By Jenny Neyman
The arbitrator had spoken. The next meeting of the bargaining teams for the Kenai Peninsula Borough School District, the Kenai Peninsula Education and Education Support associations will demonstrate how much of the arbitrator’s advice will be heeded.
After a year of negotiations, including a round of mediation, between the district and associations failed to produce an agreed-upon contract to cover a three-year period beginning with the current 2012-13 school year, the bargaining teams presented their proposals and arguments regarding the final few sticking points of the contract to arbitrator Kathryn T. Whalen on Oct. 1 and 2, with written arguments being accepted up through Nov. 21. Whalen issued her recommendation Dec. 21.
The format is nonbinding arbitration, so her judgment does not automatically settle the remaining disputes, most notably over financial issues of salary and health insurance. The teams still must meet and come to agreement, but now have the guidance of an unbiased third party to help break the stalemate.
Pegge Erkeneff, communications specialist for KPBSD, is unavailable for comment until Jan. 2, though she sent a press release Dec. 21 stating that the KPBSD Board of Education would review the arbitrator’s advisory award/opinion in executive session Jan. 14, and that the district and associations’ bargaining teams would meet at 1 p.m. Jan. 22.
LaDawn Druce, president of KPEA, said that the association teams were eager to get back to the table and were pleased with the arbitrator’s recommendations.
“I just felt like overall it was a real good decision and very favorable for our cause going back to the table. Hopefully, given that, we can come to some kind of an agreement very quickly,” she said.
The biggest sticking points have been regarding the highest-dollar areas of the contract: salary and health care.
The associations’ proposal was to link the salary schedule to the Consumer Price Index for Anchorage to ensure salaries were keeping up with inflation. To do that, the associations propose that, for each of the three years of the contract, salaries increase equal to the previous year’s consumer price index for Anchorage, issued each July by the Alaska Department of Labor. The increase, then, for fiscal year 2013 would be the 2.8 percent index released in July 2012, and for fiscal year 2014 the increase would be 2.5 percent. The CPI for 2013 isn’t yet known, to determine the fiscal year 2015 increase, so the associations suggested a 2 percent estimator.
Throughout negotiations the district team has resisted linking salary increases to the CPI, because that would invite uncertainty into the budgeting structure, when other factors already are difficult to pin down, such as the extent of legislative and borough funding for schools. Instead, the district proposes a 1 percent increase for each year of the contract, as well as an additional $600 each year of the contract for KPEA employees, and $300 for KPESA employees.
Whalen recommended that the pay scale for each of the three years of the contract be increased by 2 percent.
“I have taken into account in my recommendation the district’s concerns that the (Base Student Allocation funding allotment from the state) has not increased since (fiscal year 2011), the uncertainty of state funding, differences in other jurisdictions identified as comparable by the associations, the compounding effect of salary base increases and district responsibility to employees, students and the educational community,” Whalen wrote.
“I have recommended a 2 percent increase in each year because I am convinced by the evidence that members of the associations deserve a base percentage increase to the salary schedule that is more than the district’s proposal of 1 percent in each year. Yet, with the issue of health care also an important financial issue, the associations’ combined economic proposals are too much,” Whalen wrote.
Druce said she was pleased with the recommendation. Though it did not support the associations’ proposed link to the cost of living index, it was a higher salary increase than the district had been proposing.
“I felt really good about the salary at 2 percent, even though it wasn’t cost of living, it was obviously more than the 1 percent,” she said.
The district’s proposal on health care is to split monthly contributions between the district and employees, with the district paying $1,330 in fiscal year 2013, $1,350 in FY 2014 and $1,380 in FY 2015, and employees paying $270 per month each of the three years. Under the previous contract (which is extended as the status quo until a new contract is ratified) excess expenditures beyond the estimated monthly cost of the district’s self-funded health care plan are split 50-50 between the district and employees. In the new contract the district proposes that those excess expenditures be divvied up with the district paying 60 percent of whatever those excess costs may be, and employees paying 40 percent.
The district also proposes to develop a Health Care Task Force, made up of employees, administration and health care experts, charged primarily with finding ways to contain health care costs. The district also would like to scale back health care contributions for employees who participate in a KPBSD Wellness program, whereby participating employees pay 35 percent of the cost of excess expenses, and the district 65 percent, in FY 2014; and 30 percent, with the district paying 70 percent, in FY 2015.
The associations propose a flat, 85 percent district contribution and 15 percent employee contribution each year of the contract for all health care costs, doing away with a 50-50, 60-40 or any other different split of contributions to cover excess expenses. The associations also propose eliminating any additional contributions for family member coverage.
Whalen recommended a graduated cost split of 80 percent by the district and 20 percent by employees the first year of the contract, 83 percent and 17 percent the second year and 85 percent and 15 percent the third year. She also recommended doing away with the 50-50 split for additional costs and removing additional fees for family coverage. She endorsed the district’s proposal for a Health Care Task Force.
“It is undisputed that there have been significant increases in health care costs. The record also established significant adverse impacts on members of the associations’ bargaining units. Both parties’ proposals recognize the need to reduce the current amount paid by employees. The parties just have different approaches for achieving a more reasonable sharing of such costs for the term of the next agreements,” Whalen wrote.
“The bottom line is: The associations made a compelling case for the elimination of the 50-50 percentage split. And, I agree that straightforward percentage splits are more predictable and easily administered. As said above, I have fashioned my recommendations considering both changes to the salary schedule and health care. I find a graduated approach to reaching a percentage split of 85 percent-15 percent is financially affordable and takes into account district concerns of sufficient funding and maintaining adequate reserves,” Whalen wrote.
Druce said she expected the associations to be pleased with Whalen’s recommendation for doing away with the 50-50 split of cost overruns.
“The recommendations in health care were huge for us because that, quite honestly, is really the biggest concern, I believe, with our members is that we have got to control those out-of-pocket costs,” Druce said.
Whalen weighed in on a few other unresolved issues that have been kicked back and forth between the negotiating teams. Among them was compensation for extracurricular positions. The associations proposed linking the salary of an extracurricular position to the salary schedule, as a percentage tied to the teacher’s base salary, rather than a fixed dollar amount. Whalen did not recommend that proposal.
Neither did she recommend the associations’ proposal that each certified staff member be compensated with the value of one day per diem each quarter for increased professional responsibilities.
The district sought to exclude certain rural communities from the automated substitute system, a proposal that Whalen recommended.
On donation of sick leave, Whalen sided with the associations. The sick leave bank provision in the previous contract, which allows employees to donate sick leave hours that co-workers can use when in need, included a sunset clause. Both sides propose striking the sunset language so that the program can continue, though the district proposes adding a restriction that employees may not donate sick leave until they maintain a 320-hour sick leave balance. Whalen recommended that the program continue without the district’s proposed restriction.
If a contract is agreed upon by the negotiating teams, it must then be approved by the KPBSD Board of Education and the KPEA and KPESA memberships. Any salary or benefits changes in the contract would be retroactively applied to its intended start date at the beginning of the 2012-13 school year.