THE MATTER OF THE INTEREST
)
ARBITRATOR’S
)
ARBITRATION BETWEEN
)
OPINION & INTEREST AWARD
)
CITY OF VANCOUVER
)
)
“THE CITY” OR “THE EMPLOYER”
)
)
AND
)
)
VANCOUVER POLICE OFFICERS’ GUILD
)
)
“VPOG” OR “THE GUILD”
)
th
th
HEARING:
July 29 & 30 , 2015
Vancouver, Washington
HEARING CLOSED: October 8, 2015
ARBITRATOR:
Timothy D.W. Williams
2700 Fourth Ave., Suite 305
Seattle, WA 98121
REPRESENTING THE EMPLOYER:
Bruce Schroeder, Attorney
Suzi Schwabe, HR Director, City of Vancouver
REPRESENTING THE GUILD:
David Snyder, Attorney
Jeff Kipp, Sgt VPD & President VPOG
APPEARING AS WITNESSES FOR THE EMPLOYER:
Natasha Ramras, City Deputy Finance Director
Suzi Schwabe, HR Director City of Vancouver
Carol Wilmes, Association of Washington Cities
Michael Morrow, Aon Hewitt Consulting Firm
Debby Watts, Benefits Analyst
APPEARING AS WITNESSES FOR THE GUILD:
Jeff Kipp, Sgt VPD & President VPOG
Ron Kirkpatrick, LPG Advisors
Mark Johnston, Vancouver Fire Department
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 1
EXHIBITS
VANCOUVER POLICE OFFICERS’ GUILD
1.
VPOG Amended Proposals, 7/14/15
2.
PERC Certification of Issues
3.
Parties’ agreement to Narrow Issues for Interest
Arbitration, 6/17/15
4.
RCW 41.56.465
5.
VPOG – City of Vancouver 20012-2014, Collective Bargaining
Agreement
6.
City of Vancouver and Vancouver Police Officers Guild
Interest arbitration award, (Gary Axon, 12/16/3)
7.
City of Vancouver and Vancouver Police Officers Guild
Interest arbitration, (Michael Beck, 12/20/97)
8.
Cost of the VPOG’s Proposed Wage Increases
9.
‘Guild Proposal U13-17. Employee Insurance
Reserved
BARGAINING HISTORY
10. VPOG-City of Vancouver 2010-2011 CBA (excerpts re Insurance
and Wage Increases)
11. VPOG-City of Vancouver 2007-2009 CBA (excerpts re Insurance
and Wage Increases)
12. VPOG-City of Vancouver 2006 CBA (excerpts re Insurance and
Wage Increases)
13. VPOG-City of Vancouver 2003-2005 CBA (excerpts re Insurance
and Wage Increases)
14. VPOG-City of Vancouver 2000-2002 CBA (excerpts re Insurance
and Wage Increases)
15. VPOG-City of Vancouver 1997-1999 CBA (excerpts re Insurance
and Wage Increases)
16. VPOG-City of Vancouver 1995-1996 CBA (excerpts re Insurance
and Wage Increases)
17. VPOG-City of Vancouver 1992-1994 CBA (excerpts re Insurance
and Wage Increases)
18. OPEIU Local 11 and City of Vancouver 1986-1988 CBA
(Excerpts re shift Differential Pay)
19. Agenda – Vancouver City Council, Monday 3/22/10
20. “Meeting” Ryan Martin E-mail dated February 10, 2010 (2010
Settlement)
21. January 8, 2010, Joint Request for Mediation, Bruce L.
Schroeder
22. “VPOG Tentative Contract Agreement: David Snyder E-mail
dated October 18, 2006
23. Current VPOG Health Care Plan (City 2006 Proposal)
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 2
24. “VPOG ULP Hearing/Proposed Contract Settlement” Scott
Creager E-mail January 15, 2004
25. City of Vancouver 2003 Benefits Comparison
26. “Police Side by Side Comparison of Medical/Dental Plans”
2013 City of Vancouver Exhibit 7.13
27. Number of VPD sworn with 20 plus years of service March
2013 and May 2015
INTERNAL EQUITY/OTHER CITY CONTRACTS
28. City of Vancouver Bargaining Units (City website)
29. OPEIU Local 22, AFSCME and the Joint Labor Coalition 2015
Salary Schedule adjustments, Bruce Schroeder email messages
July 22 and July 23, 2015
30. Other City Contracts: Wage Increases
31. OPEIU Local 11 2015-2016 Collective Bargaining Agreement
32. Excerpt OPEIU Local 2011-2014 Collective Bargaining
Agreement
33. Reserved
34. IAFF Local 452 and City of Vancouver Suppression Personnel
2014-2016 Collective Bargaining Agreement
35. IAFF Local 452 and City of Vancouver Fire Marshall’s Office
2014-2016 Collective Bargaining Agreement
36. IAFF Local 4378 and City of Vancouver 2014-2016 Collective
Bargaining Agreement
37. OPEIU Local 11 Police Command Unit 2012-2014 Collective
Bargaining Agreement (excerpt)
38. AFSCME Local 307VC and City of Vancouver 2015-2016 and
2011-2014 Collective Bargaining Agreements (excerpts)
39. Joint Labor Coalition and City of Vancouver 2015-2016 and
2011-2014 Collective Bargaining Agreement (excerpts)
40. MRCS: Consumer Price Index CPI-W 2006-April 2015
41. Western Consumer Price Index Card, U.S> Department of
Labor, Bureau of Labor Statistics, July 17,2015
42. Reduction in Guild Members’ Wages Due to Increased Cost of
Living
43. Reserved
COMPARABILITY
44. Summary of Selection Criteria: Population, assessed
Valuation, Department staffing
45. WASHINGTON: State of Washington 201 Population Trends,
Table 4, November 2014; Table 30 2014 Levy Detail
Washington State Department Revenue
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 3
(http://www.ofm.wa.gov/pop/april/poptrends.pdf);
Documentation of police department size.
46. OREGON: PSU Population Research Cent Rank of Population
Certified Estimate July 1, 2014; Assessed Valuation per Tim
Fitzgerald Oregon Department of Revenue January 26, 2015
Documentation of police department size.
47. CALIFORNIA: California City County Population Estimates
January 1,2013 and 2014 Population Rankings, California
Department of Finance, Demographic Research Unit; Table 6
assessed Valuation – Cities Annual Report, John Chiang,
California State Controller; Documentation of police
department size.
48. City of Lancaster, California “Reporting Crime and
Suspicious Activity”
49. Summary of VPOG 2014 West Coast Comparability Survey:
Officers & Sergeants
50. VPOG 2014 West Coast Comparability Survey: Officers
(Patrol)
51. VPOG 2014 West Coast Comparability Survey” Officers – 40-
hour work week
52. VPOG 2014 West Coast Comparability Survey: Sergeants
(Patrol)
53. VPOG 2014 West Coast Comparability Survey: Sergeants 40-
hour work week
54. Summary of VPOG 2014 Washington Comparability Survey:
Officers & Sergeants
55. VPOG 2014 Washington Coast Comparability Survey: Officers
(Patrol)
56. VPOG 2014 Washington Comparability Survey” Officers – 40-
hour work week
57. VPOG 2014 Washington Comparability Survey: Sergeants
(Patrol)
58. VPOG 2014 Washington Comparability Survey: Sergeants 40-
hour work week
59. West coast Comparability Wage Increases Effective After
1/1/2014
60. Fannie Mae 2014 Area Median Income
61. 2013 U.S. Census Bureau Estimated Median Household Income
62. West Coast Comparables’ Bond Ratings: Moody’s and Standard
& Poor’s
63. West Coast Comparables – Specialty Pay’
64. Washington Comparables’ 2014 Sales Tax Revenue
65. West Coast Comparables’ Officers Per 1,000 (Crime in the
United States 2013, U.S. Department of Justice)
66. “Full Time Law Enforcement Employees” Tables 74 (United
States) and 78 (Washington, Oregon and California): Crime
in the United States 2013, U.S. Department of Justice
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 4
SHIFT DIFFERENTIAL
67. Other City Contracts: Shift Differential
68. VPOG’s Proposed Shift Differential Rates
69. 2013 Swing and Graveyard Shift Differential Cost Analysis –
City of Vancouver
70. “Shift Work and Occupational Stress in Police Officers” Ma
et al., Safety and Health at Work, October 2014: Shift Work
and Health: Current Problems and Preventative Actions”
Costa Safety and Health at Work, November 2010; and Sleep
Disorders, Work Shifts and Officer Wellness, Pearsall,
National Institute of Justice Reporter, June 2012
71. West Coast Comparables’ Shift Differential Pay
VOLUME II
ECONOMY
72. “Clark County completes recovery of jobs lost in economic
crash” Columbian, March 11,2014
73. “Clark County’s economy expands by 7300 jobs” Columbian,
11/25/14
74. “In our View: 2015 starts on a Roll-Strong economy bodes
well for Clark County, Columbian, 1/4/15
75. “Local Economy Shifts Gears-Strong job growth, a larger
workforce and a steady housing market, among the factors
that contributed to improvement” Columbian, 1/25/15
76. “Clark County’s economy still ‘very strong’-6200 jobs added
in the 12 months ending in January”, Columbian, 3/10/15
77. “City: Waterfront project could generate $33M in tax
revenue-Development has promising 20-year projections for
Vancouver, Clark County:, Columbian 4/27/15
78. “Taxable retail sales rise in Vancouver, Clark County-local
increases exceed that of state in 4QA”, Columbian, 5/11/15
79. “Clark County assessed home values on up-swing-Average
climbed 5-10% in 2014, assessor says”, Columbian 6/2/15
80. “May” another strong month’ for County job growth”,
Columbian 6/23/15
81. “Clark County Jobs market hits milestone in June – for
first time ever, total non-farm employment topped 150,000,”
Columbian, 7/21/15
82. “Economists: Oregon’s ‘full throttle’ will economy will
propel tax rebate, higher revenues”, Oregon Live 5/14/15
83. Reserved
84. Clark County Profile, Scott Bailey, regional labor
economist Washington employment Security Division, 11/14
85. “Monthly Employment Report for June 2015” Washington State
Employment Security Department, July, 2015
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 5
86. “Economic & Revenue Update” Washington state Economic and
Revenue Forecast Council, July 13, 015 (Excerpt)
87. Federal Open Market Committee, Federal Reserve press
release June 17, 2015
88. “Consumer confidence spikes in June” Business Insider,
6/30/15
89. “The Conference Board Consumer Confidence Index Increases
Again”, The Conference Board 6/30/15
90. Leading Economic Indicators Press Release the Conference
Board, 7/23/15
91. Reserved
92. “Vancouver Home Prices and Values”, May 2016, Zillow
93. “S&P Case/Shiller Index, Portland Metro Area” and S&P
/Case-Shiller Home Prices Indices, 6/30/15 Press Release
94. “Clark County Half-Yearly Economic Report: Jobs up, housing
tight”, Columbian, 7/26/15
96-99 Reserved
City Budget & Financial Condition
100. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2014(Excerpt)
101. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2013(Excerpt)
102. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2012(Excerpt)
103. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2011(Excerpt)
104. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2010(Excerpt)
105. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2009(Excerpt)
106. City of Vancouver Washington Comprehensive Annual Financial
Report Fiscal Year Ended December 31, 2008 (Excerpt)
107. City of Vancouver Quarterly Financial Report, First Quarter
2015
108. City of Vancouver Budget for 2015-2015 Website 7/14/15
109. City of Vancouver 20152016 Budget – Executive Summary
110. Changes in the City of Vancouver’s Net Position Over 12
years: 2003-2014
111. City of Vancouver General Fund Ending Fund Actual Revenues
and Actual Expenditures 2008-2014
112. City of Vancouver General Fund Balances 2003-2014
(Unreserved and Total.
113. Increases in the City of Vancouver General Fund Ending Fund
Balance 2006-2014
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 6
114. City of Vancouver General Fund Ending Fund Balances as a
Percentage of Actual Revenues for the Years 2006-2014
115. City of Vancouver General Fund Ending Fund Balance as a
Percentage of Actual Expenditures for the Years 2006-2014
116. City of Vancouver, Washington, Limited Tax General
Obligation Refunding Bonds, 2012, Dated December 15, 2011
(excerpt)
117. “Rating methodology – US Local Government General
Obligation Debt” Moody’s Investors Service, 1/1514
118. Government Finance Officers Association “Best Practice:
Appropriate Level of Unrestricted Fund Balance in the
General Fund (2002 and 2009) BUDGET and CAAFR)
119. End Fund Balance: Budgeted v audited – general consolidated
fire and street funds
120. City of Vancouver financial Policies
121 “2015-16 Preliminary Budget Framework City Manager Eric
Holmes, 6/12/143 email message
122. Washington Comparables’ Business and Occupational Tax
(Everett, Kent and Tacoma)
123. “Vancouver city manager gets 17 percent raise” Columbian,
6/17/14
124. “Vancouver mayor, most counselors to get raises”,
Columbian, 4/24/14
125. “Vancouver city attorneys lead way in pay increase,
Columbian 4/19/14
126. Reserved.
127. Reserved.
128. Reserved.
129 Reserved.
INSURANCE
130. 2015 Benefits Open Enrollment
131. 20125 Benefit Summary – Active PPO Plan
132. 2015 Benefit Summary – Active HAS Plan (HDHP)
133. 2015 Kaiser Benefit Summary – active Plans
134. 2015 Kaiser Benefit Summary – Active High Deductible Plans
(HDHP)
COMPARABLES
135. Medical Dental Vision (“MDV”) Premiums as of 1/1/2014
136. Medical Dental Vision (“MDV”) Premiums Current
137. Terms of Comparables’ Insurance Premium Payments 1/1/2014
138. Terms of Comparables’ Insurance Premium Payments Current
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 7
IAFF LOCAL 452 TRUST
139. Memorandum of Understanding between Vancouver Firefighters
and the City of Vancouver – Vancouver Firefighters Union
Health and Welfare Trust, 9/16/11
140. City of Vancouver and IAFF Local 452 2010-2013 Collective
Bargaining Agreement (Suppression Personnel) (Excerpt)
141. IAFF 452 Plan Design Comparisons Spreadsheet 2/26/14
142. IAFF 452 2011-2014 Plan Premium Increases Comparisons
Spreadsheet. 2/26/14
143. Summary Annual Report for the Vancouver Firefighters Union
Health and Welfare Trust Plan
144. Vancouver Firefighters Union Health and Welfare Trust Plan
Financial Statements With Independent Auditor’s Report.
9/30/14 and 2013, Schoedel & Schoedel
VOLUME III
VPOG INSURANCE AND TRUST
145. 7/2014 and 6/2015 City of Vancouver’s Per Employee Per
Month Contributions for Insurance, Bruce Schroeder 6/23/15
E-mail Message
146. Medical Dental Premiums as of 07/01/14 and 06/101/15,
6/29/15 Bruce Schroeder e-mail message and attachments
147. Response to VPOG Request for Information, 7/2/15, Bruce
Schroeder e-mail message
148. Rate Renewal Calculations for City of Vancouver Employees
1/1/14 to 12/31/14
149. City of Vancouver Uniformed Actives Medical Plan Summary
1/1/13 – 5/2014
150. Medical/Dental Census for Police Guild as of 6/19/14
151. Experience Report 2013 through 5/2015 – Uniformed
actives/COBRAQ (P through P3 attached to Murbach message of
6/24/15
152. City of Vancouver – Self Insured Marketing Results –
REVISED – Effective 1/1/16 through 12/31/15
153. 2015 Segal Health Plan Cost Trend survey
154. 2015 Milliman Medical Index
155. Aon Hewitt 2015 Global Medical Trend Rate survey Report
156. Price Waterhouse “Medical Cost Trend: Behind the Numbers
2016.”
157. LBG PowerPoint
158. LBG 9/2014 Actionable Quote for 2015
159. Jason Jakobsen and Blair Panzer 9/4/14 e-mail messages RE:
LBG 9/2014 Actionable Quote for 2015
160. LBG 9/214 PPO Co-Pay Deductible Plan Summary of Benefits
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 8
161. MODA Health, The Vancouver Police Officers’ Guild Effective
Date 1/1/2015 to 12/31/2015
162. LBG 5/2015 Illustrative Quote for 2016
163. Comparison of Probable City Cost of Providing Regence and
WDS Benefits in 2016 with VPOG Proposal
164. City of 2013 Interest Arbitration Exhibit “2018 Excise Tax
– City Only (Excluding Independent Agencies) Estimated Cost
Impact at 10% Compounded Trend
165. “Vancouver Firefighters Union Health and Welfare Trust”
Mark Johnston PowerPoint Presentation
VOLUME IV
VANCOUVER & WASHINGTON COMPARABLES’ DATA
VOLUME V
OREGON & CALIFORNIA COMPARABLES’ DATA
CITY OF VANCOUVER EXHIBIT BINDER
A
GENERAL BACKGROUND
A.1 State of WA Revised Code of WA (RCW)
A.2 Washington Administrative Code (WAC)
A.3 Current Collective Bargaining Agreement
A.4 PERC Letter Certifying Issues
A.5 City’s Proposal
A.6 Guild’s Proposal
A.7 Guild’s Amended Proposal
A.8 City Description
A.9 Police Department Description
A.10 Organizational Chart
A.11 Employee Roster
A.12 Parties’ agreement to Narrow Issues for Interest
Arbitration
B. COMPENSATION COMPARISONS
B.1 Employer’s Methodology re Comparables
B.2 Population serviced of City Comparables
B.3 Assessed Valuation of City Comparables
B.4 Assessed Valuation per Capita of City Comparables
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 9
B.5 Population served of Union Comparables
B.6 Assessed Valuation of Union Comparables
B.7 Assessed Valuation per Capita of Union Comparables
B.8 Washington Population and Assessed Valuation Data
B.9 Oregon Population and Assessed Valuation Data
B.10 California Population and Assessed Valuation Data
B.11 Geographic Location of Comparables
B.12 Excerpt from 2013 Interest Arbitration Award re
Comparables
C. FINANCIAL OVERVIEW
C.1 Financial Review
C.2 Cumulative 2-Year Cost of Proposals
C.3 Retirement contribution Rate Increased
C.4 Total Positions History – Vancouver City Staffing
Over Time
ISSUES
Issue 1: Article 11.3, Work Week
The City has withdrawn its proposal on this issue
Issue 2: Article 11.9 Patrol Staffing
The City has withdrawn its proposal on this issue
Issue 3: Article 12.4 and Appendix A – Rates of Pay
3.1 City’s Proposal
3.2 City’s Position
3.3.1
CPI History
3.3.2
Actual salary vs CPI
3.3.3
Relative Cost of Living Difference
3.3.4
Per Capita Income Comparison
3.3.5
Median Household Income Comparison
3.3.6
Median Home Price Comparison
3.3.7
Median Rent Comparison
3.4 Internal Comparisons
3.4.1
Contracts Settlement Overview
3.4.2
Market Analysis for OPEIU 11, AFSCME and
Joint Coalition
3.5 External Comparisons
3.5.1
2015
Total
Cost
of
Compensation
Comparison with City’s Salary Proposal -
Officers
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 10
3.5.2
2015
Total
Cost
of
Compensation
Comparison with City’s Salary Proposal -
Sergeants
3.5.3
2015
Total
Cost
of
Compensation
Comparison with Guild’s Salary Proposal –
Officers
3.5.4
2015
Total
Cost
of
Compensation
Comparison with Guild’s Salary Proposal -
Sergeants
3.5.5
2016
Total
Cost
of
Compensation
Comparison with City’s Salary Proposal -
Officers
3.5.6
2016
Total
Cost
of
Compensation
Comparison with City’s Salary Proposal -
Sergeants
3.5.7
2016
Total
Cost
of
Compensation
Comparison with Guild’s Salary Proposal –
Officers
3.5.8
2016
Total
Cost
of
Compensation
Comparison with Guild’s Salary Proposal –
Sergeants
3.6 Local Labor Market
3.6.1
Comparison of Vancouver Median Household
Income with 2013 Top step Officer Pay
3.6.2
Southwest Washington Labor Market News
3.6.3
Clark County Unemployment rate, 2005 –
2015
3.6.4
Washington State Unemployment Rates by
County
3.6.5
Washington State Distressed Areas List
3.6.6
Local Labor Market Comparison, 2014 Top
Step Officer Monthly Salary
3.7 Recruitment and Separation Statistics
3.7.1
Recruitment and Hiring
3.7.2
Voluntary Non-Retirement Separations
3.8 Cost of Proposals
ISSUE 4: Article 12.5 Shift Differential/Premium Pay
4.1 City’s Proposal
4.2 City’s Position
4.3 External Comparisons
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 11
4.4 Cost of Proposal
ISSUE 5: Article 12.10, Longevity Pay
The Guild has withdrawn its proposal on this issue
ISSUE 6: Article 13.4, Overtime
The City has withdrawn its proposal on this issue
ISSUE 7: Article 13.6, Callback Pay
The City has withdrawn its proposal on this issue
ISSUE 8: Article 13.8, Court Appearances
The City has withdrawn its proposal on this issue
ISSUE 9: Article 17 and Appendix B, Health Insurance
9.1 City’s Proposal
9.2 City’s Position
9.3 Internal Comparisons
9.4 External Comparisons
9.5 Kaiser Family Foundation survey 2014
9.6 Mercer Survey Report of Employer-sponsored Health
Plans
9.7 Expert Witness CV – Michael Morrow
9.8 History of Employee Contributions to Insurance
9.9 Total City Expense for Health Insurance by Year by
FTE, 2000-2014
9.10 Monthly Premium for Health Insurance by Year
9.11 Demographic Makeup of Covered Employees and
Dependents
9.12 Calculation of Per Employee per Month Health
Insurance Costs
9.13 Cost of Proposal
9.14 Fire Suppression Proposal, April 2011
9.15 Draft Analysis of Effect of Reducing the City’s
Insurance Pool
ISSUE 10 Article 19.3, Deferred Compensation
The Parties have reached agreement on this issue
ISSUE 11: Article 20.3, Compensation for Training Related
Travel
The Guild has withdrawn its proposal on this issue
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 12
ISSUE 12: Article 21.1, Equipment and Clothing Allowances
The parties have withdrawn their proposals on this
issue
ISSUE 13: Article 34, Termination and Renewal
The parties have reached agreement on this issue
BACKGROUND
The City of Vancouver (“The City’) and the Vancouver Police
Officers’ Guild (“VPOG or The Guild”) have a collective
bargaining relationship. The last collective bargaining
agreement (CBA) expired on December 31, 2014 (E A.3). The
Parties have been negotiating a successor agreement but those
efforts have not been successful.
Under the State of Washington public sector collective
bargaining statute, the VPOG has access to interest arbitration
in order to resolve a continuing dispute over the terms of a
collective bargaining agreement. The Parties can proceed to
arbitration on issues certified by the Public Employment
Relations Commission (PERC). By letter dated December 16, 2014,
PERC certified the following issues for arbitration:
Article 11.3 Work Week
Article 11.9 Patrol Staffing
Article 12.4 and Appendix A – Rates of Pay
Article 12.5 Shift Differential/Premium Pay
Article 12.10 Longevity Pay
Article 13.4, Overtime
Article 13.6, Callback Pay
Article 13.8, Court Appearances
Article 17 and Appendix B, Health Insurance
Article 19.3, Deferred Compensation
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 13
Article 20.3, Compensation for Training Related Travel
Article 21.1, Equipment and Clothing Allowances
Article 34, Termination and Renewal
In accordance with WAC 391-55-205, each Party had the right
to name one partisan Arbitrator to serve as a member of an
arbitration panel. Part one (1) of the cited code provides that
“The use of partisan arbitrators shall be deemed waived if
neither Party has notified the executive director of its
appointee within fourteen days following the issuance of a
certification of issues for interest arbitration, and the
Parties’ principal representatives shall then select the neutral
chairperson”. Both Parties waived the use of partisan
arbitrators and Timothy Williams was selected as the neutral
Arbitrator.
th
th
A hearing was held on July 29 and 30 , 2015 in Vancouver,
Washington. At the hearing, both Parties had full opportunity
to make opening statements, examine and cross-examine sworn
witnesses, present documentary evidence, and make arguments in
support of their positions.
At hearing the Parties informed the Arbitrator that only
three of the issues were still in dispute and the hearing
proceeded with both Parties presenting evidence in support of
its position on each issue. The three include:
Article 12.4 and Appendix A – Rates of Pay
Article 12.5 Shift Differential/Premium Pay
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 14
Article 17 and Appendix B, Health Insurance
RCW41.56.450 requires that a recording of the proceedings
be taken. For this requirement an official transcript of the
proceedings was made and a copy provided to the parties and one
to the Arbitrator. The Parties agreed to submit written closing
arguments, by October 8, 2015, in the form of briefs. The briefs
were timely received by the Arbitrator and he declared the
hearing closed on October 8, 2015. The Arbitrator requested and
was granted an extension of time for filing the final decision
until Monday, December 14, 2015.
INTEREST ARBITRATION OVERVIEW
Interest arbitration is a process commonly used in the
public sector for bargaining units that provide critical public
services and whose work is deemed essential for public safety.
Police, fire suppression personnel and prison guards usually
fall into this category and interest arbitration is granted by
statute in exchange for a prohibition against a work stoppage
(strike). The statutes that provide for interest arbitration
inevitably include a set of criteria that the arbitrator must
use in fashioning his or her decision. The State of Washington
follows this model in that it does provide for interest
arbitration and in RCW 41.56.465 sets forth the following
criteria for uniformed personnel:
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 15
(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, the panel shall
consider:
(a) The constitutional 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 subsection, that
are
normally
or
traditionally
taken
into
consideration in the determination of wages,
hours, and conditions of employment.
1
(2)
For employees listed in RCW 41.56.030(7) (a) through
(d) the panel shall consider a 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.
The Arbitrator’s opinion and awards in the instant case are
submitted, having given careful consideration to the above
criteria, on an issue-by-issue basis. The Arbitrator’s award is
based on a careful analysis of the evidence and argument
presented during the hearing, as well as the arguments found in
the written briefs. On each of the three issues, the Arbitrator
1
The statute contains a footnote that provides: RCW 41.56.030 was
alphabetized pursuant to RCW 1.08.015(2)(k), changing subsection (7) to
subsection (14). RCW 41.56.030 was subsequently amended by 2011 1st sp.s. c
21 § 11, changing subsection (14) to subsection (13).
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 16
will set forth the position of the Parties, his award and the
reasoning behind the award.
As is true in most interest arbitration proceedings, the
Parties were represented by experienced, highly competent labor
professionals. The arguments and evidence set forth by each
were carefully crafted to address the pertinent points of
dispute between the two Parties. The record in the instant case
is voluminous with both Parties presenting extensive documentary
and testimonial evidence. The Arbitrator has carefully reviewed
this evidence in the context of the above stated statutory
criteria. While he has given consideration to the whole record,
the Arbitrator will not attempt to provide an exhaustive
discussion of all points raised or respond to every piece of
documentary evidence. The simple fact is that each side
provided compelling arguments sufficient to warrant adopting its
position on all three issues. Ultimately the Arbitrator’s job
is to sift through the arguments and the evidence and make a
determination as to which Party made the stronger case. The
analysis that is provided is focused on setting forth the
particular points of argument that led to the final award.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 17
POSITIONS, AWARD AND ARBITRATOR’S REASONING
The Parties’ negotiations over the successor agreement
resolved all matters with the exception of three issues. The
first two issues involve wages and the third is concerned with
the Employer’s contribution to the medical benefit.
The Arbitrator notes that the question of the appropriate
list of comparators is almost always a point of dispute in an
interest arbitration proceeding. The Parties, in the instant
case, are sharply divided on this question and it will be
addressed as a preliminary point of discussion since it impacts
the ultimate decision on all three issues.
The City proposes the following list of comparables taken
from the states of Washington and Oregon:
1.
Federal Way, WA
2.
Tacoma, WA
3.
Spokane, WA
4.
Everett, WA
5.
Kent, WA
6.
Hillsboro, OR
7.
Gresham, OR
8.
Eugene, OR
9.
Salem, OR
10.
Beaverton, OR
The Guild agrees with the above ten comparables but would
add five from the state of California to include:
11.
Corona, CA
12.
Elk Grove, CA
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 18
13.
Oceanside, CA
14.
Ontario, CA
15.
Santa Rosa, CA
After extensive study of the exhibits provided by the
Parties related to the comparables and after thoroughly
reviewing the work of Arbitrator Beck and Arbitrator Axon, this
Arbitrator finds the following list of comparables appropriate
for the VPOG and the City of Vancouver:
1.
Federal Way, WA
2.
Tacoma, WA
3.
Spokane, WA
4.
Everett, WA
5.
Kent, WA
6.
Hillsboro, OR
7.
Gresham, OR
8.
Eugene, OR
9.
Beaverton, OR
10.
Elk Grove, CA
The Arbitrator’s discussion of the comparables issue begins
by noting that the City/VPOG have had two prior interest
arbitration awards where the subject of comparables was central
to the Arbitrators’ ultimate decisions. Arbitrator Beck issued
a decision in December of 1997 and Arbitrator Axon issued his
decision in December of 2013. The City, at the current time,
argues to retain the list of 10 comparables’ adopted by
Arbitrator Axon. Axon’s comparables contained five Washington
cities and five Oregon cities. Arbitrator Beck set forth 12
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 19
comparables which included four cities from California. This
Arbitrator, for the instant dispute, adopts 10 comparable cities
to include those proposed by the City; less Salem, Oregon; plus
Elk Grove, California.
The Arbitrator notes that both Axon and Beck provided
extensive discussion in their awards on the question of
comparability. The Parties, in their briefs, thoroughly
reviewed and critiqued, both pro and con, the rational set forth
by both Arbitrators. This Arbitrator finds little value in
rehashing what has already been thoroughly dissected by the
Parties in their briefs. What, hopefully, will be of value is
for him to set forth some additional thoughts that were
influential in determining the set of comparables that the
Arbitrator adopted for this decision.
The City proposes 10 comparables, the Guild argues for 15.
This Arbitrator concurs with Arbitrator Axon in finding that 10
comparables are more than sufficient to provide for a reasonable
test of comparability. More than that, in his view, provides
little additional value and makes the process of determining
comparability more cumbersome. Less than that begins to raise
questions as to the reliability of the information being
provided. The smaller the number of comparables the easier it
is for outliers to skew the results leading to unreasonable
conclusions.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 20
The Guild put a great deal of emphasis on the importance of
including California comparables and in setting forth why
Arbitrator Beck’s decision to use California jurisdictions
should be given more weight than Arbitrator Axon’s decision not
to use California jurisdictions. The City, of course, contended
that Arbitrator Axon provided a reasonable set of comparators
and that there is substantial value in consistently using the
same set from one labor contract to the next.
This Arbitrator simply notes that the statutory criteria
2
call for the use of west coast cities and cities in California
clearly qualify. A careful and thoughtful reading of Arbitrator
Axon’s award indicates that he does not outright reject cities
from California as comparators to the City of Vancouver
Washington police department but rather rejected those cities
proposed by the Guild. While the point will be discussed in
greater detail later in this analysis, this Arbitrator also
rejects four of the five cities from California that the Guild
proposed in this proceeding.
Simply put, from this Arbitrator’s perspective, applying
the statutory criteria as related to comparability permits the
use of appropriate cities from Washington, Oregon and
2
The actual words of the statute are: “employers of similar size on the west
coast of the United States.”
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 21
California. The the real issue is not the state but rather the
selection criteria.
As thoroughly discussed by the Parties, population size and
assessed valuation are two important criteria in determining a
good fit related to comparability for the City of Vancouver. As
noted above, those two criteria have been thoroughly dissected
both by Arbitrators Axon and Beck, and by the Parties themselves
in their briefs. Moreover, the 10 comparables this Arbitrator
has adopted are more than justified based on size of population
and assessed valuation.
Additionally, this Arbitrator has regularly taken the
position in interest arbitration awards that consideration also
has to be given to the economic market in which employees
purchase goods and services. In attempting to set forth the
importance of this criterion, the Arbitrator is reminded of
Moliere’s play The Miser. In this theatrical production, the
miser is a man by the name of Harpagon and Harpagon loves money.
He loves to hold it, possess it and hoard it; he loves it more
than his children. To him there is an intrinsic value to simply
having the money.
Few of us are like Harpagon. There is for the normal
person no intrinsic value to money. The value of money is in
what it can be exchanged for; a home, a car, medical services,
vacations, etc. The simple fact is that the value of money as
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 22
expressed in what it can be exchanged for changes from location
to location. Sufficient money to buy a nice 4 bedroom - 2 bath
house in Vancouver, Washington will probably not be a sufficient
amount of money to buy even a very small efficiency condominium
in downtown New York. That is why employers, like the Federal
Government that have employees spread across the country, often
find it necessary to provide a special living allowance to those
employees assigned to work in high priced locations. Thus it is
possible for an employee to receive a lesser wage than a
comparator but be better compensated in terms of what the wage
can be exchanged for.
It is primarily marketplace difference that leads this
Arbitrator to reject the California cities of Santa Rosa,
Oceanside, Ontario and Corona as comparators. Santa Rosa is
part of the Bay Area marketplace which is clearly dissimilar to
that of the City of Vancouver. Oceanside, Ontario and Corona
are all part of the Los Angeles marketplace and the Arbitrator
finds no reason to conclude that that marketplace is similar to
the City of Vancouver.
On the other hand, the City of Elk Grove, California is
located in the Sacramento marketplace and the Arbitrator does
see some similarity between that marketplace and the fact that
the City of Vancouver is neighbor to the City of Portland Oregon
and shares that marketplace. Thus it made sense to him to
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 23
eliminate Salem, Oregon as a comparator; its assessed valuation
per capita was the lowest (E B.7) of all the comparators
suggested by both Parties and it is the most removed from the
3
Portland marketplace . Adding the City of Elk Grove, which can
reasonably be seen as a better comparator than Salem, provides
the 10 comparables.
The Arbitrator provides one final note about the
comparators. A review of all of the comparator information set
forth by the Parties indicates that the Oregon comparators
generally have lower base wages for police officers then do the
Washington comparators. With the exception of Eugene Oregon,
however, the Oregon cities chosen as comparators share the same
marketplace as the City of Vancouver, Washington. A City of
Vancouver police officer or his or her family can often times
shop in the very same stores and obtain services from the very
same providers as a police officer in Gresham or Beaverton.
This is one reason these cities serve as good comparators.
In summary, there is no perfect set of comparables.
Rather, using population size, assessed valuation and similarity
of marketplace as three criteria, the Arbitrator has arrived at
a reasonable set of 10 comparables. These comparables will be
used as part of the process of making an ultimate decision on
3
Eugene is its own separate marketplace while Salem is on the outskirts of
the Portland marketplace.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 24
the three issues in dispute. The three issues will be presented
in sequential order.
Article 12.4 and Appendix A – Rates of Pay
Proposals:
The Guild proposes the following language to cover wage
increases for each year of the two your agreement.
12. Rates of Pay
12.4 Regular monthly rates of pay will be set forth in
appendix A
Effective
January
1,
2015
regular
wages
for
the
classifications covered by one hundred percent (100%) of
the percentage increase in the U.S. Department of Labor’s
Consumer Price Index (CPI-W) for Urban Wage Earners and
Clerical Workers, Portland-Vancouver area, for the period
July 2013 to July 2014, with a minimum of two and one-half
percent (2.5%) and a maximum of five and one-half (5.5%).
Regular wages for sergeants shall be increased by an
additional one percent (1%).
Effective January 1, 2016, regular wages for the
classifications covered by one hundred percent (100%) of
the percentage increase in the U.S. Department of Labor’s
Consumer Price Index (CPI-W) for Urban Wage Earners and
Clerical Workers, Portland-Vancouver area, for the period
July 2014 to July 2015, with a minimum of two-and one-half
percent (2.5%) and a maximum of five and one-half percent
(5.5%). Regular wages for sergeants shall be increased by
an additional one percent (1%)
The City proposes to increase wages by 1.75 in 2015 and an
additional 1.75% in 2016. The City does not propose any
additional increase to the sergeant’s wages.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 25
Award:
12. Rates of Pay
12.4 Regular monthly rates of pay will be set forth in
appendix A
Effective January 1, 2015 increase regular wages for the
classifications covered by two percent (2%). Regular wages
for sergeants shall be increased by an additional one
percent (1%).
Effective January 1, 2016, increase regular wages for the
classifications covered by two percent (2%). Regular wages
for sergeants shall be increased by an additional one
percent (1%)
Arbitrator’s Discussion:
The Guild proposes wage increases for 2015 and 2016 linked
to any increases in the CPI-W for Portland with a minimum of
2.5% and a maximum of 5.5%. At page 17 of its brief, the City
notes that the data is in and the Guild’s proposal is the 2.5%
for both years. The Guild does not contest this fact.
So, the Arbitrator is confronted with a very narrow gap
(.075%) between what the City offers (1.75%) and what the Guild
requests (2.5%). While narrow, there still is a substantial
amount of money involved and the Arbitrator was diligent in
reviewing the evidence and arguments. This review primarily
focused on questions about cost of living increases and the
comparability data.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 26
One of the statutory requirements that the Arbitrator must
use and one that is commonly associated with wage increases is
the cost of living. The Arbitrator reviewed the cost of living
evidence and finds persuasive the City’s position that a 10 year
view of wage increases compared to cost of living increases
shows a favorable position for the Guild’s wages (E 3.3.2). As
a result, no persuasive argument can be made for a catch up
increase.
Turning to comparability data based on the 10 comparables
adopted by the Arbitrator, police officers in Vancouver appear
to be right in the middle. For example, the Guild’s exhibit 51-
A provides an adjusted salary for officer top step. If the
cities of Salem, Oregon and the California cities of Corona,
Ontario, Oceanside, and Santa Rosa are removed; then the average
is $6,634. This compares to the City’s wage of $6,669.
Vancouver is just slightly ahead of the average. Of course,
this is just one exhibit. However, the Arbitrator’s review of
all of the exhibits, both City and Guild, leads him to roughly
the same conclusion. Using the adopted 10 comparators, the
Guild’s wages are just slightly better than average.
Since slightly above average was the position of the City
for the last year of the expired agreement, the question the
Arbitrator asked himself is what level of increase will it take
to maintain that position? In other words, when all of the data
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 27
is in for the comparators for 2016, what will it take for the
City to still be slightly above average in 2016. The Arbitrator
notes that the Axon award was for a 2% increase all three of the
years covered by his award. The Arbitrator is convinced that
since we are experiencing a steady growth in the economy with
only mild increases in cost of living; those facts support a
conclusion that maintaining the same 2% level of increase will
retain the desired position versus the comparables.
The above analysis applies to the officers but not
necessarily to the sergeants. The Arbitrator notes that the
Guild’s proposal includes an additional 1% increase each of the
two years of the agreement for the sergeants. Going back to the
4
10 comparators and looking at Guild exhibit 53-A, the Arbitrator
notes that the average sergeant salary on that exhibit is
$8,180. The City of Vancouver lags behind the average by almost
5% with the top step salary for sergeants of $7,793. The
Arbitrator’s review of all of the evidence related to
compensation for sergeants provides additional support to the
conclusion that sergeants do lag behind the average for the
comparables. As a result, the Arbitrator’s award includes the
additional 1% each year for the sergeants.
4
Again, Salem, Corona, Ontario, Oceanside and Santa Rosa data is removed.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 28
Article 12.5 Shift Differential/Premium Pay
Proposals:
The Guild proposes the following language to cover premium
pay for shift differential.
12.5 Shift differential Premium Pay
Effective January 1, 2015, Any sworn officer who works on a
swing shift as defined in article 11 (including early swing
th
shift – 4 shift- and late swing shift) shall be paid shift
differential premium pay of 3% of base pay as defined in
Section 12.4 of this agreement. Any sworn officer who
works on a graveyard shift as defined in article 11 shall
be paid shift differential premium pay of 5% of base pay as
defined in Section 12.4 of this agreement for each hour
worked. Shift differential premium pay shall be included
in paid days off (other than shirt-term disability) and
compensatory time off based on the employee’s specific
assignment.
The City opposes any change to the current language on
shift differential and argues for no increase in shift premium
pay.
Award:
No change to the language found in Article 12.5 of the
expired agreement.
Arbitrator’s Discussion:
In its brief, the Guild stakes out its position by
emphasizing that:
The Guild’s proposal to increase the shift differential for
the first time in nearly three decades to 3% for officers
assigned to swing shift and 5% for those assigned to
graveyard shift is supported by consideration of the loss
of value of this premium over the years, internal equity
with other City bargaining units, and the undisputed
burdens of shift work. (p 8)
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 29
What is obviously missing in the above overview, a fact
that is strongly emphasize by the City in its arguments, is the
lack of support from the comparables. Only Tacoma and Spokane
offer shift differential and Spokane pays far less than what the
Guild is requesting (E 4.3). The simple fact is that police
work is 24/7 and that makes shift work a reality that should be
assumed when you become a police officer. Moreover, the
internal equity comparisons with other City bargaining units
seem to this Arbitrator to be an apples to oranges comparison as
there are very few employees involved and only under special
circumstances.
The fact that the rate of compensation for the existing
shift differential has been ignored for three decades leads this
Arbitrator to conclude that it should continue to be ignored.
Article 17 and Appendix B, Health Insurance
Proposals:
The Guild proposes a significant change from the status quo
in seeking to implement an insurance trust through which to
provide medical, dental and vision benefits to the members of
the bargaining unit and their families. The trust would closely
model what the City of Vancouver fire suppression bargaining
unit implemented in 2011. The proposal itself is some 11 pages
long and will not be repeated here. Two key elements of the
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 30
proposal include an implementation date two months if the
Arbitrator awards for the Guild and that, in 2016, the City
would contribute to the trust $1696.80 per member per month.
The City opposes the shift to the medical trust and argues
to continue with the insurance program currently in place with a
few small improvements and the addition of the following new
language in Article 17.2:
Beginning January 1 of each year of the contract, the City
contribution will increase up to 5% of the previous years’
City contribution. Any increase in contributions above 5%
will be the employees’ responsibility, in addition to the
10% dependent contribution.
Award:
The Arbitrator awards for the City on this issue but
without adding the new language to Article 17.2 – no 5% cap
on increased insurance costs.
Arbitrator’s Discussion:
This is a case of almost persuaded as the Guild put on an
extensive and convincing case with regard to the potential
benefits of a medical trust for the members of the bargaining
unit. There are a number of good reasons why the Guild’s
proposal could have been awarded including the fact that the
City already has a successful model, the issue of internal
equity considering the fact that the fire suppression unit was
granted the right to have a medical trust in 2011, that there
are clearly benefits to members of the bargaining unit when
their medical, vision and dental benefits are provided through a
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 31
medical trust and, in the long run, there may actually be cost
savings to the City.
But, as noted above, almost persuaded. Almost for what the
Arbitrator perceives to be some very good reasons. In summary
form the more important of those reasons can be outlined as
follows:
1.
Establishing a medical trust breaks new ground as no
comparable provides medical, vision and dental
benefits through a trust. This raises a statutory
concern to the Arbitrator; a concern that can be
satisfied
but
only
upon
strong
showing
that
implementing the medical trust at this time is
reasonably feasible and doable.
2.
This award covers a two year agreement and is being
released at the end of the first of those two years.
That would mean that at most the medical trust would
exist for the limited time of 10 months under this
agreement and be in its startup phase as negotiations
commence over a successor agreement. That is not an
ideal situation. Far better to implement the medical
trust at the beginning of a longer agreement with the
stability that a long term agreement provides.
3.
The Guild acknowledges that the City will pay more per
employee ($1696.80 versus $1456.73) under the trust
than it currently does under its partially self-
insured benefits program (Tr 29). In and of itself,
that does not bother the Arbitrator. What concerns
him is that the City ought to receive something for
the additional money. What the City should expect to
receive is less contentiousness over the benefits that
are provided and cost containment assurances. With
only a 10 month possible life expectancy, the
Arbitrator is not convinced that the Guild is in a
position to offer the City any assurances that cost
can be contained.
4.
Most significantly, the Arbitrator’s review of the
evidence leads him to believe that the ability of the
Guild to implement the medical trust in a two month
period of time is based in part on a quote from MODA.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 32
There are two problems with this quote. For one
thing, it would have to be updated with new
information before it could be used (Tr 364). More
importantly, arbitrable notice is taken of front page
articles in the Oregonian that MODA is in financial
trouble at the current time and has determined to
cease doing business in the states of Washington and
California. That being the case, the Medical Trust is
back at square one in terms of needing to obtain a
quote from a bona fide insurance provider. Obviously
that can be done but the question is at what cost will
the quote come in? Too little time and too risky is
this Arbitrator’s observation.
In summary, while the Arbitrator supports for a number of
reasons the implementation of the Medical Trust, he will not
award it for this contract. More work needs to be done and it
would need to be implemented earlier in a contract period.
As to the Employer’s request for a 5% cap, the Arbitrator
sees no reason to award that provision at this time as it would
take the pressure off the Employer to manage its partially self-
insured program in such a manner as to limit increased costs.
This reason is particularly important to the Arbitrator since
the Employer has just recently implemented its self-insurance
program.
2015 Interest Arbitration between City of Vancouver and VPOG, pg. 33
AWARD SUMMARY
The Arbitrator awards the following on the 3 issues in dispute:
Issue 1.
12.4 Regular monthly rates of pay will be set forth in
appendix A
Effective January 1, 2015 increase regular wages for the
classifications covered by two percent (2%). Regular wages
for sergeants shall be increased by an additional one
percent (1%).
Effective January 1, 2016, increase regular wages for the
classifications covered by two percent (2%). Regular wages
for sergeants shall be increased by an additional one
percent (1%)
Issue 2.
12.5 Shift Differential/Premium Pay
No change to the language found in Article 12.5 of the
expired agreement.
Issue 3
Article 17 and Appendix B, Health Insurance
The Arbitrator awards for the City on this issue but
without adding the new language to Article 17.2 – no 5% cap
on increased insurance costs.
This interest arbitration award is respectfully submitted on the
14th day of December, 2015 by,
Timothy D. W. Williams
Arbitrator
Award Summary: 2015 Interest Arbitration between City of Vancouver and VPOG, pg. 34
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