City
of
And
Interest
Arbitration
Arbitrator: Gary L. Axon
Date
Issued:
Arbitrator:
Axon; Gary L.
Case #: 10376-I-93-00222
Employer:
City of
Date Issued:
IN THE MATTER OF )
) PERC CASE NO.
INTEREST ARBITRATION )
) 10376-1-93-00222
BETWEEN )
) INTEREST
ASSOCIATION, ) OPINION AND AWARD
Union, ) 1992-1994
AGREEMENT
)
and )
)
CITY OF
City. )
HEARING SITE:
HEARING DATES: July 26, 27, 28,
29, 30
August
3, 4, 9, 1993
POST-HEARING BRIEFS DUE: Postmarked
RECORD CLOSED ON RECEIPT OF BRIEFS:
REPRESENTING THE
Lynn
D. Weir
Webster,
Mrak & Blumberg
600
1325
REPRESENTING THE CITY OF SEATTLE: Otto G. Klein, III
Heller, Ehrman,
White & McAuliffe
Cathy
L. Parker
Civil
Division
City
of
600
ARBITRATOR: Gary
L. Axon
1465
Pinecrest Terrace
TABLE
OF CONTENTS
Page
I. INTRODUCTION 2
II. PROCEDURAL
RULING ON
TO
EXCLUDE EVIDENCE 10
III. POSITION
OF
A. Background 14
B. SPMA Proposals 18
C. Cost of Living 21
D. Cost of Living Is Not an Appropriate
Factor
in
Comparative Economic Analysis 22
E. Other
F. Ability to Pay and Spending Priorities 27
G. SPMA's
Overtime Proposals 28
H. Medical Issues 30
I. Emergency Leave 33
J. Duration 34
K. Conclusion 35
IV. POSITION
OF THE CITY
A. Background 36
B. Wage Proposal 38
C. Cost of Living 39
D. Relative Cost of Living Differences in
the
WC
7 Should be Given Substantial Weight by
the
Arbitrator 40
E. Available Indexes Support the Existence
of
the
Cost of Living Differential Between
Seattle
and the WC 7 41
F. Runzheimer
Study 44
G. Benchmark for Comparison 47
H. Medical Premiums 47
I. Uniform Allowance, Differed
Compensation and
Pension
Pick-Up 48
J. Top Step Wages 49
K. Internal Equity 50
L. Public and Private Sector Settlements 51
M. Second Year Wages 52
N. Three Percent Premium Pay for
Precinct
Captains 52
0. Contract Year 53
P. Overtime 53
Q. City Insurance Proposals 55
R. Longevity 58
S. Sick Leave/Family Emergencies 59
T. Conclusion 60
V. ARBITRATOR'S
AWARD - WAGES
A. Background 61
B. Constitutional and Statutory Authority
of
the Employer 69
C. Stipulation of the Parties 70
D. Cost of Living 71
E. Intercity Cost of Living Data 73
F. Comparability 78
G. 1994 Adjustment 91
H. Longevity 92
I. Premium Pay for Precinct Captains 92
J. Changes in Circumstances During Pendency
of
this proceeding 92
K. Other Factors Normally or Traditionally
Taken
Into
Consideration in the Determination of
Wages,
Hours and Conditions of Employment 93
APPENDIX
A - SALARIES 94
VI. ARBITRATOR'S
AWARD - MEDICAL COVERAGE 96
VII. ARBITRATOR'S
AWARD - OVERTIME 100
VIII. ARBITRATOR'S
AWARD -
SICK
LEAVE/FAMILY EMERGENCIES 103
IX. ARBITRATOR'S
AWARD - LONGEVITY 104
X. ARBITRATOR'S
AWARD - DURATION 106
I. INTRODUCTION
This
case is an interest arbitration conducted pursuant
to RCW 41.56.450. The parties to this dispute are the City of
Management Association ( "
are parties to a Collective Bargaining
Agreement that expired on
1992
for a new labor Agreement. The
Collective Bargaining
Agreement covers approximately 62 employees
holding the ranks of
lieutenant, captain and major in the Seattle
Police Department.
The members of this bargaining unit are
generally long-term
employees of the City who hold supervisory
Positions in the Police
Department.
The
City of
522,000 in 1992. The Seattle Police Department is divided into
four main precincts for the purposes of
delivering police services.
The North Precinct extends north from
square miles with a population of
approximately 222,000. The West
Precinct includes the downtown business core
and some community
living areas, with 11.5 square miles and
63,000 residents. The
East Precinct covers from I-5 to Lake
Washington, with 8.5 square
miles and a population of 80,000. The South Precinct covers some
31 square miles of the south end of the City
with a population of
about 152,000.
A precinct
is commanded by a patrol
captain and
supervised by a lieutenant on each of three
8 hour daily watches.
Up to 180 police officers are assigned to a
single precinct, with
a lieutenant typically commanding 50 or more
personnel at one time.
Administratively
the Police Department is divided into
four bureaus, each commanded by an assistant
chief, who is assisted
by a major.
Another major commands all of the patrol captains. In
addition, a major also commands the street
functions which include
traffic, K-9, swat teams and the Harbor
Patrol Unit. Within each
bureau the major manages certain areas of
responsibility and
oversees captains and lieutenants. Some of the majors are assigned
to manage specific police functions such as
vice, narcotics and the
follow-up investigation of crimes.
The
first Collective Bargaining Agreement between the
parties was effective
to interest arbitration before a panel
chaired by arbitrator
Michael
H. Beck. The
parties again resorted
to interest
arbitration in 1984 before a panel chaired
by arbitrator Allen R.
Krebs.
Once again the parties went to interest arbitration in 1987
before a panel chaired by arbitrator
terms of
agreement which took effect on
Concurrently with the proceeding before
arbitrator Snow, the City
also resorted to interest arbitration with
the International
Association
of Firefighters Locals 27
and 2893 representing
bargaining units within the
In
1989 the City and its two firefighter units submitted
to interest arbitration its contract dispute
for resolution before
a panel chaired by arbitrator Phillip Kienast. Following
the 1989
award by Kienast,
the City sued to set the award aside.
The
parties resolved the litigation with a new
Agreement. The City and
the firefighter unions were thereafter able
to negotiate successor
contracts
expiring on
arbitration.
The
parties to this arbitration made extensive reference
to the decisions issued by the other
arbitrators in the earlier
awards.
Each side found support for its respective positions from
the prior interest arbitration awards. The previous interest
arbitration awards were specifically cited
by the parties with
respect to how the other arbitrators dealt
with the issue of the
City's
attempt to introduce
evidence concerning relative
differences in the cost of living among the
various comparator
jurisdictions. Each of the other arbitrators was required
to
address
a private study the City had commissioned from the
Runzheimer
Company on the issue of relative differences in the cost
of living among the seven West Coast
jurisdictions the parties had
used for purposes of comparison.
In
anticipation that the City would seek to introduce the
work of the Runzheimer
Company on the alleged relative differences
in the cost of living among the seven West
Coast jurisdictions, the
differences in the cost of living. The motion was filed prior to
the commencement of the arbitration
hearing. The City filed a
reply asking the Arbitrator to deny the
evidence.
At the beginning of the arbitration hearing, the
announced that it would not seek a ruling
from the Arbitrator on
its motion to exclude evidence prior to the
taking of testimony on
the merits of this case. The
motion in the post-hearing brief, and asked
the Arbitrator to
reject the use of any evidence concerning
relative differences in
the cost of living in coming to an Award in
this case. The
Arbitrator will deal with this issue in the
section entitled
Procedural Rulings.
Concurrently
with the filing of the motion to exclude
evidence, there were a number of unfair
labor practices filed with
the PERC relating to issues placed before
this Arbitrator. In a
memorandum dated
preliminary decision which pulled several of
the subjects the
parties had submitted to interest
arbitration. Based on Schurke's
decision, the Arbitrator took no evidence or
argument on the issues
that had been removed from interest
arbitration by Mr. Schurke.
The
hearing in this case took eight days for the parties
to present their evidence and
testimony. The majority of the
hearing time was consumed on the issues
surrounding the statutory
factor of comparability. The hearing was recorded by a court
reporter and a transcript consisting of
approximately 1,267 pages
was made available to the parties and the
Arbitrator for the
purpose of preparing the post-hearing briefs
and the 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. Each side called expert
witnesses to testify in support of their
respective positions. The
expert
witnesses were knowledgeable
and qualified in
their
respective fields. The parties offered into evidence substantial
written documentation to sustain their
arguments on the issues
submitted to interest arbitration.
The
Arbitrator continued to receive evidence from the
parties
after the last
day of hearing.
The post-hearing
submissions were offered by mutual agreement
in order to complete
the record, and to make the arbitration
record as current as
possible.
Counsel for the parties submitted comprehensive and
lengthy post-hearing briefs to assist the
Arbitrator in corning to
a decision in this case. Both sides also offered numerous interest
arbitration awards issued by other
arbitrators in the state of
entered into a stipulation that this case
would be heard and
decided without the use of partisan
arbitrators specified in RCW
41.56.450.
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 introduction of the issue and
position of the parties, I then will state
the principle findings
and rational which caused the Arbitrator to
make the Award on the
issues in dispute.
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 and argument presented. However, when formulating this
Award the Arbitrator did give careful
consideration to all of the
evidence and argument contained in the
record of this case.
Because of the size and complexity of the
record, the parties
agreed that the Arbitrator would be excused
from the 30-day time
limit prescribed by RCW 41.56.450 for the
issuance of his Award.
In
a letter received on
for the
had settled issues raised by the City's
proposals to define "shift
extension" as two hours preceding or
one hour following the normal
shift, and for a work schedule reopener. As such,
there was no
need for the Arbitrator to address these
issues in the opinion and
Award.
The parties also made the
Arbitrator aware of the
continuing litigation of the unfair labor
practices- during the
course of the Arbitrator's preparation of
the Award.
During
the long bargaining history the parties have
developed a list of agreed upon comparators
for the purpose of
determining wages and working conditions for
the members of this
bargaining unit. The agreed upon list of comparators consists
of
seven West Coast cities. The comparators are referred to by the
parties as the West Coast 7 ("WC
7"). The seven jurisdictions are
as follows:
The
wages and working conditions of command officers
employed in the WC 7 served as the primary
point of reference for
the evidence presented by the parties in
this case.
This arbitration
arises under the Public
Employees
Collective Bargaining Act ("the
Act"). The Act enumerates several
statutory
factors to be considered by the
Arbitrator. The
statutory guidelines to be considered by an
interest 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
*
* *
(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. PROCEDURAL
RULING ON
The
commencement of the arbitration hearing, and
continued during the
course of the arbitration hearing is best
summarized in the
introduction to the
This
motion is based on: (1) 1993
amendments
to
the statutory standards by which Interest
Arbitration Panels
must make their
determinations,
which demonstrate the intent
of
the legislature that such evidence not be
considered
in proceedings such as these; (2)
the dubious
value of analyses
concerning
relative
cost of living and the refusal by
most
arbitrators to consider them in their
determinations;
(3) the high cost and unfairly
disparate
burdens that litigation of such
analyses imposes
on litigants of
unequal
economic resources;
and (4) the
City's
unlawful
refusal to provide the Association
with information needed to prepare for a
hearing
on such issues.
The
City filed a responsive pleading to the
motion to exclude evidence asserting
City's position that such evidence should be
considered by the
Arbitrator.
According to the City, the
a "variety of novel but misguided and
misplaced arguments" to have
the Arbitrator ignore the fact that it costs
more to live in
arbitrators who have resolved disputes
between this bargaining
unit, and the City, and others with whom the
City has contracts,
have uniformly allowed evidence concerning
relative differences in
the cost of living. The City submits the Arbitrator should allow
the evidence, and then make a decision as to
what weight should be
given to the evidence concerning relative
cost of living among the
WC 7.
Regarding
the
not consider the evidence because of the
City's unlawful refusal to
provide the
hearing, the City reasons this claim is the
subject of an unfair
labor practice which is properly resolved by
the
Employment Relations Commission
("PERC"). City of
International Association of Firefighters
Local 1604, 119 Wn. 2d 373
(1992).
The
against the City prior to this
proceeding. Executive Director
Schurke
rejected all of these unfair labor practices by ruling that
as long as each side has provided the other
with a list of
comparables, the other side can do its own
research and make its
own interpretation of the information it
gathered. Since the PERC,
through Executive Director Schurke, has made a determination in
this case that the City does not have to
produce the information
sought by the
whether the evidence is relevant pursuant to
RCW 41.56.450.
The
Arbitrator holds that the
evidence is not well founded and should be
rejected. RCW 41.56.450
states in relevant part as follows:
.
. . The rules of evidence prevailing
in
judicial
proceedings may be considered, but
are
not binding in any oral testimony or
documentary evidence
or other data deemed
relevant
by the chairman of the arbitration
panel
may be received in evidence. . .
This Arbitrator concurs with arbitrator
Snow's decision in 1988
where he held that evidence concerning
relative differences in the
cost of living is relevant to the
determination of wages under the
statute.
City of
The
Arbitrator to exclude all evidence related
to relative cost of
living differentials as a matter of
law. By ruling that the
suggesting the City's evidence concerning
relative cost of living
is credible and should control the outcome
of this case. The task
of the interest Arbitrator in this process
is to determine the
ultimate weight that should be given to the
evidence offered on
relative cost of living. The question of how much weight should be
given to the purported differences in cost
of living among the WC
7 will be discussed later in the wage issue.
Moreover,
the Arbitrator finds that
that
the evidence should be
rejected because the City
has
unlawfully refused to provide the
to prepare for such a hearing is
unpersuasive. The Arbitrator
concurs with the City that the determination
of whether or not the
City has committed an unfair labor practice
is properly one for the
PERC.
Therefore, I am unwilling to deny the City the opportunity
to present its evidence related to the
relative differences in the
cost of living.
In
sum, the
relative differences in the cost of living is denied. The
Arbitrator will examine the evidence and
determine its relevance,
and weight to be accorded in the discussion
on the wage issue.
III. POSITION
OF THE
A. Background
The
evolution and compensation history of
In 1980 the lieutenants base pay was 9.5%
above the average of the
WC 7.
Arbitrator Beck's award in 1983 Positioned the members of
this unit 5.6% above the average for the WC
7. Under the Krebs'
award in 1984 the monthly base salary was
3.5% above the WC 7 and
within 0.4% of the average effective
September 1985. Arbitrator
Snow's award set the base salary effective
September 1, 1986, for
a lieutenant at $3,828 per month, or 1.39%
below average for the WC
7. The
judicial appeal of the 1989 award by arbitrator Kienast
resulted in a settlement which placed the
base monthly salary 7.61% below average for
the WC 7 as of August
31, 1992.
In the view of the
for
lieutenants had fallen
so low that
increases in total
compensation ranging between 12.9% and 20.3%
are required to bring
7.
The
history of the arbitration awards reveals that
arbitrators Krebs, Beck and Kienast refused to accept the City's
position that relative differences in the
cost of living should be
utilized for perpetuating compensation for
personnel below the average of the WC
7. Arbitrator Snow was the
only person who gave any weight to the City's
evidence regarding
relative cost of living.
Turning
to the legislative purpose and intent of the
statutory scheme for resolving contract
impasses between public
employers and unions representing uniform
law enforcement and
firefighter personnel, the
dedicated
and continuous service
of uniform personnel. In
addition, the award must serve as an
effective alternative to the
strike as a means of settling labor
disputes. RCW 41.56.430. The
Union reasons morale suffers when
compensation is disparately low
or hours disparately long. Adoption of the
promote higher morale and dedication to
service, and mitigate
against the ills that the legislature sought
to cure by the passage
of the impasse resolution legislation.
The
statute also directs the arbitration panel to take
into
consideration additional standards
or guidelines when
establishing the wages and working
conditions for employees subject
to the impasse procedure. No issues have been raised in this
proceeding concerning the constitutional or
statutory authority of
the City.
Further, the City has conceded it has the ability to pay
all amounts proposed by the
relevance is the parties' agreement that the
WC 7 are the proper
group of comparable employers for
consideration under Subsection C
of the Act.
It
is the
hours and working conditions of the
employees represented by SPMA
with those of employees of similar rank in
the WC 7 serves as the
basis to establish appropriate compensation
levels.
Regarding
the factor of the average consumer prices for
goods and services, the
comparing relative levels of
compensation. The Consumer Price
Index ("CPI") is not intended to
be used to make relative cost of
living comparisons among the WC 7. The cost of living data best
serves as a measure of changes in purchasing
power during the term
of the Collective Bargaining Agreement by
which wages can be
adjusted. Thus, the Arbitrator should use
actual compensation data
from the comparable cities--to the extent it
is available--to judge
whether members of this unit need to
"catch up" to relative parity
with the other jurisdictions.
Turning
to the "other factors" criteria of the Act, the
to the Arbitrator that it reverse the
erosion of compensation
suffered by members of the SPMA bargaining
unit since 1979. The
statutory
mandate for the
Arbitrator requires that
total
compensation for members of this bargaining
unit be restored at
least to the average of the WC 7.
The
provide guidelines that will assist the parties
to reach negotiated
settlements in the future. From the
award should instruct the parties clearly on
their statutory
obligations,
and articulate fair and consistent standards for
making economic comparisons. This Arbitrator should join with the
other arbitrators who have rejected the
City's attempt to unfairly
adjust total compensation for the WC 7 based
on the Runzheimer
living
cost figures. The
Arbitrator should clearly
and
authoritatively reject the City's attempt to
distort economic
comparisons through these inappropriate
measures.
The
goal of SPMA in this round of bargaining is to
restore parity of compensation between
their WC 7 counterparts. Absent a compelling demonstration of
changed
circumstances justifying a
departure from previous
settlement patterns, the award of this
Arbitrator should take
The
demonstrates the need for "firm
guidance" from the Arbitrator to
assist the parties in reaching future
settlements. The four-month
wage freeze proposed by the City to be
followed by a 2.8% raise in
salary is contrary to the historical
settlement patterns reached
between these parties.
B. SPMA
Proposals
The
September 1, 1992, through
APPENDIX
A - SALARIES
A.1 The classifications and corresponding rates of
pay covered by
this Agreement are as follows. Said rates of pay are effective
First Top
Step Step
Police
Lieutenant $6165 $6433
Police
Captain $7102 $7398
Police
Communications
Director $7102 $7398
Police
Major $8168 $3508
A.2 Effective
Section A.1 shall be increased by an amount
that will cause the
total compensation to be not less than the
average of the seven
West Coast cities used as comparison
cities (
A.3 Effective
in Section A.1 shall be increased by an
amount that will cause the
total compensation to be not less than the
average of the seven
West Coast cities used as comparison
cities (
A.4 The total
compensation calculation will
include all
compensation including wages, employer's
pension fund payment,
premiums for longevity, education, and
certification, holiday pay,
vacation pay and medical and dental
insurance. Calculations of
total compensation will be based on the top
step Lieutenant with
twenty years of service and holding the
maximum level of all
educational and certification requirements.
A.5 There
shall be two wage steps in each rank or position. The
first step shall begin on the date of
promotion to that rank or
position and the top step will begin six
months after the date of
promotion to that rank or position. The first step will have a
basic rate of pay that is 96% of the top step
for each rank or
position.
A.6
The differential between the top step of each rank shall be
15%.
The Director of Communications shall be paid at and receive
all of the benefits and premiums of the Rank
of Police Captain.
A.7 A
longevity premium shall be paid and shall be based on the
top step of each rank, position or
classification and shall be
added to the
salaries during the life of the Agreement
in
accordance with the following schedule.
Longevity Percentage
Completion of ten (10) years of service 4%
Completion of fifteen (15) years of service 6%
Completion of twenty (20) years of service 8%
Completion of twenty-five (25) years of
service 10%
Jt. 4(a) Appendix A.
Regarding
medical insurance plans contained in Article 8,
the
paying full cost for LEOFF II employees and
for dependents for both
LEOFF I and LEOFF II employees, and continue
the current cost
sharing formula for Group Health and pacific
Medical. Jt.
Ex.
4(a).
The
Union next proposed to modify Article 3 to afford
overtime pay for captains and majors for
time worked in excess of
40 hours per week at the rate of time and
one-half. The
would also reduce to one-half hour the
period beyond work in an 8
hour day for which employees accrue
overtime.
Turning
to the City proposals, the
Arbitrator to reject the proposals to modify
Article 3, Employment
Practices;
Article 5, Holidays;
Article 8, Medical Coverage;
Article 10, Sick Leave; and Article 19,
Duration.
The
are evaluated it is demonstrated that
increases between 13.7% and
20.3% in salary and longevity are required
effective September 1,
1992, to restore total compensation to the
average of the WC 7.
Depending on the amount the Arbitrator might
award on longevity,
lesser increases in base salary would be
required. For the second
and third years of the three-year contract,
the
a formula that would be sufficient to
maintain a 20-year
lieutenant with total compensation equal to
the average 6f the WC
7. The
bargaining unit to catch up and keep up with
their counterparts in
the WC 7.
Historically
the parties have used compensation for a
lieutenant with 20 years of longevity as the
benchmark for making
comparisons and determining differentials
between the ranks. In
the current round of bargaining the City now
asserts that 23 years
of service should represent the
benchmark. The Arbitrator should
reject the City's attempt to vary the
benchmark position in order
to make its offer more acceptable. Variation in the standard 20-
year benchmark will only invite constant relitigation of the
benchmark in future bargaining.
The
base salary alone, an increase of at least
7.1% as of September 1,
1992, and 11.1% as of
salary to restore a 20-year lieutenant to the
WC 7 average.
However, it is the position of the
be based on total compensation paid to
members of this bargaining
unit.
The evidence offered by the
total compensation is calculated for hours
worked, the disparities
as of
7. These
disparities increase when the comparisons are made as of
September 1, 1993, the first anniversary of
the new contract. The
increase on the base salary of 19.5% is
necessary to equal the
average of the WC 7.
Moreover,
SPMA has proposed to increase longevity at 20
years of service from 4% to 8%. If the Arbitrator grants this
proposal, then the additional increase on
base salary of 15.5% will
bring
C. Cost of Living
The
guideline for interest arbitration panels to
utilize in making
economic adjustments. Cost of living is best used as a means to
make mid-term economic adjustments. The initial term on the
contract should be resolved by the
comparison of wages, hours and
conditions of employment between Seattle and
the WC 7. Once the
wages are established for the first
year, the CPI should be
employed for mid-term adjustments that
ensure buying power will not
be eroded during later years of the contract
term.
SPMA
has proposed that for 1993 and 1994 the base rate
should be adjusted so the total compensation
is not less than the
average for the WC 7. If the Arbitrator grants the
proposal for a first year increase
sufficient to "catch up" with
the WC 7, then the CPI should be employed
for the second and third
years of the contract.
The
Arbitrator should reject the City's use of a formula
based on 90% of the CPI with the floor of 2%
on a cap of 7% for
future increases. Fractional costs of living adjustments do not
preserve purchasing power when the employer
seeks to shift future
medical premium increases to the
employees. The parties most
recent voluntary settlements required the
use of 100% of the CPI-W.
The City's contracts with the
the firefighter unions use a full cost of
living formula.
D. Cost of Living Is Not an Appropriate
Factor in
Comparative
Economic Analysis
The
City's use of intercity living cost
comparisons in order to
discount the compensation paid to similar
personnel of the WC 7
based on allegedly lower prevailing wages
and cost of living in
intercity cost of living comparisons. This Arbitrator should
follow the previous decisions of arbitrators
Beck, Kienast and
Krebs in rejecting the use of intercity cost
of living comparisons
for determining the appropriate wage level
of SPMA members.
Even
if the Arbitrator does consider such comparisons,
they warrant no reduction in
based on alleged differences in prevailing
wages or living costs.
Evidence presented by the
Federal Wage System surveys of private
sector blue collar wages
published by the Department of Defense, Area
Wage Surveys and the
Occupational Compensation Survey published
by the Bureau of Labor
Statistics demonstrate that
average of the WC 7.
The
by RCW 41.56.460(c). Pursuant to statute an arbitrator may not
properly impose relatively lower economic
status on
safety
personnel within their
community than their
WC 7
counterparts enjoy within their respective
communities. Under such
circumstances the Arbitrator should
disregard the City's relative
cost of living analysis as unsuitable for
consideration in an
arbitration proceeding as a matter of policy
and legislative
intent.
The Arbitrator should also disregard such cost of living
evidence because the City has not cooperated
to permit SPMA
reasonable opportunity to test the
evidentiary soundness of the
City's living cost studies.
The
living evidence is unreliable. The privately commissioned report
by the Runzheimer
Company purported to quantify alleged differences
in wages and living costs in the WC 7 by
which it reduced the WC 7
compensation for purposes of comparison with
studies published by
were
offered to enhance
the credibility of
the Runzheimer
conclusions through a parade of data, all
concededly flawed. The
City's approach that make reliance on the Runzheimer living cost
report inappropriate. The arguments of the
follows:
1. Direct evidence of indicator
occupations
is
readily available and supported by unbiased
government
surveys to measure wages across
cities. The ability to determine prevailing
wage
rates across areas can be done far more
easily,
economically and reliably than one can
measure
the cost of living by private studies
or
other means.
2. Proper inter-area cost of living
studies
are
enormously costly and complex. The BLS
abandoned its
inter-area cost of
living
studies in
1981. Private studies
like
Runzheimer fail to account for other factors
which
can affect the wage levels in different
jurisdictions. Hence, studies like Runzheimer
are
inherently unreliable and should not be
credited
in this proceeding.
3. Runzheimer's
results concerning housing
prices
are inherently flawed because they vary
greatly from
actual home purchase
values
reported
by the City for its police managers
than
those used in the Runzheimer study.
4. The Runzheimer study
is structurally
flawed
because in relies unduly on rigid home
purchase
specifications.
5. The Runzheimer
Report is flawed because it
fails
to differentiate between the consumption
and
investment components of home ownership.
A
purchase of a house cannot be viewed as both
investment
and savings.
6. The City and Runzheimer
have manipulated
the
contents of Runzheimer's report so as to
preclude
SPMA from evaluating the data to
support
the conclusions regarding the housing
element
of the cost of living study.
7. Runzheimer's
methodology for selecting
representative
home purchase transactions must
be
deemed flawed because Runzheimer will not
disclose the criteria for
making its
selections.
8. Runzheimer
has hidden its methodology to
the
point that SPMA was not even permitted to
know
the standard error of any of the data
samples
used in the study.
9. The Runzheimer
Report is structurally
flawed
because it assumes that all police
managers
in Seattle and the WC 7 will drive
the
same automobiles the same distance each
year.
10. The Runzheimer
methodology ignores the
fact
that workers may benefit from state and
local
governmental services financed by taxes.
11. The Runzheimer
study reaches conclusions
that
are contrary to those reached by BLS
experts
who have no stake in the outcome of
this
proceeding. For example, Runzheimer
argues
that food cost at home is lower in
experts
conclude just the opposite, namely
that
food at home costs more in
12. Runzheimer's
market basket of goods and
services
is insufficient to provide accurate
data
when compared to the BLS market basket of
goods
and services for calculating the CPI.
In
sum, the
seriously flawed and should not be used as a
basis to reduce
compensation for
Lastly, the
City's other intercity
cost of living
evidence is likewise unreliable for the same
or similar reasons
stated for rejecting the Runzheimer
study. The other evidence
offered by the City to support its arguments
regarding intercity
cost of living has been judged to be of
"dubious value" and should
be disregarded by this Arbitrator in his
determinations in the
instant case. Even arbitrator Snow who allowed
consideration of
the Runzheimer
Report indicated that he used it only as a source of
guidance,
and not as a precise measure of
cost of living
differences between Seattle and the WC 7.
E. Other
The
City has historically placed a high value on the
experience of
established
in 1980.
The compensation and working conditions established
during these times should not be altered
absent a persuasive
demonstration of circumstances warranting a
reduction in the
relative wage position of this group of
employees.
The
testimony offered by police managers demonstrated
that workload increased tremendously over
recent years as the
result of the greater demand for police
services. Further, the
range and scope of management duties
performed and the activities
undertaken to stop crime and to assist
citizens through the
community policing program has driven the
workload of the members
of this bargaining unit to its highest
levels. Testimony offered
by members of this bargaining unit at the
hearing revealed an
organized and dedicated group of management
employees seeking to
provide the highest level of police services
for the citizens of
F. Ability to Pay and Spending Priorities
It
is the position of the
adequate reserves to pay SPMA's
proposal, and the electorate
strongly supports expenditure of public
funds for public safety.
According to the
but unfounded in view of the evidence that
demonstrates the City is
in good financial health. The City does not dispute its ability to
pay wages
in accordance with the proposal.
Therefore, the
Arbitrator must assume the City is in a
position to restore
relative compensation levels to the average
of the WC 7 as proposed
by SPMA.
The
compensation has declined in relation to
their counterparts in
other areas of City employment. There has been a serious erosion
of parity to comparable fire department
personnel, the mayor and
City counsel members. It will take a 10.3% increase to restore the
1986 relative parity level between a
battalion chief in the fire
department and a police captain.
Adoption
of the City's proposal will also accelerate the
erosion of the relative standing of police
managers among Puget
Sound jurisdictions.
enjoyed
a pay advantage
over local commanders
in smaller
jurisdictions in the
case will not only restore
parity with the WC 7, it will also restore
the superiority of their
compensation over the smaller
G. SPMA's
Overtime Proposals
The
the overtime provision of the current
Agreement In addition, the
City has discretion to award compensatory
time off in lieu of
overtime compensation. Pursuant to the
would have the option to receive overtime
compensation for time
worked in excess of 40 hours per week. The
to one-half hour the period beyond work in
an 8 hour day for which
employees accrue overtime.
While
the
managers and expect to do what it takes to
get the job done, the
current working system for captains and
majors in the
Police Department is unfair and destructive
of bargaining unit
morale.
Employees in these ranks now must routinely work long
hours of overtime each month in order to do
their jobs. A
survey of the membership revealed that
captains work an average of
48 1/2 hours of overtime per month. The majors average over 34
hours overtime per month. The precinct commanders work an average
of 60 to 70 hours per week.
Testimony
from the captains and majors revealed that the
escalation in workload can be traced in part
to the explosion in
the prevalence of violence, drugs and
gangs. Because the community
is concerned and frightened, the City has
sought to respond in part
by becoming involved in community
Policing. The community Policing
concept expands the amount of overtime hours
necessary by command
officers to perform their jobs. Further, internal factors have
also expanded the workloads of the command
officers. The
witnesses explained that due to staff
reductions in other parts of
the
Department, functions such
as training, inspections
and
research have shifted work to command
officers. The
cites the need for a greater command
presence due to the fact
supervision and direction. Police managers routinely take work
home with them in order to complete tasks
necessary to accomplish
the job.
Regarding
the executive leave provision contained in the
present contract, the
program does not adequately compensate
members for their overtime
work.
The overtime work by captains and majors far outstrips the
59 to 60 hours of executive leave available
to the command staff.
According to the
put in by lieutenants
"off-the-clock." The demands
of the job are
so great that these managers cannot take all
of their executive
leave and still accomplish their duties.
Turning
to the City's proposal for a 3% premium pay for
precinct commanders, the
"insult" than a remedy. The 3% premium would only serve to
legitimize the unfair work demands the City
places on police
managers.
Nor would the 3% premium provide the City with financial
incentives
to alleviate the
workload burdens that
overtime
compensation
has historically served
in this country.
All
predictions are for workloads and work hours
of Seattle Police
managers to increase.
The
issue of whether the Fair Labor Standards Act applies
to members of this bargaining unit is the
subject of litigation
between
the City and
the Union. The City
disputes the
applicability of the Fair Labor Standards
Act to the members of
this bargaining unit. For purposes of this proceeding, the
Arbitrator must assume that SPMA will not
succeed in its litigation
on the applicability of the Fair Labor Standards
Act to the members
of this unit.
For
all of the above stated reasons, the Arbitrator
should reject the City's offer and award the
Union's proposal to
modify the
overtime provisions of the Collective Bargaining
Agreement.
H. Medical Issues
SPMA
proposes to continue current medical benefits with
the
City paying full costs for
LEOFF II
employees and for
dependents of both LEOFF I and LEOFF II
employees. In addition,
the Union would have the City continue the
current cost sharing
formula for Group Health and Pacific
Medical. This would result in
an annual cost figure of $4,354 per
employee. Un. Ex. 152.
The
Union vigorously asserts that the City's assumptions.
for calculating the cost for insurance
seriously overstates the
actual cost to the City for members of this
bargaining unit. The
City has computed an annual cost figure of
$7,458 per employee for
medical insurance.
From
the viewpoint of Union, to reduce base year salaries
through a total compensation analysis using
the $7,458 figure not
only seriously overstates the total amount
paid in 1993 but will
compound the inequity over the second and
third years of the
contract.
The reasons offered by SPMA for calculating the cost of
the insurance benefit are summarized as
follows:
1. The use of LEOFF II premium cost best
recognizes
the changing demographics of this
bargaining
unit. The predominance of LEOFF I
members
of this bargaining unit will change
dramatically
during the term of this contract
as
the older officers begin to retire. As
the
LEOFF I
membership rapidly declines,
the
number of
LEOFF II members
will rapidly
increase
within this bargaining unit. Thus,
the
declining percentage of LEOFF I members
makes
any expense differential temporary.
2. The Union's calculation affords the
SPMA
bargaining
unit the
benefit of city wide
pooling
of health care costs
and premium
experience. Use of LEOFF I direct payment
costs
is contrary to pooling principles that
the
City otherwise follows in its approach to
health
care cost and benefit administration.
The
dwindling numbers of LEOFF I police group,
over
time, will only exacerbate the situation.
3. Adoption of LEOFF II premium costs
avoids
having
to come
to terms with the
City's
misleading,
questionable and nonexistent data.
The
premium charge for dependents of LEOFF I
is
overpriced, and the City admits there is no
data
to support the charge. It is now beyond
dispute
that LEOFF I premium no longer bears
any
relation to the cost incurred in this
group.
4. The use of the LEOFF II premium cost
most
fairly
applies the benefit of this bargaining
unit's
share of the $2 million refund and $4
million
premium freeze and premium holiday
received
by the City from King County Medical.
Adoption
of
premium rates in
effect at contract
expiration
will enable prompt
settlement of future
contract
negotiations. To use the 1993 premium amounts in the
total
compensation analysis as suggested by the
City, only provides the
City with an incentive to delay resolution
of the dispute.
The
City has used the annual medical cost figure of
$7,458 in all of its total compensation
exhibits. City Exs.
102,
104, 106.
According to the Union, this figure is misleading and
seriously overstates the medical costs
incurred by the City for
this bargaining unit. The City's approach to the insurance
calculation assumes that all bargaining unit
members are covered by
the LEOFF I program when in fact the City's
exhibit shows that 11
members are not LEOFF I employees. It also incorrectly assumes
that all bargaining unit members will elect
the most expensive
LEOFF I dependent coverage. The Union claims that it would be
seriously unfair to calculate the insurance
cost using the most
expensive numbers in order to drive down
wages for members of this
bargaining unit. SPMA concludes that the proper measure of the
medical cost component of total compensation
is the LEOFF II
premium amount.
Turning
to the remainder of the City's proposal on
medical issues, the Union avers the
Arbitrator should reject, with
one exception,. the City's medical
proposals. SPMA has no objection
to the City's proposal to reduce the
employee share of the group
health premium from 20% to 10% and the
City's proposal to increase
the service co-pays for doctor visits,
prescription drug supplies
and emergency room visits. The Arbitrator should decline to impose
any preferred provider medical benefit
program on the LEOFF II
employees and dependents covered by King
County Medical ("KCM").
The City has not justified this change by
comparison with either
the WC 7 or local comparators. No other bargaining unit of City
employees has agreed to such a plan. SPMA has no objection to a
contract provision that would permit the
City to offer Preferred
Provider Organization ("PPO")
coverage as an option to employees in
this bargaining unit.
The
Arbitrator should also reject the City's attempt to
impose on the employee a share of future
insurance premiums after
1993.
There is no benefit to the City or to the employee from
premium sharing because health insurance
premiums payable by
employees are paid with after-tax
dollars. If all future rate
increases fall on the employee, the City
will have no incentive to
negotiate to keep those premiums down.
I. Emergency Leave
The
Arbitrator should reject the City's proposal to amend
Article 3.13 by limiting release time for
family emergencies to
LEOFF I employees. While LEOFF II employees can use sick leave
for
family emergencies, none of the WC 7 provide
a separate paid family
emergency
leave benefit. The Arbitrator
should reject this
proposal in order to maintain parity within
the bargaining unit.
LEOFF II employees should not have their
personal sick leave
reduced in order to care for family members,
when LEOFF I employees
are not so restricted. Nor has the City demonstrated that any
other LEOFF II employees in the City or the
state must forego sick
leave to handle family emergencies. Therefore, the City's proposal
should be rejected by the Arbitrator.
J. Duration
The
Arbitrator should adopt SPMA's proposal for a three-
year contract with full retroactivity to
September 1, 1992. The
parties have consistently agreed to contract
periods extending from
September 1 until August 31 of the following
year. The Arbitrator
should reject the City's attempt to alter
the term of the contract
from January 1 through December 31. It is the position of the
Union that
the parties had agreed to a
three-year contract
extending from September 1, 1992, until
August 31, 1995. On July
19,
1993, the City
repudiated its agreement
and bargained
regressively by proposing an unlawful term
of three years and four
months, ending December 31, 1995. At the
hearing, the City altered
its proposal and offered a contract of two
years and four months,
ending December 31, 1994, with pay increases
not effective until
January 1,
1993. The changes in the City's
proposals on the
duration of the contract are the subject of
an unfair labor
practice complaint.
The proposed
four-month salary adjustment
period
constitutes a salary freeze that carries
forward year after year
into the future. The City has not justified such a regressive
change.
By altering a change of the Contract term, the members of
this bargaining unit would be placed further
away from the CPI
adjustment, and increase the disparity in
the contract term with
the WC 7 whose adjustments extend from July
1 through June 30~
SPMA is aware of no case where an interest
arbitrator has ever
failed to give full retroactivity to a wage
increase.
K. Conclusion
The
SPMA concluded in its post-hearing brief as follows:
Compensation of
Seattle police management
personnel
relative to their counterparts in
the
comparison cities has steadily eroded each
year
since SPMA commenced bargaining in 1979.
Troubled
financial times for the City provided
an
early explanation, but with the City's
fiscal heath
restored there has
been no
restoration
of appropriate compensation levels
such as precided the crisis.
The SPMA
economic
proposals provide a suitable basis
for
this restoration.
The
statute under which this proceeding is
convened
has as its primary goal to foster the
dedicated and
uninterrupted service of
uniformed
personnel. But such dedication does
not flourish
in the face
of the City's
consistently
regressive bargaining posture.
Nor
ought it be necessary for this small
bargaining
unit to shoulder the burdens of
litigation
for every contract settlement. A
proper award
should facilitate future
settlements.
For
these reasons and the reasons set forth
above
in this brief, the Arbitrator should
award
SPMA's proposals.
Brief,
p. 149.
IV. POSITION
OF THE CITY
A. Background
The
City recognizes that members of the SPMA have
performed admirably in steering the
Department through a course of
change mandated by shifting needs for police
services. However,
the City is unwilling to "hand over the
key to the treasury" as a
reward for police managers having performed
their jobs well. SPMA
believes fairness and equity require that
they be paid at or above
the average of their West Coast comparable
jurisdictions. Pursuant
to the Union's approach all other factors
are to be ignored. The
City avers that all of the statutory factors
must be taken into
account
when setting compensation
for the members
of this
bargaining unit. The Arbitrator must give consideration to the
impact of
an award on the citizens of
Seattle and on the
approximate 10,000 other City employees.
The
City next asserts it is the task of the interest IF
Arbitrator to fashion an award which
constitutes an extension of
the bargaining process. This Arbitrator must reject the notion
that interest arbitration is the place for
the attainment of
unrealistic proposals which would never be
acceptable in the
underlying negotiation process. The Arbitrator should enter an
award which will be as nearly as possible to
what the parties
themselves would have reached if they had
continued to bargain with
determination and good faith. Application of the mechanical
formula proposed by SPMA does not take into
account the full range
of factors which are required under
Washington law.
The
goal of the City in these negotiations is to work
hard to be conscious and fair in its
approach to labor relations
with all of its 50 different bargaining
units which are represented
by over 30 unions. Eighty percent of the City's employees are
covered by collective bargaining agreements. In the Police
Department alone, there are 9 different
bargaining units which must
be considered in the formulation of the
City's labor relations
policy.
The
City reviews a great many factors when determining an
appropriate wage increase for represented
employees. At the outset
the City looks at the CPI to determine what
it will take for
employees to maintain their purchasing
power. For many years the
CPI was the primary factor behind the City's
labor negotiations.
In recent years when inflation has been low,
the public safety
units have tried to shift the focus to
looking at the WC 7 as a
dominant factor for establishing wage rates.
The
City also examines the local labor market to ensure
that its wage and benefit package is
competitive with other Puget
Sound employers. The taxpayers will not support wage increases
which are out of line or inappropriate with
other local public
sector employees. Economic conditions in the City of Seattle
are
also a basic criteria when determining a
wage increase for City
employees.
Another important factor is the relationship to other
bargaining units. Over the last 20 years, the members of SPMA
and
Seattle Police Officers' Guild have received
about the same wage
increase.
The City cannot ignore what is happening with other City
bargaining units when it negotiates with
SPMA.
The
City also examines the relationship of the SPMA to
the stipulated comparables in the WC
7. Pursuant to its
evaluation of the WC 7, the City factors in
differences in the
relative cost of living among the WC 7. The City also reviews the
percentage increases given by the other WC 7
cities and performs a
total compensation analysis. The City submits its approach is
consistent with the statutory framework for
resolution of disputes
under interest arbitration.
The
City argued that SPMA proposals are little more than
"an effort to turn arbitration into
gamesmanship." The Arbitrator
should reject the Union's myopic focus upon the California labor
market." The Arbitrator should draft an award which
instructs the
parties that the statute requires
consideration of many factors,
not just a rigid comparison with the wages
paid in the WC 7.
B. City Wage Proposal
The
City has proposed that members of this bargaining
unit receive a 2.8% increase effective
January 1, 1993. Pursuant
to the City's proposal, wages would be
frozen at their present
level from September 1, 1992, through December 31, 1992.
In
reviewing the City's proposal the Arbitrator
should consider that
the City agreed to absorb the entire 1993
medical cost increase for
the bargaining unit. The cost of that agreement worked out to
approximately $79,000, which is close to 2%
of the salary for this
bargaining unit. While the City does not argue inability to
pay,
the City's financial health dictates a
cautious approach to the'
establishment of wages for the members of
SPMA. The City is not
flush with cash which should be allocated to
a 15% to 30% wage
increase for the members of this bargaining
unit. Declining
revenues and financial uncertainty in the
private sector argue
against adoption of the Union's proposal.
Additionally, the
City has taken
significant and
substantial measures in response to a
slowing economy. The City
has reduced expenditures in order to balance
the budget. The City
imposed a hiring freeze in May of 1991. In the 1992 budget 224
positions were eliminated and another 175
positions were slashed
from the 1993 budget.
C. Cost of Living
The
City takes the position that increases in the cost of
living support the offer of a 2.8% wage increase
for the first year
of the contract and a cost of living
increase for 1994. The U.S.
CPI-W Index increased at an annual rate of
3.1% from September 1991
through August 1992,
which was the last year of
the prior
bargaining Agreement. Since that time annualized increases in the
CPI-W have ranged from 2.8% to 3.2%. Locally, the Seattle area CPI
has increased at about 3.5%. If the CPI medical cost component is
excluded, the CPI increase was 2.8%
effective August of 1992.
Since then the index without the medical
component has seen an
average increase of 2.8%.
The bargaining
history supports a wage increase
controlled by a CPI formula. Three of the four previous contract
years set the wage increase based upon a CPI
formula. The
overwhelming majority of City bargaining
units have agreed upon an
increase of 90% of the CPI for 1993
wages. The City calculates
that since the CPI applicable to this unit
was 3.1%, use of a 90%
figure results in a wage increase of 2.8%.
D. Relative Cost of Living Differences in
the WC 7
Should
be Given Substantial Weight by the Arbitrator
It
is the position of the City that in setting wages for
this bargaining unit the Arbitrator must
take into account the
differences in the cost of living in the WC
7. According to the
City, all of the independent measures which
either party offered at
the arbitration hearing support the
conclusion that the cost of
living is higher in California than in
Washington. Dr. Jonathan
Leonard gave persuasive testimony that wage
differences tend to
reflect the cost of living differences
throughout the country. Dr.
Leonard explained that if you are going to
compare pay levels
across regions or time periods with very
different pay levels, one
has to take into account differences in the
cost of living. In Dr.
Leonard's view, all of the indexes the City
used in this case tend
to correlate with each other. The studies all tell the same story
that the cost of living is higher, in
general, in the
comparison cities than in
unanimous support for the notion the cost of
living is higher in
Even
the Union witness, Mr. Kilgallon concurred with Dr.'
Leonard that wages tend to reflect any cost
of living differences
among the WC 7.
E. Available Indexes Support the Existence
of a Cost of
Living
Differential Between Seattle and the WC 7
Federal
Pay Act. The federal government has
provided by
law a premium differential for certain
specified West Coast cities.
Law enforcement officers in
differential and for law enforcement
officers in
Oakland,
San Jose CMSA
and in the
San Diego CMSA,
an 8%
differential is paid. Law enforcement officers 'employed by the
federal government in
differential. Kilgallon testified
that in
the
intercity cost of living report revealed
that for the first quarter
of 1993,
other West Coast jurisdictions.
AIRINC. AIRINC is an organization which independently
prepares intercity cost of living data. AIRINC collected data
during 1992 for
standard of living used is based on a before
tax income of $50,000.
AIRINC concluded that the cost of living in
Seattle is 15.8% lower
than the average cost of living in San
Francisco and Los Angeles.
If housing is excluded, the differential is
about 12%.
Urban
Family Budget. The Bureau of Labor
Statistics
published
an urban family
budget for many
years before
discontinuing it in 1981. In 1981 the average urban family budget
for West Coast cities (excluding
increase for each location. Using this methodology, the 1992 urban
family budget for
other WC 7 jurisdictions
Housing
Data. The City offered a number of
studies
concerning
the cost of
housing in the
various West Coast
jurisdictions. The Coldwell Banker study revealed that among
all
of the WC 7, only
According to the Coldwell Banker report, the
average differential
between a house in
The
Federal Housing Finance Board prepared data on the
average price of newly built single family
homes subject to
conventional first mortgages. During the first quarter of 1993 the
average price of a home in
six West Coast jurisdictions.
the study.
Information
provided by the National Association of
Realtors from the WC 7 revealed that
25% lower than the average of the WC 7
jurisdictions for the first
quarter of 1993. For the entire year of 1992,
lower than the average of the West Coast
jurisdictions. In sum,
all of the
studies reveal that the cost of
housing in the
Department
of Commerce. The most recent data available
from the Department of Commerce is for
1988. Per capita income in
Department of Commerce also computed the
average annual pay in
large metropolitan areas. For. 1989
average annual pay in the WC 7.
Area
wage Surveys. Both parties spent a
considerable
amount of time compiling data and offering
testimony concerning
wage comparisons in the comparable
jurisdictions. The Department
of Labor's reports were the source of most
of the data on the
subject of area wage surveys. The use of the data was complicated
by the fact the surveys represented
different years for different
jurisdictions. A change in methodology for collecting the
data
also complicated utilization of area wage
surveys. Whatever flaws
may exist in the area wage surveys, the
bottom line is that wages
are higher in the WC 7 than in Seattle.
For
office occupations, Seattle is 5.6% below the WC 7
average.
If one examines professional and technical employees,
Seattle is 5.9% below the WC 7 average. Dr. Leonard testified from
his review of the data that the pattern
generally holds up that
wages tend to be higher in California than
in Seattle.
The
most recent data was released after the hearing and
included in the record of this case by
stipulation. A review of
the job categories reveals that wages are
higher in the West Coast
comparables than they are in Seattle. Administrative occupations
in Seattle are paid 9.1% below the WC 7
average. Technical
occupations in Seattle receive 4.9% less
than the WC 7, and
clerical occupations receive 6.5% less than
the WC 7. A new
category of police officer has also been
included in the Department
of Labor data collection system. In the Seattle police officer
category,
the Department of Labor study demonstrates Seattle
officers are paid 10.9% less than their WC 7
counterparts.
F. The Runzheimer
Study
The
City commissioned a study by the Runzheimer Company
to
compare the cost
of living in
each of the
West Coast
jurisdictions with Seattle. The results of the Runzheimer
Report
are
entirely consistent with the conclusions reached by the
previously described intercity cost of
living studies. Regardless
of who does the study, the results demonstrate
that cost of living
and relative wages are higher in California
than in Seattle. Even
Union witness Kilgallon
admitted that the Bay Area is a "high cost,
high wage" area. This Arbitrator should follow the lead set by
the
most recent arbitration award between the
parties by arbitrator
Snow giving weight to the evidence
concerning intercity cost of
living.
The
City maintains the Arbitrator should give Substantial
credit
to the Runzheimer Report.
The Runzheimer Report
demonstrated the total difference between
the cost of living in
Seattle and the average of the West Coast
jurisdictions is 6.4%.
Another critical fact that is often
overlooked in comparing the
difference between Seattle and the West
Coast jurisdictions is in
state and local taxes. Oregon and California have a state income
tax, Washington does not. The average payment of state and local
taxes for the WC 7 employees is almost
$2,000 at the $62,700 income
level.
The members of this bargaining unit make no similar payment
for state income taxes.
The
Arbitrator should credit the findings of Runzheimer.
Runzheimer
is a well-respected organization with an impressive list
of public and private clients. Public agencies and private
organizations utilize Runzheimer's
city cost of living data to help
them adjust wages in a manner which reflects
differences in cost of
living between various locations.
The
methodology utilized by Runzheimer to examine cost of
living is reliable. Runzheimer
employs demonstrated techniques for
creating
cost of living
information about various
cities.
Runzheimer
methodology examines living costs in the categories of
taxation, transportation, housing, and goods
and services. Annual
family living costs in each category are
totaled and compared with
other jurisdictions in order to arrive at a
total comparative
analysis.
With respect to the Union challenge to the Runzheimer
data based upon its refusal to release the
underlying proprietary
formulas which are used in making its living
costs assessments, the
City argues the position is unfounded. As a private organization
Runzheimer
must protect its proprietary information against those
who
would copy and
erode its Position
in the marketplace.
Runzheimer
produces reports that are relied on by large companies
such as IBM, Weyerhaeuser and Boeing. When it produces these
reports, it does not release all of the
formulas or background
information. The private corporations and
government entities rely
on the information provided by Runzheimer. The
City asks the
Arbitrator to make a decision based upon the
Runzheimer data.
Additionally,
SPMA had ample opportunity to examine the
Runzheimer
Report prior to the hearing in order to prepare for
cross-examination of the Runzheimer
representative. Counsel for
the Union had adequate opportunity to
cross-examine the Runzheimer
representative at the arbitration
hearing. The mere fact that
Runzheimer
retains some underlying formulas as propriety does not
diminish the validity of the report's
conclusions.
The
City does not doubt that there are improvements which
could be made in the Runzheimer
methodology. While Runzheimer
may
not be a perfect report, it does establish
it Costs more to live in F
California than in Seattle.
The
results of the Runzheimer study suggest there is
about a 6.4% differential between living
costs in Seattle and the
WC 7.
That differential should be included by the Arbitrator in
any analysis of the total cost of
compensation. Seattle compares
favorably with the compensation in the WC 7
jurisdictions. City
Exhibit 102 reveals that Seattle police
lieutenants will be 2% over
the WC 7 average if the City offer of 2.8%
is awarded in this
proceeding
and cost of living
differences are appropriately
accounted for. Police captains will be 3% over the West
Coast
average and police majors will be over 6%
above the West Coast
average using similar analysis. In the last interest arbitration
between these parties arbitrator Snow
concluded that a differential
of slightly over 5% between Seattle and the
WC 7 was appropriate.
G. Benchmark for Comparison
The
City takes the position that the 23-year lieutenant
should be the basis for comparison. According to the City, the
historical practice with respect to total
costs of compensation and
longevity has been to use the average tenure
for lieutenants in the
unit at that point in time. The City has used the 23-year
lieutenant as a benchmark for comparison,
while the Union has a 20-
year lieutenant as the point of
comparison. Since 23 years is in
fact the average seniority of lieutenants,
it should be adopted by
the Arbitrator. The averages are easily computed and the
23-year
figure can readily be used in comparison
with the other WC 7
jurisdictions.
H. Medical Premiums
In
making the total compensation analysis, there are two
primary components to this assessment. First, one must look for
the premium cost which is paid to the
provider. For most SPMA
members this is King County Medical. Since the 23-year officer is
a LEOFF I employee, LEOFF I rates have been
used. The
argued for a blended rate to take into
account some members of the
bargaining unit are LEOFF II and pay a lower
rate. The City
objects to using a blended rate at this
time. The use of a blended
rate skews the data and understates
a total compensation analysis. The thrust of the parties' total
cost compensation analysis is to look at a
particular individual as
the average employee for purposes of
comparison. That average
employee in this bargaining unit has 23
years of service and
participates in the LEOFF I program.
The
second issue on the medical premium calculation is to
determine the appropriate year to use as the
basis for making the
computation.
From the viewpoint of the City, the best measure of
insurance costs is its most recent
experience. These are the
actual amounts expended by the City for
LEOFF I employees. They
are not estimates, they are actual
expenditures to be paid for
medical coverage. The Arbitrator should reject the
to ignore the amounts actually paid to King
County Medical for each
LEOFF I officer. The City's figures accurately reflect that
amount
of premium cost. The Arbitrator should also reject any attempt
to
second guess the rate structure established
and charged by third-
party providers.
I. Uniform Allowance, Differed
Compensation and
Pension
Pick-Up
Uniform
allowance should be excluded from the total
compensation analysis because there is no
accurate way to ensure
that a fair comparison can be made between
departments that have
quartermaster systems and those who require
uniforms and provide
equipment.
Deferred compensation programs should also be excluded
from the total compensation analysis based
on the long-standing
practice
of the parties.
The inclusion of
the deferred
compensation
program in the
wage analysis is
fraught with
uncertainty and error.
Regarding
the manner in which to account for the pension
pick-up, the City submits the best way of
determining the' net
impact on the employee is to start with the
total salary paid the
employee and thereafter deduct the actual
contribution which is
required after any pick-up has been made by
the employer. The
impact of this methodology is included in
City Exhibit 100 and
should be used by the Arbitrator as it has
been in previous
arbitrations.
J. Top Step Wages
One
method of analyzing the wage issue is to look simply
at top step wages being received by
employees in question. The
issue for resolution in this case is total
compensation. The base
salary paid in
a significant factor which weighs heavily in
favor of the City's
proposal.
The
salary was only 6.7% behind the WC 7 on
If the City's 2.8% increase is awarded,
behind the WC 7. Given the substantial cost of living
differential
between
the jurisdictions, City
concludes members of
this
bargaining unit are being fairly and
appropriately compensated.
The
WC 7 is inaccurate. The SPMA members stand today in exactly the
same place in relation to the WC 7 as they
did in 1979. Any
changes in the relationship between Seattle
and the WC 7 can be
explained by the fact that inflation has
been running much higher
in
SPMA
members have fared well in comparison to other
employees in the
City's study of
police services and have over 25,000
population demonstrated that
average received by their
captains receive 8% more than their
This comparison strongly supports the City's
position in this
arbitration.
K. Internal Equity
The
City devotes a substantial effort to try and ensure
internal equity for all of its
employees. The vast majority of
contracts effective
with an increase of 3.2%. That increase was arrived at by awarding
90% of the local area CPI to its
employees. Unrepresented
employees received this same increase. The City and SPMA have
historically used the national CPI to
determine the appropriate
wage level.
SPMA members have enjoyed a slightly higher rate based
on the use of the
It is equitable to have members of this unit
receive a slightly
lower rate of increase this year now that
the local area CPI is
increasing at a faster rate. The City's proposed 2.8% increase for
1993 is 90% of the national CPI.
The
only exception to the pattern of 1993 wage increases
is the
Guild wages were about 10% behind their West
Coast counterparts.
Since
SPMA members are
not as far
behind the West
Coast
jurisdictions, an increase of 2.8% is
appropriate. The City's
offer would also retain the differential
between the ranks. On the
other hand, the
differential between the sergeant and the
lieutenant.
L. Public and Private Sector Settlements
The
average increase in the WC 7 jurisdictions for the
contract year July 1992 through June 1993 is
2.5%. City Ex. 87.
Puget Sound jurisdictions which the City
used for comparison are
paying an average increase in 1993 of
3%. City Ex. 124. Double
digit increases are not even close to what
is happening in the
local community with respect to wage
increases.
Private
sector wage increase for contracts effective in
the 3rd quarter of 1992 was 3%. City Ex. 90.
The average increase
in the 4th quarter of 1992 was 2.7%. The City's proposed increase
of 2.8% is consistent with negotiated
private sector settlements.
The
happening in contract settlements.
M. Second Year Wages
The
City has proposed that the Arbitrator award a second
year wage increase for 1994 of 90% of the
increase in the U.S. All
Cities CPI-W with a minimum of 2% and a
maximum of 7%. The wage
increase for SPMA bargaining unit members
has frequently been tied
to the CPI.
The increase received by all other City employees with
multi-year agreements is tied to the
CPI. Forty-two bargaining
units in the City have agreed on an increase
for 1994. Thirty-nine
of those forty-two settlements have agreed
to have their 1994
increase to be set at 80% of the local
CPI. The three exceptions
are also tied to the CPI, but have a 100% of
the CPI formula.
The
paid by the WC 7 is totally unacceptable to
the City. First, it
would
impose retroactive obligations
on the City
whenever
adjustments were made in the salary schedule
for one of the West
Coast jurisdictions Second, the
the formula would work concerning the
treatment of pension plans.
Third, the formula proposed by the
compensation programs.
In
sum, City submits the
unworkable and ignores other relevant
factors in setting the wage
increase for the second year of the
contract.
N. Three Percent Premium Pay for Precinct
Captains
The City
recognizes the increasing
workload and
responsibilities placed on precinct
captains. In response to this
need, the City has proposed 3% premium pay
be awarded captains
while acting as precinct commanders. The 3% premium will work out
to over $2,000 a year. The 3% premium appropriately responds to
the workload concerns raised by the
O. Contract Year
Existing
contract language sets the present contract year
at September through August. The City proposed that the new
Agreement remain in effect until December
31, 1994. The standard
contract year in the state of
December 31.
The change to a calendar year has been accomplished
with
every single bargaining
unit with which the City
has
negotiated a contract. In the most recent negotiations with the
Seattle Police Officers' Guild, the contract
was changed to a
January 1 effective date. The City submits its proposal to alter
the contract year to a calendar year should
be adopted.
P. Overtime
The
captains and majors. The City has rejected this proposal because
the members of this bargaining unit are
managers who are not
required to punch a clock. It is expected that police managers
will perform the work necessary to
accomplish the job. As SPNA
witnesses
testified to at the hearing, they
are not "clock
watchers."
The
evidence to support its proposal for
overtime. However, almost all
of that evidence related solely to the
precinct captains. The City
has appropriately addressed the workload of
the precinct captains
with its offer for premium pay when members
are employed in the job
of precinct captain.
In
reviewing the overtime proposal, the Arbitrator must
keep in mind that SPMA members have paid
meal periods. All
captains and majors are paid for a hours
work from 8 a.m. until 4
p.m., even thought some of this time is
spent on a meal break.
Moreover,
the City's position is further buttressed by
the executive leave program for majors and
captains. The executive
leave program provides recognition in the
form of additional time
off for hours worked by this group of
employees in excess of 40
hours per week. Fire management employees do not receive
executive
leave.
The executive leave benefit received by captains and majors
is unique to this bargaining unit. In 1989,
the negotiated
settlement increased the amount of executive
leave from 40 hours to
50 hours for captains and to 60 hours for
majors.
Police
captains and majors are also given tremendous
discretion in terms of establishing their
hours of work. This
flexibility enables police commanders to
adjust their hours and
schedules to suit their personal needs and
the needs of the job.
The Arbitrator
should also reject
SPMA's
overtime
proposal given the pending FLSA
litigation. The lawsuit was filed
a few months prior to the arbitration
hearing. As a matter of law,
the decision as to whether the City should
be required to pay
overtime for its employees should initially
be decided by the
United States District Court. The contract explicitly states that
overtime will not be paid for captains and
majors. It should
remain that way unless the court determines
the FLSA requires a
change in the way in which overtime should
be paid.
The
Arbitrator should reject the Union proposals to
delete executive leave in return for
overtime compensation. Nor
should the Union's proposal to delete the
restrictions on the use
of compensatory time be adopted. Neither party has addressed this
issue prior to the hearing or during the
hearing, and it should not
be addressed by the Arbitrator.
If
the Arbitrator adopted the Union proposal for overtime
to captains and majors, the City offered
proposals contingent on
resolution of overtime for captains and
majors. In the event the
Arbitrator awarded the overtime proposal,
the City proposed that
the paid meal period provision be deleted
and that a FLSA Section
7(k) hours threshold should be explicitly
included in the contract.
The City would also have the Arbitrator
delete the restriction
contained in Article 3.4.2
of the Agreement on rescheduling
furlough days. The City wants to be able to adjust schedules
so as
to avoid unnecessary overtime. In the event the Union proposals
are awarded, the City should be given
flexibility to schedule
employees to avoid payment of overtime.
Q. City Insurance Proposals
The
City proposed three basic changes to the medical
coverage provisions of Article 8. First, the City proposed that
the Agreement include a preferred provider
organization as part of
the health care packages available for
employees through King
provide that any increase in King County
Medical rates would be
shared between the employer and employee,
with the employee paying
20%.
The change would be effective in 1994.
At the same time, the
City would reduce the employee share of
payments for HMO plans from
20% to 10%.
The
City's proposals on the health care provisions are
motivated by skyrocketing increases in the
cost of providing
insurance to the members of this bargaining
unit. The annual rate
for the King County Medical premium has
increased from $1,536 in
1989 to $4,035 by 1993. The same type of increase occurred with
the two health maintenance organizations
("HMOs") which are
available as part of the health care
package. The Group Health
premium has doubled since 1989. The Pacific Health premium has
more than doubled from 1989 to 1993. City Exs. 184,
185. The
cumulative increase in inflation from 1986
to 1993 was 24%. During
that same period to time, the medical
component of the CPI has
increased by 55%. However, the premium for King County Medical
has
increased by 111%. City Ex. 188.
The
City health insurance programs have allowed employees
the option of electing whether to
participate in the
Medical program or one of the HMOs. For City employees generally,
the rate of participation in the HMOs is
about 45%. On the other
hand, SPMA members have elected coverage in
the King County Medical
plan.
Only four bargaining unit members participate in the HMOs.
The City premium rate in 1993 for each King
County Medical employee
is $4,035.
The Group Health premium is $3,758.
The Pacific Health
premium is $3,851. The total cost of medical care insurance for
SPMA members in 1993 was $469,831. City Ex. 192.
That figure is
over twice the amount City spent for this
bargaining unit in 1988.
In
response to the increase in insurance premiums, the
City seeks to achieve managed care programs
for the health benefit
programs, premium cost sharing and cost
sharing with employees.
The principle component of the City's
proposed changes is to
implement a PPO for the SPMA bargaining
unit. The majority of
large public employers in the Puget Sound
area have a PPO plan.
Five of the WC 7 jurisdictions have a PPO
plan. The PPO plan
proposed by the City is a good one and
should be awarded by the
Arbitrator.
Turning
to the Union's objections to the PPO plan, the
City maintains the opposition is without
merit. While it is true
no other active group of City employees is
required to participate
in a PPO plan, one group has to be the
first. The City intends to
work toward requiring PPO participation for
all of its employees.
The
information to evaluate the merits of the
City's proposed PPO
program.
According to the City, the Union has more than been fully
informed about the merits of the PPO
program. There is absolutely
no basis in fact to suggest the Union has
been denied vital
information about the PPO program.
The
as an option. Testimony of City witnesses explained that
there is
no financially viable way of writing a PPO
plan which would have
the necessary incentives to encourage
voluntary participation in
the PPO.
The
City next argues the Arbitrator should award the
City's proposed change in co-pays for SPMA
members. Because the
City wants to encourage SPMA members to use
managed care it is
proposing that the premium co-pay for the
HMO plans be reduced to
10%.
At the same time the City is proposing that effective January
1994 King County Medical enrollees will pay
the difference between
the 1993 and 1994 monthly premiums. King County Medical has
projected there will be no increase in the
1994 premium. If that
projection becomes a reality, employees will
not be required to pay
any additional amounts. The Arbitrator should concur with the City
that it is a worthy goal to encourage the
use of managed care as a
method of limiting health care costs to the
City.
The
Arbitrator should also award the changes in the co-
pay features for doctor's visits, 30-day
drug supply prescriptions
and emergency room visits for both of the
HMOs. These changes are
part of the HMO program as mandated by Group
Health and Pacific
Health.
The theory of this is that by requiring co-pays, employees
tend to take a stronger ownership position
in the cost of health
care.
The impact on employees will be relatively minor.
R. Longevity
The
article of the contract. In the view of the City, the facts do not
warrant any increase in SPMA's
longevity pay. Five of the WC 7
jurisdictions do not pay any longevity
premium. The average
longevity pay for
a 20-year police lieutenant
in the WC 7
jurisdictions is $181. A lieutenant in this bargaining unit
receives $2,364 in longevity pay. The longevity pay provision was
added to the 1989 Agreement. It should not be changed in the 1992
Agreement.
No
other management group in the City of
longevity pay. The cost implications of the
excessive.
During the first year the additional cost would be
$263,000.
The
evidence of a need for modifying the
longevity provision.
S. Sick Leave/Family Emergencies
The
City proposes amending Article 3.13 restricting the
use of release time for family emergencies
to LEOFF I employees.
During the term of the last Agreement, the
City started allowing
employees to use sick leave for dependent
care when a family member
is sick.
Prior to this change, no such use of sick leave could be
made.
With the change in the family emergency leave policy,
Article 3.13 leave is no longer necessary
for LEOFF II employees
who have sick leave benefits. At the same
time the City recognizes
that such leave is entirely appropriate for
LEOFF I officers who do
not receive sick leave benefits. The City proposal is consistent
with the practices in the WC 7.
T. Conclusion
The
City concluded in its post-hearing brief as follows:
The City has
attempted to approach these
proceedings,
and each individual issue, in a
fair
and equitable manner. The City would
very
much like to get off the treadmill of
interest arbitration,
which seems to be
dictating the
relationship between these
parties. Hopefully, as a result of guidance
provided
by this Award, this result can be
achieved.
The
ultimate task of an interest arbiter is to
determine
and award the -agreement which the
parties
would have reached if they had been
forced
to keep bargaining. In 1989, the
parties
achieved a negotiated settlement which
resulted
in SPMA members being paid about 5%
less
than the WC7. Vol. 111:18:19-23. This
negotiated
settlement followed Arbiter Snow's
interest
arbitration award which adopted this
relative
relationship between
WC7. For many years, the parties have agreed
that
overtime is inappropriate for majors and
captains. There is nothing in the evidence to
suggest
that this historical practice would
not
have been, and should not be, replicated
for
each of these issues. Conversely, the
case for a PPO is
compelling. The City
respectfully
requests that its position on
each
issue be awarded in the proceeding.
Brief,
p. 131.
V. ARBITRATOR'S AWARD - WAGES
A. Background
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.
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 the relevant
facts are on which to
base an award to resolve a contract dispute.
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.
Each
party placed into the record numerous interest
arbitration awards from other
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 the instant
dispute. Three aspects
set this case apart from a typical interest
arbitration. First,
the bargaining unit is composed entirely of
members who hold
supervisory positions and are veterans of
the
Department.
Second, due to the fact
largest city, all of the comparators--except
one--are jurisdictions
located
in
exception.
Third, the parties are experienced in the use of
interest arbitration and have become quite
sophisticated in the
interest arbitration procedure.
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
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."
Regarding
the present case, in the judgment of
this
interest Arbitrator, entirely too much time
was spent on legal
wrangling over fine points of law. RCW 41.56. 430 contemplates
"there should exist an effective and
adequate alternative means of
settling disputes by uniformed
personnel." The parties would be
better served by a de-emphasis on the
legalisms and concentrating
on presenting facts to assist an interest
arbitrator in producing
a reasoned award. Only by reducing the adversarial nature of
the
interest arbitration process, will the
parties be able to decrease
their
costs, diminish the
time spent in
preparation and
presentation of evidence, and shorten the
process from submission
to award.
A review of the record of prior interest arbitration
awards between the parties clearly reveals a
pattern of increasing
costs, time and complexity as each case
evolved from negotiation to
final award.
It
is also this Arbitrator's impression the increasing
adversarial nature of the process has moved
the parties closer to
a judicial proceeding rather than the
interest arbitration system
envisioned by Chapter 41-56 RCW. While this Arbitrator has
carefully reviewed all of the
"legal" arguments raised by the
parties, I have attempted to avoid becoming
enmeshed in these
arguments which would operate to the
detriment of a decision based
on the facts placed before your
Arbitrator. In their closing
briefs, both parties asked the Arbitrator to
draft an award which
would provide guidance to the parties to
resolve future contract
disputes in an expeditious manner. Thus,
I have strived to
concentrate on the facts of the case, and
whenever possible avoid
a judicial type of response to the
respective positions taken by
the parties.
In
the instant case both parties offered substantial
economic data, complex studies and expert
testimony to bolster
their respective positions. Each side vigorously challenged the
evidence offered by the other party as
flawed, defective and
statistically unsound. Because of the methods by which each party
sought to justify its calculation of total
compensation, this
Arbitrator was faced with a record that
included little common
ground on the proper approach to compute
total compensation. The
evidence and argument by both parties on the
statutory factor of
comparability proved the point that making
comparison studies is
not an exact science.
The
contract period for
31, 1992, paid the members of this unit on a
salary schedule which
provided:
Police
Lieutenant $4,422 $4,604 $4,795 Police Captain $5,086 $5,295 $5,516
Police
Communications Director $5,086 $5,295 $5,516
Police
Major $6,091 $6,342
The
lieutenant effective
freeze the existing salary from
31, 1992.
Effective
rate of pay by 2.8% through
for a lieutenant would be set at $4,929 per
month.
The
Arbitrator finds after careful review of the evidence
and argument, as applied to the statutory criteria that the
existing
salary schedule should be
adjusted by 2% effective
1993, the salary schedule shall be increased
by 4%. For calendar
year j994, the salary schedule shall be
adjusted based on a CPI
formula with a minimum increase of 3% and a
maximum increase of 7%.
The reasoning of the Arbitrator is set forth
in the discussion
which follows.
The
2% increase awarded by the Arbitrator for the four-
month transition period will set the salary
schedule effective
Police
Lieutenant $4,510 $4,696 $4,891
Police
Captain $5,188 $5,401 $5,626
Police
Communications Director $5,188 $5,401 $5,626
Police
Major $6,213 $6,469
Effective
January 1, 1993, the salary schedule will be
increased by 4% to reflect the following:
Police
Lieutenant $4,690 $4,884 $5,087
Police
Captain $5,396 $5,617 $5,851
Police
Communications Director $5,396 $5,617 $5,851
Police
Major $6,462 $6,728
The
Arbitrator concurs with the City that SPMA should
join with the rest of the bargaining units
and move to a contract
year which coincides with the calendar
year. However, I disagree
with the City's proposal to impose a
four-month wage freeze to
accomplish the change. There is no justification for an award
which would freeze the salary schedule of
this group of employees
for a four-month period. The Arbitrator will award an increase to
cover the
four-month period from
A
threshold issue developed between the parties over
whether to use the 20-year lieutenant as the
point of comparison or
a 23-year lieutenant as the basis for
computing wages for purposes
of
comparison. The parties agree that the top step for a
lieutenant should serve as the benchmark for
comparison. What the
parties disagree over, is whether the
20-year lieutenant or the 23-
year lieutenant should serve as the point of
reference. The main
difference in the two figures is in the
vacation time earned. A
lieutenant earns one additional day of
vacation for each year after
20 years of employment up to a maximum of 30
years.
The
City selected the 23-year lieutenant based on its
computation that 23 years is the average
length of service for
lieutenants for the Department. City asserts that since 23 years
is the average seniority, it should be used
as the benchmark for
comparison. On the other hand, The
lieutenant has traditionally been the
benchmark position for fixing
compensation of bargaining unit employees.
The
Arbitrator holds that the 20-year lieutenant should
serve as the benchmark for making
comparisons between
the WC 7.
The benchmark position should remain constant through
successive contract negotiations. The city's approach of using a
floating benchmark serves to complicate and
confuse what should be
a relatively simple point of reference to
develop wage comparison
data over the years. The benchmark should not turn on some average
tenure of the unit at an undefined point of
time.
In
the present case, the Arbitrator did utilize the
comparison studies of a 20-year and 23-year
lieutenant depending on
the need for data to illustrate a particular
point. I made no
attempt to recompute
either the City's 23-year point of reference
or the
facilitated by adoption of the 20-year
lieutenant as the benchmark
on which both parties develop their
compensation studies. Interest
arbitrators who might be called to resolve
contract disputes in
years to come should not be placed in the
position of having to
decide and evaluate compensation studies
with different benchmarks
as the point of reference to evaluate the
wage studies.
Both
the
arguments to support their respective
positions on the wage issue.
The Arbitrator must reject the increase
sought by
excessive and not justified when evaluated
in the context of all of
the relevant criteria. While City has not
argued inability to pay,
the evidence offered by the City on the
Seattle area economy and
financial condition of the City does not
warrant an award of
increasing wages by 14 to 20%.
Adoption
of the SPMA's proposal would cost the City an
estimated $19,584,662 over the 36-month
period. City Ex. 142(A).
The City calculated the percentage increase
for funding the Union
proposal over the 36-month period would be
approximately 46.9%.
Nothing in this record compels the
Arbitrator to burden the City
with an award carrying a price tag of the
magnitude sought by SPMA.
Nor was the Arbitrator persuaded by the
record evidence that the
members of this bargaining unit should be
propelled toward the top
of the salaries paid in the WC 7.
If
the Arbitrator were to award the SPMA proposal the
base pay for the lieutenant effective
increase from $57,540 per year to $77,196
per year. A captain
would earn $88,776 per year and a major
would earn $102,096 per
year. Non-salary benefits driven by the base
pay would see similar
increases.
The bottom line is the evidence as applied to the
statutory criteria simply does not justify
awarding SPMA's wage
offer.
B. Constitutional and Statutory Authority
of
the Employer
No
issues were raised by either party concerning the
statutory and/or constitutional authority of
the City.
C. Stipulation of the Parties
The
stipulation of the parties regarding the appropriate
comparators was of major significance to
this interest arbitration.
The parties agreed that seven West Coast
jurisdictions referred to
as the WC 7 should serve as the primary
point of reference with
which to measure
The
seven jurisdictions are as follows:
#
OF
SWORN
POPULATION EMPLOYEES RATIO
CITY
AVERAGE RATIO 1/572
City
Ex. 170.
D. Cost of Living
Cost
of living is a factor which must be considered by an
arbitrator under RCW 41.60.460. SPMA and the City agree the
All Cities Index, CPI-W, is an appropriate
measure of changes in
cost of living. The parties offered widely divergent views on
how
the cost of living criteria should be
applied in the instant case.
SPMA
takes the position the cost of living factor is a
"secondary guideline" for interest
arbitration best used for making
mid-term economic adjustments.
According to the
comparison of wages, hours and conditions of
employment between
Seattle and the WC 7 provides the
appropriate standard to determine
wages for September 1992. Thus, the Arbitrator should not utilize
cost of living data in establishing the
initial wage level for the
1992 Agreement.
It
is the position of
adopted for the second and third years of
its proposed three-year
contract.
In the view of
ensure purchasing power is not eroded during
the later years of a
multi-year contract.
The
City argues the Arbitrator must take into account the
cost of living factor when establishing
police wages. In support
of its 2.8% wage offer, City presented
evidence the
Index increased at an annual rate of 3.1%
from September 1991
through August 1992. Further, the annualized increases in the CPI
have ranged from 2.8% to 3.2%. The average increase over the
relevant period has been about 3%. The
by about 3.5%.
Moreover,
the City asserts that if the medical component
is removed from the CPI, then the CPI Index
recorded increases of
2.6% to 3%, with an average of about
2.8%. City Ex. 81. The CPI
applicable to SPMA members was 3.L%. Hence,
City submits its 2.8%
offer for 1993 is consistent with the CPI
factor.
The
Arbitrator finds that SPMA's position that cost of
living should not be considered in creating
the wage schedule for
the first year of the contract to be without
merit. RCW 41.56.460
draws no distinction between using the cost
of living factor as a
guide whether one is determining wages for
the first, second or
third years of a collective bargaining
agreement. In the judgment
of this Arbitrator, the cost of living factor
as measured by the
CPI-W, argues against the 13% to 20%
increases proposed by Union.
The
CPI-W has been stable since the period of the 1991-92
contract, through the present time. Generally, the CPI-W has
reflected increases of around 3%. The Arbitrator's award of 2% for
the last four months of 1992 and 4% for 1993
is consistent with the
CPI when measured against the data on
comparative wages and
benefits paid in the WC 7.
E. Intercity Cost of Living Data
One
of the most controversial areas of this dispute was
the City's attempt to bolster its position
with evidence on the
relative cost of living differences in the
WC 7. SPMA adamantly
resisted the introduction and consideration
of intercity cost of
living data.
Earlier in this Award the Arbitrator rejected the
from the record as a matter of law.
The
question now turns to what, if any, weight should be
given to the evidence offered by the City on
cost of living
differences between Seattle and the WC
7. This Arbitrator finds
arbitrator Snow's approach in his 1988
decision on the use of the
inter-area cost of living data well-reasoned
and justifiable under
RCW 41.56.460. Snow wrote in his 1988 award--in
part--regarding
relative cost of living data as follows:
Yet, neither
comparability data nor
the
stipulations
of the parties are dispositive of
the
issue. The statute has set forth a
number
of
standards to be considered, employing such
other factors
which are normally or
traditionally
taken into consideration in the
determination of wages.
Implicit in the
statute
is a legislative recognition that it
would
be too simplistic merely to compare
wages
paid in large cities along the west
coast,
without acknowledging that different
economic
conditions may prevail among them.
Thus, the
legislature has instructed
arbitration
panels to consider factors such as
the
cost-of-living or traditional factors such
as
the dynamics of the local labor market and
the
impact of a "labor area."
Award,
p. 35, Emphasis added.
Snow
wrote in
rejecting the SPMA position
on the
Runzheimer
Report:
At
the same time, the Consumer Price Index
clearly is
a useful tool,
although an
imprecise one,
in evaluating inter-city
comparisons. For example, if wages in Seattle
and
San Francisco have been approximately the
same
since 1967 but inflation was drastically
higher
in San Francisco than in Seattle during
the
ensuing years, logically one can expect
that
wages in San Francisco would have to
increase
faster than those in Seattle in order
for
wage parity to exist. It is reasonable
to
conclude that, if
dollars have greater
purchasing
power in one city than in another,
this
fact ought to be taken into account in
determining
an appropriate wage. Accordingly,
the
CPI data may be used to indicate generally
how
significant are the disparities in actual
compensation
between comparable cities. Nor
has
RCW 41. 56.450 or 41.56.460 restricted the
arbitration
panel's use of the economic data
in
the way suggested by the Association.
The
CPI and
other inter-city "cost-of-living"
comparisons
could have relevance and have been
used
in determining the appropriate wage to be
paid
members of the bargaining unit. It is
important to
stress that the
statutory
criteria
are not completely separable, and no
one factor
can be relied
on exclusively
without
some recognition of the impact on
other
statutory criteria.
Award,
pp. 46, 47, Emphasis added.
Even
with its faults, Snow concluded the Runzheimer study
was a valuable tool in determining wages for
this bargaining unit.
Snow reasoned:
As a
result of such
uncertainties, the
Runzheimer
Report has been
used only as
another
source of guidance: and the arbitrator
has
not relied exclusively on the conclusions
of
the Runzheimer Report as a precise measure
of
cost-of-living differences between
and
the comparative cities. At the same
time,
the
Report has not been discounted entirely.
As
the evidence submitted by the parties made
clear,
the Runzheimer Report was not the only
evidence
showing that the cost-of-living in
comparative
cities is higher than it is in
Seattle.
Award,
P 56, Emphasis added.
The
evidence offered by the City on intercity cost of
living through the Runzheimer
Report housing data, ACCRA report
and the AIRINC study all support the City's
position that cost of
living is higher in the
enforcement officers are paid a premium when
assigned to such high
cost
areas as San Francisco
or Los Angeles. Federal
law
enforcement officers assigned to Seattle and
Portland do not
receive the premium.
The
Area Wage surveys conducted by the Department of
Labor were the subject of considerable
debate. Each side made
their own points based on a reading of the
Area Wage surveys, and
related information. The Arbitrator holds
the City made the better
case for its proposition that for various
occupations, "wages are
higher in the WC 7 than in Seattle."
Through
the testimony of Dr. Leonard, the City was able
to demonstrate that "wage differences
tend to reflect cost of
living differences." Dr. Leonard correctly reasoned that if you
are going to compare pay levels across
regions then it is necessary
to take into account differences in the cost
of living. Responding
to the
to measure intercity cost of living, Dr.
Leonard observed while
none of the indexes is without fault, they
all give "unanimous
support for the notion that the cost of
living is higher in
Union
expert witness Kilgallon pointed to flaws and
weaknesses in the City's effort to measure
intercity cost of living
between Seattle and the
analysis picked around the edges of the
City's evidence concerning
intercity cost of living. In the judgment of this Arbitrator,
Kilgallon
was not able to demonstrate the City's evidence on
intercity cost of living was fundamentally
flawed, and should
therefore be totally ignored.
Moreover,
counsel for the Union presented a comprehensive
and wide-ranging attack on the validity of
utilizing intercity cost
of living data to resolve this dispute. Many of those same
arguments were raised before arbitrator Snow
and were rejected by
Snow.
This Arbitrator concurs with arbitrator Snow that to allow
any flaw or weakness in the evidence to eliminate
its evidentiary
usefulness would incorrectly remove a great
deal of helpful
information from consideration by an
interest arbitrator.
The
Arbitrator was convinced by the Union's arguments
that the City's evidence on intercity cost
of living should not be
applied in a rigid or mechanical
manner. The City submitted the
results of all of its intercity cost of
living data "suggest there
is about a 6.4% differential between Seattle
and the WC 7." Based
on this 6.4% differential, the City argued
the Arbitrator should
include this figure in any analysis of the
total compensation paid
SPMA members.
The
Arbitrator holds the City's evidence does not rise to
the
level which would warrant the
application of a precise
mathematical formula to the determination of
Seattle police wages
for
the 1992-1994 contract.
Given the varying degrees of
reliability and errors in the cost of living
data, the Arbitrator
rejects the City's attempt to drive wages
down for Seattle police
managers based on a purported "6.4%"
intercity cost of living
differential between Seattle and the WC 7.
The
Arbitrator finds the City's cost of living data
permits
a reasonable inference
that cost of
living in the
comparative California cities is higher than
in Seattle. The
totality of the intercity cost of living
data serves to prove the
wage disparity between Seattle and the WC 7
is not as great as
alleged by the
other relevant factors, the Arbitrator
concludes SPMA's proposal
which seeks between a 13.7% and 20.3%
increase in salary and
longevity in order to bring wages to the
average of the WC 7, is
not justified.
F. Comparability
The
driving force behind the positions of the parties on
the wage issue was comparability. While the parties stipulated to
the seven West Coast cities that should be
used to define
police management wages, they differed
sharply on the methodology
which should be used to calculate total
compensation provided to
police managers in the comparator
jurisdictions. The parties
agreed to certain basic compensation data in
constructing their
respective
exhibits on total
compensation. However, they
vigorously
disagreed over the
use of such
elements as the
appropriate benchmark for comparison,
medical insurance premiums,
intercity cost of living data, CPI figures,
uniform allowance,
pension contributions and deferred
compensation in determining
total compensation for purpose of creating
comparison studies. The
evidence and testimony offered by the
parties was extensive and the
subject of major controversy during the
course of the arbitration.
The
starting point for examination is to look at the top
step wage being paid to employees in the WC
7, without regard to
other elements of compensation. Even this process was complicated
by the use of different time periods and
assumptions regarding the
top step wage. Union Exhibit 35(a) revealed a maximum base
wage as
of September 1992 as follows:
Annual
Basis
City Base
Salary
Average - PERS $61,654
Average - P&F $62,095
Seattle $57,540
Variance
of
PERS
Hours/dollars -$4,114
Percent -6.7%
P&F
Hours/dollars -$4,555
Percent -7.3%
Un.
Ex. 35(a).
A
similar study for base wages paid as of September 1993
demonstrated:
Annual
Basis
City Base
Salary
Average - PERS $63,936
Average - P&F $64,422
Seattle $57,540
Variance
of
PERS
Hours/dollars -$6,396
Percent -10.0%
P&F
Hours/dollars -$6,882
Percent -10.7%
Un.
Ex. 37.
The
Union study of base wages shows
salary of 6.7% behind the WC 7 on
PERS figure is used, or 7.3% behind the WC 7
if the
figure is used. SPMA used the 20-year lieutenant as the
benchmark.
The City wanted to compare the 23-year
lieutenant which would
narrow the wage difference because of
additional vacation time for
a
The
City's study of base salaries for 1993 revealed
similar figures. City Exs.
92-99. The City reasoned that adoption
of its 2.8% proposal would place
average of the WC 7. Given the substantial difference in the cost
of living between jurisdictions, City
submits SPMA members are
fairly and appropriately compensated. If the
the base salary figures is correct as of
increase of 7.1% (PERS) or 7.9% (P&F) is
necessary to restore the
In addition, the
average of the WC 7 growing to 11.1% (PERS)
and 13.2% (P&F) in
September 1993.
Next,
the parties turned to making comparisons based on
total compensation. Because each side included different factors
in their total compensation analysis, widely
different conclusions
were reached on exactly how
relation to their counterparts in the WC
7. Each side also reduced
their total compensation to an hourly rate
to make a comparison.
The results
of the SPMA
compensation per hour
computations for September 1992 are
displayed at Union Exhibit
35(a).
Several columns from the Union study are noteworthy for
review in this case. They are:
Annual
Basis
14 16 20 24
Total
Direct Total Total Total
Comp
Compen- Compen Compen- net
of
sation and sation sation net Employee
Health
Care of Employee Pension
Costs Pension Contrib.
Contrib.
Long Beach $72,104 $78,072 $78,072 $42.80
Average - PERS $70,887 $74,711 $72,904 $39.89
Average - P&F $71,247 $74,191 $72,384 $39.60
Variance
of
PERS
Hours/dollars -$4,676 -$8,499 -$10,282 -$5.71
Percent -6.6% -11.4% -14.1% -14.3%
P&F
Hours/dollars -$5,035 -$7,979 $ 9,763 -$5.42
Percent -7.1% -10.8% -13.5% -13.7%
Base
Salary Increase Indicated to Attain Average
PERS 7.1% 12.8% 16.4% 16.7%
P&F 7.6% 12.1% 15.6% 15.9%
Un.
Ex. 35(a).
The
direct compensation and employer health care
cost placing
6.6% below average for the WC 7. (7.1% for P&F). According to
bring the members up to the average of the
WC 7 for total Direct
Compensation and Health Care Costs. (7.6% for P&F).
Additionally,
if the pension pick-up is added the effect
is
even more dramatic. Column 16
demonstrates the average
compensation for WC 7 lieutenants including
pension pick-up on
September 1, 1992, is 12.8% above Seattle
(PERS) and 12.1% (P&F).
Total Compensation Net of Pension Pick-Up is
displayed at column
20. The
disparity at this comparison proves the need for an
increase of 16.4% (PERS) and 15.6% (P&F)
to reach the average of
the WC 7.
According to the Union1 if the calculations are done on
an hourly basis an increase of 16.7% (PERS)
and 15.9% (P&F) is
warranted.
The City performed its
own Total Compensation Net
Employee Contributions for hours worked by a 23-year police
lieutenant.
The study revealed in relevant part for 1993 as
follows:
TOTAL
COMPENSATION NET EMPLOYEE PENSION CONTRIBUTIONS FOR HOURS
WORKED
BY 23-YEAR POLICE LIEUTENANTS IN WEST COAST CITIES
1993
|
Compensation Items |
Long Beach |
|
|
|
San Diego |
San Francisco |
San Jose |
|
Total Comp. Less Pension |
$71,505 |
$77,927 |
$62,492 |
$70,641 |
$65,115 |
$63,704 |
$72,106 |
|
Cost of Living Adjustment |
91.4% |
93.0% |
96.9% |
98.5% |
92.5% |
91.2% |
92.3% |
|
Total Comp Per Year Adjusted To C.O.L. |
$65,356 |
$72,472 |
$60,555 |
$69,581 |
$60,231 |
$58,034 |
$66,554 |
|
Total Comp. Per Hour Worked |
$35.83 |
$40.44 |
$33.42 |
$38.32 |
$32.88 |
$31.96 |
$34.88 |
AVERAGE
COMPENSATION EXCLUDING
ITEMSSEATTLE
Total Comp.
Less
Pension $69,070 $65,279
Cost of
Living
Adjust. 93.7% 100.0%
Total Comp.
Per Year
Adjusted
to C.O.L. $64,683 $65,279
Total Comp.
Per Hour
Worked $35.39 $36.11
City
Ex. 102.
Based
on this computation the City concludes
2% above the average for the WC 7 in total
compensation paid.
Two
major factors caused the parties to reach different
conclusions about the relative standing of
SPMA members and the WC
7. First,
the City used an annual health care cost figure of
$7,458.
SPMA used an annual figure of $4,356 on the LEOFF II
premium rate for 1992. Second, the City made a cost of living
adjustment to the total compensation based
on its relative cost of
living data which it claimed demonstrated
cost of living is
slightly over 6% less in
The
Arbitrator held in the discussion on cost of living
that he was not willing to accept a rigid
formula to account for
cost of living differences between Seattle
and the WC 7. The
Arbitrator does accept the City's evidence
as a general proposition
that demonstrates the cost of living is
higher in the
cities than in
cost of
living is only one of
several factors an
interest
arbitrator must consider when making a
salary determination under
the statute.
The health
care cost used
by City to
make its
computations was $7,458 annually. The average health care cost in
the WC 7 is $4,855, excluding
$2,603 above the average, and is $4,208
above
lowest contribution level of $3,250. While the
represents
an accurate health cost to City per member, the
Arbitrator is convinced the $7,458 is so far
out of line with the
WC 7 that it unfairly distorts the
comparison. The members of SPMA
have no control over the $7,458 figure. SPMA urged the Arbitrator
to use a blended premium rate in calculating
total compensation.
In the judgment of the Arbitrator, the use
of a blended rate would
improperly
skew the data.
However, this Arbitrator cannot
disregard the fact the
than the average and should be discounted in
the final analysis.
The
Arbitrator further finds the evidence offered by the
City is cause for restraint in the matter of
salary improvements
for this group of employees. However, the evidence before this
Arbitrator falls far short of the need for a
four-month wage
freeze, followed by a 2.8% increase for the
next twelve months for
the SPMA bargaining unit. Adoption of the City's position would
drive the relative standing of this group of
employees in a
downward direction when measured against
their counterparts in the
WC 7.
The dedicated and uninterrupted public service of this group
of employees would not be well-served by an
award which would push
the wage structure of police managers lower
in the rankings with
the comparators.
SPMA
vigorously argued throughout the arbitration that
the legislative mandate compelled an award
which would "restore"
the total compensation to the average of the
WC 7. There is
absolutely no such requirement in the
statute. Whenever one
compares compensation and computes averages,
it means one of the
comparators must be at the bottom of the
group and another will be
at the top of the list. Normally, the goal of this Arbitrator has
been to provide a remedy to correct problems
where the pay scale is
substantially below the average of the
comparators. In other
words, where the low paying jurisdiction's
total compensation bears
little or no resemblance to total compensation paid by the
comparators, catch up pay may be justified.
The
Arbitrator finds the members of this bargaining unit
are providing productive and efficient
police management services
for the citizens of Seattle. Responding to crime and developing
appropriate responses to crime has placed
greater work demands on
the police managers. However, the admirable performance of this
dedicated group of officers does not
translate into a justification
for an excessive and extravagant wage
settlement.
No
purpose would be served by this Arbitrator giving a
detailed analysis of the specific total
computation analysis made
by the parties because of the inherent
differences in methodology
used in the computations. What can be derived from a close
examination of the wage comparison studies
offered by both parties
is that this
group of employees is well paid
and enjoys a
competitive and advantageous salary
schedule. In addition, the
membership enjoys a high level of non-salary
benefits beyond the
payment of wages resulting from the salary
schedule. In terms of
the overall wages and benefits it can be
safely concluded SPMA
members are not in need of a significant
increase based on a catch
up because their total compensation is
substantially out of line
when measured against the WC 7.
This
Arbitrator specifically rejects the Position of the
City that the wages and benefits for members
of this unit should be
found to be unreasonable or extravagant when
measured against the
salaries of other law enforcement personnel,
particularly the WC 7.
What is evident from the evidence before
this Arbitrator is that
this group of employees enjoys a competitive
package of wages and
benefits which still allows room for
improvement when evaluated
against all of the statutory criteria. A
salary adjustment for the
duration of this contract which would diminish
the relative
standing of SPMA members in terms of total
compensation with the WC
7 must be avoided.
The
implementation of this Award will set the salary
schedule with a 2% increase effective
Police
Lieutenant $4,510 $4,696 $4,891
Police
Captain $5,188 $5,401 $5,626
Police
Communications Director $5,188 $5,401 $5,626
Police
Major $6,213 $6,469
The
4% increase effective
Police
Lieutenant $4,690 $4,884 $5,087
Police
Captain $5,396 $5,617 $5,851
Police
Communications Director $5,396 $5,617 $5,851
Police
Major $6,462 $6,728
Union
Exhibit 36 displayed the maximum base salaries
effective September 1993 as follows:
[2]
Maximum
Base
City Salary
Long Beach, CA (1) $68,298
Average - using PERS $63,936
Average - using P&F $64,422
The
Award of this Arbitrator will put in place a salary
schedule that is competitive and will
maintain the relative wage
ranking of SPMA members when compared to the
pay levels in the WC
7. For
the period July 1992 through June 1993 the average increase
in the WC 7 was 2.5%. City Ex. 87.
The Award of this Arbitrator
placing the top step wage for a lieutenant
at $61,044 in 1993 is
within the range of reasonableness when
measured against the
factors enumerated in RCW 41.56.460. While the City did not make
an inability to pay argument, it urged
fiscal restraint based on
economic conditions in
the Arbitrator takes into account the
expressed concerns of the
City that an award should be consistent with
the current fiscal
condition of the City.
The
Arbitrator also gave considerable weight to the
internal equity factor. For contracts effective on January 11
1993, the pattern of settlements for City
bargaining units was a
3.2% increase. The 3.2% figure was based on the 90% of the
CPI
formula.
The major exception to this pattern was the SPOG which
received a 5% increase effective January if
1993. City Ex. 88.
The 4% increase for this bargaining unit in
1993 fits within the
settlement patterns for other City employees
of 3.2% and the 5%
agreed to for
Moreover, the Award
is in line with the range of
settlements being given to other public and
private settlements in
the Puget Sound area for 1992-93 City Exhibit 89 reflects an
average wage increase of 3% by the employers
surveyed. If the
Arbitrator had adopted the SPMA position,
the wage settlement would
have been totally out of touch with public
and private wage
adjustments in the Puget Sound area.
In
coming to a decision on the 1993 salary adjustment,
the Arbitrator was cognizant of the fact the
City absorbed the
entire 1993 medical cost increase for SPMA
members. The amount of
the increase is approximately $79,000. By rejecting the City's
proposal for a PPO, the Arbitrator has
essentially retained the
status quo on insurance for the duration of
this Agreement. The
acceptance of the
Arbitrator to exercise restraint in the
amount of the wage increase
to be set for 1993.
G. 1994 Adjustment
The
formula that would cause the "total
compensation" of the members of
this bargaining unit to be not less than the
"average of the WC 7."
The Arbitrator holds this formula would be
unworkable and unduly
complex
to administer. As
these proceedings dramatically
illustrated, the determination of total
compensation is not a
simple task.
Moreover,
the Union proposal would require a continuing
adjustment of Seattle wages because the
language fails to exclude
mid-term contract changes that might be
implemented in the WC 7
compensation packages from the formula. Adoption of the proposed
formula would essentially require the City
to write a blank check
for 1994 wages to be paid to this bargaining
unit.
The
formula proposed by the
because it would tie
compensation paid in the WC 7. This Arbitrator has previously
rejected the Union approach to establishing
the compensation
schedule
for SPMA members based
exclusively on the
average
compensation paid in the WC 7. There is nothing in the record or
law that mandates SPMA members to be paid
total compensation equal
to the average of the WC 7.
The
CPI formula proposed by the City is reasonable and
should be adopted with one exception. The minimum increase should
be set at 3% rather than the 2% as proposed
by the City. The
Arbitrator will modify the City's proposed
language to reflect this
change.
H. Longevity
The
Arbitrator in Section IX of this Award rejected the
SPMA proposal to expand and increase the
longevity pay. The
current longevity Percentages shall remain
unchanged. The amount
of longevity pay shall be adjusted to
reflect the premium based on
the top pay step of the lieutenant effective
I. Premium Pay for Precinct Captains
The
Arbitrator discussed this issue in Section VII,
Overtime, of the Award. In that discussion the Arbitrator rejected
the union position and found in favor of the
City 3% premium for
captains who serve as a precinct
commander. The City's new
language proposed at A.7 will be awarded.
J. Changes in Circumstances During Pendency of the
Proceeding
The
Arbitrator received numerous revised and corrected
exhibits after the conclusion of the
arbitration hearing. These
exhibits were submitted by mutual agreement
of the parties. The
Arbitrator also received a series of
correspondence from counsel
concerning pending unfair labor practice
litigation between the
parties.
This correspondence was disregarded by the Arbitrator in
formulating his Award.
K. Other Factors Normally or Traditionally
Taken Into
Consideration
in the Determination of Wages, Hours
and
Conditions of Employment
The
discussion regarding intercity cost of living data is
also held appropriate for evaluation under
this criteria.
In
sum, the Arbitrator will order a 2% increase effective
from September 1, 1992, through December 31,
1992, as part of the
transition to a calendar year contract
term. Effective January 1,
1993, the salary schedule shall be adjusted
by 4%. Effective
on the CPI-W shall be implemented with the
modification of a 3%
minimum.
The City's proposal on premium pay for precinct captains
will be ordered. All SPMA proposals
regarding the salary issue are
hereby rejected.
AWARD
The
Arbitrator awards that Appendix A - Salaries shall
provide as follows:
APPENDIX
A - SALARIES
A.1
The classifications and corresponding rates of pay covered by
this Agreement are as follows. Said rates of pay are effective
Police
Lieutenant $4,510 $4,696 $4,891
Police
Captain $5,188 $5,401 $5,626
Police
Communications Director $5,188 $5,401 $5,626
Police
Major $6,213 $6,469
A.2 Effective
Section A.1 shall be increased by 4%. Longevity pay will be
adjusted in accordance with the new salary
scheduled effective
A.3 Effective
January 1, 1994, the base wage rates set forth in
Section A.1 as adjusted pursuant to Section
A.2 above shall be
increased by ninety percent (90%) of the
percentage increase from
July 1992 to July 1993 in the
Price Index for Urban Wage Earners and
Clerical Workers (the
CPI-W).
The salary increase will in no case be less than 3% or
greater than 7%. Longevity pay will be adjusted in accordance
with
the new salary schedule effective
A.4 In
the event the "Consumer Price Index" becomes unavailable,
the parties shall jointly request the Bureau
of Labor Statistics to
provide a comparable Index for the purposes
of computing such
increase,
and if that is not satisfactory,
the parties shall
promptly undertake negotiations solely with
respect to agreeing
upon a substitute formula for determining a
comparable adjustment.
A.5 Effective
percent (5%) of their actual base wage rates
shall be paid to
Police Lieutenants assigned to the Bomb
Squad while so assigned.
A.6 Effective
September 1, 1992, longevity premiums based upon the
top pay step of the classification Police
Lieutenant shall be added
to salaries in Section A.1 during the life
of this Agreement in
accordance with the following schedules:
Monthly
Equivalent in Dollars
Longevity Percentage Effective
Completion of fifteen
(15) years
of service 3% $132
Completion of twenty
(20) years
of service 4% $176
A.7
Effective
percent (3%) of their actual base wage rate
shall be paid to Police
Captains while assigned to the position of
precinct commander.
VI. ARBITRATOR'S
AWARD - MEDICAL COVERAGE
Present
in Article 8, Medical Coverage, is a generous
package of health insurance benefits. There are no issues before
the Arbitrator concerning the level of the
benefits available to
SPMA members. The focus of the dispute is over how the
medical
benefits will be delivered and who will pay
for the cost of the
insurance programs. The health insurance cost to City for the 63
SPMA members and dependents for 1993 will be
$469,831. City Ex.
192.
This figure used the "L-1 Premium/Dental/Direct Costs" to
make the calculation of total cost.
SPMA
proposed to continue the existing programs with the
City paying the vast majority of the costs
for medical coverage.
The City made three main proposals in an
effort to contain the
rapidly rising cost of providing health
insurance to the members.
First, the City would include a PPO as part
of the health care
package.
Second,
the City proposed that any increase in the King
the employer and employee, with the employee
paying 20%. At the
same time the City would reduce the co-pay
for the HMO plans from
its current level of 20% to 10%. Third, the City proposes some
minor changes in the co-pay features of the
Group Health and
Pacific Medical plans.
Regarding
the City's proposal to include a PPO, the
Arbitrator is not convinced he should force
a PPO program on the
members of this unit at this time. The only PPO currently in
existence with the City involves
"retired"
Guild members. While it is true PPO plans are common in both
the
WC 7 and major public employers in the Puget
Sound area, PPO plans,
with one exception, are not part of the
health insurance program
for employees of the City of
willing to place SPMA members at the
forefront of the PPO movement
for City workers.
The
Arbitrator does concur with the City that increasing
the co-pay on KCM rates to require members'
share in any increase
in the 1994 premium is warranted. If the SPMA is going to continue
its adamant objection to a PPO program,
members should start paying
a portion of the cost to continue an
expensive package with KCM.
The majority of the members of this unit are
enrolled in the KCM
plan which is the most expensive option
available to deliver health
insurance coverage to this unit. The 1993 rate is $4,035 for KCM.
City Ex. 182. The Group Health premium is $3,758. City Ex. 184.
The Pacific Health rate for 1993 is
$3,851. City Ex. 185.
Moreover,
the City as part of its proposal has offered to
decrease the co-pay for the HMOs from 20% to
10%. With this option
available, SPMA members who want to reduce
the amount of the co-pay
can do so by changing coverage from KCM to
one of the two HMO
plans.
As a practical matter, there will be no co-pay in 1994
because KCM has notified the City it does
not intend to increase
the premium for 1994.
The
Arbitrator notes that the City's proposed language
does not use the 20% figure as the amount of
the co-pay, but would
have the members pay 100% of the difference
between the 1993 and
1994 insurance premium rate. The Arbitrator will award modified
language to require the parties to share
equally in any increase in
the KCM premium. In this manner, both the members and the City
will have a stake in future premium
increases for KCM coverage.
The
Arbitrator also holds that City proposals to change
the
co-pay features for
doctor visits, 30-day drug
supply
prescriptions and emergency room visits for both of the HMO
programs are well-taken. Adoption of this proposal will require
members to pay a $5 fee for each visit to a
provider, increase the
prescription fee from $3 to $5, and increase
the emergency room fee
from $25 to $50 per visit.
In
sum, the Arbitrator holds that the time for adopting
a PPO is rapidly approaching as a means to
control health care
costs.
However, the subject should be deferred to the next round
of bargaining. The Arbitrator's adoption of premium cost
sharing
for the KCM plan is intended to demonstrate
to the SPMA that the
status quo regarding KCM should not continue
beyond the term of
this contract. The City's goal to encourage SPMA members to
use
managed care is valid and should be pursued
in future negotiations.
AWARD
The
Arbitrator awards that Article 8 shall be modified to
state:
Premium
Sharing: Effective January 1, 1994,
King
County Medical (KCM) enrollees and the
City
will each pay 50% of the difference
between
the 1993 and 1994 monthly premiums,
which
reflect the plan ranges described below.
For
calendar year 1994, Group Health (GH) and
Pacific
Health (PH) enrollees will pay 10% of
each
year's respective monthly premium.
Effective
Group
Health Cooperative and Pacific Health,
will
require subscribers to pay a $5 fee for
each
visit to a provider, $5 for each 30-day
prescription
drug supply and $50 for each
emergency
room visit.
The remainder of Article 8 shall remain
unchanged.
VII. ARBITRATOR'S
AWARD - OVERTIME
The
Arbitrator concludes the City's position is correct
that the members of this bargaining unit
should not have the
benefit of flexibility in determining their
work schedules and
participate in a generous executive leave
program, while at the
same time be entitled to overtime
compensation for work in excess
of 40 hours.
While there is certainly merit to providing some
overtime opportunities for members of this
unit who are compelled
to work many hours in excess of 40 hours per
week, this Arbitrator
is unwilling to force overtime on the
parties without a change in
the way scheduling is accomplished. Since SPMA has made no
proposal which would modify the members'
flexibility to determine
their own work schedules or to delete executive leave,
the
Arbitrator
is compelled to reject
the
overtime.
Pursuant
to Section 3.4.1
overtime compensation is
available to lieutenants. Captains and majors do not earn overtime
compensation for work in excess of 40 hours
per week. However,
captains and majors do participate in
an "executive leave" program
which provides for paid time off in lieu of
overtime. During each
calendar year a major is granted 60 hours of
noncumulative paid
executive leave. A captain is granted 50 hours of noncumulative
paid executive leave. The executive leave program went into the
contract in 1984. The amount of executive leave time was raised
to
its present levels in the 1989
negotiations. As Assistant Chief
Brasfield
testified; paying managers overtime would run counter to
the concept that commanders are paid to take
initiative and make
independent judgments. Managers are not
required to punch a clock.
They are expected to give and take
flexibility to get the job done.
City of Seattle, Beck, 1983. Working additional hours is expected
and required when one is a manager in the
Police Department and in
other areas of City government.
Moreover,
in evaluating this proposal, the Arbitrator has
taken into account SPMA members are paid for
the standard eight
hours of work which includes paid meal
periods. The fact the
members of this unit enjoy a paid meal
period argues against the
adoption of the Union's overtime proposal for
captains and majors.
One
of the most compelling reasons for rejecting the
overtime proposal for majors and captains is
the presence of the
executive leave program. The executive leave program is unique to
the members of this bargaining unit. The executive leave program
was negotiated into the contract as
recognition for the long hours
of work and standby time worked by captains
and majors. City Ex.
210. During
the 1989 negotiations, SPMA negotiated an increase in
the amount of time available for executive
leave. The presence of
a generous executive leave program mitigates
against SPMA's claim
that captains and majors should also receive
overtime.
The
SPMA has filed a lawsuit pursuant to the FLSA seeking
overtime pay for all bargaining unit members
for all hours worked
over 40 hours per week. Given the existence of the FLSA lawsuit,
this
Arbitrator is persuaded
the status quo
should not be
significantly altered by this interest
arbitration proceedings.
Once the FLSA issues are resolved, the
course of future bargaining
concerning overtime will be
established. When that day arrives,
the parties will be able to negotiate within
established legal
guidelines.
The
City has not ignored the increased workload and
responsibilities placed on precinct
captains. The City's proposal
to add a 3% premium to captains while acting
as a precinct
commander is an appropriate response to a
demonstrated problem.
The Arbitrator will award the 3% in the wage
issue section of this
Award.
AWARD
The
Arbitrator awards that the SPMA's proposals to modify
the overtime article should not be
adopted. Section 3.4 shall
remain unchanged in the successor contract,
except as modified by
the mutual agreement of the parties.
VIII. ARBITRATOR'S
AWARD - SICK LEAVE/FAMILY EMERGENCIES
Article
3.13 currently provides that both LEOFF I and
LEOFF II employees can be granted paid time
off to attend to family
emergencies.
During the term of the last contract, the City began
allowing employees to use sick leave for
family emergencies. LEOFF
II employees can use sick leave for family
emergencies.
The
change in policy regarding the use of sick leave for
family emergencies prompted the City to
propose a modification to
Article 3.13 to limit use of sick leave to
LEOFF I employees.
The
Arbitrator finds that LEOFF II employees should not
be required to forego sick leave to handle
family emergencies.
LEOFF I employees are not similarly
restricted. The Arbitrator
concurs with the
AWARD
The
Arbitrator awards that the City proposal to modify
Article 3.13 should not become a part of the
Collective Bargaining
Agreement and the provision shall remain
unchanged.
IX. ARBITRATOR'S
AWARD - LONGEVITY
Present
contract language sets longevity premiums as a
percentage of the top step of a police
lieutenant. Jt.
Ex. 9,
Appendix A - Salaries, A.6. There are two longevity steps. After
completion of 15 years of service, the
member earns a 3% longevity
premium.
At the completion of 20 years of service, the longevity
premium increases to 4%. This translates into a $2,364 longevity
premium for a 20-plus year
102.
The
longevity provision was first added to the contract
in 1990.
The Union proposal would create a longevity scale of 4%
for a 10 year employee, rising to 10% for a
25 year employee. Only
two of the five WC 7 jurisdictions pay
longevity premiums. The
Seattle longevity pay for veteran officers
exceeds the $1,164 paid
in Oakland and $100 paid in Sacramento. City Ex.
102. The
Arbitrator concurs with the City that the
cost of funding the
proposal is excessive.
The
Arbitrator holds the current longevity premium is
reasonable and adequate when examined
against the internal and
external comparators. Since the
persuasive evidence to justify the
substantial change to the
longevity program, the Arbitrator concludes
the Union proposal
should not become a part of the contract.
AWARD
The
Arbitrator awards that Appendix A - Salaries, A.6,
longevity, based on a 3% longevity premium
after 15 years of
service and a 4% longevity premium after 20
years of service, shall
remain unchanged.
X. ARBITRATOR'S
AWARD - DURATION
There
are two issues in dispute over this provision of
the contract. First, the City proposed to change the
contract
from its current September through August
configuration, to a
calendar year of January through
December. Second, the City
proposed that the new contract remain in effect
until December 31,
1994.
The Union proposed a three-year
contract commencing
The
Arbitrator finds the contract year should be changed
to
coincide with the
calendar year. Collective bargaining
agreements which begin their contract cycle
on January 1 are the
norm in the state of
year contract with all unions it has had the
opportunity to
negotiate with on the subject. The SPOG agreed to a January 1
effective date in the latest round of
bargaining. The City's case
that better financial planning could be
achieved with a January 1
effective date was convincing.
The
Arbitrator does not agree with the City's proposed
wage freeze for the period
1992.
I will address the pay issue in the discussion on wages.
The
change in the configuration to a calendar year will
result in a contract with a duration of two
years and four months
or
28 months. This
Arbitrator normally favors
multi-year
agreements of three years. While the
contract, the Arbitrator believes a contract
year of two years and
four months will not represent a hardship on
either party. The
Award in the instant case of a
contract--eight months short of the
three-year Agreement the Union was
seeking--is justified on a one-
time basis in order to accomplish the move
to the January 1
effective date.
Moreover,
the Arbitrator refused to award the City's
proposal for a PPO on the ground the time
was not ripe to impose a
PPO on SPMA members. As I noted in the discussion concerning
medical coverage, the status quo cannot
continue in the methods by
which medical insurance coverage is provided
to the members of this
unit.
A contract duration of less than three years will require
the parties to come to grips with the
insurance issue for 1995 and
thereafter.
AWARD
The
Arbitrator awards that the term of this Agreement
shall be from
Respectfully
submitted,
Gary
L. Axon
Arbitrator
Dated: