Legislature(2019 - 2020)SENATE FINANCE 532
04/18/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Updated Labor Contract - Department of Administration | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 18, 2019
9:04 a.m.
9:04:53 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Peter Micciche
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Mike Shower
ALSO PRESENT
Kate Sheehan, Director, Personnel and Labor Relations,
Department of Administration; Neil Steininger, Chief Budget
Analyst, Office of Management and Budget, Office of the
Governor.
SUMMARY
PRESENTATION: UPDATED LABOR CONTRACT - DEPARTMENT OF
ADMINISTRATION
Co-Chair Stedman reviewed the meeting agenda.
^PRESENTATION: UPDATED LABOR CONTRACT - DEPARTMENT OF
ADMINISTRATION
9:06:38 AM
KATE SHEEHAN, DIRECTOR, PERSONNEL AND LABOR RELATIONS,
DEPARTMENT OF ADMINISTRATION, discussed the presentation
"Labor Contracts," (copy on file).
NEIL STEININGER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR,
9:06:57 AM
Ms. Sheehan turned to Slide 2, "State Personnel Overview,"
which had a table. She noted that the slide was shown
during a presentation to the committee in February, and the
slide had been updated.
Ms. Sheehan continued that the slide reflected the
Management Plan budgeted positions and the total funding
for those positions by type of funding.
Co-Chair Stedman asked how many permanent full-time
employees were retained by the state.
Ms. Sheehan qualified that the budgeted PCN would be
different than how many current employees the state had;
the slide was based on the FY 19 management plan and showed
14,864 permanent full-time employees, plus 598 marine union
employees. She added that in FY 18, the state had a total
of 14,546 employees.
Co-Chair Stedman asked about annual payroll.
Ms. Sheehan stated that the total payroll would be what the
employee received in premium pay.
Mr. Steininger interjected that the for the listed union
and non-covered employees the total was approximately $1.1
billion. The post vacancy funding for marine unions was
approximately $81 million. He said that the actual payroll
costs varied based on turnover.
9:09:32 AM
Co-Chair Stedman understood that the states obligation to
payroll yearly was listed on the slide in the Total
Funding (Post-Vacancy) column of the chart and totaled
$1,763,948,915. He asserted that this was the total payroll
obligation.
Mr. Steininger answered in the affirmative. He noted that
the figure included paychecks and health insurance
benefits.
Co-Chair Stedman thought it was helpful to explain what the
state's obligations were. He noted that there were
different funding sources, including federal funds. He
asked Mr. Steininger to address federal funds noted in the
last column on the chart.
Mr. Steininger explained that federally funded positions
would be funded by grants or matched state dollars. He
added that Other Funding would be grants form sources other
than the federal government. He noted that designated
general funds (DGF) could include positions funded wholly
through receipt of fees.
Co-Chair Stedman asked whether the total less the Other
Funds and Federal Funds columns left a $1.2 billion
obligation for payroll.
Mr. Steininger replied in the affirmative.
9:12:12 AM
Co-Chair von Imhof asked whether there was data for
comparing FY 10 through the present. She wondered about the
growth of the expense. She thought it was important to
understand a historical lookback to determine what the
costs could be in the future.
Mr. Steininger stated that he could produce a lookback
going back 10-years.
Co-Chair Stedman requested the 10-year lookback be provided
to the committee.
Co-Chair von Imhof wanted to see a graph depicting the
change over time as well as a table with the data.
9:14:08 AM
Senator Micciche agreed that the requested information
would be interesting. He asked for clarification of the
number of state employees, within and outside of the
bargaining units.
Ms. Sheehan stated that Slide 2 was based on budgeted PCNs.
The next slide would show the actual number of employees
for FY 18. Ms. Sheehan explained that PCN signified a
position control number. Every position had a number
attached to it and each employee was placed into one of the
numbers. She added that occasionally there were vacancies
in the budgeted positions; sometimes reports were run on
actual number of employees and sometimes on the budgeted
positions.
9:15:38 AM
Senator Micciche asked whether there were more employees
paid by the state that were not listed on the slide.
Ms. Sheehan affirmed that University was not on the slide.
She said that she could provide the information later.
Co-Chair Stedman thought that the information could be
included in the previous request.
Ms. Sheehan noted that Slide 2 did not include the
Legislature or Courts.
Senator Micciche lamented that the public was always
confused during discussions about the actual number of
state employees.
Co-Chair Stedman thought that the requested information
would be helpful as the legislature expected to navigate
tighter and tighter budget scenarios.
9:17:41 AM
Senator Bishop considered total salary plus premium pay and
asked whether premium pay was considered overtime pay.
Mr. Steininger answered in the affirmative.
Senator Bishop recalled that overtime, across bargaining
units, was $40 million. He wondered why there was so much
overtime pay. He asked for a historical look at overtime
pay. He requested an explanation of the cost associated
with adding a PCN.
Mr. Steininger offered to get back to the committee with
information.
9:19:36 AM
Senator Hoffman recalled legislation for steps and ranges
for employees. He wanted a report showing how much the
state was spending by department above and beyond those set
steps and ranges.
Ms. Sheehan asked if Senator Hoffman was referencing
legislation allowing employees to be paid above merit
steps.
Senator Hoffman answered in the affirmative.
9:21:11 AM
Ms. Sheehan displayed slide 3, "Bargaining Unit (BU)
Detail," which showed a table based on actual employees in
FY 18 and the percentage total that they made up of the
Executive Branch workforce. The table was broken down into
those that were currently being negotiated, including:
Masters, Mates, and Pilots (MMP); the Marine Engineers
Beneficial Association (MEBA); the Inlandboatmens Union of
the Pacific (IBU); and the AK Vocational Technical Center
Teachers (AVTECTA). The four contracts were in current
negotiations; the three marine contracts expired on June
30, 2017 and AVTECTA was expiring June 30, 2019. She listed
the contracts pending for action during the current
legislature:
Before Legislature
Confidential Employees Association CEA
Alaska State Employees Association ASEA
Teachers Education Association of Mt. Edgecumbe
Alaska Correctional Officers Association ACOA
Ms. Sheehan listed the negotiations that would begin in the
Fall 2019 and Fall 2020:
Fall 2019
Public Safety Employees Association - PSEA
Fall 2020
Alaska Public Employees Association APEA(SU)
Public Employees, Local 71 - LTC
Ms. Sheehan pointed out that the last group was the non-
covered employees and that any action to their pay plan was
done through legislation.
9:23:35 AM
Co-Chair Stedman asked for explanation about troopers
contract. He recalled that the previous year there had been
a request to adjust troopers salaries to increase
recruitment and retention.
Ms. Sheehan affirmed that there had been a market-based pay
study for troopers that determined that the state had not
been paying at market. Based on the study, the state had
increased pay by one pay range (approximately 7.5 percent).
Mr. Steininger informed that there was a supplemental
budget request of $3.6 million to covers those FY 19
salaries. He stated that there was a request in the FY 20
budget to accommodate the salary adjustment.
9:24:57 AM
Senator Wilson considered how the pay increases would play
into negotiations for troopers.
Ms. Sheehan stated that the pay study helped, but the pay
was still behind that of the Anchorage Police Department.
She said that an additional 7.5 percent had been bargained
and was pending for legislative approval. She thought that
the fall negotiations would consider current market-based
studies.
Senator Wilson asked about any other market-based pay
studies that were in process.
Ms. Sheehan stated that the focus aside from troopers was
nurses. There had been issues recruiting nurses for
correctional facilities. Psychiatric and correctional
nurses had been moved up one pay range, approximately 7.5
percent. Phase 2 of the study had just been completed and
had included psychiatric nurses, correctional nurses,
certified nurses' aides, psychiatric nurse aides, and
resident nurses. The study had not yet been implemented and
was only recently completed.
9:27:28 AM
Senator Olson considered the trooper pay increase and noted
that the Village Public Safety Officers (VPSO) were not
included.
Ms. Sheehan stated that the VPSOs were not part of the PSEA
and the state did not bargain their contract. The VPSO
contracts were bargained by the Department of
Administration.
Senator Olson assumed that the VPSO had not received a pay
increase. He wanted to draw attention to the issue. He
wondered what was occurring the Department of Law with
prosecuting attorney pay ranges.
Ms. Sheehan replied that she did not know. She agreed to
research the issue and get back to the committee.
9:28:55 AM
Co-Chair von Imhof referenced the nursing salary study. She
asked whether salary versus benefits had been considered as
well as the total financial package and the work
environment. She thought some individuals valued salary
over benefits and vice versa. She thought that the value of
the job was holistic and wondered what would attract and
retain quality workers for a long period of time.
Ms. Sheehan responded that, particularly with correctional
nurses, the issue was one of environment over salary. She
noted that when conducting the market pay study, salaries
were the priority, but she agreed that benefits played into
whether employees stayed in nursing positions.
9:31:26 AM
Ms. Sheehan showed Slide 4, " Summary of Bargaining," which
showed a table of the 5 pending contract negotiations:
ASEA General Govt Unit 2019-2022
7,510 Employees
3 percent COLA Effective 7/1/2019
1 percent COLA Effective 7/1/2020
1 percent COLA Effective 7/1/2021
Heath trust contributions
$1539 first year
$1555 following 2 years
Work rules regarding management rights
ACOA 2019-2021
877 Employees
0 percent first year
4.5 percent Effective 7/1/2019
3 percent Effective 7/1/2020
Employee contributions to economy plan
Confidential Employees 2019-2021
184 Employees
No COLA
Employee contributions to economy plan
40-hour workweek Effective 7/1/2019
State Troopers
7.5 percent COLA Effective upon legislative approval
Teacher Association of Mt. Edgecumbe 2015-2017
3 percent Effective 7/1/2019
3 percent Effective 7/1/2020
3 percent Effective 7/1/2021
Tentative agreement reached November 16, 2018. New
contract set to begin July 1, 2019.
9:34:20 AM
Senator Wilson asked whether there were other groups that
were looking at going to 40 hours per week outside of the
confidential employees.
Ms. Sheehan reported that in 2018 the Supervisors Union and
Labors, Trades, and Crafts moved to a 40-hour workweek.
9:35:00 AM
Co-Chair von Imhof asked whether all the contracts were
public information.
Ms. Sheehan answered in the affirmative. She noted that all
the contracts were on the State of Alaska Division of
Personnel website.
Ms. Sheehan added that the teachers at Mt. Edgecumbe were
contributing toward heath insurance.
9:36:10 AM
Mr. Steininger referenced Slide 5, "FY20 Budgetary Impacts
of Bargaining Unit Agreements," which showed both the new
contracts and the out-year cost of contracts negotiated in
prior years:
New Contracts
CEA - $1.2 million
ASEA - $30.2 million
ACOA - $4.2 million
TEAME $73 thousand
Co-Chair Stedman asked for a definition of acronyms.
Mr. Steininger explained that CEA was the Confidential
Employees Association, GGU or ASEA was the General
Government Unit or Alaska State Employee Association, ACOA
was the Alaska Correctional Officers Association, and TEAME
was the Mt. Edgecumbe teachers.
Co-Chair Stedman reminded that committee hearings were for
the public, and it was important to define terms.
Mr. Steininger continued, listing the ongoing contracts:
Ongoing Contracts
LTC Labor, Trades, and Crafts - $3 million
PSEA Public Safety Employees Association - $9
million
SU Supervisory Union - $1.7 million
Mr. Steininger relayed that the estimates were based on FY
2019 management plan position counts.
9:38:49 AM
Mr. Steininger reviewed Slide 6, "Out Year Estimates
Salary Adjustments":
• Estimates based on FY2019 Management Plan position
counts.
• Does not account for changes in state workforce.
o Amounts will be recalculated in development of
FY21 budget.
Mr. Steininger qualified that the numbers on the table on
the slide were estimates based on the FY 2019 management
plan for decision making purposes. He noted that the
numbers did not account for changes in state workforce or
salaries.
9:40:02 AM
Senator Bishop commented that the salary adjustment figures
were helpful when crafting budget subcommittee closeouts.
9:40:36 AM
Co-Chair Stedman observed that the slide showed
approximately $25 million over the next two years for
bargaining agreements.
Mr. Steininger affirmed that for FY 20, there was an
expectation of $25 million when the three bargaining units
were added together. In FY 21, there was an increase of
about $6.8 million for ASEA, $75,000 in FY 20-21 for TEAME,
and additional 3 percent for ACOA in FY 20-21 at $4.4
million.
Co-Chair Stedman thought it would be helpful include the
information on the slide with the requested 10-year
lookback that Mr. Steininger would be bringing the
committee. He thought the information would provide a
helpful snapshot of economic trends.
9:42:16 AM
Co-Chair von Imhof looked at the UGF listed on the slide
while contemplating a spending cap. She understood that
according to Slide 6, in FY2021 the state would need to
make headroom for an additional $2.6 million for ASEA and
$4.1 million for ACOA.
Mr. Steininger stated that Co-Chair von Imhof interpreted
the information correctly. He said that the information
could be provided by department.
Co-Chair Stedman felt that the information would be
helpful.
9:43:56 AM
Co-Chair von Imhof wanted to make sure that the slide
reflected the total number for all bargaining units. She
noted that the spending cap legislation currently being
considered by the legislature had a 5-year lookback at the
rate of CPI. She wondered about the growth rates and
worried that salaries and benefits could crown out other
expenditures.
Mr. Steininger stated that the table only included salary
adjustments for the three bargaining units that had out-
year salary adjustments. He changes would be made for
health insurance that were more difficult to estimate into
the out-years and were not included in the table. Some were
based on the total cost of the health insurance plan and
some were a fixed amount.
Co-Chair Stedman stated that the committee would have the
Legislative Finance Division (LFD) reach out and
synchronize with OMB to compare updated projection numbers.
He noted that LFD would be presenting to the committee the
following week, and he hoped for a much clarity as possible
moving forward int eh budget process.
9:46:27 AM
Ms. Sheehan showed Slide 7, "APPENDIX."
Mr. Sheehan highlighted Slide 8, " 2019 AlaskaCare Employee
Plan Premiums," which showed a table created based on a
question from a previous committee hearing. She explained
that the employees under AlaskaCare, negotiators bargained
the employer contribution to the health trust but not the
employee contribution. The actuaries had determined a
specific premium for each plan based on the total estimated
cost and the different value of the plan. She relayed that
she did not have health benefits in her division and was
limited in her knowledge.
9:47:37 AM
Co-Chair von Imhof understood that the monthly premium for
the Consumer Directed Health Plan Employee and Family was
$68 monthly.
Ms. Sheehan replied in the affirmative.
Co-Chair von Imhof surmised that the employee paid 3.5
percent of the monthly cost.
Ms. Sheehan shared that the only thing the state bargained
was the employee contribution to the economy plan; the
standard plan had always had an employee contribution and
had never been bargained.
Co-Chair von Imhof recalled that several bargaining units
had their own trust accounts and that negotiators only
bargain what the state paid into the accounts per employee.
Ms. Sheehan answered in the affirmative.
Co-Chair von Imhof asked for a chart showing all the
different bargaining units, and their trusts, and what had
been bargained per person, per year, and then a comparison
with what was paid under AlaskaCare.
Ms. Sheehan agreed to provide the information.
9:49:13 AM
Ms. Sheehan advanced to Slide 9, "Resident Versus Non-
Resident Receiving COLD," which showed a chart that was
also a result of a question raised in a previous committee
meeting. She explained that the cost of living differential
(COLD) was to care for the difference in pay between Alaska
and Seattle. She pointed out that approximately 86.5
percent of the IBU received the differential as part of
their hourly rate, 67 percent of Marine Engineers, and 73
percent of Masters, Mates, and Pilots. She concluded that
about 82 percent of the current vessel employees resided in
the state and received a cost of living differential for
doing so.
Co-Chair Stedman asked for an explanation for the COLD. He
wondered why the differential was paid for employees living
in the state.
Ms. Sheehan stated that most employees received a
geographic differential because there were communities
within the state that cost more to live in. There was a
separate statute for marine vessel employees that provided
that, vessel employees should live in the state while
recognizing that it cost more to live in Alaska than in
Seattle; the rates within each collective bargaining
agreement were bargained based on the statute.
Co-Chair Stedman wondered about the dollar amount for the
COLD received by employees.
Ms. Sheehan noted that the amount varied by position and
was bargained into the hourly wage of some employees. She
offered that other units had a flat amount. She offered to
provide the information later.
Co-Chair Stedman thought that in the current AMHS financial
climate, the numerics on the overall percentages would be
helpful to the discussion.
9:53:02 AM
Co-Chair von Imhof asked how often there was a cost of
living comparison between Seattle and Alaska. She recalled
that the cost of housing in Seattle was skyrocketing. She
asked whether there was a periodic cost of living analysis
for Seattle and Alaska. She thought maybe the state had
reached a point where the cost of living in Alaska was
close enough to Seattle that COLD was no longer necessary.
Ms. Sheehan stated that the last study commissioned was in
2008, and the study was done by the McDowell Group. She
expanded that statute states that a study should be done
every 5 years, with an appropriation from the legislature,
the legislature had las appropriated for the study in 2008.
Co-Chair Stedman asked for Ms. Sheehan to provide
information on the cost of such a study for the committee
to consider. He was curious whether the numbers had changed
over the last decade.
Ms. Sheehan recalled that the study cost $398,000 in 2008.
9:55:54 AM
Ms. Sheehan turned to Slide 10, " Rejection of Monetary
Terms:CBA Terms":
ASEA: Re-enter negotiations for 10 days; if no
agreement, Class 2 and Class 3 employees may take a
strike vote
APEA: Not required to enter negotiations; impasse
exits and members may call for a strike vote
CEA: Must re-enter negotiations upon demand by either
party; negotiations last for 10 days but may be
extended by mutual agreement; if no agreement, impasse
exists and members may call for a strike vote
IBU: Must re-enter negotiations within five days
MEBA: Must re-enter negotiations immediately
MMP: Must re-enter negotiations immediately
PSEA: Upon written request, immediately negotiate a
mutually satisfactory supplemental agreement
ACOA: Must re-enter negotiations immediately
LTC: Impasse exists and parties agree to pursue
reasonable efforts to obtain a mutually satisfactory
resolution
AVTECTA: Impasse exists and parties agree to pursue
reasonable efforts to obtain a mutually satisfactory
resolution
TEAME: Must re-enter negotiations immediately
Note: No definition of immediately is provided for
in the collective bargaining agreements.
Ms. Sheehan noted that renegotiations would be entered into
if contracts were not funded.
Co-Chair Stedman could not recall a time when the
legislature had not funded the negotiated agreements.
Ms. Sheehan had found that LTC were not funded in 1986, the
PSEA had not been funded in 1994, and in 2009, the ACOA
interest arbitration award was not funded one year, but
then was funded the following year.
Co-Chair Stedman noted that the issue in 2009 had been a
political anomaly.
9:57:31 AM
Ms. Sheehan referenced Slide 11, " Sample Historical COLAs
& Anchorage CPI Comparison," which showed what was
bargained back to the mid-1980s. She noted that the slide
showed only the cost of living allowances and did not
account for merit steps or pay increments.
Co-Chair Stedman thought some of the data on the slide
could be rolled into the ten-year look-back requested by
the committee. He thought that trend analysis would be
helpful in grappling with the rates of change.
Co-Chair Stedman thanked OMB and the departments for
working together to put the presentation together.
ADJOURNMENT
9:59:54 AM
The meeting was adjourned at 9:59 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 041819 DOA Final Senate Finance Presentation 4-18-19 (002).pdf |
SFIN 4/18/2019 9:00:00 AM |
Labor Contracts |
| 041819 Copy of SalAdj CRs by Fund Source 4.18 (002).xlsx |
SFIN 4/18/2019 9:00:00 AM |
Labor Contracts |