City
of
And
Mount
Interest
Arbitration
Arbitrator: Gary L. Axon
Date
Issued:
Arbitrator:
Axon; Gary L.
Case #: 10183-I-92-00218
Employer:
City of
Date Issued: 11/06/1993
IN THE MATER OF )
)
INTEREST ARBITRATION ) PERC
NO. 10183-1-92-218
)
BETWEEN ) NEUTRAL ARBITRATOR'S
)
MOUNT
SERVICES
GUILD, ) AWARD
Guild, ) 1993
WAGE REOPENER
)
and )
)
CITY OF
)
City. )
HEARING SITE: City Hall
HEARING DATES: July 8, 9, 12, 1993
POST-HEARING BRIEFS DUE: Postmarked
RECORD CLOSED ON RECEIPT OF BRIEFS:
REPRESENTING THE GUILD: James M. Cline
Hoag, Vick, Tarantino & Garrettson
REPRESENTING THE CITY: Bruce L. Schroeder
Heller,
Ehrman, White & McAuliffe
6100
701
ARBITRATION PANEL: Mike Marker
Guild
Appointed Member
Linford Smith
City
Appointed Member
Gary
L. Axon
Neutral
Arbitrator
1465
Pinecrest Terrace
(503)
488-1573
Table
of Contents
Page
I. Introduction 2
II. Background 7
III. Position
of the Guild 9
IV. Position
of the City 23
V. Discussion
and Findings 41
A. Guild Proposal to Change the Wage Grid 44
B. Wages 46
Constitutional
and Statutory Authority
of
the Employer 49
Stipulations
of the Parties 49
Comparability 49
Cost
of Living 57
Changes 59
Other
Factors 59
Award 60
I. INTRODUCTION
This
case is an interest arbitration conducted pursuant
to Chapter 41.56 RCW. The parties to this dispute are the City of
and the
("Guild"). In 1990 the parties negotiated their first
Collective
Bargaining Agreement under
covered
the three-year period from
called for a salary reopener
for the third year of the contract.
The
parties were unable
to resolve the
sole issue of the
appropriate wage rate for 1993 through
negotiation and mediation.
The matter was certified for interest
arbitration pursuant td RCW
41.56.450, et seq.
The
City of
and timber economy.
between
corridor.
The 1993 population of the City is approximately 20,450.
The City actively promotes a rural and
small-town atmosphere as
part of its mission statement. City Ex. 65.
66,100 in 1983 to 88,500 in 1993. The City of
also grown from a population of 17,647 in
1990 to 20,450 in 1993.
City Ex. 19.
The largest employers within the City limits are the
various public agencies, including
and
a public hospital.
There are no
major industrial or
manufacturing employers located in
opened in the neighboring city to the north,
retail businesses relocated out of
at
approved several new residential
subdivisions to accommodate the
increasing population of
since the mid-1980s.
The
Mount Vernon Police Department is comprised of
approximately 36 full-time positions
including a Chief, Assistant
Chief, a Captain and a Records Manager who
are in non-represented
management positions. The bargaining unit is composed of 27
officers.
Twenty-one are patrol officers and 6 are sergeants. The
average length of service in the bargaining
unit is almost 10
years.
The Mount Vernon Police Department provides a full range of
law enforcement services for the citizens of
the City. The bulk of
the Police Department is funded by the
City's general fund.
The
hearing in this case took three days for the parties
to present their evidence and
testimony. The majority of the
hearing
time was consumed on
the issue of
the appropriate
jurisdictions with which to compare
establishing the 1993 wage schedule. The hearing was recorded by
a court reporter and a transcript consisting
of 689 pages was made
available to the parties and the arbitration
panel for the purpose
of preparing the post-hearing briefs and
award. Testimony of the
witnesses was taken under oath. At the hearing the parties were
given the full opportunity to present
written evidence, oral
testimony and argument. The parties provided the Arbitrator with
substantial written documentation in support
of their respective
positions.
Comprehensive and lengthy post-hearing briefs were
submitted to the Arbitrator with
accompanying interest arbitration
awards issued in the state of
The
approach of this Arbitrator in writing the award will
be to summarize the major and most
persuasive evidence and argument
presented by the parties. After the introduction of the issue and
positions of the parties, I will state the
principal findings and
rationale which caused the Arbitrator to
make the award on the wage
issue.
The
parties filed their post-hearing written briefs in a
timely manner and the record was closed as
of
On
for the purpose of the admission of the
newly signed
Police Department agreement. On
brief in opposition to the
After evaluating the arguments submitted by
counsel regarding the
Motion to Reopen the Record, the Arbitrator
denied the Motion to
Reopen in an order dated
Because
of the extensive record made in this case the
parties agreed to an extension of the
statutory requirement that a
decision be issued within thirty days of the
close of the record.
On
with the party appointed members of the
arbitration panel to
discuss the evidence and argument contained
in the record of this
case.
The comments and observations of the party appointed panel
members were of great assistant to the
neutral Arbitrator in making
his
findings of fact
and award on the issue presented for
arbitration. The written decision is solely the work of
the
neutral Arbitrator.
This
Arbitrator carefully reviewed and evaluated all of
the evidence and argument submitted pursuant
to the criteria
established by RCW 41.56.460. Since the record in this case is so
comprehensive it would be impractical for
the Arbitrator in this
discussion and award to restate and refer to
each and every piece
of evidence or testimony presented. However, when formulating the
1993 wage award the Arbitrator did give
careful consideration to
all of the evidence and argument submitted.
The
single issue submitted to interest arbitration in
this case is the 1993 wage issue under the reopener provision of
the 1991-93 Collective Bargaining Agreement.
The
statutory factors to be considered by the Arbitrator
may be summarized as follows:
(a) The
constitutional and statutory
authority
of the employer;
(b) Stipulations of the parties;
(c) (i) For
employees listed in RCW
41.56.030(7)(a)
and 41.56.495, 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 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 of
circumstances during
the pendency of the
proceeding;
(f) Such other factors, not confined to the
foregoing,
which are normally or traditionally
taken
into consideration in the determination
of
wages, hours, and conditions of employment.
II. BACKGROUND
This
case comes to arbitration pursuant to a reopener
clause in the 1991-93 Collective Bargaining
Agreement. The single
issue subject to the reopener
involves the wage level for 1993.
The present salary schedule is structured on
an eight step system.
It takes nine years to reach the top step of
the current salary
schedule.
The nine year salary grid has been in place for several
years.
Pursuant to the 1992 contract, a beginning patrolman starts
at $2,278 per month and rises to a top step
after nine years of
$2,838 per month. A Mount Vernon police officer's wage is
$2,742
after five years with the Police Department.
The
sergeants are also included in this bargaining unit.
A sergeant with zero to two years experience
earns $2,949 per month
which increases to $3,049 per month after
two years. The sergeant
reaches the top step of the salary scale
after four years. The top
step pay for a sergeant is $3,149 per month.
The
City pays the entire premium for medical care for
bargaining unit members and their dependents
pursuant to the terms
of the contract. The members of this bargaining unit work a
substantial amount of overtime. In addition, shift differential is
paid for work between 5:00 p.m. and 9:00
a.m. Premium pay is also
provided for special assignments made to the
members of this
bargaining unit.
The
1991 Agreement yielded a 7% increase.
The second
year of the contract generated a 3% increase
under a CPI formula
based on 100% of the all-cities CPI-U index,
with a minimum of 3%
and a maximum of 7% computed on a reading of
the November 1990 to
November 1991 index.
The
Union proposed for 1993 to alter the wage grid by
reducing the time it takes to reach the top
step from nine years to
five years.
The Union has proposed a wage increase that would
average 17%.
The City proposed to retain the existing salary grid
with a 3% across the board increase.
The
driving force behind the positions of the parties on
the wage issue was comparability. Each party
submitted substantial
evidence and argument to support its
position on the appropriate
comparators for the purpose of establishing
wages for Mount Vernon
police officers. The Arbitrator was also supplied with several
interest arbitration decisions involving
other Washington cities.
The arbitration of this case was conducted
approximately six and
one-half months into the 1993 contract
year. By the time this
award is issued, approximately two months
will remain on the 1993
contract.
The Arbitrator has evaluated this case in the context of
a third year reopener
and the implications of this award for future
negotiations between the parties.
III. POSITION
OF THE GUILD
The
Union proposed a salary schedule for 1993 wages as
follows:
PATROL
PAY STEP MONTHLY WAGE
0-1 years $2606
1-2 years $2737
2-3 years $2867
3-4 years $2997
4-5 years $3128
5+ years $3258
SERGEANTS'
PAY STEP
0-2 years $3449.89
2-4 years $3567.31
4+ years $3684.69
The
Guild's position on 1993 wages was based almost
exclusively on its list of comparators. According to the Guild,
its proposed list is more consistent with
both statutory and other
traditional factors relied upon in the
selection of comparator
jurisdictions in interest arbitrations than
the list offered by the
City.
The Guild's "Weighted Multi-Factor Approach" resulted in a
list of eight Washington jurisdictions which
the Union believed
represented a fair and equitable basis on
which to establish Mount
Vernon
police wages. The
Guild proposed eight
Washington
jurisdictions as its list of
comparables. They are as follows:
CITY POPULATION NUMBER OF OFFICERS
Bremerton 36,380 56
Longview 32,650 46
Puyallup 26,140 43
Lacey 22,660 31
Mount Vernon 20,450 29
Mountlake Terrace 19,880 29
Des Moines 19,460 27
Port Angeles 18,270 27
Aberdeen 16,665 36
Average without
Mount
Vernon 24,013 35
The Union submits the factors which relate
to size, function,
wealth and location of the comparator
jurisdictions are most likely
to be understood by the parties to produce a
list of "like"
jurisdictions.
The
Guild avers that its method of analysis produced a
balanced and reasonable set of
comparators. The Union's list was
composed of cities located in western
Washington and excluded
cities without "uniform personnel"
or those with less that 15,000
population.
The variance range was established to multiply or
divide by a factor of 2. The Guild's demographic factors used as
a basis for selecting comparables were as
follows:
1) Population
2) Assessed
Valuation
3) Assessed
Valuation per capita
4) Retail
Sales
5) Retail
Sales per capita
6) Number
of Officers
7) Number
of Crimes
The factors given the most weight in the
analysis were population
and assessed valuation.
The
Guild claimed that the factors it relied on for
selecting comparators offer the best
approach to determine "like
employers
of similar size."
The argument of
the Guild is
summarized in the sections which follow.
1. Population. Population is the
best
measure of "similar size." Further, increases
in population often increase the complexity
and workload of the law enforcement
officers'
job.
Population must be viewed in tandem with
several other factors. Cities in the Guild's
list of comparables range from 16,665
persons
in Aberdeen to 36,380 persons in Bremerton.
The average population of the eight cities
without Mount Vernon is 24,013. The Guild's
comparators
are justified based
upon the
population
range of the
jurisdictions
resulting from the Guild's study.
2. Assessed
Valuation. Assessed valuation is
a traditional factor utilized by arbitrators
in the process of selecting comparators. The
reasoning for using assessed valuation is
that
police officers not only protect people,
they
also protect property. Assessed valuation
when viewed in conjunction with retail sales
is probably far and away the best measure of
the City's tax base and its ability to pay.
An equitable wage award will take into
account
the similarity of Mount Vernon to cities of
similar ability to pay. Assessed valuation
serves as a rough measure of the wealth of a
community.
3. Assessed
Valuation Per Capita. Assessed
valuation per capita is simply a more fine-
tuned method of selecting comparators. The
logic
of utilizing assessed valuation per
capita is that one gets a better measure of
a
city's ability to pay than by looking at
assessed valuation alone. Assessed valuation
per capita also provides a better snapshot
of
the local effort than does assessed
valuation
standing by itself.
4. Retail Sales.
In Washington, a
significant share of local income to cities
is
generated by the retail sales tax. The volume
of retail trade should also be viewed as a
generator
of police work as
increases in
commercial
centers will likely
result in
rising
crime related to
such centers.
Bargaining history supports the use of
retail
sales
as an element
for determining
comparability. In
1991 the City
relied
extensively on purported diminished retail
trade to justify a diminished wage
settlement.
An
evaluation of comparable
retail sales
indicates that Mount Vernon is hardly sales
tax poor.
While neighboring Burlington's
growth as a commercial center may have
caused
a temporary interruption in Mount Vernon
sales
tax growth, the evidence reflects that Mount
Vernon appears to have a healthy sales tax
base.
5. Retail
Sales Per Capita. Retail sales per
capita also provides a means of controlling
for size and more carefully assessing the
local effort of a jurisdiction towards
support
for its police department.
6. Number of
Officers. The number
of
officers is a method of determining whether
employers are like employers. As departments
grow
in size, they
generally grow in
sophistication and specialization. Increasing
specialization usually
leads to greater
economic rewards for those participating in
the more specialized police department. The
increase
in police wages
under such
circumstances is a reflection of the greater
demands made
upon the enterprise
and the
officers who serve the City.
7. Number
of Crimes. Number of crimes has
sometimes been relied upon by arbitrators to
select comparators. Crime data is seen as a
measure of workload and output of employees.
While crime reporting methods may vary from
jurisdiction to jurisdiction, the number of
crimes is a factor worth giving some weight
t6
in the selection of comparators.
In
sum, the Guild submitted that its weighted multi-
factor approach is an honest and rational
method for selecting
comparators.
The Guild does not insist that this is the only way
to select comparators, but that it is a fair
way on which to base
Mount Vernon police wages.
Regarding
the City's method of utilizing population alone
as the basis for determining comparators,
the Union submits such an
ad hoc approach by using population only as
a first cut and then
excluding a significant number of Puget
Sound jurisdictions ignores
the impact of nearby large metropolitan
areas. Mount Vernon is
strategically placed along Interstate 5
mid-way between Seattle and
Vancouver, B.C. Such an ad hoc method of selecting
comparators is
not rational or fair because the economic
influence generated by
the metropolitan area goes unrecognized.
The
Guild next argues that Mount Vernon comparators
should be selected out of the western
Washington labor market.
Presence in a common labor market is
certainly one measure for
determining whether employers are like each
other. Arbitral
authority teaches that selecting comparators
based on a common
labor market or geographic proximity is
preferred. When there are
a sufficient number of jurisdictions within
the local market pool,
arbitrators adopt jurisdictions that are
geographically close to
the target jurisdiction. The reason for looking at the local labor
market is based on two primary factors. First, it is the market in
which the employer competes for the purchase
of labor. Second,
human nature is such that it is expected
that employees are more
likely to look at jurisdictions
geographically proximate, than
those that are geographically distant to
determine whether their
wages are fair and equitable. Wages based on parity with Walla
Walla and Pullman, located in the far
eastern part of the state of
Washington, will not be perceived as fair
and just.
The
Guild contends there are a sufficient number of
proper and fair comparators that can be
drawn from within a labor
market west of the Cascades. The population and number of police
departments in the Puget Sound area are so
significant that it is
bound to have an impact on any jurisdiction
adjacent to this area.
There is no need to go east of the Cascades
to find appropriate
comparators.
Turning
to the testimony of the City's expert witness,
economist David Knowles, the Guild submits his testimony was
"incomprehensible, contradictory,
unscholarly and nonsensical."
Knowles never offered a coherent or logical
definition of what
constituted a labor market. Nor had he actually studied the labor
market for police officers. Whatever Knowles meant by a labor
market, it appears his testimony had little
or no resemblance to
anything which has ever been utilized in defining
a labor market in
prior interest arbitrations. The Guild vigorously argues that
Mount Vernon's proximity to Seattle has a
strong influence on the
Mount
Vernon economy that
cannot be ignored
in selecting
comparators.
Mount Vernon is located sixty miles from the center
of Seattle.
The evidence offered by the Guild regarding Seattle's
influence on Mount Vernon was not
successfully rebutted by the
City.
The daily migration of thousands of persons along the
Interstate 5 corridor set western Washington
jurisdictions apart
from eastern Washington cities.
Economic
evaluations of Mount Vernon by neutral parties
reveal this City is significantly impacted
by its close proximity
to Seattle.
Mount Vernon is strategically located mid-way between
Seattle and Bellingham. A profile of Skagit County noted that
Mount Vernon "was ideally situated to
be both a supplier of goods
to those markets and a conduit for trade
between the two." There
is a
significant "spillover from Puget Sound with many residents
commuting to jobs in Snohomish and King
counties and bringing their
paychecks home to Mount Vernon. Another report by the Employment
Security Department predicted that Skagit
County would be under
tremendous pressure "to accommodate
population and economic growth"
largely because of their proximity to nearby
Everett and Seattle.
Real
estate expert Tom Kelly testified as to the effect
of Mount Vernon's proximity to the Seattle
area on its housing
market.
Kelly cited a marked increase in commuting since 1990.
Kelly concluded that this City is linked now
more than ever to the
tn-county economic base of King,
Pierce and Snohomish counties.
The City's own finance director was quoted
as characterizing Mount
Vernon as a commuter's paradise." The
changes in the Mount Vernon
housing market are
direct evidence of
this City's economic
integration with the Seattle area.
It
is also the position of the Guild that this City
should not be viewed as a
"stand-alone" jurisdiction.
Because
Mount Vernon sets on the edge of a larger
metropolitan area, a very
strong relationship exists between the
jurisdiction's proximity to
Seattle and wages. Therefore, the Guild submits that it is
appropriate to select a group of comparators
that on the whole
share Mount Vernon's characteristics in
terms of proximity to
larger metropolitan areas.
RCW
41.56.460(c)(i) requires comparisons made between
jurisdictions of "like personnel of
like employers of similar
size."
The statute mandates that only cities above 15,000 may be
considered as comparators to the City of
Mount Vernon. According
to the Guild, cities with a population below
15,000 do not employ
police officers as "uniform
personnel" under the act. By using
cities
with a population
below 15,000 the Arbitrator would
incorrectly use jurisdictions that do not
have "like personal of
like employers." Wages for those police contracts in cities
above
15,000 are much more likely to be set as a
reference to the
specific
statutory criteria controlling
in this interest
arbitration.
Jurisdictions under 15,000 do not have the benefit of
interest arbitration.
Regarding
the factor of cost of living, the Guild offered
specific empirical data regarding two of the
better measures of
cost of living--housing costs and
income. On the other hand, the
City offered only "theories" about
what the cost of living in Mount
Vernon might be as compared to the other
Washington jurisdictions.
The City offered a theory to measure the
differences in the cost of
living
between the jurisdictions
through the testimony
of
transportation planner Brent Baker. The Guild argued Baker's
theories do not actually measure the cost of
living between cities.
Rather he propounds a theory about what the
differences in cost of
living might be among the various comparator
jurisdictions. His
theory
was totally untested.
On cross-examination, several
aberrations in Baker's model were identified
which undercut its
validity.
Baker was unable to explain why there was a 22%
difference between the cost of living in
Pasco and the cost of
living across the river in Richland and
Kennewick. Nor was Baker
able to explain why San Juan County's cost
of living was lower than
the cost of living in the remote northeast
Washington counties of
Pend Oreille and Ferry.
Both
parties recognize that there is no index which
measures the relative differences in the
cost of living in Mount
Vernon with the other comparator
jurisdictions. According to the
Guild, the only accurate way to measure the
cost of living is to
actually measure the price of goods being
bought, and no one has
done that for Mount Vernon. The best available data presented at
this hearing to measure Mount Vernon's cost
of living was the house
pricing data presented by the Guild.
Median
family income is also a measure of comparability
because it allows inferences about local
effort to be drawn from
the reports.
In addition, the ratio of police officer salaries to
median family income is a test of
equity. Even the City's own
economist testified that income measures of
per capita and median
family income were good indicators of local
wealth and local cost
of living.
The
Guild takes the position that abundant evidence
exists the local economy is prosperous. The City mistakenly uses
unemployment data for the entire County and
offered no data on the
actual employment rate in Mount Vernon for
support of its position
that high unemployment justifies a low wage
settlement. While
recognizing that Skagit County has a strong
agricultural base, the
economy is diversifying beyond agricultural
based industries. It
is reasonable to assume that the people
moving to Mount Vernon are
not doing so to work in the agricultural
industry. Nor should the
lack of "smokestack industry" be
viewed as a negative in discussion
of the Mount Vernon economy. If Mount Vernon's long-term plan is
to be a bedroom community, maintaining a
relatively pristine
environment with light industry and service
jobs is a rational
approach to growth management in the City.
The
Guild prepared sixteen tables which summarized the
chief points of comparison on the relevant
demographic factors
between the eight jurisdictions it proposed
and those proposed by
the City.
Guild Post-Hearing Brief, pp. 39-61.
The Arbitrator
will not repeat the findings displayed on
the sixteen tables. The
Guild submits its
list of comparators is based on coherent,
understandable principles which are
well-grounded in statue and
arbiter precedent. A review of the City's list of comparables
reveals that it has been shifting over the
term of the contract and
has been result oriented. The evolving set proposed by the City
over time is undoubtedly a reflection of the
City proposing a list
of jurisdictions with the lowest possible
wages, and searching for
a theory to support its comparator
jurisdictions. In the 1990
negotiations the City proposed a list based
on a population plus or
minus 50%.
At that time the City did not attempt to exclude the
counties immediately to the south of Mount
Vernon. The Guild went
with a western Washington list
thinking it would promote a
settlement of this contract. Across the range of the relevant
demographic factors, Mount Vernon is
generally near the median of
the Guild's list of comparators, while it is
generally near the top
of the list proposed by the City. By using population as the only
demographic variable by which to select
comparables and then
excluding the four counties to the south of
Mount Vernon, the City
has put together a distorted list. The Arbitrator should adopt the
Guild's list of comparators and reject the
list offered by the
City.
Regarding the
City's proposed "local
labor market"
consisting of the jurisdictions of
Burlington, Sedro Woolley, Oak
Harbor, Anacortes and the Skagit County
Sheriff's Office, the Guild
submits the model adopted by the City is
flawed and should not be
relied upon by the Arbitrator to establish a
wage award. The City
offered little empirical evidence to support
its claim that this
would
be the appropriate
group of comparator
jurisdictions.
Further, the City never defined what it
meant by a local labor
market.
The City also proposed Oak Harbor as part of the local
labor market jurisdictions, but rejected
Bellingham and Everett
which in terms of travel time are closer to
Mount Vernon than is
Oak Harbor.
Mount Vernon is by far the largest City in the local
labor market group. By equities, Mount Vernon should be the wage
leader of this group. The Skagit County Sheriff's Department pays
far in excess of Mount Vernon which reverses
a normal industry
standard in which cities normally pay law
enforcement officers more
than counties in the same locale. The wide range in the ratios of
population and assessed valuation reveals
the difficulty in using
dissimilar jurisdictions in the same labor
market for making
comparisons.
Guild post-Hearing Brief, p. 67, Table 18.
The
wage offer proposed by the Guild is supported by
relevant factors traditionally used to
determine wage awards in
interest arbitration proceedings. The Guild has taken a position
that comparators should be compared on the
basis of their five-year
wage.
There is a recognized tradition in interest arbitrations to
make wage comparisons based on a
benchmark. The Guild approach has
been to use a format of comparing top-step wage
on a five-year
basis and treating any wages added after the
five-year mark as a
longevity premium. By using the fifth year of service as the
benchmark for comparison, it is possible to
make calculations and
comparisons on an "apples to
apples" basis for similarly situated
employees.
In
the 1991 negotiations, the City claimed it was unable
to meet the Guild's wage demands because
loss of retail business
had caused a decline in tax revenues. The Guild agreed to a wage
reopener
with the promise that if revenues were improved at that
time the employees would receive a catch-up
increase. The revenues
have improved and it is now time for an
award which would bring the
wages
of this bargaining unit up to parity with the other
comparable jurisdictions. The offer of the size proposed by the
Guild should be viewed in the context of the
entire three-year
package.
The City bought itself more time by making promises to
catch-up the wages for the officers in the
third year. What the
Guild is proposing by its substantial wage
increase is simply a
backloading into
the third year
of what should
have been
distributed over the full three years of the
contract. The time is
now to award the substantial increase in
wages proposed by the
Guild in order to establish parity with the
other comparable
jurisdictions.
If
the Arbitrator determines to use a cost of living
index as a part of setting a wage award, the
Arbitrator should
utilize the Seattle index which is commonly
used to measure the
appropriate wage level for Washington public
agencies. In 1992 the
Collective Bargaining Agreement stipulated
the use of the All-
Cities index rather than the Seattle
index. There was a 3.7%
difference in the two indices which caused
Mount Vernon wages to
fall further behind the comparators. Real wages over time have
been declining for the members of this
bargaining unit. Adoption
of the City's proposed 3% award for 1993
would be lower than real
wages in 1989 and near the 1987 wage level.
To
the extent internal parity is relevant, the Arbitrator
should note that the City has provided
firefighter wage increases
in excess of other employees also subject to
interest arbitration.
The increase agreed to for firefighters for
1993 was 4.5%. The
Guild believes that internal parity is of
little usefulness and may
well violate the statutory requirement that
wages be determined in
reference to comparable employers. While the internal parity
factor might be relevant where there is an
ability to pay argument,
this is not an issue in the instant
case. City has the fiscal
resources necessary to pay the wages
proposed by the Guild.
In
sum, as this City has grown the demands on its police
officers have increased. The City has become more prosperous as
its tax base has shown significant
improvement in recent years.
The Guild asks the Arbitrator to make an
award that is fair and
equitable and will give the parties some
stability in future
contract negotiations.
IV. POSITION
OF THE CITY
The
City proposed a 3%, across the board adjustment to
the
current salary grid
for patrol officers
and sergeants,
retroactive to January 1, 1993. The City's proposal would leave
the current nine year, eight step salary
grid in place through the
remainder of this contract. The 1993 salary schedule proposed by
the City would provide as follows:
Police
Salary
Monthly
Proposed
Patrolmen 1993
(3%)
0-6 month 2347.08
6 mo-1 year 2401.83
Over 1-2 years 2470.83
Over 2-3 years 2525.67
Over 3-5 years 2774.42
Over 5-7 years 2824.08
Over 7-9 years 2873.83
Over 9 years 2923.67
Sergeants
0-2
years 3037.17
over
2-4 years 3140.42
over 4
years 3243.83
City
Ex. 72.
The City believes its proposal is fashioned
in light of all the
factors mandated by Washington law.
City
believes its proposal is fair for seven basic
reasons.
First, the City is already paying consistent with the
average of the jurisdictions in its local
labor market. Second,
officers are also paid in relation to
its "true" comparable
employers.
Third, the cost of living factor also supports the
City's proposal.
Fourth,
the City's proposal is justified by consideration
of the relative cost of living differences
between jurisdictions.
The undisputed facts demonstrate that it is
significantly less
expensive to live in Mount Vernon than it is
in the central Puget
Sound area.
Fifth, the turnover rate in this Department reveals
that only three officers have left over a
ten-year period, all for
reasons unassociated with salary. Sixth, the City's proposal is
consistent with the increases given other
City workers. Seventh,
the economic conditions in Skagit County and
the City's finances
argue in favor of the City's 3% offer.
The
City's concern is that adoption of the Guild's
exorbitant
proposal would run
counter to the
principles of
Washington law. According to the City, the Arbitrator's task
is to
fashion an award which constitutes an
extension of the bargaining
process.
The Arbitrator's role in this case is not to upset the
City's traditional position in relation to
its comparables. The
City hopes that the result of this
arbitration will be that future
negotiations will be approached by both
parties with intent to
resolve their differences at the bargaining
table rather than in an
adversarial interest arbitration hearing.
Like the Guild, the City
relied primarily on the comparables as the
basis for its 3% of fer.
The
City generated a list of cities with a population
plus or minus 50% of Mount Vernon. In order to reflect the rural,
agricultural nature of Mount Vernon and its
environs, the City
excluded all cities in this population band
which were located in
the central Puget Sound region. The Puget Sound region was defined
by the City as jurisdictions in Snohomish,
King, Pierce, Thurston
and Kitsap counties. This approach reduced the list to twelve
Washington jurisdictions, six of which were
west of the Cascades
and six of which were east of the
Cascades. The City then reviewed
its
list and eliminated the two
smallest eastern Washington
jurisdictions.
The
ten jurisdictions which the City maintains are "like
employers" are as follows:
CITY POPULATION
1992 1993
Kelso 11,837 11,850
Anacortes 12,110 12,260
Pullman 23,190 23,480
AVERAGE 18,415 18,703
The
City urges the Arbitrator to adopt the recognized
plus
or minus 50%
measure for selecting
a similarly sized
jurisdiction. The Guild advocates a skewed population ban
which
would include cities twice the size of Mount
Vernon. The adoption
of an approach which would yield a
population ban of 50% down and
100% up should not be recognized as an
appropriate means to compute
a fair combination of comparable employers.
Regarding
the Guild's claim that it is inappropriate to
utilize cities smaller than 15,000 in
population, the City submits
the Guild's approach should be
rejected. The definition relied on
by the Guild has been amended by the
Washington State legislature.
The new law signed by the governor on May
15, 1993, reduced the
population threshold to 7,500 for law
enforcement personnel subject
to
interest arbitration. Even
though the amendment is not
effective until July 1, 1995, the statute
reflects the legislative
intent to broaden the reach of interest
arbitration for police
officers.
Even if the amendment is not given full effect by the
Arbitrator,
the City claims that the Guild's argument is not
supported by the statutes. Under the Guild's argument, all
jurisdictions located
in Oregon and
California would be
automatically excluded from the definition
of "uniform personnel"
regardless of size. RCW 41.26.030 requires parties to consider
comparable employers from Oregon, California and Washington.
Police in those states have their own
enabling laws which are not
controlled by Washington's statute. The
Arbitrator should conclude
that
the legislature did
not intend to
constrain interest
arbitrators to population bans contained in
the definition of
"uniform personnel'' when deciding on
similarly sized jurisdictions.
The
cumulative effect of the Guild's limit on the lower
end of the population and the broadening of
the upper end is a list
of comparables which is substantially larger
than Mount Vernon.
The City's proposed comparators has a
population range of 11,852 to
28,802.
This represents a range of 41% larger than Mount Vernon to
42% smaller than Mount Vernon. On the other hand, the Guild's
comparables range from 16,665 to 36,385, a
percentage range of 19%
smaller than Mount Vernon to 78% larger than
Mount Vernon. The
average population on the City's list was
18,415 which is similar
to Mount Vernon's current population.
The
City next asserts the Arbitrator should exclude
cities located in the central Puget Sound
urban area. The statute
requires the comparable to be "like
employers." The methodology
adopted by
the City in
developing its comparables
excluded
jurisdictions located in the heart of the
central Puget Sound urban
core.
Arbitrators have recognized that jurisdictions located
within the central Puget Sound area are
different because of the
substantial influence of Seattle. The evidence offered at the
hearing supports the position that Mount
Vernon is not like
jurisdictions located in the Seattle metropolitan
core. The
population density figures demonstrated that
Skagit County has only
45.8 people per square mile compared with
Snohomish County directly
to the south with over 222.8 people per
square mile. The remaining
counties in the urban cluster range from a
low of 221.8 people per
square mile to King County with 709 people
per square mile.
Skagit County
is a rural county with 7.3%
of the
employment in agricultural related
industries. This is in contrast
to Seattle/Snohomish County where less than
4 tenths of the
employees are employed in agricultural
related work. The bulk of
the jurisdictions on the City's list of
comparables were similarly
situated in terms of the agricultural
percentage in the work force.
Skagit
County had an
unemployment rate of
10.7% which is
substantially higher than the unemployment
rate in the urban
counties.
The
testimony of Dr. David Knowles revealed that Skagit
County is a rural area that is not densely
populated. It does not
have the economic influence placed on it
because of its proximity
to Snohomish, King and Pierce counties. In the judgment of Dr.
Knowles, the central Puget Sound cluster
ends north of Everett
before reaching the agricultural base of the
Skagit County Valley.
Moreover,
the statistics do not back-up the Guild's claim
that Mount Vernon has become a "bedroom
community" for the urban
areas.
Rather, the data showed that 85.4% of Skagit County workers
live in Skagit County. Only 2.4% of Skagit County residents travel
to King County to work. City Ex. 9.
While it may be true the
number of commuters has increased over the
last decade, Mount
Vernon is a long way from becoming a bedroom
community similar to
those counties located immediately to the
north and south of King
County.
The
City claims its comparables are "like" Mount Vernon.
Anacortes and Oak Harbor are located in the
same local labor market
and are geographically the closest to Mount
Vernon. Anacortes is
also very close to Mount Vernon's assessed
evaluation, even though
its population is less. The cities of Centralia, Kelso, Port
Angeles and Aberdeen are all cities located
in western Washington.
They are also a small-town hub of an
otherwise rural area.
Centralia and Kelso have the additional
similarity of being along
the Interstate 5 corridor. These ten cities are located in
counties where the density is significantly
less than the Seattle
metropolitan area. The bulk of these areas also have higher
proportions of agricultural employment in
their work forces. They
also share the "unfortunate trait of
having unemployment rates
which are significantly greater than those
counties in the Seattle
metropolitan core." In sum, the jurisdictions chosen by the City
satisfy the statutory requirement of being
"similarly sized" and
being "like employers."
Turning
to the Guild's set of comparator jurisdictions,
the City submits the Arbitrator should
reject the Guild's results
oriented list of dissimilar sized cities
which are unlike Mount
Vernon.
The Guild's multi-factor regression analysis is not
statistically supported. According to the City, the Guild's list
is a results orientated compilation of
jurisdictions which are
unlike Mount Vernon. The Guild offered no expert testimony
supporting
the statistical underpinnings
for the regression
analysis.
Moreover,
Dr. David Knowles and Brent Baker, the City's
experts,
testified about the
significant risk in
utilizing
regression
analysis as used by
the Guild to
establish its
comparators. Both Dr. Knowles and Baker testified there
were
significant pitfalls in using the
statistical analysis by the Guild
to come up with its list of
comparators. Baker testified that the
regression model does not prove a cause and
effect relationship.
The Guild offered no evidence to counter the
expert testimony of
Dr. Knowles and Baker. The framework for the Guild's analysis was
unsupported and therefore should be rejected
by the Arbitrator.
Even
if the Guild's model is statistically accurate, the
methodology behind the model is statistically
flawed. While
assessed valuation may have some support in arbitrable decisions
involving
firefighters who protect
property, the primary
responsibility of the police is to protect
people. Assessed
valuation does not measure the value of a life. If assessed
valuation is being used as a measure of a
jurisdiction's wealth, it
ignores other major components of a city's
revenue sources such as
sales tax and utility taxes. The absence of a strong sales tax
revenue counters any strength in property
tax. A true measure of
the City's revenues for paying a wage
increase is total revenues.
The City submits that this figure does not
appear anywhere in the
Guild's analysis because other revenue
sources for Mount Vernon
have been stagnant even in light of
population growth.
The
Guild further compounded its errors by automatically
excluding all eastern Washington
jurisdictions from its list of
comparators.
Dr. Knowles testified that the difference between
eastern and western Washington is not really
between east and west,
but rather between rural and urban. There are pockets of rural
communities in western Washington, north of
Everett and south of
Olympia.
Skagit County is a rural area comparable to jurisdictions
located in eastern Washington. The Guild's analysis neglects to
take into consideration the fact that Skagit
County is a rural
county which possesses many of the
similarities in terms of its
population density to cities located in
eastern Washington.
The Guild's
results orientated method of selecting
comparables is also illustrated by the fact
that Bambridge Island,
Bothell and the city of SeaTac do not appear
on the source material
for testing under the Guild's computer
analysis. According to the
City, the real explanation for this omission
is that they are
trying to eliminate jurisdictions with lower
pay. Further, the
Guild also eliminated Oak Harbor for some
unexplained reason. On
the other end of the scale, the Guild
included the city of Aberdeen
which has an assessed evaluation which is
less than half of Mount
Vernon which should call for automatic
exclusion under the Guild's
methodology. Aberdeen is a high paying
jurisdiction which explains
why it was not excluded from the Guild's
list of comparators even
though its own model would call for its
deletion from the list.
The
City cited other examples of where it alleged the
Guild
had failed to
follow its own methodology. A close
examination
of the Guild's
exhibit demonstrates they
have
gerrymandered a list of alleged comparables
that are not even
supported by their own methodology,"
even if that methodology were
statistically sound.
The
Guild has shifted from their former comparables
utilized in the 1990 negotiations without
explanation. Present on
the 1991 list of comparables were eleven
jurisdictions drawn from
eastern and western Washington, Oregon and
California. The only
holdover on the current Guild
list of comparables
is Lacy,
Washington.
The Guild's unexplained abandonment of its 1991
comparables is yet one more piece of
evidence of the Guild's
gamesmanship.
The
City next argues that Mount Vernon police officers
are paid fairly in relation to its
comparables. The Arbitrator
should focus on the top step officer wages
for similar periods.
The Guild's attempt to utilize step five of
the current salary
proposal for purposes of comparison should
be rejected by the
Arbitrator.
The monthly salary for top step police officers has
been consistently utilized by interest
arbitrators as the benchmark
for comparison for police wages.
Moreover, it is important to know the City pays a
significant amount of money to the members
of this bargaining unit
by way of premium pay and overtime. Fifty-nine percent of the
patrol officers receive premium pay. The impact of the patrol
premium results in an additional $41.22 per
month if prorated over
the entire group of officers. The City did not include this
additional salary expense when considering
the appropriate third
year salary adjustment.
City Exhibit
28 compared Mount
Vernon with its
comparables using all 1992 rates. The average pay of the City's
ten comparables in 1992 was $2,857. Mount Vernon is within $19 per
month of that average at $2,838 per
month. When Mount Vernon's
wages are placed side by side with the two
cities closest to it,
Anacortes and Oak Harbor, the wage looks
even fairer. Anacortes
top step police officers receive $2,859,
while Oak Harbor officers
receive $2,412. The bottom line is the 1992 position of Mount
Vernon in relation to its comparables is not
out of line with its
traditional position with those same
comparables. The 3% offer of
the City will maintain Mount Vernon's wages
in a like position for
1993.
The
City next contends that police officers are paid
fairly when adjusted for the relative cost
of living differences
between metropolitan jurisdictions and Mount
Vernon. The City
offered proof of differences in relative
cost of living between
these jurisdictions through the expert
testimony of Brent Baker.
Baker's testimony supports a conclusion that
the cost of living
remains significantly less in Mount Vernon
than it does in the
urban areas to the south.
Regarding
the Guild's housing cost analysis, the City
contends it does not reflect the true cost
of living differences
between Mount Vernon and the central Puget
Sound area. The
testimony of the Guild real estate expert
Tom Kelly was flawed
because there was no consistency in the
source of information used
in his report. Nor was there any attempt to define a
prototype
home for comparison in all of the
jurisdictions that were studied
by Kelly.
In addition, Kelly did not measure sales prices for
identical periods of time. This is not a scientific analysis of
housing prices. The City does not dispute that the cost of
housing
in Mount Vernon has increased and that
assessed evaluations have
also increased. However, the Arbitrator should reject
Kelly's
analysis as sufficient to prove that the
cost of housing in Mount
Vernon is on par with that of the central
Puget Sound area.
Turning
to the Guild's proposal to reduce the salary
schedule from nine to five years, the City
maintains this proposal
should not be adopted. In the view of the City, the shortening of
the time to reach the top step is a
significant alteration in the
wage grid which should not be accomplished
in an arbitration
confined to a third year wage reopener. The total
cost for
implementing the proposal is
15.59%. The Arbitrator should
conclude the Guild has failed to demonstrate
a compelling need to
change the wage grid with its accompanying
significant cost to the
City.
With
respect to the cost of living factor, the City
asserts its wage proposal is fair in light
of recent changes in the
CPI.
Since September 1991 the CPI-U for all U.S. Cities has been
no greater than 3.4%. The CPI-W is not significantly different.
Numbers for the same period of time range
from a high of 3.2% to a
low of 2.4%.
City Ex. 31.
It
is also the position of the City that members of this
bargaining unit have been sheltered from significant
increases in
cost for medical care because the City pays
100% of the premiums
for officers and their dependents. City Exhibit 32 takes the CPI-U
and the CPI-W indexes and excludes the
medical care components. As
a basic matter, this shaves an additional
.02% to .03% from the
affected CPI. From the City's point of view, the CPI
excluding the
medical care component, provides the better
method of measuring the
true impact of inflation on the members of
this bargaining unit.
Members
of this bargaining unit received a 7% increase in
1991 and a 3% increase in 1992 during the
first two years of this
contract.
The 10% increase over the first two years of the
Agreement far exceeds the CPI increases for
that same period. When
viewed over the time span from 1984 through
1992, the City alleges
that actual wages of police officers have
fared even better when
compared to the consumer CPI. City Ex. 36.
During that period,
actual wages grew from $1,893 to $2,839, a
cumulative increase in
wages of 50% over the period from 1984 to
1992. The CPI for that
same period was 35%. If officers' wages had grown by a sum equal
to the full CPI, the current salary would
only be $2,550 per month.
Hence, the City submits a catch-up for
inflation is not justified.
On
the issue of internal parity, the City's proposal is
fair when compared with wages of other City
personnel. Internal
parity is considered by interest arbitrators
under the catchall
factor of the statute. RCW 41.56.460(c). When police salaries are
compared with salaries of firefighters, the
police officers have
maintained a superior wage position since
1985. The top step for
a firefighter in 1992 was $2,662 versus
$2,838 for a patrol
officer.
There is no basis for an adjustment to bring police
salaries in line with fire, since they are
already significantly
ahead.
The City provided a 3%
increase for 1993
for all
employees except firefighters. The firefighters received a 4.5%
increase to reflect the fact they had
historically been behind
their compatriots in the police
Department. There is nothing in
the internal parity factor that justifies
the 17% to 19% increase
sought by the Guild in this interest
arbitration.
It
is also the position of the City that police wages are
fair in relation to wages paid by
jurisdictions in the local labor
market.
According to the City, a local labor market can be a
separate group of jurisdictions to use as
comparables. The City
avers this factor is particularly relevant
because conditions in
the local labor market affect a city's
ability to attract and
retain
qualified officers. Dr.
Knowles testified that the
importance of the local
labor market has traditionally been
utilized as a basis for establishing
wages. The City offered the
following five jurisdictions as relevant in
the local labor market.
Anacortes
Burlington
Oak
Harbor
Sedro
Woolley
Skagit
County Sheriff's Department
This
list includes all
of the significant
police and law
enforcement departments in Skagit County.
The
average wage for police officers in the local labor
market in 1992 was $2,793. City Ex. 13.
The top step pay for a
Mount Vernon police officer is $2,838. Because Mount Vernon police
officers already enjoy a salary that is
higher than paid in the
local labor market, the Arbitrator should
award the 3% offered by
the City.
In
contrast to the Guild's position that Bellingham and
Everett are participants in the local labor
market, the City argues
they are not in Mount Vernon's local labor
market. The only basis
offered by the Guild for including
Bellingham and Everett in the
local labor market was apparently on the
ground of mileage between
Mount Vernon and the two cities. Bellingham and Everett have never
been discussed in bargaining as cities
within Mount Vernon's labor
market.
The expert testimony of Dr. Knowles was that Skagit County
was a self-contained labor market which did
not include Everett to
the south or Bellingham to the north. This was supported by the
lack of significant commute patterns across
Skagit County lines by
either Skagit County residents going
elsewhere to work or non-
residents coming into Skagit County to
work. As Dr. Knowles
pointed out this is a prime indicator of
whether the local labor
market is localized or not. Residency patterns of officers also
support the localized nature of the labor
market. All of the
officers live in Skagit County close to the
City of Mount Vernon.
None of the officers live in Snohomish
County or Whatcom County.
Bellingham
and Everett are properly excluded from the
local labor market based on the significant
difference in size.
The city of Everett has a population of
76,980 and Bellingham to
the north has a population of 55,480. Everett has a police
department comprised of more than 138
officers and Bellingham
employs 85 officers which is significantly
higher than the 27
employed by this City. Based on population of these two cities and
the size of their police departments, there
is no justification for
including them in the list of comparators
for establishing Mount
Vernon police wages.
The
City also argues that current economic conditions in
Skagit County do not warrant the Guild's
wage proposal. The
region's
economic condition is
painfully reflected in its
continuing stagnant employment rate. With very few exceptions,
Skagit County unemployment rates have
remained in double-digit
figures.
Between May 1992 and May 1993 the unemployment rate
increased one full percentage point from
9.3% to 10.3%. City Ex.
46.
These unemployment rates have exceeded state and national
levels for the period dated all the way back
to 1970. Skagit
County qualifies as a distressed area, which
is a measure of
ongoing unemployment which substantially
exceeds the state average.
Skagit County is also designated as a
"labor surplus area." All of
the counties which are on the City's
proposed list of comparable
jurisdictions are on the labor surplus
list. The bulk of the
Guild's comparables are not.
Per
capita income figures for Skagit County also lag
significantly behind the state average. The industry make-up in
Skagit County is also troubling in that it
has a high proportion of
seasonal employment. This seasonal
employment is attributed to the
large agricultural base. City Ex. 53.
The proposed residential
developments and the opening of Eagle
Hardware do not equate to
economic vitality necessary to pay for the
Guild's proposal.
The
City's financial condition does not justify the
significant wage proposal of the Guild. If awarded, the total cost
increase in one year alone for this proposal
would be $165,042. In
base salaries alone this reflects a 15.59%
increase. While the
City is not making an inability to pay
argument, the City's own
financial condition does not justify the
"exorbitant wage proposal
demanded by the Guild." The City is also mindful of the clouds on
the financial horizon implicit in Initiative
601-602. These
initiatives raise the prospect of
significantly reducing criminal
justice funding which would undermine the
ability to maintain the
Police Department. Increasing taxes to fund the Guild's proposal
is impractical. Recent tax levies including a bond issue to
improve the police station and other City
facilities have been
rejected by the voters. In 1992 the Mount Vernon School District
similarly had two budget failures for
capital improvements. The
climate in Mount Vernon is not conducive to
tax increases.
The
facts in the record of this case demonstrate the
Department has had no turnover for reasons
associated with salary.
No officer has left for other. departments
over the last five years.
There is no turnover problem justifying a
significant change in the
wage rate.
Private
sector wage increases as reported by the Bureau
of National Affairs reveals first year
increases for 1993 were 3%.
Wage increases for public employees ranged
from a high of 4% from
1993 to the most common figure of 0% for
this City's school
district.
Wage increases by private employers in the area are also
consistent with the increase being offered
by the City. Texaco is
awarding a 0% increase while Christianson
Seed has granted 3.7%
increases for 1993. Adoption of the Guild's 17% proposal is
totally out of character with public and
private sector settlements
in the Mount Vernon area. The City concluded in its post-hearing
brief as follows:
The
City's proposal is fair, equitable
and
consistent with the statutory factors.
The
Guild's request for a 17% increase in one
year
is none of these things: it is unfair,
inequitable and
inconsistent with the
statutory
factors.
Brief,
p. 64.
V. DISCUSSION
AND FINDINGS
At
the outset of this issue a few preliminary comments
about the statutory procedure are in
order. RCW 41.56.460 refers
to the basis on which an interest
arbitration award should be
formulated as "standards or guidelines
to aid it in reaching a
decision." The
Arbitrator is then
directed to take
into
,,consideration'' the factors listed in the
provision. The listed
criteria are not defined in the law. Arbitral authority has
provided some guidance to the application of
the statutory factors
to particular cases.
Both
parties placed into the record numerous interest
arbitration awards in other Washington
cases. The Arbitrator found
these decisions helpful in defining the
parameters for this award.
As with any labor conflict, this case has
its own unique facts
which required your Arbitrator to exercise
his judgment on the
particular circumstances of this dispute.
The statute
also provides that
the Arbitrator may
consider other factors "not confined to
the foregoing, which are
normally
or traditionally taken
into consideration in the
determination of wages, hours and conditions
of employment." This
phrase allows the parties and the interest
arbitrator considerable
latitude in determining what are the
relevant facts on which to
base an award to resolve a contract
dispute. The City asserted
several of its arguments should be evaluated
under the "catchall"
factor.
The
factors identified in the statute are "standards or
guidelines" which cannot be applied
with surgical precision. The
relative weight to be given to any of the
criteria listed in the
statute is not specified. Further, it is important to note that
this Arbitrator is responsible for applying
the evidence to the
statutory factors even if the evidence
submitted by the parties is
incomplete, misleading, selective or
manipulative. Recognizing
these problems, it still remains the
obligation of this Arbitrator
to apply the record evidence to the criteria
set forth in the
statute.
In assessing the evidence and argument on the wage issue,
the Arbitrator has attempted to extract
facts from the record
evidence which provide reasonable and
credible support for this
award.
The starting point for the analysis of the evidence on the
wage issue in this case is
comparability. Both sides devoted the
majority
of their evidence
and argument to
the issue of
comparability.
The
submission of a dispute to interest arbitration does
not occur in isolation. It is part of the continuing relationship
between the parties to this Collective
Bargaining Agreement.
Arbitrator Carlton Snow wrote in his City of
Ellensburg (1992)
decision about avoiding the
"charade" of comparability.
Snow
correctly noted that it is reasonable for
the parties to negotiate
vigorously
about the proper
jurisdictions of comparability.
However, he warned against the use of highly
adversarial technical
data and studies to support opposite
viewpoints. The opinion
expressed by arbitrator Snow was that the
legislative intent was to
"design a principle-based decision
making process, not a charade
disguised as a scientifically objective
system."
In
the present case both parties offered substantial
economic data, complex studies and expert
testimony to bolster
their own respective positions. Each side vigorously challenged
the evidence offered by the other party as
flawed, defective and
not statistically sound. Because of the methods by which each
party sought to justify its proposed
comparators, this Arbitrator
was faced with a record that included little
common ground on the
proper approach to selecting the appropriate
comparators. Given
this situation, the Arbitrator felt
justified in making greater
changes in the parties' proposed lists of
comparators than I would
normally do in an interest arbitration.
A. Guild Proposal to Change the Wage Grid
The
Guild proposed to reduce the current salary schedule
from an eight step schedule to a six step
schedule. The City would
continue the current eight step
schedule. The Arbitrator finds the
current wage grid should remain unchanged
for 1993.
This
interest arbitration is limited to the appropriate
wage level for the 1993 contract year. A reduction from nine years
to five years to reach the top step would be
a significant
alteration of the salary schedule. In the context of a third year
wage reopener, the
Arbitrator is not persuaded to award a drastic
change in a wage grid which has existed for
over ten years.
Moreover, adoption of
the Guild proposal would be
extremely costly. Based on the Guild's wage proposal, salary
increases for individual officers would
range from 13% to 17%.
City Ex. 57. Even if a lower wage increase was awarded,
the
additional costs to the City of a revised
wage grid should not be
imposed by an interest arbitrator in a third
year reopener.
Having
rejected the Guild's proposed change for 1993, the
Arbitrator does find there are valid reasons
to alter the existing
wage
grid. However, any changes
should be left to future
bargaining when the entire Collective
Bargaining Agreement is open
for negotiation. A review of the police contracts contained in
the
record reveals that an eight step salary
schedule which takes nine
years to reach the top is not the norm.
The
subject of changes in the wage grid should be left to
future negotiations. The Guild's proposal to reduce the eight step
salary schedule to a six step schedule for
1993 is rejected.
B. Wages
The
Arbitrator finds after careful review of the evidence
and argument, as applied to the statutory
criteria, that a 5%
increase for 1993 retroactive to
The 5% applied to the existing wage grid
will establish a salary
schedule for 1993 to pay:
Police
Salary
Monthly
Patrolmen 1993
5%
0
- 6 months 2393.00
6 mo-1 year 2449.00
Over 1-2 years 2519.00
Over 2-3 years 2575.00
Over 3-5 years 2829.00
Over 5-7 years 2879.00
Over 7-9 years 2930.00
Over 9 years 2980.00
Sergeants
0-2 years 3096.00
over
2-4 years 3201.00
over 4
years 3306.00
The reasoning of the Arbitrator is set forth
in the discussion
which follows.
Members
of this bargaining unit were paid wages in 1992
on a schedule which read:
Police
Salary
Monthly
Patrolmen 1992
0-6 months 2278.75
6 mo-1 year 2331.92
Over
1-2 years 2398.83
Over
2-3 years 2452.08
Over
3-5 years 2693.58
Over
5-7 years 2741.83
Over
7-9 years 2790.17
Over 9
years 2838.42
Sergeants
0-2
years 2948.67
over
2-4 years 3048.92
over 4
years 3149.33
City
Ex 72.
The parties agreed to a 7% increase for 1991
and an additional 3%
for 1992 which established the above salary
schedule.
Two
threshold issues developed between the parties over
the issue of determining comparability. First, the Guild argued
that only jurisdictions with a population
above 15,000 should be
used for comparators. According to the Guild, jurisdictions below
15,000 do not employ "uniformed
personnel" as defined by the
collective bargaining law. As such, they exist in a separate labor
market which cannot be considered as
"like employers" under the
law.
In the judgment of this Arbitrator, the statutory definition
of
"uniformed personnel"
does not automatically
exclude all
jurisdictions with population less than
15,000 for purposes of
establishing comparators. To the extent proposed comparator
jurisdictions are below 15,000, they may logically affect the
weight to be given to the wages paid in a
15,000 and under
comparator.
In my judgment, the statute does not mandate total
exclusion of a jurisdiction from a list of
comparators simply
because the population is below 15,000.
The
threshold population for law enforcement personnel
subject to interest arbitration has been
changed by legislation.
The new legislation will reduce the
threshold population to 7,500.
However, the change is not effective until
July 1, 1995. The
recent legislative amendment argues against
total exclusion from
the comparator list of all jurisdictions of
less than 15,000
population.
The
second threshold question concerns the appropriate
benchmark with which to make wage
comparisons. The Guild used the
Step 5 rate of $2,742 per month as the
benchmark rather than the
top step.
From the Guild's point of view, using a Step 5 rate
allowed for an apples to apples" comparison of
wages. The
traditional benchmark for comparing wages is
the top step wage.
Adoption of the Guild's approach would
compel the Arbitrator to
ignore reality. Specifically, a Mount Vernon officer at Step
7
earns $2,790 and the officer at Step 8 earns
$2,838. These amounts
are substantially higher than the Guild's
purported "top step."
Nine of the 21 patrol officers are on Step 7
or Step 8.
The
Arbitrator holds--under the circumstances of this
case--the top step wage is the appropriate
level to make the
initial comparison. The fact it takes Mount Vernon officers nine
years to reach the top is entitled to some
consideration when
making the detailed analysis of the
comparator jurisdictions. If
it takes a police officer in a comparator
city five years to reach
the top, and nine years for a
the top, this fact cannot be totally ignored
by the Arbitrator. As
previously discussed, the parties need to
address this issue in
future negotiations.
Constitutional
and Statutory Authority of the Employer
Regarding
the constitutional and statutory authority of
the City, no issues were raised with respect
to this factor.
Stipulations of the Parties
Regarding
the factor of stipulations of the parties,
there were none of any significance
presented to the Arbitrator.
Comparability
The
predominant and defining issue in this case was the
factor of comparability. The evidence offered by the parties on
the issue of comparability was extensive and
the subject of
considerable controversy during the course
of this proceeding. The
parties were sharply divided on the methodology
which should be
used to select the comparator
jurisdictions. Each side went to a
substantial effort to demonstrate the flaws
in the approach used by
the
opposing party in
its effort to
select the comparable
jurisdictions. The Guild challenged the City's methodology
of
relying solely on population, to the
exclusion of other factors, as
contrary to the statutory command to compare
with "like employers."
The City alleged the Guild's multi-factor
regression analysis "is
a results-oriented compilation of
jurisdictions which are unlike
Mount Vernon."
In
addition to utilizing totally different methods to
select comparators, both parties to this
contract made substantial
changes to the comparators utilized when the
contract was first
negotiated.
A review of the jurisdictions used when the contract
was first negotiated in 1990-91 discloses
little or no resemblance
to the lists proposed to this Arbitrator in
1993. No satisfactory
explanation was offered by either party for
the dramatic changes in
the comparator jurisdictions to be used as a
guide to set Mount
Vernon police wages for 1993.
The
only common jurisdictions on both lists were Aberdeen
and Port Angeles. In essence, there are no historical
comparators
with which to measure police wages in Mount
Vernon. On the issue
of establishing the comparators, this
Arbitrator is starting from
the beginning, and not simply fine tuning
what the parties have
already agreed to as appropriate comparators
for establishing Mount
Vernon wages.
Regarding
the City's methodology, the Arbitrator finds it
is too narrowly constructed to yield a sound
base on which to
determine Mount Vernon police wages. By focusing solely on
population, the City ignores other elements
that give insight into
determining "like employers." The problem is complicated by the
City's automatic exclusion of cities located
in Snohomish, King,
Pierce, Thurston and Kitsap counties.
The results
of the City's
exclusive reliance on
population outside of the central Puget
Sound region caused four of
its ten comparators to be from eastern
Washington. The four cities
are Pasco, Wenatchee, Pullman and Walla Walla. Mount Vernon
is not
an eastern Washington city. It is located on the Interstate 5
corridor within the "sphere of influence"
of larger metropolitan
areas to the immediate north and south.
The
influence of the metropolitan areas is reflected in
rapid population growth for Mount
Vernon. Mount Vernon had a
population of 14,260 in 1986. In 1993 the population stood at
20,450.
Since 1989 the population rose by 5,660 to its current
level.
Guild Ex. III, F(3). The assessed
valuation has almost
doubled from $476,118,903 in 1986 to
$815,494,595 in 1992. Guild
Ex. II, E(2). These figures and others are indicative of a
City in
transition, experiencing rapid growth.
Moreover, the
City's methodology produced
three
jurisdictions with less than 15,000
population. While I have
previously held automatic exclusion of
jurisdictions under 15,000
is not compelled, it is
my conclusion that utilizing three
jurisdictions out of the ten, with
populations under 15,000 gives
too much weight to police units without
interest arbitration.
The
Arbitrator holds it is simply unrealistic for the
City to submit a list of ten jurisdictions
composed of four eastern
Washington cities and three cities with less
than 15,000 population
with which to compare wages and benefits for
members of this
bargaining unit.
Turning
to the Guild's proposed list of comparators, the
Arbitrator concludes it is too heavily
weighted toward metropolitan
jurisdictions to the exclusion of all
eastern Washington cities.
Further, Bremerton has a population of
36,380 which exceeds Mount
Vernon's population of 20,450 by
15,930. The Guild's own figures
also reveal Bremerton has substantially
higher assessed valuation
and retail sales than Mount Vernon. Bremerton should be excluded
from the list of comparators. Longview should be excluded for
similar reasons, and by virtue of its
distance from Mount Vernon.
Likewise, Des Moines should be deleted
because it is in the center
of the Seattle urban area. While Mountlake Terrace has several
demographic characteristics similar to Mount
Vernon, the geographic
location of the city in the immediate
Seattle metropolitan area
warrants its exclusion from the list of
comparators. As Mount
Vernon
continues to grow,
Mountlake Terrace represents
a
jurisdiction which could be added to the
list of comparators for
future negotiations.
The
Arbitrator accepts from the Guild's proposed list of
comparators the cities of Puyallup and
Lacy. Both Lacy and Mount
Vernon are equidistance from Seattle. Lacy has 31 officers in its
police department.
Puyallup
is somewhat larger with a population of 26,140
and a police department of 43 officers. Like Mount Vernon,
Puyallup is surrounded by rural area and
remains far enough away
from Seattle that it cannot be considered a
suburb.
Centralia is
somewhat smaller than
Mount Vernon.
However, its police department of 25
officers is close to the size
of Mount Vernon. Because Centralia is a small-town hub in the
center of a rural area and located on the
Interstate 5 corridor, it
serves as an appropriate point of comparison
for determining Mount
From
the list of comparators offered by the City, the
Arbitrator accepts
Anacortes and
analysis for determining the
comparators. Both cities are located
in the same geographic area of the
state.
close to
department. Even
the Guild would accept
comparable, if two conditions were met. The two conditions being
a collective bargaining agreement negotiated
under the statute, and
a wage scale consistent with industry
standards. In the judgment
of this Arbitrator, neither of these
conditions is justification to
exclude
The
Arbitrator selected
list because it is a rural city located in
eastern
Geographically, it is also the closest
eastern
Mount
valuation, retail sales, etc,
on the demographic variables.
The
Arbitrator agrees with the parties that
and
purposes, the third city of
both parties. The Guild also conceded that if the
Arbitrator were
to use an eastern
the most logical choice. In the judgment of this Arbitrator, the
four jurisdictions of
Mount
The
Arbitrator concludes the eight cities listed below
are appropriate comparators for establishing
the wage level to be
paid
City Population Size of Department
Anacortes 12,260 17
Lacy 22,660 31
Average
without
Mount
Vernon 20,450 29
The
above list of eight cities provides a balanced group
of similarly sized, like employers. Anacortes and
located in the same labor market. The parties concur that
and Port Angeles are appropriate points of
comparison. For all
practical purposes, the parties agree
list of comparators.
area.
Lacy and
comparators.
of the Cascades.
As
did the parties, the Arbitrator focused on developing
a list of comparators which will not only be
useful in 1993, but in
future negotiations. While the list of comparators adopted by the
Arbitrator is not perfect, it will serve to
establish a solid base
for guidance in future negotiations. It is recognized some fine
tuning of the comparator list may be
necessary in the next round of
bargaining. Because
the Arbitrator developed
his list of
comparators from both parties' lists, the
salary data was not the
same, or was incomplete. Based on the best information available
in the record and from what I could discover
from the contracts,
the wages for the comparators appear as
follows:
City 1992 1993
Anacortes 2,859 *2,859
Lacy 3,259
Average(6) 2,884
Average
wage for 1993 including
cities
without a 1993 settlement. 3,082
Average
wage for 1993 of six cities
with
1993 contracts. 3,231
*Wage not settled at time of arbitration
hearing.
Given
the absence of complete data, the use of the
average wage
figures is not
as reliable a measure
as this
Arbitrator would prefer. However, the figures do reveal generally
that as the wages stand for all eight
jurisdictions it would take
a $244 per month increase to bring
of all cities or $393 per month to reach the
average of the six
jurisdictions with 1993 settlements. While the City is not
arguing inability to pay, this Arbitrator is
unwilling to award the
17% to 19% wage increase proposed by the
Guild. The economic
conditions of
a one-year increase of that magnitude. Nor is there any evidence
in the record of this case which convinced
the Arbitrator of a need
to set
paid in the comparable jurisdictions.
The
5% increase will set the top step salary at $2,980.
While this increase is larger than the 1993
increases for both
internal and external comparators, the
Arbitrator took into account
it takes nine years to reach the maximum
wage under the existing
salary
schedule. The 5%
increase is also
consistent with
negotiated increases of 7% and 3% for 1991
and 1992 respectfully.
The
5% increase will position members of this bargaining
unit in the middle range of the comparators
for 1993. For 1993 the
top salary will rank number six out of the
nine jurisdictions. The
top step wage of $2,980 per month will put
in place a wage schedule
that is competitive and reasonable in
relation to the comparators.
The Arbitrator is also mindful of the fact members of this
bargaining unit continue to enjoy fully paid
health insurance for
employees and dependents.
Cost
of Living
Turning
to the criteria of cost of living, the parties
differed in their approach to the
issue. Evaluation of the
evidence presented on this factor is
complicated by the fact there
is no established or recognized index for
measuring cost of living
changes for
for Seattle or the ACCRA index. The Guild urged the Arbitrator to
use housing costs in
cost of living.
In
contrast to the Guild, the City relied on the CPI as
a more accurate measure of the true impact
of inflation on the
members of this bargaining unit. City Exs.
31-38. The City also
offered a study by Brent Baker on the
subject of geographic cost of
living differences. City Ex. 39.
Baker also testified regarding
his study and its conclusions.
With
all of its faults and weaknesses, the Arbitrator
must give the greater weight to CPI as an
indicator of the impact
of inflation on the members of this
bargaining unit. The December
1991 CPI-U (All U.S. Cities) rose 3.1% from
December 1990. The
December 1992 CPI-U (All
from December 1991. The CPI-W (All
percentage increases for the same
periods. Given the fact members
of this bargaining unit received 10%
increases during the first two
years
of the contract,
no conclusion is
justified that a
substantial wage increase is necessary to
compensate for the loss
in purchasing power due to inflation.
Turning
to the testimony of Guild real estate expert Tom
Kelly, the Arbitrator accepts the testimony
of Kelly to the extent
housing prices have been rapidly increasing
in Mount Vernon.
Kelly's study indicated the average sales
price of a Mount Vernon
home rose from $57,119 in 1986 to $119,448
in 1993. His conclusion
that growth and densely populated areas
cling to, and expand along
the shoreline and freeways is also sound.
The
Arbitrator cannot adopt the Guild's attempt to use
Kelly's work as the measure of relative cost
of living between
jurisdictions. First, there is no uniformity in the source
of the
information in Kelly's cost of living
report. Second, the type of
home sought to be compared was not
defined. Third, housing costs
are only one element of the cost of living.
In
sum, the testimony and report of Kelly
does not
justify the substantial wage increase
claimed by the Guild in this
case.
The 5% awarded by the Arbitrator is consistent with recent
increases recorded in the CPI.
Changes
On
the factor of changes in the foregoing circumstances
during the pendency
of this proceeding, the Arbitrator rejected a
Guild attempt to unilaterally submit
evidence after the record had
been closed.
Other
Factors
Turning
to the "other factors" which are normally or
traditionally taken into account in the determination
of wages, the
Arbitrator finds four factors are worthy of
consideration in the
present case. First, all City employees received a 3%
increase for
1993, except the firefighters. The firefighters negotiated a 4.5%
increase.
Second, 1993 wage increases for
public and private
employees in the Mount Vernon area were
modest ranging from 0% to
4.5%.
Third,
the low Department turnover rate reveals a wage
level that is sufficiently competitive to
attract and retain
qualified police officers.
Fourth,
a 5% wage award for 1993 reflects the fact that
rapidly increasing population is making
greater demands on the
members of this bargaining unit for police
services in terms of
numbers and types of crimes.
In sum,
the 5% increase
and the establishing
of
comparators will put in place a solid
framework for negotiation of
the successor Agreement for 1994.
AWARD
The
Arbitrator awards that a 5% increase be applied
across the board to the existing salary
schedule retroactive to
Respectfully
submitted,
Gary
L. Axon
Interest
Arbitrator
Dated: