Legislature(2013 - 2014)SENATE FINANCE 532
04/08/2013 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB77 | |
| SB74 | |
| SB85 | |
| SB95 | |
| SB96 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 85 | TELECONFERENCED | |
| + | SB 95 | TELECONFERENCED | |
| + | SB 96 | TELECONFERENCED | |
| = | SB 74 | ||
| = | HB 77 | ||
SENATE BILL NO. 95
"An Act relating to the compensation, allowances,
geographic differentials in pay, and leave of certain
public officials, officers, and employees not covered
by collective bargaining agreements; relating to
certain petroleum engineers and petroleum geologists
employed by the Department of Natural Resources;
relating to increased pay for certain partially exempt
employees of the state in specific circumstances;
making conforming amendments; and providing for an
effective date."
10:02:51 AM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for CS SB 95 (FIN), Work Draft 28-GS1101\U
(Wayne, 4/7/13).
Co-Chair Meyer OBJECTED for discussion.
10:04:01 AM
Ms. Marasigan noted that her office worked to create the
work draft before the committee. She requested that the
department provide a bill overview for the committee.
10:04:43 AM
CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION (DOA) introduced himself and the director of
labor relations, Nicki Neal. He noted two changes to the
bill. The first addressed section 20 and a change that did
not comply with current law. The change included salary
adjustments for certain exempt officers and employees of
the executive branch. He noted that the employees received
COLAs, but when the bill was drafted the option was omitted
for exempt employees. The second piece would allow judges
to receive the geographic differential language. He would
discuss the issue further in his overview of the bill.
10:06:01 AM
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
10:06:22 AM
Mr. Thayer presented the PowerPoint, "Alaska Department of
Administration, Overview of HB 195 and SB 95, State
Employee Condensation and Benefits" (copy on file).
Mr. Thayer began with slide 2: "What are HB 195 and SB 95
About?"
· Consistency with cost of living, reduction of leave
accrual, cap on leave amount and decreases in the pay
increment
· Enhance ability to recruit and retain highly-skilled
professionals
· Implementation of Geographical Pay Differential for
last phase of remaining employees
Mr. Thayer continued with slide 3: "Overview of the Bill
Sections."
· Section 1-4: Leave Accrual and Cap
· Section 5: Petroleum Engineers/Geologists
· Section 6-8: Cost of Living Increases
· Section 9: Pay Increments
· Section 10: Partially-Exempt Salaries
· Section 11-14: Geographic Pay Differentials
Mr. Thayer discussed slide 4, "New Leave Accrual and Cap."
He stated that the accrual rates were negotiated by the
General Government Employees Union and the confidential
employees to reduce leave accrual for new-hires beginning
July 1, 2013. The new accrual rating required 16 years of
service to receive 270 hours of leave. He mentioned the new
mandatory leave usage requiring an employee to use two
weeks of leave annually if they had less than 400 hours in
their leave balance. If an employee had greater than 400
hours of leave as of December 16th, they must use three
weeks of leave annually.
Mr. Thayer pointed out the new maximum accrual limit of
1000 hours for executive, judicial and legislative branch
employees. The department discovered, prior to drafting the
bill that without a cap the department faced a $164 million
liability in employee's leave. The top ten state employees
would cost the state $1.6 million at retirement. The
legislation would reduce the state's leave liability by
two-thirds.
10:09:22 AM
Vice-Chair Fairclough appreciated the administration's
efforts. She asked about the survey provided by the
McDowell Group. She wondered how the mandatory leave usage
compared to the average accrual for state employees.
Mr. Thayer explained that the study addressed the
geographic pay differential, which was located in a
different portion of the bill. The study established the
cost of living.
10:11:00 AM
Vice-Chair Fairclough wondered if the sick leave had been
rolled into paid time off.
Mr. Thayer responded that the state utilized Paid Time Off
(PTO), which encompassed all forms of leave.
10:12:20 AM
Vice-Chair Fairclough wondered about a study or survey
comparing sick leave with PTO for best practice.
10:12:36 AM
Nicki Neal, Director, Division of Personnel, Department of
Administration explained that a survey of that nature had
not been commissioned in Alaska. Prior to the 2013
collective bargaining, a survey of other states was
performed. The department received responses from
approximately 15 states that had annual and sick leave
programs. The responding states reported a cap of 450
hours.
10:13:08 AM
Vice-Chair Fairclough appreciated the compromises. She
wondered how robust the benefits provided by the state
were. She hoped that the administration would continue to
work with the union contractors to communicate the dynamics
facing the state. She asked about a comparison of leave
accrual among other states and the federal government.
10:14:56 AM
Ms. Neal was not sure about comparisons with the federal
government, but she offered to provide the information to
the committee. Regarding other states, Alaska compared
appropriately with leave accrual. She pointed out that the
other states had both annual and sick leave, whereas Alaska
had PTO.
10:15:12 AM
Mr. Thayer looked at slide 5, "Petroleum
Engineers/Geologists."
Section 5:
· Removes exclusion of in Division of Geological and
Geophysical Surveys (DGGS).
· Only 1 position - DGGS, Energy Section Manager
(currently SU Geologist V) - vacant since March 17,
2012.
o Position requires complete understanding of
petroleum systems analysis and exploration that
is obtained primarily through industry experience
o Industry salaries are approximately 50 percent
higher than current authorized salary (data from
Assoc of Petroleum Geologists 2011 Survey)
o Two national searches failed - No qualified
applicants after 45 days of recruitment and
advertising in national trade publications
· Amendment applicable to DNR, DGGS only
10:16:16 AM
Mr. Thayer discussed slide 6, "Cost of Living Increases."
Sections 6-8:
· Effective 7/1/13 - 1 percent
· Effective 7/1/14 - 1 percent
· Effective 7/1/15 - 2.5 percent
· Consistent with terms of recently negotiated
collective bargaining agreements
· Applies to noncovered classified and partially exempt
(PX) and many exempt employees of the executive
branch, employees of the legislature (AS 24.10.011),
and the judicial branch.
10:16:32 AM
Mr. Thayer highlighted slide 7, "Pay Increments."
Section 9:
· Effective 7/1/15 the percentage between pay increments
(J and above) will decrease from 3.75 percent to 3.25
percent
· Consistent with terms of recently negotiated
collective bargaining agreements
· Applies to noncovered classified and PX employees -
also applies to many exempt employees through policy
· Applies to legislative branch if a policy has been
adopted (AS 39.27.011(j))
10:17:06 AM
Mr. Thayer displayed slide 8, "Partially-Exempt Salaries."
Section 10:
· Partially Exempt (PX) positions are subject to
classification and pay plans which limits flexibility
· State often not competitive for top talent - need some
flexibility for mission critical positions
· Governor or designee on case-by-case basis:
o serves critical governmental interest of state
o employee possesses exceptional qualifications
o recruitment difficulties exist; or
o necessary to compete with labor market
· Applies to executive branch Partially Exempt (PX)
employees only
10:18:36 AM
Mr. Thayer discussed slide 9, "Geographical Pay
Differentials." He noted that sections 11-14 addressed the
survey conducted by McDowell Group in 2008 and completed in
2009. The study set the base at zero for Anchorage and
South Central Alaska. Based on the outcome of the survey,
Fairbanks would see a 3 percent pay differential, while
Juneau and Sitka would see 5 percent. Kodiak, Cordova and
Valdez would see 11 percent. Dillingham, Nome, and the
Roadless Interior would receive 37 percent. Barrow, Bethel,
Aleutians, and South West small communities would see 50
percent. Kotzebue, Unalaska/Dutch Harbor would receive 60
percent.
Mr. Thayer furthered that the change would affect the
executive branch with an increase for 483 employees, while
122 would see no loss in pay and 727 would see no change at
all. The legislative branch would have 154 employees with
an increase, 24 without a loss in pay, and 204 without
change. He noted that the study was performed every five
years depending on appropriations.
10:20:34 AM
Co-Chair Meyer looked at slide 9 and opined that the Tok
and Glennallen Regions would be more expensive than
Anchorage.
Mr. Thayer raised the same question initially, and was told
that the survey viewed the cost of living, housing,
utilities, food and transportation when making the
recommendations.
10:21:27 AM
Co-Chair Kelly wondered if the percent above the base was
considered in the retirement calculations.
Ms. Neal responded that a Tier One employee was considered,
otherwise a person must work 50 percent of time in the
location to receive the geographical pay differential on
retirement.
10:22:15 AM
Co-Chair Meyer wondered if the geographical pay
differentials were budgeted into the operating budget.
Co-Chair Kelly replied that the bill's cost was included in
the fiscal note.
Co-Chair Meyer CLOSED public testimony.
10:23:28 AM
Mr. Thayer discussed the fiscal notes, which were prepared
by the Office of Management and Budget (OMB) and would
implement changes in the first year of the contract, which
is when the geographic differential would take effect. In
FY 15 a decrease would be seen. The 2.5 percent increase
would be seen in FY 16.
Co-Chair Kelly wondered if the total amount of the
contracts was less than originally anticipated.
Mr. Thayer concurred. He explained that various union
negotiations altered the projected figures.
10:25:14 AM
Co-Chair Kelly opined that the fiscal note fit well within
the expectations.
10:25:49 AM
Co-Chair Meyer pointed out that the fiscal note would
change with the CS's inclusion of the courts.
Mr. Thayer stated that the court sought geographic
differential pay for 23 judges, which would affect the
fiscal note minimally.
Vice-Chair Fairclough addressed the fiscal notes
individually. She noted that the first fiscal note affected
OMB in FY 14 by $8,171,900, in FY 15 by $4,821,800 and FY
16 by $10,644,000. The bill related to compensations,
allowances, geographic differentials in pay and leave for
certain public officials, employees not covered by
collective bargaining and related to certain petroleum
engineers and geologists employed by the Department of
Natural Resources (DNR). Beginning in FY 14, salaries were
increased by 1 percent, same for FY 15, but an increase of
2.5 percent was anticipated for FY 16. The salary schedule
matched the recent negotiated agreement reached between the
state and the supervisory and general government units.
Vice-Chair Fairclough continued with the second fiscal note
for the Legislative Branch. In FY 14, $1,281,200, FY 15,
$410,400 and FY 16, $1,039,300 was stated. The final fiscal
note was for the Alaska Court System that would be amended
by the 23 judges as explained earlier. The third fiscal
note showed $741,900 for FY 14, $749,100 for FY 15 and
$1,890,900 for FY 16.
10:28:30 AM
Senator Hoffman remarked that legislators would not see pay
increases as a result of the legislation.
Co-Chair Meyer asked if the bill pertained to staff.
[Response was indecipherable]. He understood that the total
dollar amount was less than anticipated.
Co-Chair Kelly replied yes.
Co-Chair Meyer stated that the fiscal note was large, but
so was the number of employees. He appreciated the
negotiation process. He was unsure about whether the deal
was ratified.
Mr. Thayer replied that the supervisory unit was in the
process of ratification and expected the wrap up to occur
later in the month. The general services expected
ratification in the later part of May, due to the size of
their bargaining unit. He clarified that 23 judges would be
eligible for the geographical pay differential.
10:30:15 AM
Co-Chair Kelly MOVED to REPORT CS SB 95 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 95 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new fiscal impact note from
the Legislature; new fiscal impact note from the Court
System; and previously published fiscal impact note: FN1
(GOV).
10:31:53 AM
AT EASE
10:32:09 AM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 95 - NEW Sectional Analysis.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 95 |
| SB 95 - Sectional Analysis.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 95 |
| SB 96_SFIN_4-8-13.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 96 |
| SB 96 Sectional.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 96 |
| SB96.Apache letter.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 96 |
| Sponsor Statement SB 96.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 96 |
| SB 85 Alaska Aerofuel Letter of Support.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 85 |
| SB 85 FEDCo Letter of Support.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 85 |
| SB 85 CS Memo.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 85 |
| SB 85 Sponsor Statement.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 85 |
| SB 85 VWGoA Support.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 85 |
| HB 77 Amendment 1.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 |
| SB 74 - Dedicated Fund Question Legal Memo.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 74 |
| CS for SB 95 State Employee Compensation and Benefits.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 95 |
| DOA_SB95-HB195_BillOverview(April2013).pptx |
SFIN 4/8/2013 9:00:00 AM |
HB 195 SB 95 |
| HB77SCSCS(FIN)-DNR-MLW-4-8-13.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 |
| SB95-ACS-000-04-02-13.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 95 |
| SB074-UA-SYSBRA-4-01-13.pdf |
SFIN 4/8/2013 9:00:00 AM |
SB 74 |
| HB 77 Wrangell Resolution Opposition.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 |
| HB 77 Public Testimony - Sandberg.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 |
| HB 77 Publit Testimony Opposition - Hillstrand.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 |
| SB 26 AK Chapter comment 22March2013.pdf |
SFIN 4/8/2013 9:00:00 AM |
HB 77 SB 26 |