The Kenai Peninsula Education and Kenai Peninsula Education Support associations and the Kenai Peninsula Borough School District have reached a tentative contract agreement.

The three negotiating teams agreed to accept the bulk of Oregon-based advisory arbitrator Gary Axon’s decision, with a few last-minute concessions. KPESA President Patti Sirois said the associations did not know what to expect going into Wednesday’s meeting.

“(The arbitrator’s) decision was non-binding so we had no idea what they were thinking, just like they had no idea what we were thinking,” she said.

Anchorage-based lawyer Saul Friedman was the first to speak and said the school district would take Axon’s decision as is. In response, the associations’ lead negotiator Matt Fischer, said both unions were still concerned about the per-employee, per-month health care caps, and the fact that Axon did not propose additional stipends for KPESA members in his report.

The dispute reflected a difference of opinions both the school district and associations found in their interpretations of Axon’s report. Fischer said there was a sufficient amount of information about annual health care costs that did not come out during or after arbitration, and it would be unnecessary to follow all conditions suggested in the decision.

“Yes, the arbitrator saw two days of testimony, but we all know there’s much more behind this,” he said.

Everyone agreed their fiercest concerns come from how to address the high price of providing health care to the school district’s employees.

In his report, Axon suggests the school district and employees equally split the costs if the employee’s medical bills exceed $1,731.45 per month on the traditional plan, and $1,645.61 on the high-deductible plan next year.

Fischer said he was concerned about the burden the per-employee, per-month cap may place on staff. He said many employees may reach the cap much more quickly than originally projected prior to arbitration — numbers that changed, he said, once arbitration concluded — by the school district’s health care broker Colleen Savoy, and that the school district should pay a higher percentage.

Fischer said he is also concerned there is not enough information about the one-time opt-out offer that will be offered to employees. He said the school district may realize fewer savings than expected if there are fewer staff on the plan to help offset the costs of other employee’s high medical bills.

Friedman said Axon had the best information available at the time to make his decision regarding the 50-50 split, and that the school district supported the decision.

“The current methodology has not stemmed the ever increasing costs of the current health care plan and we believe the way to do that is through a cap, and he (Axon) accepted that,” Friedman said. “He didn’t accept the full cap at 100 percent but he did accept the fact that there should be a cap.”

Eventually, the sides settled on keeping the cap, but allowing the employees to opt-out of the school district’s health care plan as soon as the tentative agreement is ratified, rather than following Axon’s suggestion of waiting until Jan. 1, 2017. Things will work slightly differently for part-time employees.

“Employees who work between 20 and 30 hours per week are grandfathered into the new health care contract, and will have a one-time option to opt out of receiving health care coverage,” said Pegge Erkeneff, school district liaison. “This will become in effect when the contract goes into effect, in contrast to the July 1, 2017, date recommended by the arbitrator.”

Also upon ratification of the tentative agreement, employees that meet the minimum Affordable Care Act Alternative Insurance requirements will be able to opt-out of the school district’s health care plan, said KPEA President David Brighton. The high-deductible, high-premium plan will be phased in beginning Jan. 1, 2017, he said.

“We have ongoing concerns about the cost of health care,” Brighton said. “But we thought this was the best offer we can get on the contract.”

Overall, Brighton said he thought the arbitrator had done “a good job splitting the baby.”

Discussions became heated earlier in the meeting when the teams address the topic of stipends.

Fischer argued it was inferred that the arbitrator intended to include that support staff should also be given one-time stipends off of the salary schedule for completing their FY16 work calendar, while Friedman said, “He (Axon) made it very clear what his proposal and recommendations were.”

KPEA negotiating team member Jesse Bjorkman stepped in to calm the nerves.

“We need to be respectful of each other, we need to realize that we have a lot on the line here for both parties,” he said. “If we could just keep a level head I think that is going to be better for everyone.”

From there, the talks went relatively smoothly.

After the associations and school district met separately to caucus twice, the teacher association’s team agreed to split their stipend with members of the support staff. Fischer said to reduce the teacher’s stipends from $750 to $650, and portion the remainder out equally among support staff.

In response, the school district agreed to offer both the support and teacher association members $750 stipends for FY16, if the associations agreed to language changes regarding implementation of the high-deductible, high-premium health care plan.

“I am glad it was recognized that support staff are an integral part of the whole education of our children,” Sirois said.

A verbal agreement was reached; the three teams broke for lunch and returned to sign off on the agreements. The associations and school district will wrap up their separate processes for ratification by Oct. 25, and the Board of Education must then approve the contracts.

Wednesday’s agreement came more than one year after contracts were set to begin. The new contracts are good for three years. The next collective bargaining between the school district, KPEA and KPESA will start in January 2018.

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