INTEREST ARBITRATIONS

Decision Information

Decision Content

City of Centralia

And

Teamsters, Local 252

Interest Arbitration

Arbitrator:      Gary L. Axon

Date Issued:   06/08/1996

 

 

Arbitrator:         Axon; Gary L.

Case #:              11884-I-95-00255

Employer:          City of Centralia

Union:                Teamsters Local 252

Date Issued:      06/08/1996

 

 

 

 

           

             IN THE MATTER OF                                 )

                                                                                    )

            INTEREST ARBITRATION                       )           CASE NO. 11884-1-95-255

                                                                                    )

                  BETWEEN                                               )              ARBITRATOR'S AWARD

                                                                                    )

            TEAMSTERS LOCAL 252,                         )           1996 INTEREST ARBITRATION

                                                                                    )

                                                            Union,             )

                                                                                    )

                                    and                                          )

                                                                                    )

CITY OF CENTRALIA, WASHINGTON,  )

                                                                                    )

                                                            City.                )

 

 

 

 

 

 

HEARING SITE:                                                                  City Hall

                                                                                                Centralia, Washington

 

HEARING DATE:                                                                March 6, 1996

           

POST-HEARING BRIEFS DUE:                                        Postmarked April 18, 1996

 

RECORD CLOSED ON RECEIPT OF BRIEFS:              April 25, 1996

 

REPRESENTING THE UNION:                                         David W. Ballew

                                                                                                Davies, Roberts and Reid

                                                                                                Attorneys at Law

                                                                                                Suite 550

                                                                                                101 Elliott Avenue West

                                                                                                Seattle, WA 98119

 

REPRESENTING THE CITY:                                             Otto G. Klein, III

                                                                                                Heller, Ehrman, White

                                                                                                 & McAuliffe

                                                                                                6100 Columbia Center

                                                                                                701 Fifth Avenue

                                                                                                Seattle, WA 98104-7098

 

ARBITRATOR:                                                                    GaryL. Axon

                                                                                                1465 Pinecrest Terrace

                                                                                                Ashland, OR 97520

                                                                                                (541) 488-1573

 

                                                            Table of Contents

ISSUE                                                                                                 Page

 

Introduction                                                                                        2

 

1 -        Wages                                                                                     6

 

2 -        Premium Pay                                                              32

 

3 -        Holidays/Vacations                                                                33

           

I.          INTRODUCTION

 

            This case is an interest arbitration conducted pursuant

to the Public Employees Collective Bargaining Act.  The parties to

this dispute are Teamsters Union Local 252 (hereinafter "Unioni")

and the City of Centralia, Washington (hereinafter "City")   The

Union and the City are parties to a Collective Bargaining Agreement

that covered the period January 1, 1992, through December 31, 1994.

The  parties  entered  into negotiations  to  reach  a  successor

Agreement to the 1992-94 Collective Bargaining Agreement.   The

parties were successful in resolving most of the issues that

divided them in contract negotiations.  Three issues were submitted

to the Arbitrator for resolution.

 

            Centralia, Washington is located in Lewis County.  The

City has a population of 12,730 persons.  Lewis County is sparsely

populated with a population of 24.7 persons per square mile.  The

Union represents 22 police officers and 5 sergeants.  On July 1,

1995, the patrol officers fell within the statutory definition of

"uniform personnel"  which  granted  them  interest  arbitration

according to the Public Employees Collective Bargaining Act.  RCW

41.56.030(7) (b) (i) .  Prior to July 1, 1995, the members of this

bargaining unit were statutorily prohibited from engaging in any

economic activity in support of its bargaining proposals.

 

            At  the commencement of  the arbitration hearing the

parties agreed to use a list of comparable jurisdictions to assist

in the resolution of this contract dispute.  The ten jurisdictions

are the same group of comparators used by an Ad Hoc Salary Review

Committee in 1992 composed of individuals from management and

labor.   The jurisdictions stipulated to as comparable for the

purposes of this interest arbitration are:

            Chehalis          Tumwater

            Kelso              Ellensburg

            Issaquah         Hoquiam

            Enumclaw       Oak Harbor

            Marysville      Moses Lake

 

Because of the stipulation of the parties, it was unnecessary for

either the City or the Union to present evidence on the issue of

the appropriate jurisdictions with which to compare Centralia for

the purposes of establishing the terms of the successor Agreement.

 

            The hearing was tape recorded by the Arbitrator as an

extension of his personal note taking.  Testimony of the witnesses

was received under oath.  At the arbitration hearing the parties

were given the full opportunity to present written evidence, oral

testimony and argument.  The parties provided the Arbitrator with

substantial written documentation in support of their respective

cases.

 

            The parties also submitted comprehensive and lengthy

post-hearing briefs in support of their respective positions taken

at arbitration.  The three issues identified for an Award by this

Arbitrator are as follows:

 

 

1.         Wages

2.         Premium Pay

3.         Holidays/Vacations

 

            This Arbitrator carefully reviewed and evaluated all of

the evidence and argument submitted pursuant to the criteria

established by RCW 41.56.465.  The approach of your Arbitrator in

writing the Award will be  to  summarize  the major and most

persuasive evidence and argument presented by the parties on each

of the issues.  After the introduction of the issue and positions

of the parties, I will then state the basic findings and rationale

which caused the Arbitrator to make the Award on the individual

issues.

 

            The statutory criteria are standards or guidelines to aid

an interest arbitrator in reaching a decision in a case subject to

this procedure in resolving disputes.  The statutory factors to be

considered by the Arbitrator may be summarized as follows:

 

(a)        the  constitutional  and  statutory

authority of the employer;

 

(b)        the stipulations of the parties;

 

(c)        the wages,  hours  and conditions  of

employment of like personnel of like employers

of similar size on the West Coast of the

United States;

 

(d)        the average cosumer prices for goods and

services,  commonly  known  as  the  cost  of

living;

 

(e)        changes  in  any  of  the  foregoing

circumstances  during  the  pendency  of  the

proceedings; and

 

(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.

 

            For those employees in a city with a population less than

15,000, consideration must also be given to regional differences in

the cost of living. The jurisdictions agreed to by the parties for

purposes of comparison included cities from both eastern and

western Washington.

 

A.        Background

 

            The most significant fact in this case is that the

parties have agreed upon wage increases for 1995, 1996 and 1997.

Pursuant to the parties' agreement, bargaining unit members will

get a 2.7% increase for all of 1995, a 2.25% increase for 1996 and

an increase based upon the change in the Seattle/Tacoma CPI-U Index

for 1997.  Thus, the issue of annual wage increases for the members

of this bargaining unit is not in dispute.

 

            Centralia police officers do not participate in the

social security program. As such, there is no deduction from their

wages for the employee contribution to the social security system

or an employer cost for social security.

 

            In 1987 the City implemented a salary schedule consisting

of 23 ranges with 7 steps per range. At that time, patrol officers

were placed in Range 13 of the salary schedule where they have

remained since 1987.  The Union proposed moving patrol officers to

Range 14 as of July 1995.  The City objects to the movement of the

patrol officers from Range 13 to Range 14 of the salary schedule.

 

B.        The Union

 

            The Union takes the position that the time has come to

adjust the salary range for patrol officers which has been in

existence for nearly ten years.  The Union submits its proposal

will protect the integrity of the 7-step advancement system, as

well as spreading out the economic impact on the City over time.

 

The Union is proposing moving individual patrol officers up one

step on Range 14.  As of July 1995, seven of the twenty-two patrol

officers in the bargaining unit had topped out at Range 13, Step G.

Under the Union's proposal, those seven officers would receive a

new step advancement date as of July 1, 1995. The remaining patrol

officers would retain their existing step advancement date for

further adjustments.

 

            The Union maintains its position is supported by the

internal comparators.  Teamsters Local 252 represents the clerical

and support staff.  The contract for that bargaining unit called

for negotiated COLA increases and movement of some employees to a

higher range on the salary schedule.  Under the police clerical

contract, the Department's secretary was also moved up one complete

range.

 

            Turning to the external comparators, the Union begins by

noting the City spent a considerable amount of time attempting to

persuade the Arbitrator that Issaquah should be excluded from the

group.   The Union maintains that the City's attempt to exclude

Issaquah from the comparator group was based on flawed information.

 

            Moreover, the City's Exhibits 10 through 13 list each of

the comparator cities by name and purport to set forth data

pertaining to population, demographics, per capita personal income,

median household income, average net earnings and average wage for

covered employment. At the arbitration hearing it was learned that

the data as to the comparator cities was not based upon economic

data on a city by city basis.  The economic data was instead culled

from information as  to  the  entire  county within which  the

comparator cities are located.  The legislature in developing the

interest arbitration statute expressly provides that comparisons

should be made to "employment of like personnel of like employers

of similar size." The statutory directive to interest arbitrators

has resulted in arbitrators routinely rejecting comparing uniform

personnel in cities to uniform personnel in counties.

 

            The statutory directive to interest arbitrators has

resulted in arbitrators routinely comparing uniform personnel in

cities to uniform personnel in other cities.  Nor is there support

for comparing uniform personnel of the City to all personnel of all

employers of all counties in which the mutually agreed upon

comparators lie.   The entire purpose of  furnishing data on

comparator cities is to provide an arbitrator the information to

make a principled-based decision.

 

            Union witness Mark Endresen prepared a series of exhibits

which included a breakdown of population, valuation and taxes as

provided by the State Auditor.  Un. Exs. 2-11.  Union Exhibit 12

consisted of eight separate summaries of raw data drawn from

information contained in the State Auditor's Office reports.  The

witness also ranked compensation paid in the comparators based on

the collective bargaining agreements from the ten cities. Endresen

compared the longevity pay, educational incentive pay and whether

the employer participated in social security in the ten other

cities.

 

            Under the Union's proposal the highest step that any

patrol officer would attain in 1995 would be Range 14, Step F which

has a base pay of $3,254.  This would place the top step base pay

for a patrol officer at Step G at $3,368 per month.  Without the

increase in the range from Range 13 to Range 14, Centralia would be

ranked number seven at $3,148 per month.

 

            Union Exhibit 12, page 9 reflects various items of

compensation including longevity pay, educational incentive and

FICA/Medicare in order to show what the Union alleges is the actual

cost of the proposal to the City.  The Union calculated the cost to

the City with this proposal to move to Range 14 to be $3,527 per

month.  If officers remained at Range 13 the top step would cost

the City $3,305 per month.  The Union's calculation of the total

cost revealed the following rankings if the cost of FICA/Medicare

are factored in for the comparators.

 

            CITY                                                               TOTAL

                                                                                   

            1.         Issaquah         .           .           .           $4062  MO.

            2.         Kelso              .           .           .           $3767  MO.

            3.         Enumclaw       .           .           .           $3681  MO.

            4.         Tumwater       .           .           .           $3594  MO.

            5.         Oak Harbor    .           .           .           $3556  MO.

            6A.      Centralia(#14)            .           .           $3527  MO.

            6.         Marysville      .           .           .           $3481  MO.

            7.         Centralia(2.7) .           .           .           $3305  MO.

            8.         Ellensburg      .           .           .           $3231  MO.

            9.         Hoquism         .           .           .           $3194  MO.

            10.       Chehalis          .           .           .           $3147  MO.

            11.       Moses Lake   .           .           .           $3122 MO.

                                                                        Un. Ex. 12, p. 9.

 

            Regarding the City's attack on the Union's presentation

of evidence which included cost of FICA/Medicare, the Union submits

this is a mistaken effort on the part of the City.  The notion that

social security taxes should be ignored as they do not represent

actual compensation to the employee misses the point.  The fact is

those other jurisdictions that pay into FICA and Medicare are

making expenditures that jurisdictions such as Centralia, which

only pays into Medicare, do not have to make.  The facts in this

case presented by the Union are intended to show the actual cost to

the City of adopting the Union's proposal.

 

            In sum, the Union submits the facts demonstrate the Union

proposal is within the range of reasonableness when compared with

the comparator cities mutually agreed upon by the parties.  The

Union did not come into arbitration "shooting for the stars" with

the hopes of getting the moon.   The Union seeks a reasonable

compensation package which is entirely consistent with its relative

ranking within the comparator cities.   The majority of patrol

officers have seniority of less than five years.  The Union hopes

to achieve a compensation package that will attract and maintain

patrol officers within the Centralia Police Department.  The Union

concludes that its proposed adjustment in the salary range is in

the best interest of both the bargaining unit members and the City.

 

C.        The City

 

            The City takes the position that there is absolutely no

evidence to support the substantial change in the salary schedule

for Centralia police officers.   According to the City,  the

Teamsters' proposed "phase in" of the increase is illusory.  The

impact of the Teamsters' proposal will be an immediate increase in

police officer wages of about 7%.  Under the Teamsters' proposal

all employees will move back one step on July 1, 1995, at the same

time they move up one grade.  Employees would then move up to their

existing step on July 1, 1996.  Since the Arbitrator's Award will

be issued sometime in May or June of 1996, the practical impact of

the "phase-in" is that all bargaining unit members would receive a

7% increase in their base salary in the summer of 1996. This would

translate into a 10% total increase for 1996.  The record simply

does not justify an increase of this magnitude.

 

            Turning  to  the  wage  analysis  of  the  comparable

jurisdictions, the City's study establishes that Centralia officers

are fairly paid in comparison with their counterparts in the ten

other jurisdictions.

 

            The City begins by noting that an analysis of the

comparables is complicated by certain unique factors in the city of

Issaquah.   Issaquah is in King County and thus in the greater

Metropolitan Seattle Area.   Issaguah's assessed valuation per

capita is substantially higher than all of the other comparables.

The total taxes in Issaquah further suggest there is a significant

difference between Issaquah and the other comparable jurisdictions.

Issaquah's total tax per capita is substantially higher than any of

the other jurisdictions. The record also indicates that per capita

personal income is substantially higher in Issaquah than in the

rest of the comparables.

 

            The top step base wage for Issaquah is almost $400 higher

than  the  second  highest  paying  jurisdiction  on  the  list.

Arbitrators  have  recognized  that  if  a  jurisdiction  pays

substantially more  than other  jurisdictions  on  the  list  of

comparables it must be discounted in some way so as not to distort

the data.  In addition, the top two steps in Issaquah are merit

driven and are entirely discretionary with the city of Issaquah

If the city decides not to award merit pay, the officer may not

challenge the city's determination.  In recognition of the unique

situation of Issaquah, the City used two different methodologies in

analyzing the comparables.  The first method included Issaquah's

top step, assuming all police officers received the discretionary

step increases.   The City next prepared a formulation which

excluded Issaquah from the comparable average.  The City submits

that the two comparisons (with and without Issaquah) provide the

Arbitrator a "range of reasonableness" with which to measure City

wages.

 

            The  comparison  study  of  1995  base  monthly wages,

including the 2.7% increase for 1995 in Centralia, resulted in an

average wage of $3,171 per month.  If Issaquah is excluded, the

average dropped to $3,111 per month in the nine jurisdictions.

City Ex. 17.  Centralia officers will be paid $3,148 at the top

step in 1995.  This is .73% below the average or 1.19% above the

average if Issaquah is excluded.

 

            The City next offered data which included longevity pay

for purposes of making the wage comparison.   The City made its

comparison with police officers at ten years of service and fifteen

years of service.  City Exs. 18, 21.  A Centralia police officer

with ten years of service would earn an additional $50 per month in

longevity pay bringing the total salary to $3,198 per month.  The

average  total  monthly  salary,  including  longevity,  in  the

comparator group is $3,196 and $3,139 if Issaquah is excluded.

Seven of the comparator cities do not pay a longevity premium.

 

            The City also prepared an exhibit which factored in

educational incentive pay. The parties agreed that the appropriate

educational incentive pay for purposes of comparison was the AA

degree.  With the education incentive added to the base salary and

longevity, a Centralia police officer would receive $3,261 per

month at the top step.  The educational incentive is worth 2% in

Centralia. The average for a ten-year police officer is $3,237, or

$3,184 if Issaquah is excluded.   At the fifteen-year level of

service, a Centralia police officer would earn a base pay in 1995

of $3,148 but with the longevity and education incentive, the total

would rise to $3,271 per month.  City Ex. 22.  The average salary

for an officer with fifteen years of service and an AA degree in

the comparative group would be $3,253, or $3,202 if Issaquah was

excluded.  In percentage terms at the ten-year level the Centralia

pay is .73% above the average, or 2.41% above the average if

Issaquah is excluded.

 

            The City next argued the "The Twin Cities Factor" must be

recognized in establishing the wage schedule.   Chehalis  and

Centralia are intimately and inextricably linked through various

governmental and quasi-governmental agencies.   The two police

departments generally work closely together. On average, Centralia

police officers  wages have been about 8% over Chehalis police

officers' wages since 1990.   The City's offer for 1995 will

maintain this relationship between the "twin cities."  With the

2.7% increase for 1995 in Centralia, the differential will be 8.8%.

If the Teamsters' proposal for a range increase were awarded, the

differential would be almost 16% or double the average it had been

over the last six years.   The Teamsters have not offered any

evidence,  argument  or  basis  for  radically  altering  this

relationship.

 

            The law requires that "consideration must also be given

to regional differences in the cost of living."  RCW 41.56.465(f).

In the City's viewpoint, regional differences in the cost of living

support the City's position.  Even without this express statutory

factor,  regional differences in the cost of living have been

traditionally considered under the "other factors" which interest

arbitrators have had discretion to utilize in framing an award.

The Washington Legislature has made consideration of this factor

mandatory for jurisdictions with a population of less than 15,000.

 

            The City asserts that there are significant differences

in the cost of living throughout the state of Washington.  Given

the higher cost of living in the Puget Sound Metropolitan Area,

employees working in the Puget Sound Area generally receive more

pay.   Whether one looks at per capita personal income, median

household income or average net earnings per worker, it must be

concluded individuals in King County and Snohomish County are

higher paid than individuals elsewhere in the state.  Arbitrators

have repeatedly recognized this differential, and have taken it

into account in varying ways.   Thus,  the City submits it is

inappropriate to expect that police officers in a non-metropolitan

area will be paid at the same level as police officers in the

Seattle Metropolitan Area.

 

            The City's evidence demonstrates that Centralia and Lewis

County are significantly below both the comparables and the state

average in every economic comparison offered at the hearing.  The

data offered by the City was collected on a county-wide basis.

While not as precise as data for each individual municipality, it

does provide ample evidence of the significant differences between

geographic areas in the state of Washington.   In addition, a

significantly higher percentage of low income households are

located in the City of Centralia than in the rest of Lewis County.

 

            The City summarized its data in the post-hearing brief as

follows:

 

Per Capita Personal Income

           

                                    Comparables             State

            Centralia         Average                     Average

            $17,365             $20,218                     $21,774

 

                        Median Household Income

                                    Comparables             State

            Centralia         Average                     Average

            $30,682           $37,682                       $40,398

 

                        Average Net Earnings Per Worker

                                    Comparables             State

            Centralia         Average                      Average

            $27,282           $29,836                       $31,478

           

                        Average Monthly Wage

                                    Comparables             State

            Centralia         Average                      Average

            $ 1,770            $ 1,962                        $ 2,150

 

            The City does not ask the Arbitrator to apply a precise

formula in analyzing this data.  The City concedes there is no

specific  formula which could be  appropriately used in  this

proceedings.   However, the analysis of this data is certainly

relevant in determining Centralia's appropriate place among the

comparable jurisdictions.

 

            The City argues the economic data demonstrates that

Centralia police officers should not expect to be paid above the

average of the comparable jurisdictions.  Since every analysis of

wages and income show that Centralia is below the average in both

the comparables and Washington State, there is no reason Centralia

police officers should be treated differently.   The Union's

proposal for a 7% grade increase would significantly change the

relationship between Centralia and its comparables. Depending upon

the comparison, it will put Centralia police officers from 7% to

10% ahead of the comparables.   City Exs. 17-23.   The regional

differences factor strongly supports the position of Centralia in

this case.

 

            The City next turns to the increases received by other

City employees and in the comparable jurisdictions.  The other

comparable jurisdictions which have settled for 1996 have generally

agreed upon a CPI-based formula for their wage increase, similar to

that agreed upon by the parties to this dispute.  In addition, the

wage increases received by other bargaining units in the City are

in the same general range as salary increases received by the

Teamsters under the wage agreement.  It is significant that three

of these units are represented by the Teamsters.

 

            Regarding the factor of changes in consumer prices the

Consumer Price Index for the U.S., whether it is the CPI-W or the

CPI-U Index, has been running at less than 3%   City Exs. 29, 30.

The Seattle area CPI-W and CPI-U are increasing at about 3%.  The

most recently reported index for Seattle (January 1996) shows an

increase of only 2.7% for both indexes.   City Exs.  31,  32.

According to  the City,  the Consumer Price  Index overstates

increases in the cost of living by an average of 1% to 1.5%.  This

overstatement is caused by substitution bias, outlet bias, formula

bias, quality change and new products.  The City believes that a

restated figure of a 1% to 2% increase in the CPI is what should be

used by the Arbitrator in analyzing this factor.

 

            It is also the position of the City that local economic

conditions do not support a substantial wage increase. Centralia's

local economy has been stagnant for some time.  The average annual

earnings in Lewis County are only 85% of the state average.

Significantly, the difference between Lewis County and the state

average has increased substantially over the last ten years. Lewis

County has been officially declared a distressed area in the state

of Washington.  City Ex. 7.

 

            Moreover,  the  impact  of  recent  floods  have had a

devastating effect on the City's financial condition.  The damage

to City property was $10 to $11 million.  While much of the outlay

will be paid by the federal government, the City must still come up

with 12.5% of the cost estimated at $1.25 million.  The City is

also involved in a significant environmental dispute with the

federal government which would have a potential impact on the City

ranging from $10 to $100 million.

 

            In sum, the City maintains this is not the time to turn

Centralia into a wage leader among the comparables.  The parties

have agreed on a fair and reasonable cost of living increase for

each of the next three contract years.   The City concludes no

further increase in warranted or appropriate.

 

            With  respect  to  the  Teamsters   evidence  offered

concerning population and total tax revenues for each of the

comparable jurisdictions, the City submits this data supports its

offer in this proceeding.   The Union ranked all comparable

jurisdictions by population and by total tax.  However, there is a

substantial difference between  jurisdictions  on  the  list  of

comparables.  A better way of comparing the relative rankings in

these jurisdictions is by analyzing total tax per capita.  The

City's calculations placed Centralia at number eight in the total

tax ranking per capita.  After implementation of the agreed upon

2.7% increase for 1995, Centralia police officers will be sixth

(the median) among the comparables for most comparisons.  The City

submits that the total tax per capita reveals this is about where

the City should be on the calculations by wage level.

 

            The City takes the position that the Union's suggestion

that the Arbitrator should consider participation in the social

security system when determining whether a range increase is

required at Centralia is flawed.   First, by including social

security in the analysis it mixes apples and oranges.  All other

components of the wage comparison are limited to money which is

actually received by an individual police officer. Social security

money contributed by the employer does not go to the officer, but

rather to the federal government.   Police officers in other

jurisdictions have their pay reduced because of the deduction for

social security charges.  The Union's wage study does not reflect

that police officers' take home pay in the comparators is reduced

by the employee cost of social security.

 

            Moreover, the parties have adopted a relatively simple

method of analyzing the comparables by choosing to ignore a great

number of pays and benefits in their analysis.  The parties did not

include medical or dental premiums, life and disability insurance

premiums or other premium pays available to police officers. There

is no consideration made for hours of work,  including work

schedule, vacation and holiday time.  If a party is going to offer

a total cost of compensation analysis,  it should include all

relevant costs of compensation.  The Union's picking and choosing

of such benefits should be rejected by the Arbitrator.

 

            Three different arbitration decisions have rejected

inclusion of an employee's social security payments in a wage

comparison study.   King County Fire District 16  (Beck, 1988);

Cowlitz County (Beck, 1987) ; King County (Dorsey, 1985) ; City of

Bellingham (Latsch, 1996) .  Further, the parties did not discuss

social security contributions at the bargaining table and the Union

should not be allowed to raise it at interest arbitration.

 

            The members of this bargaining unit have the option to

get into the social security system but have not done so.  If the

bargaining unit opted to go into the social security system, the

individual officers would be required to contribute about 7% of

their pay to social security.  Therefore, the Arbitrator should

reject any attempt to include the employer's contribution to social

security in determining whether an additional 7% increase is

necessary for Centralia police officers.

 

            Based on all of the above stated arguments, the City

concludes there is no basis to award a 7% grade increase to

Centralia police officers.

 

D.        Discussion and Finding

 

            The Arbitrator holds that the Union's proposal to advance

all police officers from Range 13 to Range 14 on the salary

schedule  should not be  included  in  the  1995-97  Collective

Bargaining Agreement.   The application of the evidence to the

statutory criteria failed to demonstrate the Union's proposal to

change the structure of the salary schedule for Centralia police

officers should be awarded. The Arbitrator will award that current

contract language be continued.  The reasoning of the Arbitrator- -

as guided by the statutory criteria- -is set forth in the discussion

which follows.

 

Constitutional and Statutory Authority of the Employer

 

            Regarding the factor of constitutional and statutory

authority of the City, no issues were raised with respect to this

factor.

 

Stipulations of the parties

 

            The parties entered into two critical stipulations which

are relevant to this interest arbitration.   First, the parties

agreed to a group of ten Washington cities with which to compare

Centralia for the purpose of measuring and defining the wages and

working conditions for this bargaining unit.

 

            Second, the parties have agreed to a cost of living

adjustment of 2.7% for 1995 and 2.25% for 1996.   Further, the

parties agreed the 1997 wage adjustment will be controlled by a CPI

formula which will guarantee a 2% minimum increase up to a maximum

increase of 5%. Hence, the evaluation of the Union's proposal must

be considered in the context of the agreed upon wage increases--as

measured against the wages paid police officers--in the stipulated

comparator group of the ten Washington cities.

 

Comparability

 

            The stipulation as to the ten Washington cities with

which to compare Centralia for the purpose of establishing wages

and working conditions is a credit to the parties.  In addition,

both parties performed a wage analysis which focused primarily on

base wages.   The parties did not attempt to perform a total

compensation analysis frequently used in interest arbitration

cases.

 

            One area of dispute over methodology in making the

comparison studies was the Union's addition of 7.65% to the base

wages of the comparator jurisdictions to account for the employer

cost  of  social  security.    Since  Centralia  officers  do not

participate in social security, the Union argued it was appropriate

to add the cost of social security to the other cities who

contribute to social  security in order to make an accurate

comparison.  The City maintains social security cost paid in the

comparators should not be used in resolving the salary range

dispute.

 

            The Arbitrator holds the Union's addition of the cost of

social  security  to the  base  wage  in  the  comparators  is

inappropriate for four major reasons.  First, the use of a social

security component in developing a wage comparison study is not an

accepted methodology used in Washington interest arbitration

awards.   Where it has been offered, interest arbitrators have

rejected social security as a valid component of a wage study.

 

            Second, the Union's wage study with the social security

element mixes apples and oranges. . With the exception of social

security, all other elements of the study represent actual money

paid to the police officers.  A police officer who is employed by

a city that participates in the social security system will also

make a contribution to social security that effectively reduces

take home pay.  In order to be accurate, the Union's comparison

would have to reflect the reduced take home pay of the individual

officer, as well as employer cost.

 

            Third, the parties to this dispute have used a basic

methodology to make their wage comparisons.  If the Union is going

to utilize a social security element, the methodology would have to

be expanded to a total compensation comparison study.  When this

approach is adopted, it is typical to use a great number of pay and

benefits,  such as premium pay,  medical  insurance,  life  and

disability insurance, uniform allowances, vacation and holiday time

and retirement, to develop the basis for comparison.  The use of

the single element of social security in a wage study is not an

accurate way to compare total compensation.   Fourth,  social

security is not a negotiated benefit.

 

            The 1995 base monthly salary, with the 2.7% adjustment

for Centralia reflects the following:

 

COMPARISON OF 1995 BASE MONTHLY SALARY

 

                                                                        Top Step Officer

                                                                        Base Monthly Salary

            Issaquah                                                         $3,713

            Tumwater                                                       $3,339

            Enumclaw                                                       $3,336

            Kelso                                                              $3,254

            Marysville                                                      $3,234

            Oak Harbor                                                    $3,153

            Hoguiam                                                         $3,086

            Moses Lake                                                   $2,900

            Chehalis                                                          $2,893

            Ellensburg                                                      $2,805

            AVERAGE                                                     $3,171

            AVERAGE excluding Issaquah                    $3,111

 

            Centralia                                                         $3,148

            Centralia/Average                                         -0.73%

            Centralia/Average

                        excluding Issaquah                            1.19%

                                                                                    City Ex. 17.

 

            The same comparison with the addition of longevity and

education incentive for an officer with ten years of service

established the following ranking:

 

COMPARISON OF 1995 BASE PAY PREMIUMS

 

 

 

Police Officer with 10 Years Service and A.A. Degree*

                        Base salary    Longevity       Education Incentive   Total Monthly salary

 

Issaquah         $3,713             0                                  $0                                $3,713

Kelso              $3,254             4%                              $50                              $3,434

Enumclaw       $3,336             0                                  1.25%                         $3,378

Marysville      $3,234             $35                              $100                            $3,339

Tumwater       $3,339             0          .                       0                                  $3,339

Oak Harbor    $3,153             0                                  $100                            $3,253

Hoquiam         $3,086             0                                  2%                              $3,148

Ellensburg      $2,805             3%                              2%                              $2,945

Moses Lake  $2,900              0                                  0                                  $2,900

Chehalis          $2,893             0                                  0                                  $2,893

                                                           

 

AVERAGE                                                                                                     $3,237

AVERAGE excluding Issaquah                                                                    $3,184

Centralia         $3,148             $50                              2%                              $3,261

           

Centralia/Average                                                                                         0.73%                           

Centralia/Average excluding Issaquah                                                         2.41%

 

Assumes 2.7% increase for 1995 in Centralia

 

*Degree not related to law enforcement

 

City Ex. 19.

 

            The City argued Issaquah represents a unique situation.

The City is correct that Issaquah with a top step some $400 per

month above the second ranked Kelso, distorts the average wage.

However, Issaquah is among the comparator group and cannot be

totally ignored.  Issaguah is clearly the wage leader among the

eleven cities.  Because Issaquah pays an exceptionally high wage,

its influence on the average wage must be discounted.

 

            The next three cities in the ranking all pay within $85

per month of each other on the base wage.  City Ex. 17.  Centralia

is comfortably positioned in the middle three cities at the base

monthly salary ranking.  The lowest paying cities at base wage pay

are a group of four which pay from $62 to $343 per month less than

Centralia.   If incentives are included,  a similar pattern is

maintained.

 

            The adoption of the Union's proposed Range 14 would

establish a top step wage at Step F of $3,368 per month.  The top

base pay for Centralia would jump to the highest paying of the

cities, other than Issaquah.  The grade increase would represent a

7% increase in addition to the 2.7% cost of living adjustment for

1995.  Based on the evidence in this record, there are no grounds

for establishing Centralia as a wage leader among the ten cities

agreed on as the comparators.

 

            The City's evidence established Centralia police officers

are paid at or slightly above the average of the comparator group,

depending on whether Issaquah is included.  On the record before

this Arbitrator, there are no grounds to conclude Centralia police

officers are paid a substandard wage which demands drastic and

immediate measures to correct the situation.

 

            While  the  evidence  does  suggest  some  additional

improvements in the wage schedule could be justified to enhance

Centralia's  competitive  position  within  the  middle  three

jurisdictions, and the highest paying cities (Issaquah excluded),

the Union's proposal before this Arbitrator is to change the range

at which police officers are compensated.  On the issue submitted

to this Arbitrator, I have no authority other than to accept or

reject the proposed increase in the range from Range 13 to Range

14.  The parties have agreed to three cost of living adjustments

over the term of the contract.   Therefore, the Arbitrator must

resist any attempt to interfere with the agreed on cost of living

adjustments.

 

            The wage adjustments received by police officers in the

comparator group does not justify an increase of the magnitude

which would flow from a move to Range 14 . As previously noted, the

1996 wage increases for police officers in the comparator group are

based on CPI driven formulas.  Generally, the CPI formulas adopted

in the comparator group set a minimum raise of 2% ranging up to a

maximum of 5%.

 

            Internal comparability favors the City's proposal. While

not controlling for this bargaining unit, the City has reached

settlements with its other units in the 2.5% to 3% range.  The

record  evidence does not  justify a wage  increase  for  this

bargaining unit that would be excessive in relation to the amount

received by other City employees.

 

            The Award of this Arbitrator should not be interpreted to

mean future modifications in the structure of the salary schedule

would be inappropriate.  As the Union correctly pointed out, seven

of the twenty-one police officers are topped out at Step G on Range

13.  By the time this contract expires, the number of members at

the top step will have increased.  Given Centralia's wage position

in the middle of the comparator group, efforts will have to be made

to protect and improve the competitive position for members in this

unit in bargaining for a successor contract.  There are no valid

reasons to drive the wages paid to the members of this bargaining

unit down in the wage rankings.

 

Cost of Living

 

            The Arbitrator holds  the  factor of cost of living

supports the City's position to retain the current Range 13 for

police officers.  The National CPI-W and CPI-U has been running

less than 3% for the past several years.  The Seattle area .CPI-W

and CPI-U have recorded annual increases ranging from 2.5% to 3.5%

in recent years.  The agreed on wage increases for 1995, 1996 and

1997 are consistent with the changes in the cost of living as

measured by the various Consumer Price Indexes.

 

            In sum, the Union's proposal to change the salary range

finds little support in the cost of living factor.

 

Changes in Circumstances During the Pendency of the Proceedings

 

            The only relevant change in circumstances is the salary

increases received by police officers in the comparable cities

during the course of bargaining for this contract. As noted in the

comparability discussion, wage increases for 1996 in the comparable

jurisdictions were largely based on CPI formulas with a guaranteed

minimum of 2% to a maximum of 5%    Given the range of wage

increases generated in the comparator group for 1996, the amount of

the increase which would flow from a range increase is not

justified by this factor.

 

Other Factors

 

            RCW 41.56.465(f)  requires  that  for  cities  with  a

population less than 15,000  "consideration must be given to

regional differences in the cost of living."  The difficulty for

the parties in presenting evidence on this factor is that there are

no reliable measurements of the differences in cost of living in

Centralia and the ten other comparator jurisdictions. The economic

data is often collected on a county-wide basis rather than on a

city to city system.

 

            The City offered considerable economic data which it

believed established there are significant differences in the cost

of living throughout the state of Washington.  City Exhibit 11

showed 1993 per capita personal income to be 30% higher in King

County.   Median household income is almost 20% higher in King

County than the state average.  City Ex. 12.  Further, net earnings

per worker in King County are 20% higher than the state average.

City Ex. 12.

 

            The City's evidence demonstrated that in every economic

comparison offered at the hearing, Lewis County was below the state

average.  In addition, there are a significant number of low income

households located in Lewis County.  City Ex. 12A.  Based on the

economic data, the City submits it would be inappropriate to pay

non-metropolitan area police officers at the same level as King

County law enforcement personnel. The City also reasoned Centralia

police officers should not expect to be paid above the average of

comparable communities.

 

            The weakness in the City's reasoning based on the

economic data is that the economic data does not purport to measure

regional differences in the cost of living.   As the source

documents reveal,  the studies are of such items  as  income,

unemployment, average net income per worker, etc.  The Arbitrator

rejects the City's claim that based on the economic data Centralia

police officers should not be expected to be paid above the average

pay in the comparator group.

 

            The Arbitrator holds that the data offered by the City

argues against the 7% increase- -resulting from changing the range--

on top of the agreed on cost of living adjustments.  However, if

other factors justified above average pay for this group of

employees, this Arbitrator would be free to make such an award.

The Union offered no evidence which countered the City's evidence

on the regional differences factor.   In sum, absent from this

record is any evidence that local economic conditions supported the

substantial wage increase which would result from moving police

officers to Range 14 on the salary schedule.

 

AWARD

 

 

            The Arbitrator rejects the Union's proposal to change the

salary range for Centralia police officers from Range 13 to Range

14.       The current contract language shall continue unchanged in the

1995-97 Collective Bargaining Agreement.

ISSUE 2 - PREMIUM PAY

 

Section 5.1.7 of the current Agreement provides:

 

All employees shall receive a minimum of one

hundred and eight (108) days off per calendar

year.

 

During bargaining proposals were made to compensate detectives and

the DARE officer with a $100 per month premium.  The trade off

would be the deletion of Section 5.1.7.

 

            Counsel for both parties addressed this issue in their

post-hearing briefs.  After reading the briefs, the Arbitrator was

left with the impression there was no dispute between the parties

over the premium pay issue.  The Arbitrator sought clarification

from counsel as to whether there was still a difference between the

parties on this issue.

 

Based on the record and responses of counsel,  the

Arbitrator concludes the parties are in agreement that current

contract language should continue unchanged.

 

AWARD

 

            The Arbitrator awards that Section 5.1.7 shall continue

in the successor Agreement without change.

 

ISSUE 3  HOLIDAYS/VACATIONS

 

            A         Background

 

            Section 7.1.1 recognizes ten designated holidays and two

floating holidays as paid time off.   Section 7.8.1 provides a

vacation schedule which reads:

 

            Year of Continuous                                                    Hours per

            Completed Service                 Hours per Month       Year/Days

            0          -  5                               6.66                             80        10

            6          - 11                              10.00                           120      15

            12        - 18                              13.33                           160      20

            19        - Over                         16.66                           200      25

 

 

            Detectives and the DARE officer receive an additional

four days off per year.   The added time off is granted in

recognition  of  the  fact  detectives  do  not  receive  extra

compensation for their assignments.   Detectives and the DARE

officer work an additional four days over what they would have

worked if assigned to patrol and doing shift work.

 

            The Union proposed that police officers with less than

ten years of service be granted two additional vacation days.

During bargaining it was suggested by the City that the additional

days off be characterized as floating holidays. At arbitration the

City proposed to continue the current vacation schedule.

 

B.        The Union

 

            The Union proposed that police officers with less than

ten years of service be provided with two additional days off per

year.   According to Business Agent Mike Mauermann,  the two

additional vacation days are necessary to bring the members in line

with the comparators.   In the post-hearing brief  the Union

corrected a "mathematical error," to make it clear that the number

of vacation days for officers at years four and five would be

twelve days.   Police officers with six and seven years would

receive seventeen days of vacation.

 

            Moreover, the Union maintains there was a meeting of the

minds during bargaining that police officers with under ten years

of service would get two additional days off.  According to the

Union, the City agreed to two additional floating holidays. At the

hearing, the City withdrew it proposal and seeks to maintain the

status quo. The Union submits its proposal is justified and should

be accepted by the Arbitrator.

 

C.        The City

 

            The City takes the position that vacation and holidays

for police officers should be combined and analyzed as one.  When

total paid time off is combined, the City submits no additional

time off is required.  The Union's failure to include holiday time

in Union Exhibit 16 is significant since the extra days off sought

by the Union are in fact holidays.

 

            In City Exhibit 37, the display reflects that during the

first ten years of employment, Centralia police officers receive

more time off than the average in four of the years, and in five

years they receive less time off.  In the first years of service,

Centralia is equal to the average.   Further,  in years eleven

through twenty-five, Centralia police officers receive more time

off than the comparables in eleven of the fifteen years.

 

            The City's position is bolstered by the fact six members

of the unit receive an additional four days off that are not

reflected on the exhibit.  The six members would be the detectives

and DARE officer.  The City also points out that all other City

employees are on the same vacation schedule.  Thus, there should be

no distinction between the vacation schedule for the police unit

and other City employees.

 

            The City next argues the Union's proposal to add two

additional days of vacation to each of the first ten years of the

vacation schedule is flawed. If the proposal is adopted, employees

with eleven years of experience will receive less vacation than

employees with six through ten years of experience.    The City

submits  such a schedule would be potentially disruptive  of

Department morale and should be rejected.

 

D.        Discussion and Findings

 

            The threshold question to be addressed is the alleged

meeting of the minds on this issue during the bargaining process.

Absent from this record is any written evidence the parties reached

a tentative agreement on the issue of additional time off.  As

such, the City is free to make its proposal at arbitration to

maintain the status quo.

 

            The Arbitrator rejects the City's attempt to use the

additional four days off that detectives and the DARE officer

receive to justify the status quo.  The additional time off is

granted as "compensation" for the work in these two assignments.

Therefore, it is inappropriate to compare these four days to the

holiday or vacation benefits enjoyed by all members.

 

            A careful examination of City Exhibit 37 reveals that

except for the first five years of service Centralia police

officers are at or above the average of the combined number of

holidays and days of vacation earned per year in the comparator

group.  At years twenty and twenty-five, Centralia officers enjoy

four to five days more of paid time off than the average of the ten

cities.  The obvious weakness is during the first five years of

service where new officers are one to three days below the average

depending on the year of service.  No such pattern appears at the

six through ten year level of service.

 

            The Arbitrator holds that some relief is due for the

officers in the first five years of service.  The Arbitrator will

order that one additional day of vacation be added to the one

through five year level of service on the vacation schedule.  This

change will be ordered effective January 1, 1997.

 

AWARD

 

            The Arbitrator awards that effective January 1, 1997, the

vacation schedule shall be modified to provide one additional day

of vacation at the one through five year levels of service.

 

Respectfully submitted,

 

Gary L. Axon

Arbitrator

Dated: June 8, 1996

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