Legislature(2019 - 2020)ADAMS ROOM 519
04/11/2019 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Understanding Labor Contracts | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 11, 2019
2:30 p.m.
2:30:42 PM
CALL TO ORDER
Co-Chair Wilson called the House Finance Committee meeting
to order at 2:30 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
None
ALSO PRESENT
Kate Sheehan, Director, Personnel and Labor Relations,
Department of Administration
SUMMARY
PRESENTATION: UNDERSTANDING LABOR CONTRACTS
DEPARTMENT OF ADMINISTRATION
Co-Chair Wilson reviewed the meeting agenda.
^PRESENTATION: UNDERSTANDING LABOR CONTRACTS
2:30:42 PM
KATE SHEEHAN, DIRECTOR, PERSONNEL AND LABOR RELATIONS,
DEPARTMENT OF ADMINISTRATION, provided a PowerPoint
presentation titled "Department of Administration:
Understanding Labor Contracts" dated April 11, 2019 (copy
on file). She intended to address monetary terms with
collective bargaining units including the cost of living
adjustments (COLA) and the merit and pay increments;
bargaining laws and rules; and current contracts pending
before the legislature.
Co-Chair Wilson asked what things occurred automatically
(i.e. step increases) and what portions the Department of
Administration (DOA) could negotiate.
Vice-Chair Johnston asked what was in statute and what was
in federal law pertaining to contracts.
Ms. Sheehan agreed to address the items during the
presentation. She began on slide 4 and detailed that DOA
negotiated COLAs. She cited the current contract with the
Alaska State Employees Association that included a 3
percent increase on July 1, 2019, 1 percent the second
year, and 1 percent the third and final year of the
agreement.
Ms. Sheehan highlighted that DOA also negotiated merit
increases and pay increments. Merit increases applied to
most employees. The three marine unions did not have merit
increases or pay increments and the teachers' associations
had a different salary schedule. She explained that merit
increases were steps A through F and were approximately 3.5
percent between each step. Merit increases were received
annually with an acceptable or better evaluation. She
elaborated that the increases were automatic; if an
increase was taken away because of poor performance with a
"low acceptable or unacceptable" evaluation, timely notice
was required (if the evaluation was late, the increase was
automatic).
2:33:52 PM
Representative Sullivan-Leonard asked about the percentage
on a normal merit increase.
Ms. Sheehan replied that the average merit increase was 3.5
percent. She noted the increases varied by bargaining unit
- some went as low as 3.2 percent and some went as high as
4 percent based on how salary schedules had been
established years ago.
Ms. Sheehan continued to address slide 4. She explained
that once an employee hit step F (or step G for General
Government Unit members) they moved into pay increments.
She detailed that pay increments had been bargained and put
into statute in 2008 and 2009. She elaborated that the
increments occurred every two years and were 3.25 percent
with no cap. She explained a performance evaluation rating
of mid-acceptable or higher was necessary in order to
receive the increment. The Public Safety Employee's
Association contract included a cap on pay increments and
the Supervisory Union did not have a cap, but payments were
spread out farther than two years (at a given point in the
steps the increases move to every three years).
Representative LeBon asked for verification that a
performance rating of acceptable or better was required to
earn an increase.
Ms. Sheehan replied in the affirmative.
Representative LeBon shared that when he had worked in the
private sector, performance reviews had put 90 percent of
the workforce above average. He asked what percentage of
the workforce at the state level fell into the acceptable
or better category. He asked if the state was employing a
multitude of individuals who were receiving the maximum
increase.
Ms. Sheehan responded that the situation was similar to
Representative LeBon's experience in the private sector.
She did not have a percentage, but the majority of state
employees received evaluations of mid-acceptable or higher.
Co-Chair Wilson asked about a contract that showed
increases of zero for three years. She wondered if
employees truly received no increases during the contract
period or if they received 3.5 percent per year with
nothing additional.
Ms. Sheehan replied it would be 3.5 percent per year with
nothing additional. When a contract showed all zeros, it
pertained to zero COLAs, but the merit increases and pay
increments remained.
Co-Chair Wilson asked for verification that with a 4
percent COLA in the current year, corrections [Alaska
Correctional Officers Association Correctional Officers
Unit] would receive 7.5 percent up to steps F and G and
then every other year they would receive 3.25 percent added
to the 4 percent.
Ms. Sheehan replied in the affirmative. She elaborated that
the 4 percent was applied, and employees received whatever
they were due in terms of a merit increase or pay
increment. If there was another COLA adjustment in the
second year of the contract (as in the correctional
officers' contract), employees would receive that on top of
whatever merit increase or pay increment they were due.
2:37:49 PM
Co-Chair Wilson asked why the COLA was not the actual cost
of living (e.g. the Anchorage CPI) and when it had become
negotiated.
Ms. Sheehan answered that she did not know when COLA had
started to be negotiated. She reported that she had been
with the division since 2004 and during that time, the COLA
had not been tied to the CPI. She elaborated that sometimes
the COLA had exceeded or been under CPI and sometimes there
was no COLA.
Vice-Chair Ortiz remarked that he believed it had only been
in recent years with the low rate of inflation increase,
that increases had sometimes been greater than cost of
living increases; however, there were many more years where
COLA increases were under the rate of inflation.
Co-Chair Wilson had always thought that cost of living
adjustment meant cost of living adjustment. She did not
realize COLA was negotiated. She understood that Vice-Chair
Ortiz was saying a COLA increase could have been a 1
percent increase, while the cost of living may have been 2
or 3 percent. She thought it would be interesting to look
at the historical differences.
Vice-Chair Johnston asked if the supervisory unit and
public employee unit had caps.
Ms. Sheehan replied that the public safety employees had a
cap and the supervisory union spread out the years in
between [the increases]. The theory was that an average
state employee [in the aforementioned unions] who worked
for 30 years would not get as high a pay increment because
the years were spread out in between.
Vice-Chair Johnston asked for verification that the COLA
was not region specific - all correctional officers had the
same COLA regardless of their location.
Ms. Sheehan agreed. The COLAs were the same for all
employees in a bargaining unit.
Vice-Chair Johnston found the concept interesting because
it really was not a cost of living adjustment.
Co-Chair Wilson noted there was also the concept of the
geographical pay differential. She believed it was 60
percent in Bethel and 3 to 5 percent in Juneau. She
surmised that the geographical differential would be on top
of COLA and salary increases.
Ms. Sheehan replied in the affirmative. She elaborated that
the pay differential was 5 percent in Juneau and 50 percent
in Bethel. Depending on where an employee lived, they may
have an additional geographic differential to account for
the higher cost of living in some communities.
2:40:48 PM
Representative Carpenter was surprised a COLA was
negotiated. He thought it was a raise under a different
name. He asked if there was a process, factors, or criteria
used to determine the number.
Ms. Sheehan answered it depended on the contract and
situation (e.g. whether there were recruitment and
retention difficulties). She noted there was a cost of
living adjustment for troopers pending before the
legislature for 7.5 percent. The increment aimed to try to
catch up with what the Anchorage Police Department was
paying. The department also tried to engage in pattern
bargaining. For example, if DOA was negotiating an annual
increase of 1 percent for three years for one union, it may
try to negotiate the same increase for another union. The
department also looked at the prior contract to consider
whether a union had high COLAs given that year.
Additionally, when unions went to interest arbitration and
the COLAs were awarded by an arbitrator, DOA may lower the
COLA the following year if it had been considered high.
There were various factors that played into determining the
number.
Representative Carpenter surmised that the COLA adjustments
had nothing to do with the cost of living and everything to
do with a negotiation process surrounding what it would
take to retain employees.
Ms. Sheehan answered affirmatively. The presentation
included a slide showing what the state bargained in
comparison to the Anchorage CPI.
Representative Josephson stated that in the late 1970s the
inflation rate was 14 percent - a notoriously high rate
that affected borrowing and other things. He thought in
that circumstance a bargaining unit's argument for cost of
living adjustments would be vastly stronger. He remarked
that Ms. Sheehan had indicated in her response to
Representative Carpenter that there was no correlation
between the numbers. He asked if that was what Ms. Sheehan
had meant to say.
Ms. Sheehan answered yes and no. She elaborated that the
department took many things into account including
inflation and the state's financial situation. She
explained that the negotiating parties began from very
different standpoints and met in the middle with a fair
result for both parties.
2:44:12 PM
Ms. Sheehan returned to slide 3 and reported that the
department was currently negotiating with the top
bargaining units on the slide. Four of the contracts were
currently pending in front of the legislature. The state
had just completed binding interest arbitration with the
Alaska Correctional Officers Association and the contract
had been submitted; the contract had expired June 30, 2018.
Co-Chair Wilson asked if the 4 percent increase was
retroactive back to when the contract should have been in
place.
Ms. Sheehan replied that the arbitrator had awarded a zero
percent effective July 1, 2018 so there would be no
retroactive pay. The 4.5 percent would be effective on July
1, 2019 (the second year of the contract).
Vice-Chair Johnston asked if they were allowed to talk
about the contracts while under negotiation.
Ms. Sheehan answered that the power of negotiations resided
with the executive branch, while the legislative branch had
the power of appropriation. The executive branch did not
talk to the legislative branch about the negotiations. She
noted that in the past the department had received intent
language. She summarized that the department kept
negotiations separate from the legislative branch until
contracts were sent over for approval.
Vice-Chair Johnston referenced the list of bargaining units
on slide 3 and asked if contracts were finished or still in
negotiation.
Ms. Sheehan answered that the it was a bit of both. The
correctional officer's contract was finished. The current
contract for the Alaska State Employees Association (the
largest union comprised of administrative assistants,
paralegals, engineers, etcetera) would expire on June 30,
2019; the new contract had been agreed upon and was
currently pending before the legislature. The department
was in negotiations with the Alaska Vocational Technical
Center Teachers as the current contract was due to expire
on June 30. The current contract for the Confidential
Employees Association (primarily composed of human
resources staff in the DOA Division of Personnel) would
expire on June 30; the new contract had been agreed upon
and was currently pending before the legislature.
2:47:01 PM
Co-Chair Wilson asked for the details of the pending
contracts.
Ms. Sheehan replied with the contract details. The Alaska
State Employees Association had a 3 percent COLA in the
first year and 1 percent in the second and third years. The
Confidential Employees Association had no COLAs associated
with the new three-year contract, but employees were moving
from a 37.5-hour workweek to a 40-hour workweek. She
elaborated that the change in workweek had been approved
the preceding year for the Supervisory Union and the Labor,
Trades and Crafts Unit.
Representative Josephson thought it sounded like the state
had won the bargaining match. He asked for verification
that the Confidential Employees Association had accepted a
contract with no COLA adjustments and with an increased
workweek.
Ms. Sheehan answered the individuals were getting paid for
the additional 2.5 hours per week. She continued to review
the bargaining units on slide 3. The next three units were
the three marine unions including the Inlandboatmens' Union
of the Pacific (unlicensed crew); the Marine Engineers
Beneficial Association (licensed engineers); and the
Masters, Mates and Pilots (licensed crew). The three
contracts had all expired on June 30, 2017; agreement had
not yet been reached and the parties were continuing to
bargain. Once agreement was reached the terms would be
submitted to the legislature.
Representative Josephson asked about the binding interest
arbitration or binding arbitration. He thought that under
those circumstances, the legislature had a purely
appropriation function. He asked for verification that
under the circumstance, the legislature was required to
appropriate.
Ms. Sheehan responded that due to binding arbitration the
executive branch was required to submit the monetary terms,
but the legislature was not required to appropriate the
funds. If the legislature did not appropriate the funds, as
with any other collective bargaining agreement, the
department would go back to the negotiating table. She
pointed out that voluntary agreement could not be reached
in the first place, which was the reason for arbitration.
She shared that in 2009 an interest arbitration award had
been sent to the legislature; it had not been approved that
year, but the same agreement was approved the following
year.
Representative Josephson surmised the legislature had
changed its mind and adopted what it formerly had not
adopted.
2:49:59 PM
Ms. Sheehan answered in the affirmative.
Co-Chair Wilson remarked it could have been a different
legislature.
Ms. Sheehan continued to review bargaining units on slide
3. The Teachers' Education Association of Mount Edgecumbe
contract was currently pending. The contract had expired
June 30, 2017 and the negotiation had been ongoing since
that time. Agreement had been reached and the terms were
pending before the legislature. The contract included a 3
percent COLA in all three years, with an effective date of
July 1, 2019.
Co-Chair Wilson asked if the contracts had the same steps
as the other state employees since it was a state school.
Ms. Sheehan answered in the negative. She detailed that the
union was set up much like a school district - their steps
were based on years of experience, degrees, and continuing
education credits.
Ms. Sheehan continued with slide 3 and detailed that the
Public Safety Employees Association was the next contract
up for negotiation in the fall of 2019. She clarified that
the contract for the Public Safety Employees Association
currently before the legislature applied to troopers only.
She explained that the entire union was comprised of court
service officers, fire marshals, and airport police and
fire officers. The state would begin bargaining with the
entire group in the fall.
Co-Chair Wilson asked about 7.5 percent that was given on
top of the existing contract. She asked if it was 7.5
percent per year or until the current negotiation was
complete. She asked if the 7.5 percent was added to the 4
or 5 percent raise that was already in the contract.
Ms. Sheehan answered that the Public Safety Employees
Association had a 6 percent raise the first year of their
last agreement and zero COLAs the remaining years. The 7.5
percent only applied to the troopers.
Co-Chair Wilson asked if the 7.5 percent had ever been
added to the 6 percent. Alternatively, she wondered if the
6 percent had gone down to zero.
Ms. Sheehan answered that the 6 percent was gone; the
percentage was currently zero.
Vice-Chair Johnston asked if the contract had been reopened
"just for this purpose."
Ms. Sheehan replied in the affirmative. She elaborated
there had been intent language the preceding year to open
up negotiations for the troopers for recruitment and
retention. The contract had been opened and included
troopers, public safety employees, command staff in the
Supervisory Union. The 7.5 percent applied to trooper
recruits, troopers, corporals, sergeants, lieutenants,
captains, and majors.
2:53:00 PM
Representative Knopp thought there had been two rounds of
7.5 percent. He asked if the total was 15 percent.
Ms. Sheehan replied in the affirmative. She elaborated that
some of the 7.5 percent was through a market based pay
study (a classification study). She explained that the
department had reviewed the study and every position had
been increased by a range, which was approximately 7.5
percent. She clarified that a range increase from captain
to major was only around 3.5 percent because their ranges
were not as far apart. When the state had discovered its
incongruity with the Anchorage Police Department it had
started looking at other large police departments in Alaska
and in the State of Washington. She explained that Alaska
had been losing numerous troopers to King County in
Washington. The state had determined it was not at market
and had increased positions by one range. She noted that
the classification action was separate from the
negotiations. The state had also gone back and negotiated a
7.5 percent increase on top of the range increase they had
received.
Co-Chair Wilson asked how much the study cost.
2:54:22 PM
Ms. Sheehan replied that the study was done in-house within
the Division of Personnel.
Co-Chair Wilson asked if a study was required by contract
or statute before a raise could be given.
Ms. Sheehan answered that statute required like pay for
like work, so the department did internal alignment and
looked at market-based pay. In order to do a range change,
a study was necessary.
Ms. Sheehan continued with the last bargaining units on
slide 3. She reported that in the fall of 2020 the
department would begin negotiations with the Supervisory
Union (all supervisors) and Labor, Trades and Crafts
(general maintenance, equipment officers, electricians,
food services). She elaborated that the two groups had been
pending in front of the legislature the preceding year and
had gone to a 40-hour workweek with no COLA adjustments.
The last group was the Non-Covered - Exempt, Partially
Exempt and Excluded. She reported that any salary change
was in statue as part of the state-pay plan.
2:55:34 PM
Representative Josephson noted it had always struck him as
strange that a deputy commissioner could earn $200,000 and
the commissioner position salary was set in statute at
around $150,000. He asked for the accuracy of his
understanding.
Ms. Sheehan answered that deputy commissioners were
partially exempt and were subject to the state pay plan;
many of these employees made higher salaries because they
were longer term state employees. Commissioners were exempt
and their salary was set by the State Officers Compensation
Commission.
Representative Josephson countered that a deputy
commissioner was not always a longer serving employee.
Ms. Sheehan agreed.
Representative Josephson remarked that he had always
thought a place to cut was in some of the highest exempt
salaries. He thought the committee should have a
conversation on the subject at some point.
Co-Chair Wilson stated that was the reason for starting
with the current meeting.
Ms. Sheehan moved to slide 5 and addressed examples of
monetary terms found in state collective bargaining units.
She highlighted it was set in statute that the state
bargains a cost of living differential for the marine
units. She noted the differential pertained to Alaska
versus Seattle, Washington; it did not look at communities
within Alaska. She detailed that all contracts had leave
provisions bargained. There were different incentive pays;
for example, correctional officers and public safety
employees had pilot premium pay and diver pay. She
continued that many unions had the geographic pay
differential with rates based on a 2008 study by the
McDowell Group. Most of the travel and per diem that was
bargained was tied to the Alaska Administrative Manual.
2:57:52 PM
Vice-Chair Johnston asked about correctional officer
education incentive pay. She asked if the state had any
sidebar as far as education or whether it was just general
education.
Ms. Sheehan answered that the education incentive pay was
for a bachelor's degree or higher but was not limited to a
specific field.
Co-Chair Wilson asked if the purpose of the education
incentive pay was to enable an employee to get a raise. She
used teachers continuing education to improve their skills
in their field. She wondered if there were parameters
around the incentive.
Ms. Sheehan answered that it was an increased percentage of
pay used as a recruitment tool and was not tied to a
specific position.
Representative Sullivan-Leonard asked for the average per
diem pay.
2:59:01 PM
Ms. Sheehan answered that the administrative manual
outlined per diem of $60 per day or $40 per day for day
trips.
Representative Josephson reported he had met an employee
whose job it was to travel around the state for half of
every week for Medicaid compliance. He recalled the woman
had described that until she arrived in Bethel from
Anchorage, for example, that she was not on the clock and
received no pay. He asked if that was possible.
Ms. Sheehan replied that travel time was not compensable
time if it was outside a person's normal workhours. For
example, if the woman left Anchorage at 7:00 a.m. she would
not receive pay from 7:00 a.m. to 8:00 a.m. She noted that
if a person was overtime eligible the scenario would be
slightly different. She explained that the state did not
compensate for travel time unless it was during an
employee's workhours.
Representative Carpenter asked for detail on family night
pay and extracurricular pay pertaining to Mt. Edgecumbe.
Ms. Sheehan answered that because Mt. Edgecumbe is a
boarding school, the school requests that teachers and
their families eat dinner with the students; the teachers
received some additional pay for that time. Extracurricular
pay pertained to teachers coaching one of the teams,
heading the debate club, or taking on additional duties.
Representative Knopp asked if the cost of living
differential was different than COLA.
Ms. Sheehan replied that the two items were different. She
detailed that the cost of living differential was only for
the marine unions and was in statute. She noted the
differential compared Alaska versus Seattle, Washington.
She stated it was separate from COLAs.
Representative Knopp asked for verification the cost of
living differential was in statute.
Ms. Sheehan replied in the affirmative.
Representative Knopp asked Ms. Sheehan to follow up with
the specific statute.
3:01:37 PM
Ms. Sheehan moved to a table on slide 6 showing a sample
historical COLAs and Anchorage CPI comparison from 2001 to
2018. She noted that the department had a spreadsheet with
the information going back to the 1980s. The slide showed
what had been bargained or awarded through interest
arbitration compared to the Anchorage CPI. She highlighted
that sometimes the COLAs exceeded CPI and other times they
were below CPI. Slide 7 showed the average yearly base
salary for FY 18. She reported that the information used
actual salaries for filled positions and included all pay
(overtime, premium pay, shift differential, and geographic
differential). The slide provided an idea of the average
salary for each bargaining union.
Co-Chair Wilson asked if the only way to change the
geographic differential was in statute.
Ms. Sheehan answered that the differential was in statute
and was bargained. She elaborated that in 2007 or 2008 the
department had an appropriation and had commissioned a
geographic differential study. Subsequently, the
legislature had put the information in statute and the
department had bargained it.
Co-Chair Wilson surmised it took the study to make the
change.
Ms. Sheehan answered that the state could bargain a
different rate, but it would not have any different figures
showing the differences in the communities without new
information.
Co-Chair Wilson provided a scenario where the legislature
decided there were not sufficient funds to keep the
differential at the current levels. She asked for
verification that a study would not necessarily be
required, but the department would not know how to set new
levels without a study.
Ms. Sheehan agreed. She moved to slide 8 pertaining to
monthly health insurance benefit credits for AlaskaCare
members. She reported there were 11 unions, 4 of which had
their own health trusts. Starting in FY 17 the benefit
credit increased and held steady at $1,555. She believed
the figure would remain the same for another year or two.
3:04:09 PM
Vice-Chair Johnston thought it appeared the state was
starting to get a handle on costs in FY 14 through FY 16.
She asked what happened in FY 17.
Ms. Sheehan answered that she did not know. She detailed
that retirement and benefits were not in her division's
jurisdiction. She informed members that the responsible
division had been working hard at plan management to keep
the number steady.
Co-Chair Wilson noted if there was more interest in the
healthcare portion the committee hear more about the issue
in a later meeting.
Vice-Chair Ortiz asked if the dollar figures on slide 8
represented the state's monthly contribution to an
individual employee's healthcare benefits.
Ms. Sheehan answered affirmatively. The figures showed the
employer contribution per eligible employee per month. She
shared that in the past several years the department had
started negotiating an employee contribution for the
economy plan, which historically had not been done.
Representative Josephson speculated that if the table on
slide 8 showed average salaries since 2006, the figures may
be 20 to 30 percent higher rather than 50 percent higher.
Ms. Sheehan agreed that the percentage would be very high
if data included COLAs, merit steps, and the pay increment.
Representative Josephson referenced the largest union ASEA
as an example and cited the average salary was $61,000
[slide 7]. He asked if the average FY 06 salary was
$31,000.
Ms. Sheehan answered she did not believe so, but she did
not know what it would be.
Representative Josephson thought the information
illustrated that a lot of the increase in budgeting was due
to healthcare, which was not the fault of the employees.
Co-Chair Wilson thought it was something the committee
needed to look into. She had concerns about paying out to a
health trust instead of making them part of the system. She
considered whether or not it was making the system more
expensive. She noted that the topic was likely for a
different presenter.
3:06:43 PM
Vice-Chair Johnston stated there had been some great
efforts made by DOA. She thought it would be a good idea to
hear more on the topic from the department. She was
concerned about the health insurance benefit figure for FY
17 [slide 8] and wondered about the increase.
Representative LeBon referenced the insurance benefit
credit [shown on slide 8]. He asked for verification that
the dollar amount was an average per annual credit provided
to an employee for health insurance.
Ms. Sheehan replied that health insurance was not her
specialty. The data on slide 8 showed the employer cost to
insure an employee under the economy healthcare plan.
Representative LeBon asked how much the employee
contributed to the benefit.
Ms. Sheehan answered it depended on the bargaining unit.
Some employees were contributing 12 percent, others
contributed a flat number, and some did not contribute
anything. The state had started bargaining an employee
contribution in the past three to four years for the
economy plan only. Employees with the premium plan had
always contributed. The goal was to have everyone pay up to
12 or 15 percent.
Ms. Sheehan continued with her presentation. She reported
there were four health trusts including Labor, Trades and
Crafts; the Public Safety Employees Association; Masters,
Mates and Pilots; and the Alaska State Employees
Association. She highlighted the current rates paid by the
state (the information was not included in the
presentation). The state was currently paying $1,432 for
the Alaska State Employees Association; $1,503 for Labor,
Trades and Crafts; $1,555 for the Public Safety Employees
Association; and $1,346 for Masters, Mates and Pilots. The
numbers were much lower than the others because they had
gone without a contract and the state had been paying
status quo.
3:09:22 PM
Ms. Sheehan moved to slide 9 titled "Bargaining 101." She
reported that negotiations were mandated by the Public
Employment Relations Act (PERA) in AS 23.40.070 through AS
23.40.250. The state began negotiations typically in the
fall and each collective bargaining agreement had an
article explaining when they could ask for negotiations
(negotiations could begin earlier if desired). Statute
designated that agreements could not be over three years in
duration. She detailed that PERA also required the state to
bargain wages, hours, and terms and conditions of
employment. The state may, but was not required to,
negotiate permissive subjects of bargaining. One of the
largest permissive subjects was classification. She
referenced her earlier testimony that there was
classification in statute requiring like pay for like work.
The state, through its classification system, decided the
appropriate pay and duties for a position (this was not
bargained).
Ms. Sheehan continued reviewing slide 9. Monetary terms of
agreements were required to be submitted to the legislature
no later than the 60th day of legislative session to
receive consideration during that calendar year. She
clarified it did not mean the legislature could not
consider the contracts after the 60th day; in many years
they had been considered beyond that day. She detailed that
if negotiations did not lead to an agreement and mediation
failed, employees had the right to strike once their
contract was expired. Employees did not get paid when on
strike, but they could not be terminated when participating
in a lawful strike. She explained that not all employees
were able to strike.
Ms. Sheehan described the three classes of employees in
statute. Class I employees were public service including
troopers, correctional officers, nurses, and other. Class
II employees (primarily Alaska Marine Highway System vessel
employees) could go on strike but only for a minimum amount
of time; the state could seek an injunction and call
employees back to work. Class III employees were eligible
to go on strike and included all other employees.
3:12:01 PM
Vice-Chair Johnston asked if it would be possible to
receive a list showing a breakdown of the employee
classifications in bargaining unit.
Ms. Sheehan asked if Vice-Chair Johnston was interested in
the different job classes in each bargaining unit.
Vice-Chair Johnston agreed.
Ms. Sheehan agreed to follow up with the information.
Ms. Sheehan addressed the last bullet point on slide 9 and
reported that striking employees may be replaced under
certain circumstances. There were numerous laws surrounding
striking employees and the different types of strikes. She
could provide the committee with additional information on
the topic if requested. She moved to slide 10 and reviewed
"next steps." She detailed that the department was required
to submit monetary terms to the legislature by the 60th day
or within 10 days after reaching agreement. Contracts were
subject to funding by legislative appropriation. She
elaborated that if the legislature failed to fund the
monetary terms, the next steps varied by bargaining unit
and may be affected by whether a tentative agreement was
reached with sufficient time to permit submittal by the
60th day. She added that the terms of agreement were also
subject to ratification by the membership.
Ms. Sheehan continued with slide 10. She reported that if a
union failed to ratify the agreement and the funding had
already been put into the contract, the funding was reduced
proportionately, things operated under status quo, and the
parties returned to negotiations. She reported that all of
the contracts currently pending in front of the legislature
had ratified.
Co-Chair Wilson referenced Ms. Sheehan's statement that the
contracts were sent to the legislature 10 days after
reaching agreement. She asked how the process worked.
Ms. Sheehan replied that if agreement was reached outside
of the 60th day, the department had 10 days to submit the
contract to the legislature.
Co-Chair Wilson asked if the contract was sent to Juneau,
via email, or other. She did not recall receiving anything.
Ms. Sheehan replied that a monetary terms report was
submitted to the Senate President and the Speaker of the
House.
Co-Chair Wilson wondered why all legislators did not
receive the information.
Ms. Sheehan replied that she did not know but would look
into the question.
Vice-Chair Johnston asked why the information did not go to
the Legislative Budget and Audit Committee.
Co-Chair Wilson noted that Ms. Sheehan would follow up on
the issue.
Ms. Sheehan noted that the information was also sent to the
Office of Management and Budget (OMB). She did not know who
OMB provided the information to.
Co-Chair Wilson remarked that was not the legislature. She
also intended to ask the Speaker for the information.
3:15:10 PM
Ms. Sheehan briefly highlighted the three strike classes on
slide 11.
Co-Chair Wilson asked if corrections had gone to mediation
because they could not strike. She wondered if anyone could
go through mediation after a certain point.
Ms. Sheehan answered that mediation was required for any
strike Class 1 group (correctional officers and public
safety employees); the group was allowed to go to interest
arbitration because it could not go on strike. Class 2 and
3 typically went to mediation because sometimes it took an
outside party to get one side to shift a little.
Ms. Sheehan turned to slide 12 that provided additional
detail on strike classes. She highlighted that PSEA
employees were all under strike Class 1. She reported that
most of the larger unions including the General Government
Union and Supervisory Union were a mix but were mostly
comprised of Class 3.
3:16:47 PM
Ms. Sheehan discussed contractual terms on slide 13. She
stated that if terms of an agreement were not ratified or
were not approved and funded by the legislature, most of
the agreements required the parties to reenter
negotiations. The unions were all slightly different. She
moved to a bargaining unit road map on slide 14. The top
bubbles in green showed the general process of
negotiations, reaching voluntary agreement, submittal of
monetary terms to the legislature, and the funding of
monetary terms through appropriation. She highlighted an
arrow pointing down to a bubble indicating that if the
terms were not funded, the parties returned to
negotiations. She stated it became trickier when
negotiations resulted in impasse. She explained that
impasse was a term of art meaning that neither side felt
they could move any more. Under the scenario, Class I
employees went to interest arbitration. For all other
employees, once the contracts expired (typically June 30),
the employees could go on strike or the employer could lock
them out; they could continue status quo with the contract
and continue to try to work towards agreement; or the state
could implement its last best offer.
Co-Chair Wilson asked if the state had ever locked anyone
out.
Ms. Sheehan replied not to her knowledge.
Vice-Chair Ortiz asked if there was a difference between
interest arbitration and binding arbitration.
Ms. Sheehan replied in the negative.
Ms. Sheehan concluded on slide 15 showing a summary of
pending bargaining agreements. She detailed that ASEA had
received a contract with a 3 percent COLA the first year
and 1 percent in the second and third years. The first year
of the agreement had health trust contributions of $1,530
in the first year and $1,555 in the second and third years.
She noted that the state had access to their trust
documents, which were reviewed by a state actuary to
determine the appropriate rate (to avoid over or
underfunding the trust). Additionally, the contract secured
some work rules regarding management rights.
3:19:27 PM
Vice-Chair Johnston asked if the department had access to
review the health trust financials.
Ms. Sheehan replied in the affirmative. She detailed that
contracts included language requiring the union to provide
information annually.
Vice-Chair Johnston asked if the department had full or
limited access to the information.
Ms. Sheehan answered that she did not know that it was full
access. The department had access to information the
actuaries had determined was necessary to make a decision.
She believed the state had more access to information in
some trusts versus others. For example, Masters, Mates and
Pilots was a multi-employer trust and there was some
concern over providing all of the information.
Vice-Chair Johnston thought fund balances would be of
interest. She wondered if the department's actuaries were
privy to the information. Ms. Sheehan replied the
department had access to the information.
Co-Chair Wilson asked if a comparison was ever made between
AlaskaCare and the health trusts. She believed the
insurance under some of the health trusts was better than
AlaskaCare. She thought it sounded like the state was not
paying any more for the trusts. She surmised perhaps
AlaskaCare employees would be better off under the health
trust insurance.
Ms. Sheehan did not know what comparisons the Division of
Retirement and Benefits did, but she would look into it.
She continued summarizing current pending bargains. The
Alaska Correctional Officers Association contract had been
agreed upon in interest arbitration. The contract had zero
percent in the first year beginning July 1, 2018, 4.5
percent starting on July 1, 2019, and 3 percent the third
year. As part of the arbitration decision, the union would
be required to pay an employee contribution to healthcare
of up to 12 percent.
Ms. Sheehan moved to the Confidential Employees contract
that included no COLAs and a 40-hour workweek. The union
had voluntarily agreed to employee contributions of up to
12 percent and up to 15 percent in the last year of the
contract. The troopers received a 7.5 percent COLA for
command staff and troopers. The Teachers Education
Association of Mt. Edgecumbe received 3 percent COLA each
of the three years. Additionally, new columns for years of
service and continuing education credits had been added.
3:22:21 PM
Ms. Sheehan noted that there were additional slides showing
bargaining units summaries including average member age and
other.
Vice-Chair Johnston noted that the committee was working on
the last of its budget process. She asked for verification
that approving the department's budget included the
approval of the contracts.
Ms. Sheehan answered that the budget bill typically
contained a section listing the bargaining unit contracts
that were subject to the legislature's approval. She did
not know where the personal services lines were located in
the budget.
Co-Chair Wilson believed $58 million had been added to the
budget based on of contracts that had been negotiated. She
confirmed that it was additional funding beyond the salary
increases that went into each agency.
Co-Chair Foster agreed.
Vice-Chair Johnston asked if approving the appropriation
was how the legislature was involved in the process.
Co-Chair Wilson agreed. She stated that she had included an
amendment to take out the specific funds and had
subsequently received numerous visitors on the topic.
Vice-Chair Johnston asked if there were some steps that
would be taken if the legislature did not approve the
contracts.
Ms. Sheehan replied in the affirmative. She detailed that
in most cases the parties would reenter negotiations.
Co-Chair Wilson believed Ms. Sheehan had stated that
negotiations may continue to occur, but the department
could potentially end up putting the same proposal before
the legislature the following year to try to obtain
approval.
Ms. Sheehan replied that the scenario could happen. She
elaborated that if the parties understood there was an
issue, hopefully there would be movement on each side to
come up with a contract the legislature would approve.
Co-Chair Wilson reviewed the schedule for the following
day.
ADJOURNMENT
3:25:36 PM
The meeting was adjourned at 3:25 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFIN DOA Labor Contracts Presentation 4-11-19 @130PM Recovered.pdf |
HFIN 4/11/2019 1:30:00 PM |
HFIN_DOA Labor Contracts |
| RepTWilson EXBranch JobClass Titles PCNS 4 18 19.pdf |
HFIN 4/11/2019 1:30:00 PM |
HFIN DOA Response Q Labor Contracts |
| EX Branch Job Class Titles Assigned to PCNs PDay -190415.pdf |
HFIN 4/11/2019 1:30:00 PM |
HFIN DOA Response Q Labor Contracts |