By Jenny Neyman
Negotiating teams for the Kenai Peninsula Borough School District, Kenai Peninsula Education Association and Education Support Association are headed back to the bargaining table Wednesday with just one remaining area left to hammer out in contract talks that have been ongoing since last January.
Negotiations went before nonbinding arbitration in October, with the arbitrator’s advisory report released in December. Teams reconvened Jan. 22, where the district presented what it termed its “last best offer.”
The proposal adopts many of the arbitrator’s recommendations, including an annual salary increase of 2 percent each of the three years of the contract. In health care, the district is offering to shoulder a greater portion of the cost of the district’s self-funded insurance, lowering participating employees’ monthly premium to $291 per month, down from the $340 per month they were paying in fiscal year 2012. The district also agrees to eliminate the additional amount employees were contributing for dependent, spouse and family coverage.
The district also agreed to do away with the 50-50 split on cost overruns of the health care plan. In the previous contract, if health care expenditures exceeded the predetermined monthly contributions from the district and employees, those cost overruns were split 50 percent by employees and 50 percent by the district. Now if there are cost overruns, they will be paid at a rate of 80 percent by the district in the first year of the contract (fiscal year 2013), 83 percent in year two (FY2014) and 85 percent in year three (FY2015), with employees paying the resultant 20 percent in year one, 17 percent in year two and 15 percent in year three.
All this was welcome news to the associations in the closed-to-the-public bargaining session Jan. 22. There was just one deviation in the district’s offer from the arbitrator’s recommendation. The district is proposing changes to the membership and authority of the Health Care Committee, to prevent changes in health care coverage without agreement by district representatives and association members.
The district is proposing to eliminate one KPEA seat and add three seats to be appointed by the superintendent. Currently the committee consists of four KPEA members, three KPESA members and one Kenai Peninsula Administrator Association member. The district also proposes requiring a supermajority of 75 percent in any vote on changes to district benefits.
Also in the proposal is the stipulation that the district would not be required to adopt changes if they resulted in violations of established laws or regulations, altered the administration or management of health care benefits, resulted in a cost increase to the plan of more than 5 percent or would be detrimental to the financial interests of the district, as determined by the superintendent.
According to Pegge Erkeneff, communications specialist for the district, the changes are meant to safeguard the finances of the district, as it is proposing to shoulder additional health care contributions.
“When the district becomes responsible for 85 percent of every dollar spent, in contrast to 50 percent, the district believes that it is reasonable and necessary to have representation on the committee that impacts district finances,” Erkeneff stated.
LaDawn Druce, president of KPEA, said that the associations needed time to consider the district’s proposed changes to the Health Care Committee, as Jan. 22 was the first time such a change had been brought up.
“We started out pretty positive at the table on (Jan. 22). They made statements basically that they were prepared to award the arbitrator’s decision. And that was, ‘Wow, OK. I thought we were going to sit here and argue about salary or the 50-50 some more.’ But we had no idea that was contingent on this complete restructuring of the Health Care Committee,” Druce said. “We weren’t able to come to an agreement because of this major, last-minute overhaul change. It was the very first time this was brought up.”
The bargaining session Jan. 22 broke for caucus at about 9 p.m. without an agreement, and did not resume that night. The associations needed time to think through the proposed changes, Druce said.
For instance, Druce posited, would the change in committee makeup result in disproportionate representation for association members — the bulk of the users of the health care plan?
“It says the superintendent gets to appoint three people — it doesn’t even explicitly say they have to be employees,” Druce said. “And then there’s the concern of the kind of overriding power the superintendent might have. So we’re just trying to work through things like that.”
Druce said that the associations didn’t feel like the district team was entertaining of questions and more discussion so late on Jan. 22, so they’ve invited the district back to the table in an open session Wednesday, to which the district team agreed. The associations plan to ask clarifying questions about the proposed committee changes and submit their own proposal.
The worst-case concern for the associations, Druce said, is that changes to the plan won’t be able to be made under the new structure, or that gains employees have made in health care coverage and in cutbacks in premiums and costs will be jeopardized.
“Our members have said time and time again, it’s really been the health care costs that have been problematic for them over the last few years,” Druce said. “So we knew that getting a salary increase wasn’t the end all be all. It’s always had to be the combination of salary and health care. So one of our initial fears was there could be something in this proposal that we’re not even seeing yet that could potentially erode any of those financials gains that this contract may have gotten our employees.”
The proposal gives the district more of a say in changes, thus giving it more control over costs, but Erkeneff said that the proposal isn’t meant to stagnate or reverse changes.
“The committee requires a 75 percent vote of all members. The district cannot unilaterally reduce or increase health care plan benefits, nor can the associations. The district will not be able to unilaterally increase or decrease health care plan costs, nor will the associations,” Erkeneff said. “The committee will need to work collaboratively together, and make decisions to allocate resources to employees, with fiscal responsibility and sustainability.”