HOUSE BILL NO. 456 "An Act making appropriations to satisfy the agreed-upon monetary terms of certain collective bargaining agreements for certain public employees; and providing for an effective date." NANCY BEAR-USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION testifie1d on behalf of HB 456. She explained that HB 456 would ratify labor contracts negotiated by the Department. HB 456 would make a total appropriation of $368,630.0 thousand dollars to satisfy the monetary terms of collective bargaining agreements with the Alaska Vocational Technical Center Teachers' Association (AVTEC) and the Marine Engineers' Beneficial Association (MEBA). She provided members with a list of the Department's contract negotiation goals and objectives (copy on file). She stressed that the Department's goals are to: * Maximize the quality, cost effectiveness, and productivity of government services to the public; * Enhance management flexibility to respond effectively to changes in economic conditions and operational needs; * Realign the cost of wages and benefits to, bring the state's compensation package back into appropriate standards, reflect the current and foreseeable economic environment, and prioritize benefits and funding to meet labor and managements's common interest in providing for 2 employees' greatest benefit needs; and * Modify the contract to provide opportunities for improving productivity, accountability, consistency, and efficiency of state government operations. Commissioner Usera emphasized the Department's desire to provide a more flexible benefit package. She stressed the importance of employee involvement. She maintained that growth and inflation factors must be included in considerations. She reminded members that during the time the Alaska pipeline was being constructed the state had difficulty attracting and maintaining qualified employees. She asserted that one of the goals of the Department is to continue to attract and maintain qualified employees. Commissioner Usera provided members with a summary of the state's eleven bargaining units (copy on file). She reviewed the status of each of the bargaining unit's labor contract negotiations. Commissioner Usera discussed the AVTEC contract. She observed that the unit is comprised of 36 employees who are affiliated with the National Educational Association. She noted that the contract contains: * A management rights clause; * Clarification of layoff procedures, specific to the facility; * Added, at employer discretion, sabbaticals after seven years of continuous service; * Eliminated and cashed out FY 95 annual leave, (employees now receive five days of annual leave and sick leave.) * Added complaint procedures for disputes other than interpretation of contract; * Clarified that additional educational credits must be job-related; * Allowed a COLA of up to 2 percent; * Established a per employee health coverage cost to allow unions to determine individual packages. Co-Chair Larson noted that HB 456 funding information is incorrect. He observed that sections 2 and 3 make 3 appropriations from the Alaska Marine Highway System Fund. Funding contained in section 2 was added to other funds. Section 3 was added to general funds. He suggested that, in order to maintain consistency, funding in sections 2 and 3 should be listed together. DAN SPENCER, FISCAL ANALYST, OFFICE OF THE GOVERNOR noted that the Office of the Governor advises that appropriations from the Alaska Marine Highway System fund be listed as other funds. Representative Martin requested information regarding frequent flyer mileage. Commissioner Usera noted that negotiations by the previous administration awarded ownership of frequent flyer miles to employees through a letter of agreement. Representative Martin expressed concern that the highest paid employees receive the best benefit packages. Commissioner Usera noted that health coverage benefits are a set amount per employee. Retirement benefits are tied to salary. Commissioner Usera provided members with a detailed breakdown of the MEBA contract (copy on file). Co-Chair MacLean asked if the Department of Administration had considered a unilateral COLA freeze. Commissioner Usera explained that the Department has placed a COLA freeze on exempt employees. She observed that the state is under obligation to bargain with other units. Representative Brown asked how many employees participate in the MEBA Vacation Committee. Commissioner Usera clarified that 4 or 5 employees participate on the committee. MILA DOYLE, LABOR RELATIONS ANALYST explained that employees meet 2 to 3 times a year. Issues are resolved in one to five days. Representative Navarre MOVED to report HB 456 out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. HB 456 was reported out of Committee with no recommendations.