SENATE BILL NO. 182 "An Act relating to salary differences in collective bargaining agreements subject to the Public Employment Relations Act that are based on a difference in the cost of living outside the state and the cost of living in the state; and providing for an effective date." 9:07:52 AM SENATOR FRED DYSON, noted that the Department of Administration had created a spreadsheet, "Top Three Earners - Marine Units", which charted the incomes of the top three earners in the three bargaining units. He stated that a point of contention in the bargaining units was that employees with seniority got to choose routes and had first choice of overtime hours. He said that the most senior employees did well financially and workers lower in the ranks were not offered a fair chance for overtime. He felt that this could restrict a new employee's opportunities for professional growth. 9:10:21 AM Senator Olson asked why the bill had not been initially presented as a fix for outdated statutes. Senator Dyson replied that he could only speculate, but thought that the leadership at the time had not wanted to address a tough issue and anger the unions. 9:11:07 AM Vice-Chair Fairclough shared that the administration had issued a response to her question from the previous hearing of the bill (copy on file). She wondered what the term "A- days" meant. NICKI NEAL, DIRECTOR, DIVISION OF PERSONNEL AND LABOR RELATIONS, DEPARTMENT OF ADMINISTRATION, replied that A- days were typically accrued in the southwest system; an employee accrued a day of leave for every day that they worked. She said that when the employee was not at work they turned in leave so that they had the ability to work 365 days a year. 9:12:32 AM KATE SHEEHAN, DEPUTY DIRECTOR, DIVISION OF LABOR RELATIONS, DEPARTMENT OF ADMINISTRATION, explained that for the A-days days, with the one crew system, employees worked 3 to 6 months with no break. A day of leave was accrued for each day worked. 9:12:53 AM Vice-Chair Fairclough inquired whether the route of the vessel interfered with regularly changing crews. Ms. Sheehan replied in the affirmative. She said that the routes were longer; crossing the Gulf of Alaska. 9:13:12 AM Vice-Chair Fairclough asked whether employees accumulated overtime on those long routes, in addition to the day of leave. Ms. Sheehan replied that it would depend; employees worked 8 hour days and could potentially accrue overtime, in addition to the A-days. 9:13:41 AM Vice-Chair Fairclough inquired whether the standard was 8 hours with the stipulation of 40 hours per week. Ms. Sheehan replied that there was daily overtime; if an employee worked in addition to 8 hours in one day, they would receive overtime for that day. 9:14:14 AM Vice-Chair Fairclough understood that employees were accumulating sick leave and annual leave on top of the earned day of leave. Ms. Sheehan responded that it would depend on which union the employee belonged to. She explained that the Marine Engineers' Beneficial Association (MEBA) gave A-days or personal leave but did not offer annual or sick leave. The Inland Boatmen's Union (IBU) offered a choice between annual leave, sick leave, or A-days. She furthered that Masters, Mates and Pilots (MMP) did not accrue A-days, instead they received a lump-sum payment in lieu of a rate. 9:14:50 AM Vice-Chair Fairclough understood that the accrual rate worked as such: 1 year = 2 - 4 weeks of leave (depending on your union) 2 years = 4 - 6 weeks of leave 3 years = 4 - 8 weeks of leave 4 years = 8 - 9 weeks of leave She surmised that the cap was at 8 - 9 weeks. She queried whether employees received annual or sick leave. Ms. Sheehan responded that if an employee accrued annual leave then they also accrued sick leave on days that were not A-days. 9:15:52 AM Co-Chair Meyer wondered how the current negotiations with the union were going. Ms. Sheehan replied that the administration was going into negotiations today with MMP; unfortunately and agreement had not been made by the 60th day, which was Friday, March 21, 2014. She said that negotiations were ongoing and that some progress had been made, but some significant issues were still contentious. 9:16:51 AM Co-Chair Meyer expressed frustration that the legislature should not be involved in the collective bargaining process. He would leave the bill's passage up to the will of the committee, but maintained that the legislature should not be involved in union negotiations. 9:18:03 AM Senator Dyson responded that the bill spoke to one component that was in statute and was therefore not bargain-able. He felt that the current administration had proposed the legislation due to the impending financial situation as a way to rein in spending. He stressed that there was a desire to drive down the mandatory personnel costs. He stated that the budget for personnel costs in the Alaska Marine Highway System was alarming. He believed that the bill was before the committee because it was the work of the legislative finance committees to oversee cost containment. 9:20:06 AM Senator Dunleavy requested clarification that the bill would take the issue out of statute but would not prevent it from being negotiated back in sometime in the future. Senator Dyson responded in the affirmative. Senator Dunleavy understood that if the system found itself struggling to find qualified workers to fill positions in the future then incentives would be built into the agreements of future negotiations. Senator Dyson responded that it was possible. He noted that there was an internal problem of employees lower in seniority not being able to get the time it took to qualify for the next license, which would open entry level positions. 9:21:29 AM Senator Dunleavy thought removing the statute would not impact the negotiations process because it did not create a cap on salaries or benefits. 9:22:07 AM Senator Hoffman wondered whether the immediate effective date could extend to a later date. Senator Dyson responded that the hard date was meant to be motivational. 9:23:15 AM Senator Hoffman agreed that the legislature should not be introducing legislation that would affect or impact negotiations. He asserted that it was not the committee's place to interject legislation that would color the negotiations of the bargaining unit. Co-Chair Meyer noted that the effective date would coincide with the fiscal years. 9:23:52 AM Senator Hoffman rebutted that it could take effect during a fiscal year further in the future. Senator Dunleavy clarified that the bill would not prevent future negotiations and believed that the effective date should remain as written. 9:24:32 AM Senator Dyson said that the bargaining unit had substantial leverage. Co-Chair Meyer was not convinced that the effective date needed to be changed. Senator Dyson thought that the administration believed that it was important that the legislation be implemented as soon as possible. He felt that the administration had been generous to grandfather in the existing employees. He said that if moving the effective date was what it was going to take for the bill to pass then so be it. 9:26:45 AM AT EASE 9:26:54 AM RECONVENED Vice-Chair Fairclough MOVED to REPORT CSSB 182(FIN) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 182(FIN) was REPORTED out of committee with no recommendation and with a new indeterminate fiscal note from the Department of Transportation and Public Facilities. 9:27:15 AM AT EASE 9:30:19 AM RECONVENED