International
Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No.
160
And
Intercity
Transit
Interest
Arbitration
Arbitrator: Alan R. Krebs
Date
Issued:
Arbitrator:
Krebs; Alan R.
Case #: 11554-I-95-00247
Employer:
Intercity Transit
Date Issued:
IN THE MATTER OF
INTERCITY TRANSIT
AND
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE
WORKERS,
AFL-CIO, DISTRICT LODGE NO.
160
Date Issued:
INTEREST ARBITRATION OPINION AND AWARD
OF
ALAN R. KREBS
Appearances:
INTERCITY TRANSIT Bruce
L. Schroeder
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE
WORKERS,
AFL-CIO, DISTRICT LODGE NO.
160 Dennis P. London
TABLE OF CONTENTS
A. PROCEDURAL MATTERS
1
B. APPLICABLE STATUTORY PROVISIONS 2
C. ISSUES
4
D. PROPOSALS BY INTERCITY TRANSIT 5
E. PROPOSALS BY THE UNION 6
F. BACKGROUND
7
G. THE CONSTITUTIONAL AND STATUTORY AUTHORITY
OF THE EMPLOYER
9
H. STIPULATIONS OF THE PARTIES 11
I. COMPARABLE JURISDICTIONS 11
J. WAGE COMPARABILITY 19
1. With
Comparable Employers 19
2. With the Local Labor Market 20
K. STEP COMPARABILITY 22
1. Step
comparability with comparable employers 23
2. Step
comparability with local public employers 24
L. LEAD DIFFERENTIAL COMPARABILITY 24
M. TRAINING PREMIUM COMPARABILITY 25
N. ECONOMIC INDICES 25
0. FISCAL CONSTRAINTS 26
P. OTHER FACTORS 28
1. Internal
Parity 29
2. Turnover 30 30
Q. EXPLANATION OF AWARD 30
R. INTEREST ARBITRATION AWARD 30
IN THE MATTER OF
INTERCITY TRANSIT
AND
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE
WORKERS,
AFL-CIO, DISTRICT LODGE NO.
160
OPINION OF THE ARBITRATOR
A. PROCEDURAL MATTERS
In accordance with RCW 41.56.492, an interest arbitration
hearing
was held involving certain employees in the maintenance
department
of Intercity Transit. These employees
are represented
for
purposes of collective bargaining by International
Association of Machinists and
Aerospace Workers, AFL-CIO,
District Lodge No. 160. The undersigned was selected by the
parties
to serve as the Arbitrator. The parties
specifically
waived
the provision in RCW 41.56.450 which calls for the
establishment
of a three member arbitration panel. A
hearing was
held
in
was
represented by Bruce L. Schroeder of the law firm Heller,
Ehrman, White & McAuliffe. International Association of
Machinists and Aerospace
Workers, AFL-CIO, District Lodge No. 160
was
represented by Dennis P. London, Business Representative.
At the hearing, the testimony of witnesses was taken
under
oath
and the parties presented documentary evidence.
A court
reporter
was present, and, subsequent to the hearing, a copy of
the
transcript was submitted to the Arbitrator.
The parties agreed upon the submission of post-hearing
briefs. The Arbitrator received the briefs on June 22
and 26,
1995. In view of the lengthy record, the parties
agreed to waive
the
statutory requirement that the interest arbitration award be
issued
within 30 days following the conclusion of the hearing.
Instead, it was agreed that
the Arbitrator would have 60 days to
submit
his award.
While your Arbitrator has
carefully reviewed and considered
all
the evidence presented, given its volume it would be
impractical
to detail all the information and statistics
provided. Evidence presented has been set forth in this
Opinion
to
the extent deemed necessary to explain and support the Award
B. APPLICABLE STATUTORY PROVISIONS
In the state of
transportation
systems and their employees are unable to reach
agreement
on new contract terms by means of negotiations and
mediation,
RCW 41.56.492 calls for interest arbitration to
resolve
their dispute. In interest arbitration,
an arbitrator or
arbitration
panel adjudicates a resolution to contract issues
regarding
terms and conditions of employment, which are at
impasse
following collective bargaining negotiations.
RCW 4l.56.492 sets forth certain criteria which must be
considered
by the arbitration panel in deciding the controversy:
* * *
In making its determination,
the arbitration
panel
shall be mindful of the legislative
purpose
enumerated in RCW 41.56.430 and as
additional
standards or guidelines to aid it
in
reaching a decisions [decision], shall
take
into consideration the following
factors:
(a) The
constitutional and statutory
authority
of the employer;
(b) Stipulations of
the parties;
(c) Compensation
package comparisons,
economic
indices, fiscal constraints, and
similar
factors determined by the arbitration
panel
to be pertinent to the case; and
(d) 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.
RCW 41.56.430, which is
referenced in RCW 41.56.492, reads as
follows:
Uniformed personnel--Legislative
declaration. The intent and purpose of this
1973 amendatory act is to
recognize that
there
exists a public policy in the state of
personnel
as a means of settling their labor
disputes;
that the uninterrupted and
dedicated
service of these classes of
employees
is vital to the welfare and public
safety
of the state of
promote
such dedicated and uninterrupted
public
service there should exist an
effective
and adequate alternative means of
settling
disputes.
C. ISSUES
The employer's actual title is the
Transportation Benefit Area,
but it is most commonly known as
Intercity
Transit.
Intercity transit is the public
transportation
provider in
independent
municipal corporation governed by a nine-member board
composed
of representatives from cities within
and
the County government. The
employees
in the maintenance department bargaining unit.
There
are
eight classifications within the bargaining unit: lead
mechanic,
mechanic, apprentice mechanic, lead service worker,
support
specialist, service worker, vehicle cleaner, and cleaner.
This bargaining unit was first
certified on
state
Public Employment Relations Commission.
Following
certification,
the parties were unable to reach an agreement on a
new
contract despite their efforts in negotiations and the
efforts
of a mediator. In accordance with RCW
41.56.492 and RCW
41.56.450, the executive
director of the Public Employment
Relations Commission certified
that the parties were at impasse
on
several issues. The issues submitted to
arbitration are:
1) Wages
2) Duration of
Contract
3) Retroactivity.
During the arbitration
hearing, the parties mutually agreed that
the
duration of the contract should be three years.
With the
exception
of wages and retroactivity, the parties have agreed to
all
contract provisions for a three-year agreement, expiring on
D. PROPOSALS BY INTERCITY TRANSIT
1. General
Wage Increases
Intercity Transit proposes a 2.5 percent general wage
increase
effective on the first full pay period after January 1,
1995,
an increase which it has already implemented. Effective
with
the first full pay period after
Transit proposes a general
wage increase equal to the percentage
general
wage increase for 1996 to be negotiated with Amalgamated
Transit
Intercity
Transit's employees, including its coach operators.
Effective with the first full
pay period after
Intercity Transit proposes a
general wage increase equal to the
percentage
general wage increase for 1997 negotiated with ATU
Local
1384.
2. Progression
To Top Step
The second component of Intercity Transit's wage proposal
involves
the number of steps from entry level to top step.
Effective with the first full
pay period after
Intercity Transit proposes to
reduce the current 13-step wage
progression
to seven steps. Effective with the first
full pay
period
after
eliminate
an additional step, resulting in a 6-step progression.
Effective with the first full
pay period after
Intercity Transit proposes to
eliminate an additional step,
resulting
in a 5-step program. Effective with the
end of the
last
full pay period before
proposes
to eliminate one additional step, resulting in a 4-step
progression
at the end of this collective bargaining agreement.
Employees would move one step
per year based solely on time in
service. Employees present in a step slated for
elimination
would
move to the next highest step. The wage
differential
between
steps would increase from 2.5 percent to 5 percent.
3. Lead Mechanic
Differential
Intercity Transit proposes no special adjustment for lead
mechanics. They would receive the same general wage
increase and
step
movement described above.
4. Classroom
Training Premium
Intercity Transit proposes to pay 50 cents per hour above
the
regular rate for actual time employees serve as instructors
in
classroom training.
5. Intercity
Transit proposes that any pay increase
awarded
should be retroactive to
E. PROPOSALS BY THE
1. The
following
form:
Step 1 Step 2
Step 3 Step 4
Classifi- Probation to 1 Yr. Over 1 Yr. Over 2 Yrs.
Over 3 Yrs.
cation
Journeyman
Mechanic $15.00 $16.00 $17.00 $18.00
Service
Worker $12.60 $13.25 $14.10 $14.95
Cleaner $10.00 $10.90 $11.80 $12.45
LEADS 10%
OVER JOURNEYMAN RATE
PLACEMENT BASED UPON YEARS OF
SERVICE IN CLASSIFICATION.
The
2. Classroom
Training Premium - 10 percent
3. Effective
January 1, 1996, a percentage wage increase
equal
to that received by ATU Local 1384, but with a minimum of 2
percent.
Effective
to
that received by ATU Local 1384, but with a minimum of 2
percent
.
4. Retroactivity
of any pay increase to
F. BACKGROUND
Intercity Transit assumed operation in 1981 in the urban
areas
of
of
the County in 1993. This expanded
service resulted in an
increase
in the work force from 193 to over 300.1 According to
Intercity Transit's 1995
budget, it services an area of 758
square
miles with a population of 184,400. The
city of
where
Intercity Transit is centered, is located approximately 30
miles
from the much larger city of
the
metropolitan center of
government
is by far the largest single employer in the County.
Intercity Transit operates a
variety of public transportation
services,
including fixed-route buses, shuttles connecting state
facilities,
dial-a-ride vans, vanpools, and intercounty service
between
Thurston and
1
The number of employees is calculated on a full-time
equivalency
(FTE) basis.
_______________
Intercity Transit obtains its funding from four principal
sources. The two largest sources of revenue by a wide
margin are
a
local sales tax generated and approved by voters within
Intercity Transit's service
area and a percentage of the state
motor
vehicle excise tax (MVET) generated within the service
area. Additional revenues are derived from federal
and state
grants
as well as passenger fares. Funding is
received from the
state
for the operation of the shuttle service for state offices.
Intercity Transit has already granted bargaining unit
employees
an across-the-board wage increase of 2.5 percent
effective
with the first payroll in January 1995.2 According to
Intercity Transit, this
increase represents an ''advance'' on its
proposal
for this contract. During collective
bargaining for
this
contract, the parties agreed to some benefit improvements in
overtime,
out of class pay, and vacation accrual.
The additional
cost
of these improvements adds up to about 0.4 percent of the
compensation
cost for the bargaining unit. In
addition,
Intercity Transit agreed to
continue providing medical coverage
for
employees and their dependents at no cost to the employees.
2
There is one mutually recognized ''red-circled'' employee who
did
not receive a pay increase.
_______________
G. THE CONSTITUTIONAL AND STATUTORY AUTHORITY OF THE EMPLOYER
This is the first standard or guideline set forth in RCW
41.56.492
for consideration by the arbitrator. Intercity Transit
argues
that it is barred by the state constitution, statute, and
case
law from granting a retroactive pay increase.
The Union
responds in
a cursory manner that its request for a retroactive
pay
increase is within legal parameters.
Article VIII, Section 7 prohibits a municipal corporation
from
making a gift of public funds. Language in Christie v. The
Port of Olympia, 27 Wn 2d 534, 544 (1947) indicates that a
municipal
corporation cannot provide a retroactive pay increase
covering
work already performed, unless before such work was
performed
there was an explicit agreement that future wage
payments
were not to be considered full compensation.
In this
context,
in 1973, the state legislature enacted RCW 41.56.950
which
would permit a retroactive pay increase in the situation
where
there was a collective bargaining agreement which had
expired:
Whenever a collective
bargaining agreement
between a
public employer and a bargaining
representative
is concluded after the
termination
date of the previous collective
bargaining
agreement between the same
parties,
the effective date of such
collective
bargaining agreement may be the
day
after the termination date of the
previous
collective bargaining agreement and
all
benefits included in the new collective
bargaining
agreement including wage increases
may
accrue beginning with such effective date
as
established by this section.
Then, in King County/Public
Safety Employees Local 519, PD 4236
(PECB, 1992)
, a hearing examiner for the Washington Public
Employment Relations
Commission held that it was an unfair labor
practice
for a union to insist to impasse on a retroactive pay
increase
for a group of employees who had not been previously
covered
by a collective bargaining agreement, where there had not'
been a
prior ''Christie agreement'' stating that wage increases
from
the date of that special agreement would be subject to the
results
of collective bargaining. The hearing
examiner reasoned
that
without such a prior agreement to use as a starting point,
the
Washington Constitution, as interpreted in the Christie
decision,
signified that the employer could not legally offer
retroactive
pay increases to previously unrepresented employees.
This holding is particularly
significant here since the
Washington Public Employment
Relations Commission regulates
collective
bargaining, in accordance with Chapter 41.56 RCW, for
the
parties to this dispute.
Thus, the cited cases support Intercity Transit's
position
against
retroactivity in the circumstances here.
In any event,
as
indicated below, Intercity Transit's position on the merits of
its
retroactivity proposal is sufficiently supported by the
evidence
presented.
H. STIPULATIONS OF THE PARTIES
As previously indicated, the parties have stipulated to a
three-year
agreement. Although not technically a
stipulation,
they
also agree upon two specific employers which should be used
for
compensation comparisons with Intercity Transit. Comparable
jurisdictions
will be discussed in the next section.
I. COMPARABLE JURISDICTIONS
The governing statute requires that the arbitrator
consider
''compensation
package comparisons." In order to make such
comparisons,
the arbitrator must first decide which jurisdictions
are
to be compared.
Intercity Transit takes the position that this factor
allows
consideration
of both comparable employers in the public transit
industry
as well as employers in the local labor market.
In
order
to select comparable employers in the public transit
industry,
Intercity Transit applied a band of minus 50 percent of
its
service area population and plus 50 percent to develop a list
of
comparables within Washington and Oregon:
Service Area Population
C-Tran (Clark County 269,500
Lane Transit 201,400
Kitsap Transit 174,160
Ben Franklin Transit 128,874
Salem Transit 120,000
Whatcom Transit 105,000
Intercity Transit 184,400
Intercity Transit asserts that
the bulk of the agencies suggested
are
on the Interstate 5 corridor outside of the exceedingly dense
central
Puget Sound core.
The Union proposes a list of five comparable transit
agencies. It provided population figures for the counties
in
which
these agencies were located, rather than the service area
population. Intercity Transit. provided the numbers for the
service
area populations:
Service Area
Population County Population
Pierce County 575,730 648,900
Community Transit 335,000 516;5003
Kitsap Transit 174,160 213,200
Ben Franklin Transit 128,874 169,900
Grays Harbor Transit 66,500 67,400
Intercity Transit 184,400 185,900
3 The large difference between
Community Transit's county
population
and service area population is explained by the
existence
of a second transit authority located within the county
in
the city of Everett.
__________________
The Union asserts that Pierce
Transit is an appropriate
comparable
employer because it has a joint service area with
Intercity Transit and also
because they must compete in
recruiting
maintenance employees because of their proximity. The
Union argues that Community
Transit is comparable despite being
somewhat
larger, because it has been used as a comparable
employer
in the past. The Union asserts that
Kitsap Transit is
comparable
because it is close in size and it has been used by
Intercity
Transit as a comparator in the past. According to the
Union, Ben Franklin Transit
was selected because it is common
practice
to select one comparable jurisdiction located in Eastern
Washington. The Union contends that it selected Grays
Harbor
Transit because of its
geographic proximity even though it is a
much
smaller agency.
Dan Snow is the executive director of the Washington
State
Transit
Association. That
organization represents the 24
operating
transit agencies in the state. Mr. Snow
testified that
Intercity Transit's list of
comparable agencies is a good one
since
''it makes sense to talk about systems that are on the I-5
corridor
outside of large urban areas, but not too far outside.''
Mr. Snow testified that Pierce
Transit and CommunityTransit are
not
comparable to Intercity Transit since they are much larger
organizations
and they have much more densely populated service
areas. In Mr. Snow's opinion, Grays Harbor Transit
is too small
to
be compared particularly in view of the recent tremendous
growth
experienced by Intercity Transit. Cathy Silins is the
manager
of the public transportation office within the Washington
State
Department of Transportation. Ms. Silins
testified that
Pierce Transit and Community
Transit are not comparable to
Intercity
Transit. She
testified that those two transit systems
are
considered large urban transit systems and are therefore
eligible
for direct allocation of funding from the federal
government. In contrast, Intercity Transit would be
considered a
small
urban transit system as are Whatcom Transit, Kitsap
Transit,
and Ben Franklin Transit.
Dennis London, a business representative for the Union,
testified
that during a PERC hearing, he had heard somebody from
Intercity Transit testify that
Community Transit was used as a
comparator
by Intercity Transit. Mr. London further
testified.
that
the Union excluded Whatcom Transit as a comparator because
that
agency subcontracts its maintenance work to the city of
Bellingham and Whatcom Transit
itself does not employ mechanics.
He testified that C-Tran was
excluded because of its distance and
its
higher population.
Melody Johnson has been the manager of human resources
for
Intercity
Transit for the past ten years. Ms. Johnson testified
that
Intercity Transit has not used Community Transit as a
comparable
agency, but has occasionally utilized Kitsap Transit
and
Ben Franklin Transit for comparison. Ms.
Johnson testified
that
Community Transit and Pierce Transit are not similar to
Intercity Transit because of
their size, location, and services
they
provide.
Intercity Transit provided evidence of wages and
percentage
increases
paid to mechanics by all seven public employers in
Thurston
County who employ mechanics. It also provided evidence
of
wage levels paid to mechanics by eight automobile dealerships
located
in Thurston County, as well as average wage levels paid
to
mechanics in Thurston County, as reflected in an area wage
survey
published by the state Employment Security Department.
It is important to note that Chapter 41.56 RCW lists
different
interest arbitration standards for transit employees
than
it does for uniformed personnel. Since
1973, police and
fire
uniformed personnel have been subject to interest
arbitration. In such proceedings, RCW 41.56.465 and its
predecessor
RCW 41.56.460, call for compensation comparisons
between
like personnel of like employers on the west coast of the
United States. When RCW 41.56.492 was enacted in 1993 for
transit
employees, the legislature chose to apply much of the
legislation
already enacted for uniformed personnel, but it made
some
changes with regard to the standards or guidelines which the
interest
arbitrator must consider. One of those
differences is
that
in interest arbitrations involving transit employees, the
arbitration
panel is called upon to consider ''compensation
package
comparisons . . . and similar factors determined by the
arbitration
panel to be pertinent This is
certainly a
less
specific standard than that applied to uniformed personnel
The effect of this is to
permit a wider range of discretion in
the
arbitration panel in selecting appropriate comparators.
In order to determine the prevailing practice, interest
arbitrators
will generally try to find the most relevant
comparisons,
comparisons that the parties themselves would be
likely
to consider during their collective bargaining
negotiations. Thus, comparisons with similar types of
employers
would
be more relevant than comparisons with very different types
of
employers. Comparisons with other
employers which are
geographically
proximate would be more relevant than comparisons
with
distant employers.
Here, the parties agreed upon two transit agencies which
they
believe are comparable. Those two, Ben
Franklin Transit and
Kitsap Transit,
will be adopted here. Of the remaining
transit
agencies
which the parties proposed and for which they provided
comparability data,
I have selected the following three as
appropriate
for comparison with Intercity Transit:
C-Tran, Lane
Transit,
and Salem Transit. Each of these transit
agencies fall
within a
population band of 50 percent over or under the
population
of Intercity Transit. They, like
Intercity Transit,
are
also on the I-5 corridor and reasonably close to larger urban
centers. Salem Transit, like the employer here, is
headquartered
in a
small city which serves as the state capitol.
While it
would
be desirable to have a few more comparable jurisdictions,
for
the reasons described below, I am not convinced that the
other
transit agencies suggested by the parties are appropriate
for
consideration.
Intercity Transit is three times as large as Grays Harbor
Transit. Grays Harbor Transit is neither adjacent to
Thurston
County, nor is it on the I-5
corridor. There is just no
reasonable
basis for considering Grays Harbor Transit while
ignoring
other transit agencies which are closer in size or
location
to Intercity Transit. Pierce Transit and
Community
Transit operate in much more
populated urban regions than does
Intercity
Transit.
There is insufficient evidence that Community
Transit has previously been
relied upon as a comparable
jurisdiction
to Intercity Transit. Whatcom Transit
cannot be
used
as a comparable agency because the undisputed testimony
indicates agency does not employ mechanics,
but rather
has
subcontracted its maintenance functions to the city of
Bellingham. Rogue Valley Transit is not comparable based
on a
combination
of factors, including its substantially smaller size,
its
distant out-of-state location in southern Oregon, about 400
miles
away, and its isolation from any significant urban centers.
Moreover, inclusion of Whatcom
Transit and Rogue Valley Transit
would
lead to an imbalance among the comparators, in that a large
majority
would be smaller than Intercity Transit.
Thus, the
principal
comparable jurisdictions that will be utilized to
compare
compensation levels with Intercity Transit are:
C-Tran
Lane Transit
Kitsap Transit
Ben Franklin Transit
Salem Transit
Consideration shall also be given to evidence presented
regarding
compensation comparisons to public and private sector
employers
in Thurston County who employ maintenance employees and
mechanics. Compensation paid for similar types of work
by
employers
in the local labor market falls within the statutory
standard
of ''compensation factor comparisons . . . and similar
factors.'' Certainly, if wages paid for mechanics by
Intercity
Transit were considerably
below the local prevailing wage for
mechanics,
this would likely be a concern addressed by both
parties
during collective bargaining.. As
observed by Elkouri and
Elkouri,
in How Arbitration Works, 4th Ed. (BNA, 1985) at page
808, ''Employees are sure to
compare their lot with that of other
employees
doing similar work in the area.''
However, it is
certainly
the case that compensation paid for similar work by
similar
employers, in similar locations, such as the five
comparable
jurisdictions listed above, is the most significant
comparison. Indeed, the parties appear to recognize this
since
they
introduced into evidence the labor agreements for the relied
upon
public transit agencies, but provided no such supporting
documentation for
local labor market employers.
J. WAGE COMPARABILITY
1.) With
Comparable Employers
Below are reflected the 1995 hourly wages for
representative
classifications
paid by the selected comparable jurisdictions and
for
Intercity Transit, with the 2.5 percent increase already
provided
by Intercity Transit factored in:
Mechanic
Kitsap Transit $18.264
C-Tran 16.23
Ben Franklin Transit 16.14
Salem Transit 14.76
Lane Transit 14.69
Average $16.02
Intercity Transit $17.57
Relation to average +8.8%
Support Specialist
Kitsap Transit $14.75
Lane Transit 14.39
Salem Transit 12.71
C-Tran 12.19
Ben Franklin Transit 11.78
Average $13.16
Intercity Transit $14.38
Relation to average +8.5%
Vehicle Cleaner
Lane Transit $12.98
Kitsap Transit 12.30
4
The Kitsap Transit contract provides for up to 4 percent in
group
merit pay, depending on whether certain department and
agency
goals are met. This has not been
factored into the
compensation
level since it would be entirely speculative based
on
the record presented here, as to whether the employees would
receive
any group merit pay.
___________________
C-Tran 10
07
Ben Franklin Transit
8.90
Salem Transit No
Position Match
Average $11.06
Intercity Transit $11.42
Relation to average
+3.15%
2.) With the Local Labor Market
Mechanic Wages
Public Employers 1995
Wages
City of Lacey $19.00
City of Olympia 17.51
City of Tumwater 17.29
Thurston County 17.05
State of Washington 16.94
North Thurston School
District 13.96
Average $16.95
Intercity Transit $17.57
Relation to average +3.5%
Private Employers5 1995 Wages
Capitol Coachman, Mazda$17.50
Capitol Chevrolet/
Capitol Mazda 16.00
Hanson Volkswagen 15.90
Boone Ford 15.50
Hulbert Pontiac-Cadillac 15.00
Evergreen Hyundai 15.00
Rotter's Olds, Buick, GMC 15.00
Lincoln-Mercury of
Olympia 14.63
Average 15.56
Intercity Transit
$17.57
Relation to average +11.4%
5
Intercity Transit also submitted evidence of an area wage
survey. That survey reflects that auto mechanics in
Thurston
County were paid a mean wage
of $14.41 in February 1992. The
wage
rates listed here are more significant since they are
current
and specific.
___________________
Mr. London testified that there is a distinction between
the
work
done by mechanics at auto dealerships, such as those listed
above,
and the work done at Intercity Transit.
He testified that
auto
dealerships do not work on wheelchair lifts and some other
specialized
equipment contained on transit equipment.
In Mr.
London's opinion, if
non-transit comparators are utilized, they
should
involve ''the heavy end of the industry'' where wages are
higher. No evidence was presented regarding this
segment of the
work
force. Ms. Johnson testified that some
of Intercity Transit
mechanics
had previously worked at some of these auto
dealerships. She also noted that health benefits paid by
Intercity Transit are, on average, more generous than those
provided
by the auto dealerships.
For the reasons already discussed, I find that evidence
of
the
prevailing wages in the local market is significant, though
to a
lesser extent than are comparisons with comparable transit
agencies. In the local labor market, I find public
employers to
be
somewhat more significant for comparisons with Intercity
Transit than are private
employers since they are likely to have
more
in common regarding organizational structure, mission, and
resources. The wage rates presented above are the best
evidence
of
prevailing local wage rates which was presented at the
hearing. I find that they do have relevance.
K. STEP COMPARABILITY
The current wage scale includes a wage progression of 13
steps
for each classification. There is a 2
1/2 percent
difference
in pay between steps. Employees may
either be denied
a
step increase, or receive a one or two step increase depending
on
performance. Such step increases have
been provided each year
in
July.
Intercity Transit's proposal would eliminate the even
numbered
steps, effective with the first full pay period after
July
1, 1995, thereby reducing the number of steps from 13 to 7.
By eliminating every other
step, there would be a 5 percent
difference
between steps, rather than the current 2.1/2 percent
difference. Movement to the next step would occur each
year in
July as has occurred in the
past, but would no longer be
dependent
upon performance. The number of steps
would be further
reduced
by eliminating the bottom step effective with the first
full
pay period after July 1, 1996 to reduce the number.of
steps
to
6, again eliminating the new bottom step in like manner in
July 1997 to reduce.the number of steps to 5, and then doing the
same
at the end of the last full pay period of 1997, leaving 4
steps
at the expiration of the contract.
The Union would change the step structure effective
January
1, 1995, creating a new step 1
which employees would receive
during
their first year of employment with Intercity Transit.
Employees with between one and
two years of employment would
automatically
be placed at a new step 2. Employees
with between
two
and three years of employment would automatically be placed
at a
new step 3. With three or more years
with Intercity
Transit, employees would be
placed at step 4, which would be the
top
rate for the classification. Movement
between steps would
occur
on the employee's anniversary date with Intercity Transit,
though
no step movement would occur after employees top out on
their
third anniversary. The Union would also
combine the
support
specialist and service worker classifications and also
the
vehicle cleaner and cleaner classifications.
The Union
provided
no evidence in support of these classification mergers.
1.)
Step comparability with comparable employers
Employer # of steps # of years6.
Kitsap Transit 1 At Entry
Ben Franklin Transit 5 3.5
Lane Transit 6 4
C-Tran 5 4.5
Salem Transit 6 4.5
Average 4.67 3.18
Intercity Transit -
Current 13 @
129
Intercity Transit
Proposal 13>4 @12>4
Union Proposal 4 3
6
"# of Years'' reflects the number of years that it takes to
progress
from the bottom step to the top step.
7
The average of the four comparable jurisdictions that have
steps
is 5.5 steps in 4.1 years.
8See
footnote 5.
9 Variable depending upon performance.
____________________
2.) Step
comparability with local public employers
Employer # of
Steps # of Years
North Thurston
School District 1 At Entry
City of Olympia 5 4
State of Washington
11
4.5
City of Tumwater 5 5
Thurston County
10
9
City of Lacey 11 10
Average 7.210 5.411
Intercity Transit
Current 13
@12
Intercity Transit
Proposal 13>4
@12>4
Union Proposal 4 3
L. LEAD DIFFERENTIAL COMPARABILITY
Employer Lead
Differential
C-Tran 5.0%
Lane Transit 4.9%
Salem Transit 4.9%
Kitsap Transit 3.9%
Ben Franklin Transit 3.1%
Average 4.36%
Intercity Transit Proposal
and Current 6.6%
Union Proposal 10%
premium
The Union argues in its brief that Intercity Transit
''failed
to focus on the fact that the leads [at Intercity
Transit] function at a
supervisory level with responsibilities
far
exceeding those of the majority of the other comparators.''
No evidence presented at the
hearing supports this contention.
10
The average of the five jurisdictions that have steps is 8.4
steps
in 6.5 years.
11
See footnote 10.
__________________
Moreover, Sharon Skeels, Intercity Transit's director of
administration, testified
that she requested job descriptions
from
the comparable agencies and made sure that the duties of the
compared
positions did match the work performed by Intercity
Transit
employees. She
used the position of lead mechanic as an
example
where this was done.
M. TRAINING PREMIUM COMPARABILITY
Training
Premium
Salem Transit $0.50 per hour
Ben Franklin Transit 0
Kitsap Transit 0
Lane Transit 0
Salem Transit 0
Intercity Transit - Current 0
Intercity Transit
Proposal $0.50 per hour
Union Proposal 10% premium
The parties agree that the
training premium would apply where the
employee
is required to instruct other employees in a classroom-
type
setting.
N. ECONOMIC INDICES
The statute requires a consideration of ''economic
indices.'' The most common of the economic indices
relied upon
by
interest arbitrators are those published by the U.S.
Department
of Labor relating to changes in the cost of living.
Reflected below is the change
in the cost of living for calendar
year 1994,
according to several of the leading indices:
CPI - W (All U.S. Cities) 2.7%
CPI - U (All U.S. Cities) 2.7%
CPI - U (Seattle-Tacoma) 3.4%
CPI - W (Seattle-Tacoma) 3.6%
Intercity Transit points out that
bargaining unit members
are
insulated from increases in medical costs by receiving
employer
paid health benefits. Intercity Transit,
relying upon
several
published articles, questioned whether published CPI
figures
actually overstates the true level of inflation.
Intercity Transit submitted
figures which indicate that the top
step
wages for mechanics have kept up with published cost of
living
increases during the past ten years, and that over this
period,
vehicle cleaners have received pay increases
substantially
above the published rise in the cost of living.
0. FISCAL CONSTRAINTS
This standard requires a consideration of Intercity
Transit's financial
circumstances, i.e., its ability to pay
additional
costs associated with a new labor agreement.
Inherent
in
this factor is the fact that public transit agencies in
Washington are
limited in their funding sources.
Intercity Transit's 1995 budget documents reflect a
projected
increase of only 1.7 percent over 1994 revenues. Sale
tax
revenues are expected to grow only slightly.
The projected
slow
growth is not surprising inasmuch as the state government,
which
is the predominant employer in the county, provided no
general
wage increase in either 1994 or 1995, and some of the
other
local public employers, such as the county government,
followed
suit. Projected higher expenses are
expected to reduce
cash
and reserves by the end of 1995 to less than half of what
they
were at the beginning of the year. Randy
Riness, Intercity
Transit's director of
development, testified that with its
operating
reserves dwindling and soon to be nonexistent, the
agency
has recently undergone some modest service reductions, and
he
expects that more service reductions are coming. Moreover,
current
levels of funding from the state and federal government
are
in jeopardy. Ms. Sums testified that in
recent years,
there
has been a significant deterioration in the funding of
public
transportation agencies. She testified
that in 1990, the
maximum
motor vehicle excise tax devoted to transit was reduced
from 1
percent to .815 percent. Then two years
ago it was
further
reduced to .725 percent. Ms. Silins testified that
further
reductions in this revenue source are being considered by
the
legislature. Mr. Snow testified that the
legislature has
diverted
$12 million from the transit account to road
construction. Mr. Snow testified that there are active
efforts
in
the legislature to divert even more funds from transit to
roads. Mr. Snow testified that current levels of
federal funding
are
also threatened. He testified that the
House Budget
Resolution would cut funding
for transit by more than 40 percent.
He further testified that in
the current political climate, there
is
no hope of obtaining additional funds for transit by raising
the
local sales tax.
I find based on the dwindling reserves and the small
increase
in revenues over the past year, that Intercity Transit
currently
can afford to finance only a modest increase in wages
and
benefits. Given the evidence that its
funding sources are
seriously
threatened by legislative and congressional cuts in
support,
Intercity Transit is legitimately apprehensive
concerning
its ability to finance substantial wage and benefit
increases
in the near future. On the other hand,
the prediction
of
slow growth in the local economy is suggestive of a small
growth
in revenues, if it turns out that transit funding is not
significantly
negatively impacted by legislative and
congressional
action. In sum, it appears that there
exists
considerable
uncertainty regarding the level of revenues over the
next
few years, more so than would be usual.
P. OTHER FACTORS
RCW 41.56.492 requires a consideration of "such
other
factors .
. . which are normally or traditionally taken into
consideration
in the determination of wages, hours and conditions
of
employment.'' Such factors, which are
discussed below, have
been
considered, but with lesser weight than that which is given
to
the specifically enumerated criterion of comparability,
economic
indices, and fiscal constraints.
1.) Internal
Parity
From the standpoint of both Intercity Transit and the
Union,
the
settlement reached by Intercity Transit with its other
bargaining
unit and the wage increases provided to nonrepresented
employees
are significant. There is often an
understandable
desire
by employers to achieve consistency in its dealings with
employee
groups. Unions want to do at least as
well for their
memberships
as other unions and employee groups have done.
At
the
bargaining table, the settlements reached by the employer
with
other unions, and wage increases granted to other groups of
employees
are likely to be brought up by one side or the other.
The significance of internal
parity is evident here inasmuch as
the
parties have already agreed to tie wage increases for the
second
and third years of the agreement with the increase to be
negotiated
with Intercity Transit's other bargaining unit.
Thus,
internal
parity is a factor which should be considered.
For 1995, Intercity Transit's ATU bargaining unit
received a
2.5 percent pay increase. Non-represented employees received
wage
increases ranging from 1.6 percent to 2.5 percent.
Maintenance employees received
the same percentage wage increase
as
ATU bargaining unit members in 1993 and 1994.
Percentage wage
increases
paid to maintenance employees exceeded those received
by
ATU members in each of the years 1990 through 1992. The ATU
contract
provides for a wage progression of a probationary rate
and
six steps. There is 7 percent difference
in wages between
steps
in that contract.
2 . ) Turnover
Turnover and ability to attract qualified applicants are
significant
indicators of whether existing compensation levels
are
adequate. Here, there has been a low
turnover rate.
Excluding retirements and
transfers, there has been either no
resignations
or one resignation each year since 1990.
In its
last
recruitment for vehicle cleaner, Intercity Transit had 224
applications
for one opening. There were 34
applications for two
mechanic
positions. These statistics indicate
that the
compensation
package paid by Intercity Transit is sufficient to
attract
and retain employees.
Q. EXPLANATION OF AWARD
Balancing the various factors, your Arbitrator shall
award a
wage
increase of 2 1/2 percent for all classifications, effective
with
the first full pay period after January 1, 1995, with
improved
step movement according to Intercity Transit's proposed
timetable. Such a percentage wage increase, considered
in
conjunction
with the improved benefits and continued full funding
of
medical benefits, is consistent with the increase in the cost
of
living and with the wage increases received by other Intercity
Transit
employees. With
this wage increase, bargaining unit
employees
would continue to receive higher wages than the average
of
comparable transit agencies. The wage
level would also be
favorable
when viewed in the context of the local labor market.
The cost of the Union proposal
estimated by Union Business Agent
London based on information
provided to him was about 22 percent.
The unrebutted
evidence provided by Intercity Transit was that
the
Union's proposal would result in immediate increases for 23
of
the 32 bargaining unit members ranging from 10 percent to 46.7
percent. Such an increase is excessive and is
unsupportable
based
on any of the statutory standards. It is
particularly
inconsistent
with the reality of a local tax base depressed by
the
dominant local employer having provided no general wage
increase
during the past two years. Intercity
Transit's proposal
for
1995 regarding wages and step movement, which has been
adopted,
would result in wage increases of 7.6 percent to 10.5
percent
for 22 of the 32 bargaining unit members.
Five employees
who
are already at the top step would receive the minimum 2 1/2
percent
increase, four would receive between 3.8 percent and 5.1
percent
and one employee would continue to be red-circled. These
increases
appear to be reasonable, particularly in view of the
limited
increase in revenue. The evidence
presented neither
supports
the Union's demand for a 10 percent differential for
lead
employees, nor its demand for a 10 percent training premium.
None of the selected
comparable jurisdictions provide for
premiums
of that size. Intercity Transit's
proposal for a 50-
cent-per-hour
training premium shall be adopted. That
rate
corresponds
with the highest training premium offered by any of
the
comparable transit agencies. Intercity
Transit's proposal to
reduce
the number of steps from 13 to 4 over the life of the
contract
is reasonable. By the end of the
contract term, the
step
structure would be in line with most of the comparable
agencies. The gradual implementation of the new step
structure
during
the contract term appears to be a significant additional
expense
for Intercity Transit. Such gradual
implementation would
avoid
the excessive immediate costs which would be caused by
immediately
reducing the number of steps to four as the Union
proposes. For the second and third year of the contract
term, I
shall
order a percentage increase consistent with the increase to
be negotiated
with the ATU bargaining unit. The
parties are in
agreement
as to this. Their disagreement is over
whether there
should
be any minimum increase, with the Union requesting a 2
percent
minimum and Intercity Transit opposing any minimum. . I
find that
a 1.5 percent minimum wage increase in 1996 and 1997 is
appropriate. The Union relies on the minimum 2 percent
increase
in
the current ATU contract. The ATU
contract was not submitted
into
evidence and there was no evidence presented regarding how
the
''2 percent minimum'' language reads in the ATU agreement.
In any event, it appears that
Intercity Transit's future revenues
are
more threatened now than they have been before.
The 1.5
percent
minimum appears to be a reasonable balance between
protecting
the employees from an unexpectedly low increase
negotiated
by the ATU bargaining unit and Intercity Transit's
reasonable
apprehension of disappointing revenues.
Minimum
increases
of 1.5 percent during 1996 and 1997 takes into
consideration
applicable economic indices such as the CPI, as
well
as fiscal constraints, and comparability, particularly since
the
actual increases may very well be higher inasmuch as they are
tied
to the increases to be negotiated by Intercity Transit with
the
numerically predominant ATU bargaining unit.
R. INTEREST ARBITRATION AWARD
It is the determination of your Arbitrator, in accordance
with
the findings set forth in the attached Opinion, that the
1995-97 Collective Bargaining
Agreement between Intercity Transit
and
International Association of Machinists and Aerospace
Workers, AFL-CIO, District
Lodge No. 160 shall be consistent with
the
following:
I. Effective
on the first full pay period after January 1,
1995, the rates of pay for all
classifications shall be
increased by 2 1/2
percent.
Effective January 1, 1996, the
rates of pay for all
classifications
shall increase by a percentage equal to the
general
wage increase for 1996 negotiated with Amalgamated
Transit union Local 1384, but
in any event shall increase no
less
that 1.5 percent.
Effective January 1, 1997, the rates of pay
for all
classifications
shall increase by a percentage equal to the
general wage
increase for 1997 negotiated with Amalgamated
Transit union Local 1384, but in any event
shall increase no
less that 1.5
percent.
II. Effective
with the first full pay period after July 1, 1995,
Intercity Transit shall reduce the current 13
step wage
progression to 7
steps with a 5 percent differential between
steps, in accordance
with its wage proposal as contained in
Employer Exhibit 1.5 submitted during the
interest
arbitration
proceeding.
Effective with the first full pay period
after July 1, 1996,
Intercity Transit shall eliminate the bottom
step, resulting
in a 6 step
progression.
Effective with the first full pay period
after July 1, 1997,
Intercity Transit shall eliminate the bottom
step, resulting
in a 5 step
progression.
Effective with the end of the last full pay
period before
December 31, 1997, Intercity Transit shall
eliminate the
bottom step,
resulting in a 4 step progression.
Employees shall move one step per year in
July as they have
in the past, but
such step movement shall be based solely on
time in service.
Employees who are in a step slated for elimination
shall
move to the next
higher step.
III. A
classroom training premium of 50 cents per hour above the
regular rate shall
be paid for actual time employees serve
as instructors in
classroom training.
IV. There
shall be no special adjustment for lead employees over
and above the
existing premium. They shall receive the
same
general wage
increase and step movement as described above.
Redmond
, Washington
Dated: August 24, 1995 S/ALAN P. KREBS
Alan R. Krebs,
Arbitrator