City
of
And
Interest
Arbitration
Arbitrator: Charles S. LaCugna
Date
Issued:
Arbitrator: LaCugna; Charles S.
Case #: 05380-I-84-00123
Employer:
City of
Date Issued:
IN INTEREST ARBITRATION
between OPINION
BENEFIT ASSOCIATION
AWARD
and
THE CITY OF
Place of Hearing:
Date of Hearing:
Post Hearing Briefs:
Date of Award:
Arbitrator: Charles
S. LaCugna
For the City: Otto G. Klein, III, Esq.
Syrdal, Danelo, Klein & Myre
For the Association: Will Aitchison, Esq.
Aitchison, Imperati, Paull,
Barnett
& Sherwood
TABLE OF CONTENTS
I FACTS 1
II APPLICABLE STATE LAW 2
III INTERPRETATION AND APPLICATION
OF STATE LAW 2
Guideline (c) Comparison
of the wages, hours, and
conditions of employment of
personnel
involved in the proceeding
with the
wages, hours, and conditions
of em-
ployment
of like personnel of like
employers of similar size on
the west
coast of the
A The Association's Interpretation and
Application of Guideline (c) 4
B The City's Criticism of the Associ-
ation's
Comparative Method 7
C The City's Interpretation and Appli-
cation
of Guideline (c) 11
D The Association's Criticism of the
City's Comparative Method 18
E The Arbitrator's Evaluation of the
Parties' Interpretation and Appli-
cation
of Guideline (c) 19
Guideline (d) The
Average Consumer Prices for Goods
and Services, Commonly known
as the
Cost of Living
22
A The Association's Interpretation and
Application of Guideline (d) 22
B The City's Interpretation and
Application of Guideline (d) 27
C The Arbitrator's Evaluation of the
Parties' Interpretation and
Application
of Guideline (d) 29
Guideline (e) Such Other
Factors which are normally
taken into consideration in
the deter-
mination
of Wages, Hours, and Conditions
of Employment 30
A The Factors
1 Work Load 30
a The Association on Productivity 30
b The City on Productivity 31
2 Turnover Rate 32
3 Ability to Pay 33
4 Other wage Settlements 38
5 How
Other Washington Cities 38
6 The Local Labor Market 38
7
8 Considerations on Equity 40
B The Arbitrator on "Other Factors"
1 On Productivity 41
2 On the Turnover Rate
41
3 On the Ability to Pay 41
ISSUES
Issue No 1 Wages
A The Association on Wages
42
B The City on Wages 42
C The Arbitrator's Conclusion on Wages
1 The Financial Condition of the City 44
2 Wage Settlements in the Local Market 45
Issue No 2 Duration of the Agreement 46
Issue No 3 Hours of Work 47
Issue No 4 Call Back Time 48
Issue No 5 Vacation Scheduling 49
Issue No 6 Required Utilization of Vacation Time 51
Issue No 7 Medical Insurance 52
Issue No 8 LEOFF II Benefits
a Off-Duty Disability 53
b Sick Leave Conversion 55
c Sick Leave Bank
I FACTS
On
newick
Police Officers Benefit Association began negotiations
for a successor agreement, and
on
quested mediation. After the
two mediation sessions of
March 14, 1984, and
PERC, on
items subject to arbitration
since the certification and
before the arbitration hearing
on
parties reduced the number of
items subject to arbitration to
those discussed in this
Opinion and Award
My Opinion and Award is based on the hearing of October
15, 1984, the transcript of
the hearing (263 pages), the
Association's first Brief and
Exhibits (135 pages), the
Association's second Brief (75
pages), the City's Brief (114
pages), the City's fifteen
(15) Exhibits, and a Joint Exhibit
which contains previous
interest arbitration awards, three
fact finding opinions in
Dr. Richard O. Zerbe, Jr., entitled A Selection of Comparable
Cities by Statistical
Method, and a LERC monograph on
Ability to Pay.
On
for their review, a
preliminary draft of my Opinion and Award,
which set forth my
understanding of their respective positions.
This Opinion and Award is my
considered opinion on all matters
before me.
II THE APPLICABLE STATE LAW
RCW 41.56.430 UNIFORMED
PERSONNEL - LESGISLATIVE DECLARATION
The intent and purpose of this 1973 amendatory act is
to recognize that there exists
a public policy in the state
of
means of settling their labor
disputes; that the uninterrupted
and dedicated service of these
classes of employees is vital
to the welfare and public
safety of the state of
that to promote such dedicated
and uninterrupted public
service there should ecist an effective and adequate alter-
native means of settling
strikes.
RCW 41.56.460 UNIFORMED
PERSONNEL - INTEREST ARBITRATION
PANEL - BASIS FOR
DETERMINATION.
In making its determination, the panel shall be mindful
of the legislative purpose
enumerated in RCW 41.56.430 and
as addition standards or
guidelines to aid it in reaching a
decision, it shall take into
consideration the following
factors:
(a) The constitutional and statutory authority of
the employer;
(b) Stipulations of the parties;
(c) Comparison of the wages, hours and conditions of
employment of personnel
involved in the proceedings
with the wages, hours, and
conditions of employment
of like personnel of like
employers of similar size
on the west coast of the
(d) The average consumer prices for goods and ser-
vices, commonly known as the
cost of living;
(e) Changes in any of the foregoing circumstances
during the pendency
of the proceedings; and
(f) Such other factors, not confined to the fore-
going which are normally and
traditionally taken into
consideration in the
determination of wages, hours,
and conditions of employment.
III INTERPRETATION AND APPLICATION OF RCW 41.56.460
Three principles inform my evaluation of the parties
interpretation and application
of RCW 41.56.460. First and
foremost, I have sought to
fashion a "total package" award,
an award that reflects, no
matter how imperfectly, the
"probable"
agreement, an agreement that the parties would
have struck by themselves in
free, robust, give-and-take
negotiations, the ultimate
political-economic reality of labor
relations. No party should get
in arbitration what it could
not get at the bargaining
table. Therefore, I have given very
little weight to the
statistical data, no matter how logically
or mathematically correct,
that contravened this first prin-
ciple
of labor relations because the relative bargaining
strength of the parties, not
statistical evidence, determines
the collective bargaining
agreement. Second, I have dis-
counted the Association's
morally attractive "catch-up" argu-
ment,
an equity argument, because the argument is arguable
forever, and because it
incorrectly assumes that an injustice
exists and that mathematical
equality will remedy that in-
justice. Third, where
possible, I have retained the status
quo because the status quo,
admittedly imperfect, has moral
legitimacy. Collective
bargaining history and law have
sanctioned the principle, quieta non movere. Parties reluc-
tantly
and slowly change the status quo, a congeries of all
those past practices and
prescriptive rights which have
arisen out of the continual,
gradual, accommodated, ever-
evolving relationship between
them. Parties change the
status quo only if the
proposing party can adduce over-
whelmingly
hard, concrete, positive, and persuasive evidence
to show a proposal is not only
desirable but practical and
necessary.
(c) Comparison of the wages, hours, and conditions
of employment of personnel
involved in the pro-
ceeding
with the wages, hours, and conditions of
employment of like personnel
of like employers of
similar size on the west coast
of the
A. The Association's Interpretation and Application of
Guideline (c)
To find the cites that are comparable to
Association adopted the method
enunciated by Dr. Richard Zerbe,
an economist at the
A Selection of Comparable
Cities by the Statistical Method.
The Association thought that Zerbe's method was superior to
all previous interpretations
of the expression "similar size."
Previously, advocates and
arbitrators had interpreted the ex-
pression
"similar size" in population or geographic terms.
The Association thought that Zerbe's method was superior to
the old interpretations not
only because the Zerbe method had
an "intuitive
rationale" but also because it relied on em-
pirical
objective data. And, because many advocates and arbi-
trators
have accepted Zerbe's method a "fairly
consistent
approach" to the issue of
comparability has emerged.
According to the Association, Zerbe had concluded that there
was a statistically
significant relationship between the
presence of certain
demographic variables and the levels of
law enforcement salaries.
These demographic variables not
only have a compelling
intuitive rationale, but when applied
to police officers, they
produce comparable jurisdictions.
Professor Zerbe's
criteria are:
1. Population
2. Number of law
enforcement officers
3. Officers per
population
4. Per capita
income
5. Assessed
valuation
6. Assessed
valuation per capita
7. Part I Crimes
8. Part I Crimes
per officer
9. Part I Crimes
per capita
10. Rate of population increase
Each criterion by itself and
each criterion combined with
another or several criteria
says something about the economic
activity of a particular city
and produces a "good measure of
comparability."
To arrive at its comparable cities, the Association
applied each criterion to
every city in
and
comparability criteria.
Against this data, the Association
established the comparability
range for each criterion by
multiplying and dividing
two. If the Association found
that a city fell outside Ken-
newick's
range, i.e., below 17,500 or above 70,000 for each
of the comparability criteria,
the Association excluded that
city from consideration as a
comparable city. This method
led to the Association's
comparable cities. The cities are:
To determine the wages of
the Association used the wage
of the top step police officer,
the "benchmark"
wage, and the "adjusted" wage. The
the adjusted wage, the
Association added the amount of the
employee's pension
contribution "picked up" by the employer
to the employee's base salary.
The Association compared
parable cities and concluded
that
are entitled to a 5.5%
"catch-up" wage increase. The 5.5%
request is fair because
tween
3.11% and 2.32% longer hours than police officers in
its comparable cities;
to work an unpaid 15-minute
briefing period. Other cities
pay for the briefing time. The
Association calculated hourly
wages for employees with 5,
10, 15, and 20 years of tenure,
with their education levels:
either a high school education,
an associate's degree (or its
police certification equivalent)
or a bachelor's degree (or its
certification equivalent).
The Association concluded that
the catch-up percentages
necessary to bring Kennewick
to the average wage in the com-
parable jurisdictions range between
7.19% to 9.6%, depending
on tenure or education (Brief,
p. 18). From its Exhibit 20,
an exhibit which summarized
all the previous wage exhibits,
the Association concluded that
the average wage increase
necessary to bring Kennewick
to the average wage in its
comparable jurisdictions was
8.7%.
To arrive at "total compensation," the Association
analyzed wages, incentive
payments, retirement costs, insur-
ance
costs, holiday costs, vacation costs, uniform allowances,
and cleaning allowances, and
it converted the accrued but
unused sick leave to cash
benefits upon retirement (Exhs. 21-
24). Then the Association
compared Kennewick's total com-
pensation
with the total compensation in its comparable
cities. The Association
concluded Kennewick is 10.3% behind
the average total compensation
of its comparable cities.
The Association believed that its method of selecting
comparable cities was
empirically objective and that its
statistics show that
Kennewick's police officers are 5.5%
behind the average paid to
police officers in comparable
jurisdictions. If incentive
plans and the hourly rate are
included in the calculations,
police officers need an 8.78%
catch-up increase. And, if the
total compensation figures
are compared, Kennewick police
officers would need 10.34% to
catch up to officers in the
Association's comparable cities.
By any measure, the range of
increase should be from 5.5% to
10.34%.
B. The City's Criticism of the Association's
Comparability Method
The City urged the arbitrator to reject the Asscoiation's
comparability methodology and
the Association's comparable
cities. The City rejected the
Association's assertion that
arbitrators have accepted the Zerbe criteria, that these
criteria are significantly
related to the levels of law en-
forcement
salaries, that a "fairly consistent" approach to
comparability has emerged, and
that Washington arbitrators
have accepted the Zerbe method. Only two arbitrations, the
Renton and Olympia
arbitrations, used all of Zerbe's criteria.
And, even these two arbitrations
do not support the Associ-
ation's
analysis. One arbitrator used only population and
assessed valuation; the
arbitrator explicitly rejected other
factors. Another arbitrator
did not use three of the ten
factors. Further, Zerbe's analysis is incomplete because he
failed to test the effect that
per capita income and popu-
lation
increase have on police salaries. Also, statistics
on Part I Crimes per officer
and Part I Crimes per capita are
unreliable statistics: they
not only fluctuate but also are
subject to budgetary
considerations. Fluctuating criteria
should not be used in any
comparable cities analysis. Redding,
the only city selected by both
parties as a comparable city,
clearly illustrates the
fluctuation. Moreover, the Associ-
ation
listed Redding's wage as $2,170; the actual wage for
Redding police officers is
$1,966.
The City also said that the Association's analysis was
flawed in a number of
respects. First, the Association used
old data, i.e., the data from
1970 through 1980, when it
analyzed the effect of
population increase on salaries. The
outdated data does show that
Kennewick had grown 126% during
these ten years. It is true
that during the early seventies
Kennewick's population did
increase at a rate from 1% to 4%
per year, and that from 1975
through 1980, Kennewick's popu-
lation
did increase at an annual rate of 10% to almost 17%.
However, in 1981, Kennewick's
population grew at a rate of
.01%; in 1982, the increase
was 2.7%, but in 1983, the popu-
lation
decreased. During the last 3 years, the years
omitted in the Association's
analysis, Kennewick grew only
2.2% or.7% annually. Prorated
over a ten year period, Ken-
newick's
population growth rate is between 7% and 8%.
Kennewick's population has
increased because Kennewick has
annexed certain areas. If
Kennewick had not annexed these
areas, Kennewick's population
would have decreased by about
2,000 during the past three
years. Today, Kennewick is not
a rapidly expanding city. It
is unfair and inaccurate to
omit the figures for the last
three years and to assert that
Kennewick's growth rate is
126% and to compare Kennewick
only with cities that had a
growth rate of from 63% to 252%
during 1970 to 1980. Further,
the Association unfairly ex-
cluded
78 cities and seven of the City's proposed cities;
viz., Bellingham, Bremerton,
Chico, Medford, Olympia, Richland,
and Yuba City, solely because
they were growing too slowly.
All but three of the City's
comparable cities would have been
included as comparable cities
if the Association had not used
the population increase
factor. Kennewick is not longer a
vibrant growing and expanding
city. WPPSS has cancelled two
plants and completed a third.
As a result the whole Tri-
Cities area now suffers a
massive economic slowdown
The Association also used old data for per capita income;
the Part I Crimes data is from
1981; the part I Crimes per
capita uses the 1980
population, and the Association failed
to indicate the year of the
data for assessed valuation and
for the number of police
officers. More recent figures are
available, the Association
should have used them.
Second, the Association ignored one of Zerbe's
own
critical criterion: distance
from the hub city, a factor
which Zerbe
said was "powerfully" related to police salaries.
Zerbe
had concluded that police salaries decline as the dis-
tance
from a hub city increases. The Association unfairly
used as comparable cities
those cities near metropolitan
areas. It did so because
police salaries of cities near
metropolitan areas are higher.
The City set the estimated
distance between the
Association's comparable cities and a
major metropolitan city.
Oregon Cities:
Beaverton five miles from Portland
Gresham nine miles from Portland
Hillsboro eighteen miles from Portland
California cities:
Gilroy twenty miles from San Jose
Escondido twenty-two miles from San Diego
Carlsbad twenty-five miles from San Diego
Manteca forty miles from Oakland
Hemet fifty-eight miles from San Diego
Turlock fifty-nine miles from San Jose
Visalia one hundred ninety-five miles from San Jose
Redding two hundred miles from San Francisco
Third, the Association unfairly excluded Fountain valley
although Fountain valley met
all of the Association's dropout
criteria; Clouis
and Chino met eight (8) of the criteria, but
the Association excluded these
cities. Fourth, the Associ-
ation
did not include one city in the entire state of Wash-
ington,
or one city in the local area.
The City concluded "...the Association has used a highly
questionable approach to
arrive at a group of cities which
the City believes are
generally not comparable with Kenne-
wick...." "The
Association's comparable cities analysis
should be rejected."
(Brief, p. 31)
C. The City's Interpretation and Application
Guideline (c)
The City thought that the expression "similar size" em-
braces more than population.
To be comparable, one city must
be "like" another
city. To determine whether one city is
"like" another city,
the advocate and the arbitrator first
must determine whether or not
a city is or is not near a
major metropolitan center
because geographic proximity deter-
mines the economic and
political life of the city.
To emphasize the importance of distance, the City at first
compared wages of top-step
police officers, top-step fire-
fighters, a senior secretary,
a building inspector, a mechanic,
and a finance director on the
east and west sides of the Cas-
cades. The City concluded that
"In each and every case, the
average wage paid east of the
mountains was substantially less
than that paid west of the
mountains. The variations ranged
from approximately 6% for
finance directors to 18% for senior
secretaries" (Brief, p.
13). To test the relationship between
salaries and proximity to a
major metropolitan center, the
City compared the statistical
relationship between top-step
police officer salaries and
distance from Seattle in miles.
The City concluded "with
99.9% confidence" that distance from
Seattle and top-step monthly
salary of police officers are
linearly related. The City
then developed a linear formula
to compare the relationship
between distance and salaries.
Applied to Kennewick (216
miles from Seattle) and "all other
factors being equal,"
Kennewick's top-step police officer
salary should be $2,088.33.
The 71.6% difference in salaries
between Washington cities can
be explained solely by their
distance from Seattle.
The City said that the proximity to a major metropolitan
center also affects assessed
valuation and assessed valuation
per capita. The City compared
these two factors in metro-
politan
and non-metropolitan cities in Washington that were
within fifty percent of
Kennewick's population. The City
found that in 1983
metropolitan cities (based on proximity
to Seattle or Portland) had an
average assessed valuation of
$1,355,400,000;
non-metropolitan cities had an average
assessed valuation of
$77,457,000. Similarly, metropolitan
cities had an assessed
valuation per capita of $41,308.00;
non-metropolitan cities had an
assessed valuation per capita
of $24,710. The City concluded
that there are "substantial
economic differences between
cities based on metropolitan
proximity" (Brief, p.
14).
To arrive at its list of comparable cities, the City
used three criteria. First, it
used the same population
range used by the Association,
viz., a city's 1983 population
must range from 17,570 to
52,709, i.e., 50% below or 50%
above Kennewick's 1983
population. Second, the City said
that a city must be located in
a metropolitan statistical
area (MSA) which has a
population within the parameters of
50% above and 50% below the
Tri-Cities' MSA. Third, the City
must not be in a consolidated
metropolitan statistical area
(CMSA).
The City ultimately rejected the straight mileage
criterion and adopted the
federal government's metropolitan
statistical area groupings, MSAs. The City rejected the
mileage criterion because it
was both "arbitrary" and trouble-
some, especially if a city is
near a metropolitan area. For
example, Bremerton and Renton,
both about 10 miles from down-
town Seattle, cannot be
compared because Puget Sound forms a
natural geographic barrier
between Bremerton and Seattle. No
such barrier exists between
Renton and Seattle. The MSA cri-
terion
overcomes the geographical problem because the MSA
embraces a large population
nucleus, together with adjacent
communities which have a high
degree of social and economic
integration with that nucleus.
Sometimes, small MSAs become
so interdependent and
integrated that they form a larger
area called consolidated
metropolitan statistical area (CMSA).
On the west coast there are
four CMSAs: Seattle-Tacoma,
Portland-Vancouver, San
Francisco-Oakland-San Jose, Los
Angeles-Anaheim-Riverside.
However, not all contiguous MSAs
combine into a CMSA.
Therefore, the City looked for cities
within similarly sized MSAs, i.e., MSAs that were plus
or
minus fifty(50) percent the
size of the Tri-Cities MSA.
Cities within smaller or
larger MSAs would not be "like"
Kennewick.
RANK ORDER OF CITY'S
COMPARABLE MSA'S
BY 1983 POPULATION
1. Yakima 178,512
2. Chico-Paradise 153,670
3. Bremerton 152,613
4. Richland-Kennewick-Pasco 149,787
5. Medford 134,024
6. Olympia 129,886
7. Redding 123,005
8. Bellingham 109,969
9. Yuba City 109,119
AVERAGE 136,350
The City excluded Pullman and Walla Walla
because these
two cities are not in an MSA.
The City concluded that its methodology was "consistent
with and, indeed, closely
tailored to the statutory mandate
to find 'like' employers of
similar size" (Brief, p. 20)
The City applied this criteria and proposed that the
arbitrator select the
following cities as cities comparable
to Kennewick: Yakima,
Bellingham, Redding, Medford, Bremerton,
Richland, Olympia, Chico,
Paradise, Yuba City and Pasco.
RANK ORDER OF CITY'S
COMPARABLE JURISDICTIONS
BY 1983 POPULATION
1.
2. Bellingham 47,823
3. Redding 44,934
4. Medford 40,284
5. Bremerton 37,442
6. Kennewick 35,139
7. Richald 35,033
8.
9.
10. paradise 24,049
11. Yuba
City 20,082
12. Pasco 17,784
These cities have an average population of 34,194; Ken-
newick's
population is 35,139, a difference of only 2.7%.
Not only do all these cities
range within a plus or minus 50%
of Kennewick's assessed
valuation per capita of. $26,202.00,
but the overall average is
$26,598.00, a difference of 1%
to Kennewick's assessed
valuation per capita.
The City recognized the inherent difficulties in any
comparability study (Brief, p.
43). State laws in Washington,
Oregon, and California are
different and the effective date
of wage increases is often
different. Some increases take
effect on July 1, other
increases take effect on January 1.
To cope with the second
difficulty, the City used an annual-
ized
average wage figured on a calendar year basis. For ex-
ample, Bellingham's salary
wage was $2,160, but the July wage
increased it to $2,292. The
City averaged the $2,125 Ken-
newick
police officers received under the City's proposal in
January 1984 with the $2,168
the officers would have re-
ceived
beginning July 1984. The averaged wage for Kennewick
is $2,146.
The City thought that because Kennewick contributes 7%
of each officer's salary to
Social Security in addition to
PERS payments, these amounts
should be treated as income.
All retirement benefits should
be added to the base wage
calculations because
Kennewick's police officers will be
substantially better off at
retirement than their counter-
parts in those cities which
have withdrawn from Social
Security. The City's
contributions to Social Security should
be credited to the City
(Brief, p. 46). The City rejected
the Association's view that
contributions to Social Security
are "illusory." The
City would not make these payments if it
thought that no benefit would
accrue to its employees.
If the arbitrator adds the City's PERS and Social Security
contributions to the base wage
and if he compares this wage
with the City's comparable
cities, he will find that Kenne-
wick is 5.8% above the average
of its comparable cities
(Brief, p. 47). And, if he
compares the adjusted base wage,
he will find that Kennewick is
substantially above the average
of its comparables. Kennewick
ranks third out of twelve
cities and is only third
behind Medford. And, even if the
arbitrator excluded Social
Security contributions, Kennewick
would still be average. The
1984 adjusted wage for the
City's comparables excluding
Social Security contributions
is $2,131; Kennewick's
adjusted wage is $2,146. If the arbi-
trator
adopts the City's 1984 proposal, Kennewick would be
slightly above the average of
its comparable cities.
The City compared the education incentive and longevity
pay plans of its comparable
cities with Kennewick's educati-
onal
incentive and longevity pay plans. To determine how
Kennewick's police officers
compared with officers in com-
parable jurisdictions, in
educational incentive and longevity,
the City used a hypothetical
model: an officer with an A.A.
and five years of service, an
officer with a B.A. and five
years of service, an officer
with ten years of service, an
officer with fifteen years of
service and an AA, and an
officer with twenty years of
service. In each case, Kenne-
wick officers came out
substantially ahead of their compar-
able cities' counterparts. The
differences are as follows:
__________
Comparable
Cities Kennewick % Difference
Five years/A.A. $2,111 $2,360 11.7%
Five years/B.A. 2,352 2,414 7.1%
Ten years 2,164 2,328 7.6%
Fifteen years/A.A. 2,183 2,360 8.1%
Twenty years 2,184 2,414 10.5%
__________
The City admits that there might be many permutations
possible, yet the conclusion
is the same: the data shows that
Kennewick officers are doing
substantially better than the
police officer in the
comparable cities (Brief, p. 48)
The City also offered a "total package comparison,"
admittedly "fraught with
problems," because different juris-
dictions work different hours,
different jurisdictions pay
different amounts for the same
benefit, e.g., medical or
dental benefits, and vacation
schedules are different.
Admittedly, it is not an
"apples to apples" comparison (Brief,
p. 49).
of service, and concluded that
the Kennewick police officers
were substantially better off
than their comparable city
counterpart on a net hourly
compensation basis. The follow-
ing
are the City's figures:
__________
Comparable
Cities Kennewick %
Difference
Five years $14.16 $15.05 6.3%
Ten years 14.41 15.67 8.7%
Fifteen years 14.43 16.10 11.6%
Twenty years 14.92 16.47 10.48%
__________
D. The Association's Criticism of the City's
Comparability Method
First, the Association said that the City's approach to
comparability produced a list
of cities that have virtually
nothing demographically in
common with Kennewick because many
of the City's comparable
cities have considerably less econo-
mic
vitality than Kennewick (Transcript, passim, Brief, p. 10)
Second, the City's approach is untried, untested, and
without sufficient factual
foundation. It is true that the
federal government has
classified and grouped certain cities
into MSAs,
CMSAs, and PMSAs, but the
classification is geo-
graphical, not according to
population. And, "it is com-
pletely
uncertain whether such classifications make any sense
in the context of
comparability analysis." Simply because
cities are grouped into a
geographical MSA, CMSA, or PMSA
does not make the cities
comparable.
Third, the City's approach to comparability has pro-
duced a
group of cities that are vastly dissimilar in "size."
Kennewick is 100% larger than
Pasco in population; and Kenne-
wick's growth rate is four
times the growth rate of Pasco.
Fourth, the City has disregarded simpler and more widely
accepted demographic
methodology, a methodology used in many
arbitrations. Fifth, the
Association's methodology is signi-
ficantly
superior to the City's "stark" geographical and
loosely defined population
groupings (Brief, p. 14).
E. The Arbitrator's Evaluation of the Parties' Interpre-
tation
and Application of Guideline (c)
I have given no weight to the parties' arguments on com-
parability
for a variety of reasons. First, the parties ad-
mitted
that the many and inherent logical and practical dif-
ficulties
made it almost impossible to arrive at comparable
cities. The Association
admitted that the best it could
achieve was "a measure of
comparability"; and the City rightly
asserted that comparability is
as "ephemeral as ever." In
their search for comparable
cities the parties found that one
city might be similar to
another city in one respect, but
dissimilar in other respects.
And, even if one city were
similar to another city in
many respects, that city was not
necessarily comparable because
the one or two differences
might be substantive economic,
political, social, legal psy-
chological
differences.
Second, the parties' different methodology led them to
different
"comparable" cities. The Association warmly em-
braced Zerbe's
method, an attractive but deceptively simple
method. The method, perhaps
useful as an academic model, is
deficient because it does not
and cannot reach, much less
measure, all the factors that
shape the life of a city.
Specifically, the method can
only reach a very small portion,
and only the economic portion
of the life of a city. The
method necessarily neglects
the other known causes, the many
psychological-political causes
that shape a collective bar-
gaining agreement. For
example, the method does not take
into account, as here, the
City's "unwillingness to pay."
The method also incorrectly
assumes that an analysis of com-
parative
statistics, the abstract "averages", can measure
and ultimately locate
comparable cities. Some arbitrators
have noted the limitations
inherent in the Zerbe method;
they have not, as the
Association said, "consistently"
adopted the Zerbe method. Arbitrators have used other cri-
teria
to determine "comparability", notably population and
geography. The seminal Zerbe method is one way to proceed,
not the only way. The
Association's application of the Zerbe
method contradicts its high
praise of the method. Zerbe
unequivocally stated that
distance from a metropolitan area
was "powerfully"
related to wages. Yet, the Association
failed to use this criterion.
Common sense tells us that a
city near to or far from
Kennewick might be statistically
comparable to Kennewick but
that city is not necessarily com-
parable to Kennewick. A host
of demographic forces, the
legal framework, the culture,
the climate, and the mores of
of that city might be decidedly
different from Kennewick.
A city in Southern California
might be statistically com-
parable to Kennewick, but it
cannot be "like" Kennewick. It
is these demographics, not
statistics, that determine the
wages, hours, and conditions
of employment of police officers.
The City's methodology was logically inconsistent. The
City placed primary emphasis
on the local conditions in the
Tri-Cities area, yet it
offered cities far removed from the
local areas as cities
comparable to Kennewick. The City also
incorrectly assumed that
because Kennewick is part of the
Tri-Cities MSA, that cities in
the MSA are comparable to
Kennewick. As the Association
pointed out, Richland and
Pasco are not comparable to
Kennewick just because they be-
long to the same MSA.
Third, the parties could not agree on what elements con-
stituted a
total compensation package for comparison pur-
poses. Specifically, the
parties could not agree on whether
or not social security should
be included in the total package
comparison.
Fourth, the search for comparability necessarily failed
because the parties used
different data, and because advocates,
by very profession, are
result-oriented. In sum, the parties
did not make an "apples
to apples" comparison.
(d) The Average Consumer Prices for Goods and Services,
Commonly Known as the Cost of
Living
A. The Association's Interpretation and Application
of Guideline (d)
After a lengthy analysis of the relative merits of the
PCE deflator and the CPI, the
Association rejected the PCE
deflator as a true measure of
the cost of living (Brief,
pp. 50-52). The Association
also rejected the view that the
CPI should be discounted for
housing costs and for medical
costs. To counter the usual
argument that consumers rent
houses and that not all
consumers purchase a new house every
year, the Association quoted
the BLS. Paraphrased, the BLS
said that the CPI does not
assume that everyone buys a new
house every month. The house
price and mortgage interest
components in the CPI
represent the expenditures only of
those who actually purchased
their own home in the base period.
In effect, those who purchased
their own homes before the
base period are assumed to
have no house price or mortgage in-
terest
costs. Further, the housing cost for those who pur-
chased their homes before the
base period are represented in
the index only by property
taxes, insurance, and maintenance
and repairs. House prices and
contracted mortgage interest
costs represent a small group
of families, roughly 6% of the
total of those who actually purchased
a home in the base
period. Further, the CPI's
housing component assumes that
consumers purchase a new house
not every year but approximately
every 7 years. The 1970 census
figures show that Washington
consumers purchased a new home
every 7.1 years. And, the
rate of increase of the CPI's
housing component has risen at
the slowest rate of any other
housing cost index. For example,
the CPI home purchase
component of the housing cost portion
of the CPI reported an annual
increase of 6.7% a year during
1968-1978. But other indices
of house prices show a more
rapid annual rate of
inflation. Further, the argument that
the CPI's housing component
does not take into account those
consumers who rent rather than
purchase their homes has no
force today because the CPI-U
currently uses a "rental equiv-
alency"
housing component which does incorporate rentals.
The Association also cited the
facts and the arguments from
an article by Daniel J.D.
Mitchell in the May 1980 Monthly
Labor Review, and Jack
Triplett's review of Mitchell's study.
The Association concluded that
"not only does the housing com-
ponent
of the CPI not overstate the effect of inflation but,
if anything, it results in a
downward bias in the CPI" (Associa-
tion
Exhibit on the Cost of Living, pp. 59-61, and Brief, p. 27).
The Association also rejected
the argument that the CPI
overstates the cost of living
because employers, not employees,
pay for all or part of medical
premiums. The Association be-
lieved
that the CPI should not be discounted for medical costs
because medical coverage paid
by the employer is a "type of
income" for the employee
and part of the overall cost package
to the employer. Further,
"it has yet to be calculated what
an employee does with the
surplus monies not spent on the
medical component." The
Association theorized: "If those ex-
penditure
categories are categories in which the CPI is in-
creasing faster than medical
expenditures, the result would
be a downward bias in the CPI
as a measure of the employee's
cost of living. If, however,
the expenditure categories that
receive the additional income
are experiencing price in-
creases lower than the medical
coverage, the CPI would give
an upward bias of the changes
in the cost of living of the
employee." The
Association concluded that unless and until
it is determined where
employees, covered by employer-paid
medical insurance, spend their
money, it is inappropriate to
make any adjustments to the
CPI with respect to the CPI's
medical component (Brief, pp.
60-63).
The Association preferred the Seattle CPI-U (all urban
consumers) to the Seattle
CPI-W (excludes certain consumers)
as the appropriate measure of
the rate of inflation. The
Association acknowledged that
the CPI-W would "appear to be
the better index" for
active employees because the CPI-U
includes retirees. But the
Association preferred and used
the CPI-U "with some
reservations" because the BLS, in 1982,
included a rental equivalency
to replace the old housing com-
ponent.
The CPI-W will not incorporate the rental equival-
ency
until at least after January 1985. The CPI-U is pre-
ferable
for another reason: the CPI-U has been a "smoother"
index for the past two (2)
years, not subject "to wild vari-
ations
dependent upon small changes in the prime rate of in-
terest"
(Brief, p. 66).
The Association rejected the ACCRA index, the index of
the American Chamber of
Commerce Researchers Association, be-
cause the index is not only
inapplicable to the police
officers but it is seriously
flawed in its methodology (cf.
infra the City's use of
ACCRA). The ACCRA index is applicable
only to "a mid-management
executive family's pattern of ex-
penditures
for consumer goods and services," not to police
officers. The ACCRA index
would naturally rank Kennewick
comparatively
"lower" in the cost of living index because
costs dominate the ACCRA
index. The ACCRA is not a predic-
tive
tool for comparison purposes. The ACCRA index has
serious deficiencies: the
number of items priced is very
limited, it completely ignores
taxes, and it completely fails
to take into account
advertising; its data is compiled by
representatives of individual
Chambers of Commerce through-
out the country. ACCRA
"is fraught with the peril for error"
(Brief, p. 36).
The Association admitted that the CPI is imperfect and
that to use the CPI to
forecast economic changes is "fraught
with uncertainty" because
the CPI "can and does fluctuate
significantly, depending not
only on the general economic
conditions extant at a
particular moment, but on the vagaries
of politics and isolated
economic events as well" (Brief, p.67).
Nevertheless, the Association adducced figures based on the
wages of top-step police
officers to show (Exh. 25) that
Kennewick police officers are,
at a minimum, 5.6% behind in-
flation.
If the actual wages had matched inflation, the
"real wages" would
be $2,244.10, not $2,125.00. Even if the
salary of a Kennewick police
officer had kept up with the
CPI, his salary would not have
kept up with and will not keep
up to the CPI because the
City's offer does not take into
account the "timelag" effect of salary increases. Wages in-
crease annually but prices
increase continually. To fully
reflect the cost of living,
changes in wages would have to
change in step with prices;
wages that change less frequently
than prices result in wage
losses even if the percentage wage
change is equal to the
percentage change in price. The
Association calculated that a
police officer with an income
of $20,000 per year in the
initial year with an assumed
change in the cost of living
at 10% would lose $900.90 or 5%
of his yearly salary. Even the
5% loss is understated be-
cause it assumes that prices
only change each month rather
than continually. When prices
continually change, the total
loss is $946.07, not $900.67.
To make up the loss in wages
when wages are not adjusted
during the year, the Association
said that 4.7% should be added
to any other adjustments made
to wages for inflation if it
is assumed prices change only
monthly, and 4.8% if it is
assumed prices change continually
(Brief, p. 74). This is the
proper way to take the "time lag"
into account. The
Association's conclusion was: "To be com-
pletely
adjusted for inflation over the last thirteen (13)
years, the wages of police
officers would need to be increased
by 8.72%, the 5.6% "real
wage" adjustment plus the 3.07%
"time lag"
adjustment" (Brief, pp. 33-34)
B. The City's Interpretation and Application
of Guideline (d)
The City used the Seattle September-September CPI-W
because the parties have used
that index since 1978. The
City thought that its 2% wage
increase offer for 1984 is con-
sistent
with the 0.9% decrease in the CPI-W as of September
1983. In October 1984 the
CPI-W had increased to 3.8%, but
now it has declined to 3.2%.
The CPI-U was at 3.4% and is
now at 3.3%. The arbitrator
should use the 3.2% CPI-W
figure.
The arbitrator should use CPI-W, not the CPI-U, because
the CPI-W more closely
measures the effect of inflation on
police officers: the CPI-U
includes retirees and social
clubs. The CPI-W should be
discounted for the medical pre-
miums
picked up by the City, but the City did not know how
much because no one knows how
police officers spend the money
not spent on medical premiums.
To counter the Association's argument that inflation has
eroded police officers'
"real wages," the City adduced figures
to show that over the last
five (5) years, Kennewick police
officers' salaries have
increased substantially more than
the rise in the CPI-W. The
City figures follow:
__________
Time CPI-W
(Sept.
to Sept.) Kennewick Salaries
1978-1983 48.1% 60.3%
1979-1983 33.8% 45.8%
1980-1983 16.1% 34.%
1981-1983 4.% 15.%
1982-1983 -0.9% 6.%
__________
To arrive at the "real wage," the City divided the
actual
wage by the CPI figure for the
period and then multiplied by
by 100. The resulting figures
are: in 1974 the real wage
increase was $622.04; over the
next five or six years the
real wage increased and
decreased slightly but in 1980 the
real wage went to $623, But
over the last few years, the real
wage has increased
dramatically: to $710 in 1983. The City
concluded that Kennewick
police officers are approximately
14% better off today than they
were in 1980; and the City's
present offer will increase
the real wage of police officers
again up to $715.00. In short,
Kennewick police officers
have been treated
"exceedingly well" (Brief, p. 60).
The City believed that the
average police officer who
came into the department seven
years ago has not suffered
from inflation. In 1977 the
salary was $1005. During the
first 3 to 4 years, his salary
increase was minimal, but the
wage adjustment for the period
from 1977 to 1983 has been
115% compared to the CPI of
68%.
The City rejected the Association's contention that
because the amount of money
differential is 40% higher in
San Francisco "a similar
differential would seem to be called
for" (Brief, p. 62). The
City cited studies by the American
Chamber of Commerce Research
Association which compares the
cost of living in the various MSAs and PMSAs throughout the
United States. Its figures
show that for 1984 most of the
major metropolitan areas on
the west coast have a cost of
living substantially higher
than the national average of 100.
For example, the cost of
living for the San Francisco PMSA
is 134.6, but the cost of
living for the Richland-Kennewick-
Pasco MSA is 94.9. The City
concluded that because there is
a substantial cost of living
difference between Kennewick
and a city in the San
Francisco area, those police officers
in cities in or near
metropolitan areas are not comparable
and should not receive equal
pay.
The City rejected the Association's "time lag"
argument.
The City pointed out that when
parties set salaries, they
set them for the year, not for
January (Brief., p. 64)
Further, the Association
manipulated figures to make the time
lag argument. It, too, could
manipulate figures and it did
so. The City adjusted the
timing one month and showed that
an officer would have a $932
gain rather than a $901 loss.
(The Manipulated Figures are
on p. 64-65 of the City's Brief)
Further, whether there is a
time lag or a time gain, the
fact is that all officers
everywhere are subject to it.
C. The Arbitrator's Evaluation of the Parties' Inter-
pretation
and Application of Guideline (d)
I have given no weight to the parties' cost of living
arguments. First, the CPI is
an imperfect, inadequate measure
of the cost of living because
it contains many intractable
variables, and because it
measures prices retrospectively.
Second, I find it difficult to
understand how the Seattle CPI,
either the CPI-W or CPI-U, is
relevant to Kennewick's cost-
of living. The parties'
arguments are perplexing. The
Association rejected the
CPI-W, favored the CPI-U, but ad-
mitted
that it used the CPI-U "with reservations." The City
emphasized local factors, but
it would apply the Seattle
CPI-W to Kennewick, a city 216
miles from Seattle. Third,
the ACCRA index is wholly
inappropriate because it does not
cover or take into account the
hours, wages, and conditions
of employment of police
officers.
(e) Such Other Factors Which Are Normally Taken Into Con-
sideration
in the Determination of Wages, Hours, and
Conditions of Employment
1. Work Load
(a) The Association on Productivity
The Association argued that the increased productivity of
Kennewick's police officers
justified its request for a 5.5%
increase. The Association
admitted that the attempt to
measure productivity in law
enforcement is "fraught with un-
certainty" but statistics
"can be fairly used to measure both
work 'inputs' and 'outputs'
necessary for a work load analysis"
(Brief, p. 78). The
Association's statistics show that from
1976 to 1983 Part I Crimes had
risen 90.6%. In 1983 Part I
Crimes had risen 112.80%; Part
I Crimes from 1976 to 1983 had
also risen 13.7%. Requests for
patrol services have risen by
21.73%; in 1983 these requests
were 2.84% higher than the
average for the period between
1976-1983. Kennewick police
officers have issued 4.78%
more moving traffic citations than
they did since 1976.
Kennewick's police officers' work load
is relatively high because
Kennewick has a low level of
officers per 1000 persons but
a relatively high and increasing
crime rate. In spite of the
rising crime rate, the reduction
in staff of police personnel
and the low level of policing,
Kennewick police officers had
a clearance rate 30.9% in 1983,
50% higher than the national
average. The clearance rate for
all cities with populations
between 25,000 and 49,999 is about
30% lower than the clearance
rate in Kennewick, and the clear-
ance
rate for all jurisdictions in the Pacific states is al-
most 37% lower than the
clearance rate in Kennewick. Kenne-
wick's clearance rate, on the
rise since 1976, is "truly
astounding."
(b) The City on Productivity
Although the City is proud of its police officers and
its police administration, the
City believed that its police
officers are not entitled to a
productivity "bonus" because
the Association's statistics
do not support its claim. The
City admitted its statistical
dilemma. If the statistics
show that crime has gone down
or is going down, police officers
can argue that their
productivity has increased; if statistics
show crime has risen or is
rising, police officers can argue
that they deserve more money
because they are working harder.
The City criticized the
Association's statistics. The City
thought that the Association
unfairly compared 1983 statistics
with 1977 statistics. In the
late seventies, the City was
growing rapidly because
nuclear plants were being built, but
in 1983 and 1984, the nuclear
plant construction had ceased.
In 1979, the number of Part I
offenses per officer was 58.6;
in 1983, it was 52.3. The
number of Part I offenses has
dropped dramatically. In 1979
there were 86 Part II offenses
per officer; in 1983 there
were only 42 Part II offenses per
officer. Both types of offenses
have dropped every year since
1979. Further, these offenses
are a small part of the overall
police work. The total number
of annual calls has decreased
from 30,400 in 1979 to 26,270
in 1984. Over the last five
years, the clearance rate for
Kennewick police officers has
remained relatively constant.
The five year average is
30.9%; the 1983 clearance rate
is 30.7%. Although Kenne-
wick's clearance rate is above
the national average, Kenne-
wick has been above the
national average for the last five
years. Further, the
Association did not compare Kennewick's
clearance rates with the
clearance rate of its comparable
cities. The Association
inappropriately relied on regional
statistics, statistics
unrelated to cities "like" Kennewick.
2. Turnover Rate
The Association said that the arbitrator must consider
Kennewick's
"startling", "absolutely appalling" turnover rate.
A crisis is approaching. The
Association's Exhibit 36 shows
the turnover rate for the past
five years to be 25%: 10 out
of 39 officers have left the
department to take higher paying
jobs in law enforcement
elsewhere, a turnover rate directly
attributable to low wages
(Brief, p. 97). Low wages do not
save the City money because it
costs approximately $20,000
to $30,000 to fully train a
new police officer, and it takes
approximately five years to
develop an experienced and mature
police officer. Experience is
significant because one police
officer must "back
up" another police officer in emergencies.
Kennewick's high turnover rate
and the inexperience of many
low tenured officers tends to
remove the margin of safety
needed to protect police
officers.
The City countered. It should not come as a surprise
that many police officers have
been with the City only 4 to
6 years. In the late
seventies, Kennewick created ten (10)
new officer positions because
Kennewick was expanding econo-
mically.
These officers are now reaching the four, five, and
six year point in their
careers. The Association misstates
the facts: only three (3)
officers have voluntarily left the
department over the last four
years. The turnover in the
late seventies has now ceased.
The police department has
lost fewer employees on a
percentage basis than other de-
partments.
3. Ability to Pay
The City rejected the Association's request for a 5.5%
increase for 1984 not because
it could not pay but because it
was inadvisable to pay. The
City refused to pay because Ken-
newick
is in a "pathetic" economic condition. The City un-
equivocally and directly
challenged the Association's asser-
tion
that Kennewick is a fast growing, economically vibrant
city, a city in a turnaround
condition whose future looks
bright. The City did not deny
that Kennewick had grown sub-
stantially
during the 1970s, primarily because WPPSS employed
many people to build the three
(3) nuclear plants. Today,
however, one plant has been
completed, one has been termi-
nated,
and the other mothballed. This substantial decrease
in work, a layoff of 9,000
employees, has interrupted Kenne-
wick's previous prosperity.
Kennewick's population grew during
the last three years not
because its economy was vibrant or
booming, but because Kennewick
has annexed territory. If the
City had not annexed
territory, the City would have lost almost
2,000 persons. The facts show
that Kennewick suffers economic
stagnation. During the last
few years, the non-agricultural
payroll within Benton County
has decreased by almost 10%.
Kennewick has the highest
unemployment rate of any west coast
city, currently at 15.1%, a
rate higher than the rate of the
whole Tri-Cities area.
Kennewick's economic downturn is
evident in other ways. The
value of all building permits,
residential and commercial,
for new and remodel work, has de-
creased from $56 million in
1979 to $9 million in 1983.
Occupancy rates for multiplexes,
mobile homes and apartment
complexes have decreased
substantially over the last three
years. Although sales tax
receipts in the late seventies had
increased from 8% to 37% per
year over the last five years,
sales tax receipts have
increased at an average rate of less
than 1% per year. And, in two
of the last three years, there
has been a decrease in sales
tax revenues. Kennewick ranks
19th in per capita
distribution of state collected revenues
distributed to Washington
cities. The revenue available to
Kennewick is $277.44, but the
state-wide per capita revenue
yield for cities is $446.08.
Further, since 1978 the CPI has
increased 56.3% but general
government revenue has increased
only 36.8%. The City estimated
that its revenue projections
(admittedly quite sketchy) for
1985 would increase from 1.3%
to 4.7%, depending on how much
additional territory the City
annexes. But the increase
would be offset by the City's
obligation to provide
governmental services.
The City cannot easily raise revenue. It could impose
an optional local sales tax,
but this is not a real alterna-
tive
because Kennewick is close to the Oregon border where
there is no sales tax. A local
sales tax could drive con-
sumers
to Oregon to shop. Neither Richland nor Pasco, nor
Benton or Franklin counties
has a local sales tax. Over the
last six years, the citizens
of Kennewick have consistently
rejected ten (10) different
bond elections or tax initiatives,
whether the issue was street
improvements, parks, emergency
dispatch, or hospitals. The
City has reduced the number of
its employees: in 1983 the
City reduced the 1982 payroll by
10%, the equivalent of 25 full
time positions (the actual
number of positions left
unfilled is about 35 to 40). The
number of city employees per
thousand population decreased
significantly in 1983; in 1982
Kennewick had 6.60 employees
per thousand citizens; in 1983
Kennewick had 6.02 employees
per thousand. From 1982
through 1984 the City reduced the
total number of its employees
by 11.9%, but the City reduced
the police department by only
7.2%. Contrary to the Associ-
ation's
view, the police officers have not suffered the brunt
of the reductions.
The Association (Exhibits 40-42) incorrectly asserted
that there has been a 566%
increase in expenditures. The
ending fund balance shows a
surplus because the state auditor
informed the City that the
City must actually budget 10% of
its general funds into the
ending fund balance category. The
City now has a favorable
ending fund balance because the City
made personnel cuts and took
other savings measures. If the
ending fund balance figure is
inserted into the Association's
Exhibit 40, the figures would
show very little increase in
expenditures. The
Association's Exhibit 41 makes a similar
mistake: it does not include
the ending fund balance. If that
amount were added, the total
would be $7,744.926. Thus, the
overall increase from 1982 to
1984 is only 7.7%. The 7.7%
compares favorably with an 11%
increase in the police budget.
Further, the Association's
Exhibit 42 uses actual dollars,
not the budgeted amounts. If
actual dollars were used, the
1983 and 1984 figures would be
close to the figures for 1982.
The Association knows that
Kennewick is not an economically
healthy and robust city. In
fact, Kennewick's poor economic
conditions could justify no
increase at all in wages. This
explains why the City, at
first, suggested a wage freeze.
Only after July 1, when it
found it could pay something more,
did the City raise its offer
to a 2% increase for 1984 (Brief,
p. 41).
4. Other Wage Settlements
The Association pointed out that arbitrators sometimes
use other wage settlements as
a factor to arrive at wages.
The Association pointed to the
following facts. The average
wage settlement throughout the
State of Washington for 1984,
for cities with service
populations above 15,000, was 3.7%.
In Eastern Washington, Pullman
had settled for 7.2%; Spokane
for 5.5%, Yakima for 3.5%, and
Pasco and Richland had agreed
to a wage freeze. The average
settlement in Eastern Washing-
ton cities was 3.6%. The Pasco
police officers have received
a 2% wage increase each
quarter of 1985; the Yakima police
officers have received a 5%
wage increase effective January
1985, and a 2.5% increase
effective July 1985; Kennewick's
firefighters have received a
4% wage increase effective Janu-
ary
1, 1985; the average wage award in five law enforcement
factfindings
and interest arbitrations in Oregon and Wash-
ington
in 1984 (Olympia, Seattle, Portland, Washington County
and Hermiston) is 5.9%. The
Association said that "it appears"
that the average settlement in
Washington police agencies for
fiscal year 1985 is between
five and seven percent. Five (5)
percent to seven (7) percent
for 1985 is reasonable because
the economy in the Tri-Cities
area in general and in Kenne-
wick in particular has not
only been improving over the
past year, but is
"stable" and "likely to improve" in the
future (Brief, p. 115).
5. How Kennewick Ranked in Relation to Other Washington
Cities
The Association's Exhibits show that, although Kenne-
wick is the tenth largest city
in Washington, Kennewick ranks
25th in the wages it pays to
its police officers. Further,
the City's expenditures per
capita for police officer sal-
aries
are the third lowest in the state, and these expendi-
tures
are significantly lower than every other Eastern Wash-
ington
city, save one. And, Kennewick has one of the lowest
ratios of per capita income to
police salaries in Washington.
6. The Local Labor Market
The City considered the local labor market a significant
factor, probably the most
significant factor in any deter-
mination
of wages. The City urged the arbitrator to give
great weight to the local
labor market because the local labor
market has more effect on
Kennewick's police officers than
any other factor (Brief, p.
50-51). The local labor market
embraces similar social,
geographic, and economic units.
Officers are recruited from
the same pool and they have simi-
lar
job duties and responsibilities. It is the local labor
market that has produced
freely negotiated agreements and
the historic relationship
between Kennewick, Richland, and
Pasco. Every year since 1974
Richland police officers have
received more than Kennewick
officers and Kennewick officers
have received more than Pasco
officers (Brief, p. 53). The
City's 2% offer will continue
this historic relationship: it
will bring Kennewick police
officers to within $32.00 of the
Richland police officers, a
differential less than the dif-
ferential
between Richland officers and Kennewick officers at
any time over the last eleven
years. Previously, the smallest
differential between the two
cities was the $45.00 different-
ial
in 1975. For 1984 Richland and Pasco officers both
agreed on a wage freeze;
Kennewick firefighters and operating
engineers also agreed to a
wage freeze. However, because the
City found that it was in
slightly better fiscal condition
than it had expected to be,
the City decided to give a 2%
raise effective July 1, 1984
to firefighters, to operating
engineers and to other City
employees.
The figures show that Kennewick and Richland officers'
salaries continued to climb,
but Pasco officers have not kept
up with the historic
relationship. To preserve this historic
relationship, the City of
Pasco and the Pasco Police Officers
Guild have agreed to a wage
increase of 8% for 1985. Pasco
police officers' wages will
rise to $2,164, and if the arbi-
trator
awards 4% to the Kennewick officers for 1985, Kenne-
wick officer salaries will
rise to $2,254. Richland and
Pasco police officers have
both agreed to a wage freeze.
Many other public and private sector employers and unions
in the Tri-Cities have agreed
to a wage freeze, including the
Plumbers and Pipefighters Union, a militant union (Tr. p. 107
and Brief, p. 56). The City's
2% wage increase offer not only
reflects the local labor
market conditions, it preserves the
historic relationship between
Richland, Kennewick, and Pasco.
7. Kennewick Belongs to the Tri-Cities MSA
The Tri-Cities is an economically and socially integrated
area, an MSA. In the Tri-Cities
area, police officers fre-
quently
interact with each other. The three cities operate
a centralized emergency
dispatch system for the entire Tri-
Cities region. The three
cities coordinate many functions:
they have a common Justice
Center (shared with Benton County);
they have a joint training
program, a common computer system
to maintain crime statistics
and to spot regional trends;
they all belong to the
Tri-Cities Good Roads Association, to
the Mid-Columbia Building
Inspection Association, and to the
Columbia River Association of
Planners; they form a Tri-
Cities library district (with
Benton-Franklin Governmental
Conference) which has a mutual
aid pact. In short, the inter-
action between these three
cities, and Benton and Franklin
Counties as well, is
substantial and ongoing (Tr. p. 156-157;
Brief, p. 55).
8. Consideration of Equity
The City pointed out that all other City employees have
accepted or received 2% for
1984 and 4% for 1985. It is true
that the police officers and
firefighters have not always
moved in tandem from 1974 to
1983, but the total percentage
increase has been almost
equal: 154.4% for police officers
and 154% for firefighters.
Equity demands that all employees
share the economic hardship
equally (Brief, p. 57)
The Arbitrator on "Other
Factors"
I have given no weight to the parties' arguments on pro-
ductivity,
on the turnover rate, and on ability to pay.
1. On Productivity
As the Association admitted, statistics on productivity
are "fraught with
uncertainty": there is just no way to
measure productivity in
professional occupations. The crime
rate incidence caused by
criminals fluctuates and is beyond
the control of the City.
Further, crime figures are only a
small part of a police
officer's work load; police officers
perform many other functions.
2. On the Turnover Rate
Although the figures seem to support the City, I am very
suspicious about the avowed or
putative reasons why persons
enter or leave law
enforcement. The reasons are as varied as
they are mysterious. Wages
alone do not determine the entry
or the leave rate. A variety
of reasons, not subject to
statistical analysis,
determine entry or leave rate: economic
necessity, morale in a
particular police department, benev-
olent
and vigorous police administration, recreational
facilities, established roots,
and safe neighborhoods.
3. Ability to Pay
The Association's argument that the City could pay 5.5%
for 1984 is of no consequence
because the City admitted that
it could pay, and would pay if
the arbitrator so ordered.
Therefore, the Association's
lengthy discussion on the mono-
graph Ability to Pay: A Search
for Definitions of Standards
and Arbitration, has no revelance here.
Issue No. 1 Wages
A. The Association's Conclusion on Wages
The Association believed that all its statistics - on
comparability, on the cost of
living, on workload, on turn-
over rates, on productivity -
persuasively argue that its
request for a 5.5% wage
increase for 1984 is not only equit-
able but conservative.
Statistics on the comparable juris-
dictions show that Kennewick
is about 5.8% behind its com-
parable cities and its
analysis of the cost of living shows
that Kennewick is 5% to 8%
behind the rate of inflation.
Kennewick police officers'
work load is incredible; the
police department is
productive; Kennewick ranks low both in
staffing levels and
expenditures per capita among Washington
cities, and low in
relationship to police salaries in the
community. The arbitrator
should not Award a wage increase
less than 5.5%.
B. The City's Conclusion on Wages
The City proposed a two-year agreement; a 2% wage in-
crease effective July 1, 1984,
and 4% wage increase effective
January 1, 1985.
The City believed that its proposal is fair, reasonable,
and justified because the
proposal is equal to the salary in-
crease offered to, and
accepted by all other represented em-
ployees
in the City; because the increase is equal to the
salary increase given to all
non-union employees of the City;
because the increase compares
favorably with increases given
police officers in Richland
and Pasco; because the City's
proposal will, during 1984 and
1985, maintain the historical
wage relationship between the
police officers in Kennewick
and the police officers in
Richland and in Pasco; because the
City's proposal is consistent
with its comparable cities;
because the existing adverse
economic conditions existing in
the Tri-Cities justify the
proposal; and because other public
and private sector employees
in the Tri-Cities have received
similar raises.
The arbitrator should adopt the City's proposal.
C. The Arbitrator's Conclusion on Wages
What shall the wages of Kennewick police officers be?
Shall the arbitrator award the
City's offer: 2% for 1984 and
4% for 1985? Or, shall the
arbitrator award 5.5% for 1984
and from 5% to 7% for 1985, as
the Association requested? To
answer this question, I have
asked myself: what would have
been the "probable"
agreement? Would the Association's
statistics and arguments
convince the City? Given the polit-
ical,
economic, and psychological context, what would the
parties have agreed to in free
collective bargaining?
I have attached great significance and decisive weight
to two local conditions, the
financial condition of the City
and the wage settlements in
the Tri-Cities and in the City
of Kennewick, because these
two local conditions, more than
statistical analysis, directly
affect and ultimately determine
the collective bargaining
agreement.
Kennewick belongs to the Tri-Cities MSA, an economically
and socially integrated area.
Kennewick, the largest of
these three cities, has a
population of 35,000; Richalnd's
population is 31,000; and Pacso's population is 19,000.
Kennewick, bounded on the west
by a joint border with Rich-
land and on the north by the
Columbia River, has some growth
potential to the south and
southeast. The City, a bedroom
community, has moderate
commercial activity but a very
limited industrial tax base.
Territorially, Kennewick em-
braces several islands within
its confines. Persons on these
islands, county residents, do
not pay toward the general city
government operations for
street, parks, and other amenities,
but they benefit from its
government. These county residents,
however, do pay higher fees
for services such as water, sewer,
and special park programs.
1. The Financial Condition of the City
First, Kennewick is not, as the Association said, a
vibrant, economically stable
city with a bright future.
The City's analysis of its
financial position, uncontested
by the Union, shows that the
decline of WPPSS has caused high
unemployment in the Tri-Cities
area. As a result, the City
has had to reduce
expenditures, lay off employees, and
initiate savings programs.
Second, and very important, citi-
zens
have rejected outright all City proposals to raise
revenue. Third, the City's
power to tax is very limited.
2. Wage Settlements in the Local Market
Wage settlemnts in the Tri-Cities
area directly affect
the wages of Kennewick police
officers. Most wage settle-
ments
for the Tri-Cities area range from zero (0) percent to
two (2) percent for 1984. Only
Benton County settled for
3½%; Kennewick General
Hospital settled for 4% in 1984 but
for 2% for 1985; and Kadlec Hospital settled for 3% for 1984.
In the City of Kennewick,
firefighters, operating engineers,
and other City employees
accepted or received 2% for 1984
and 4% for 1985. These local
conditions impose severe
economic, political, and
psychological restraints on the
City. Therefore, I conclude
that it is highly unlikely that
in free collective bargaining
the City would grant the
Association 5.5% for 1984 and
5% to 7% in 1985.
What, then, shall be the wages for police officers in
1984 and in 1985? Shall it be
the City's 2% offer? I can-
not award the City's offer of
2% for 1984 or 4% for 1985
because the offer does not
take into consideration the
historical disparity in wages
between police officers and
firefighters. This historical
wage pattern is an excellent
barometer to determine wages
because free collective bargain-
ing,
not compulsory arbitration (except in one case) has pro-
duced
this disparity. The figures from 1974 to 1983 show
that police officers have been
paid slightly more than fire-
fighters. To preserve this
historical disparity, police
officers should be paid more,
but only slightly more than
firefighters. I have reviewed
all figures, and I have con-
cluded
that the Association could get from the City more than
the 2% the City offered the
firefighters for 1984, and more
than the 4% the City offered
the firefighters for 1985.
Therefore, I award the
Association 2.4% wage increase for
1984, and a 4.4% wage increase
for 1985. This award takes
into account the economic
conditions of the whole Tri-Cities
area, the settlements in the
Tri-Cities area, the wage
settlements in
difference between the wages
of police officers and fire
fighters.
Issue No. 2: Duration of
Agreement
The City proposed a 2% wage increase effective July 1,
1984, and a 4% wage increase
effective
Association proposed a one (1)
year agreement. The City
rejected a one-year agreement:
a one-year agreement would send
the parties back to the
bargaining table immediately. A two-
year agreement would allow the
parties to begin bargaining
sometime in mid-1985 for a
successor agreement.
Award: The Agreement shall run from July 1, 1984, through
December 31, 1985.
The Association recognized the need for a longer agree-
ment.
Issue No. 3: Hours of Work
Article 7(c) of the current agreement requires police
officers to appear for an
unpaid fifteen (15) minutes "line-
up" time before their
regular work shift to get assignments.
The Association's proposal,
"clearly the most important in
these proceedings," would
delete Article 7(c) (Brief, p. 116).
The arbitrator should award
the Association's proposal be-
cause officers should be paid
for all work that they perform.
The total unpaid time is not
insignificant: fifteen minutes
a day amounts to 1.25 hours
per week or the equivalent of
3.13% in wages. Police
officers in Kennewick's comparable
jurisdictions work an average
of 3.2% less hours per year
than do police officers in
Kennewick; only one fo the com-
parable jurisdictions has an
unpaid briefing time.
The City urged the arbitrator to reject the Association's
proposal because the proposal
is a radical departure from
long established past
practice. The issue is not unpaid time.
Police officers are paid for
eight (8) hours and fifteen (15)
minutes, the fifteen minutes
is part of the police work day.
Officers are paid on a monthly
basis, not an hourly basis.
The majority of the City's
comparable cities have uncompen-
sated lineup time;
lineup time. Police officers
in
benefit; hence, they actually
work only seven hours forty-five
minutes per day. The cost of
the Association's proposal is
not insignificant: at a
straight time rate, the cost to the
City would be 3.13%; at
overtime rate, the cost for the coming
year would be $48,000, a very
costly item (City Brief, p. 92)
Award: Retain the status quo.
The City's financial condition, past practice, and area
practice argue for the status
quo. However, because this
subject matter is of great
importance to the Association, the
parties are hereby ordered to
consider this matter during the
1985 negotiations.
Issue No. 4: Call Back Time
Article 8(a) of the current agreement guarantees police
officers a minimum three hours
overtime pay whether or not
their court appearance lasts
three hours. The City proposed
that, if an officer's court
appearance lasts less than three
hours, the City be empowered
to assign work to the police
officer for the remaining
time. The City said that its pro-
posal
simply asks "an hour's work for an hour's pay" because
a police officer is seldom in
court for the entire three
hours. The proposal is fair
because the City now is experi-
encing
economic difficulties; police officers should share
the economic burden; police
officers should be more pro-
ductive
especially because the staffing levels in the police
department have been reduced
by 7%. Police officers would
be required to work only if
there is actually work to do.
Police officers could do the
paper work which they sometimes
do on overtime hours. The time
also could be used for train-
ing
and for many other purposes.
The City estimated that in 1983 the City paid officers
for 786 hours for court time,
time for which the officers
did not work. The premium pay
more than adequately compen-
sates the employees for the
disruption and the inconvenience
caused by recall. Although its
proposal is not supported by
the data on its comparable
cities, the City noted that Rich-
land, adjacent to Kennewick,
is one of the two cities that
does have this call back
requirement. The City believed that
this is a proposal "whose
time has come" (Brief, p. 98).
Award: Retain the status quo.
The City's proposal is vague and indefinite; past
practice argues for the status
quo.
Issue No. 5: Vacation
Scheduling
In its application of the vacation provision, the City's
practice has been to allow
police officers to use vacation
time in increments of five (5)
days or more. To allow police
officers to take vacation in
increments of less than five
days, the Association proposed
the following provision:
Subject to the reasonable
operational needs of the
department, employees shall be
allowed to schedule
vacation time in increments of
less than five (5)
days.
The Association thought its proposal fair because
virtually all employees in the
public or private sector allow
it, the practice in the
comparable jurisdictions, where that
practice is ascertainable,
allows employees to take vacation
time in increments of less
than five (5) days, and the City's
interpretation of the current
collective bargaining agreement
"appears to stray
far" from the intent of the language be-
cause the current agreement
does not restrict the use of
vacation time (Brief, p.
125-127). Finally, the use of
vacation time is always
subject to the operational needs of
the City.
The City rejected the Association's proposal because the
current system is working. The
City does not require police
officers to take vacations in
increments of more than five
days - last year, 139
vacations of 174 vacations taken were
for less than five days. The
City will generally schedule
police officers's
vacations for five days or longer because
longer vacations relieve
stress and refresh officers. The
City opposes the Association's
proposal to make sure that the
City can continue to exercise
this preference. The present
practice does not adversely
affect police officers. Police
officers may take vacation for
fewer than five days. All
other employees use the
current and long established vacation
allocation system. The
Association has failed to adduce
sufficient evidence to support
its proposal.
Award: Retain the status quo.
The City must have administrative discretion to schedule
vacations. The Association's
language "subject to the reason-
able operations" of the
City is ambiguous and potentially
troublesome language.
Issue No. 6: Required Utilization of Vacation Time
The Association proposed to eliminate the current language
which requires a police
officer to use at least 75% of his
accrued vacation during the
fiscal year. The Association's
substitute proposal was;
"No employee shall be allowed to
carry over from one year to
the next any more than one year's
accrual of vacation
time." The Association made this proposal
because those officers in the
department a short time accrued
little vacation time. These
officers cannot take vacations
of two weeks or more
"even though their levels of accrual
would normally permit them to
do so" (Brief, p. 128). The
Association made its
substitute proposal because the Associ-
ation
recognized the City's concern for unfunded liability.
The arbitrator should award
the Association's proposal because
the proposal is fairly common
in law enforcement, and because
it provides the City with the
necessary protection against
substantial unfunded
liability. At the same time, the pro-
posal
grants police officers the necessary flexibility to
take meaningful and important
vacations with their families.
And, the proposal would also
bring
with the practice in the
comparable cities.
The City believed that the current requirement that a
police officer use 75% of his
annual vacation should be re-
tained.
The City favors and encourages police officers to
take vacations to clear their
minds and to return to work
refreshed and ready to work.
Vacations make better employees,
better employees are more
productive. In practice, police
officers use substantially
more than 75% of their vacation.
Since 1980 the least amount of
vacation earned and used was
87%. The City said that it was
rightly worried about its
unfunded liability because the
legislature might require
municipal employers to fully
fund pension plans for all
amounts which may be due upon
retirement.
Award: Retain the status quo.
The
It is unwise administrative
practice for the City to agree to
or for the arbitrator to order
any unfunded liability because
an unfunded liability, no
matter how small, mortgages the
City's financial future.
Issue No. 7: Medical Insurance
The City, concerned with the rapidly rising cost of
health care, proposed that, if
beginning
the composite medical premium
exceeded $175.00, the Associ-
ation
elect (1) to pay the excess amount over $175.00, or (2)
to agree to a $100/$300
employee-dependent deductible. The
City pointed out that over the
last three years the CPI has
increased at a total 6.5%, but
medical costs for the City of
vides benefits superior to the
plans in
City agreed to pay $20.00 per
month premium increase, an
increase of almost 1% of a
And, the City is willing to
pick up another $25.00 for 1985,
another 1% increase. Employees
often share the cost of medi-
cal insurance; only three
cities of the City's twelve com-
parable cities fund the entire
medical plan. The operating
engineers have agreed to the
proposal; the firefighters have
agreed to a $100/$300
deductible.
The Association said that the arbitrator should not con-
sider
such a dramatic change unless the City can show that it
has taken measures to contain
costs. The City has not done
so. The Association would be
ready to participate in cost
containment discussions. For
example, the Association would
be willing to negotiate a
"wellness" program. The City's
cost is currently $15.72 per
month per employee, less than
the costs in the Association's
comparable cities.
Award: Retain the status quo.
However, since this matter is of great concern to the
City, the parties are hereby
ordered to consider this matter
during the 1985 negotiations.
Issue No. 8: LEOFF II Benefits
a. Off Duty Disability
The Association proposed that the City fund (1) an off-
duty disability insurance
policy for LEOFF II officers. In
1976 the Legislature,
concerned with the substantial unfunded
liability of the LEOFF system,
changed the retirement system
of police officers and
firefighters. The Legislature created
the LEOFF II system which
provided retirement benefits for
LEOFF II officers that are substantially
lower than those
provided for LEOFF I officers.
The Legislature left it to
cities to negotiate LEOFF II
supplemental benefits.
The arbitrator should adopt the Association's proposal
because the proposal costs the
City little, an estimated
$20,00.[sic] The proposal
would plug "one of the most gaping
holes" in the LEOFF II
system: the LEOFF II system has no
adequate provision for an
off-duty police officer who becomes
permanently disabled.
The City rejected the Association's proposal because the
cost, approximately
$5,000-$10,000, is high, especially in
these times of economic
distress. None of the City's com-
parable cities have such a
benefit. The proposal would re-
verse legislation intent,
i.e., to eliminate public funding
for off-duty disabilities. The
record shows that LEOFF I
officers use substantially
more sick leave than any other
employees in the City; last
year non-contract employees used
2.6% of sick leave; operating
engineers 2.6%, LEOFF II fire-
fighters 2.4%, and LEOFF II
police officers 3.4%. But LEOFF
I firefighters were off 13.1%
of the time. The proposal would
make the LEOFF II system a
"reincarnation" of LEOFF I.
Award: Retain the status quo.
The proposal is an added cost to the financially
troubled City.
b. Sick Leave Conversion on Retirement
The The Association proposed that the
City pay LEOFF II
officers 50% of all accrued
but unused sick leave on retire-
ment.
The cash benefit would provide a small sum for health
insurance and for other
retirement costs in the first years
of retirement.
The Association thought its proposal fair because it
would act as a "sick
leave incentive for officers, partic-
ularly
in the latter years of their employment"; it would re-
ward a police officer for
judicious utilization of sick leave.
Five of the Association's
comparable cities have sick leave
conversion provisions, and 21
of the 29 cities in
surveyed by the Attorney
General had such a provision. The
cost to the City is minimal.
Hypothetically, a current Kenne-
wick police officer, under the
Association's proposed conver-
sion
system, would upon retirement be entitled to nine days
of sick leave per year for
each of an estimated twenty-five
years of employment, or for
two hundred and twenty-five (225)
days of sick leave at the 50%
conversion rate. At 50% the
police officer would be
entitled to 112.5 days of sick leave
upon retirement; since the
officer earned $98.08 per day of
service, the cost for 112.5
days of sick leave would be
$11,033.86. Amortized over 25
years, the cost to the City
would be $6.78, or 1.73% of a
top-step officer's salary. The
sick leave conversion system
benefits both the City and
police officers at very little
cost to the City.
The City rejected the proposal for a variety of reasons.
First, the proposal would
create an unfunded liability for
50% of all of the accumulated
sick leave which, at current
rates, would amount to
$35,000. Second, the cost is not mini-
mal; responsible fiscal
management requires that the liability
be funded. Third, LEOFF II
officers would not use less sick
leave because the City does
not have a problem with the use
of sick leave. Studies suggest
that payoff systems do not
effectively control sick
leave. Fourth, the proposal is a
form of severance pay; sick
leave is to be used for sick
leave, not for retirement.
LEOFF II pension payments and
Social Security payments
provide fore retirement. Under the
present system, police
officers will receive generous and
substantial pension payments.
A 20 year LEOFF II officer who
retires in 1985 would receive
$1,652, which is about 75% of
his base wage. Fifth, the
Association did not base its pro-
posal
on its comparability criterion; the Association only
chose cities in Washington.
Sixth, eight of the City's
eleven comparable cities do
not have a sick leave cash-in
plan. In the last
negotiations, the City bought out of a
previous sick leave conversion
system for LEOFF II firefight-
ers.
The City hopes to buy out of the sick leave conversion
systemffor
the operating engineers. The Association unfairly
requests such a system for
LEOFF II officers.
Award: Retain the status quo.
Sick leave must be used for sickness, not for retire-
ment.
The proposal is an added cost to the financially
troubled City.
3. Sick Leave Bank
The Association proposed that the City create a sick
leave bank for LEOFF II
officers. Under the proposal, LEOFF
II police officers could draw
up to 120 hours from the sick
leave bank during the first
few years of their employment.
but only if the LEOFF II
officer did not have the necessary
accrued sick leave to cover a
catastrophic or serious illness.
When the police officer
returned to health, he would be obli-
gated to reimburse the bank
for the sick leave "borrowed."
The proposal costs the City nothing. The record shows
that many LEOFF II police
officers take more than eight (8)
hours of sick leave during
their first twelve months of ser-
vice. If a police officer
needed to take sick leave during
the first twelve months of his
employment, he would have to
take leave without pay. A number
of law enforcement labor
agreements in the State of
Washington have sick leave banks.
The City rejected the Association's request for a sick
leave bank because none of the
City's comparables have such
a proposal; no other City
employees have such a bank. The
record shows that City
employees use very little sick leave
during the first year. The
last fifteen officers hired by
the City used 1.83 days,
substantially less sick leave than
the sick leave used for all
employees of the City. In 1983
LEOFF II officers used on the
average 69.9 hours of sick
leave; LEOFF I officers used
on the average 272.7 hours.
Non-contract employees used 53
hours; operating engineers
used 54 hours. There is no
need for a sick leave bank for
LEOFF II officers.
Award: Retain the status quo.
The Association failed to show that there was an imper-
ative
need for a sick leave bank. And, a sick leave bank
would require administrative
machinery, an added cost to the
financially troubled City.
I hereby retain complete jurisdiction over this Opinion
and Award until
/s/
Date: