The Kenai Peninsula Education and Kenai Peninsula Education Support associations say they are ready for advisory arbitration with the Kenai Peninsula Borough School District.

The meeting with Oregon-based arbitrator Gary Axon is scheduled for June 1-2. Each negotiating team has submitted three proposals since Axon was jointly selected in January. The groups have met twice since, including most recently with Public Education Health Trust (PEHT) Chief Financial Officer Rhonda Kitter on March 30 to discuss moving away from the school district’s self-funded system, but no tentative agreement has been reached.

“Both sides came up with plan and each said ‘no’ to these (proposals),” said David Brighton, Kenai Peninsula Education Association president. “I think both sides are ready for arbitration.”

After the meeting with the PEHT, a nonprofit and arm of Alaska’s National Education Association that provides health care for large and small educational institutions, the associations responded by accepting the school district’s health care offer from February 2015. The two-tier plan introduced a high-deductible, high-premium plan in addition to the currently offered traditional plan, and is expected to save the school district money.

School district spokesperson Pegge Erkeneff said in previous Clarion interview that both the school district and employees who switch to the high-deductible plan would be paying fewer contributions each month. It would potentially be more ideal for employees that don’t use their health care plans often. The proposal includes a window each year for employees to switch plans, and the chance to opt-out of school district provided health care altogether if an employee signs on with a different provider.

Initially the associations were skeptical that adding the high-deductible plan would results in savings for the school district, and were concerned employees would foot any unexpected costs. In October, the associations proposed an overhaul that would eliminate the traditional plan, and move the school district’s 1,200 plus employees to the high-deductible plan. The school district eventually rejected that idea.

Brighton said the associations had supported the school district signing on with the PEHT before rates were increased by 25 percent two day before the March 30 meeting with Kitter. It was believed the association’s members would not support paying significantly more on the PEHT’s plan than they are currently, but would be open to revisiting the option if it “ever makes sense,” he said.

“I am satisfied with the self-funded plan. We provide an excellent product and service,” Brighton said. “Right now the benefit is we seem to have a cheaper plan than we can find elsewhere.”

Once the associations accepted the school district’s original health care offer, the school district responded on April 8 with a package proposal that the associations rejected because the school district’s proposed caps on the per employee, per month contributions did not increase in FY18 and FY19, and employees would be responsible for covering any unexpected cost increases to the health care plan, Brighton said.

Originally the school district had proposed signing one-year contracts, which were set to begin July 1, 2015. The associations were willing to sign 2-year contracts, and Brighton said the associations would only approve three-year contracts if “the numbers are there.”

The school district’s new offer for salaries and benefits included a 1 percent increase outside the salary schedule, which would not adjust for inflation, Brighton said.

“We need money on the salary schedule,” he said.

Brighton said he believes the money is there, even though revenue sources are strained.

“I think the district is being very careful as they looking at state funding,” he said.

He pointed to the school district’s unrestricted general fund balance that currently hovers around $8 million, and that after cutting nearly $4 million in services, the projected FY17 deficit is about $200,000. He said he believes it would be safe for administrators to spend the fund balance down further, especially in a year where teachers are being cut. Roughly 15 positions are scheduled to be eliminated or left unfilled in the Board of Education approved budget.

Axon’s decision, which Brighton said the three teams will likely receive mid-July, will not be legally binding. Once the report comes in, the associations and school district will meet again soon after and see if a tentative agreement can be met.

Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.