1. Call to order and roll call

Chair: Marie Scholle

Rita Bowen, President, UAS Staff Council, 1997-1999

Hilary Davies, President-elect 1997-1998 and President, 1998-99,

UAA Assembly

Betty Dupee, President, Statewide Administrative Assembly, 1998-99

Ron Gatterdam, President-elect, UAF Faculty Senate, 1998-1999

Josh Horst, President, USUAS-J, 1998-1999

Josh Hunter, President, USUAA, 1998-1999

Mary Stasenko, NW College Student Body, 1997-1998

Mike Smith for Patti Thorne, Vice President, UAA Assembly, 1998-1999

Pat Ivey, Executive Officer

Brian Brubaker, Admin. Assistant

Absent:

Paula Long, Past President, UAF Staff Council 1998-1999

Jean Richardson, President, ASUAF, 1998-1999

Janet Dye, Chair, UAS Faculty Council, 1998-1999

* Others present:

Mike Humphrey, Statewide Benefits Director

Patty Kastelic, Executive Director, Statewide Human Resources

Jeremy Vermilyea, President, UAF Alumni Association

Kathleen Shepro, Co-president, UAA Staff Council

Four members of the UAF Staff Council

Jake Poole, Director, UAF Alumni Association

Carla Yurkovich, Member, Statewide Administration Assembly

Alisa Curry, UAA Governance Office

Karen Cummings, former president, UAS Staff Council

Susan Warner, former president, UAS Staff Council

Mike Mayberry, Northern Regions President, CEA

Leafy McBride, Member, Statewide Administration Assembly

Rudy Jalner, Matanuska-Susitna College

Lydia Anderson

*Note: there were several others who were present and asked questions but we were unable to catch their names for the purposes of listing them here.

2. Adopt agenda

DRAFT MOTION: Moved by Dupee, seconded by Gatterdam, passed

"The System Governance Council moves to adopt the agenda for the July 23, 1998 meeting. This action is effective July 23, 1998."

3. Approve June 26, 1998, minutes

MOTION: Moved by Dupee, seconded by Hunter, passed

"The System Governance Council moves to approve the minutes for the June 26, 1998 meeting. This action is effective July 23, 1998."

4. OLD BUSINESS

4.1 Constitutional changes

Marie Scholle read the following motion from the agenda,

MOTION: Moved by____, seconded by____

"The System Governance Council moves to accept the second reading of the proposed amendments and any additions and/or amendments thereto and to move the amendments to third reading and action at the next meeting of the Council. This action is effective July 23, 1998."

The amendments proposed were as follows:

BOLD CAPS UNDERLINED = ADDITIONS

BOLD (( )) UNDERLINED= deletions

Proposed Amendment #1

ARTICLE I. INTENT

It is the intent of the Board of Regents: 1) that the faculty, staff, ((and)) students AND ALUMNI shall share in the governance of the university, 2) that shared governance is an integral part of the business of the university, and 3) that participators in shared governance are empowered by the Board of Regents to carry out their governance responsibilities to the best of their abilities without interference or fear of reprisal.

Proposed Amendment #2

ARTICLE II. NAME

The Board of Regents hereby establishes a mechanism for system governance consisting of faculty, staff, ((and)) student, AND ALUMNI representatives which shall be called the System Governance Council, hereinafter "Council."

Proposed Amendment #3

ARTICLE III. AUTHORITY, ROLE

B. Role

The Council shall provide an opportunity for faculty, staff. ((and)) students AND ALUMNI ASSOCIATION REPRESENTATIVES to interact with the university president, regents and others regularly to discuss matters including, but not limited to, the following: policies and procedures for, and participating in, the university budget process; the framing of long range plans; university development; enhancing the university's public image and educating the public. The Council shall communicate the results of those discussions to the university community. The Council may also coordinate matters of mutual concern to the ((Alliance of Faculty Senates)) FACULTY ALLIANCE, the Staff Alliance, ((and)) the Coalition of Student Leaders AND THE ALUMNI ASSOCIATIONS.

Note: Alumni already possess these powers and rights independently of the other governance groups in Regents' Policy and University Regulation 02.08.01, just as students do in Regents Policy Part IX. Alumni involvement with faculty, staff and student governance will create closer ties between the groups as they work to strengthen and improve the University system and enhance the university's public image. The change to the faculty governance group title is editorial to reflect name change for that group already approved.

Proposed Amendment #4

ARTICLE IV. MEMBERSHIP AND ORGANIZATION

A. Voting membership

The voting membership of the Council shall consist of one faculty, one staff, ONE ALUMNUS and one student representative each from the University of Alaska Anchorage, the University of Alaska Fairbanks, and the University of Alaska Southeast, one staff representative from Statewide Administration Assembly, ((and)) one additional at-large student representative,

Proposed Amendment #5

ARTICLE IV. MEMBERSHIP AND ORGANIZATION

B. Selection

Faculty and staff representatives to the Council shall be selected in such a manner as prescribed by the local governance groups. Student representatives shall be selected by the Coalition of Student Leaders as prescribed in the Coalition Constitution. ALUMNI ASSOCIATION REPRESENTATIVES SHALL BE SELECTED BY THE BOARD OF DIRECTORS OF THE RESPECTIVE ALUMNI ASSOCIATION AS PRESCRIBED IN THE ASSOCIATION BYLAWS.

Proposed Amendment #6 (removed from consideration)

ARTICLE IV. MEMBERSHIP AND ORGANIZATION

D. Qualifications

Representatives to the Council should have prior shared governance experience wherever possible WHICH INCLUDES ALUMNI ASSOCIATION INVOLVEMENT.

Proposed Amendment #7

ARTICLE IV. MEMBERSHIP AND ORGANIZATION

F. Ex-officio, non-voting membership

Ex-officio, non-voting membership in the Council shall include the President of the University, the chancellor or other administrative officer((, and one alumnus)) from each MAU, and any other such person or persons as the President may designate, and such others as determined by the Council.

Proposed Amendment #8 (removed from consideration)

ARTICLE V. MEETINGS

B. Voting

Voting shall be by simple majority of the full voting membership except for amendments to the constitutions or bylaws. Amendments to the Council constitution affecting membership rights shall require ((a consensus with no negative votes)) A TWO THIRDS MAJORITY OF THE VOTING MEMBERSHIP IN ACCORDANCE WITH ROBERT'S RULES OF ORDER.

Discussion:

Further action on this issue was to have occurred at the first fall meeting of the Council.

At the last Council meeting there was only one amendment proposed for a constitutional change to seat alumni as voting members instead of ex-officio non voting. The motion was defeated because further amendments were required before action could be taken. Pat Ivey said that Rita Bowen and Ruth Danner, Vice President of the UAS Alumni Association, helped prepare the changes to the alumni amendment proposal, based on the concerns expressed at the first reading at the June meeting of the Council by John Craven who strongly suggested that further changes were required. It was also suggested at the last meeting that further research needed to be done on practices at other institutions.

Hilary Davies expressed confusion that she thought she had volunteered to go over the constitution and do the research for the September meeting. She was concerned about the following.

a) changing the constitution in the summer when the faculty are off contract and neither the UAA Assembly nor the UAA Faculty Senates had had the chance to consider it because they don't meet in the summer;

b) The newly proposed changes had not been seen by her; thus the reading should be called first reading, not second.

c) Since the new changes had not been seen before, this should be called the second reading, not the first; and

d) Regents Policy 03.01.01 should have been included in the agenda, should be discussed with the Board of Regents, and, if the alumni were to be voting members, would have to be changed to include the alumni.

Scholle asked how the alumni were included before the change when the alumni association split into three organizations. Ivey explained that when there existed only a single system governance organization prior to 1986 and there was only one systemwide alumni organization, the UA Alumni Association director sat on the systemwide faculty, staff and student governance group (then called the Statewide Assembly). When the university restructured 1986-1988, the alumni split into three groups and the Assembly facilitated that through the creation of an ad hoc non voting Alumni Network Committee which eventually translated into a section of Regents' Policy 02.08.01, and the alumni were not included in the new system governance structure. Last year, the System Governance Council did provide three ex-officio seats on the Council, one for each alumni association, in part to consolidate university support activities. . To date, the Alumni Network as a formal organization, has not been formed.

Davies responded that alumni should definitely be on the Council in an ex-officio capacity, and thus far, had not seen anything in her research into other institutions that convinces her otherwise. However at the moment, Davies was more concerned about the amendment process.

Davies said the System Governance Council is made up of university employees and students and are certain issues that should be coming to the System Governance Council that affect the well being of employees and students at the university concerning academic issues, health benefits, etc. She believed that only the employees and students should be voting on these issues. Further, Davies felt that the System Governance Council should go back to operating as it had in the past and not be involved in legislative activities; that the Council should be concerned with the University of Alaska, its policies, its welfare, its paid employees and students.

Scholle said that faculty, staff, student and academic issues were taken care of through the other governance groups, and only in the case of conflicting views would they ever be taken up by the Council whose role in such matters is to coordinate and facilitate.

Vermilyea explained that the purpose of attaining a voting membership for alumni in the Council comes down to having the alumni take their place in the leadership of the university, and not an agenda to take over the System Governance Council or override the will of the majority on employee and student issues, and he wanted to belay those concerns. This is an effort for the alumni to have a voice and an ear to what happens within the university. Alumni can't go out and sell the university to the legislature, as they did effectively this past season, and to the public, without knowing what the system needs, what its goals are, and to be involved in the priority setting for the institution. He believes this is a positive step for the institution that will provide more incentive and information for the alumni to go out and fight for the institution, and therefore, on behalf of students, faculty and staff. Davies said she wasn't discounting what the alumni have done this year; however the alumni have a direct pipeline already through Regents Policy 02.08.01 and are ex-officio on the System Governance Council.

Davies also had a concern about proposed amendment #6. It was deemed redundant and was removed from consideration.

Gatterdam suggested, based on the motion passed in June, and amended the draft motion in such a way that final action wouldn't be taken until the October 22 meeting, that would give all the groups plenty of opportunity to look at the amendments. He said that currently, changing the constitution requires unanimous vote in favor to adopt the constitutional changes, so the vote can be stopped with a single vote.

He wasn't opposed to the alumni having a vote, but would vote against proposed amendment #8 because it was vague as to what membership rights were and silent on other kinds of constitutional amendments. Gatterdam wants further debate about why the Council should go from consensus to two-thirds. Hunter did not want membership rights voted upon with by a two-thirds majority instead of everyone.

Ivey explained that proposed amendment #8 to eliminate unanimous consent regarding membership rights came from a previous Council member's feeling that it may not be appropriate. She added that unanimous consent relating to membership rights was placed in the constitution originally because some members at the formation of the Council were afraid of loosing their Council seat. Proposed amendment #8 was removed from consideration.

Davies will not vote on this until it has been brought before the UAA Assembly. Scholle asked when the next UAA Assembly meeting will be. Scholle suggested that members look at this and bring it back to the September meeting for a second reading, then a vote in October.

4.2 Other old business

There was no other old business.

5. NEW BUSINESS

5.1 Health Benefits Changes - FORUM

Scholle requested that changes and further information be provided in advance whenever possible. Patty Kastelic said that the information recently received was provided before; some will be going to each staff member's home.

Patty Kastelic said that this is our forum and that they are happy to answer questions. She said that they are not here to discuss anything that effects faculty or any staff represented by a bargaining unit.

She believes that the Council may not be the best forum; by law these issues are not discussed for faculty in this forum.

The university decided to go to a defined contribution model a year ago. The regents asked that the non-represented staff not be put on defined contribution until all union staff were on such a plan. The university decided to cap its contributions and increase them by 3% a year.

$10 and $20 per pay period per employee will be the difference between what the university agreed to pay and costs incurred.

Everyone can choose to pay on a 19 or 26 pay period basis, based on whether they are 12 or 9 month employees.

Kastelic asked what 3% meant. Patty Kastelic said that the university has decided that it will only pay 3% more than they paid for health benefits in the previous fiscal year.

Scholle asked what happens if the increase in cost is less than a 3% increase. If the actual cost doesn't meet the university's cap if the increase is less than 3%.

Kastelic responded that the university pays all claims plus an administrative fee.

Scholle said she understands that as long as costs increase faster than 3% inflation rate, employees still pay. Patty Kastelic said that this is part of the total process. The money used to pay for health care is not in a special, reserved account.

Kastelic said that in order to pay health care costs and administration, the university negotiates for a staff benefit rate with the federal government. The rate is based on past experiences and other estimated factors.

If the university guesses wrong and costs are greater than estimated, then that has to come from the personnel line in the department's budget. This is closely monitored on an annual basis by federal auditors. Right now, the university pays in excess of 92% of health care costs for employees and their dependents.

Scholle says that staff hear shortages occur because staff use more health care costs than were expected.

Kastelic said that 95% of costs occur in claims that cost less than $5,000.

Scholle said that she sees that costs are increasing and that staff will have to pay $10 to $20 per pay period to pay for it. Scholle would like to see the staff get money back when costs are less than expected.

Kastelic said that the university has said it is no longer going to pay all health care costs, but rather would set a cap. Scholle said that then the administration needs to stop thinking that they can continue to cap wage increases; that it's getting to the point that staff can't continue to work here anymore. The staff voted against a union in the expectation that the university will continue to work with staff.

Kastelic said that health care costs have increased faster than almost any other item. Scholle said that the state may have given less in health care costs, but they increased their wages in the same time period.

The state GGU (General Governmental Unit) just increased its health care costs (deductible and out of pocket), Scholle said

Curry said that it is helpful to see the comparison of the state's health plan and the university's; she would also like to see a comparison of the state and university wages also. Curry said that benefits and compensation are a package. Scholle said that if staff are asked to pay more; they also expect to get more; and the university is loosing staff.

Kastelic said that each MAU is looking at ways to balance their budget. She said that student enrollment is decreasing, and that the university has lost 30% of its buying power. There is not any new money.

Scholle said that health care is part of an overall compensation package. Scholle said that there are $8-an-hour employees that this will effect more severely than those who make more. Kastelic said some employers have graduated charges for things like parking, tuition, and health care.

Kastelic says that dependent coverage is very expensive and the amount recovered is less.

Cummings said that she interprets that benefits are probably getting changed. She understands that everyone is getting charged the same thing. Marie Scholle said that it' always been this way.

Curry asked what percent the costs increased from the previous year. Patty Kastelic said that the rate of increase was 6%. She said that the final numbers will be known within three weeks. It could be between 5.8 and 6.5%.

Warner asked Kastelic what the defined contribution is. Is it considered part of the overall compensation package? Kastelic said yes. Is there the option to apply the defined contribution to a plan of an employee's own choosing? Kastelic said that has never been considered. If the university allows employees to opt out and allow employees a $414 credit for coverage elsewhere, it wouldn't necessarily mean that the university saves money. The same amount of overall money would need to be collected from the departmental budget.

Kastelic said that the administration has been considering a voluntary, new draft option in the healthcare plan. This option would be a cost shift to employees in a different manner. Employees would pay a higher deductible.

Smith from UAA asked if the $10 to $20 per pay period would come from dependents. Patty Kastelic said it would be per employee, not per dependent. She said that there was some discussion of increasing dependent charges. She said that they are trying to achieve one, single university plan. Increasing dependent charges could be an option in the future, but not in this year.

Smith feels that this would be a better way of distributing the 3% cost.

Warner asked what the current number of employees paying into the plan was, it is 3,308. Around 9,000 people are covered, including dependents. The plan costs around $18.7 million.

A participant in Juneau noticed some changes in the prescription, vision and dental plans. Humphrey said that the plan is still in evolution. In the case of dental, Blue Cross and Mercer suggested the university change its plan to more closely resemble the industry standard.

Jennifer from Anchorage said that she is unsure about the network in the plan. Patty Kastelic said that network plans create steerage. If you choose to go to a non-network doctor, the plan pays less of the cost. It would then encourage medical providers to join the network.

Smith recently received an employee survey in the mail and asked if it related to the health plan changes Kastelic said that the survey only went to a sampling of non-represented staff. The results will give the administration an opportunity to decide what to focus on next year.

Smith asked if the wage increase on the table is tied to the health benefit cost increase. Kastelic said that only the United Academics union linked the wage increase with the increase in health care costs.

Bowen asked if people wanted to choose the new option, would those employees be asked to pay the same amount of money to cover the shortfall as those who choose the basic plan? Kastelic said no, the basic people will track with the basic and so forth. Choosing in open enrollment will determine your increase in charges for the year 2000.

McBride said she is a healthy person with low health costs. She would never choose option one. Why would she want $100 more in deductible? Patty Kastelic said it will be because of the new wellness provision that pays for physicals and so forth ($400 per person, including dependents, per year). Even though there is a higher deductible, you get wellness money to help with prevention.

Kevin in Anchorage assumes option one is meant to save money. The university has the option to increase revenue by increasing tuition and fees. He suggests that we discuss increasing tuition or using a portion of future tuition increase to cover some of the increased health care costs.

Kastelic says that the university has already capped its contribution; it is not going to more for health care, that has been decided. Option 1 would help employees reduce their share of future cost increases.

Jennifer in Anchorage said that $10 to $20 per pay period this year could be repeated year after year without end. Patty Kastelic said that is a legitimate concern. The only way that dynamic can change is if health care provider inflation slows or if the amount of health care services used decreases. The university has decided to cap its exposure.

Scholle asked if a cafeteria health plan could be used. Patty Kastelic said that this allows more choice while keeping administrative costs down but it is difficult to have a real open cafeteria with employees in such diverse geographic locations. The university has already switched from a defined benefit world to a defined contribution with three health plan choices.

One question was what kind of incentive there was to choose option one versus the basic plan? Kastelic said that if you choose option one, then at the end of the year your increase in cost would be less than those who had the basic rate. You're flagged for the year behind, no matter what you do. This year, outside experts predicted a 12% increase and the actual experience for the university this year was 6%. This is why it is based on historical costs.

Mayberry asked if enough people choose option one, will that mean that costs overall will actually decrease? Will that drive up the cost of the basic plan? Mike Humphrey said no.

Dupee asked about dual coverage, Mike Humphrey said that coordination of benefits will continue.

Kastelic said that the UA Benefits Update page will be going out to all employees in the mail. The new plan option will be firmed up. Patty Kastelic said that the Board will not take any action on this; it will take effect without their action.

Bowen asked if the option one plan could be put out on the web page; Mike Humphrey said that it could be done by Monday.

Mayberry asked if this option one saves money, why not just put the plan in place and keep the staff on defined benefits?

McBride said she is concerned about whether or not her personal physician is on the Blue Cross network.

Jalner in Palmer asked what is reasonable and customary and usual charges. Is there any clarification from the university and Blue Cross on what that means? What is the number? Patty Kastelic said that information is proprietary. It's based on what is typical using a lot of similar procedure prices to draw from. They don't like you to see the numbers. Kastelic said you can ask the doctors what the charge and ask Blue Cross about a given procedure. In general, if it's an elective procedure, you can call Blue Cross about it.

Anderson said there is nothing to do to reduce 1999 charges. If all employees choose option 1, does that mean no charges in 2000? Patty Kastelic said that in theory, it is possible. The likelihood is better with option one.

How much will the additional option raise administrative costs? Kastelic said that they will be the same. The university pays $27.96 per employee per month for administrative costs. It doesn't depend on how many claims or pieces of paper Blue Cross handles.

Mike from UAA said that Patty Kastelic and Mike Humphrey put a lot of effort into this issue and he thanks them for their efforts. Patty Kastelic said that the more university employees understand this and explain it to other employees, the better the understanding will be so that are not fearful and confused.

5.2 Other new business

There was no other new business.

6. Date, time and agenda items for next meeting

The next regular meeting of the Council is September 24.

7. Comments & other items of concern

There were no other items of concern.

8. Adjournment

The Council adjourned at 4:40pm.