SB 182-PUBLIC EMPLOYEE SALARY DIFFERENTIALS  9:43:13 AM CHAIR DYSON stated that the committee with take up SB 182. He noted that the Administration provided testimony at the previous hearing. He set forth that his intention is to get through 35 or 40 minutes of public testimony and asked the union representatives to come forward and testify. 9:44:14 AM BEN GOLDRICH, Union Representative, Marine Engineers' Beneficial Association (MEBA), Juneau, Alaska. 9:44:23 AM RON BRESSETTE, Regional Representative, International Organization of Masters, Mates & Pilots Union (MM&P), Juneau, Alaska, said he represents the licensed deck officers onboard the Alaska Marine Highway System (AMHS). 9:44:35 AM RICK DEISING, Regional Director, Inlandboatmen's Union of the Pacific-Alaska Region (IBU), Juneau, Alaska, said he is a 32 year retiree from AMHS. MR. GOLDRICH set forth that the members of the three unions are the Senators' constituents. He asserted that SB 182 will result in roughly a 10 percent pay cut for MEBA members across the board and penalizes MEBA members for being Alaskan citizens. He said Cost of Living Differentials (COLD) has been part of the AMHS wage for 30 years and enables members to live throughout the state. He stated that COLD was intended as an incentive for mariners to move to Alaska and it has been a success. 9:46:12 AM He continued that the overwhelming majority of MEBA members live in Alaska. He asserted that SB 182 targets only those members living in the state. He pointed out to the committee that SB 182 puts MEBA members in a strange place in addressing COLD when MEBA is actively in negotiations with the State. He remarked that early on in negotiations the Administration voiced their concern for COLD and MEBA has been negotiating in good faith throughout in an effort to come to a mutually agreeable conclusion. He asserted that SB 182 passage is asking MEBA to negotiate out of a hole. He noted that the all of the union bargaining units are concerned with SB 182 due to the current vacancy rates that range from 7 to 20 percent. He set forth that the intent is to bring young mariners into the state, live in Alaska, and work their careers in AMHS. He asserted that removing COLD from union member's wages is going to prevent the unions from bringing young talent into Alaska in addition to losing those with years of experience. He said at a time when wage really is all there is now, a 10 percent pay cut is just a killer and it is a big hit for AMHS moral. 9:48:35 AM SENATOR GIESSEL noted that a chief engineer's wage is $40.62 per hour in Alaska, plus $677.96 for non-watch pay. She asked what non-watch pay is. MR. GOLDRICH replied that non-watch pay is a payment that the chief engineers receive in lieu of overtime. He detailed that a chief engineer generally works a 12 hour day, but a day could be 18 hours long. Non-watch pay was intended to be based on 11 hours of overtime pay, but members work for beyond the 11 hours every month. SENATOR GIESSEL asked if the $677.96 is per pay period. MR. GOLDRICH replied that the $677.96 is a flat amount that the chief engineers receive per pay period regardless of how many hours they work. MR. BRESSETTE noted that Mr. Goldrich addressed concerns for all three unions. 9:51:07 AM MR. DEISING set forth that IBU represents the unlicensed AMHS employees. He said SB 182 will harm all Alaskans that work in the state. He detailed that IBU has 640 members in AMHS and 5 percent are from out of state. He asserted that a 10 percent pay cut is going to harm the lifestyle of every IBU member, harm Alaska communities, and will not entice new employees to work for AMHS. He pointed out that IBU members are well trained, first responders that wear multiple hats on ships. SENATOR WIELECHOWSKI addressed the 40 year old contract language which basically says the base rate is based on a Seattle rate, but COLD is provided for employees that live in Alaska. MR. BRESSETTE answered yes. SENATOR WIELECHOWSKI continued that if COLD is taken away, every Alaskan member will receive a pay cut, while the people who live outside of Alaska keep their wage the same. MR. BRESSETTE answered yes. 9:54:11 AM SENATOR COGHILL noted that the contract with COLD was set in 1977. He asked what the 1977 differential is versus present day. MR. GOLDRICH answered that the differential was set between Seattle and Anchorage. He said currently the State contends that the cost of living in Seattle and Anchorage is roughly the same. He remarked that the State's cost of living assertion is probably true if an individual lives in downtown Seattle where housing prices are sky high. He asserted that it is vastly more expensive to live in Alaska than the Lower 48. He pointed out that MEBA members do not receive step-increases, but receive a negotiated wage that Alaska members base their living on with COLD. 9:56:00 AM SENATOR COGHILL asked if it would be more advantageous to negotiate a wage with COLD due to Alaska's dynamic geographical issues. MR. GOLDRICH answered that COLD is a better fit for AMHS and noted that the State does not offer geographical differential in negotiations. He said starting from 10 percent less with a geographical differential would only benefit day-boat members. SENATOR WIELECHOWSKI set forth that the three unions are in negotiations with the Administration. He asked if there is anything to stop the Administration from coming to the bargaining table and renegotiate the SB 182 provision. 9:57:50 AM MR. GOLDRICH replied absolutely not. MR. DEISING added that COLD has been a topic with the Administration. He asserted that union members are very passionate about keeping the benefits they have and serving Alaskans to the best of their ability. MR. GOLDRICH addressed the Administration's concerns into nonresidents receiving COLD and noted that over the past 12 years only 1 member has lost in arbitration. He said it is the State's responsibility to take members to task who are nonresidents. He asserted that only Alaskan members are receiving COLD. 10:00:40 AM SENATOR WIELECHOWSKI noted the unusual language in the agreement that dates back a long time. He remarked that the Legislature always talks about Alaska hire and encouraging people to live in Alaska, COLD is actually a pretty clever way to do that. MR. GOLDRICH responded that COLD works. SENATOR GIESSEL stated that the Legislature encourages Alaska hire. She referred to the information provided to her and noted that there are substantial benefits to living in Alaska outside of COLD. She pointed out that after 5 years of service, an AMHS- Alaska resident annually receives 420 vacation hours with 180 sick-leave hours and an AMHS-nonresident receives 160 vacation hours with 96 sick-leave hours. She asserted that AMHS employees receive significant benefit as Alaska residents in addition to COLD. MR. BRESSETTE replied that in the MM&P contract, there is no difference between Alaska residents and out of state residents as far as vacation accumulation or sick leave accumulation. He pointed out that everyone gets the same thing for sick-leave accumulation and vacation hours is based on hire-date. 10:02:51 AM SENATOR GIESSEL replied that she will follow up with the State and noted that her information differs from what Mr. Bressette had noted. CHAIR DYSON addressed Senator Wielechowski and noted that parts of the negotiation are prescribed due to the 1977 law. He noted that the Administration has addressed a geographical differential in recent negotiations. MR. GOLDRICH answered that if the State is going to offer up geographical differential pay, the unions are looking forward to hearing their proposal in negotiations. CHAIR DYSON stated that he may be mistaken and noted his understanding that the Administration is aware of a potential pay cut. He said he is hopeful that the Administration will maintain pay and benefit levels that will keep union members happy. He announced that the committee is going to run out of time and noted that two or three pages of testifiers have signed up. He announced his plan to provide time for testifiers who are online and in person. He asked that the testifiers not repeat what had already been said unless it is very necessary. 10:05:13 AM CHRIS OLSEN, Chief Engineer, Motor Vessel (MV) LeConte, Alaska Marine Highway, Wasilla, Alaska, noted that MV LeConte is home ported in Juneau and he is a member of MEBA. He stated that he is testifying against SB 182. He asserted that SB 182 penalizes him for being an Alaska resident. He said he has been an AMHS crew member for 18 years and noted that he relocated to Alaska in 1986. He said there is no comparison between the maritime unions' COLD and the geographical difference for the other regular state Alaska unions; the two are completely different and unrelated to each other. He asserted that SB 182 is specific to the maritime union's COLD payment. He asserted that the 1977 contract agreement rewards employees who choose to live in Alaska and keeps wages within Alaska while supporting communities. He noted that he does not agree with the study that claims that the cost of living in Seattle is equal to Anchorage and added that he pays for commuting to Juneau on a biweekly basis. 10:08:29 AM PATRICK PHILLIPS, Crew Member, Motor Vessel Fairweather, Alaska Marine Highway System, Alaska Department of Transportation & Public Facilities, Juneau, Alaska, said he moved to Alaska 20 years ago. He asserted that SB 182 punishes him and changes the deal he originally agreed to. He asserted that the passage of SB 182 will be a hardship to him. 10:10:10 AM JARED BARLOW, Ordinary Seaman, Motor Vessel Kennicott, Alaska Marine Highway System, Alaska Department of Transportation & Public Facilities, Klawock, Alaska, stated that he is an IBU member. He said he is speaking against SB 182 and asserts that the bill's passage will hurt him. He remarked that there is a cost living difference between Alaska and Seattle. 10:13:21 AM TERESA GILBERT, Chief Steward, Motor Vessel Kennicott, Alaska Marine Highway System, Alaska Department of Transportation & Public Facilities, Juneau, Alaska, stated that she is buying a home in Juneau and sets her budget according to her wages. She said a cut in pay will be detrimental to her finances. She noted that she has worked 30 years for AMHS and intends to retire in Juneau. CHAIR DYSON replied that the committee wants Ms. Gilbert to stay in Juneau. He asked if the union representatives had any closing comments. MR. GOLDRICH answered no. CHAIR DYSON noted that he has about nine pages of testifiers and explained that it is very difficult to get through the entire list. He encouraged written testimony to be submitted and noted that SB 182 will be heard in other committees in addition to having to go through the House as well. He asked representatives from the Administration to address the committee. 10:16:12 AM NICKI NEAL, Director, Division of Personnel and Labor Relations, Alaska Department of Administration, Juneau, Alaska. 10:16:28 AM KATE SHEEHAN, Deputy Director, Labor Relations, Division of Personnel and Labor Relations, Department of Administration, Juneau, Alaska. CHAIR DYSON asked to clarify that not having COLD will result in AMHS employees taking up to an $18,000 decrease per year. He remarked that Alaska residents will be discriminated against because they would not get something even though they have a higher cost of living and the accusation that there will be no geographical differential that many other state employees receive. MS. SHEEHAN addressed the bargaining piece and stated that the DOA's bill interruption is that there would no longer be COLD negotiations. She pointed out that there have been discussions on COLD and geographical differential. She noted that the 2008 McDowell Study used a national study to show that there is no COLD between Seattle and Anchorage. She said the Administration is in the process of having geographical differential conversations with the three unions and referenced new geographical differential rates implemented with other state unions. 10:18:22 AM CHAIR DYSON asked to clarify that the Administration's use of the word "COLD" means the term of art that is in the statute. He inquired that the bill's passage will allow the Administration to make adjustments based on where people's jobs are, or where people live as the standards used by the State for other employees. MS. SHEEHAN answered that geographical differential is more difficult with the marine units because they can live wherever they choose to live. She added that AMHS employees generally work weekly on-off based schedules and can choose to live in a place other than their change port. She pointed out that AMHS has three day-boats in Metlakatla, Juneau, and Cordova; that is clearer to address. She pointed out that the geographical differential was for the different intrastate cost of living and COLD was for interstate. CHAIR DYSON pointed out that testimony implied that passing the bill just means an $8,000 to $18,000 wage cut. He asked to verify that it is the State's intent to negotiate an adjustment to keep AMHS' compensations competitive. MS. NEAL answered that there will be options gained through collective bargaining and those have already been discussed with the unions regarding changes to the geographic rates within Alaska. She pointed out that there were discussions on protection for current employees on wage reduction. 10:20:52 AM SENATOR WIELECHOWSKI read the language from the current MM&P Collective Bargaining Agreement with the State as follows: Section 17.02, this is something you negotiated and you agreed to, it says, "It is agreed that the cost of living differential between Alaska and Seattle, which is referred to in AS 23.40.210, shall be a mandatory subject for collective bargaining, and shall not be changed, modified, adjusted, re-determined, or altered in any way by the state of Alaska unilaterally and no change shall be made without the consent and agreement of the union." He asked Ms. Neal to verify that the section he read was the section that the Administration negotiated. MS. NEAL answered yes, at one point in time many years ago. SENATOR WIELECHOWSKI asked if Section 17.02 is currently valid. MS. NEAL answered yes. SENATOR WIELECHOWSKI asserted that the Department is violating Section 17.02. MS. NEAL replied that she disagreed. SENATOR WIELECHOWSKI asked for an explanation as to how the Administration is not involved in an unfair labor practice. MS. NEAL answered that the bill is irrespective of the negotiations currently being held with the unions. SENATOR WIELECHOWSKI responded that the bill says COLD shall be changed without the consent and agreement of the union. He asked if the Administration has the unions' consent and agreement to change COLD. He pointed out that he heard unanimous testimony that the Administration did not have consent and agreement from the unions. MS. SHEEHAN replied that the Administration is currently bargaining with the unions on COLD and the process is irrespective of the bill. She said the Administration is bargaining the COLD and geographical differentials. She remarked that the whole contract with the unions is open for negotiations and the Administration is not violating the current contract and is not involved in unfair labor practices. 10:22:55 AM SENATOR COGHILL inquired if the Administration is presently bound statutorily to COLD. MS. SHEEHAN answered yes. SENATOR COGHILL asked that the bill's passage would only apply to prospective bargaining agreements. MS. SHEEHAN answered yes. SENATOR COGHILL asked if Senator Dyson invited the Administration to you comment on the bill. MS. SHEEHAN answered yes. SENATOR COGHILL opined that he did not believe that the Administration was acting in bad faith by commenting on a bill that would change prospective bargaining. He stated that the unfortunate part is the unions and the Administration is in the middle of bargaining. CHAIR DYSON added that he understands Senator Wielechowski's point is not that these people discuss it, but indeed that it is a part of negotiation in contrast to the law. He asked if anyone in the committee room is a labor attorney. SENATOR WIELECHOWSKI [raised his hand.] CHAIR DYSON asserted that his previous statement was an important question. He said he will hold SB 182 over. He asked that someone from the Administration have a labor attorney at the next meeting in order to address the issues raised by Senator Wielechowski. He noted that he is sympathetic to the bill, but added that he has the question about having SB 182 pass in the midst of negotiations. He apologized and asked that individuals who did not get a chance to testify to submit written testimony. He announced that SB 182 is set aside.