IN THE MATTER OF ARBITRATION )
) OPINION AND AWARD
BETWEEN )
) OF
TEAMSTERS LOCAL 524 )
) GEORGE LEHLEITNER
v. )
)
KITTITAS COUNTY ) NEUTRAL ARBITRATOR
)
(INTEREST ARBITRATION) )
)
________________________________)
HEARING: June 5, 2003
BRIEFS RECEIVED: June 30, 2003
NEUTRAL ARBITRATOR: George Lehleitner
4702 S.W. Scholls Ferry Rd., #334
Portland, Oregon 97225
PARTISAN ARBITRATORS: Anthony F. Menke for Kittitas County
Wayne Johnson for Teamsters Local 524
REPRESENTING THE UNION: Rocky L. Jackson, Attorney at Law
REPRESENTING THE COUNTY: Michael R. McCarthy, Attorney at Law
I. INTRODUCTION
This case involves an interest arbitration dispute submitted by the parties to a tripartite
panel consisting of Neutral Arbitrator George Lehleitner and Partisan Arbitrators Anthony F.
Menke for Kittitas County (County) and Wayne Johnson for Teamsters Local 524 (Union).
A hearing was held before the Panel in Ellensburg, Washington on June 5, 2003, The
County was represented by Rocky L. Jackson, Attorney at Law, and the Union by Michael R.
McCarthy, Attorney at Law. At hearing both sides were afforded an opportunity to present
documentary and testimonial evidence and to cross examine witnesses, as necessary.
The parties agreed to submit simultaneous post hearing briefs to the Arbitration Panel.
The briefs were received by the Neutral Arbitrator on June 30, 2003.
I conferred by telephone conference call with the Partisan Arbitrators on July 28, 2003. It
was agreed at that time with the concurrence of the parties to hold this matter in abeyance for a
period of time so that the Partisan Arbitrators could communicate with the parties concerning the
possibility of a mutually acceptable resolution. Unfortunately, notwithstanding a good faith
effort by both sides, the parties were unable to come to an agreed upon resolution. Consequently,
I conferred with the Partisan Arbitrators again on August 22, 2003 and received their input. I
wish to thank both of them for their excellent cooperation and input, which I found extremely
helpful in arriving at a decision.
II. ISSUES IN DISPUTE
The contractual issues in dispute are Wages and Health Insurance.
III. THE STATUTORY CRITERIA
The undersigned arbitrator was selected in accordance with RCW 41.56, et seq.
The criteria for making a decision is set forth in RCW 41 .56.465 as follows:
RCW 41.56.465. Uniformed personnel-Interest arbitration panel-Determinations-Factors
to be considered.
(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)(l) For employees listed in RCW 41.56.030(7)(a) through (d),
comparison of the wages, hours, and conditions of employment of personnel
involved in the proceedings with the wages, hours, and conditions of employment
of like personnel of like employers of similar size on the west coast of the United
States.
(d) The average consumer prices for goods and services, known as the
cost of living.
(e) Changes in any of the circumstances under (a) through (d) of this sub-
section during the pendency of the proceedings; and
(f) Such other factors, not confined to the factors under (a) through (3) 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.
(2) Subsection (l)(c) of this section may not be construed to authorize the panel
to require the employer to pay, directly or indirectly, the increased employee
contributions resulting from chapter 502, Laws of 1993 or chapter 517, Laws of 1993 as
required under chapter 41.26 RCW. [1995 c 273 §2; 1993 c 398 § 3.]
IV. BACKGROUND
The Union represents a bargaining unit consisting of Deputies, Captains, and Sergeants
employed by the Kittitas County Sheriffs Department.
The County is located on the east side to the Cascade crest in central Washington. It has
a population of 34,800 as of 2002.
Issue #1- WAGES
The predecessor collective bargaining agreement expired on December 31, 2001. Both
sides are proposing a three (3) year agreement with wage adjustments on January 1, 2002,
January 1, 2003, and January 1, 2004.
Under the current salary schedule Patrol Officers earn $3,169.00 per month plus a
longevity premium ranging for $32.50 to $85.00 per month after eight (8) years of service.
Captains and Sergeants earn $3,394.00 and $3,689.00 respectively per month plus the applicable
longevity premium after one (1) year in grade.
A. The Union
The Union proposes retroactive wage adjustments of 4.3% effective January 1,
2002 and January 1, 2003, and a 4.3% adjustment effective January 1,2004.
The Union’s arguments are summarized as follows:
(1) The County is not claiming an inability to fund the Union’s modest wage
proposals. Consequently, if the Union’s wage proposal is supported by the factor
of comparability as well as other applicable criteria, it is incumbent upon the
Arbitration Panel to award it.
(2) The Union produced convincing evidence that low wages and benefits paid by
the County to bargaining unit employees have created a serious turnover problem
in the Sheriffs Department. For instance, the credible testimony of former and
current employees of the Sheriffs Department established that they either already
left or are contemplating leaving for better paying positions in the local labor
market because of substandard wages and benefits. In this regard both the City of
Ellensburg Police Department and the Central Washington University (CWU)
Security Department provide superior wages and benefits for less demanding
work.
(3) The factor of comparability favors the Union’s wage proposal. Even if the
arbitration panel adopts the County’s methodology for doing wage comparisons
(i.e., the County’s preferred comparator jurisdictions and the factoring in of the
County’s proposed wage adjustments), it is apparent that 2002 County wages lag
significantly behind the average wage of the comparator jurisdictions. More
specifically, using the County’s own analyses as described above, wages for top
step police officers lag behind the comparator average from 9.3% to 20.8%’
depending on years of service. If, on the other hand, the Union’s analysis is used,
top step officers in Kittitas County are 1 1.48% below average. Moreover, when
one calculates “real hourly wages” (i.e., hourly pay for time worked, including
longevity pay), it is apparent that police officers in this County lag significantly
behind their peers in the comparator jurisdictions, particularly with respect to
younger officers. In sum, it is obvious that a significant amount of “catch up” is
required to bring Kittitas County officers up to an acceptable wage level based on
the factor to comparability.
(4) Using the County’s proposed analysis (i.e., County preferred comparators and
factoring in the County’s proposed wage adjustments), County wages continue to
lag significantly below the average of the comparator jurisdictions in 2003 and
2004. More specifically, even using the County’s methodology, which indulges
every assumption in its favor, top step deputy wages remain from 5.6% to 7.9%
below average in 2003 and from 5.2% to 6.6% below average in 2004.
(5) The Arbitration Panel should summarily reject the County’s unseemly
argument that since deficits existed between Kittitas County and the comparator
jurisdictions prior to 2001 , such deficits should continue in perpetuity. Simply
stated, there is no arbitral precedent for such an argument, particularly where, as
here, it is apparent that the County has the financial wherewithal to pay a
competitive wage. The statutory scheme is designed to provide a competitive
(i.e., comparable) wage to all employees as long as the unit of government has the
financial ability to pay such a wage.
(6) Under the facts of this case it may not be necessary to decide whether the six
(6) agreed upon comparators proposed by the County (Stevens, Whitman,
Okanogan, Douglas, Jefferson and Pacific Counties) or the expanded list (adding
Franklin and Chelan Counties) are most appropriate. This is so because an
analysis of either set of comparators reveals that Kittitas County lags significantly
behind in wages and benefits. Stated differently, comparisons of Kittitas County
wages and benefits to either set of comparators supports the Union’s proposals.
(7) If the Arbitration Panel finds it necessary to conduct a comparability analysis
(i.e., decide which of the proposed comparators are most appropriate), the Union’s
proposed comparators should be selected. This is so because they fall within an
appropriate population range (50% to 200% of the target jurisdiction), they are in
the same geographic area and there are enough jurisdictions to do a meaningful
comparison. Moreover, the additional comparators proposed by the Union
(Franklin and Chelan Counties) are demographically similar to Kittitas County
and in the case of Chelan County shares a border. However, should the
Arbitration Panel determine that it is not necessary to decide which jurisdictions
provide the most appropriate comparators, the Panel should specifically indicate
that it has not determined whether Franklin and/or Chelan Counties are
appropriate comparators.
(8) If the Arbitration Panel bases its comparisons on the Union’s expanded list of
comparable jurisdictions, the disparity becomes even greater. More specifically,
the Union’s wage comparisons, based on “real hourly wages,” including longevity
pay, reveal that Top Step Deputies in Kittitas County as of January 1,2002 are
8.52% to 14.35% behind, depending on their years of service. Similarly,
Sergeants are 7.67% to 9.8% below the average of the comparator jurisdictions.
Even after the wage adjustments proposed by the Union are factored in, the gap
with respect to most employees narrows by less than one-third.
(9) Interest Arbitrators routinely consider turnover and competition in the local
labor market. As previously discussed, the County is already experiencing
significant problems with turnover. The problem will only be exacerbated if
something is not done to improve non competitive wages and benefits.
B. The County
The County proposes that effective January 1,2002 wages for all bargaining unit
employees will be increased by 3.5% in 2002,3.0% in 2003 and 3.0% in 2004.
The County’s arguments are summarized as follows:
(1) Prior to analyzing the contract issues in dispute, the Arbitration Panel must
decide which comparables are most appropriate. In the County’s view, the six (6)
comparator jurisdictions agreed upon by both sides (Whitman, Stevens, Douglas,
Okanogan, Jefferson and Pacific Counties) are the most appropriate comparators.
This is so for the obvious reason that both sides have agreed these jurisdictions are
appropriate and because there are enough of them to do a meaningful comparison
without adding Franklin and Chelan Counties to the mix. Moreover, all of the six
(6) agreed upon comparator jurisdictions fall within the same population range
and share similar assessed values. With respect to the Union’s attempt to add
Chelan County to the mix, this suggestion should be rejected because its
population is twice that of Kittitas County and its assessed valuation is more than
double.
(2) The Union’s attempt to compare Kittitas County wage rates and benefits to
those provide by CWU and the City of Ellensburg should be summarily rejected.
Interest Arbitrators routinely reject proposed comparators that are not similar (i.e.,
Counties to Cities or universities) even if they are in the same labor market.
(3) While it may be true that wage rates in Kittitas County are below the average
of the comparator jurisdictions, the fact remains that the County’s wage proposal
maintains the County’s relative ranking from a historical perspective. As of 2001,
the deputies were approximately $198 below the average of the comparator
jurisdictions. With the County’s proposal of 3.5% in 2002 and assuming a 2.7%
increase in unsettled jurisdictions, the gap is reduced to $192.00. Factoring in the
County’s proposed 3% adjustments in 2003 and 2004, the deficit is further
reduced to $188 and $182 respectively, thereby maintaining the County’s relative
ranking among the comparator jurisdictions. Moreover, if the arbitrator factors in
longevity premiums provided to Kittitas County officers, the disparity is even
smaller.
(4) With the exception of the 2000 contract year during which Sergeants and
Detectives received mutually agreed upon special adjustments at the expense of
Line Deputies, the bargaining history since 1995 reveals a consistent pattern of
wage adjustments in the 3.0% to 3.5% range. The County’s proposal of a 3.5%
adjustment in 2002 and 3.0% in 2003 and 2004 is consistent with this pattern.
(5) Another statutory factor the Arbitration Panel must consider in arriving at an
award is the cost of living as measured by the Consumer Price Index (CPI). The
annual increase in the CPI from 2001 was 2.7%, for 2002 it was 1.4% and the
average of the first four (4) months in 2003 was 2.8%. Clearly, the County’s
proposed wage adjustments of 3.5%, 3.0% and 3.0% during this period compares
favorably with the CPI.
(6) The wage adjustments offered by the County compare favorably with
settlements the County has reached with other bargaining units during the term of
this Contract. For instance, in 2001, all County bargaining units with the
exception of the Appraisers received no wage increase. In 2002, settlements with
other Kittitas County bargaining units ranged from 2.7% to 3.1%. Finally, in
2003 Kittitas County settlements range from a low of 1 .O% to a high of 2.5%.
Clearly, the County’s proposed adjustments compare favorably with these
settlements.
(7) The County’s proposal also compares favorably with settlements reached by
the six (6) comparable jurisdictions agreed upon by the parties. These settlements
range from a low of 1.0% to 5.0% as a high for 2002. For 2003 of those
jurisdictions settled the range was from 1.0% to 4.0%.
C. Analysis
The analysis of the Neutral Arbitrator is based on an application of the statutory
criteria to the facts of this case. What follows is a summary of the focal points in that
analysis.
In my view this case lends itself to a straight forward analysis because no inability
to pay defense was raised and also because the comparables suggested by the parties,
while not identical, lead to similar conclusions.
At the outset, I agree with the Union’s suggestion that it is not necessary to decide
which comparables are most appropriate because whichever group is used the results are
substantially the same. For this reason, I will use the six (6) comparators agreed upon by
the parties and proposed by the County without making a determination whether Chelan
and Franklin Counties would also have served as appropriate comparator jurisdictions.
1. Comparability
Without question, comparability is one of the key determinants used by
Interest Arbitrators to determine appropriate wage adjustments. This is
particularly true where, as here, no evidence of an inability to fund a reasonable
wage adjustment was produced.
I have no intention of going into a detailed analysis of the comparability
data because it is apparent to me that however the data is analyzed, wage rates in
Kittitas County lag significantly behind the average of the comparator
jurisdictions placing the County in a “catch up” mode. I will, however, in
fashioning an award err on the side of being conservative because, as will be
discussed elsewhere, my goal is to divert funds that could be allocated to wage
adjustments to improve the woefully deficient medical benefits provided by the
County to bargaining unit employees.
On a related topic, I will briefly address the County’s relative ranking
argument. Basically, the County argues that its wage rates have for some time
(apparently since at least 1995) lagged behind the average of the comparator
jurisdictions and its wage proposal does nothing more or less than maintain its
relative ranking. That argument would be far more persuasive were there
evidence on the record that the County was unable, as distinguished from
unwilling, to fund reasonable wage adjustments designed to bring Kittitas County
wage rates more in line with the average. This is particularly true where, as here,
demographic factors such as population and assessed valuations suggest Kittitas
County should be more in line with the average of the comparator jurisdictions.
2. Cost of Living
It is true that the cost of living as measured by the CPI for the relevant
time period (i.e., 2002-2004) is generally consistent with the County’s wage
proposal. On the other side of the coin, what we are really talking about in this
case is the amount of “catch up” needed above the cost of living to bring Kittitas
County officers in line with their counterparts.
3. Other Factors
Another factor traditionally considered by Interest Arbitrators involves
supply and demand in the local labor market. In this case the supply and demand
factor pertains more to the medical insurance benefit than it does to wage rates.
Nevertheless, low wage rates compared to other local labor market employees
such as CWU and the City of Ellensburg were cited as a factor for Kittitas County
deputies taking jobs with these employers. Suffice it to say, while the County is
quite correct in arguing that CWU and the City of Ellensburg are not appropriate
comparators, the fact remains that Kittitas County is experiencing very real
retention problems because of its low wage rates. This factor supports the
Union’s more generous wage proposal.
One final factor cited by the County in support of its wage proposal
involves internal parity. The County contends it would be inappropriate for the
Arbitration Panel to award wage adjustments that are out of line with settlements
previously made with other Kittitas County bargaining units. I will take this
factor into account in fashioning my award.
4. Summary
As previously indicated, an application of the statutory criteria to the facts
of this case tend to support a significant “catch up” award in line with the Union’s
proposal.
On the other side of the coin, I am even more concerned with the amount
of out-of-pocket expenses officers have to pay to maintain full family medical
benefits than I am with below average wages. Consequently, I will award
conservative wage adjustments with the intent that dollars that would otherwise
go to wage adjustments will be allocated to medical insurance.
D. AWARD
(1) Effective January 1, 2002 retroactively adjust all bargaining unit salaries by
3.5%.
(2) Effective January 1,2003 retroactively adjust all bargaining unit salaries by
3.0%.
(3) Effective January 1,2004 adjust all bargaining unit salaries by 3.0%
Issue #2 - Article 25 - MEDICAL, DENTAL, VISION AND LIFE
INSURANCE BENEFITS
Under the terms of the predecessor agreement, the County provides medical,
dental, vision and life insurance benefits pursuant to plans provided by the Association of
Washington Counties Insurance Trust. With respect to medical coverage, the County
contributes up to $420.60 for medical premiums with the understanding that effective
January 1, 2001 any increase in premium based on the least expensive plan offered will
be split by the County and the Union with the increased amount becoming the new cap.(1)
Premiums are based on a step rate system but contributions are pooled for employees not
requiring the full contribution amount. With respect to dental, vision and life insurance
benefits, the County's contribution is capped at the cost of employee only coverage.
______________
1 Apparently the new cap is $426.48 (see, Union Exhibit AA, page 3)
A. The Union
The Union proposes to amend Article 25 to read as follows:
“Article 25 - Medical, Dental, Vision, Life and Retirees Benefits
25.1 Effective January 1, 2002, and each month thereafter, the Employer shall
pay into the following named trusts for each employee who is covered by
this agreement compensated for eighty (80) hours or more in the previous
month the following:
25.1.1 Medical Plan: Contribute the sum of $539.80 into the Washington
Teamsters Welfare Trust, per month for benefits under JC28XL Plan.
(Includes long-term disability, short-term disability, and twelve (12) month
waiver).
25.2 Dental Plan: Effective January 1, 2002, the Employer shall pay the full
cost of dental coverage, the sum of $87.90 per month for benefits under
the Washington Teamsters Benefit Trust Dental “RC Plan.”
25.3 Vision Plan: Effective January 1, 2002, the Employer shall pay the sum of
$11.35 per month for benefits under the Washington Teamsters Benefit
Trust Vision Plan.
25.4 Effective January 10, 2002, the Employer agrees to pay the Washington
Retirees Welfare Trust for each employee who received compensation for
eighty (80) hours or more in the previous month the following: the sum of
$39.85 per month for continued benefits under the “RWT PLUS.”
25.5 Maintenance of Benefits. The Union agrees that during the life of this
Agreement it will not request additional benefits, and the Employer agrees
to pay any increase in contribution rates as required by the Trustees to
maintain these benefits. Payments required under any of the foregoing
provisions shall be made on or before the tenth (1 0th) day of the month.
[2003 costs are listed on Attachment A.]
25.6 Acceptance of Trusts: The Employer hereby acknowledges that it has
received true copies of the Washington Teamsters Welfare Trust and the
Western Conference of Teamsters Pension Trust, and shall be considered a
party thereto. The Employer further agrees that the Employer-Trustees
named in said trusts, and their successors in trust are and shall be its
representatives and consents to be bound by the actions and determination
of the trustees.”
The Union’s arguments are summarized as follows:
(1) By any objective measure, the current situation at Kittitas County with respect
to medical insurance is intolerable and must be changed. For instance, the
credible testimony established that when the amount paid for health insurance
premiums is factored in, the income of at least three (3) deputies is so low that
they are eligible for Medicaid coupons to cover their children’s medical care.
Equally shocking, deputies requiring full family coverage now pay as much as
$708.19 out-of-pocket to cover their health insurance costs (Union Exhibit GG).
As a result, many members of the department are unable to fully cover their
families or they have had to seek Medicaid assistance.
(2) No other County among the comparator jurisdictions proposed by the County
has done what Kittitas County seeks to do; freeze its health and welfare
contributions for three (3) years notwithstanding a dramatic increase in premiums
(County Exhibit Binder - Medical Insurance, pages 2 and 3). The end result of
the County taking this position has been that in 2003 officers in Kittitas County
requiring full family insurance have to pay as much as $746.35 out-of-pocket per
month while the County pays no more than $426.48 per employee, per month.(2)
____________
2 Pooling as of March 2003 adds $56.90 to the County’s contribution to bargaining
unit employees requiring dependent coverage.
(3) As previously discussed, the Union’s modest wage demand of 4.3%
represents less than half of the deficit between wage rates in Kittitas County and
the average of the comparable jurisdictions. These deficits represent substantial
savings to the County over the term of the three (3) year agreement. The County’s
own internal documentation reveals that these savings are equal to or greater than
the total employee contributions to medical premiums in 2002 and 2003. This
being so, the Union proposes that these wage savings be funneled into medical
benefits, i.e., they should be used by the County to provide fully paid medical
coverage for all bargaining unit employees.
(4) Any rational review of the comparability data shows that over the term of the
agreement, i.e., from 2002 - 2004, Kittitas County officers pay far more for health
insurance than their counterparts in the comparator jurisdictions. For instance, a
review of the County’s preferred comparators for 2002 shows that a Kittitas
County employee paid from $222.97 to $300.16 more per month for medical
insurance (Union Exhibit BB).(3) A similar conclusion can be discerned by
reviewing the information under the Medical Insurance Tab, page 2, in the
County’s binder, which shows that Kittitas County deputies paid $261.70 more
than the average of their counterparts in the comparator jurisdictions.
______________
3 The difference between $222.97 and $300.16 is created by pooling.
(5) Unfortunately, the disparities get dramatically worse in 2003. Union Exhibit
DD shows that Kittitas County deputies now pay a whopping $441.60 more per
month than deputies in the comparator jurisdictions, while the corresponding
County analysis reveals an even greater disparity of $515.74 per month.
Moreover, both parties’ analyses show that while Kittitas County deputies pay
more, the County pays significantly less. Suffice it to say, this situation is
intolerable and must be corrected.
(6) The County’s attempt to make the Union responsible for its LEOFF I liability
is illegal. The County is obligated under RCW 41.26.150 to furnish retiree health
and welfare benefits to so called LEOFF I retirees, i.e., those who retired prior to
October 1, 1977. The important point is that the County obligation to LEOFF I
retirees arises completely out of the applicable retirement statute, RCW 41.26, et
seq. It is well established that it is illegal to bargain regarding subjects covered by
the LEOFF retirement system or to submit those subjects to interest arbitration
inasmuch as LEOFF I retirees are no longer members of the bargaining unit.
Firefighters v. City of Seattle, 93 Wn App 235 (1998), Allied Chemical & Alkali
Workers Local 1 v. Pittsburgh Plate Glass Co., 404 US 157, 30 LEd 2d 341
(1971). Under these circumstances, the County is barred from attempting to
bargain concerning the LEOFF I issue.
(7) The Arbitration Panel should award full retroactivity both as to wages and
health care benefits. If the award is not made retroactive, the County will have
achieved, through delay, the very thing it does not deserve; namely a freezing of
its meager $476.36 health and welfare contribution. If the interest arbitration
process is to have any meaning, the Panel’s health benefits award must be made
retroactive to 2002.
B. The County
The County proposes to retain current contract language except that effective
January 1, 2002 its monthly contribution toward medical premiums for each bargaining
unit employee will be $426.48, subject to pooling. Under the County’s proposal, it
continues to pay the full cost of employee only coverage for dental, vision and life
insurance under WCIF.(4)
______________
4 Except as noted, the only difference from the language of the predecessor
agreement pertains to the reference to the possibility of changing to the Teamsters JC28XL
Medical Plan. This reference is omitted from the County’s proposed language.
The County’s arguments are summarized as follows:
(1) The Union’s attempt to force the County to change from the WCIF Plan to the
Teamsters JC28XL Plan should be rejected for a number of reasons. First,
Kittitas County employees are on the WCIF Plan. Under these circumstances, one
(1) bargaining unit should not be permitted to drive the determination of an
employer’s medical plan. In this regard, the evidence suggests that removal of
one (1) group of employee from WCIF could result in increased premium costs
for the County and the remaining employees. Second, no evidence was presented
by the Union suggesting that the County’s obligations with respect to LEOFF I
retirees could be accommodated if the County changed from WCIF to the
Teamsters JC28XL Plan. The County currently is obligated to provide full
coverage until death to 11 LEOFF I retirees. Were the County to leave the current
plan, WCIF would cancel coverage for the LEOFF I retirees leaving the County
with open-ended liability. The parties have attempted to bargain this issue in the
past but have been unable to come to a resolution. Finally, the history of the
bargaining unit is that despite lengthy negotiations on the issue, the parties have
always agreed to stay with the WCIF Plan.
(2) The next question for the Arbitration Panel pertains to the amount of the
County’s contribution. A breakdown of the comparability data reveals that of the
six (6) agreed upon comparators, three (3) have Teamster plans and the other three
(3) have non Teamster plans. Only one (1) of the comparables, Pacific City, has
the JC28XL Plan the Un ion is proposing.
The only way to reasonably compare medical insurance is to compare
those counties with the same or similar plans. Of the six (6) agreed upon
comparables submitted by the County, two (2) have the same or similar plans to
Kittitas County; namely, Whitman and Okanogan Counties. Douglas County is a
hybrid inasmuch as it does not have a Teamster plan but it uses a composite rate.
Of these three (3) Counties, the average for employee only medical insurance paid
by the County is $382.00 (Employer Binder; Medical Insurance, page 3). The
average out-of-pocket from employee only coverage is $115.75 With respect to
full family coverage for the same three (3) jurisdictions (Whitman, Okanogan and
Douglas Counties), the employee out-of-pocket costs for 2003 average $513.11.(5)
The average would be even higher if Franklin County at $661.26 out-of-pocket for
full family insurance were factored in (Union Exhibit CC).
____________
5 I have used the figures in the County’s binder. Those figures are slightly different
than the figures cited in the County’s brief.
Comparisons between these three (3) jurisdictions and Kittitas County
show that the latter has an employee only cost of zero (0) for 2003 and a full
family out-of-pocket of $746.35 compared to a range of $315.00 (Douglas
County) to $633.00 (Whitman County) for the comparable jurisdictions.
(3) It is true that the full family out-of-pocket for Kittitas County is higher than
that of the comparator departments but the history of settlements between the
parties establish the basis for this differential. In this regard, commencing in 2001
the County began moving toward a fixed contribution of $450.00 for all County
bargaining groups. By 2002 all groups were fixed at $450.00 and this holds true
for 2003.
(4) A review of the bargaining history between the County and its deputies
establishes that this County has historically paid for employee-only coverage with
only minimal contributions to full family coverage and pooling commencing in
2000. The County’s proposal is in line with what the parties have historically
bargained with respect to dependent coverage.
(5) It is true that increases in premium costs have skewed the percentage out-of-
pocket costs paid by bargaining unit employees, which currently stand at 61%.
However, Whitman County at 57% and Okanogan County at 45% are also
relatively high. Moreover, based on what the County contributes for dependent
coverage for other County employee groups, the proposed contribution level is
appropriate and should be awarded.
C. Analysis
The Neutral Arbitrator concurs with the Union’s characterization of the current
situation with respect to health care benefits as “intolerable” and I would add the word
“troubling.” To be blunt, while I recognize that sharply escalating health insurance
premium costs are making it difficult for employers to provide fully paid, quality health
coverage for their employees, I am shocked by the out-of-pocket premium costs paid by
Kittitas County officers (and some others) for full family coverage. I am also struck by
the disparity in out-of-pocket costs required for full family coverage when a step system
is utilized as distinguished from a composite rate. Clearly, the latter makes more sense
for employees requiring full family coverage.
1. Ability to Pay
Inasmuch as no evidence of an inability to pay as distinguished from an
unwillingness to pay was produced, this criterion is not a factor in arriving at an
award. Moreover, as previously discussed, I have taken a conservative approach
toward wage adjustments because I want all available dollars to be allocated
toward improving health care coverage. Finally, as the Union correctly observes,
this County has over the last three (3) years realized substantial savings by
maintaining a very low cap on premiums it pays for health insurance based on an
employee-only coverage approach. The unfortunate end result of this approach
from the employee’s perspective has been a dramatic increase in the amount they
are required to pay for full family coverage. In my view, basic fairness dictates
that at least some of those savings must be used to provide better health coverage
for all bargaining unit employees.
2. Comparability
As was the case with wages, I will use the six (6) comparators proposed by
the County (i.e., Whitman, Stevens, Okanogan, Douglas, Jefferson and Pacific
Counties) without attempting to determine whether the two (2) additional
comparators proposed by the Union would also be appropriate. What I will not
do, however, is adopt the County’s suggestion that I eliminate three (3) of the
comparators from its own list (Pacific, Stevens and Jefferson Counties) of
comparable jurisdictions because they happen to have Teamster plans with
composite rates and lower premiums. Simply stated, it would be grossly unfair to
allow the County to manipulate the comparative date in its favor by eliminating
from consideration those jurisdictions that pay most of the premiums for their
employees. If anything, the County should take a cue from the fact that Teamsters
or other plans with a composite rate structure generally cost less and provide a
better benefit for bargaining unit employees requiring full family insurance. In
this regard it is important to understand that since most employees need (or soon
will need) full family coverage, a system whereby its contribution is based on
employee-only coverage is fatally flawed.
A comparability analysis based on the six (6) agreed upon jurisdictions
proposed by the County already establishes that Kittitas County is out of step
when it comes to insurance. While there are some relatively minor variations
depending upon whether one uses the Union’s or the County’s analysis and factors
in the effect of pooling, the fact remains that in 2002 Kittitas County deputies paid
from $222.97 to $300.16 more for health care than the average paid by deputies in
the comparator jurisdictions (Union Exhibit BB and Employer Binder under
Medical Insurance, Tab 2). Moreover, as the Union correctly observes, the
disparities got dramatically worse in 2003 with Kittitas County deputies now
paying out-of-pocket on average a whopping $441.60 more than their counterparts
in the comparator jurisdictions (Union Exhibit DD).(6) All the while, the share of
the premium amount paid by the County over this period actually declined.
Suffice it to say, the situation as it stands is intolerable and must be corrected.
___________
6 The County’s comparability data, as revised at hearing, which include the effect of
pooling, show that Kittitas County deputies paid $438.62 more on average than their counterpart
in the comparator jurisdictions (Employer Binder under Medical Insurance, Tab 2)
3. The Current Plan versus the Teamsters Plan
The County proposes to retain the existing plan while the Union wants to
adopt the Teamsters JC28XL Plan.
I would be less than candid were I to say that I am not tempted to award
the Teamsters JC28XL Plan as proposed by the Union. After all, it provides an
equivalent benefit to bargaining unit employees and it comes in at a substantially
lower cost.
On the other side of the coin, the County’s concerns with respect to open-
ended liability for LEOFF I retirees in the event it changes from the current plan
to the Teamsters JC28XL Plan appear to be justified. In this regard, while it is
true that the LEOFF I obligation is not per se a proper issue for bargaining that is
really not the point. The reality is that the County has a financial obligation to its
LEOFF I retirees and it is fully justified in taking that obligation into account in
deciding which insurance plan best meets its overall needs. Inasmuch as it is
undisputed that LEOFF I retirees would not be covered under the JC28XL Plan, I
am unwilling to award a change in plans that would leave the County with this
open-ended liability. Moreover, as the County correctly observes, removing the
Sheriffs Department from the existing plan could result in increased premium
costs for other County bargaining units.
While I will not award a change in plans, I feel compelled to point out the
obvious. Inasmuch as retention of the more expensive County plan is going to
cost the County more in the future, it would behoove the County to leave no stone
unturned in searching for a composite rate plan that satisfies its overall needs.
Coincidentally, it may well be in the long-term interest of the employees to
consider a less expensive plan that will serve the dual purpose of providing
adequate insurance coverage while at the same time minimizing employee out-of-
pocket costs.
4. The Relative Ranking Argument
As previously discussed under the “Wages” section of my award, the
County’s relative ranking argument, i.e., that its proposal is consistent with what it
has always done with insurance, is not persuasive. It is true that under certain
circumstances a legitimate goal of a comparative analysis in an interest arbitration
is to maintain the relative ranking of the target jurisdiction as compared with the
other jurisdictions in the comparator grouping. Stated a little differently, among
any group of comparators someone has to be first and someone has to be last.
Thus, leaving aside other factors, the goal should be for the target jurisdiction to
maintain its historical, relative ranking among its peers.
The problem with too slavish an adherence to the relative ranking
approach is that it discounts other relevant factors such as ability to pay and
related demographic factors, i.e., population, cost of living, labor market, assessed
valuations, etc. The reality is that there are typically valid reasons based on these
factors for certain jurisdictions to rank first, last, or somewhere in the middle. In
this case, inasmuch as the County produced no evidence of an inability to pay and
other demographic factors do not support a sub par relative ranking, its argument
is not persuasive.
5. Retention
The Union produced persuasive evidence establishing that deputies have
either left or are contemplating leaving the Department largely because of the
insurance issue. To be blunt, this is where “the rubber meets the road.” If a
department is losing good deputies because its compensation package is
inadequate, it’s time to make a change.
6. Summary
The Union argues with considerable merit that to be meaningful, my
award with respect to health insurance as well as wages must be made retroactive.
Otherwise, according to the Union, the County will achieve through delay the very
thing it does not deserve, i.e., the freezing of its meager $476.36 health and
welfare contribution.
From my perspective, it is impractical, if not impossible, to recapture
through retroactivity the amount of out-of-pocket deputies have had to pay over
the past three (3) years. On the other hand, I fully intend to use the savings the
County has enjoyed by limiting its insurance contributions over the last three (3)
years to prospectively improve the insurance benefit for bargaining unit members.
More specifically, my goal will be to increase the County’s contribution level for
full family coverage from approximately 38% to 90%. This will be done within
the framework of the existing Health Insurance provision that includes the pooling
concept.
7. Award
(A) Effective September 1,2003 the County’s contribution toward
medical, vision, dental and life insurance shall increase to 90% of the
premium cost for full family coverage. The County’s contribution will be
subject to pooling.
Respectfully submitted this 29th day of August, 2003
George Lehleitner
Neutral Arbitrator
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