CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:45 p.m. and announced SB 289 (APPROP: COST OF OF CERTAIN LABOR AGREEMENTS) to be up for consideration. COMMISSIONER NANCY USERA, Department of Administration, said there is one correction to the Funding Information section which should say General Fund $92,000 and Other Funds, which are Marine Highway Funds, should be $276,630. She said there was a packet for each of them that contained summaries of the two agreements. In the Alaska Vocational Technical Center Teachers (AVTEC) agreement, she said, they are changing to a new teacher based salary schedule and are eliminating the automatic 3% salary increases. Included in some of the changes was a management rights clause which gives much more latitude to management in terms of determining key things like overtime, work rules, and hours. Layoff procedures were clarified and sabbaticals for teachers were only at the employer's discretion and only after 7 years of service. In terms of their goal to provide greater flexibility and more productivity and accountability, there was a conversion. The annual leave provision was eliminated and replaced with 5 personal leave days instead. The dispute resolution procedure was clarified. This contract also delineates that additional education credits have to be job related. On health insurance they were able to get all of the units to make a choice either on the employer provided plan which will be provided or they could convert to a trust of a comparable amount of money and the union can provide its own insurance to its members. SENATOR SALO asked if this was an entirely contribution defined plan. COMMISSIONER USERA answered that it was before. SENATOR SALO asked if the employee has any protection from the plan becoming absolutely watered down? COMMISSIONER USERA said no and explained that each unit was given their choice as she mentioned. She said she believes that there is no benefit more important to an employee than their health benefits. Her interest is in trying to provide the best, most meaningful benefits within the funds available to do that. She recognizes that benefits of a laborer would be different from those of a worker behind a desk. SENATOR RIEGER asked if it was the state's policy to target a cost to the employer for his plan? COMMISSIONER USERA answered no and said the state's contribution was currently at $423.50. One change now is that everyone has to pay something to go to the doctor which has made a big difference in cost containment. SENATOR RIEGER asked if it was policy to not increase the $423.50? COMMISSIONER USERA said she couldn't imagine a plan that would pay more than that. She said there will be more and more effort towards cost containment because of national concern with health care. As for the Licensed Alaska Marine Highway Engine Room Employees (MEBA) agreement, she said, $38,800, an amalgamation of small things, is a supplemental associated with the current fiscal year. They have also eliminated management's obligation to negotiate permissive subjects of bargaining. MEBA has three shore-side port engineers that are represented by MEBA who are actually shore-side personnel and there were a number of changes to their contract which better represents their hybrid situation. For instance they reduced paid holidays from 12 to 11, they eliminated penalty pay for early call back from vacation, and eliminated overtime except for preapproved hours only. They firmed up the language on the drug testing policy. Maintenance and care went from $40 to $45 per day. Personal leave is tied to a reopener of wages in the fall of 1994. The theme for these labor contracts has been to try to contain the costs of each of these bargaining units, but to allow as much flexibility as possible in trying to rearrange the wages and benefits to increase productivity for the employers and still provide meaningful benefits for the employee. Rather than lock in a cost of living increase, they tied a reopener this year on wages to the leave issue so if there would be an increase in wage there would be a decrease in the leave associated with that. For health insurance, they were able to get them onto the employer plan with a reopener in the fall of 1994. The 2.9% cost of living increase goes into effect the first of September. COMMISSIONER USERA said she believed these agreements very effectively represent a cost containment, increases in productivity, and changes in some areas or incremental reductions. Number 309 SENATOR SHARP asked what kind of work week the MEBA people were on? MILA DOYLE, Labor Relations Analyst, said it depends on which system they are assigned. Southeast employers work 84 hours pay periods, week on, week off. The southwest system employees work 120 and 186 hours - essentially every day on and a comparable amount of time off. SENATOR SHARP asked how many hours annually they worked. MS. DOYLE answered she couldn't give him an exact figure on that. SENATOR SHARP said he would like to see what the average hours worked would be for a fifteen year employee. SENATOR LINCOLN asked if she could explain the discipline for drug testing. COMMISSIONER USERA explained that a lot of the controversy lies in not having the language clear. SENATOR SHARP moved to adopt CSSB 289(L&C). There were no objections and it was so ordered. SENATOR KELLY moved to pass CSSB 289(L&C) from Committee. There were no objections and it was so ordered.