INTEREST ARBITRATIONS

STATE OF WASHINGTON
PUBLIC EMPLOYMENT RELATIONS COMMISSION

IN RE: INTEREST ARBITRATION ) PERC Case NO.: 22956-1-08-521
BETWEEN:                    )
CITY OF ELMA,               ) 
                            )
           Employer,        )
                            )
      and                   ) OPINION, FINDINGS AND AWARD
 FRATERNAL ORDER OF POLICE, )
 OLYMPIC MOUNTAIN LODGE 23, )
                            )        
          Union.            ) 
                            
                            
                            
NATURE OF PROCEEDINGS

    This case resulted from an impasse reached by the
parties in their negotiations of a collective bargaining
agreement for the period January 1, 2008, through December
31, 2010. During the period covered by the last collective
bargaining agreement, bargaining unit employees were represented
by Teamsters Local 252. That Union was succeeded
by the Fraternal Order of Police, Olympic Mountain Lodge
23, which then bargained to impasse with the Employer.

    The Union is represented by Michael E. Coviello,
Associate General Counsel, FOP. The Employer is represented
by Bette Meglemre of Puget Sound Public Employers.

    The parties selected Michael E. de Grasse to act as
sole, neutral arbitrator, after waiving,thei.r right
to a three-member panel of arbitrators. By agreement, a
hearing was scheduled and held in Elma on March 19, 2009.
Testimony was taken under oath or affirmation, and exhibits
were received. A verbatim transcript of the hearing
was prepared and furnished to the arbitrator.

    At the hearing, the parties stipulated that Michael
E. de Grasse was to act as the sole arbitrator in determining
all issues presented. The parties stipulated that the
case is properly before the arbitrator, and agreed that
there were no objections on grounds of procedural or
substantive arbitrability.

    At the conclusion of the hearing on March 19th, the
parties agreed to submit briefs in lieu of oral closing
arguments. The briefs were submitted in accordance with
the parties' schedule, and received by the arbitrator on
May 18, 2009. On that day this case was deemed submitted
for a decision. This decision is the determination of
the issues in dispute, based on the evidence presented,
pursuant to RCW 41.56.450.


ISSUES PRESENTED

1. Whether a new provision should be established
to require the Employer to evaluate each member of the
bargaining unit annually on a form mutually agreeable to
the Union and Employer. (Article 11)
2. Whether a procedure should be established for
removal of certain disciplinary records from an officer's
personnel file. (Article 11)
3. Whether an officers' bill of rights should be
adopted. (Article 14 )
4. How much should wages be increased during the
three-year period of the parties' anticipated collective
bargaining agreement? (Article 22, Appendix A)
5. Whether the shift differential should be increased.
6. Whether longevity pay should be increased.


FACTS AND CONTENTIONS

    The City of Elma is a non-suburban town in Grays
Harbor County, Washington. According to the Employer, its
population is 3125; the Union has it at 3142. Elma
employs five patrol officers and one lieutenant, a11 of
whom are in the bargaining unit. The chief also works
on the street, as needed, but is not a member of the
bargaining unit. Before the FOP became the collective
bargaining representative here, the Employer had a
three-year agreement with Teamsters Local 252.

    The last collective bargaining agreement between the
Employer and its police officers expired on December 31,
2007, about three weeks after the FOP was certified as
the Teamsters' successor. Negotiations ensued, an impasse
reached, mediation failed and the case was referred for
arbitration of the unresolved issues. The parties have
agreed that resolution of outstanding issues will be
retroactive to January 1, 2008.

    The Public Employees' Collective Bargaining Act sets
forth standards or guidelines to aid the arbitrator's
decision making. RCW 41.56.465. Pertinent here, are
the "cost of living," and the wages, hours and conditions
of "like personnel of like employers of similar size on
the west coast of the United States." RCW 41.56.465(1)(e)
and (2). The latter guideline entails formulation of
a list of comparable employers. Characteristics of the
comparables or comparators are then examined in the
analysis of the parties' positions.

    Here, the parties sharply differ concerning determination
of the cost of living.  They diverge little in their choice
of comparables, while greatly diverging in the conclusions
derived from purportedly comparable data.

    As to the noneconomic matters, the Union seeks more
procedural protection and process concerning performance
evaluation and discipline. The Employer contends that all
the requested process is undue given the absence of any
real problems, and the small police department. With
respect to economic issues, the parties agree that a wage
increase is needed. The Employer seeks a cost of living
increase, only, seeing no disparity between current compensation
and that of comparable employees. The Employer
rejects the Union's c1aim for a market adjustment in
wages. Notwithstanding the parties' diverging contentions
and conclusions concerning compensation, the Employer
asserts no inability to pay.

STATUTORY STANDARDS

    As noted above, two statutory standards or guidelines
are germane: cost of living and comparable employers.
Concerning the cost of living, the Employer argues that
the All Cities CPI-U should govern. It asserts that this
index has been used by this Employer in collective bargaining
for about seventeen years. The Union responds that the
Employer draws unsupported conclusions from this index.
Additionally, the Union cites regiona1 indices for
Seattle-Tacoma-Bremerton and Portland-Salem. While the
Union correctly notes that consideration of regional
differences in the cost of 1iving is mandated by statute,
other factors are given more weight in the following analysis.

    With respect to comparable employers, the parties'
formulations overlap. The Employer lists Forks, Granite
Falls, La Center, McCleary, Montesano and Raymond. The
Union lists the same towns, and adds Ridgefield. Selection
criteria used by the Employer are population, geographic
proximity and assessed valuation. These criteria were
used by the Union, along with three others:  total number
of officers; officers per 1000 people; and crimes per
officer. Based on these criteria, the Union found all six
towns listed by the Employer to be comparable, and added
Ridgefield and Yelm. On the advice of its expert, the
Union deleted Yelm. Thus, the parties differ in their
choice of comparables with respect to only one employer.

    Viewing Ridgefield in the light of selection criteria
used by both parties, it should be excluded. Ridgefield's
population is 4015; the average population of the six towns
accepted as comparable by both parties is 2855. Elma's
population is 3125, or 3142. Ridgefield i s 104 miles from
Elma; the average distance of Elma from the six towns
accepted as comparable by both parties is 69 miles. The
assessed valuation of Ridgefield is $690,239,577; the
average assessed valuation of the six towns accepted as
comparable by both parties is $190,371,121. The assessed
valuation of Elma is $163,477,894. These variances between
Ridgefield and the other undisputedly comparable towns
militate against treating Ridgefield as comparable. There-
fore, the comparable employers in this case are Forks, Granite
Falls, La Center, McCleary, Montesano and Raymond.

ANALYSIS AND FINDINGS
                     
                     I
                     
    Whether to evaluate the performance of bargaining unit
employees is generally and traditionally a management
prerogative. Here, the Union adduced no deficiencies in
the collective bargaining re1ationship of the parties that
would be rectified by the elaborate evaluation requirement
it has proposed. None of the comparable employers has a
collective bargaining agreement requiring performance
evaluations. Based on the evidence, the Union's proposal
for performance evaluations should be rejected.

                       II
                       
    In conjunction with performance evaluations, the
Union proposed a process for removing records of certain
disciplinary actions from personnel files. While two
comparable employers (Forks and La Center) provide for
removal of disciplinary documentation, three do not
(McCleary, Montesano and Raymond). The employer proposed
as comparable only by the Union (Ridgefield) has no removal
provision. Granite Falls limits the period during which
it may use a written warning for further discipline; it
does not require removal. Clearly, the Union's proposal
gains little support from employers that it deems comparable.
As with its position on performance evaluations, the Union
offers no persuasive evidence of harm that would be remedied
by this proposal.

    In the Employer's view, the Union's proposal is
unnecessary. Additionally, the Employer contends that
removal of disciplinary records as would occur were the
Union's proposal accepted could impair both the Employer and
officers who would be benefited from a longer view of
disciplinary history.

    Based on the evidence, the Union's proposal for removal
of disciplinary records should be rejected.

                           III
                           
    The Union proposal for an officers' bill of rights
contains elaborate procedural requirements. Many of the
proposed requirements are designed to 1imit the time
during which a disciplinary investigation may be conducted.
With several exceptions, the Union's proposal would require
disciplinary investigations to be completed within 180 days
of the date the Employer is properly notified of the alleged
misconduct. Other provisions specify requirements governing
witness interviews and granting officers rights to present
rebuttal or mitigating evidence before the Employer makes
a final determination.

    In urging rejection, the Employer asserts char the
11 11 overwhelming regularion and protocol" is proposed in
the absence of any showing whatsoever that it is necessary,
practical or desirable." (Employer's Brief at 22) The
Employer notes that the current contract language provides
officers' rights. In its examination of comparable employers,
the Employer concludes that four have provisions like the
current agreement (Forks, Granite Falls, La Center and
Montesano), and two have none. Comparability analysis does
not support the Union on this question.

    The Montesano rights provision is closer to the Union's
proposal than is the language found in the Forks, Granite
Falls and La Center contracts. Those provisions are more 
like that found in the parties' last agreement. Moreover,
the Employer seems to be grounding its position on its
view of a national standard. (Tr. 21:15-25) The statutory
standards governing this case do not include national
standards in comparability analysis. Absent a stipulation,
consideration of national standards should be disallowed.
Based on the evidence and the above analysis, including
that which addresses the Union's other noneconomic proposals,
the Union's proposal for an officers bill of rights should
be rejected.

                       IV
                       
    Whether to increase wages is undisputed. Both parties
propose substantial raises to take effect during the 2008-2010
contract term. As noted above, the Employer does not plead
poverty. Thus, the question is how much?

    The Union argues for a base wage increase of: 6% on
1-1-08; 3% on 7-1-08; 6% on 1-1-09; and 5% on 1-1-10. The
Employer would reduce the seven-step pay grade classification
system to a five-step system. By compressing the steps
and increasing the base wage by 3% from step to step, the
Employer calculates a 1.5% increase over 2007. To this
increase, effective 1-1-08, the Employer adds 2.7% in
recognition of the increased cost of living. Then, effective
1-1-09, the Employer proposes an increase in the base wage
by 4%, and an increase of a like percentage on 1-1-10.

    Each party advances its view of the cost of living
in support of its position. The Employer relies on the
All Cities CPI-U, and proposes a 2.7% increase for 2008.
That index increased 2.7% from June 2006 to June 2007.
The Employer does not explain why it chose June 2006-
June 2007. Perhaps it used this period because that is
the period used to compute cost of living increases in the
agreement which expired on December 31, 2007. Nevertheless,
there is no rationale offered for selecting that period
for computing cost of living increases. It should be noted
the same index increased more than 5% for the period June
2007-June 2008. Finally, the Employer offers little
quantitative rationale for its proposed increases of 4%
in 2009 and 2010 insofar as those are characterized as
cost of living adjustments.

    The Union's approach to the cost of living combines
a rejection of the Employer's conclusions with its own
analysis of indices as well as other factors. (Union's
Brief at 56-60) Essentially, the Union uses consumer
price indices to buttress its argument that the cost
of living "compels a significant wage increase." (Union's
Brief at 59) Yet, the Union's proposed wage increase "is
not tied to the CPI." (Union's Brief at 59)
Neither party stakes its position on a compelling
use of cost of living. The Employer asserts that consumer
price indices are flat. The Union urges the contrary.
Either could be correct concerning the future. Both
focus intently on comparable employers. It is that
arena where the compensation question is resolved.

    The Employer has developed its own approach to
handling comparable data. The Employer has constructed
approach its calls "Total Cost Compensation."

        The Employer offered a Total Cost of
        Compensation Chart for each of the years
        2008 and 2009. The long-standing methodology
        utilized by Puget Sound Public
        Employers on behalf of the Employer contemplates
        base pay plus longevity pay
        plus education incentive divided by the
        net hours worked by the employee to achieve
        a net hourly cost of compensation. The
        net hours worked is derived by starting with
        the total hours scheduled (40 hours per week
        or 2,080 per year) less the number of vacation
        hours earned less holiday hours. The
        resulting "net hours" figure is the number
        of hours the employee will actually work
        if all vacation and holiday leave time is
        used. (Employer's Brief at 11)
        
    Using this approach for a hypothetical officer with ten
years of service who holds a BA or equivalent, the Employer
concludes that its total cost of compensation is less
than 1.5% lower than that of comparable employers. Thus,
the Employer contends that bargaining unit employees,
after receiving its offer, will be better paid than the
average of comparable employers.

    The Employer's approach as applied here is flawed
factually and legally. On the facts, the hypothetical
officer is just that. No one in the bargaining unit fits
the description proffered by the Employer. Also, the cost
approach, particularly with respect to vacation pay and
holiday leave, overlooks distinctions that undermine
comparabi1ity among employers designated comparable.
That is to say, the Employer has found no common denominator
that permits a fair comparison of vacation and holiday
leave.

In addition to factual flaws, the Employer's approach
departs from governing statutory standards.

          Uniformed personnel--Interest arbitration
          panel--Determination--Factors to be co-
          sidered
          
          (1) In making its determination, the panel 
          shall be mindful of the legislative purpose
          enumerated in RCW 41.56.430 and, as ad-
          ditional standards or guidelines to aid it
          in reaching a decision, the panel shall
          considered:

         (a) The constitutiona1 and statutory authority
          of the employer;
          
         (b) Stipulations of the parties;
         
         (c) The average consumer prices for goods and
         services, commonly known as the cost of living;
         
         (d) Changes in any of the circumstances under
         (a) through (c) of this subsection during
         the pendency of the proceedings; and
         
         (e) Such other factors, not confined to the
         factors under (a) through (d) of this sub-
         section, 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) For employees listed in RCW 41.56.030(7)(a)
        through (d), the panel shall also consider a 
        comparison of the wages, hours, and
        conditions of employment of personnel
        involved in the proceedimgs with the
        wages, hours, and conditions of employment
        of like personnel of like employers
        of similar size on the westcoast of the
        United States . . . . RCW 41.56.465(1) and
        (2)
        
Wages, hours and conditions are to be compared not
a construct of costs.

    Based on the statutory standards and the evidence,
the best approach to determining the needed wage increase
flows from the examination of the base wage rates of
comparable employers. Although not stipulated, there
appear to be no significant disparities between bargaining
unit employees and cornparables with respect to other
components of compensation. Thus, the base wage rate is
the talisman.

    The goal here is to approximate parity in wage rates
between bargaining unit employees and like employees of
like employers. Accepting undisputed data provided by
the Union, base pay for bargaining unit employees on
December 31, 2007, was $3810 per month. The average base
pay for comparable employees (those working for the six
towns agreed t o be comparable by both parties) is $4299.
To achieve parity with comparable employers, an increase
of 11% is necessary. To sustain parity is more prob1ematic.
The Employer's proposal neither achieves nor sustains
parity. Rough approximations and attention to the dif-
ferences between the parties' respective wage increase
proposals leads to a compromise figure.

    Based on the evidence and the statutory standards,
the base pay of bargaining unit employees should be
increased 6% effective 1-1-08, 5% effective 1-1-09 and
5% effective 1-1-10.

                         v
                         
    Based on the foregoing analysis, the Union's
proposed changes and increases in shift differential
and longevity pay, should be rejected. The provisi.ons
found in the parties' last collective bargaining agreement
concerning shift differential and longevity pay should
continue without change.

                     AWARD
                     
    Based on the evidence and in light of governing
statutes, the base wage rate of bargaining unit employees
shall be increased 6% effective January 1, 2008, 5%
effective January 1, 2009 and 5% effective January 1, 2010.
All other requested changes are denied.

    Dated this 12th day of June, 2009.
    
    
                            Michael E. de Grasse
                            Arbitrator