Legislature(2019 - 2020)SENATE FINANCE 532

02/17/2020 09:00 AM Senate FINANCE

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Audio Topic
09:01:10 AM Start
09:03:19 AM Presenation: Labor Contracts and Monetary Terms
09:58:10 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Labor Contract & Monetary Terms by Kate Sheehan, TELECONFERENCED
Director, Division of Personnel & Labor Relations
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 17, 2020                                                                                          
                         9:01 a.m.                                                                                              
                                                                                                                                
9:01:10 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  von  Imhof  called the  Senate  Finance  Committee                                                                    
meeting to order at 9:01 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Kate  Sheehan, Director  of Personnel  and Labor  Relations,                                                                    
Department of Administration; Senator Cathy Giessel.                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
PRESENATION: LABOR CONTRACTS and MONETARY TERMS                                                                                 
                                                                                                                                
Co-Chair  von Imhof  relayed that  the committee  would hear                                                                    
from  the  Department  of   Administration  (DOA)  on  labor                                                                    
contracts, get  an update on  recent negotiations,  and look                                                                    
at  how state  employee pay  and benefits  had changed  over                                                                    
time.  She  remarked  that  as   the  state's  savings  were                                                                    
depleted   and   discussions   of  cash-flow   became   more                                                                    
important,  she believed  that  it was  critical  to take  a                                                                    
close look at personnel costs.                                                                                                  
                                                                                                                                
Co-Chair  von Imhof  thanked Commissioner  Tshibaka and  her                                                                    
team for working closely with  the co-chairs' offices to put                                                                    
the  presentation information  together. She  had asked  the                                                                    
commissioner to  provide the committee with  a granular look                                                                    
at pay  and benefits for  the various bargaining  units over                                                                    
time  to  help give  the  committee  a sense  of  personnel-                                                                    
related cost drivers.                                                                                                           
                                                                                                                                
Co-Chair von  Imhof suggested that  as the  largest employer                                                                    
in  Alaska,   state  government   needed  to   balance  cost                                                                    
containment against being a  competitive employer that could                                                                    
attract  talent  to  serve the  public  as  efficiently  and                                                                    
effectively as possible. She stated  that as the legislature                                                                    
considered a spending  cap and looked at  the Consumer Price                                                                    
Index  (CPI) and  inflation, there  were other  cost drivers                                                                    
that could  rise faster and  crowd out other costs  as state                                                                    
spending approached a cap.                                                                                                      
                                                                                                                                
^PRESENATION: LABOR CONTRACTS and MONETARY TERMS                                                                              
                                                                                                                                
9:03:19 AM                                                                                                                    
                                                                                                                                
KATE  SHEEHAN, DIRECTOR  OF PERSONNEL  AND LABOR  RELATIONS,                                                                    
DEPARTMENT   OF    ADMINISTRATION,   commented    that   the                                                                    
presentation would  review some bargaining  agreements, what                                                                    
the division would  be working on in the  upcoming fall, and                                                                    
would take  a close look  at salaries over the  previous ten                                                                    
years. She reminded  that the state was  required to bargain                                                                    
wages,  hours,  and terms  of  conditions  of employment  as                                                                    
found   in  the   Public  Employment   Relations  Act.   She                                                                    
referenced  AS  23.40.  Under statute,  DOA  chose  what  to                                                                    
bargain, and any changes to  what was bargained needed to be                                                                    
done through legislation.                                                                                                       
                                                                                                                                
Ms.  Sheehan discussed  the presentation  "Labor Contracts,"                                                                    
(copy on file).                                                                                                                 
                                                                                                                                
Ms. Sheehan read slide 2, "Bargaining Unit Acronyms                                                                             
                                                                                                                                
     ACOA - Alaska Correctional Officers Association                                                                            
     APEA - Alaska Public Employees Association                                                                                 
     ASEA - Alaska State Employees Association                                                                                  
     AVTECTA - Alaska Vocational Technical Center Teachers'                                                                     
     Association                                                                                                                
     CEA - Confidential Employees Association                                                                                   
     IBU - Inlandboatmen's Union of the Pacific                                                                                 
     LTC - Labor, Trades, and Crafts                                                                                            
     MEBA - Marine Engineers Beneficial Association                                                                             
     MMP - Masters, Mates, and Pilots                                                                                           
     PSEA (AA) - Public Safety Employees Association                                                                            
     (Troopers, Court Service Officers, Deputy Fire                                                                             
     Marshalls)                                                                                                                 
     PSEA (AP) - Public Safety Employees Association                                                                            
     (Airport Police and Fire Officers)                                                                                         
     TEAME - Teachers Education Associations at Mt.                                                                             
     Edgecumbe                                                                                                                  
                                                                                                                                
Ms. Sheehan spoke to slide 3, "Important Definitions":                                                                          
                                                                                                                                
     COLA - Cost of Living Adjustment                                                                                           
     Steps - Steps A-F/G, awarded every year                                                                                    
     Pay Increments - Step J and above awarded every other                                                                      
     year with acceptable or higher performance                                                                                 
                                                                                                                                
Ms. Sheehan  noted that COLA  was bargained with  each union                                                                    
and  done with  legislation  for the  partially exempt.  She                                                                    
added that COLA  was also put into the  state personnel act.                                                                    
Most  employees received  merit  steps  and pay  increments.                                                                    
Merit steps were  received every other year  with or without                                                                    
a performance evaluation,  and the steps were  an average of                                                                    
about 3.5 percent. The only  groups that did not receive the                                                                    
steps  and  pay  increments  were the  three  marine  vessel                                                                    
employee types,  and the teachers and  instructors at Alaska                                                                    
Vocational Technical  Center (AVTEC).  She detailed  that an                                                                    
employee performance  evaluation was  required to  receive a                                                                    
pay  increment,  which  were either  3.25  percent  or  3.75                                                                    
percent depending upon  the collective bargaining agreement.                                                                    
There were previously longevity  steps, which changed to pay                                                                    
increments in 2009.                                                                                                             
                                                                                                                                
9:07:35 AM                                                                                                                    
                                                                                                                                
Ms. Sheehan referenced slide 4, "Bargaining Update":                                                                            
                                                                                                                                
     Inlandboatmen's Union of the Pacific:                                                                                      
     ? 0/1.5/1.5 COLA                                                                                                           
     ? $210 lump sum payment if enrolled in the Employee                                                                        
     Only Economy Plan in January 2022                                                                                          
     ? $570 lump sum payment if enrolled in the Employee                                                                        
     Plus Family Economy Plan in January 2022                                                                                   
     ? Employees begin contributions to healthcare                                                                              
       Length of Agreement: 2019-2022                                                                                           
                                                                                                                                
     AK Vocational Technical Center Teachers' Association:                                                                      
     ? 0/1.5/1.5 COLA                                                                                                           
     ? $350 lump sum payment in July 2020                                                                                       
     ? Hours transferred from Union Hour Leave Bank                                                                             
     ? Length of Agreement: 2019-2022                                                                                           
                                                                                                                                
Ms. Sheehan noted  that the two contracts on  the slide were                                                                    
currently before the legislature  for approval. She recalled                                                                    
that there had been a  strike that was successfully mediated                                                                    
the  previous August.  For IBU,  a COLA  of 1.5  percent was                                                                    
about $600,000.  The department had also  bargained employee                                                                    
contributions, which was new for IBU.                                                                                           
                                                                                                                                
Ms.  Sheehan   informed  that  there  had   been  a  federal                                                                    
mediation to reach agreement on  the contract for the Alaska                                                                    
Vocational    Technical    Center   Teachers'    Association                                                                    
(AVTECTA).                                                                                                                      
                                                                                                                                
Co-Chair  von Imhof  asked if  people that  lived in  Alaska                                                                    
received COLA or if residency affected COLA.                                                                                    
                                                                                                                                
Ms. Sheehan informed that COLA  was for all employees in the                                                                    
bargaining  unit. She  noted that  the marine  unions had  a                                                                    
cost of  living differential (COLD) which  was for residents                                                                    
versus  non-residents.  State  residents received  a  higher                                                                    
hourly  rate   than  non-residents.  Marine   Engineers  and                                                                    
Masters, Mates  and Pilots (MMP)  received a lump  sum given                                                                    
with each pay  period and more money was  given for residing                                                                    
within the state.                                                                                                               
                                                                                                                                
Senator Olson thought he had  heard Ms. Sheehan comment that                                                                    
a 1.5 percent COLA was equivalent to $50,000.                                                                                   
                                                                                                                                
Ms.  Sheehan  clarified  that the  COLA  was  equivalent  to                                                                    
$600,000 for  the Inlandboatmen's Union and  $50,000 for the                                                                    
AVTEC Teacher's Association.                                                                                                    
                                                                                                                                
Senator Olson  asked if  the unions  were getting  the funds                                                                    
every year.                                                                                                                     
                                                                                                                                
Ms. Sheehan answered in the affirmative.                                                                                        
                                                                                                                                
Co-Chair von Imhof clarified that  that the whole bargaining                                                                    
unit received the funds rather than each person.                                                                                
                                                                                                                                
9:11:06 AM                                                                                                                    
                                                                                                                                
Co-Chair   von  Imhof   asked   about  employee   healthcare                                                                    
contributions  for  the  Inlandboatmen's  Union.  She  asked                                                                    
about the percentage of the monthly premium.                                                                                    
                                                                                                                                
Ms.  Sheehan  relayed  that  the  state  had  only  recently                                                                    
started  bargaining  employee  contributions.  Previously  a                                                                    
person  under  the  economy  plan   in  AlaskaCare  made  no                                                                    
contribution. There was  only one union that did  not have a                                                                    
contribution in  AlaskaCare. The  rate would  vary according                                                                    
to  each  union. There  was  currently  an  8 to  9  percent                                                                    
employee contribution.                                                                                                          
                                                                                                                                
Co-Chair  von Imhof  asked if  the two  unions paid  8 to  9                                                                    
percent or if the amount was an average.                                                                                        
                                                                                                                                
Ms. Sheehan  stated that  the amount  was an  average across                                                                    
unions.  The  goal was  for  all  unions  to have  the  same                                                                    
language and consistency.                                                                                                       
                                                                                                                                
Co-Chair  von Imhof  considered  federal pay  and had  found                                                                    
that federal employees paid 20 percent of healthcare costs.                                                                     
                                                                                                                                
Ms. Sheehan did not know  what federal employees paid. There                                                                    
were two  different plans under  AlaskaCare, and  those that                                                                    
enrolled in the standard plan  paid more than those enrolled                                                                    
in the economy plan. She  offered to provide the information                                                                    
at a later time.                                                                                                                
                                                                                                                                
Co-Chair von Imhof affirmed that  she would like comparative                                                                    
numbers  to   gain  an  understanding  of   different  plans                                                                    
available in  the state. She  thought it was  interesting to                                                                    
see how the state stood in comparison to other entities.                                                                        
                                                                                                                                
Ms.  Sheehan turned  to slide  5,  "Bargaining Schedule  and                                                                    
Detail," which showed  a table that listed  the total number                                                                    
of  employees and  percentage of  the  total employees.  She                                                                    
noted  that  the state  was  currently  bargaining with  the                                                                    
Public  Safety  Employees  Association  (PSEA),  the  Marine                                                                    
Engineers  Beneficial   Association,  and  MMP.   All  three                                                                    
bargaining units  were set  to expire on  June 30,  2020. In                                                                    
the fall  the department  would start negotiations  with the                                                                    
Alaska Correctional Officers  Association; Labor, Trades and                                                                    
Crafts (LTC);  and the  Alaska Public  Employees Association                                                                    
(APEA).                                                                                                                         
                                                                                                                                
Ms.   Sheehan  continued   that   in  the   fall  of   2021,                                                                    
negotiations   would  begin   with  the   teachers  of   Mt.                                                                    
Edgecumbe, AVTECTA,  the Alaska State  Employees Association                                                                    
(ASEA), the confidential  employees, and the Inlandboatmen's                                                                    
Union. She pointed out that  the largest number of employees                                                                    
were  in ASEA.  She pointed  out the  number of  non-covered                                                                    
employees was  listed, which were exempt,  partially exempt,                                                                    
and excluded.  Excluded employees were  classified employees                                                                    
not represented. The only excluded  employees were the staff                                                                    
of the  Alaska Labor Relations  Agency, with about  three or                                                                    
four employees.  Any pay increases  to the  partially exempt                                                                    
were done through legislation.                                                                                                  
                                                                                                                                
9:15:30 AM                                                                                                                    
                                                                                                                                
Senator  Wilson asked  if market-based  pay  study had  been                                                                    
conducted.                                                                                                                      
                                                                                                                                
Ms. Sheehan  stated that a pay  study had been done  for the                                                                    
Alaska State  Troopers class series,  and had  increased the                                                                    
series  by one  range, or  approximately 7.5  percent. There                                                                    
was   an  additional   COLA  adjustment   of  7.5   percent.                                                                    
Additionally, the department was  finishing up a large nurse                                                                    
market-based  pay  study.  The  adjustment was  one  to  two                                                                    
ranges up, depending  upon the job. The  jobs were primarily                                                                    
with in  the Department  of Health  and Social  Services and                                                                    
the Department of Corrections (DOC).                                                                                            
                                                                                                                                
Senator Wilson  asked if there  were additional  pay studies                                                                    
forthcoming.                                                                                                                    
                                                                                                                                
Ms.  Sheehan  stated  that the  department  was  working  on                                                                    
classification  studies and  had  recently finished  studies                                                                    
for  police officers  and other  positions.  She offered  to                                                                    
provide  a  complete  list  of  the  studies  and  positions                                                                    
involved.                                                                                                                       
                                                                                                                                
Ms. Sheehan considered slide 6, "Benefits":                                                                                     
                                                                                                                                
     ? Health Benefits:                                                                                                         
     ? Employee Premium contribution                                                                                            
     ? Health Trusts:                                                                                                           
     ? State of Alaska contributing at a rate which seeks                                                                       
     balance                                                                                                                    
       Pension:                                                                                                                 
     ? Defined benefit and defined contribution plans                                                                           
                                                                                                                                
Ms. Sheehan noted  that there were four  health trusts: MMP,                                                                    
PSEA, ASEA,  and LTC.  Recently the  PSEA joined  the health                                                                    
trust  for ASEA.  She understood  that  there were  employee                                                                    
contributions  in the  health trusts  but did  not know  the                                                                    
contribution  level.   She  noted   that  pension   was  not                                                                    
bargained  and   pointed  out  that  the   Marine  Engineers                                                                    
Beneficial  Association  was  not  part  of  PERS,  and  its                                                                    
pension contribution was bargained.                                                                                             
                                                                                                                                
9:18:21 AM                                                                                                                    
                                                                                                                                
Ms.  Sheehan  displayed  slide  7,  "State  Contribution  to                                                                    
Health Trust/  Health Insurance," which showed  a data table                                                                    
displaying  current health  insurance rates  and types.  She                                                                    
noted  that   starting  in  July  2020,   all  employees  in                                                                    
AlaskaCare and  the trusts  were up to  the cost  of $1,555.                                                                    
She pointed  out that MMP  was still at the  last negotiated                                                                    
rate  of  $1,346  after  not  being  able  to  reach  a  new                                                                    
agreement.                                                                                                                      
                                                                                                                                
Co-Chair von Imhof asked if  Ms. Sheehan knew what the trust                                                                    
was able  to negotiate with healthcare  providers. She asked                                                                    
who would receive any potential savings.                                                                                        
                                                                                                                                
Ms. Sheehan stated that there  was bargaining language where                                                                    
the trust would  have to provide enough  information for the                                                                    
state's actuary to make a  decision. The goal was to neither                                                                    
overfund nor  underfund the  trust. It  had been  found that                                                                    
the trust  was likely  overfunded for  years because  of the                                                                    
formula  being   used.  The  actuaries  would   receive  the                                                                    
information  and arrive  at the  appropriate amount  to fund                                                                    
the trust.  She would provide further  information about who                                                                    
might receive  any savings,  and a  list of  the information                                                                    
that the trust was required to provide.                                                                                         
                                                                                                                                
Co-Chair   von   Imhof   wondered  about   the   amount   of                                                                    
overfunding.   She   understood  that   healthcare   trust's                                                                    
financials were not public.                                                                                                     
                                                                                                                                
Ms. Sheehan  affirmed that the  trust's financials  were not                                                                    
public.                                                                                                                         
                                                                                                                                
Co-Chair  von Imhof  wondered if  the financial  information                                                                    
could be made public through legislation.                                                                                       
                                                                                                                                
Ms. Sheehan did not know.                                                                                                       
                                                                                                                                
Senator Bishop thought certain trusts were confidential.                                                                        
                                                                                                                                
Ms. Sheehan  knew that MMP  was a multi-employer  trust with                                                                    
confidential information.                                                                                                       
                                                                                                                                
Co-Chair von  Imhof thought as  the state  considered rising                                                                    
costs and a  spending cap, it was tough  when public dollars                                                                    
were spent without information.  She reiterated her question                                                                    
about any  potential gap between  the state dollars  and the                                                                    
expense.                                                                                                                        
                                                                                                                                
Ms. Sheehan  highlighted slide  8, "Employee  Counts," which                                                                    
showed a table  of employee counts in  the executive branch.                                                                    
She pointed out that the  table listed actual employees that                                                                    
received a paycheck, rather than  position counts. The slide                                                                    
included full time,  part-time, and non-permanent employees.                                                                    
She clarified  that non-permanent employees could  work from                                                                    
a month or two up to twelve months.                                                                                             
                                                                                                                                
Senator Bishop  looked at  the employee  count and  asked if                                                                    
the total included covered and non-covered employees.                                                                           
                                                                                                                                
Ms. Sheehan answered in the affirmative.                                                                                        
                                                                                                                                
Senator Bishop thought there were  about 12,600 employees in                                                                    
2009; and the current count was about 12,277.                                                                                   
                                                                                                                                
Senator Wielechowski asked if there  was a count of employee                                                                    
vacancies.                                                                                                                      
                                                                                                                                
Ms.  Sheehan  did  not  have the  information  at  hand  but                                                                    
offered to provide it at a later time.                                                                                          
                                                                                                                                
9:23:48 AM                                                                                                                    
                                                                                                                                
Ms. Sheehan looked at slide  9, "FY2019 All Bargaining Units                                                                    
Comparison,"  which showed  a table.  She informed  that the                                                                    
slide related  to a four-page document  entitled "Bargaining                                                                    
Unit Comparison 2009-2019" (copy  on file). The first column                                                                    
showed bargaining units.  Only permanent full-time employees                                                                    
were used  for the data.  She explained that the  COLA would                                                                    
reflect whatever was bargained in  the year; and she pointed                                                                    
out that  in 2019 there  were no COLAs bargained.  The steps                                                                    
previously  mentioned were  3.5 percent,  and if  the column                                                                    
showed  "n/a" it  meant  there  was no  merit  steps or  pay                                                                    
increases such as in the  three marine unions. Any increases                                                                    
were through  a COLA. She  noted that the teachers  at AVTEC                                                                    
and Mt.  Edgecumbe had a  step structure like  other teacher                                                                    
collective bargaining agreements.                                                                                               
                                                                                                                                
Ms. Sheehan stated that pay  increments were 3.75 percent or                                                                    
3.25 percent.  Most pay increments  did not have a  cap. She                                                                    
looked at the fiscal year  overtime pay column, which showed                                                                    
all overtime pay for the  year for each bargaining unit. The                                                                    
next columns  showed the number of  employees paid overtime,                                                                    
and the  average paid  per employee. She  looked at  the "FY                                                                    
Gross  Pay" column,  which included  any  terminal leave  or                                                                    
leave cash-ins.  She made  note of  the two  columns showing                                                                    
SBS employer contributions, (6.13  percent), and the average                                                                    
contribution  per  employee.  She  highlighted  the  columns                                                                    
showing PERS contributions and health insurance.                                                                                
                                                                                                                                
9:27:25 AM                                                                                                                    
                                                                                                                                
Ms. Sheehan  continued to address  slide 9.  She highlighted                                                                    
columns that  showed gross totals  for SBS, PERS  and health                                                                    
insurance.  Other columns  averaged the  cost per  employee.                                                                    
There was  a comparison  of the  total gross  SBS percentage                                                                    
compared to the CPI. She  pointed out that the table started                                                                    
in 2009.  She pointed  out that between  2017 and  2018, the                                                                    
total  gross  SBS, PERS,  and  health  insurance change  per                                                                    
employee  had been  significantly increased.  The shift  was                                                                    
attributed to a change in  data systems, resulting in a lost                                                                    
pay  period.  Starting  in  2018,   the  data  reflected  an                                                                    
additional pay period.                                                                                                          
                                                                                                                                
9:29:22 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked if there  had been an increase or                                                                    
decrease in cost when the  state went from twice monthly pay                                                                    
periods to a bi-weekly pay system.                                                                                              
                                                                                                                                
Ms. Sheehan  stated that not  all employees were moved  to a                                                                    
bi-weekly  pay  schedule.  The  department  was  looking  to                                                                    
convert all groups June 1, 2020.                                                                                                
                                                                                                                                
Senator  Wielechowski asked  if  Ms.  Sheehan could  provide                                                                    
some  numbers.  He  recalled  that   the  court  system  had                                                                    
estimated the  change would cost  an additional  $247,000 to                                                                    
switch to bi-weekly payroll.                                                                                                    
                                                                                                                                
Co-Chair von Imhof understood that  when any company changed                                                                    
pay systems  there would be a  cost shift in the  first year                                                                    
because of the  last paycheck. She thought  there should not                                                                    
be a recurring increase in  expense. She emphasized the need                                                                    
for one system.                                                                                                                 
                                                                                                                                
Senator Wielechowski  reiterated that he wanted  to know the                                                                    
cost to the state.                                                                                                              
                                                                                                                                
Co-Chair  von  Imhof  referenced the  document  showing  ten                                                                    
years of historical costs. She  asked about payment steps of                                                                    
3.5  percent, and  the total  costs and  asked how  the math                                                                    
worked out.                                                                                                                     
                                                                                                                                
Ms. Sheehan  stated that not  all employees would get  a pay                                                                    
increment  or merit  step  every year.  She  noted that  the                                                                    
merit steps  and payment increments were  not funded because                                                                    
of vacancies. She could not  explain all the percentages and                                                                    
acknowledged  that some  looked strange.  She pondered  that                                                                    
number  of   employees,  gross  pay,  and   the  COLAs  were                                                                    
different at different times.                                                                                                   
                                                                                                                                
9:33:00 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof asked  Ms. Sheehan  to look  at previous                                                                    
years when the  percentages were higher. She  thought it was                                                                    
interesting that the steps were  higher than the Alaska CPI.                                                                    
She thought  it appeared  that a  good portion  of employees                                                                    
had received overtime pay for  the last decade. She wondered                                                                    
if the practice could be managed to save the state funds.                                                                       
                                                                                                                                
Ms. Sheehan  believed in some  cases the amount  of overtime                                                                    
could be  managed, but in  other cases could not  because of                                                                    
staffing  requirements.  She   referenced  minimum  staffing                                                                    
levels  for   correctional  facilities  and   other  24-hour                                                                    
institutions. She  mentioned overtime for IT  personnel. She                                                                    
thought the amount  of overtime differed by  division but in                                                                    
many cases was due to lack of staff.                                                                                            
                                                                                                                                
Co-Chair  von Imhof  observed  that at  least  half of  ASEA                                                                    
members  received  overtime  each  year,  and  it  had  been                                                                    
consistent each year.                                                                                                           
                                                                                                                                
Ms. Sheehan  noted that many  of the employees in  ASEA were                                                                    
eligible for overtime under the Fair Labor Standards Act.                                                                       
                                                                                                                                
Co-Chair von  Imhof asked Ms. Sheehan  to describe "eligible                                                                    
for overtime" employees.                                                                                                        
                                                                                                                                
Ms. Sheehan stated that the  ASEA was the broadest group and                                                                    
employees   and   included    nurses,   office   assistants,                                                                    
psychiatric  nurse  aids,  children's  support  specialists,                                                                    
eligibility technicians, and engineers.  The members of ASEA                                                                    
was  the most  diverse group,  and because  of the  types of                                                                    
jobs they were  eligible for overtime. Many  of the members,                                                                    
such  as engineers,  worked extraordinarily  long hours;  as                                                                    
did nurses.                                                                                                                     
                                                                                                                                
Co-Chair von Imhof  asked if the employees  were salaried or                                                                    
hourly.                                                                                                                         
                                                                                                                                
Ms. Sheehan thought that most were paid hourly.                                                                                 
                                                                                                                                
Senator Bishop  thought there  was a lot  "baked in"  to the                                                                    
overtime statistics. He used  the example of competitiveness                                                                    
to  the   private  sector.  He   thought  there   were  some                                                                    
bargaining units  in which  you could  make almost  twice as                                                                    
much  by working  for  the private  sector.  He thought  the                                                                    
matter should be investigated.                                                                                                  
                                                                                                                                
Co-Chair von  Imhof commented that as  healthcare costs went                                                                    
up, not  paying any healthcare  premium or paying  8 percent                                                                    
to 9 percent was very attractive.                                                                                               
                                                                                                                                
9:38:13 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski   asked  if   any  of   the  employees                                                                    
voluntarily worked  overtime hours  if they were  ordered to                                                                    
do so.                                                                                                                          
                                                                                                                                
Ms. Sheehan stated  that overtime was mandatory  for many of                                                                    
the employees being discussed.                                                                                                  
                                                                                                                                
Senator  Wielechowski asked  if Ms.  Sheehan could  quantify                                                                    
the number of employees required to do overtime.                                                                                
                                                                                                                                
Ms. Sheehan offered to try and find the information.                                                                            
                                                                                                                                
Co-Chair von Imhof  clarified that the overtime  pay did not                                                                    
include those who worked four 10-hour shifts.                                                                                   
                                                                                                                                
Ms.  Sheehan  stated  that there  were  different  alternate                                                                    
work-week  agreements. She  used the  example of  the Alaska                                                                    
State Troopers. Many unions did  not have daily overtime but                                                                    
did  have   weekly  overtime.  The  overtime   was  adjusted                                                                    
depending upon the schedule.                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  understood  that  with some  employees,                                                                    
overtime  was unavoidable.  She  believed that  it had  been                                                                    
consistent  over the  last  ten years.  She  thought it  was                                                                    
either  part of  the  standard operating  procedure or  that                                                                    
overtime had not been managed well in some cases.                                                                               
                                                                                                                                
Ms.  Sheehan  addressed  slide  10,  "All  Bargaining  Units                                                                    
Comparison: Wages and Health Insurance,"  which showed a bar                                                                    
graph providing another form of  comparison. She pointed out                                                                    
that the wages  and health insurance benefits  were shown as                                                                    
a share of  the total compensation for ten  years. The gross                                                                    
pay was clearly the  largest employer contribution, followed                                                                    
by health insurance.                                                                                                            
                                                                                                                                
Ms.  Sheehan advanced  to slide  11,  "All Bargaining  Units                                                                    
Comparison: Wages and Health Insurance,"  which showed a bar                                                                    
graph comparing  the average employee pay  and benefits. The                                                                    
information was taken from the  document provided to members                                                                    
and showed  the average  pay per  employee was  not adjusted                                                                    
for inflation.                                                                                                                  
                                                                                                                                
Ms.  Sheehan  looked  at slide  12,  "All  Bargaining  Units                                                                    
Comparison: Wages and Health Insurance,"  which showed a bar                                                                    
graph  that depicted  the same  information as  the previous                                                                    
slide but adjusted for CPI.                                                                                                     
                                                                                                                                
Co-Chair von  Imhof asked what  it would look like  if there                                                                    
was a line drawn to depict the CPI.                                                                                             
                                                                                                                                
Ms.  Sheehan  thought  the depiction  would  fluctuate.  She                                                                    
noted that the  department was working on the  slide and had                                                                    
some  difficulty with  the data.  She intended  on finishing                                                                    
slides  and providing  them to  the committee  later in  the                                                                    
week.                                                                                                                           
                                                                                                                                
9:41:47 AM                                                                                                                    
                                                                                                                                
Ms. Sheehan  noted that the  following slides looked  at the                                                                    
same information  on the document, broken  out by collective                                                                    
bargaining  unit. Instead  of comparing  them on  one slide,                                                                    
each slide  showed year to  year for each union.  All eleven                                                                    
unions were represented in a separate slide.                                                                                    
                                                                                                                                
Ms. Sheehan  showed slide 13, "Bargaining  Unit Comparison -                                                                    
Alaska Correctional Officers Association."                                                                                      
                                                                                                                                
Co-Chair  von  Imhof  thought  it was  helpful  to  see  the                                                                    
different unions. She looked at  the average hourly overtime                                                                    
pay, which  started at $4,000  per employee in 2009  and was                                                                    
currently at about $10,000. She  asked if the change was due                                                                    
to labor shortages,  or overtime. She noted  that the number                                                                    
of employees  had not jumped.  She questioned  whether there                                                                    
was  a significant  employee  shortage,  why were  employees                                                                    
working longer  hours, and  why it  was costing  more money.                                                                    
She  wondered  what  DOC  could  do  to  help  mitigate  the                                                                    
situation.  She referenced  the  plan to  reopen the  Palmer                                                                    
Correctional Center  and wondered  how the state  would find                                                                    
the funds.                                                                                                                      
                                                                                                                                
Ms. Sheehan understood that because  of minimum staffing and                                                                    
not being  fully staffed, there  was a lot more  overtime at                                                                    
the institutions. She noted that  the department was doing a                                                                    
new type  of recruitment and  thought if more  officers were                                                                    
hired it would  reduce overtime. She was happy  to follow up                                                                    
with  the department  and  get back  to  the committee  with                                                                    
further information.                                                                                                            
                                                                                                                                
Co-Chair  von Imhof  thought that  the percentage  of people                                                                    
doing overtime  versus full-time  employees had  been steady                                                                    
for  the last  decade. She  wondered if  the department  had                                                                    
been understaffed the whole time.                                                                                               
                                                                                                                                
Ms.  Sheehan  thought  there  had  been  perpetually  under-                                                                    
staffing.  She noted  that correctional  officers signed  up                                                                    
for overtime  during weeks  off. Additionally,  the officers                                                                    
worked automatic overtime when  a 12-hour shift was extended                                                                    
to  16  hours.  Some   institutions  were  more  chronically                                                                    
understaffed   than  others.   She  offered   to  get   more                                                                    
information from the department.                                                                                                
                                                                                                                                
Co-Chair von Imhof  thought it would be nice to  know if the                                                                    
mandatory overtime  was a  bargained concept,  or if  it was                                                                    
for another reason.                                                                                                             
                                                                                                                                
Ms.  Sheehan affirmed  that overtime  and holdover  language                                                                    
was bargained.                                                                                                                  
                                                                                                                                
Co-Chair von  Imhof asked if overtime  and holdover language                                                                    
was bargained for all unions.                                                                                                   
                                                                                                                                
Ms. Sheehan did not know  and stated that every contract was                                                                    
slightly different.                                                                                                             
                                                                                                                                
9:46:05 AM                                                                                                                    
                                                                                                                                
Ms.   Sheehan   referenced   slide  14,   "Bargaining   Unit                                                                    
Comparison  - Alaska  Public  Employees Association,"  which                                                                    
showed a  table with  a year by  year comparison.  She noted                                                                    
that APEA was the supervisor's  union. At the top, the table                                                                    
showed  the  standard  work  week. For  APEA,  there  was  a                                                                    
bargained change  from a  37.5-hour work  week to  a 40-hour                                                                    
work week for an approximate  cost of 6.6 percent. The other                                                                    
unions on  a 40-hour work  week were PSEA,  the Confidential                                                                    
Employee's Association (CEA), and LTC.                                                                                          
                                                                                                                                
Ms. Sheehan turned to slide  15, "Bargaining Unit Comparison                                                                    
-  Alaska  State  Employees  Association,"  which  showed  a                                                                    
table. She noted  that the ASEA standard work  week was 37.5                                                                    
hours, but there were some class 1 employees at 40 hours.                                                                       
                                                                                                                                
Ms.   Sheehan   considered   slide  16,   "Bargaining   Unit                                                                    
Comparison  - Alaska  Vocational Technical  Center Teachers'                                                                    
Association,"  which showed  a table.  the AVTECTA  standard                                                                    
work week was 7.5-hour days, 5 days a week.                                                                                     
                                                                                                                                
Ms. Sheehan displayed slide  17, "Bargaining Unit Comparison                                                                    
-  Confidential  Employees   Association,"  which  showed  a                                                                    
table. The  CEA moved  to a 40-hour  work week  the previous                                                                    
year and did not receive a COLA for the year.                                                                                   
                                                                                                                                
Ms.   Sheehan  highlighted   slide   18,  "Bargaining   Unit                                                                    
Comparison -  Inlandboatmen's Union," which showed  a table.                                                                    
She  noted that  the IBU  employees worked  week-on/week-off                                                                    
for 84 hours per week.                                                                                                          
                                                                                                                                
Co-Chair  von   Imhof  asked  if  the   IBU  employees  were                                                                    
currently working.                                                                                                              
                                                                                                                                
Ms. Sheehan stated that some of the employees were working.                                                                     
                                                                                                                                
Senator Wielechowski asked if  IBU employees were still paid                                                                    
if the  Alaska Marine Highway  System (AMHS) ships  were not                                                                    
running.                                                                                                                        
                                                                                                                                
Ms. Sheehan  stated that  some employees needed  to be  on a                                                                    
vessel to  make sure it  was safe. There was  a much-reduced                                                                    
workforce  when ships  were in  layup  or at  the dock,  and                                                                    
employees that were not working did not get paid.                                                                               
                                                                                                                                
Co-Chair von  Imhof asked  if there  would be  overtime paid                                                                    
when employees were on a ship that was not sailing.                                                                             
                                                                                                                                
Ms.  Sheehan  stated  that  marine  vessel  employees  would                                                                    
receive overtime if  there was an employee  to relieve them.                                                                    
She would inquire and provide further information.                                                                              
                                                                                                                                
Co-Chair  von Imhof  thought there  should  not be  overtime                                                                    
other than for mechanics.                                                                                                       
                                                                                                                                
Ms. Sheehan offered  to provide the list of  vessels and how                                                                    
many employees were on each.                                                                                                    
                                                                                                                                
Ms. Sheehan looked at slide  19, "Bargaining Unit Comparison                                                                    
- Labor,  Trades, and Crafts."  She reiterated that  LTC had                                                                    
moved to a 40-hour work week.                                                                                                   
                                                                                                                                
Ms. Sheehan addressed slide  20, "Bargaining Unit Comparison                                                                    
- Marine  Engineers Beneficial Association," which  showed a                                                                    
table.  She  noted  that  the  Marine  Engineers  Beneficial                                                                    
Association had  a 168-hour assignment and  worked two weeks                                                                    
on/two weeks off like the MMP.                                                                                                  
                                                                                                                                
9:49:35 AM                                                                                                                    
                                                                                                                                
Ms.  Sheehan   advanced  to   slide  21,   "Bargaining  Unit                                                                    
Comparison - Masters, Mates, and Pilots."                                                                                       
                                                                                                                                
Ms. Sheehan looked at slide  22, "Bargaining Unit Comparison                                                                    
-  Public  Safety  Employees Association  (PSEA-AA),"  which                                                                    
showed a table.  She noted that the  troopers, court service                                                                    
officers, and fire marshals worked a 40-hour week.                                                                              
                                                                                                                                
Ms. Sheehan  spoke to slide 23,  "Bargaining Unit Comparison                                                                    
-  Public  Safety  Employees Association  (PSEA-AP),"  which                                                                    
showed a table.  She added that the airport  police and fire                                                                    
officers  worked  80  hours  in a  14-day  work  period.  In                                                                    
Fairbanks, the  employees were  working 24-hour  shifts with                                                                    
three days on and six days off.                                                                                                 
                                                                                                                                
Ms.   Sheehan   referenced   slide  24,   "Bargaining   Unit                                                                    
Comparison   -  Teachers   Education   Association  at   Mt.                                                                    
Edgecumbe,"  which showed  a data  table that.  The teachers                                                                    
worked a standard work week of 40 hours.                                                                                        
                                                                                                                                
Ms.   Sheehan    displayed   slide   25,    "Department   of                                                                    
Administration  -  Championing  improvement in  the  State's                                                                    
performance and results."                                                                                                       
                                                                                                                                
Senator Wielechowski  asked if  Ms. Sheehan could  provide a                                                                    
similar spreadsheet that showed exempt employees.                                                                               
                                                                                                                                
Ms. Sheehan agreed to provide the information.                                                                                  
                                                                                                                                
Co-Chair von Imhof  asked about totals in  the final slides.                                                                    
She  wondered  about COLAs  by  year  and  what was  in  the                                                                    
aggregate  number.   She  knew   that  in   previous  years,                                                                    
healthcare costs had  risen quite a bit. She  wanted to know                                                                    
what  was  going  into  the number  and  if  the  cumulative                                                                    
increase was  higher than inflation.  She looked at  the bar                                                                    
graph on  slide 10  and considered  the comparison  of wages                                                                    
and  health insurance  for all  bargaining units.  She asked                                                                    
about  the  status of  the  Janus  decision [a  2018  United                                                                    
States  Supreme  Court  ruling that  limited  the  power  of                                                                    
unions to collect fees from nonmembers.]                                                                                        
                                                                                                                                
Ms.  Sheehan   noted  that  the  department   was  currently                                                                    
bargaining with some  unions to change language  that was in                                                                    
the  collective   bargaining  agreements.  There   had  been                                                                    
agreements reached under the  prior administration with some                                                                    
unions  for   some  language  that  did   not  compel  union                                                                    
membership.  There  was   outdated  contract  language  that                                                                    
parties were not following because  it was illegal after the                                                                    
ruling.  There was  a temporary  restraining  order, and  no                                                                    
practice  had been  changed other  than  membership was  not                                                                    
compulsory.  Dues  were  not collected  unless  an  employee                                                                    
signed up for membership in a union.                                                                                            
                                                                                                                                
9:53:14 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof asked how  the state knew which employees                                                                    
signed up.                                                                                                                      
                                                                                                                                
Ms. Sheehan informed  that employees could sign  up with the                                                                    
union, and a form was  forwarded to the division of finance.                                                                    
If an  employee never  wanted to become  a member,  the dues                                                                    
were never set up as a deduction.                                                                                               
                                                                                                                                
Co-Chair von Imhof asked if  there were approximately 15,000                                                                    
forms in the department's possession.                                                                                           
                                                                                                                                
Ms. Sheehan stated that the  department had all the forms of                                                                    
those employees that had signed up to be members.                                                                               
                                                                                                                                
Co-Chair von Imhof asked how many forms the department had.                                                                     
                                                                                                                                
Ms.  Sheehan did  not  have the  information  but agreed  to                                                                    
provide the number at a later time.                                                                                             
                                                                                                                                
Senator Wilson  asked how many  members had turned  in forms                                                                    
versus how many had opted out of union membership.                                                                              
                                                                                                                                
Ms.  Sheehan  stated  she  would  get  the  information  for                                                                    
Senator Wilson.                                                                                                                 
                                                                                                                                
Co-Chair  von Imhof  looked  at slide  5,  which showed  the                                                                    
number of  employees in 2019  for each bargaining  unit. She                                                                    
asked if the forms would need to be renewed each year.                                                                          
                                                                                                                                
Ms. Sheehan  thought part of  the pending  lawsuit concerned                                                                    
how often the form would have  to be renewed. Each union had                                                                    
a slightly different form.                                                                                                      
                                                                                                                                
Co-Chair  von  Imhof  asked  if  the  forms  were  paper  or                                                                    
electronic.                                                                                                                     
                                                                                                                                
Ms. Sheehan stated that the form was paper.                                                                                     
                                                                                                                                
9:55:10 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  asked if  there  was  savings to  the                                                                    
state  if an  employee decided  not to  be represented  by a                                                                    
collective bargaining unit.                                                                                                     
                                                                                                                                
Ms. Sheehan was not aware of savings to the state.                                                                              
                                                                                                                                
Co-Chair von  Imhof thought the question  was debatable. She                                                                    
questioned   the   savings   of  other   states   that   had                                                                    
incorporated the  Janus decision. She thought  there was not                                                                    
sufficient time to address the topic.                                                                                           
                                                                                                                                
Ms.  Sheehan  stated  that   employee  time  processing  had                                                                    
remained the  same. She thought  other states  had proceeded                                                                    
differently.                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof thought  the act  of collecting  dues on                                                                    
behalf of unions  using state payroll was  not the expensive                                                                    
part  of the  process.  She discussed  the  union's role  in                                                                    
collecting dues.                                                                                                                
                                                                                                                                
Ms. Sheehan affirmed  that there was staff  dedicated to the                                                                    
processing of the forms.                                                                                                        
                                                                                                                                
Senator  Wielechowski thought  there was  no savings  to the                                                                    
state if someone did not become a member of a union.                                                                            
                                                                                                                                
Ms. Sheehan  relayed that  the state  must pay  whatever was                                                                    
agreed to in the collective bargaining agreement.                                                                               
                                                                                                                                
Senator  Wielechowski assumed  that  the union  had to  keep                                                                    
representing the employee  even if she or he  was not paying                                                                    
dues.                                                                                                                           
                                                                                                                                
Ms.  Sheehan answered  in the  affirmative. She  stated that                                                                    
under  the Janus  decision,  the union  would  still be  the                                                                    
exclusive representative.                                                                                                       
                                                                                                                                
Senator  Hoffman asked  if the  area cost  differentials for                                                                    
troopers in  rural areas  of the  state calculated  into the                                                                    
numbers on the slide showing PSEA data.                                                                                         
                                                                                                                                
Ms.  Sheehan  answered in  the  affirmative  and stated  the                                                                    
differentials would be part of the gross pay.                                                                                   
                                                                                                                                
Co-Chair von  Imhof discussed the  agenda for  the following                                                                    
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:58:10 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:58 a.m.                                                                                          

Document Name Date/Time Subjects
021720 DOA 2020 Legislative Presentation SFIN.pdf SFIN 2/17/2020 9:00:00 AM
Labor Contracts 2020
021720 BU Profile Comparison FY 09-19-Senator VonImhof-January 2020.pdf SFIN 2/17/2020 9:00:00 AM
Labor Contracts 2020