliminary estimates showed an approximate
savings of over $125 million in the next 20 years. For
example, the state had been looking at the elimination of
three floors at the Atwood Building in Anchorage; the
potential savings would be over $1 million. He elaborated
that agencies could be moved from private leased space,
which rented at $2 to $3 per square foot, into a building
that cost $1.56 per square foot. He concluded that in the
Atwood Building alone there was the potential for a $2
million savings. There were capital costs associated with
the shift, but the payback period was within five to seven
years. He noted that savings resulting from space reduction
would occur over the long-term.
Co-Chair Kelly asked whether there was a plan to reduce the
leave accrual. Mr. Thayer responded that DOA was in
negotiations with unions related to leave accrual.
Discussions had included a potential leave accrual cap or a
new leave accrual. He believed there was an acknowledgement
by all parties that the unfunded liability was huge.
9:59:43 AM
Senator Bishop pointed to slide 14 related to health
insurance costs. He stressed that something needed to be
done to arrest the growing costs of health insurance for
the state. He emphasized that the state could not expect to
stay in business if costs continued to increase by $100
million every six years. He relayed that he had brought
information to DOA. He asked for an update on methods that
would save the state money related to health care costs. He
noted it could be provided at a later time.
Vice-Chair Fairclough looked at the bargaining road map on
slide 18. She observed that it would be helpful for
everyone for negotiations to occur under a standard road
map to make it easier to navigate if the state was put in a
position where it could not approve a contract due to a
lack of funds. She wondered whether the state was
negotiating to streamline the process. She stated that the
$164 million of outstanding leave and the ability for an
employee to cash out all their leave upon separation from
the state was adding substantially to the liability.
According to her math, using the 37.5-hour workweek instead
of a 40-hour workweek added up to a full year within a 16-
year time period; she believed the state paid for close to
two years in time off (in addition to benefit packages) for
employees who worked 30 years. She discussed that the
benefit was significant and provided families with
flexibility. She stated that the federal government cost of
living allowances were difficult for the state to compete
with and caused the state difficulty when working to
attract specialized employees.
10:03:49 AM
Co-Chair Meyer inquired if there were some bargaining units
that could not strike (e.g. public safety employees,
corrections, or other). Ms. Neal replied in the
affirmative. She elaborated that Class I employees could
not strike, which included state troopers, airport, police
and fire, and correctional officers. She added that some
Class I employees worked within GGU and SU as protective
service workers (e.g. probation officers and pioneer home
employees).
Co-Chair Meyer asked for verification that employees could
cash-in their entire leave amounts. Ms. Neal answered in
the affirmative. She detailed that most bargaining units
allowed employees to cash-in an unlimited amount of accrued
leave; a minimum balance of 37.5 hours was required to
remain in an employee's account.
Co-Chair Meyer asked whether leave included vacation and
sick time. Ms. Neal responded that leave was classified as
personal leave for most units; there was not a designated
sick leave bank.
Co-Chair Meyer asked whether there was a concern from a
safety standpoint if employees never took time off. He
believed the purpose of leave was to allow employees to get
rest. He was worried about how a lack of time off would
affect employees who carried guns as a job responsibility.
He opined that there may be workers' compensation issues
that should be considered as well. He believed leave was
healthy for the state and the employee.
Ms. Neal replied that mandatory leave usage provisions were
meant to address the issue. She elaborated that most
collective bargaining agreements required the use of a
minimum of 37.5 hours per year; however, when employees
accrued the maximum level of 36 days per year they still
accumulated a significant amount of leave. She noted that
occasionally departments certified that an employee did not
have the opportunity to use the leave due to business
needs.
Co-Chair Meyer noted that overtime for Anchorage police
officers was negotiated and was based on seniority. He
asked whether overtime was based on seniority for state
employees. Ms. Neal answered that overtime needed to be
equitably assigned; it was not assigned strictly on a
seniority basis.
10:07:14 AM
Senator Olson asked about the distribution of state
employees in Tiers I through IV. Ms. Neal would follow up
on the question. She noted that Tier I employees were
beginning to decline, but she did not have the precise
numbers.
Co-Chair Kelly asked for verification that merit increases
were no longer provided. Mr. Thayer replied that merit
increases were provided during an employee's first five
years with the state. Following the first five years an
employee received a pay increment every other year going
forward.
Co-Chair Kelly asked for confirmation that all state
employees received merit increases in the first five years.
Mr. Thayer answered in the affirmative. Co-Chair Kelly
surmised that the word "step" had been replaced with the
word "merit." He wondered whether merits and steps had been
merged because merit had not been used as it should have
been.
Ms. Neal answered that increases were merit steps.
Employees were automatically awarded merit increases unless
a supervisor proactively denied the increase through a
written performance evaluation prior to the due date.
Co-Chair Kelly asked how frequently supervisors had denied
merit increases in the past year. Ms. Neal replied that she
did not have the number, but that it did not occur often.
Co-Chair Kelly remarked on poor management related to pay
issues. He recalled his discussion with a former
commissioner 15 years earlier; the commissioner had relayed
that three merit increases had been denied the past year.
He communicated that state supervisors should work to
improve management skills.
10:10:15 AM
Mr. Thayer responded that the state had been asked to
provide bargaining units with information on its management
practices; the state had learned a significant amount
through the process. He explained that the reports
generated in response to the units' questions raised issues
pointing out that management skills needed improvement. He
discussed that over time, information requests had shown
the state that the existing leave accrual system was a
problem.
10:11:14 AM
AT EASE
10:11:36 AM
RECONVENED
Co-Chair Kelly thanked the department for its presentation
and time. He invited former Senator Jim Duncan to address
the committee if he desired. [Mr. Duncan declined and
thanked the committee from his seat in the audience.]
ADJOURNMENT
10:12:32 AM
The meeting was adjourned at 10:12 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOA-Labor Contracts2013 (02-20-13) Senate Finance-FINAL.pdf |
SFIN 2/20/2013 9:00:00 AM |