Legislature(1999 - 2000)
02/03/1999 09:02 AM Senate FIN
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* first hearing in first committee of referral
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SENATE FINANCE COMMITTEE
LOGNOTES
February 3, 1999
GENERAL SUBJECT(S): Overview: Bargaining Units and Status of State
Employee Contracts
The following overview was taken in log note format. Tapes and
handouts will be on file with the Senate Finance Committee through the
21st Legislative Session, contact 465-2618. After the 21st
Legislative session they will be available through the Legislative
Library at 465-3808.
Time Meeting Convened: 9:02 am
Tape(s): SFC-99 # 19, Side A & B
PRESENT:
Senator Parnell, Chaired
the Meeting
Senator Adams
Senator Torgerson
Senator P. Kelly
Senator Donley
Senator Green
Senator Leman
Senator Phillips
Senator Wilken
ALSO PRESENT:
Bob Poe, Commissioner, Department Of Administration;
Alison Elgee, Deputy Commissioner, Department Of Administration;
David Koivuniemi, Assistant Commissioner, Department Of
Administration;
Chris Christensen, Special Council, Alaska Court System;
Tammy Stromberg, Fiscal Analyst, Division of Legislative Finance.
Tape: SFC - 99 #19, Side A 9:02 am
CO-CHAIR SEAN
PARNELL
Introduction of members. Topic of the
meeting is to hear a presentation on the
state employee bargaining units contract
negotiations.
COMMISSIONER BOB
POE
Department of Administration.
Introduce David Koivuniemi, Assistant
Commissioner, Department of Administration.
(Refer to two handouts before committee
members showing breakdown of bargaining
units and information regarding each one.)
I plan to give a short overview and then
turn over to Mr. Koivuniemi, who has been
working on the negotiations.
At this point there has been some
negotiating going on with several of the
bargaining units
DAVID KOIVUNIEMI
(List bargaining units currently in
negotiation.)
COMMISSIONER BOB
POE
We've laid out goals we would like to
obtain including legislation passed the
prior session.
CO-CHAIR SEAN
PARNELL
Committee members don't wait until
presentation is finished before asking
questions.
DAVID KOIVUNIEMI
I will be going through the handouts.
We have 12 collective bargaining units.
Handout lists number of employees covered
by each unit. Adds up to over 12,000 state
employees covered by a bargaining unit.
General Government Unit (GGU). We have met
with them twice and have other meetings
scheduled.
We've entered into ground rules with them
and have set a boilerplate.
Supervisory Unit (SU). We have not yet
entered into discussions with this unit.
Interest Based Bargaining (IBB). We are
trying this different approach to
negotiating employee contracts. The
premise is that parties don't come to the
table with a list of demands, but instead
have a list of issues and all work to
brainstorm. The intent is to try to reach
agreement by consensus.
We are going through training on this
method, which is free. We are not spending
additional money on this.
Labor Trades and Crafts (LTC). We are
using the same IBB system with this
bargaining unit. We have met with them
several times and have other meetings
scheduled.
We are looking at pretty extensive portions
of their contract.
Negotiations have been very positive.
As a side note, all negotiations have been
going well with no major disagreements to
date. We've been able to agree to disagree
and set aside those issues to continue
making progress.
PSEA Troopers. Department itself is meeting
with contractors to work on operations
issues.
They are making progress.
PSEA Correctional Officers.
Negotiations are proceeding well but I
wouldn't say fast. We are being very
cautious.
They are all Class One employees who are
not allowed to strike.
Inland Boatman's Union (IBU). We are
meeting with them today.
Master, Mates and Pilots (MMP) and Marine
Engineers (MEBA). We have not scheduled
meetings with them yet. They usually watch
and follow the agreements of the IBU.
Confidential (CEA). We will also be using
the IBB method and have scheduled training.
Alyeska Central School (ACSEA) and Alaska
Vocational Tech (AVTECTA). No meetings
scheduled.
Mt. Edgecumbe (TEAME).
COMMISSIONER BOB
POE
We don't do negotiations for state
employees working for the court system or
the University of Alaska.
SENATOR RANDY
PHILLIPS
Regarding the wage and hour study released
a couple weeks ago, have you reviewed and
are you using the information garnered from
the findings in your negotiations?
POE
We have reviewed the report. We agree with
some but not all of the findings.
KOIVUNIEMI
We are also considering the budget gap
situation in our negotiations.
SENATOR RANDY
PHILLIPS
Can we assume the bargaining units are also
considering the recent loss of jobs in oil
industry related private businesses?
POE
Not necessarily.
KOIVUNIEMI
We are conducting a classification study
with the Local 71 to implement a lower wage
grade classification for food service and
custodial worker positions in the Pioneers'
homes. We are very aware of the budget
problems and want you to know that "we are
not doing nothing."
SENATOR RANDY
PHILLIPS
KOIVUNIEMI
We haven't pinned a number of people down
in all bargaining units. We are working on
establishing a boilerplate. Certainly
economic factors are being considered. We
will address at the table.
SENATOR RANDY
PHILLIPS
Do you have a schedule (plan) worked out to
address all the contracts together?
KOIVUNIEMI
All the contracts expire this year. We are
working with all the bargaining units.
However, the marine units tend to wait for
the outcome of the IBU contract. We are
doing something will all listed here in the
handout. Local 71. We have been working
on the reclassification of job position
with them for about a year now. The same
teams that have been working on
reclassification are now working on
bargaining, so we are farther along with
them than others. We are doing them all
right now.
SENATOR JOHN
TORGERSON
Without breaching confidentiality
agreements can you lay out where you are
with some of these? Can you tell us about
any increases in benefits and salaries? I
want broad answer; you don't need to list
specific units.
POE
Difficult to say without violating the Fair
Bargaining Process. Some bargaining units
are looking for increases some are not.
SENATOR JOHN
TORGERSON
I assume you have direction from the
Governor. Are you reopening the idea of
privatizing some services such as day-boat
ferry service?
POE
We have looked at some of this. I
apologize for the need to be vague.
CO-CHAIR SEAN
PARNELL
I will offer same amount of committee time
to address University of Alaska and Alaska
Court System contracts about to expire.
Over the three years, what is the total
cost of the increases?
KOIVUNIEMI
Every one-percent increase would cost $8.5
million.
CO-CHAIR SEAN
PARNELL
My figures show a total increase excluding
Alaska Court System and University of
Alaska is $50million plus over the last
three years. I want to confirm those
amounts with yours.
Earlier agreements made with legislature
were done in much better budget times.
Note other companies' layoffs due to the
economy. We are going to be looking for
reductions. Let us know if there is
anything that we can do to help you in your
negotiations.
POE
I have heard similar comments from other
legislatures.
SENATOR JOHN
TORGERSON
Regarding the Teacher Tenure Bill Sen.
Green sponsored a few years ago. It opened
negotiations up to the public. Can we do
that with other bargaining units?
I don't understand why the negotiators hide
behind closed doors if what we are doing is
all in good faith. Request you find out if
we can statutorily mandate that all
negotiations be made public.
POE
I'm not a lawyer, but I understand that the
body can do a lot.
SENATOR LOREN LEMAN
A few years ago the Tier III Retirement
benefits was part of the contracts. It left
some items unfinished.
POE
Introduce Alison Elgee, Deputy
Commissioner, Department of Administration.
SENATOR LOREN LEMAN
It would be helpful to get an idea of where
healthcare costs are today. It would help
to know about increasing the co-payment and
other options.
ALYSON ELGEE
The Tier III retirement proposal was
reviewed a couple years ago and all but one
element was rejected.
The one element that was accepted was a
ten-year employment requirement before
eligibility for retirement health care
coverage.
This is not required statutorily but part
of policy.
Heath care costs have risen. (Detailed )
In past contracts, employee contributions
have been set and the employer made up the
difference.
SENATOR LOREN LEMAN
My understanding is that all elements were
not rejected, but just not acted upon.
There was quite a bit of interest in them.
Now is a different time. For today and the
next 5-10 years, we need to understand what
are the tools to allow us to take care of
employees and keep within a budget package.
SENATOR DAVE DONLEY
Have you looked into the issue of pay
equity for women working in the state
system? We had done quite a bit of work
five years ago. What has been done
recently?
ELGEE
We've looked at classification process. We
take job classes and look at their equality
both internally within other state agencies
and externally. We do this blind to
gender.
SENATOR DAVE DONLEY
How long has it been since an outside study
has been done to see if your processes are
gender neutral?
ELGEE
About 1986.
SENATOR DAVE DONLEY
The current health insurance structure has
been downsized to reduce cost. I don't
think it's fair to cut benefits for
employees below the Range 15 salary at the
same level as those earning above a Range
15. There are a lot of single mothers
working below those ranges. The wage and
hour study shows that a pay Range 8 is
below market value.
I also want to comment of the loss of the
wellness physical as part of the benefits
package. I don't understand the public
policy behind that. I believe it is a
tremendous mistake as far as preventative
health care is concerned.
ELGEE
The well-physical benefit in the past was a
benefit provided in a SBS Supplemental that
the employees had to pay for themselves.
When we went to the new plan it became a
covered service. The annual physical exam
is now covered by the state. The
difference is that it is now subject to the
same deductible as for other services. GGU
is looking at an option of having the state
cover the cost of this service, which will
raise their costs.
I agree that reduced employer contributions
hit lower paid workers harder because it
effects a larger portion on their salary.
We share that concern.
SENATOR DAVE DONLEY
The option of the wellness physical gets
bad if someone is healthy, doesn't go to
doctor, then gets a physical and gets hit
with $400 bill because they haven't met
their deductible. This will discourage
people from getting physicals. I believe
wellness physicals result in a lower cost
in the long run.
ELGEE
There is no empirical data to support that
outcome. I happen to agree that preventive
care is better. Under the old plan, if
employee chose the SBS Supplemental option
they paid an extra $40 per month. It is
actually cheaper now to employees.
SENATOR DAVE DONLEY
Private sector employers with collective
bargaining units seem to be delivering
better health care compared to state. Have
you looked at them for guidance?
ELGEE
Our LTC unit participates in a union
benefits package that the state contributes
to. This costs us a higher amount for this
package than others do.
SENATOR DAVE DONLEY
ELGEE
SENATOR DAVE DONLEY
I ask you to sit down with them and hear
their experiences. I understand that they
deliver very good health care packages and
their costs are below $400 per month. They
have offered to help the state.
CO-CHAIR SEAN
PARNELL
Thank presenters.
Other business.
Recess 9:43 am / 9:49 am
CO-CHAIR SEAN
PARNELL
SENATOR DAVE DONLEY
(Speak to proposed resolution he handed out
during break.) It addresses the single
subject rule. I would like members to
consider over next several weeks.
This would provide us with another tool.
SENATOR LOREN LEMAN
I think it's an idea worth taking up.
However, it won't be a tool available to us
for two years because we'll have to vote on
it.
CO-CHAIR SEAN
PARNELL
I'm planning to open a discussion on
subcommittees. I will be appointing
subcommittee membership soon officially.
We need to incorporate the fiscal gap into
our subcommittee discussions. I think this
is a great opportunity to make some changes
to make Alaska a better-run state. All
Alaskans need to come to grip with the
situation. We must look 20-30 years out.
I encourage the committee to look at
Alaska's future. I don't want us to get
locked into looking at the short-term
horizon before May when we have to. We
need to make meaningful reductions. We are
going to look for ways to consolidate
services and functions. I ask for
subcommittees to look at that and think
about the long-term state of the economy.
I'm excited at the opportunity to work
through this process.
List subcommittee chair positions.
Department of Administration: Senator Gary
Wilken
Department of Commerce and Economic
Development: Senator Lyda Green
Department of Community and Regional
Affairs: Senator Pete Kelly
Department of Corrections: Senator Sean
Parnell
Alaska Court System Senator Gary Wilken
Department of Education: Senator Gary
Wilken
Department of Environmental Conservation:
Senator Loren Leman
Department of Fish and Game: Senator John
Torgerson
Office of the Governor: Senator Sean
Parnell and Senator John Torgerson
Department of Health and Social Services:
Senator Pete Kelly
Department of Labor: Senator Lyda Green
Department of Law: Senator Dave Donley
Legislature: Senator John Torgerson and
Senator Sean Parnell
Department of Military and Veterans
Affairs: Senator Randy Phillips
Department of Natural Resources: Senator
Randy Phillips
Department of Public Safety: Senator Dave
Donley
Department of Revenue: Senator Loren Leman
Department of Transportation and Public
Utilities: Senator John Torgerson
University of Alaska: Senator Loren Leman
List will be available later today showing
committee memberships.
Tape: SFC - 99 #19, Side B 12:38 PM
CO-CHAIR SEAN
PARNELL
Ask for comments or suggestions.
SENATOR PETE KELLY
I agree with you assessment that this is an
opportunity to address the problems. I
want to look back and say, "thankfully
someone changed the way they funded state
government."
SENATOR AL ADAMS
Before we talk about the future, I'd like
to talk about the present. The current
deficit we need to look at that very
closely. The Administration has thrown out
a plan that we should address and we should
set a deadline for reaching a decision
about that plan in March. If we come up
with our own plan, we should release it
early to the public for comment in time for
responses and suggestions rather than wait
until the very end of the session when we
just draw from the CBR.
SENATOR LOREN LEMAN
Agree. However, the governor hasn't put
out a plan, just an outline. I'm anxious
to see the entire plan.
CO-CHAIR SEAN
PARNELL
Adjourn 10:00 am
SENATE FINANCE COMMITTEE
LOG NOTES
02/03/99
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