International Association of
Fire Fighters, Local 3816
And
King County Fire District 44
Interest Arbitration
Arbitrator: Jane Wilkinson
Date Issued:
Arbitrator:
Wilkinson; Jane
Case #: 15764-I-01-360
Employer:
King County Fire District 44
Date Issued:
BEFORE
THE ARBITRATION BOARD
In the Matter of the Interest )
Arbitration Between )
)
King County Fire District
44 )
) ARBITRATOR’S
the Employer )
) AWARD
)
and )
) PERC No. 15764-I-01-360
International Association of
Fire Fighters )
Local 3816 )
)
the
_______________________________________________)
Appearances:
|
For the
District: Cabot Dow Labor Consultant |
For the
|
Panel of
Arbitrators:
|
Fire
District Appointee: Monroe Shropshire
Fire Commissioner King County Fire District |
Union
Appointee: Mike Wilson 3rd District
Representative, |
|
Neutral Arbitrator: Jane Wilkinson,
Attorney and Arbitrator PMB |
|
Date of Final Award:
Table
of Contents
Witness List i
Exhibit List i
I. Proceedings 1
II. Statutory Criteria 1
III. Background Information 2
IV. Selection of Comparators 4
A. Parties’ Proposed Comparators 5
B. Positions of the Parties - Comparators 6
C. Arbitrators’ Analysis and Findings -
Comparators 9
V. The District’s Fiscal Health and Future Condition 16
A. Positions of the Parties 16
B. Arbitrators’ Analysis and Findings -
District’s Fiscal Health and Future Condition 20
VI. Wage issue 21
A. Proposals - Wages 21
B. Positions of the Parties - Wages 22
C. Arbitrators’ Analysis and Findings - Wages 28
VII. Longevity Pay Issue 40
A. Proposals - Longevity Pay 40
B. Positions of the Parties 40
C. Arbitrators’ Longevity Pay Analysis and
Findings 41
D. Arbitrators’ Conclusion and Award on
Longevity Pay 43
VIII. Acting Lieutenant Pay Issue 43
A. Proposals - Acting Lieutenant Pay 43
B. Positions of the Parties 43
C. Arbitrators’ Acting Lieutenant Pay Analysis
and Findings 44
D. Arbitrators’ Conclusion and Award on Acting
Lieutenant Pay 47
IX. Health Care Premium and Plan Issue 47
A. Proposals - Health Care Premium and Plan 47
B. Positions of the Parties 47
C. Arbitrators’ Health Care Premium and Plan
Issue Analysis and Findings 51
D. Arbitrators’ Conclusion and Award on Health
Care Premium and Plan Issue: 58
X. Final Award 59
A. Wages 59
B. Longevity Pay 59
C. Acting Pay 59
D. Health Insurance Premiums for Dependents and
Health Plans. 59
XI. Appendix A - Compendium of
Witness List
For the Employer:
Henry Kramer, Fire Commissioner
Judy Minor, Fire Commissioner
Gregory Smith, Fire Chief
Cabot Dow, Labor Negotiator
Michael Barlow, Deputy Chief
Kevin Nold,
member of the
For the
Cabot Dow, Labor Negotiator
(recalled)
Gregory Smith, Fire Chief
Donald Goff, Fire fighter
Greg Markley, District
Representative,
William B. Eberlein,
Fire fighter
Exhibit List
Employer Exhibits:
1.
2. Chapter 41.56 RCW and WAC Impasse Resolution Rules
3.
4.
5. Current Collective Bargaining Agreement, Expired
6. Data Re: Fire District
7. District Personnel Information
8. Negotiations Documents
9. Documentation on Comparables
10. Wage Comparables
11. Longevity Pay Comparables
12. Acting Pay Comparables
13. Financial Information re Insurance
14. Past Ten Years’ Labor Agreements
14.2
(Update) Bureau of Labor Statistics Data - updated CPI data,
15. Contracts, 1990-1998
16. Cites from Relevant Arbitration Awards
17. Cites Population Bands Used by Previous Arbitrators
18. Summary
18-1.Spreadsheet
-
19. Backup data concerning information from the
Employer on Kitsap Fire District No. 18
20. Two spreadsheets showing insurance costs for
each bargaining unit member 1999 - 2002.
21.1
Rebuttal to Union Exhibits 21-23 Re: Hours of Work and Work Schedules, undated
21.2
Rebuttal (page 2) to Union Exhibits 21-23 Re: Hours of Work and Work Schedules,
undated
1. PERC letter Certifying issues for Interest Arbitration
2. Greg Markley’s letter listing issues Local 3186 wanted certified
3. Cabot Dow’s letter listing issues the District wanted certified
4. Local 3186’s specific Proposals for Arbitration
5. District’s specific Proposals for Arbitration
6. 1998 - 2000 King #44 CBA
7. 1995 - 1997 King #44 CBA
8. Exhibit listing All Comparables Cited by Either Party During Negotiations
9. Excerpt from 1998 - 2000 King #44 CBA showing Article 37
Agreement on Comparables
10. TA from 1997 showing Article 37 Agreement on Comparables
11. Additional Potential Comparables given to Local by District during
negotiations
12. Excerpts from 2001 WA State Fire Service Directory Showing
Population Served, Assessed Valuation and Geographic Area Served for
Comparables
13. 2001 - 2003 Collective Bargaining Agreement Between JAFF, Local
3315 and Snohomish County Fire Protection District #3
14. 2000 - 2002 Collective Bargaining Agreement Between IAFF, Local
3235 and Snohomish County Fire Protection District #8
15. 2001 - 2003 Collective Bargaining Agreement Between Maple Valley
Professional Fire fighters, IAFF, Local 3062 and King County Fire Protection
District #43
16. 2000 - 2002 Collective Bargaining Agreement Between Key Peninsula
Fire fighters, IAFF, Local 3152 and Pierce County Fire District #16
17. 1998 - 2000 Collective Bargaining Agreement Between IAFF, Local
3740 and King County Fire Protection District #20
18. 2000 - 2002 Collective Bargaining Agreement Between
IAFF, Local 2819 and
19. 1999 - 2001 Collective Bargaining Agreement Between
Poulsbo Fire Department and IAFF, Local 2819
20. CPI - Related Information
21. Comparison of Number of Days Worked Per Month by Members of Local
3186’s Bargaining Unit and By Comparables
22. Comparison of Productivity Hours Worked Per Year by Members of
Local 3186’s Bargaining Unit and By Comparables
23. Contacts For Information Regarding
Productivity Hours
24. Comparison of Annual Compensation Received by Local 3186’s
Bargaining Unit Members and Comparables
25. Base Wage and Longevity Comparisons for Local 3186 and Comparables
26. Education Pay Incentive Comparisons
27. Deferred Comp. /Social Security Comparisons
28. 2001 WFCA Insurance Premium Rates
29. WFCA Insurance Premium Payment Comparisons
30. Back up Data Regarding Insurance Information Obtained For
Comparables
31. WFCA Insurance Program Overview and Plan Options
32. WFCA Administrative Guidelines
33. Comparisons of Acting Lieutenant Pay Received by Members of Local
3186’s Bargaining Unit and Comparables
34. Real estate sales information on homes being developed and sold
around
35. King Fire District 44 Revenues from 1995 through 2001
(approximation)
36. Labor market information for the Seattle-Tacoma-Bremerton area and
other labor markets in Washington State, various dates, taken from various
governmental on-online sources
I. Proceedings
This dispute, between the King County Fire District 44 (the Employer or
District) and the International Association of Fire Fighters Local 3186 (the
Union) concerns certain terms of a labor agreement between the two parties with
an effective date of January 1, 2001, and an expiration date of December 31,
2003. The parties reached an impasse in
their negotiations on four issues.
Pursuant to RCW 41.56.450, those issues were certified for interest
arbitration by the Public Employment Relations Commission (PERC) and submitted
to a three-person panel of arbitrators chaired by neutral arbitrator Jane R.
Wilkinson for resolution. Evidentiary
hearings were held in southeast
II. Statutory Criteria
In RCW 41.56.465, the
(1)
In making its determination, the
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 decision, it shall take into consideration the following
factors:
(a) The
constitutional and statutory authority of the employer;
(b) Stipulations
of the parties;
****
(c)(ii) For employees listed in RCW
41.56.030(7)(e) through (h), comparison of the wages, hours, and conditions of
employment of personnel involved in the proceedings with the wages, hours, and
conditions of employment of like personnel of public fire departments of
similar size on the west coast of the United States. However, when an adequate number of
comparable employers exists within the state of
(d) The
average consumer prices for goods and services, commonly known as the cost of
living;
(e) Changes
in any of the circumstances under (a) through (d) of this subsection during the
pendency of the proceedings; and
(f) Such
other factors, not confined to the factors under (a) through (e) of this
subsection, that are normally or traditionally taken into consideration in the
determination of wages, hours, and conditions of employment. For those employees listed in RCW
41.56.030(7)(a) who are employed by the governing body of a city or town with a
population of less than fifteen thousand, or a county with a population of less
than seventy thousand, consideration must also be given to regional differences
in the cost of living.
In resolving the issues in this dispute,
whether or not fully articulated herein, the arbitration panel has been mindful
of these criteria and has given consideration to all of the evidence and
arguments presented by the parties relative to these criteria. The arbitration panel also recognizes that
interest arbitration is an extension of the collective bargaining process. The arbitration should endeavor to approximate
the result that reasonable parties themselves would likely have reached in good
faith negotiations. E.g., Kitsap County Fire Protection District No. 7 (IAFF Local 2876),
PERC No. 15012-1-00-333 (Krebs, 2000); City
of
III. Background Information
The King County Fire District 44 has 20 or 21 full-time employees,
including its chief and deputy chief, and two part-time employees. About 14 fire fighters, two lieutenants and
one assistant chief comprise the bargaining unit. At the start of this contract period, all
paid fire fighters, that is, all bargaining unit personnel, worked a 42.1-hour
per week daytime shift schedule that consisted of 12-hour shifts. This equated to 2195 hours per year during
the year 2000 and most of 2001. Work
hours were reduced to a 40-hour workweek or about 2086 hours per year in
2001. Turnover among paid fire fighters
is relatively low and the average length of service is somewhat over seven
years.
The District uses about 75 volunteer fire fighter/EMTs
to cover the night shift. Some
volunteers live in the District and respond to the stations from their homes,
while others live outside of the District, training and responding to incidents
when they are in the District at their respective stations. Resident Volunteers
are provided with living quarters in the fire stations and are required to
stand by for responses at the station a minimum of three times each week
between the hours of 6PM and 6AM. Response
call volume for the District was 1955 incidents in the year 2000; about 60% to
70% of those calls were for emergency medical.
During the year 2000, the King County Fire District 44 merged with and
absorbed King County Fire District No. 46.
The merger substantially increased the size of District 44 in terms of
area served, assessed valuation, operating revenues, and so forth. The District is located in a semi-rural area
of southeast
The District’s fiscal resources are not ample and it has practiced a
conservative fiscal policy, which includes no borrowing. Therefore, it annually sets aside dollars
into its capital reserve fund to make future capital purchases for the more
expensive items of equipment, such as fire engines, aid vehicles, or other
apparatus that cost more than $100,000.
The District is limited by law to a maximum levy of $1.50 per every
$1,000 of assessed valuation and prior to 2002, limited to a maximum increase
of 106% of the previous year’s total taxes.
The maximum permissible statutory levy for 2001 is $2.5 million, based
on the 106% statutory limitation on the District. In 2001, the District received a maximum of
$1.46 per $1000 of assessed valuation.
On November 6, 2001, Washington voters passed Initiative 747. This legislation places a 1% cap on annual
property tax increases; everything above that must be sent to voters for
approval.
The parties’ last contract
expired on December 31, 2000. The
parties negotiated for, but were unable to reach agreement on a successor
contract, but they agreed to a contract term of three years, beginning January
1, 2001, and ending December 31, 2003.
The Executive Director of the Public Employment Relations Commission
certified four issues (wages, health care premiums, acting lieutenant pay, and
longevity pay) for interest arbitration and the arbitration hearing admitted
testimony and exhibits on these four issues.
IV. Selection of Comparators
Having a list of suitable comparator jurisdictions is necessary for a
full evaluation of all four issues certified for interest arbitration. Therefore, a comparator list will be selected
at the outset of this discussion.
Because of the unique shift schedule worked by the Local 3186 bargaining
unit members, the neutral Arbitrator cautions that the selection of comparators
in this case is not as critical to the final resolution of economic issues as
would be the case in other interest arbitration disputes. Rather, as the parties know and as will be
discussed extensively below, the key issue concerning methodology in this case
is whether the comparison should be of monthly wages, of hourly wages, or
whether some other method should be used to take into account the unique shift
schedule of Local 3186.
A. Parties’
Proposed Comparators
1. Union’s
Proposed Comparators
The
Union proposes the following jurisdictions as comparators to King County Fire
District 44:
|
Kitsap FD No.10 Kitsap FD No.18 Pierce FD No. 16 King FD No. 20 |
King FD No. 43 Snohomish FD No. 3 Snohomish FD No.
8 |
2. Employer’s
Proposed Comparators
The
comparable jurisdictions proposed by the Employer are:
|
Clallam FD No. 3 |
Kitsap FD No. 10 Kitsap FD No. 18 Pierce FD No. 3 Pierce FD No. 16 Snohomish
FD No. 3 Snohomish FD No. 4 Snohomish
FD No. 8 |
B. Positions
of the Parties - Comparators
1. Union’s
Position
The Union notes that in determining comparability, arbitrators give the
greatest consideration to population, assessed valuation, geographic proximity
and labor market. (Citations omitted). Historical comparators normally receive
recognition from interest arbitrators, and the party who is proposing the
discontinuance of an historical comparator bears the burden of proving the lack
of comparability. (Citation omitted).
The most recent Collective Bargaining Agreement (1998-2000) stipulated
to the following three comparators: King Fire District No. 20, King Fire
District No. 43 and Kitsap Fire District No. 10. Based upon the parties’ historical agreement
that these three jurisdictions were appropriate comparators and continued to be
appropriate, the Union utilized these three comparators throughout the parties’
negotiations. When the District
indicated it no longer agreed with those comparators, the Union asked the
District to identify new comparators, which it did. The District identified Snohomish FD No. 8,
Snohomish FD No. 3, Kitsap FD No. 18 and Pierce FD No. 16, along with Kitsap FD
No. 10, which was a comparator under the 1998-2000 CBA. Neither party identified any additional
jurisdictions to the other party as being potentially comparable to King 44
during the parties’ collective bargaining and mediation process other than the
jurisdictions that are discussed above.
Therefore, in preparing for the instant interest arbitration proceeding,
the Union proceeded forward under the assumption that a determination as to the
merits of the parties’ respective interest arbitration proposals would be based
upon the above comparables. It is that
list that the Union proffers in these proceedings. They are all appropriate comparators in terms
of geographic proximity, labor market, population and assessed valuation. Any imbalance favors the District because
five of the seven are smaller in terms of population and assessed valuation
than the District. It normally would be
disadvantageous for a union to select a smaller jurisdiction, a consideration
in the Union’s favor also.
The District’s proposal of an almost entirely new set of comparators in
interest arbitration is the sort of conduct that has been held by PERC in the
past to constitute an unfair labor practice pursuant to RCW 41.56.140. See City of Clarkston, Dec. 3246 (PECB,
1989). The Union elected not to file ULP
charges because it wanted to proceed with arbitration. Nevertheless, consistent with PERC precedent,
the District should be required to abide by the comparator list it communicated
during negotiations.
In any event, a number of comparators on the District’s arbitration list
are not appropriate, the Union contends.
It includes jurisdictions outside of the geographic area and labor
market of the District by offering comparators from Clark, Cowlitz and Clallam
counties. These should not be utilized
when there are a sufficient number of jurisdictions within the Puget Sound area
from which to choose. Three comparators
on the District’s list were previously submitted to the Union and therefore are
on the Union’s list. Thus, the parties
agree on Kitsap FD No. 10, Kitsap FD No. 18 and Pierce FD No. 16. This leaves Kitsap FD No. 2, Snohomish FD No.
4 and King FD No. 26. Kitsap FD No. 2
should not be included because that unit recently organized and does not yet
have a collective bargaining agreement.
The current wages were set in a non-union environment. Had Snohomish FD No. 4 and King FD No. 26
been timely identified by the District, the Union probably would not object to
their inclusion on the list of comparators because of their similarities to the
District. Also, their exclusion or
inclusion will not significantly impact this dispute.
2. Employer’s
Position
To select comparators, the District applied a +/- 50% screen to the
populations and assessed valuations of western Washington fire districts and
selected the ten that were the closest in these values to King FD No. 44, which
is located in the center of the population and assessed valuation ranges. The resulting list is well balanced
geographically, the Employer asserts.
The District disagrees with the Union that it acted in bad faith to
offer new comparables at hearing. The
District disclosed during bargaining the criteria it would use for selecting
comparables, i.e., population
and assessed valuation, and the Union was well aware that there are a number of
other fire districts in western Washington that fit the criteria. There is no legislative requirement limiting
the arbitration panel to the comparable fire districts identified in
negotiations, nor is there a requirement for the arbitration panel to consider
what went on during negotiations, as the neutral Arbitrator stated at
hearing. Finally, during negotiations,
the District made it clear that the comparables it presented were for
illustrative purposes only. In fact, the
District’s parameters for selecting comparables have not changed. It was the Union that was intransigent during
bargaining, and now the District’s good faith efforts at sharing its intended
comparables selection methodology with the Union has been twisted and turned
against the District in the form of a bad faith claim.
The District accuses the Union of using a crude, unstable selection
methodology that does not reflect the methods commonly used by neutral interest
arbitrators. The Union’s criteria were
Puget Sound location, historical use as comparators, comparators mentioned
during negotiations. None of these
considerations are identified in the statute.
The Union apparently performed no population or valuation screen because
three of its comparators do not pass that screen.
Regarding historical comparators, the District asserts that the Union
included King FD No. 43 and King FD No. 20 despite the fact that it agreed to
delete the list of comps appearing in the 1998-2000 contract in exchange for a
new Article for a Union-sponsored Retiree Medical Trust. See Exh. E. 8-21 and testimony at Tr. II: 233. Neither King FD No. 43 nor King FD No. 20 fit
the statutory criteria for “similar size,” but they do have high compensation
levels.
C. Arbitrators’
Analysis and Findings - Comparators
1. Selection of Comparables, In
General:
Comparability is not defined by statute, although the statute does speak
to “like personnel of public fire departments of similar size.” Comparability is a relational concept that
cannot be determined with mathematical precision. The interest arbitrator faces the problem of
making "apples to apples" comparisons on the basis of imperfect choices
and sometimes-incomplete data. The
arbitrator's task is to review data in evidence and devise a manageable list of
employers that more closely resembles the important attributes of the subject
jurisdiction than those jurisdictions not on the list. In determining comparability, arbitrators
give the greatest consideration to population, geographic proximity or labor
market, and assessed valuation. See, e.g., Kitsap County (Kitsap County
Sheriff's Guild), PERC No. 13831-I-98-299 (Buchanan, 1999); City of Bremerton (Bremerton Police
Officers' Guild), PERC No. 12924-I-97-279 (Axon, 1998); City of Kennewick (International Association
of Fire Fighters, Local 1296, AAA 75 300 00225 96 (Krebs, 1997); City of Centralia (International Association
of Fire Fighters, Local No. 451), PERC No. 11866-I-95-253 (Lumbley, 1997); Spokane
County (WSCCCE, Council 2), PERC No. 10159-I-94-235 (Levak,
1995). Arbitrators are also willing to
consider other economic indicators when necessary. E.g.,
Whatcom County (Whatcom County Deputy Sheriff’s Guild), PERC Case No.
15395-I-00-347 (Gangle, 2001). With respect to geographic proximity,
Arbitrator Howell Lankford explained in a recent award:
[T]he City argues against
geographic proximity. … [H]owever, it is quite clear
that Washington interest arbitrators have commonly preferred geographically
proximate comparators when such were available. The City objects to the
introduction of such traditional “labor market” considerations as proximity
into the selection of comparables under the statute. But one of the traditional
rationale for labor market analysis in collective bargaining fits squarely
within the directive of the statute: Employees’ satisfaction -or lack of it-
with their wages and working conditions depends, first, on their sense of
local, comparability. It may be interesting in the abstract to know what police
officers make in Cheney; but what a Kelso officer could make by driving to
Centralia or Battle Ground is much more personal data. This is true of
traditional, two-party collective bargaining as well, of course: no one expects
wage data from the far corner of the state to have the same weight as wage data
from just next door. The statute directs an arbitrator’s attention, first, to
the Legislature’s finding that “the uninterrupted and dedicated service of
these classes of employees is vital to the welfare and public safety of the
state of Washington;” and it is entirely consistent with that directive to give
primary attention to wages paid by nearby employers of the same size.
City
of Kelso (Kelso Police Officers Association) (Lankford, November 16,
2001).
2. Appropriate
Comparators to King County Fire District 44
In this case, the neutral Arbitrator believes geographic proximity is an
important consideration. First, in the greater
Seattle-Tacoma-Bremerton-Everett metropolitan area (or Puget Sound area, as it
has been referred to in these proceedings) there are an ample number of fire
districts from which to choose. There is
no need to search further for comparable jurisdictions. Second, it is common knowledge that Seattle,
located in King County, is the highest cost of living metropolitan center in
Washington and Oregon. The closer one
is to metropolitan center, the costlier it is to live. This, in turn, has an effect on wages
generally. It is because of similar cost
of living characteristics of this identified region that the Bureau of Labor
Statistics maintains separate price and economic data for the
Seattle-Tacoma-Bremerton area. See, e.g., Exh. U. 36.
Four of the comparables proposed by the Employer are outside of the
Puget Sound area: Clark County FD No. 3,
Clark County FD No. 11, Clallam County FD No. 3, and Cowlitz County FD No.
2. Clark County is in the
Portland-Vancouver metropolitan area, and it tends to be a higher cost, higher
wage area of Washington State, but not as high as Seattle and some of the areas
around Seattle.
Economic indicators, such as average earnings per job and household
income, which the neutral Arbitrator took the liberty of procuring from
governmental on-line sources (and which are therefore appropriate for arbitral
notice), shows the disparity among counties:
Table 1.
|
Indicator |
King |
Clark |
Clallam |
Cowlitz |
Pierce |
Snoho-mish |
Kitsap |
|
Median
Household Income by County - 1999* |
$60,483 |
$50,005 |
$33,008 |
$38,535 |
$46,057 |
$54,713 |
$45,122 |
|
Ave. Annual
Earnings Per Job, By County, 1999** |
$47, 598 |
$31,430 |
$23,598 |
$29,914 |
$31,107 |
$34,052 |
$32,217 |
|
Median Home
Price, 2001.3, by County*** |
$268,000 |
$155,000 |
$130,000 |
$123,900 |
$160,000 |
$215,000 |
$160,000 |
* Source: Washington State Office of Financial Management, online
at http://www.ofm.wa.gov/poptrends-/table16.pdf
** Source:
***Source: Washington
State University Center for Real Estate Research, Housing Market Snapshot by
County, Third Quarter 2001, online at http://www.cbe.wsu.edu/~wcrer/
Table 2.
|
Indicator |
|
|
|
Union -
Service sector - mean hourly, Dec. 2000* |
|
|
|
Public &
Private Combined |
$19.86 |
$18.21 |
|
Public
Sector Only |
$21.56 |
$19.95 |
|
Fire
fighters, mean hourly** |
$23.16 |
$20.93 |
|
Ave. Annual
Pay, MSA, all categories 2000*** |
$41,953 |
$35,830 |
* Source: BLS, Mean Hourly Earnings By
Selected Characteristics, December 2000, online at http://www.bls.gov/ncs/ocs/sp/ncbl0355.txd
** Source: BLS, 2000 Metropolitan Area Occupational Employment and
Wage Estimates,
*** Source: BLS,
Average annual pay for all covered workers by Consolidated Metropolitan
Statistical Area, Portland-Salem MSA and Seattle-Tacoma-Everett MSA, online at
http://www.bls.gov/news.release/anpay2.t02.htm
Table 1 shows that
Of the remaining proposed comparators, as stated above, the neutral
Arbitrator applied the plus or minus 50% screen, although she agrees with
Arbitrator Levak’s comment that one does not have to
adhere to this screen “slavishly.” City of
Table 3.
(Jurisdictions
passing both +/- 50% screens are shaded/bold-faced)
|
Jurisdiction |
Population |
A/V ($
Million) |
|
King County FD 44 |
25,000 |
1,624,807,105 |
|
-50% |
12,500 |
812,000,000 |
|
+150% |
37,500 |
2,437,000,000 |
|
|
|
|
|
King #20 |
20,000 |
749,368,352 |
|
King
#26 |
29,000 |
1,479,572,614 |
|
King #43 |
40,000 |
2,333,377,334 |
|
King
#45 |
13,000 |
824,781,214 |
|
Kitsap
#10 |
15,000 |
1,315,776,082 |
|
Kitsap
#18 |
22,000 |
1,366,973,039 |
|
Kitsap #2 |
20,308 |
2,790,408,150 |
|
Pierce
#16 |
18,000 |
1,082,017,536 |
|
Pierce
#3 |
33,349 |
1,700,212,580 |
|
Snohomish
#4 |
18,000 |
979,827,037 |
|
Snohomish
#8 |
28,000 |
1,763,656,736 |
|
Snohomish #3 |
22,000 |
578,355,370 or
1,286,749,400 |
Neither party had any particularly strong objection to those
jurisdictions that passed the plus or minus 50% screen for population or
assessed valuation in the Puget Sound area.
The Union’s sole objection to them was that the Employer brought them up
for the first time at the arbitration hearing, and it posited that it was an
unfair labor practice to do so. The
Employer’s brief countered that it had not represented to the Union during
negotiations that its proffered comparables were exclusive, and that the Union
had the ability to apply the same screen and produce the same list as was
produced at hearing. The neutral
Arbitrator ordinarily does not find it helpful to explore the parties’ conduct
during negotiations, and notes that there is no requirement in the statute that
she does so. The Public Employment
Relations Commission has the exclusive jurisdiction to entertain questions of
unfair labor practices under Ch. 41.56 RCW.
See, Spokane County (Spokane County Deputy
Sheriff's Association), (Beck, 2001), (Arbitrator Beck refused to take
the union’s evidence of the employer’s bad faith bargaining into consideration,
and reminded the parties that PERC, not the panel, has jurisdiction over
"refusal to bargain" allegations).
As to the selection of comparators, the neutral Arbitrator believes it
is best to follow objective economic criteria, along with the parties’
stipulations and agreements.
Accordingly, those jurisdictions that are shaded on Table 1 will be included
in the Arbitrators’ final list of comparators.
With respect to Snohomish FD No. 3, two figures are shown, one that
passes the screen and one that does not.
The District explained that the larger figure ($1,286,749,400) included
the assessed valuation for the City of Monroe.
Without the City of Monroe, the assessed valuation is the smaller
figure, $578,355,370. The City did not,
however, explain which figure is the tax base for that fire district. Both parties proposed Snohomish FD No. 3 as
a comparator and therefore the arbitration panel assumes they are in agreement
on this. Accordingly Snohomish FD will
be included in the arbitration panel’s final list of comparators.
Next comes an examination of the proposed
The first jurisdiction is King County Fire District No. 20, proposed by
the Union. King No. 20 was one of the
three comparators to which the parties stipulated in their 1998-2000 Collective
Bargaining Agreement. Arbitrators are
ambivalent about historical comparators.
While they give some weight to those comparators, they also recognize
that economic circumstances change, political considerations that no longer exist
may have driven a prior agreement, or that a party made a mistake to which it
should not be forever bound. King No. 20
failed the assessed valuation screen with its low property valuation. It is also an anomaly, paying inordinately
high wages to its approximately six bargaining unit fire fighters, as measured
both on a monthly and hourly basis.
Finally, the arbitration panel notes that the parties reached a
tentative agreement during their negotiations not to include any comparators in
their new Agreement. See Tr. II:
233. For these reasons, the arbitration
panel rejects King No. 20 as a comparator.
Next on the list is King County Fire District No. 43, which failed the
population screen but passed the assessed valuation screen. King No. 43 was also
on the parties’ list of comparators in their prior CBA. It is a more populous, wealthier fire
district located immediately adjacent to King County Fire District 44. Because its adjacent
location has a labor market influence and passed the assessed valuation screen
and because of its historical use as a comparator, the neutral Arbitrator has
elected to include it on the final list of comparators. Importantly, King No. 43 is useful because it
is one of the few jurisdictions having a day shift schedule, and it pays a
premium to bargaining unit members who work that schedule. The significance of these facts will be
discussed in detail below.
Finally, there is Kitsap County Fire District No. 2, which failed the
assessed valuation screen, but passed the population screen. The Union vigorously objected to the
inclusion of this jurisdiction as a comparator because until recently, it was
non-union, and it still does not have a collective bargaining agreement. Thus, the wages in existence now are wages
for the year 2000, and they were unilaterally set by the employer, as opposed
to being negotiated wages. The neutral
Arbitrator agrees with the Union.
Interest arbitrators generally eschew non-union employers as comparators
if possible, and also avoid using comparators that lack current wage data. Although comparators without a current
contract can be utilized for ranking purposes when historical data for all
comparators is available, this places the comparator in a position of secondary
importance. The Employer attempted to
“age” Kitsap Fire District No.’s 2 data by 3.4%, the amount of its offer, but
this ends up being only an approximation of the final wage settlement of the
employer and the union in that district.
The neutral Arbitrator therefore rejects Kitsap No. 2 as a
comparator.
Accordingly, these ten jurisdictions comprise the Arbitrators’ final
list of comparators:
1. King
County Fire District No. 26
2. King
County Fire District No. 43
3. King
County Fire District No. 45
4. Kitsap County Fire District No. 10
5. Kitsap County Fire District No. 18
6. Pierce
County Fire District No. 3
7. Pierce County Fire District No. 16
8. Snohomish
County Fire District No. 3
9. Snohomish
County Fire District No. 4
10. Snohomish
County Fire District No. 8
V. The District’s Fiscal Health and Future Condition
Arbitrators typically consider an employer’s ability to pay wage and
benefit increases both in absolute and relative terms. Although this consideration is not explicitly
spelled out in RCW 41.56.465, it is a consideration that would fall under
subsection (f), “Such other factors, not confined to the factors under (a)
through (e) of this subsection, that are normally or traditionally taken into
consideration in the determination of wages, hours, and conditions of
employment.” It also is a consideration
that affects all four issues certified for interest arbitration. Therefore, it will be discussed in advance of
those issues.
A. Positions
of the Parties
1. Employer’s
Position
The District contends that annexation, the Farmland Preservation
Program, and the Muckleshoot Indian Reservation are
factors that show the rural nature of the District, and circumstances that will
keep it as such in the upcoming years.
All of these things have a depressing effect on the District’s tax base
and its future.
Annexation has the effect of removing that area from the tax rolls of
the District, thereby reducing its revenue. The District will continue to own
assets but is required to pay to the annexing city, in cash, properties or by a
contract for fire protection services, a percentage of the fair market value of
the assets proportionate to the percentage annexed. Thus, annexation results in both a reduction
of revenue to a fire protection district as well as a loss of assets, the
District contends.
The District is divided by Highway 18, which cuts through the northwest
corner of the District and essentially constitutes the Urban Growth Boundary
Line, to the west of which is residential and commercial territory, and to the east
of which is the remaining rural region of the District. This Urban Growth Boundary Line delineates
the boundary of the Lea Hill area, which is the area the City of Auburn began
to annex two years ago, and is continuing to annex piecemeal. This region constitutes one tenth of the land
mass area of the Fire District. When the
City of Auburn first annexed what is now known as the Southwest Annexation, the
City contracted with the District for emergency services to that area for an
amount equivalent to the usual tax revenue.
The City has now canceled that contract and the annexation process for
two new areas is nearly complete. These
annexed areas account for 14% of the District’s assessed valuation. The Lea Hill area as a whole is 10% of the
District’s landmass, but 38% of its assessed valuation. Thus, the District argues, with annexation
the District will have a dramatic decrease in revenue without a corresponding
decrease in area served. In addition,
the District’s assets will be eroded.
The rural nature of the District is evidenced in part by the existence
of agricultural lands, many of which are now protected as such by the Farmland
Preservation Program. This program
authorizes the County to preserve rapidly diminishing farmland by purchasing the
right to develop it. In selling the
development rights to their property, owners allow restrictive covenants to be
placed on the lands, which thereby limit the property’s use and development. Currently,
The District provides fire protection service to 75% of the Muckleshoot Tribal Lands, despite the fact that those lands
aren’t taxed. The District services
those lands by contract for $65,000, but payment is erratic.
The District thus maintains that the enforced rural and agricultural
nature of the District is a major contributing factor to the limited population
served by the District and its depressed assessed valuation base with which the
District has to work for its funding.
Initiative 747, passed in November 2001, places an arbitrary 1% cap on
annual property tax increases, and requires everything above this 1% threshold
to go to the voters for approval. The
significance of this legislative development is that the board will only be
able to increase the District’s tax revenue by one percent 1% a year, as
opposed to the 6% previously. The 6% cap
afforded flexibility in planning for growth and inflation, which is always
above 1%. According to the District, the
consequence of Initiative 747 is that it will soon face a shortfall of funds and
will have to confront voters with costly elections just to make ends meet, let
alone approve additional services or react to emergencies. This is an affront to the conservative fiscal
policy the District has successfully operated under for nearly a decade.
Pursuing the taxpayers for additional monies violates the District’s policy to
live within its budget, dictated by property tax revenues received and the
Board has no desire to ask the taxpayers for additional taxes in the form of
special levies or bonds.
The District encourages the Arbitrators to keep in mind this tight
fiscal picture that it will be facing when they weigh and consider the
financial impact of the
2.
The
The
The District raised concerns about the possible cancellation of a
contract for services that the District has with the City of
In conclusion, the
B. Arbitrators’
Analysis and Findings - District’s Fiscal Health and Future Condition
Although both sides have made valid points regarding that District’s
financial health, its ability to pay, and its prognosis for the future, the
arbitration panel has determined that it is not a significant special consideration in these
proceedings for several reasons:
1. The panel believes that fiscal responsibility and caution
should be the norm among small public employers, and therefore it is not
inclined to give any special consideration to an employer’s track record of
fiscal responsibility and conservatism.
Stated another way, that a public employer has behaved fiscally
irresponsibly in the past is not a reason to bind it to a fiscally irresponsible interest arbitration
award.
2. The extent to which the semi-rural nature of the District
depresses its assessed valuation, resulting tax revenues, and population served
is reflected in the arbitration panel’s selection of comparators. The comparators selected by the panel were
similar in size and assessed valuation to the District.
3. The Lea Hill annexation will reduce the revenues and assets of
the District, but also will have a proportionate reduction of obligation. There will be fewer building fires, and fewer
people needing emergency medical response.
The District may downsize, a fact the parties recognize with the reopener clause in their Collective Bargaining
Agreement. The District may lose some
economy of scale, but it presented no evidence of this, so that is only
speculative.
4. Initiative 747 is a concern, but it probably won’t affect the
District during the life of the Collective Bargaining Agreement under
consideration, and it may go the way of Initiative 695 (another tax-related
initiative, which was struck down last October by the Washington Supreme Court,
see Amalgamated Transit Union Local
587 v. the State of Washington, No. 69433-8 (October 26, 2000).
5. Finally, the arbitration panel’s final award is fairly close
to the Employer’s offers and well within its ability to pay, thus making the
District’s fiscal condition and prognosis an academic consideration.
VI. Wage issue
A. Proposals - Wages
1. Employer’s Proposal
The Employer’s final proposal on wages stated as follows:
[Article 17.1] Effective July 1, 2001, wages shall
be paid as follows:
Fire Fighter Probationary $3188.86
Fire Fighter Third Class $3664.50
Fire Fighter Second Class $4066.72
Fire Fighter First Class $4447.23
Note: The above schedule reflects a 3.4% wage
increase.
Salaries January 1st, 2002
will increase 3.0%.
Salaries for 2003 will be open
for negotiations.
2.
The
Effective on January 1 of each
year of the parties’ new CBA (2001, 2002 and 2003), the base wages of each
bargaining unit member should be increased by 100% of the mid-year
Seattle-Tacoma CPI-U plus 2%.
This translates into a 5.7%
base wage increase effective
The increase for
B. Positions
of the Parties - Wages
1. Employer’s
Position
Compensation Analysis Should Be Hourly. The Employer argues that on an hourly basis,
bargaining unit members are paid the highest of its comparators. Bargaining unit personnel in its three
stations work seven days a week, 12 hours a day, from
The dramatic difference in shift schedules underscores the fallibility
of the
The Employer points that Fire fighter Markley acknowledged that the
numbers used in Exh. U. 22
take into account neither the time during which the members of the other fire
districts are on call, nor the time during which the fire fighters actually
spend responding to calls. See Tr. II: 269.
Similarly, in response to a line of questioning regarding why hours of
work were not included in Exh. U. 24, a Union witness
testified at hearing (Tr. II: 243):
Some people work shifts, some
did not, and we felt that it was important that when we really looked at it to
kind of leave that component out.” “….we
wanted to look at monthly salaries, so we didn’t think the figure was important
to spin all the way out.
Fire
fighter Eberlein testified that because it is
difficult to measure how many calls shift fire fighters (24-hour personnel)
respond to per night, and the corresponding duration of those calls, the Union
decided to “not even deal with the standby time.” (Tr. II: 290-91). The
District urges the Arbitrator to recognize that it is a preposterous notion to
“not even deal” with the very portion of fire fighter service that makes them
so valuable to the general public. Eberlein also testified (Tr. II: 294):
“Some nights fire fighters can
sleep all night, and other nights, they may run all night, and sometimes they
have one or two calls, so I think to go through and do the whole year is to
spend a lot more work and time that I had to be able to do that.”
The
Employer asserts that the Union’s analysis also is flawed because it co-mingles
12 and 24-hour shift schedules.
In summary, according to the Employer’s argument, the fact that standby
time is difficult to quantify because of its day-to-day variance does not
render it immaterial, and it must be considered as hours worked by the
arbitration panel. Excluding it
altogether from the analysis does not even paint a partial picture of where the
bargaining unit falls in relation to comparable fire districts.
Instead, it produces a distortion of truth.
Moreover, the Union’s approach is a dramatic departure from the position
previously assumed by the Union, in which it was actually using hourly
compensation rates to assert its alleged under-compensated position in
negotiations.
Employer’s Conclusion - Wages: Using proper methodology, the
District submits that its proposals are well supported, even using the Union’s
comparators. With the Union’s
comparators, to ensure an “apples to apples” comparison with respect to the longevity
element, it chose a 10-year longevity benchmark. For a total compensation analysis, the
District considered salary, longevity pay, holiday pay, employer contribution,
deferred compensation, supplemental retirement, and medical. The result is that bargaining unit employees
rank second among the comparables in both hourly wage and total hourly
compensation and their compensation is 8% above the comparator average.
2. Union’s
Position
The Benchmark Should be Eight Years. The eight-year benchmark is the appropriate
one for comparison purposes, which actually gives the District an advantage
over a 10-year benchmark, for example, because many comparator employers
provide longevity pay at 10 years. Utilizing a benchmark of 10 years of service
would have placed the members of this bargaining unit an average of another
1.64% behind its peers in total compensation.
This shows that the total compensation analysis that the Union has
submitted to the panel has significantly underestimated the degree to which the
bargaining unit is under-compensated.
Monthly, Not Hourly, Compensation Should Be Compared: The Union maintains that monthly
compensation, and not hourly, should be the unit of comparison. Interest arbitrators have rejected attempts
to utilize compensation comparisons that were based upon the number of hours
per week or month that individuals were scheduled to be on duty under similar
circumstances to those that are presented in this instance. For example, in City of Bothell (Bothell Fire Fighters IAFF
2099) PERC Case No. 75-300-0025-87 (Krebs, 1987), the arbitrator held
that in order to prevent a total compensation analysis that was based upon
“hours of scheduled duty” from being seriously misleading, a myriad of other
issues that might impact the validity of such a total compensation analysis
also should be considered, thus making it impractical and unwise for
arbitrators to attempt to utilize such an analysis. The Union further asserts
that its exhibit and analysis of the productive hours of bargaining unit members
vis-à-vis the comparable bargaining units is a reason why it is misleading to
base a compensation analysis on the scheduled hours on duty; the Union’s
exhibit shows that by at least some important measurements, King County Fire
District 44 bargaining unit members are more productive than their peers, even
though they are scheduled to be on duty for fewer hours in any given
period. See Exh.
U. 22. In this instance, the District
has chosen to assign the members of the Union’s bargaining unit to a day shift
schedule, and thus, to a shift schedule which requires the members of the
Union’s bargaining unit to be on duty for less hours per week and less hours
per month on the average than their peers.
Further, according to the Union, the District must believe that it can
accomplish its operational mission in an enhanced fashion by assigning the
members of the Union’s bargaining unit to this day shift schedule, and in so
doing, it is getting a bargain, or “more bang for its buck,” by assigning the
members of the Union’s bargaining unit to work a day shift schedule.
The
The Union contends that in the King FD 44 bargaining unit, by
comparison, because of being on the day shift schedule, employees essentially
have no “standby” time, and only get lunch and coffee breaks “off” during their
scheduled shifts. Thus, even though the members of the Union’s bargaining unit
are scheduled to be on duty for fewer hours per week, month and year than their
peers, they are actually being assigned to perform productive tasks by the
District during more hours per week, month and year than their peers. Additionally, the Union established at
hearing that the bargaining unit’s day shift schedule requires the District’s
employees to be at work on more days per month than their peers. See Exh. U.
21.
The evidence established that day shift schedules like the one that the
members of the Union’s bargaining unit are currently assigned to work by the
District are unpopular amongst fire fighters.
See Tr. II: 242-246, Exh. U. 21, 22. This is because the ratio of non-standby time
on the day shift is relatively high, and because the day shift schedule
involves more time away from one’s family for a significant portion of the day. Thus, two of the comparators include
contractual incentives to work the day shift.
King FD No. 43 pays a 10% premium to bargaining unit members who work
the day shift, and Snohomish FD No. 3 pays a 6%
premium. (Note that only King 43 has
bargaining unit members who are actually assigned to work a day shift schedule
at this time). Thus, although at least
two of King FD No. 44’s comparators have actually agreed that their fire
fighters should be paid more
compensation per month in order to get them to agree to work an
undesirable day shift schedule rather than a 24-hour shift schedule, the
District is somehow trying to argue in this proceeding that the members of the
Union’s bargaining unit should receive less
compensation per month than their peers simply because the District has
succeeded in assigning all of the members of the Union’s bargaining unit to
work on such an undesirable day shift schedule on a regular basis. For these reasons, the Union maintains a
monthly compensation analysis should be utilized.
Total Compensation Analysis: The Union’s total compensation analysis has
included the following elements: base wage; longevity pay; education pay;
holiday pay; deferred compensation and/or social security; and the cost to the
employer of providing health care benefits to its employees and their dependents.
See Exh. U. 24.
The elements are not set in stone, and any reasonable methodology is
suitable, in the Union’s opinion.
The
All that the Union is asking for is a gradual “catch up” base wage
increase of 6% to be spread out over each year of the contract, that is, at 2%
per year. There still will be a lag, but the request is a reasonable one. Interest arbitrators have held where there is
a healthy economy, targeting wages to the comparable average is
reasonable. (Citation omitted).
The District proposes a wage increase retroactive to only July 1, 2001,
but it submitted no evidence to justify this deviation from the norm, the Union
asserts. Therefore, the pay increase for
the year 2001 should be retroactive to the start of that year, the Union
asserts.
C. Arbitrators’
Analysis and Findings - Wages
1. Methodology:
Monthly or Hourly
The most important consideration in this dispute is whether the
comparator analysis should be of monthly wages, of hourly wages, or whether
some other method should be used to take into account the unusual shift schedule
of Local 3186. Alone among the
comparators or proposed comparators, all bargaining unit members work a 12-hour
day shift and relatively low 2190 hours annually. By comparison, most employees of the
comparators work a 24-hour shift and their annual hours range from 2,340 to
2,764 or more, for an average of 2,576 annual hours worked. When viewed against its comparators, the top
step base wage of King County Fire District 44 fire fighters is relatively low,
but when converted to an hourly wage, because of the low number of hours
actually worked, the District comes out on top.
Not surprisingly, the Union argues for a monthly wage comparison, while
the Employer just as vigorously contends that an hourly wage comparison is more
appropriate.
The essence of the Union’s argument is that day shift employees work
more productive hours than 24-hour employees, who spend part of their time on
stand-by time. If Local 3186 members are
not responding to calls, they are otherwise engaged in assigned work while on
duty, except while on lunch or coffee breaks.
Therefore, the Union contends, their time is more valuable to their
employer than the time of comparable employees, and should be measured
accordingly. A pure hourly rate
comparison does not take this into account and therefore paints a distorted
picture.
The Employer strenuously disagrees.
It essentially contends that 24-hour employees are as valuable to their
employers economically as 12-hour shift employees, and that the
The problem for the neutral Arbitrator is that there may be some truth
to the
To the neutral Arbitrator, given the same fixed salary, she would prefer
fewer hours of work rather than more, and believes that would be the case for
most people, even though one might have to exert more effort during those fewer
hours. Thus, with the salary as a
constant, one’s equivalent hourly wage is higher when one works fewer
hours. As the District
pointed out, Arbitrator Lankford recently reached the same conclusion under
similar circumstances (except that the hourly wage analysis favored the union
and was opposed by the employer) in City
of
What the statute requires an
arbitrator to compare is not simply “wages” but “wages, hours, and conditions of
employment.” To the extent it is reasonably practicable, that comparison should
be done on an “all things considered” basis, reflecting wages and hours of work
together. For example, police officers who are making 20% less than the average
wage paid by comparable jurisdictions have no particular reasons to expect a
raise if they are also working a total of 20% fewer hours than the average
(which the City would certainly be quick to point out if the shoe were on the
other foot). Washington interest arbitrators have commonly recognized this
interrelationship in the past.
In
City of Centralia (IAFF Local 451)
PERC No. 11866-I-95-253 (Lumbley, 1997), the
arbitrator took a similar view, except that the arbitrator faced a complicating
factor: He had to do a comparator analysis based on the status quo, and then
factor in the employer’s proposal to increase
the bargaining unit’s total hours of work.
Regarding the hourly wage, arbitrator Lumbley
wrote:
[A]s the net hourly wage
comparisons above make abundantly clear, Centralia is simply too far out in
front. The demand that this trend
continue is one of the two reasons the parties ended up in interest
arbitration.
Addressing
the bargaining unit’s total annual hours, he commented:
By any comparison, the
scheduled hours of unit employees here are extremely low. ....
The hours worked by firefighting employees in other jurisdictions
demonstrates conclusively that the contract hours in Centralia are out of touch
and that the City's demand for a modest increase in those hours is reasonable.
Arbitrator
Lumbley ultimately reached an intermediate solution
of a longer workweek and a wage increase that reflected the longer
workweek. Cases cited in the District’s
post-hearing brief indicate that other arbitrators also have elected to use an
hourly calculation to evaluate comparables when employees within those
comparators work varying shift schedules.
City of Vancouver (Vancouver
Police Officer’s Guild, (Beck, 1997); City of Ellensburg (IAFF
1758) (Snow, 1992); City of
Bellingham v. IAFF 106, (Beck, 1991); Cowlitz County v. IBT Union 58, (Beck, 1987); City of Bellevue (IAFF 1604), (Gaunt, 1987); City of Seattle v. Seattle Police Officer’s
Guild, (Kienast, 1984).
The neutral Arbitrator, therefore, believes that the dominant wage
comparison should be on an equivalent hourly basis. Other considerations can be made to account
for the productivity of District employees.
One of those would be to maintain a presumably high ranking among the
comparators, when measured on an hourly basis.
Another possible measuring device is to look to the King County Fire
District No. 43’s CBA for guidance. A
few of its bargaining unit members work 12-hour day shifts, and they are paid a
10% premium, presumably to account for their greater productivity - or the
lesser desirability of working this shift.
Thus, one might use this precedent to factor in a 10% discount on the
District’s wages for the sole purpose of seeing where the District’s employees
stand on an hourly basis vis-à-vis its comparators.
This discussion will turn next to an examination of the wages of the
arbitration panel’s comparators relative to the bargaining unit’s. The Union stated that it used the eight-year
employee as the benchmark, while the District used the ten-year benchmark. As to the base annual or monthly salaries,
their figures agreed on all the relevant comparators. The arbitration panel will use the ten-year
benchmark, to which the Union presumably would not object because it is more
favorable to its position, and which reflects a more common breaking point for
longevity pay. The arbitration panel will use the figure 2195 as the
number of hours the bargaining unit members work in a year. This was apparently the number of hours they
worked near the outset of the CBA under consideration. Currently, however, the arbitration panel
understands that their hours have been reduced to about 2080. Therefore, the higher figure being employed
here is to the
2. Comparator
Wage Analysis
The following table shows the top step base wage of each comparator on a
monthly basis, along with annual hours worked, and the resulting equivalent
hourly wage. It also provides the same
information for King County Fire District 44 in terms of current pay, along
with the pay rate that would result from each party’s proposal for 2001.
Table 4.
Comparables’ Base Pay,
Monthly and Hourly
|
Jurisdiction |
Top Step Base Monthly Pay |
Annual Hours Worked |
Hourly Rate |
King 44
with 10% Adjustment |
|
|
|
|
|
|
|
King FD 44 Current |
$4,302 |
2195 |
$23.52 |
$21.38 |
|
Employer Proposal |
$4,448 |
2195 |
$24.32 |
$22.11 |
|
Union Proposal |
$4,547 |
2195 |
$24.86 |
$22.60 |
|
|
|
|
|
|
|
King FD 26 |
$4,557 |
2,624 |
$20.84 |
|
|
King FD 43 - 24 hr shift |
$4,894 |
2,596 |
$22.62 |
|
|
King FD 43 - 12 hr days* |
$5,383 |
2,346 |
$27.53 |
|
|
King FD 45 |
$4,493 |
2,704 |
$19.94 |
|
|
Kitsap FD 10 |
$4,575 |
2,764 |
$19.86 |
|
|
Kitsap FD 18 |
$4,471 |
2,604 |
$20.60 |
|
|
Pierce FD 3 |
$4,546 |
2,512 |
$21.72 |
|
|
Pierce FD 16 |
$4,007 |
2,607 |
$18.44 |
|
|
Snohomish FD 3* |
$4,800 |
2,340 |
$24.62 |
|
|
Snohomish FD 4 |
$4,581 |
2,340 |
$23.49 |
|
|
Snohomish FD 8 |
$4,562 |
2,680 |
$20.43 |
|
|
Average* |
$4,595 |
2,552 |
$21.75 |
|
*Snohomish FD 3 has a 45-hour
week (2340) and a 56-hour week; per the District’s brief, for comparative
purposes, the 45-hour week has been included in the above table. Similarly, the
shorter workweek was used for King FD 43.
Although the bargaining unit’s monthly wage is well behind the average,
as can be readily seen, when wages are considered on an hourly basis, the
bargaining unit’s current pay
is higher than the average of the comparators.
With the 10% discount factor applied to FD 44’s actual hourly rate, a
methodology option discussed above, the current pay trails the average
slightly. The neutral Arbitrator wishes
to emphasize that this 10% adjustment off the bargaining unit wages for
comparison purposes is merely an attempt to give fair consideration to the
Union’s argument regarding the arguably greater productivity of 12-hour
day-shift fire fighters, with the 10% figure derived from King FD No. 43’s
contract. It is an artifice derived from
a small universe (a single comparable collective bargaining agreement that has
two or three fire fighters on day shift) that could be considered problematic
if subjected to a vigorous challenge.
The difference between King County Fire District 44’s hourly wage, the
Employer’s proposed wage and the
Table 5.
King 44
Hourly vs. Comparator Average (Base Wage)
|
|
King 44 Percent Vs. Comparator Average: |
|
|
King 44 UnadjustedKing
44 Less 10% |
|
Current wage vs. comparator average |
8.15%-1.7% |
|
Employer’s proposal over comparator
average |
11.8%1.67% |
|
Union’s proposal over comparator average |
14.3%3.92% |
The next table shows the ranking of King FD 44’s wages relative to its
comparators:
Table 6.
Comparator Ranking (Base
Wage)
|
Jurisdiction |
Pay/Hr |
|
King FD 43 - 12 hr shift |
$27.53 |
|
Snohomish FD 3 - 45 hr wk |
$24.62 |
|
King FD 44 Current |
$23.52 |
|
Snohomish FD 4 |
$23.49 |
|
King FD 43 - 24 hr shift |
$22.62 |
|
Comparator
Average |
$21.75 |
|
Pierce FD 3 |
$21.72 |
|
King FD 44 Less
10% |
$21.38 |
|
King FD 26 |
$20.84 |
|
Kitsap FD 18 |
$20.60 |
|
Snohomish FD 8 |
$20.43 |
|
King FD 45 |
$19.94 |
|
Kitsap FD 10 |
$19.86 |
|
Pierce FD 16 |
$18.44 |
As
Table 6 shows, King FD 44 bargaining unit members come out third from the top
in terms of hourly pay even before any year 2001 wage increase, and one should
bear in mind that there are only a few fire fighters working these shorter
workweeks in the top two jurisdictions.
With the 10% adjustment, the bargaining unit’s rank drops three
places. However, on an adjusted basis,
both the Employer’s and the
A more accurate comparison of wages, albeit a more difficult one to
make, is a total compensation comparison.
The neutral Arbitrator chose to include base wage, longevity pay, and
employer paid health care in the total compensation analysis because the record
contains the most complete and reliable data for all of the comparators on
these elements. The results are shown on
the next table and they do not differ very much from the base wage
analysis:
Table 7.
Comparables’ Total Compensation, Monthly and
Hourly
|
Jurisdiction |
Monthly
Base |
Hours Yr |
Long %
10 yrs |
Long $
10 yrs |
Monthly
Med |
Monthly
Dental |
Monthly
Total |
Hourly
Total |
|
|
|
|
|
|
|
|
|
|
|
King 44
Current |
$4,302 |
2195 |
0 |
0 |
$550 |
$123 |
$4,975 |
$27.20 |
|
King 44
District Proposal |
$4,448 |
2195 |
0 |
0 |
$550 |
$123 |
$5,121 |
$28.00 |
|
King 44
Union Proposal |
$4,547 |
2195 |
3% |
$136.41 |
$550 |
$123 |
$5,356 |
$29.28 |
|
|
|
|
|
|
|
|
|
|
|
King FD No. 26 |
$4,557 |
2,624 |
4% |
$182.28 |
$505 |
$126 |
$5,370 |
$24.56 |
|
King FD No. 43 |
5,383 |
2,346 |
5% |
$269.15 |
$550 |
$131 |
$6,333 |
$32.39 |
|
King FD No. 45 |
4,493 |
2,704 |
0 |
$0.00 |
$550 |
$123 |
$5,166 |
$22.93 |
|
Kitsap FD No. 10 |
$4,575 |
2,764 |
2% |
$91.50 |
$550 |
$123 |
$5,340 |
$23.18 |
|
Kitsap FD No. 18 |
$4,471 |
2,604 |
2% |
$89.42 |
$550 |
$131 |
$5,241 |
$24.15 |
|
Pierce FD No. 3 |
$4,546 |
2,512 |
0 |
$0.00 |
$550 |
$131 |
$5,227 |
$24.97 |
|
Pierce FD No. 16 |
$4,007 |
2,607 |
4% |
$160.28 |
$485 |
$131 |
$4,783 |
$22.02 |
|
Snohomish FD No. 3 |
$4,800 |
2,340 |
2% |
$96.00 |
$550 |
$41 |
$5,487 |
$28.14 |
|
Snohomish FD No. 4 |
$4,581 |
2,340 |
0 |
$0.00 |
$414 |
$66 |
$5,061 |
$25.95 |
|
Snohomish FD No. 8 |
$4,562 |
2,680 |
-- |
$50.00 |
$550 |
$131 |
$5,293 |
$23.70 |
|
|
|
|
|
|
|
|
|
|
|
Averages |
$4,598 |
2,552 |
2.01% |
$93.86 |
$525 |
$113 |
$5,330 |
$25.20 |
The next table shows the total compensation rankings of King County Fire
District 44 relative to its compartors, with and
without the 10% adjustment, and includes the current King FD No. 44 pay along
with both parties’ offers.
Table 8.
Hourly Pay Ranking
|
Jurisdiction |
Total
Comp Hourly Pay |
|
King 43 |
$32.39 |
|
King 44
Union Proposal |
$29.28 |
|
Snohomish 3 |
$28.14 |
|
King 44
District Proposal |
$28.00 |
|
King 44
Current |
$27.20 |
|
King 44 Union 10% off |
$26.96 |
|
Snohomish 4 |
$25.95 |
|
King 44 District 10% off |
$25.79 |
|
Comparator
Average |
$25.20 |
|
King 44 Current 10% off |
$25.06 |
|
Pierce 3 |
$24.97 |
|
King 26 |
$24.56 |
|
Kitsap 18 |
$24.15 |
|
Snohomish 8 |
$23.70 |
|
Kitsap 10 |
$23.18 |
|
King 45 |
$22.93 |
|
Pierce 16 |
$22.02 |
Table
8 shows that in terms of actual hourly total compensation, King County Fire
District 44 bargaining unit members rank very high, just behind those few
employees in King FD No. 43 and Snohomish FD No. 3 who work a 12-hour
shift. With the 10% adjustment off base
pay, King FD No. 44’s current pay rank drops to slightly below the comparator
average, which is a respectable position considering that the comparators have
received pay hikes for 2001. Both the
Table 9.
King 44
Hourly vs. Comparator Average (Total Compensation)
|
|
King 44 Percent Vs. Comparator Average: |
|
|
King 44 UnadjustedKing
44 Less 10% |
|
Current wage vs. comparator average |
7.94%-0.56% |
|
Employer’s proposal over comparator
average |
11.11%2.34% |
|
Union’s proposal over comparator average |
16.19%6.98% |
3. Other
Statutory Considerations
a) The
Cost of Living
The Employer’s Contention - CPI: The CPI is not a cost of
living index; rather, it is a price change index. If anything, the CPI overstates inflation, in
some cases by as much as an entire percentage point. (See, Exh.
D. 14-9 and 14-10.)
There is nothing to support the notion that public or private employees
are entitled to wage increases based on 100% of the changes in the Consumer
Price Index. Nevertheless, the
District’s offer compares favorably with the CPI. In addition, the bargaining unit’s cumulative
wage increases over the past three years have put it nearly 2.5% above the
cumulative percentage increases of the CPI over the same period. During the same period, bargaining unit
members were enjoying a reduction in workweek from 44.0 hours to 42.1 hours and
their hours have recently been reduced to 40 hours per week. (Tr. II: 328).
The
Arbitrators’ Discussion - CPI:
Evidence shows that the bargaining unit received a 4% increase during
each year of the parties’ 1998-2000 contract, which outpaced the changes in the
cost of living during that period. The
increases in the cost of living were approximately 3.5%, 2.9% and 3.0% for each
of 1997, 1998 and 1999, respectively. Exh. U.
20, pg. 2. The parties agree that they
traditionally apply the mid-year Seattle-Tacoma-Bremerton index. This stipulation is somewhat ambiguous to the
neutral Arbitrator because the Bureau of Labor Statistics publishes a
Seattle-Tacoma-Bremerton CPI-U in June of each year (along with the other even
months), as well as two half-year indices, one for the first half, and one for
the second half. The exhibits presented
by the parties indicate that they use the June index published by the BLS. See Exh. E. 14 and Exh. U. 20. Those
documents show that the Seattle-Tacoma-Bremerton CPI-U increased in June 2000
by 3.7%, and in June 2001 by 4%.
The parties’ 1998-2000 agreement did not contain any reference to a
consumer price index. See Exh. U. 6, E-14.
Their 1995-1997 CBA, in Article 17.1 specified increases for 1996 and
1997 equal to 100% of the CPI-W
“calculated mid-year,” with a floor of 2.5% and a ceiling of 6%.
Interest arbitrators frequently award CPI-based increases. They generally defer to the parties’ past
practice as to which index to utilize.
They also defer sometimes to the parties’ past practice of using 100% of
the CPI, as compared to a lesser figure, such as 90%. The lesser figure took on some popularity in
the face of criticism that the CPI tended to overstate actual changes in the
cost of living. Recent methodology
adjustments and further analysis indicate that this is less apt to be true, and
arbitration awards from the past few years indicate a possible trend towards 100%
CPI increases:
Table 10.
CPI Increases in Recent
Arbitration Awards
|
Case
Name |
% CPI
Applied |
|
|
100% |
|
City of |
100% |
|
City of |
90% |
|
City of |
80% |
|
Kitsap County
Fire Protection District No. 7 (IAFF Local 2876), PERC No.
15012-1-00-333 (Krebs, 2000) |
100% |
|
City of |
100%? |
|
City of |
100% |
In
I have rejected the Employer's
contention that in setting wages based on the CPI, I should use a 90% figure.
In making this decision, I note that the BLS has established a new formula in
calculating the basic components of the CPI as of January 1999 in order to
correct the prior method which the BLS determined created upward biases in the
CPI. (footnote: See Municipal Research and
The neutral Arbitrator agrees with Arbitrator Beck’s rationale, and also
notes that the parties have not shown a past practice of discounting the CPI in
calculating their wage adjustments.
Accordingly, any CPI-based wage adjustments awarded herein will be based
on 100% of the CPI.
b) Other
Considerations
The parties presented little evidence or argument on other traditional
considerations. What evidence there was
suggested that recruitment and retention is not a problem with the District.
One significant matter, however, concerns the retroactivity of the wage
increase. The District proposes that the
first year wage increase be retroactive only to
But if interest arbitration
awards are not commonly retroactive to the expiration of the prior agreement,
that creates an obvious pressure to initiate the interest arbitration process
far enough in advance to avoid the retroactivity problem, regardless of whether
two-party bargaining has really been exhausted or not. Second, leaving long periods between
collective bargaining agreements, and without orderly wage and benefit
provisions, does not seem to serve the stated legislative intent and purpose of
the statute: "to promote such dedicated and uninterrupted public service
there should exist an effective and adequate
alternative means of settling disputes."
The first year award should be fully retroactive.
Accord,
4. Arbitrators’
Conclusion and Award - Wages
After weighing and evaluating the above considerations, it is the
conclusion and determination of the neutral Arbitrator that the bargaining unit
should be awarded a CPI-based increase for each year of the 2001-2003
Collective Bargaining Agreement. This
falls short by 2% each year of the
VII. Longevity Pay Issue
A. Proposals - Longevity Pay
1.
The
|
Years
of Service |
Pay (%
of Top Step Base Wage) |
|
0-6 yrs |
0% |
|
7-13 yrs |
3% |
|
14-20 yrs |
5% |
|
21+ yrs |
7% |
2. Employer’s
Proposal
The Employer opposes the establishment of any longevity pay schedule.
B. Positions
of the Parties
1.
The
2. Employer’s
Position
The District contends that bargaining unit employees already are
enjoying an hourly wage (calculated on both a base wage and a total
compensation basis) that is 8% higher than the average of the comparators when using the
About half of the District’s comparable jurisdictions pay this wage
premium, and the other half do not. The District urges the Arbitrator to take
note of the fact that the Union’s selected list of comparables “coincidentally”
just happen to be those same jurisdictions which pay wage premiums for
longevity. See Exh. U. 25.
C. Arbitrators’
Longevity Pay Analysis and Findings
As previously noted, King County Fire District 44 currently pays no
longevity premium. After advancement to
fire fighter first class, the pay scale remains flat. The longevity pay of the District’s
comparators relative to the
Table 11.
Longevity Pay:
Comparators/Union Proposal
|
Jurisdiction |
Longevity
Premium |
|
|
5 yrs10
yrs15 yrs20 yrs |
|
King 44
Current |
0000 |
|
King 44
Union Proposal |
03%5%7%* |
|
|
|
|
King 26 |
2%4%6%8% |
|
King 43 |
3%5%5%5% |
|
King 45 |
0000 |
|
Kitsap 10 |
1%2%3%5% |
|
Kitsap 18 (5% after 25 yrs) |
1%2%3%4% |
|
Pierce 3 |
0000 |
|
Pierce 16 |
2%4%4%4% |
|
Snohomish 3 |
0%2%3%3% |
|
Snohomish 4 |
0000 |
|
Snohomish 8 (%)** |
0.55%1.10%1.64%2.19% |
|
|
|
|
Comparator Average |
0.95%2.01%2.56%3.12% |
* The
**Snohomish FD 8 pays a flat dollar rate at five-year intervals of $25,
$50, $75 and $100. The percentage figure
is a calculated figure for purposes of comparison.
The
The difficulty the neutral Arbitrator has with any longevity pay
proposal is that longevity pay essentially is an element of base wage. For the parties, it is an easily quantifiable
economic item, although an arbitrator is less well equipped to cost this
proposal since it requires the creation of a spreadsheet showing each
bargaining unit member’s longevity. The
discussion above on wages included a total compensation analysis that took into
account the longevity premium paid by the District’s comparators, and fashioned
a wage award having that analysis, as well as the other statutory factors in
mind. The neutral Arbitrator has thus
determined that this wage award is the incremental compensation “pie” so to
speak, for the bargaining unit with a ten-year benchmark assumed. How the parties wish to divvy up that pie is
ultimately up to their mutual agreement.
The wage award gives each bargaining unit member an equal share. If they wish to divide it some other way by
carving out longevity pay, they are free to do so via collective
negotiations. As a matter of good
employment practices, one can make a case for rewarding tenure and experience
with increased pay, whether it be in the form of a longevity premium, as the
Union proposes, or in the form of a step on the pay schedule, as occurs in some
sectors. Unless the case for longevity
pay over and above the wage award is compelling, however, the neutral
Arbitrator believes it is something that should be negotiated by the parties,
and not awarded in interest arbitration.
Instead, the award should determine the appropriate level of compensation
for the bargaining unit, and make that award in the form of increased wages
instead of trying to allocate it among the various compensation categories that
arise in these cases. Specific
allocations in the form of premium pay, incentives and the like are best left
to the negotiation of the parties.
D. Arbitrators’
Conclusion and Award on Longevity Pay
For the foregoing reasons, no longevity pay will be awarded the
bargaining unit for the 2001-2003 Collective Bargaining Agreement.
VIII. Acting Lieutenant Pay Issue
A. Proposals - Acting Lieutenant Pay
1.
The
2. Employer’s
Proposal
The District proposed amending Article 17.1.2 to state that: “Effective
the first of the month after the arbitration award is issued, Acting
Lieutenants pay shall increase from $15 per shift to 8% per shift.”
B. Positions
of the Parties
1.
The Union contends that the evidence at hearing established that
bargaining unit members are assigned to work as Acting Lieutenant on a regular
and recurring basis and there is typically very little difference between the
job duties that they perform in this role and the job duties that are performed
by the District’s permanent, “hard bar” Lieutenants. Tr. II: 220-223. Thus, they should be paid the same. There is
a 12% differential between the top step base wage of a fire fighter and that of
a Lieutenant, therefore, the Union seeks 12% acting pay for assignments to this
position.
Even the District recognizes that bargaining unit members are underpaid
when assigned as Acting Lieutenants, since the District is proposing to
significantly increase the premium pay from $15 per shift to an 8% premium pay,
which is a 67% of this pay differential, versus the 100% that the
The Union points out that with the exception of King FD 20, which has no
acting pay, the comparators’ rates support the
2. Employer’s
Position
The Employer submits that its offer is supported by comparisons with
other fire departments and is a fair offer because: 1. The District’s pay premium kicks in from
the first hour that fire fighter acts for a lieutenant, whereas the norm among
other fire departments is to require the fire fighter to be on shift for an
average of 6.5 hours before they qualify for the pay premium. See
Exh. D-12. 2. The 8% pay is 67% of the 12% wage
differential between a top step fire fighter and a lieutenant. This 67% spread
is ample, given the fact there is not a corresponding increase in
responsibility, in that acting lieutenants are not responsible for ongoing
personnel issues as is the case with regular full-time lieutenants. While the
C. Arbitrators’
Acting Lieutenant Pay Analysis and Findings
All of the comparable jurisdictions pay a premium when a fire fighter is
assigned out-of-classification at the next step up, which is usually the
lieutenant classification. In specifying
the premium, the
Table 12.
Acting Pay: Comparators vs. King FD No. 44
|
Jurisdiction |
%
Premium |
Threshold
(Hrs) |
|
King 44 Current |
($15) |
0 |
|
King 44 District Proposal |
8% |
0 |
|
King 44 Union Proposal |
12% |
0 |
|
|
|
|
|
King 26 (4%-10%, used median of 7%) |
7% |
12 |
|
King 43 |
10% |
0 |
|
King 45 |
5% |
6 |
|
Kitsap 10 |
12% |
12 |
|
Kitsap 18 (5% & 10%, median=7.5%) |
7.5% |
6 |
|
Pierce 3 |
12.50% |
1 |
|
Pierce 16 |
9.50% |
12 |
|
Snohomish 3 |
20% |
4 |
|
Snohomish 4 |
10% |
6 |
|
Snohomish 8 |
7.50% |
6 |
|
Comparator
Average |
10.1% |
6.5 |
Unlike longevity pay, which is a predictable, quantifiable element of
compensation, acting pay cannot be calculated as part of the total compensation
package because it is not known in advance who will be assigned to act in the
lieutenant’s classification and for how long.
Therefore, the arbitration panel’s award pays particular heed to the
practice of the comparators. That evidence, based on the best available data of record, shows
that the District’s offer (8%) is too low, while the
On a daily basis, the lieutenant,
an acting lieutenant, probably has pretty much the same responsibilities as far
as history there. They are to supervise
the crew during their routine and emergency routines; in other words, when
they're doing their routine work at the station around the District and also
while they respond to emergency incidents. I guess the difference is that a
full lieutenant also has the additional responsibility of ongoing personnel
management, and they also have to do yearly reviews of personnel, and they're
also responsible for personnel issues that an acting
probably wouldn't be responsible for.
Tr. I: 145-46.
The
They aren't paying these
members for the job they're doing, but yet, if something should happen, we know
they're going to hold them 100 percent accountable. And during our bargaining process,
Chief Smith had mentioned that they aren't held as accountable as the other
lieutenants, and I don't know how you can do that. We operate in emergency situations where
people could get hurt very easily, and if you're only going to pay them partially
for the job they're doing, then I guess that when it comes down to the
liability issue: I guess I'm just
getting -- you know, Well, I was only getting $15, I wasn't getting full pay,
so I'm not fully responsible, and that's ridiculous.
Tr.
II: 222-23. Therefore, the weight of the
evidence is that the Acting Lieutenant does not assume the full panoply of
duties that must be undertaken by a regular Lieutenant.
The District proposed to make the Acting Pay increase effective after
the arbitration award issues. Neither
party addressed the retroactivity of the Acting Lieutenant Pay award in their
post-hearing briefs. The neutral
Arbitrator has determined to make the Acting Pay retroactive to January 1,
2001.
D. Arbitrators’
Conclusion and Award on Acting Lieutenant Pay
The arbitration panel awards the following contract language on Acting
Lieutenant pay:
“Effective
IX. Health Care Premium and Plan Issue
A. Proposals - Health Care Premium and Plan
1. Employer’s Proposal
The District proposes to amend Article 26.1 to read as follows:
The Employer agrees to provide
medical, dental, and life insurance for employees. Medical Insurance shall be
the Preferred Option Plan offered by the
2.
The
The Employer and the
B. Positions
of the Parties
1. Employer’s
Position
The District explains that it proposes to continue to pay 100% of the employee premiums through 2003. The
District has proposed to cap the District obligations on premiums for spouses
and dependents of employees through 2003 at the year 2000 level (for
Traditional WFCA Plan premiums). The District has also proposed the change from
the Traditional Plan to the Preferred Plan Option, a plan that five of the
bargaining unit members have elected to enroll their families in already. Under
the District proposal, employees will be responsible for premium increases for
their family members.
According to the District, the
Prior to 1993, the District paid 100% of the premiums for employee
medical and dental insurance and a fixed dollar amount towards dependents. Since 1993, the District has paid 100% of the
premiums for employees, spouse and eligible dependents. This occurred in exchange for significant
cost reductions that the parties obtained in the early 1990’s. At the same time the District switched from a
more expensive plan to the WFCA plan and offered both the Traditional and
Preferred Plans; employees received better benefits and the District was able to
pay all the premiums.
According to the Employer, the WFCA Traditional Plan Option is a
traditional first dollar fee-for-service plan created in the 1980s. Later, the Preferred Plan Option (PPO) was
added. The Preferred Plan Option incorporates cost containment features such as
increased deductibles and co-payments, primarily avoiding the first dollar
coverage found in the original plan, the “Traditional” Plan.
The District contends that even with its cost containment features, the
Preferred Plan Option is recognized in the insurance industry as an excellent
insurance plan providing employees with benefits that protect themselves and
their families with coverage nearly equal to or better than what is found in PPOs and other medical insurance plans available in the
insurance market. In fact, a number of District bargaining unit employees
already enroll their spouses and dependents in the PPO Plan Option. Five employees have enrolled in the PPO
also. Furthermore, the benefits come at
a lower cost.
The District also points out that over a period of eight years
(1992-2000), the District saw only a 27.5% increase in
its obligations to pay premiums for spouse and two children. During that time,
the rates increased from $379.25 to $483.55. However, in the year 2001 alone,
the premium increased approximately 20%. Clearly, the premiums costs to the
District have become excessive and out of control.
The District submits that caps on employer insurance contributions are
in place in seven other fire districts, constituting half of the District’s
comparables: King FD No. 26, Kitsap FD
No. 10, King FD No. 45, Pierce FD No. 16, Kitsap FD No. 18, Snohomish FD No. 4,
Clark FD No. 3. Of the
In conclusion, the District asserts that it does not make sense that an
employer would agree to what the
2.
The District, like its comparables, provides health insurance through
the WFCA Employee Benefit Program that offers a “Traditional” and a “Preferred”
or “PPO” plan. The District currently
pays 100% of the premiums for both the members of the
Four out of seven of the District’s comparators (King FD No. 43, Kitsap
FD No. 10, Snohomish FD No. 3 and Snohomish FD No. 8) offer exactly the same
benefits to their bargaining unit members as the District currently
offers. King FD No. 20 also pays 100% of
the premiums, but limits enrollment to the PPO.
The two remaining comparators limit the bargaining unit to the PPO and
have monthly co-pays of $9.83 per month in the case of Kitsap FD No. 18 and
$65.33 per month in the case of Pierce FD No. 16. Neither of the two
comparators that have previously implemented some sort of cost sharing system
with respect to the payment of medical and/or dental insurance premiums has
instituted the sort of onerous system that the District is seeking to implement
in this instance.
All of the District’s comparators are facing the exact same increases in
premium costs for 2002 that King FD No. 44 is facing in this instance as well.
Yet, five out of the District’s seven comparators will continue to provide 100%
coverage for those increased premiums to their employees and to their
dependents, and the other two comparators will continue to provide premium cost
sharing arrangements that are more beneficial to their employees than the one
that the District is proposing to the panel in this instance despite the
above-referenced potential increases in premium costs.
The District and all of its comparators enrolls employees and dependents
in a dental insurance plan and an orthodontia insurance plan that is offered by
the
Moreover, the
C. Arbitrators’
Health Care Premium and Plan Issue Analysis and Findings
The rate increases in the WFCA health care plans have indeed been
staggering over the past few years.
Between the years 1999 and 2000, both the Traditional and the PPO plan
rates increased 9.7%. As shown in the following
table, between 2000 and 2001, premium rates increased 22%. And from 2001 to 2002, they went up 15% for
spouse and dependents, and 45% for the employee. Dental plan increases were much less
dramatic. In 2001, the average dental
plan increase for the various categories was around 7%, and in 2002 the
increase was 4.93% across-the-board in all categories.
Table 13.
WFCA Insurance Plan Rates and
Percent Increases, 2000-2002
|
|
2000 |
2001 |
2001 |
2002 |
2002 |
|
TRADITIONAL
PLAN |
|
|
increase |
|
increase |
|
Employee |
$133.75 |
$163.18 |
22% |
$236.61 |
45% |
|
Spouse |
$204.54 |
$249.54 |
22% |
$286.97 |
15% |
|
Spouse and Child |
$322.15 |
$393.02 |
22% |
$451.97 |
15% |
|
Spouse + 2 Children |
$414.29 |
$505.43 |
22% |
$581.26 |
15% |
|
One Extra Child |
$117.61 |
$143.48 |
22% |
$165.00 |
15% |
|
Two Extra Children |
$209.75 |
$255.90 |
22% |
$294.29 |
15% |
|
|
|
|
Employee + Full
family increase for 2002: |
22.3% |
|
|
PREFERRED
PLAN |
|
|
|
|
|
|
Employee |
$109.08 |
$134.18 |
23% |
$194.56 |
45% |
|
Spouse |
$168.18 |
$205.18 |
22% |
$235.96 |
15% |
|
Spouse and Child |
$264.81 |
$323.07 |
22% |
$371.53 |
15% |
|
Spouse and 2 Children |
$340.56 |
$415.48 |
22% |
$477.81 |
15% |
|
One Extra Child |
$96.63 |
$117.89 |
22% |
$135.57 |
15% |
|
Two Extra Children |
$172.38 |
$210.30 |
22% |
$241.85 |
15% |
|
|
|
|
Employee + Full
family increase for 2002: |
22.3% |
|
|
Dental
(with orthodontia) |
|
|
|
|
|
|
Employee |
$39.86 |
$41.20 |
3.4% |
$43.23 |
4.9% |
|
One Dependent |
$27.29 |
$29.97 |
9.8% |
$31.45 |
4.3% |
|
Two Plus Dependents |
$82.58 |
$89.67 |
8.6% |
$94.09 |
4.9% |
|
Employee+Full
Family |
$122.44 |
$130.87 |
6.9% |
$137.32 |
4.9% |
The District overstates the effect of these increases on its own
costs. The District’s per employee cost
increase in the year 2000 was under 10%, and its per
employee cost in the year 2001 actually went down. Exh. E. 20 breaks out, by
employee, the cost of insurance for each of the years between 1999 and 2002,
and then gives a total monthly cost to the Employer. The following table sets forth those totals,
the number of employees each year, the cost per employee, and the percentage
change from year to year:
Table 14.
Year-to-Year Changes in Per
Employee Benefit Costs
|
|
|
|
|
Year 2002 |
Total Benefit Cost |
$11,532.02 |
|
No. Employees: 20 |
Per Employee for 2002 |
$576.60 |
|
|
Increase
from 2001 |
19.6% |
|
|
|
|
|
Year 2001 |
Total Benefit Cost |
$9,642.87 |
|
No. Employees: 20 |
Per Employee for 2001 |
$482.14 |
|
|
Increase
from 2000 |
-0.3% |
|
|
|
|
|
Year 2000 |
Total Benefit Cost |
$6,283.52 |
|
No. Employees: 13 |
Per Employee for 2000 |
$483.35 |
|
|
Increase
from 1999 |
9.4% |
|
|
|
|
|
Year 1999 |
Total Benefit Cost |
$5,741.33 |
|
No. Employees: 13 |
Per
Employee for 1999 |
$441.64
|
Data Source: Exh.
E. 20
The
relatively modest increase in 2000 occurred because two of the higher cost
bargaining unit members switched to the PPO plan, which resulted in a
significant savings. The year 2001 saw
the effect of the merger with District 46, and serendipitously, five of its
seven employees did not require insurance for a spouse or dependents. Thus, the per
employee insurance cost to the District actually declined, despite the steep
increase in rates.
There is no way to tell whether the trend in high rate increases will
continue, but it is a fair guess that they will outpace the rate of inflation
by some margin. The high rate increases
in recent years has caused the health care cost issue to be a contentious one
at most bargaining tables, and the neutral Arbitrator believes that more
represented employees are sharing in the costs of health care insurance to some
degree.
The evidence as to the comparator jurisdictions is as follows:
Table 15.
Comparator Jurisdictions’
Medical and Dental Coverage
|
Jurisdiction |
Coverage |
|
King FD No. 26 |
2001-2003: $625 employer cap for LEOFFII
full family. |
|
King FD No. 43 |
100% Employer Paid |
|
King FD No. 45 |
Employees pay anything in excess of yr
2000 dependent premiums + 15%, not to exceed 15% of the dependent premium
cost. |
|
Kitsap FD No. 10 |
100% Employer Paid |
|
Kitsap FD No. 18 |
Kaiser Physicians or Group Health w/ $5
co-pay. Starting 1999, employees pay
$9.22/mo premium, to escalate each year by the CPI. (Arbitrator estimates 2002 premium at @
$10.20). |
|
Pierce FD No. 3 |
100% Employer Paid |
|
Pierce FD No. 16 |
Employees pay all premium increases above
a 7.5% increase in each of the 2000 and 2001 rates to an accumulated total of
15% above the 2000 rates. |
|
Snohomish FD No. 3 |
Employer maximum 2001: $730 plus a COLA
for each succeeding year. |
|
Snohomish No. FD 4 |
PPO only option; 100% Employer Paid |
|
Snohomish FD No. 8 |
100% Employer Paid |
This
evidence shows that only four of the ten comparable jurisdictions provide 100%
employer paid medical and dental coverage that includes the Traditional Plan as
King FD No. 44 does now. One
jurisdiction, Snohomish FD No. 4, offers 100% employer paid full family
coverage, but offers the PPO option only, which gives it a substantial savings
(22% in 2001 for full family) over the Traditional Plan. The majority either has some sort of
employee contribution toward the premium, a cap on the employer’s liability
that could lead to an employee contribution, or a built-in containment feature
as with Snohomish FD No. 4.
Arbitration awards from the past several years also have shown a
willingness on the part of arbitrators to frame an award that includes some
sort of employee contribution to the cost of health care insurance. Appendix A to this
award lists all the awards about which the neutral Arbitrator has knowledge
from the past four years that have addressed the issue, and the arbitrator’s
disposition. In most of those cases, the
employees either were, or ended up making a contribution to the cost of
insurance. Those cases, as well as an
examination of the comparators’ CBAs also shows that
there are about as many ways of approaching this problem as there are contracts
in existence to address it. In other
words, there does not appear to be any typical, uniform or accepted
cost-sharing formula.
Turning to the parties’ proposals, the neutral Arbitrator believes they
both are unreasonable. The
One problem with the entire notion of a cap, one with which the neutral
Arbitrator struggled in fashioning the award, is that it most affects those
employees who may be least able to afford paying high monthly premiums, that
is, employees with multiple dependents.
Of course, on the other side of the coin, employees who are single or
who have spouses who also have insurance coverage cost an employer a whole lot
less, so requiring everyone in the bargaining unit to pay an equal amount isn’t
fair either. An attribute of putting the
cost-sharing burden on the high cost employee is that it could induce that
employee to switch to a lower cost plan.
In fashioning an award, the neutral Arbitrator determined to keep the
Traditional Plan option and adopt the Union language requiring the parties to
form a labor management committee to investigate cost containment
measures. Clearly, whatever is awarded
here will require refinement, if not wholesale revision by the parties, so the
parties are advised to work collaboratively on this issue. The neutral Arbitrator decided to adopt a
formula that would require the parties to share the differential in cost
between the PPO and Traditional Plan.
This approach should have the dual effect of limiting the District’s
liability and creating an incentive for employees with dependents to move to
the PPO plan to avoid paying premiums altogether. Consistent with the District’s proposal, the
neutral Arbitrator’s award will only affect spouse and dependent premiums. The District will remain obligated for 100%
of employee premiums. In addition, as
explained previously, the Arbitrator does not deem it necessary to impose cost
sharing in the dental area. Therefore,
the Employer will remain responsible for 100% of the employee and dependent
dental premiums.
The cost-sharing approach that the neutral Arbitrator has decided upon
is as follows: Effective the date of the
next plan enrollment, or March 1, 2002, whichever is later, the District will
pay the equivalent of 100% of the spouse and dependent premium for the WFSCA
Preferred Plan. If the employee elects
to enroll in the Traditional Plan, the employee shall pay, by way of payroll
deduction, 50% of the difference in monthly cost between the Traditional Plan
and the Preferred Plan for the employees’ dependents. The District shall pay the other 50%. To protect employees against an obligation
that could become too burdensome, a cap on their liability of 25% over their
previous year’s obligation will be imposed.
After reviewing Exh.
E. 20, the neutral Arbitrator calculates that the cost to employees for
dependent premiums who elect to remain with the Traditional Plan would have
been or will be as follows:
Table 16.
Cost-Sharing Impact on Bargaining Unit
Members
|
|
|
No.
Affected |
2001 |
2002 |
|
Dependents |
Plan |
Employees |
Employee
Premium ( |
|
|
Spouse + 2 |
Trad |
4 |
$44.98 |
$51.72 |
|
3 dependents |
Trad |
1 |
$35.60 |
$40.93 |
|
Spouse |
Trad |
2 |
$25.51 |
$29.33 |
|
None |
Trad |
7 |
$0.00 |
$0.00 |
|
Spouse + 1 |
PPO |
4 |
$0.00 |
$0.00 |
|
None |
PPO |
1 |
$0.00 |
$0.00 |
|
Spouse + 2 |
PPO |
1 |
$0.00 |
$0.00 |
The
plan premiums for 2003 and beyond are not available. The following table, however, assumes that
premiums continue to rise at a high rate, therefore,
it assumes an 18% annual increase.
Should that occur, the effect on bargaining unit members would be as
follows for 2003 and 2004:
Table 17.
Projected Cost-Sharing Impact
on Bargaining Unit Members
Assumes 18% Annual Premium
Increase
|
|
|
No.
Affected |
2003 |
2004 |
|
Dependents |
Plan |
Employees |
Employee
Premium ( |
|
|
Spouse + 2 |
Trad |
4 |
$61.03 |
$72.02 |
|
3 dependents |
Trad |
1 |
$48.30 |
$57.00 |
|
Spouse |
Trad |
2 |
$0.00 |
$0.00 |
|
None |
Trad |
7 |
$34.61 |
$40.84 |
|
Spouse + 1 |
PPO |
4 |
$0.00 |
$0.00 |
|
None |
PPO |
1 |
$0.00 |
$0.00 |
|
Spouse + 2 |
PPO |
1 |
$0.00 |
$0.00 |
The
neutral Arbitrator believes these costs are not unreasonable. The neutral Arbitrator’s award will not
impose any cost sharing on employees in the PPO plan. Although the Employer’s proposal effectively
would have imposed some cost-sharing, its brief states that the PPO option
already has containment features such as increased deductibles and co-payments,
thus avoiding the first dollar coverage found in the Traditional Plan.
D. Arbitrators’
Conclusion and Award on Health Care Premium and Plan Issue:
Based on the foregoing discussion and analysis, the Arbitrators’ award
on health care premiums and plan coverage is as follows:
1. The
District will make both the Washington Fire Commissioner Association’s
Traditional Plan and its Preferred Provider Plan available to bargaining unit
members, along with the Washington Dental Service Dental Plan, or such other
plans upon which the parties have mutually agreed.
2. The District will pay 100% of employee premiums for medical and
dental insurance.
3. The District will pay 100% of spouse and dependent premiums for
dental insurance.
4. The District will pay 100% of spouse and dependent premiums for
employees enrolled in the WFCA’s Preferred Provider
Plan or a plan equivalent as mutually agreed.
5. The District will pay 100% of the premium for the employees’ Life
Insurance.
6. For employees with a spouse and/or dependents enrolled in the WFCA’s Traditional Plan, the District and employee will
each pay one-half of the difference between the monthly premium for the
Traditional Plan and the equivalent monthly premium for the Preferred Provider
Plan option during the year in question, except that the employee’s obligation
shall not exceed 125% of his or her previous year’s obligation. This paragraph will take effect on the date
of the next open enrollment period following this arbitration award or on
7. The District and the
X.
Final Award
The decision and award of the neutral Arbitrator and arbitration panel
majority in this dispute is as follows:
A. Wages
· Effective
· Effective
January 1, 2002, the bargaining unit shall receive a wage increase equal to
100% of Seattle-Tacoma-Bremerton 2000 June to 2001 June CPI-U, which equals
4.0%.
· Effective January 1, 2003, the bargaining
unit shall receive a wage increase equal to 100% of Seattle-Tacoma-Bremerton
2001 June to 2002 June CPI-U.
B. Longevity
Pay
There shall be no longevity pay awarded.
C. Acting
Pay
Article
17.1.2 of the parties’ Collective Bargaining Agreement will be amended to
read:
Effective
D. Health
Insurance Premiums for Dependents and Health Plans.
Article 26 of the parties’ 2001-2003 Collective Bargaining Agreement
will be amended to read:
1. The
District will make both the Washington Fire Commissioner Association’s
Traditional Plan and its Preferred Provider Plan available to bargaining unit
members, along with the Washington Dental Service Dental Plan, or such other
plans upon which the parties have mutually agreed.
2. The District will pay 100% of employee premiums for medical and
dental insurance.
3. The District will pay 100% of spouse and dependent premiums for
dental insurance.
4. The District will pay 100% of the premium for the employees’ Life
Insurance.
5. The District will pay 100% of spouse and dependent premiums for
employees enrolled in the WFCA’s Preferred Provider
Plan or a plan equivalent as mutually agreed.
6. For employees with a spouse and/or dependents enrolled in the WFCA’s Traditional Plan, the District and employee will
each pay one-half of the difference between the monthly premium for the
Traditional Plan and the equivalent monthly premium for the Preferred Provider
Plan option during the year in question, except that the employee’s obligation
shall not exceed 125% of his or her previous year’s obligation. This paragraph will take effect on the date
of the next open enrollment period following this arbitration award or on
7. The District and the
The parties are hereby directed to amend their Collective Bargaining
Agreement for the years 2001 though 2003 accordingly.
|
Date: |
|
|
___________________________________ J.
Monroe |
____________________________________ |
|
|
Concurs on Issues:_____________________ and dissents on Issues: _________________
|
XI. Appendix A -
Compendium of
During
Past Four Years on Medical Costs
|
Case Name |
Arbitrator’s
Ruling on Medical Costs |
|
|
The Arbitrator increased the employer's
medical insurance contribution in two steps over an eight-month period from
its previous level of $425 to $543 per employee per month. But for the first time, employees will have
to contribute about $57 per month for the insurance package, "not an
unreasonable amount" according to the arbitrator. |
|
|
The employer offered three medical plans:
traditional, PPO and group health. It
paid 100% of the cost for the employee under the PPO and group plans and 90%
for the traditional plan. Full family
coverage cost employees an additional amount, e.g., $41 monthly out of their
own pocket for group health. The
employer sought to eliminate the traditional plant, and argued that the
majority of bargaining unit members had decided against the traditional plan
and that the plan was not available to unrepresented employees. The arbitrator granted the employer's wish
with the proviso that it fully fund the group plan’s
premiums. The panel reasoned that this
would bring the bargaining unit in line with the employer's other bargaining
units that enjoy fully funded coverage under a two-plan system. |
|
|
The employer's contribution to family
insurance premiums remained at 90%. |
|
|
City of Arbitrator declined to add a co-pay to the medical insurance because the parties
would soon be back to bargaining table.
He warned, however, that the status quo of 100% employer-paid
insurance "is not the standard in the comparator group," and that
the union could expect to give up this perk in the future. |
|
|
The arbitrator ordered the employer to pay
50% of the cost of health insurance of dependents in 2001, a new benefit for
the bargaining unit; he found the comparator average to be 50%. |
|
|
City of Arbitrator Krebs rejected the employer’s
proposal to have employees pay health care cost increases exceeding 8%. The union convinced the arbitrator that the
employer had not experienced runaway health care costs and the parties were
set to go back to the bargaining table for their next contract. |
|
|
Mason County Sheriff's Department
(Teamsters Local 378) (Beck, 1999) The arbitrator noted that while during the
1990's the employer’s medical premium contribution was a fixed amount which
generally covered the full premium costs, the $356 figure agreed upon for
1998 did not pay the full premium. He
agreed with the union that the premium contributions for 1999 were greater
than $368 at each of the comparables and that there was no explanation for
these greater premium contributions or any evidence regarding the coverage of
these plans In granting the employer’s proposal of
$368, he noted that local Teamster unions representing five different county
bargaining units had accept a contribution of $368 for 1999 as had all of
Mason County's other unionized employees. |
|
|
The employer proposed switching from a
traditional group health insurance plan to an HMO-based plan. Under the existing plan, the employer paid
100% of the employee's coverage and 50% of dependents' coverage, up to $195
per month. Under the proposed HMO
plan, it would pay 100% of dependents' coverage, which would still be cheaper
for the employer. The employer argued that most of its employees were covered
under the HMO plan. Arbitrator Buchanan denied the employer's
request, reasoning that the new HMO plan would equal lower-quality health
care and “employees, who are employed in high-risk employment such as these
Sheriff's employees should be in a health insurance plan that presents top
quality, easily available medical care.” He increased the employer's
contribution for dependents to 60% up to $250. |
|
|
City of Arbitrator Axon awarded the employer a $5 co-pay on medical. |
|
|
City of The union opposed the employer's proposal
to increase the fire fighters' annual health insurance deductibles and
institute a co-payment for doctors' office visits. The employer cited drastic
increases in health insurance premiums, and argued that all other employees
had agreed to the proposed changes and that it would have to administer two
health insurance plans if the fire fighters' union did not implement the
proposed changes. The arbitrator awarded the employer's proposal on this
issue, noting that only one of the comparators required its employees to
share in as small a proportion of medical costs as |
|
|
City of Arbitrator Nelson denied the Employer’s
cost-sharing proposal because of language problems in the proposal and lack
of sufficient negotiation. She stated,
“The Arbitrator will not redraft or redact the proposed language.” After a review of the evidence, the
arbitrator found that there was substantial room for bargaining on the
proposed changes. |
|
|
City of In this case, Arbitrator Lankford stated:
“I will award a cap to encourage employees to find alternatives to Kaiser
coverage with the following three limitations: First, the cap will be set at the average
insurance costs for comparable jurisdictions, i.e. 8% over the full family
cost of AWC Plan B, which will make the initial cap $552.26 (based on 2001
rates). Second, the cap will be set in
terms of the maximum cost of AWC Plan B, rather than running category by
category. Thus officers in the
employee/spouse or employee/child categories will be fully covered, and
employees in the three most expensive categories of AWC coverage will all
have an out-of-pocket cost of $53.81 if they choose to continue under the
current Kaiser coverage. Third, the
cap will take affect the first month following the employees' next
opportunity to change carriers.
Finally, nothing in the record suggests that the comparable cities
split premium increases with their police employees, so the AWC Plan B plus
8% cap will increase in subsequent years as the cost of AWC PIan B increases.”
|