Teamsters
Union Local 551
And
City
of
Interest
Arbitration
Arbitrator: M. Zane Lumbley
Date
Issued:
Arbitrator: Lumbley; M. Zane
Case #: 03284-I-81-00079
Employer:
City of
Date Issued:
INTEREST ARBITRATION
OPINION AND AWARD
OF
ZANE LUMBLEY
IN THE MATTER OF
CITY OF
and
TEAMSTERS UNION LOCAL 551
Date Issued:
Appearances:
CITY
OF
TEAMSTERS
UNION LOCAL 551
Mark C. Endresen
IN THE MATTER OF
CITY OF
and
TEAMSTERS UNION LOCAL 551
OPINION
PROCEDURAL MATTERS
The Arbitrator was selected by mutual agreement of the
parties
in lieu of those procedures set forth in RCW 41.56.450.
A hearing was held before the
undersigned on April 22, 23 and 24,
1981, in
sented by Cabot Dow of Cabot Dow Associates. Teamsters
Local 551 (herein the
Research
and Economics Advisor for Joint Council of Teamsters No.
28.
At the hearing, the testimony of witnesses was taken
under
oath and the parties presented documentary evidence. Inas-
much
as the parties did not provide for a reporter, the Arbitrator
tape
recorded the proceedings in accordance with the dictates of
RCW
41.56.450. In
lieu of filing posthearing briefs, the parties
argued
their respective cases before the close of hearing.
BACKGROUND
The
personnel
since 1970. Since that time, a number of
collective
bargaining
agreements covering these and other employees not in
issue
here have been consummated by the parties, the most recent
expiring
on
commenced
negotiations toward a new agreement.
Beginning in
November of 1980, their
negotiating sessions were conducted with
the
assistance of a Public Employment Relations Commission medi-
ator.
Impasse with respect to the issue of wages, union security
and
work-out-of-classification pay was reached on January 28,
1981. On the following day, PERC Executive
Director Schurke
directed
the parties to proceed with interest arbitration on
these
three issues. Subsequently, prior to
commencing interest
arbitration,
the union security and work-out-of-classification
pay
issues were resolved by the parties.
ISSUE
Although the general subject of wages was the only issue
remaining
at the time this interest arbitration proceeding began,
the
parties also disagreed with respect to several collateral
subjects. As a result, the following statement of the
issue was
reached
at the outset of the hearing:
1. [What are the
appropriate] wage[s] for
1981?
2. [Are the wages] for
1982 and 1983 properly
before the Arbitrator?
3. If [the answer to 2.
above is in the affir-
mative]
, [which of the following] should the
contract provide for?
(a) [Wage] openers
for 1982 and 1983; or
(b) Fixed wages (or
some kind of formula)
for 1982 and 1983.
As a threshold issue, therefore, I must determine the
term
for which wages will be decided by this proceeding. Except
for
the matter of wages, the parties have agreed to a three-year
agreement. The City argues, however, that I may not
determine
1982 and 1983 wages because
the question of wages beyond the
first
year of the agreement was not placed before the mediator.
I disagree.
As the City notes, WAC 391-55-220 precludes the raising
of
issues in an interest arbitration proceeding which were not
raised
before the mediator. In the case at
hand, the
sented its demand for parity in wages with cities
it viewed as
comparable
to
negotiating
session on
this
demand was presented orally. Moreover,
testimony at the
hearing
indicates the negotiating session broke off very shortly
after
presentation of this demand. Neither of
these, however,
appears
to preclude a finding that the
was made
before the mediator. By the same token,
at this meeting,
the
City offered for the first time its "enriched package" of a
one-time
lump sum payment of $1100 to patrolmen and $1500 to ser-
geants for 1981.
This is the same offer which it pursued in this
interest
arbitration. The fact that the City may
have been pre-
pared
to make a written presentation of its enriched package to
the
sufficient
distinction between the status of its offer and that
of
the
are
appropriately before me here.
DISCUSSION
RCW 41.56.460 requires my consideration of the following
factors:
(a) The constitutional
and statutory authority
of the employer.
(b) Stipulations of the
parties.
(c) Comparison of the
wages, hours and condi-
tions
of employment of the uniformed per-
sonnel
of the cities ... involved in the
proceedings with the wages,
hours and con-
ditions
of employment of uniformed personnel
of cities ... of similar size on
the west
coast of the United States.
(d) The average consumer
prices for goods and
services, commonly known as the
cost of
living.
(e) changes
in any of the foregoing circumstances
during the pendency
of the proceedings.
(f) Such other factors,
not confined to the
foregoing, which are normally or
tradi-
tionally
taken into consideration in the
determination of wages, hours
and condi-
tions
of employment.
In line with the above, the Union submitted a number of
facts
regarding nine assertedly comparable cities in the
state
of
Washington in an attempt to demonstrate that police officers,
both
patrolmen and sergeants, in the City of Pullman are consid-
erably underpaid.
Furthermore, it relied heavily on an analysis
of
changes in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W)
through August of 1980 to support its
position. It argued that, inasmuch as the City's top
step
patrolmen
and top step sergeants were paid base salaries 45.1%
and
47.6%, respectively, below their counterparts in its compari-
son
cities, a salary increase of approximately one-third that
amount
was appropriate in 1981 and that the
same increase plus
the
percentage by which the average of its comparison cities in-
creased
their patrolmen and sergeant salaries in the two succeed-
ing years should be granted for 1982 and 1983
in order to bring
about
absolute parity with the average of these cities by January
1,
1983.
Additionally, while it conceded that the City's finan-
cial picture was not encouraging, it contended
that the City had
the
ability to pay the salary increases sought and that the City
should
be required to search out new revenues rather than depriv-
ing its employees of a proper wage increase in
solution of its
financial
difficulties.
The City asserts that factors such as its limited busi-
ness
and property tax base (much of the City is exempt from tax-
ation because it is owned by Washington State
University) , its
declining
construction activity and its inability to institute a
business
and occupation tax by virtue of its alleged market dis-
advantage,
when combined with inflating expenditures, demonstrate
that
it hasn't the financial resources to implement a continuing
general
wage increase. Moreover, it contends
that its offer to
the
employees in question here compares favorably with its prof-
fered comparison cities and is in line with its
negotiated agree-
ments with other groups of represented City
employees. It argues
the
only money it has available to it for 1981 increased wages
for
all of its employees is a one-time, nonrecurring fund of
$80,000 generated by changing
its method of collecting utility
taxes
from a quarterly to a monthly basis in 1981 thereby causing
it
to receive those taxes relative to October and November before
the
end of calendar year 1981. As a result,
it asserts that its
allocation
of approximately $20,000 of that sum to one-time lump
sum
payments to uniformed police personnel in 1981 plus its
agreement
to provide the employees a pro rata share of 70% of new
recurring
and nonrecurring revenues derived through legislative
action
of the city council or state of Washington should be
adopted.
Both parties presented their cases with commendable
diligence
and integrity and provided me with a wealth of informa-
tion in support of their respective
positions. All the evidence
and
arguments of the parties as well as all relevant decisions
of
other arbitrators, including all of those cited to me by the
parties,
have been studied closely and considered very carefully.
However, my discussion here
has necessarily been foreshortened
in
the interest of economy and I shall discuss my deliberations
with
respect to the parties' facts and contentions only to the
extent
necessary to make the basis for my award clear.
It seems
the
most orderly way of proceeding is to reach a decision first
with
respect to comparison cities and cost of living and then to
determine
the extent to which the financial condition of the City,
as
influenced by its constitutional and statutory authority, per-
mit implementation of the award found
appropriate based on the
first
two factors.
The parties disagree totally as to what cities may be
considered
comparable. Although RCW 41.56.460
speaks in terms of
"cities
... of similar size on the west coast", there neverthe-
less
appears to be room for argument. As
Arbitrator Jackson
noted
in City of Hoquiam, Washington, and International Associa-
tion of Firefighters Local 315, Washington
Public Employment Rela-
tions Reporter, FA 270 (1980) the words
"similar size" may refer
to
factors other than population such as a city's tax base or the
geographic
area falling within its jurisdiction.
However, the
majority
of arbitrators ruling pursuant to this statute inter-
pret the reference to be to population. As for the intent of
the
words "west coast", arbitrators generally have given weight
to
facts with respect to cities of similar size located in the
states
of Washington, Oregon and California.
There is a tendency,
however,
to attach greater weight to comparability evidence from
Washington
cities.
Given the potentially different constitu-
tional and statutory authority of cities outside
the state of
Washington, this is a
reasonable approach.
As a threshold issue regarding the selection of cities
of
similar size, the population of the City of Pullman must be
determined
since the parties also disagree in that respect. The
evidence
demonstrates that, in 1980, there were 6,582 permanent
residents
in the City of Pullman and a total Washington State
University
enrollment of 17,468. Of
the total WSU enrollment,
approximately
one-half lived on campus, which has its own police
force
consisting of seventeen individuals. The
remaining stu-
dents
live either inside the non-WSU city limits or outside the
city
limits. The City contended that the
on-campus resident pop-
ulation should not be considered in arriving at the
population
size
for the City of Pullman. The Union
argued that the total
city
population, both nonstudents and students regardless
of
where
domiciled should be included. I believe
it is reasonable
to
assume that those living on campus or outside the city limits
of
Pullman spend fewer hours in non-WSU areas of the City than
outside
such areas and that those living in non-WSU areas of
the
City spend more hours within the City's jurisdiction than
outside
it. As a result, since the City must
provide police ser-
vices
for all people within its jurisdiction, it is appropriate
to
allocate the total WSU student population on a fifty-fifty
basis
between WSU and the City of Pullman.
Accordingly, I have
determined
the population of the City for purposes of this pro-
ceeding to be 15,316 (the sum of 6,582 and 8,734).
The City proposed for comparison purposes nine Washing-
ton
cities, three Idaho cities, fifteen Oregon cities and twelve
California
cities. It
arrived at this mix by first selecting
only
those cities in the four states with populations between
25% fewer and 25% more
citizens than the 14,095 citizens it con-
tended
reside in Pullman. In order to narrow
the California
sample
thus arrived at to twelve, the City also applied the re-
quirement that its total 1980 assessed property
valuation be
within
25% of Pullman's. As noted previously,
the Union's list
of
comparable cities was limited to nine other Washington cities.
The population of these cities
ranged from approximately 21,000
to
approximately 33,000, or from 12% below to 39% above the
23,768 population figure urged appropriate for Pullman.
From the list of forty-eight cities provided by the
parties,
I have selected eighteen which I believe most valuable
for
comparison purposes. Firstly, while I do
not consider the
state
of Idaho to be a West Coast city, I determined to use the
city
of Moscow under Section (f) of RCW 41.56.460 because of
its
close proximity to the City of Pullman.
As for those Washington cities proffered by the Union,
I have determined to consider
Olympia and Walla Walla. All but
one
of the remainder were eliminated because they lie within
fifty
miles of a major population center based on my belief that
such
cities are greatly affected by their close proximity to major
population
centers because they become part of a radically diffe-
rent
ecosystem than is likely to be experienced by a city like
Pullman. Kennewick, the last Union-sponsored city
eliminated,
was
removed from consideration solely by virtue of the size of
its
population. For cities inside the state
of Washington, I
share
the view of other arbitrators that similar population size
may
be defined as ranging from one-half the size of the city at
issue
to twice its size. While Kennewick is
more than twice the
size
of the population I have found for Pullman, Olympia1/ and
Walla Walla
are approximately 75% larger. With respect to those
suggested
by the City, Puyallup has been deleted by virtue of its
close
proximity to the Seattle-Tacoma population center and Kelso
has
been deleted because of its close proximity to Portland. The
remaining
seven were considered. 2/
_____
1/ In disagreement with the city, I do not consider Olympia,
which
it appears to have considered in
finding the city of Lacey a "metro-
politan
area city", a major population center.
2/ Among these is Pasco, which I also do not consider a metro-
politan
area city.
Of the fifteen Oregon cities and twelve California
cities
suggested by the City, I have used five in Oregon and three
in
California. In eliminating the remaining
cities from the two
states,
the same criteria of close proximity to a major popula-
tion center and population size were used. 3/ However, a decid-
edly smaller population range was used than in
selecting Wash-
ington cities.
Inasmuch as the City provided no evidence as to
the
constitutional or statutory authority of cities in either of
those
states, matters directly affected by the state in which
they
are located, I determined to narrow the criterion of rela-
tive population size in an attempt to offset the
lack of knowledge
with
respect to constitutional and statutory authority. There-
fore,
I severely restricted the population comparison to a near
match,
namely plus or minus 10% of the population figure arrived
at
for Pullman. After applying these two
criteria, five Oregon
cities
and three California cities remained.
_____
3/ In disagreement with the city, I consider neither Merced nor
Modesto, California, a major population center affecting the
city
of Atwater.
As a result of the analysis above, the cities which I
have
determined to use for comparison purposes are Port Angeles,
Pasco, Lacey, Mount Vernon,
Oak Harbor, Moses Lake, Centralia,
Olympia and Walla Walla, Washington; Moscow, Idaho; Klamath
Falls, Ashland, Pendleton,
Coos Bay and Grants Pass, Oregon; and
Atwater,
Barstow and Ridgecrest, California. Having thus arrived
at a
manageable list of comparison cities, I shall discuss only
the
salaries of comparable uniformed positions in those cities in
this
Opinion. Although I have considered in
depth the remaining
evidence
submitted with respect to these cities, I am convinced
I must give the greatest
weight to the factor of wages.
In this connection, while I note that two-thirds of the
eighteen
cities employ some type of education incentive as does
Pullman, I shall not consider
the parties' evidence as to this
factor
in drawing salary conclusions from my comparisons. I
shall
not do so because, although I recognize that the City must
consider
this cost in arriving at its various offers to employees,
education
incentives are paid to employees not directly in compen-
sation for doing the job assigned them but rather
in compensation
for
the acquisition of additional education which assumedly allows
them
to do their job better. Thus, in a way,
it is a kind of
merit
or premium stipend not totally unlike a promotion. More-
over,
the parties have already settled on the matter of education
incentive
and it is properly considered by me only as evidence
of
the City's overall ability to pay.
The average 1981 top step patrolman salary in these
cities
is $1619 compared to the current top step patrolman salary
in
Pullman of $1356. If the City's lump sum
offer to patrolmen
for
1981 were prorated over the twelve months of the year, top
step
patrolman salaries would equal $1448.
The average top step
sergeant
salary for the selected comparison cities is $1842 com-
pared
to the current Pullman figure of $1509.
Prorating the
City's 1981 lump sum offer
over twelve months would raise that
figure
to $1634.
As for the matter of cost of living, the City contends
the
Consumer Price Index overstates actual cost of living by at
least
19%. The Union, on the other hand,
believes that the fail-
ure of the CPI to include federal income and
social security
taxes
causes it to understate increases in living costs. I am
more
inclined to agree with the City than with the Union on this
point. I am concerned that the CPI tends to
overstate cost-of-
living
increases of the average employee who, in all likelihood,
does
not purchase such substantial goods as automobiles every
year,
much less a new home. Additionally, given
the City's pay-
ment of health insurance premiums for the
employees in question
here
as well as their spouses and children, the likelihood of
overstatement
is increased. I do not agree with the
Union's
contentions
regarding understatement caused by the failure of the
CPI
to take into account federal income and social security taxes.
Inasmuch as social security
taxes are charged at a constant rate,
they
would seem to have no impact. The same
can be said of
federal
income taxes except to the extent that a wage increase
causes
an employee to move to a higher tax bracket.
Such poten-
tial is, of course, impossible to compute
here. As a result, I
find
that the recent approach of several arbitrators in the state
of
appropriate
CPI.
The most recent agreement between the parties referred,
with
respect to the second- and third-year wage increases, to use
of
the August to August average of
Evidence adduced at the hearing
demonstrates that the specific
ones
for urban wage earners and clerical workers, otherwise re-
ferred to as the CPI-W. Between August 1979 and August 1980, the
average
Seattle-U.S. CPI-W increased by 14.3%.
In response to
the
dictates of Section (3) of RCW 41.56.460, I have examined the
most
recent statistics in this regard and determined that the
average
Seattle-U.S. CPI-W for March/April 1981 4/ has slowed its
rate
of increase to 10.5%. The
had
slowed to 11% from approximately 15.8% as of August 1980.
Similarly, the
1981 from the 12.7% noticed as
of August 1980. Eighty percent of
the
August 1980 Seattle-U.S. average of 14.3% equals 11.44% whereas/eighty percent
of
the March/April 1981 Seattle-U.S. average of 10.5% equals
8.4%.
_____
4/
April.
The discussion of comparison cities above would seem to
indicate
that
cant
wage increase. The examination of the
CPI, while revealing
a
recent slowing trend in the growth of the index, nevertheless
does
little to refute this indication.
However, the ability of
the
City to implement any given increase must be considered. That
is
not to say that uniformed police employees or any other City
employees,
for that matter, should be forced to underwrite the
provision
of public services to the citizenry. It
is that citi-
zenry, of which City employees are likely a part,
which must pay
for
the cost of the services it consumes.
Ensuring awareness of
this
is not my function here. However, I am
confident that those
City officials knowledgeable
of this proceeding will take it upon
themselves,
as they should, to enlighten those who placed them in
office
of the need to assist in ensuring quality law enforcement
services
through responsible and respectable wage levels. The
Union, on the other hand,
should not expect to gain, in one fell
swoop,
parity with any group of comparison cities whose employees
earn
higher wages when the history here demonstrates that the
current
wage structure has been arrived at through the vehicle of
voluntary
collective bargaining since 1970.
Without question, Pullman is among the poorest of
Washington
cities.
Convincing and uncontradicted statistics
provided
by the City establish that, of the twenty-five most
populous
cities in the state, Pullman ranked number twenty-four
in
sales tax receipts in 1980. Further,
when compared to the
same
list of Washington cities, Pullman ranked dead last in 1980
property
taxes due. This second factor is heavily
affected by
the
substantial Washington State University property ownership
within
the City of Pullman, all of which is exempt from taxation
by
the City. In the case of both sales and
property taxes, the
City appears to be levying at
the statutory maximum. On top of
these
considerations the City argues: 1) It is
not in a posi-
tion to raise its already high utility tax; 2)
Federal revenue
sharing
decreased in 1980 and is expected to decrease again in
1981; 3) The City is currently
charging the legal maximum admis-
sions tax; and 4) It is not in a position to
implement a business
and
occupation tax for fear of driving away current businesses
and
scaring off potential new business development.
At the same
time,
the City contends it has undertaken numerous measures de-
signed
to decrease or hold the line on expenditures.
In fact,
the
evidence presented by the City demonstrates that serious ef-
forts
in this regard have been made.
However, as the Union argues, the City must be required
to
search for innovative solutions to its financial difficulties.
It seems to me that to grant a
group of City employees no ongoing,
cumulative
wage increase relieves the City of the burden of
searching
for solutions to a certain extent. Aside
from future
considerations,
if the evidence before me established that the
City simply had no money at
the present time out of which it
could
pay a 1981 wage increase, that would be one thing. On the
facts
at hand, however, I am convinced that is not the case. I
respect
the City's arguments regarding the use of "cash carry
forward"
in payment of its daily operating expenses as well as
the
recommendation of the Municipal Finance Officers Association
that
seven to eight percent of a city's budget or approximately
one
month's revenue be kept on hand to meet current
expenditure
requirements. However, the City began 1981 with a significantly
greater
cash carry forward than either of those recommendations
would
suggest is necessary.
At the beginning of 1981, the City carried forward ap-
proximately
$300,000. Seven to eight percent of its
1981 expen-
diture budget of $2.9 million amounts to between
$203,000 and
$232,000. By the same token, one month's revenue, that
is to
say,
one-twelfth of the 1981 revenue budget of $2.7 million equals
$230,000. Moreover, $110,000 of the approximately
$300,000 cash
cary forward at the end of 1980 was realized by
virtue of the
City's austerity program
during that year which made it possible
to underexpend revenues by 2%.
Additionally, of course, there is
the
$80,000 one-time utility tax revenue realization, part of
which
the City has allocated for police personnel.
What the dis-
cussion above indicates to me is that, in spite of
the City's
relatively
poor tax base by comparison to other Washington cities,
its
management has demonstrated exceptional capability to devise
answers
in response to its financial needs. As a
result, I can-
not
agree with the City's proposal of a lump sum cash payment and
attendant
sharing of potential new revenue. I respect that the
City has attempted to arrive
at a similar accommodation with all
its
various employees. however,
the City must also respect that,
as
the quid pro quo for being denied the right to economic action,
all
uniformed personnel in the state of Washington have the right
to
seek a different award in interest arbitration.
After carefully considering all the evidence submitted,
including
the contentions of the parties, and with special atten-
tion to the legislative declaration set forth in
RCW 41.56.430, I
find
that it is appropriate to award the City's uniformed police
personnel a
general salary increase in the amount of 13% for the
year
1981, retroactive to January 1, 1981.
Specifically, 13% was
selected
in order to strike a balance between the desire to move
Pullman's policemen in the
direction of eventual parity with the
cities
selected and the desire to require the City to institute
no
more of a salary increase at this point than necessary to keep
its
policemen slightly ahead of 80% of the August 1980 Seattle-
U.S. CPI-W figure. A 13% increase will find the top step police-
men
lagging behind comparable positions in the selected cities
by
only 6% and sergeants lagging behind their counterparts by
only
9% as opposed to the current 19% and 22%, respectively.
With regard to 1982 and 1983,
I find it is appropriate to devise
a
formula which hopefully will continue to accomplish the same
two
goals stated above. In each of those
years I shall award a
1% general salary increase in
addition to an amount equivalent
to
80% of the immediately preceding August to August average
Seattle-U.S.
CPI-W. 5/
_____
5/ The reaching the conclusions above, I have determined to
award
the stated salary increases
across the board to all uniformed police
personnel in the unit rather
than to attempt to alter the historical
relative differences between the
various classifications and levels
established through collective
bargaining between the parties, no
evidence being offered that
adoption of the "salary delineation
schedule" proposed by the
union in negotiations was necessary to
correct any shortcomings or
inequities in the spread of salary in
the most recently expired
collective bargaining agreement.
AWARD
Pursuant to RCW 41.56.450, it is hereby awarded that:
I. A general salary increase of 13% shall
be given to all uniformed police
personnel
retroactive to January 1, 1981;
II. The wage for 1982 and 1983 are properly
before the Arbitrator; and
III. The contract shall provide for a general
salary increase for all uniformed
police
personnel in 1982 and 1983 in the
amount
of 1% in addition to an amount equivalent
to 80% of the immediately preceding
August
to August Seattle-U.S. CPI-W in each
of
the two years.
Seattle, Washington
Dated: June 4, 1981 Zane
Lumbley, Labor Arbitrator