City of Mount Vernon

And

Mount Vernon Police Services Guild

Interest Arbitration

Arbitrator:      Gary L. Axon

Date Issued:   11/06/1993

 

 

Arbitrator:         Axon; Gary L.

Case #:              10183-I-92-00218

Employer:          City of Mount Vernon

Union:                Mount Vernon Police Services Guild

Date Issued:     11/06/1993

 

 

IN THE MATER OF                         )          

                                                                        )          

INTEREST ARBITRATION                       )           PERC NO. 10183-1-92-218

                                                                        )

            BETWEEN                                         )           NEUTRAL ARBITRATOR'S

                                                                        )

            MOUNT VERNON POLICE           )           OPINION AND

            SERVICES GUILD,                          )           AWARD

                                                Guild,              )           1993 WAGE REOPENER

                                                                        )

                        and                                          )

                                                                        )

CITY OF MOUNT VERNON,                     )

WASHINGTON,                                           )

                                                                        )

                                                City.                )

 

 

HEARING SITE:                                                      City Hall

                                                                                    Mount Vernon, Washington

 

HEARING DATES:                                                  July 8, 9, 12, 1993

 

POST-HEARING BRIEFS DUE:                            Postmarked September 2, 1993

 

RECORD CLOSED ON RECEIPT OF BRIEFS:  September 7, 1993

 

REPRESENTING THE GUILD:                 James M. Cline

                                                                         Hoag, Vick, Tarantino & Garrettson

                                                                        Suite 200

                                                                        425 Pontius Avenue N.

                                                                        Seattle, WA 98109

 

REPRESENTING THE CITY:                     Bruce L. Schroeder

                                                                        Heller, Ehrman, White & McAuliffe

                                                                        6100 Columbia Center

                                                                        701 Fifth Avenue

                                                                        Seattle, WA 98104-7098

 

ARBITRATION PANEL:                             Mike Marker

                                                                        Guild Appointed Member

                                                                        Linford Smith

                                                                        City Appointed Member

 

                                                                        Gary L. Axon

                                                                        Neutral Arbitrator

                                                                        1465 Pinecrest Terrace

                                                                        Ashland, OR 97520

                                                                        (503) 488-1573

 

 

                                                            Table of Contents

                                                                                                                                    Page

I.          Introduction                                                                                                    2

II.        Background                                                                                                    7

III.       Position of the Guild                                                                                      9

IV.       Position of the City                                                                                        23

V.        Discussion and Findings                                                                                41

            A.        Guild Proposal to Change the Wage Grid                                        44

            B.        Wages                                                                                                 46

                        Constitutional and Statutory Authority

                        of the Employer                                                                                  49

                        Stipulations of the Parties                                                                 49

                        Comparability                                                                         49

                        Cost of Living                                                                         57

                        Changes                                                                                              59

                        Other Factors                                                                         59

                        Award                                                                                                 60

 

I.          INTRODUCTION

 

            This case is an interest arbitration conducted pursuant

to Chapter 41.56 RCW.  The parties to this dispute are the City of

Mount Vernon, Washington (hereinafter "City") or ("Mount Vernon")

and the Mount Vernon Police Services Guild (hereinafter "Union") or

("Guild").  In 1990 the parties negotiated their first Collective

Bargaining Agreement under Washington law.   The first Agreement

covered  the three-year period  from January  1, 1991,  through

December 31, 1993.   The 1991-93 Collective Bargaining Agreement

called for a salary reopener for the third year of the contract.

The  parties  were  unable  to  resolve  the  sole  issue  of  the

appropriate wage rate for 1993 through negotiation and mediation.

The matter was certified for interest arbitration pursuant td RCW

41.56.450, et seq.

            The City of Mount Vernon is located in Skagit County.

Skagit County is the center for a basically agricultural, fishing

and timber economy.  Mount Vernon is located approximately mid-way

between Bellingham and Everett, Washington along the Interstate 5

corridor.  The 1993 population of the City is approximately 20,450.

The City actively promotes a rural and small-town atmosphere as

part of its mission statement.  City Ex. 65.

            Skagit County has experienced a population growth from

66,100 in 1983 to 88,500 in 1993.  The City of Mount Vernon has

also grown from a population of 17,647 in 1990 to 20,450 in 1993.

City Ex. 19.  The largest employers within the City limits are the

various public agencies, including Skagit County, the City, schools

and  a  public  hospital.    There  are  no  major  industrial  or

manufacturing employers located in Mount Vernon.  In 1990 a mall

opened in the neighboring city to the north, Burlington.  Several

retail businesses relocated out of Mount Vernon and into the mall

at Burlington.   However, during the same period the City has

approved several new residential subdivisions to accommodate the

increasing population of Mount Vernon which has grown steadily

since the mid-1980s.

            The Mount Vernon Police Department is comprised of

approximately 36 full-time positions including a Chief, Assistant

Chief, a Captain and a Records Manager who are in non-represented

management positions.   The bargaining unit is composed of 27

officers.  Twenty-one are patrol officers and 6 are sergeants.  The

average length of service in the bargaining unit is almost 10

years.  The Mount Vernon Police Department provides a full range of

law enforcement services for the citizens of the City.  The bulk of

the Police Department is funded by the City's general fund.

            The hearing in this case took three days for the parties

to present their evidence and testimony.   The majority of the

hearing  time was  consumed  on  the  issue  of  the  appropriate

jurisdictions with which to compare Mount Vernon for the purpose of

establishing the 1993 wage schedule.  The hearing was recorded by

a court reporter and a transcript consisting of 689 pages was made

available to the parties and the arbitration panel for the purpose

of preparing the post-hearing briefs and award.  Testimony of the

witnesses was taken under oath.  At the hearing the parties were

given the full opportunity to present written evidence,  oral

testimony and argument.  The parties provided the Arbitrator with

substantial written documentation in support of their respective

positions.   Comprehensive and lengthy post-hearing briefs were

submitted to the Arbitrator with accompanying interest arbitration

awards issued in the state of Washington.

            The approach of this Arbitrator in writing the award will

be to summarize the major and most persuasive evidence and argument

presented by the parties.  After the introduction of the issue and

positions of the parties, I will state the principal findings and

rationale which caused the Arbitrator to make the award on the wage

issue.

            The parties filed their post-hearing written briefs in a

timely manner and the record was closed as of September 7, 1993.

On October 6, 1993, the Union filed a Motion to Reopen the Record

for the purpose of the admission of the newly signed Oak Harbor

Police Department agreement.  On October 8, 1993, the City filed a

brief in opposition to the Union's Motion to Reopen the Record.

After evaluating the arguments submitted by counsel regarding the

Motion to Reopen the Record, the Arbitrator denied the Motion to

Reopen in an order dated October 19, 1993.

            Because of the extensive record made in this case the

parties agreed to an extension of the statutory requirement that a

decision be issued within thirty days of the close of the record.

On September 29, 1993, the neutral Arbitrator met and conferred

with the party appointed members of the arbitration panel to

discuss the evidence and argument contained in the record of this

case.  The comments and observations of the party appointed panel

members were of great assistant to the neutral Arbitrator in making

his  findings  of  fact  and  award on the  issue presented  for

arbitration.   The written decision is solely the work of the

neutral Arbitrator.

            This Arbitrator carefully reviewed and evaluated all of

the evidence and argument submitted pursuant to the criteria

established by RCW 41.56.460.  Since the record in this case is so

comprehensive it would be impractical for the Arbitrator in this

discussion and award to restate and refer to each and every piece

of evidence or testimony presented.  However, when formulating the

1993 wage award the Arbitrator did give careful consideration to

all of the evidence and argument submitted.

            The single issue submitted to interest arbitration in

this case is the 1993 wage issue under the reopener provision of

the 1991-93 Collective Bargaining Agreement.

            The statutory factors to be considered by the Arbitrator

may be summarized as follows:

 

            (a)        The   constitutional   and   statutory

            authority of the employer;

 

            (b)        Stipulations of the parties;

 

            (c)        (i)     For  employees  listed  in  RCW

            41.56.030(7)(a) and 41.56.495, 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,  commonly  known  as  the  cost  of

            living;

 

            (e)        Changes  in  any  of  the  foregoing  of

            circumstances  during  the  pendency  of  the

            proceeding;

 

            (f)        Such other factors, not confined to the

            foregoing, which are normally or traditionally

            taken into consideration in the determination

            of wages, hours, and conditions of employment.

 

II.        BACKGROUND

 

 

            This case comes to arbitration pursuant to a reopener

clause in the 1991-93 Collective Bargaining Agreement.  The single

issue subject to the reopener involves the wage level for 1993.

The present salary schedule is structured on an eight step system.

It takes nine years to reach the top step of the current salary

schedule.  The nine year salary grid has been in place for several

years.  Pursuant to the 1992 contract, a beginning patrolman starts

at $2,278 per month and rises to a top step after nine years of

$2,838 per month.  A Mount Vernon police officer's wage is $2,742

after five years with the Police Department.

            The sergeants are also included in this bargaining unit.

A sergeant with zero to two years experience earns $2,949 per month

which increases to $3,049 per month after two years.  The sergeant

reaches the top step of the salary scale after four years.  The top

step pay for a sergeant is $3,149 per month.

            The City pays the entire premium for medical care for

bargaining unit members and their dependents pursuant to the terms

of the contract.   The members of this bargaining unit work a

substantial amount of overtime.  In addition, shift differential is

paid for work between 5:00 p.m. and 9:00 a.m.  Premium pay is also

provided for special assignments made to the members of this

bargaining unit.

            The 1991 Agreement yielded a 7% increase.  The second

year of the contract generated a 3% increase under a CPI formula

based on 100% of the all-cities CPI-U index, with a minimum of 3%

and a maximum of 7% computed on a reading of the November 1990 to

November 1991 index.

            The Union proposed for 1993 to alter the wage grid by

reducing the time it takes to reach the top step from nine years to

five years.  The Union has proposed a wage increase that would

average 17%.  The City proposed to retain the existing salary grid

with a 3% across the board increase.

            The driving force behind the positions of the parties on

the wage issue was comparability. Each party submitted substantial

evidence and argument to support its position on the appropriate

comparators for the purpose of establishing wages for Mount Vernon

police officers.  The Arbitrator was also supplied with several

interest arbitration decisions involving other Washington cities.

The arbitration of this case was conducted approximately six and

one-half months into the 1993 contract year.  By the time this

award is issued, approximately two months will remain on the 1993

contract.  The Arbitrator has evaluated this case in the context of

a third year reopener and the implications of this award for future

negotiations between the parties.

 

III.       POSITION OF THE GUILD

 

            The Union proposed a salary schedule for 1993 wages as

follows:

            PATROL PAY STEP MONTHLY WAGE

            0-1       years                           $2606

            1-2       years                           $2737

            2-3       years                           $2867

            3-4       years                           $2997

            4-5       years                           $3128

            5+        years                           $3258

 

            SERGEANTS' PAY STEP

            0-2       years                           $3449.89

            2-4       years                           $3567.31

            4+        years                           $3684.69

 

 

            The Guild's position on 1993 wages was based almost

exclusively on its list of comparators.  According to the Guild,

its proposed list is more consistent with both statutory and other

traditional factors relied upon in the selection of comparator

jurisdictions in interest arbitrations than the list offered by the

City.  The Guild's "Weighted Multi-Factor Approach" resulted in a

list of eight Washington jurisdictions which the Union believed

represented a fair and equitable basis on which to establish Mount

Vernon  police  wages.    The  Guild  proposed  eight  Washington

jurisdictions as its list of comparables.  They are as follows:

 

CITY                                       POPULATION           NUMBER OF OFFICERS

 

Bremerton                              36,380                         56

Longview                                32,650                         46

Puyallup                                  26,140                         43

Lacey                                      22,660                         31

Mount Vernon                        20,450                         29

Mountlake Terrace               19,880                         29

Des Moines                            19,460                         27

Port Angeles                           18,270                         27

Aberdeen                                16,665                         36

 

Average without

            Mount Vernon            24,013                         35

 

 

The Union submits the factors which relate to size, function,

wealth and location of the comparator jurisdictions are most likely

to be understood by the parties to produce a list of "like"

jurisdictions.

            The Guild avers that its method of analysis produced a

balanced and reasonable set of comparators.  The Union's list was

composed of cities located in western Washington and excluded

cities without "uniform personnel" or those with less that 15,000

population.   The variance range was established to multiply or

divide by a factor of 2.  The Guild's demographic factors used as

a basis for selecting comparables were as follows:

 

1)         Population

2)         Assessed Valuation

3)         Assessed Valuation per capita

4)         Retail Sales

5)         Retail Sales per capita

6)         Number of Officers

7)         Number of Crimes

 

The factors given the most weight in the analysis were population

and assessed valuation.

 

            The Guild claimed that the factors it relied on for

selecting comparators offer the best approach to determine "like

employers  of  similar  size."   The  argument  of  the  Guild is

summarized in the sections which follow.

            1.         Population.      Population  is  the  best

measure of "similar size."  Further, increases

in population often increase the complexity

and workload of the law enforcement officers'

job.  Population must be viewed in tandem with

several other factors.  Cities in the Guild's

list of comparables range from 16,665 persons

in Aberdeen to 36,380 persons in Bremerton.

The average population of the eight cities

without Mount Vernon is 24,013.  The Guild's

comparators  are  justified  based  upon  the

population   range   of   the   jurisdictions

resulting from the Guild's study.

 

2.         Assessed Valuation.  Assessed valuation is

a traditional factor utilized by arbitrators

in the process of selecting comparators.  The

reasoning for using assessed valuation is that

police officers not only protect people, they

also protect property.   Assessed valuation

when viewed in conjunction with retail sales

is probably far and away the best measure of

the City's tax base and its ability to pay.

An equitable wage award will take into account

the similarity of Mount Vernon to cities of

similar ability to pay.   Assessed valuation

serves as a rough measure of the wealth of a

community.

 

3.         Assessed Valuation Per Capita.  Assessed

valuation per capita is simply a more fine-

tuned method of selecting comparators.   The

logic  of  utilizing  assessed valuation per

capita is that one gets a better measure of a

city's ability to pay than by looking at

assessed valuation alone.  Assessed valuation

per capita also provides a better snapshot of

the local effort than does assessed valuation

standing by itself.

 

4.         Retail  Sales.     In  Washington,  a

significant share of local income to cities is

generated by the retail sales tax.  The volume

of retail trade should also be viewed as a

generator  of  police work  as  increases  in

commercial  centers  will  likely  result  in

rising  crime  related  to  such  centers.

Bargaining history supports the use of retail

sales   as   an   element   for   determining

comparability.    In  1991  the  City  relied

extensively on purported diminished retail

trade to justify a diminished wage settlement.

An  evaluation  of  comparable  retail  sales

indicates that Mount Vernon is hardly sales

tax poor.   While  neighboring Burlington's

growth as a commercial center may have caused

a temporary interruption in Mount Vernon sales

tax growth, the evidence reflects that Mount

Vernon appears to have a healthy sales tax

base.

 

5.         Retail Sales Per Capita.  Retail sales per

capita also provides a means of controlling

for size and more carefully assessing the

local effort of a jurisdiction towards support

for its police department.

 

6.         Number  of  Officers.    The  number  of

officers is a method of determining whether

employers are like employers.  As departments

grow  in  size,  they  generally  grow  in

sophistication and specialization.  Increasing

specialization  usually  leads  to  greater

economic rewards for those participating in

the more specialized police department.  The

increase   in   police   wages   under   such

circumstances is a reflection of the greater

demands made  upon  the  enterprise  and the

officers who serve the City.

 

7.         Number of Crimes.  Number of crimes has

sometimes been relied upon by arbitrators to

select comparators.  Crime data is seen as a

measure of workload and output of employees.

While crime reporting methods may vary from

jurisdiction to jurisdiction, the number of

crimes is a factor worth giving some weight t6

in the selection of comparators.

 

            In sum, the Guild submitted that its weighted multi-

factor approach is an honest and rational method for selecting

comparators.  The Guild does not insist that this is the only way

to select comparators, but that it is a fair way on which to base

Mount Vernon police wages.

            Regarding the City's method of utilizing population alone

as the basis for determining comparators, the Union submits such an

ad hoc approach by using population only as a first cut and then

excluding a significant number of Puget Sound jurisdictions ignores

the impact of nearby large metropolitan areas.  Mount Vernon is

strategically placed along Interstate 5 mid-way between Seattle and

Vancouver, B.C.  Such an ad hoc method of selecting comparators is

not rational or fair because the economic influence generated by

the metropolitan area goes unrecognized.

            The Guild next argues that Mount Vernon comparators

should be selected out of the western Washington labor market.

Presence in a common labor market is certainly one measure for

determining whether employers are like each other.   Arbitral

authority teaches that selecting comparators based on a common

labor market or geographic proximity is preferred.  When there are

a sufficient number of jurisdictions within the local market pool,

arbitrators adopt jurisdictions that are geographically close to

the target jurisdiction.  The reason for looking at the local labor

market is based on two primary factors.  First, it is the market in

which the employer competes for the purchase of labor.  Second,

human nature is such that it is expected that employees are more

likely to look at jurisdictions geographically proximate, than

those that are geographically distant to determine whether their

wages are fair and equitable.  Wages based on parity with Walla

Walla and Pullman, located in the far eastern part of the state of

Washington, will not be perceived as fair and just.

            The Guild contends there are a sufficient number of

proper and fair comparators that can be drawn from within a labor

market west of the Cascades.  The population and number of police

departments in the Puget Sound area are so significant that it is

bound to have an impact on any jurisdiction adjacent to this area.

There is no need to go east of the Cascades to find appropriate

comparators.

            Turning to the testimony of the City's expert witness,

economist David Knowles,  the Guild submits his testimony was

"incomprehensible, contradictory, unscholarly and nonsensical."

Knowles never offered a coherent or logical definition of what

constituted a labor market.  Nor had he actually studied the labor

market for police officers.  Whatever Knowles meant by a labor

market, it appears his testimony had little or no resemblance to

anything which has ever been utilized in defining a labor market in

prior interest arbitrations.   The Guild vigorously argues that

Mount Vernon's proximity to Seattle has a strong influence on the

Mount  Vernon  economy  that  cannot  be  ignored  in  selecting

comparators.  Mount Vernon is located sixty miles from the center

of Seattle.  The evidence offered by the Guild regarding Seattle's

influence on Mount Vernon was not successfully rebutted by the

City.   The daily migration of thousands of persons along the

Interstate 5 corridor set western Washington jurisdictions apart

from eastern Washington cities.

            Economic evaluations of Mount Vernon by neutral parties

reveal this City is significantly impacted by its close proximity

to Seattle.  Mount Vernon is strategically located mid-way between

Seattle and Bellingham.  A profile of Skagit County noted that

Mount Vernon "was ideally situated to be both a supplier of goods

to those markets and a conduit for trade between the two."  There

is a  significant "spillover from Puget Sound with many residents

commuting to jobs in Snohomish and King counties and bringing their

paychecks home to Mount Vernon.  Another report by the Employment

Security Department predicted that Skagit County would be under

tremendous pressure "to accommodate population and economic growth"

largely because of their proximity to nearby Everett and Seattle.

            Real estate expert Tom Kelly testified as to the effect

of Mount Vernon's proximity to the Seattle area on its housing

market.  Kelly cited a marked increase in commuting since 1990.

Kelly concluded that this City is linked now more than ever to the

tn-county economic base of King, Pierce and Snohomish counties.

The City's own finance director was quoted as characterizing Mount

Vernon as a commuter's paradise." The changes in the Mount Vernon

housing market  are  direct  evidence  of  this  City's  economic

integration with the Seattle area.

            It is also the position of the Guild that this City

should not be viewed as a "stand-alone" jurisdiction.   Because

Mount Vernon sets on the edge of a larger metropolitan area, a very

strong relationship exists between the jurisdiction's proximity to

Seattle and wages.   Therefore, the Guild submits that it is

appropriate to select a group of comparators that on the whole

share Mount Vernon's characteristics in terms of proximity to

larger metropolitan areas.

            RCW 41.56.460(c)(i) requires comparisons made between

jurisdictions of "like personnel of like employers of similar

size."  The statute mandates that only cities above 15,000 may be

considered as comparators to the City of Mount Vernon.  According

to the Guild, cities with a population below 15,000 do not employ

police officers as "uniform personnel" under the act.  By using

cities  with  a  population  below  15,000  the Arbitrator would

incorrectly use jurisdictions that do not have "like personal of

like employers."  Wages for those police contracts in cities above

15,000 are much more likely to be set as a reference to the

specific  statutory  criteria  controlling  in  this  interest

arbitration.  Jurisdictions under 15,000 do not have the benefit of

interest arbitration.

            Regarding the factor of cost of living, the Guild offered

specific empirical data regarding two of the better measures of

cost of living--housing costs and income.  On the other hand, the

City offered only "theories" about what the cost of living in Mount

Vernon might be as compared to the other Washington jurisdictions.

The City offered a theory to measure the differences in the cost of

living  between  the  jurisdictions  through  the  testimony  of

transportation planner Brent Baker.   The Guild argued Baker's

theories do not actually measure the cost of living between cities.

Rather he propounds a theory about what the differences in cost of

living might be among the various comparator jurisdictions.  His

theory  was  totally  untested.    On  cross-examination,  several

aberrations in Baker's model were identified which undercut its

validity.   Baker was unable to explain why there was a 22%

difference between the cost of living in Pasco and the cost of

living across the river in Richland and Kennewick.  Nor was Baker

able to explain why San Juan County's cost of living was lower than

the cost of living in the remote northeast Washington counties of

Pend Oreille and Ferry.

            Both parties recognize that there is no index which

measures the relative differences in the cost of living in Mount

Vernon with the other comparator jurisdictions.  According to the

Guild, the only accurate way to measure the cost of living is to

actually measure the price of goods being bought, and no one has

done that for Mount Vernon.  The best available data presented at

this hearing to measure Mount Vernon's cost of living was the house

pricing data presented by the Guild.

            Median family income is also a measure of comparability

because it allows inferences about local effort to be drawn from

the reports.  In addition, the ratio of police officer salaries to

median family income is a test of equity.  Even the City's own

economist testified that income measures of per capita and median

family income were good indicators of local wealth and local cost

of living.

            The Guild takes the position that abundant evidence

exists the local economy is prosperous.  The City mistakenly uses

unemployment data for the entire County and offered no data on the

actual employment rate in Mount Vernon for support of its position

that high unemployment justifies a low wage settlement.  While

recognizing that Skagit County has a strong agricultural base, the

economy is diversifying beyond agricultural based industries.  It

is reasonable to assume that the people moving to Mount Vernon are

not doing so to work in the agricultural industry.  Nor should the

lack of "smokestack industry" be viewed as a negative in discussion

of the Mount Vernon economy.  If Mount Vernon's long-term plan is

to be a bedroom community, maintaining a relatively pristine

environment with light industry and service jobs is a rational

approach to growth management in the City.

            The Guild prepared sixteen tables which summarized the

chief points of comparison on the relevant demographic factors

between the eight jurisdictions it proposed and those proposed by

the City.  Guild Post-Hearing Brief, pp. 39-61.  The Arbitrator

will not repeat the findings displayed on the sixteen tables.  The

Guild submits  its  list of comparators is based on coherent,

understandable principles which are well-grounded in statue and

arbiter precedent.  A review of the City's list of comparables

reveals that it has been shifting over the term of the contract and

has been result oriented.  The evolving set proposed by the City

over time is undoubtedly a reflection of the City proposing a list

of jurisdictions with the lowest possible wages, and searching for

a theory to support its comparator jurisdictions.   In the 1990

negotiations the City proposed a list based on a population plus or

minus 50%.  At that time the City did not attempt to exclude the

counties immediately to the south of Mount Vernon.  The Guild went

with a western Washington  list  thinking it would promote a

settlement of this contract.  Across the range of the relevant

demographic factors, Mount Vernon is generally near the median of

the Guild's list of comparators, while it is generally near the top

of the list proposed by the City.  By using population as the only

demographic variable by which to select comparables and then

excluding the four counties to the south of Mount Vernon, the City

has put together a distorted list.  The Arbitrator should adopt the

Guild's list of comparators and reject the list offered by the

City.

            Regarding  the  City's  proposed  "local  labor market"

consisting of the jurisdictions of Burlington, Sedro Woolley, Oak

Harbor, Anacortes and the Skagit County Sheriff's Office, the Guild

submits the model adopted by the City is flawed and should not be

relied upon by the Arbitrator to establish a wage award.  The City

offered little empirical evidence to support its claim that this

would  be  the  appropriate  group  of  comparator  jurisdictions.

Further, the City never defined what it meant by a local labor

market.  The City also proposed Oak Harbor as part of the local

labor market jurisdictions, but rejected Bellingham and Everett

which in terms of travel time are closer to Mount Vernon than is

Oak Harbor.  Mount Vernon is by far the largest City in the local

labor market group.  By equities, Mount Vernon should be the wage

leader of this group.  The Skagit County Sheriff's Department pays

far in excess of Mount Vernon which reverses a normal industry

standard in which cities normally pay law enforcement officers more

than counties in the same locale.  The wide range in the ratios of

population and assessed valuation reveals the difficulty in using

dissimilar jurisdictions in the same labor market for making

comparisons.  Guild post-Hearing Brief, p. 67, Table 18.

            The wage offer proposed by the Guild is supported by

relevant factors traditionally used to determine wage awards in

interest arbitration proceedings.  The Guild has taken a position

that comparators should be compared on the basis of their five-year

wage.  There is a recognized tradition in interest arbitrations to

make wage comparisons based on a benchmark.  The Guild approach has

been to use a format of comparing top-step wage on a five-year

basis and treating any wages added after the five-year mark as a

longevity premium.   By using the fifth year of service as the

benchmark for comparison, it is possible to make calculations and

comparisons on an "apples to apples" basis for similarly situated

employees.

            In the 1991 negotiations, the City claimed it was unable

to meet the Guild's wage demands because loss of retail business

had caused a decline in tax revenues.  The Guild agreed to a wage

reopener with the promise that if revenues were improved at that

time the employees would receive a catch-up increase.  The revenues

have improved and it is now time for an award which would bring the

wages  of  this  bargaining unit up to parity with the other

comparable jurisdictions.  The offer of the size proposed by the

Guild should be viewed in the context of the entire three-year

package.  The City bought itself more time by making promises to

catch-up the wages for the officers in the third year.  What the

Guild is proposing by its substantial wage increase is simply a

backloading  into  the  third  year  of  what  should  have  been

distributed over the full three years of the contract.  The time is

now to award the substantial increase in wages proposed by the

Guild in order to establish parity with the other comparable

jurisdictions.

            If the Arbitrator determines to use a cost of living

index as a part of setting a wage award, the Arbitrator should

utilize the Seattle index which is commonly used to measure the

appropriate wage level for Washington public agencies.  In 1992 the

Collective Bargaining Agreement stipulated the use of the All-

Cities index rather than the Seattle index.   There was a 3.7%

difference in the two indices which caused Mount Vernon wages to

fall further behind the comparators.  Real wages over time have

been declining for the members of this bargaining unit.  Adoption

of the City's proposed 3% award for 1993 would be lower than real

wages in 1989 and near the 1987 wage level.

            To the extent internal parity is relevant, the Arbitrator

should note that the City has provided firefighter wage increases

in excess of other employees also subject to interest arbitration.

The increase agreed to for firefighters for 1993 was 4.5%.  The

Guild believes that internal parity is of little usefulness and may

well violate the statutory requirement that wages be determined in

reference to comparable employers.   While the internal parity

factor might be relevant where there is an ability to pay argument,

this is not an issue in the instant case.  City has the fiscal

resources necessary to pay the wages proposed by the Guild.

            In sum, as this City has grown the demands on its police

officers have increased.  The City has become more prosperous as

its tax base has shown significant improvement in recent years.

The Guild asks the Arbitrator to make an award that is fair and

equitable and will give the parties some stability in future

contract negotiations.

 

IV.       POSITION OF THE CITY

 

            The City proposed a 3%, across the board adjustment to

the  current  salary  grid  for  patrol  officers  and  sergeants,

retroactive to January 1, 1993.  The City's proposal would leave

the current nine year, eight step salary grid in place through the

remainder of this contract.  The 1993 salary schedule proposed by

the City would provide as follows:

 

                                                Police Salary

                                                                                                            Monthly

                                                                                                            Proposed

            Patrolmen                                                                               1993 (3%)

            0-6       month                                                                          2347.08

            6          mo-1 year                                                                   2401.83

            Over    1-2       years                                                               2470.83

            Over    2-3       years                                                               2525.67

            Over    3-5       years                                                               2774.42

            Over    5-7       years                                                               2824.08

            Over    7-9       years                                                               2873.83

            Over    9         years                                                               2923.67

 

            Sergeants

            0-2 years                                                                                 3037.17

            over 2-4 years                                                                                    3140.42

            over  4  years                                                                         3243.83

                                                                                                City Ex. 72.

 

The City believes its proposal is fashioned in light of all the

factors mandated by Washington law.

            City believes its proposal is fair for seven basic

reasons.  First, the City is already paying consistent with the

average of the jurisdictions in its local labor market.  Second,

officers are also paid in relation to its  "true"  comparable

employers.   Third, the cost of living factor also supports the

City's proposal.

            Fourth, the City's proposal is justified by consideration

of the relative cost of living differences between jurisdictions.

The undisputed facts demonstrate that it is significantly less

expensive to live in Mount Vernon than it is in the central Puget

Sound area.  Fifth, the turnover rate in this Department reveals

that only three officers have left over a ten-year period, all for

reasons unassociated with salary.  Sixth, the City's proposal is

consistent with the increases given other City workers.  Seventh,

the economic conditions in Skagit County and the City's finances

argue in favor of the City's 3% offer.

            The City's concern is that adoption of the Guild's

exorbitant  proposal  would  run  counter  to  the  principles  of

Washington law.  According to the City, the Arbitrator's task is to

fashion an award which constitutes an extension of the bargaining

process.  The Arbitrator's role in this case is not to upset the

City's traditional position in relation to its comparables.  The

City hopes that the result of this arbitration will be that future

negotiations will be approached by both parties with intent to

resolve their differences at the bargaining table rather than in an

adversarial interest arbitration hearing. Like the Guild, the City

relied primarily on the comparables as the basis for its 3% of fer.

            The City generated a list of cities with a population

plus or minus 50% of Mount Vernon.  In order to reflect the rural,

agricultural nature of Mount Vernon and its environs, the City

excluded all cities in this population band which were located in

the central Puget Sound region.  The Puget Sound region was defined

by the City as jurisdictions in Snohomish, King, Pierce, Thurston

and Kitsap counties.   This approach reduced the list to twelve

Washington jurisdictions, six of which were west of the Cascades

and six of which were east of the Cascades.  The City then reviewed

its  list  and eliminated the two smallest  eastern Washington

jurisdictions.

            The ten jurisdictions which the City maintains are "like

employers" are as follows:

 

            CITY                                                   POPULATION

                                                                        1992                1993

            Kelso                                                  11,837             11,850

            Anacortes                                           12,110             12,260

            Centralia                                             12,330             12,380

            Aberdeen                                            16,630             16,665

            Port Angeles                                       18,030             18,270

            Oak Harbor                                        18,340             18,930

 

            MOUNT VERNON                           19,550             20,450

 

            Pasco                                                  20,840             21,370

            Wenatchee                                         22,710             23,000

            Pullman                                               23,190             23,480

            Walla Walla                                        28,130             28,802

 

            AVERAGE                                         18,415             18,703

 

            The City urges the Arbitrator to adopt the recognized

plus  or  minus  50%  measure  for  selecting  a  similarly  sized

jurisdiction.  The Guild advocates a skewed population ban which

would include cities twice the size of Mount Vernon.  The adoption

of an approach which would yield a population ban of 50% down and

100% up should not be recognized as an appropriate means to compute

a fair combination of comparable employers.

            Regarding the Guild's claim that it is inappropriate to

utilize cities smaller than 15,000 in population, the City submits

the Guild's approach should be rejected.  The definition relied on

by the Guild has been amended by the Washington State legislature.

The new law signed by the governor on May 15, 1993, reduced the

population threshold to 7,500 for law enforcement personnel subject

to  interest  arbitration.    Even  though the  amendment  is not

effective until July 1, 1995, the statute reflects the legislative

intent to broaden the reach of interest arbitration for police

officers.  Even if the amendment is not given full effect by the

Arbitrator,  the City claims that the Guild's argument is not

supported by the statutes.   Under the Guild's argument,  all

jurisdictions  located  in  Oregon  and  California  would  be

automatically excluded from the definition of "uniform personnel"

regardless of size.  RCW 41.26.030 requires parties to consider

comparable employers from Oregon,  California and Washington.

Police in those states have their own enabling laws which are not

controlled by Washington's statute. The Arbitrator should conclude

that  the  legislature  did  not  intend  to  constrain  interest

arbitrators to population bans contained in the definition of

"uniform personnel'' when deciding on similarly sized jurisdictions.

            The cumulative effect of the Guild's limit on the lower

end of the population and the broadening of the upper end is a list

of comparables which is substantially larger than Mount Vernon.

The City's proposed comparators has a population range of 11,852 to

28,802.  This represents a range of 41% larger than Mount Vernon to

42% smaller than Mount Vernon.  On the other hand, the Guild's

comparables range from 16,665 to 36,385, a percentage range of 19%

smaller than Mount Vernon to 78% larger than Mount Vernon.  The

average population on the City's list was 18,415 which is similar

to Mount Vernon's current population.

            The City next asserts the Arbitrator should exclude

cities located in the central Puget Sound urban area.  The statute

requires the comparable to be "like employers."  The methodology

adopted by  the  City  in  developing  its  comparables  excluded

jurisdictions located in the heart of the central Puget Sound urban

core.   Arbitrators have recognized that jurisdictions located

within the central Puget Sound area are different because of the

substantial influence of Seattle.   The evidence offered at the

hearing supports the position that Mount Vernon is not like

jurisdictions located in the Seattle metropolitan core.   The

population density figures demonstrated that Skagit County has only

45.8 people per square mile compared with Snohomish County directly

to the south with over 222.8 people per square mile.  The remaining

counties in the urban cluster range from a low of 221.8 people per

square mile to King County with 709 people per square mile.

            Skagit  County  is  a rural county with  7.3%  of  the

employment in agricultural related industries.  This is in contrast

to Seattle/Snohomish County where less than 4 tenths of the

employees are employed in agricultural related work.  The bulk of

the jurisdictions on the City's list of comparables were similarly

situated in terms of the agricultural percentage in the work force.

Skagit  County  had  an  unemployment  rate  of  10.7%  which  is

substantially higher than the unemployment rate in the urban

counties.

            The testimony of Dr. David Knowles revealed that Skagit

County is a rural area that is not densely populated.  It does not

have the economic influence placed on it because of its proximity

to Snohomish, King and Pierce counties.  In the judgment of Dr.

Knowles, the central Puget Sound cluster ends north of Everett

before reaching the agricultural base of the Skagit County Valley.

            Moreover, the statistics do not back-up the Guild's claim

that Mount Vernon has become a "bedroom community" for the urban

areas.  Rather, the data showed that 85.4% of Skagit County workers

live in Skagit County.  Only 2.4% of Skagit County residents travel

to King County to work.  City Ex. 9.  While it may be true the

number of commuters has increased over the last decade, Mount

Vernon is a long way from becoming a bedroom community similar to

those counties located immediately to the north and south of King

County.

            The City claims its comparables are "like" Mount Vernon.

Anacortes and Oak Harbor are located in the same local labor market

and are geographically the closest to Mount Vernon.  Anacortes is

also very close to Mount Vernon's assessed evaluation, even though

its population is less.   The cities of Centralia, Kelso, Port

Angeles and Aberdeen are all cities located in western Washington.

They are also a small-town hub of an otherwise rural area.

Centralia and Kelso have the additional similarity of being along

the Interstate 5 corridor.   These ten cities are located in

counties where the density is significantly less than the Seattle

metropolitan area.   The bulk of these areas also have higher

proportions of agricultural employment in their work forces.  They

also share the "unfortunate trait of having unemployment rates

which are significantly greater than those counties in the Seattle

metropolitan core."  In sum, the jurisdictions chosen by the City

satisfy the statutory requirement of being "similarly sized" and

being "like employers."

            Turning to the Guild's set of comparator jurisdictions,

the City submits the Arbitrator should reject the Guild's results

oriented list of dissimilar sized cities which are unlike Mount

Vernon.   The Guild's multi-factor regression analysis is not

statistically supported.  According to the City, the Guild's list

is a results orientated compilation of jurisdictions which are

unlike Mount Vernon.   The Guild offered no expert testimony

supporting  the  statistical  underpinnings  for  the  regression

analysis.

            Moreover, Dr. David Knowles and Brent Baker, the City's

experts,  testified  about  the  significant  risk  in  utilizing

regression  analysis  as  used by  the  Guild  to  establish  its

comparators.   Both Dr. Knowles and Baker testified there were

significant pitfalls in using the statistical analysis by the Guild

to come up with its list of comparators.  Baker testified that the

regression model does not prove a cause and effect relationship.

The Guild offered no evidence to counter the expert testimony of

Dr. Knowles and Baker.  The framework for the Guild's analysis was

unsupported and therefore should be rejected by the Arbitrator.

            Even if the Guild's model is statistically accurate, the

methodology behind the model is statistically flawed.   While

assessed valuation may have some support in arbitrable decisions

involving  firefighters  who  protect  property,  the  primary

responsibility of the police is to protect people.   Assessed

valuation does not measure the value of a life.   If assessed

valuation is being used as a measure of a jurisdiction's wealth, it

ignores other major components of a city's revenue sources such as

sales tax and utility taxes.  The absence of a strong sales tax

revenue counters any strength in property tax.  A true measure of

the City's revenues for paying a wage increase is total revenues.

The City submits that this figure does not appear anywhere in the

Guild's analysis because other revenue sources for Mount Vernon

have been stagnant even in light of population growth.

            The Guild further compounded its errors by automatically

excluding all eastern Washington jurisdictions from its list of

comparators.  Dr. Knowles testified that the difference between

eastern and western Washington is not really between east and west,

but rather between rural and urban.  There are pockets of rural

communities in western Washington, north of Everett and south of

Olympia.  Skagit County is a rural area comparable to jurisdictions

located in eastern Washington.  The Guild's analysis neglects to

take into consideration the fact that Skagit County is a rural

county which possesses many of the similarities in terms of its

population density to cities located in eastern Washington.

            The  Guild's  results  orientated method of  selecting

comparables is also illustrated by the fact that Bambridge Island,

Bothell and the city of SeaTac do not appear on the source material

for testing under the Guild's computer analysis.  According to the

City, the real explanation for this omission is that they are

trying to eliminate jurisdictions with lower pay.  Further, the

Guild also eliminated Oak Harbor for some unexplained reason.  On

the other end of the scale, the Guild included the city of Aberdeen

which has an assessed evaluation which is less than half of Mount

Vernon which should call for automatic exclusion under the Guild's

methodology. Aberdeen is a high paying jurisdiction which explains

why it was not excluded from the Guild's list of comparators even

though its own model would call for its deletion from the list.

            The City cited other examples of where it alleged the

Guild  had  failed  to  follow  its  own methodology.    A close

examination  of  the  Guild's  exhibit  demonstrates  they  have

gerrymandered a list of alleged comparables that are not even

supported by their own methodology," even if that methodology were

statistically sound.

            The Guild has shifted from their former comparables

utilized in the 1990 negotiations without explanation.  Present on

the 1991 list of comparables were eleven jurisdictions drawn from

eastern and western Washington, Oregon and California.  The only

holdover on the  current Guild  list  of  comparables  is  Lacy,

Washington.   The Guild's unexplained abandonment of its  1991

comparables is yet one more piece of evidence of the Guild's

gamesmanship.

            The City next argues that Mount Vernon police officers

are paid fairly in relation to its comparables.  The Arbitrator

should focus on the top step officer wages for similar periods.

The Guild's attempt to utilize step five of the current salary

proposal for purposes of comparison should be rejected by the

Arbitrator.  The monthly salary for top step police officers has

been consistently utilized by interest arbitrators as the benchmark

for comparison for police wages.

            Moreover,  it is important to know the City pays a

significant amount of money to the members of this bargaining unit

by way of premium pay and overtime.  Fifty-nine percent of the

patrol officers receive premium pay.   The impact of the patrol

premium results in an additional $41.22 per month if prorated over

the entire group of officers.   The City did not include this

additional salary expense when considering the appropriate third

year salary adjustment.

            City  Exhibit  28  compared  Mount  Vernon  with  its

comparables using all 1992 rates.  The average pay of the City's

ten comparables in 1992 was $2,857.  Mount Vernon is within $19 per

month of that average at $2,838 per month.  When Mount Vernon's

wages are placed side by side with the two cities closest to it,

Anacortes and Oak Harbor, the wage looks even fairer.  Anacortes

top step police officers receive $2,859, while Oak Harbor officers

receive $2,412.  The bottom line is the 1992 position of Mount

Vernon in relation to its comparables is not out of line with its

traditional position with those same comparables.  The 3% offer of

the City will maintain Mount Vernon's wages in a like position for

1993.

            The City next contends that police officers are paid

fairly when adjusted for the relative cost of living differences

between metropolitan jurisdictions and Mount Vernon.   The City

offered proof of differences in relative cost of living between

these jurisdictions through the expert testimony of Brent Baker.

Baker's testimony supports a conclusion that the cost of living

remains significantly less in Mount Vernon than it does in the

urban areas to the south.

            Regarding the Guild's housing cost analysis, the City

contends it does not reflect the true cost of living differences

between Mount Vernon and the central Puget Sound area.   The

testimony of the Guild real estate expert Tom Kelly was flawed

because there was no consistency in the source of information used

in his report.  Nor was there any attempt to define a prototype

home for comparison in all of the jurisdictions that were studied

by Kelly.   In addition, Kelly did not measure sales prices for

identical periods of time.  This is not a scientific analysis of

housing prices.  The City does not dispute that the cost of housing

in Mount Vernon has increased and that assessed evaluations have

also increased.   However, the Arbitrator should reject Kelly's

analysis as sufficient to prove that the cost of housing in Mount

Vernon is on par with that of the central Puget Sound area.

            Turning to the Guild's proposal to reduce the salary

schedule from nine to five years, the City maintains this proposal

should not be adopted.  In the view of the City, the shortening of

the time to reach the top step is a significant alteration in the

wage grid which should not be accomplished in an arbitration

confined to a third year wage reopener.   The total cost for

implementing the proposal  is  15.59%.   The Arbitrator should

conclude the Guild has failed to demonstrate a compelling need to

change the wage grid with its accompanying significant cost to the

City.

            With respect to the cost of living factor, the City

asserts its wage proposal is fair in light of recent changes in the

CPI.  Since September 1991 the CPI-U for all U.S. Cities has been

no greater than 3.4%.  The CPI-W is not significantly different.

Numbers for the same period of time range from a high of 3.2% to a

low of 2.4%.  City Ex. 31.

            It is also the position of the City that members of this

bargaining unit have been sheltered from significant increases in

cost for medical care because the City pays 100% of the premiums

for officers and their dependents.  City Exhibit 32 takes the CPI-U

and the CPI-W indexes and excludes the medical care components.  As

a basic matter, this shaves an additional .02% to .03% from the

affected CPI.  From the City's point of view, the CPI excluding the

medical care component, provides the better method of measuring the

true impact of inflation on the members of this bargaining unit.

            Members of this bargaining unit received a 7% increase in

1991 and a 3% increase in 1992 during the first two years of this

contract.   The 10% increase over the first two years of the

Agreement far exceeds the CPI increases for that same period.  When

viewed over the time span from 1984 through 1992, the City alleges

that actual wages of police officers have fared even better when

compared to the consumer CPI.  City Ex. 36.  During that period,

actual wages grew from $1,893 to $2,839, a cumulative increase in

wages of 50% over the period from 1984 to 1992.  The CPI for that

same period was 35%.  If officers' wages had grown by a sum equal

to the full CPI, the current salary would only be $2,550 per month.

Hence, the City submits a catch-up for inflation is not justified.

            On the issue of internal parity, the City's proposal is

fair when compared with wages of other City personnel.  Internal

parity is considered by interest arbitrators under the catchall

factor of the statute.  RCW 41.56.460(c).  When police salaries are

compared with salaries of firefighters, the police officers have

maintained a superior wage position since 1985.  The top step for

a firefighter in 1992 was $2,662 versus $2,838 for a patrol

officer.   There is no basis for an adjustment to bring police

salaries in line with fire, since they are already significantly

ahead.

            The  City provided a  3%  increase  for  1993  for all

employees except firefighters.  The firefighters received a 4.5%

increase to reflect the fact they had historically been behind

their compatriots in the police Department.  There is nothing in

the internal parity factor that justifies the 17% to 19% increase

sought by the Guild in this interest arbitration.

            It is also the position of the City that police wages are

fair in relation to wages paid by jurisdictions in the local labor

market.   According to the City, a local labor market can be a

separate group of jurisdictions to use as comparables.  The City

avers this factor is particularly relevant because conditions in

the local labor market affect a city's ability to attract and

retain  qualified  officers.    Dr.  Knowles  testified that  the

importance of the  local  labor market has traditionally been

utilized as a basis for establishing wages.  The City offered the

following five jurisdictions as relevant in the local labor market.

 

                        Anacortes

                        Burlington

                        Oak Harbor

                        Sedro Woolley

                        Skagit County Sheriff's Department

 

This  list  includes  all  of  the  significant  police  and  law

enforcement departments in Skagit County.

            The average wage for police officers in the local labor

market in 1992 was $2,793.  City Ex. 13.  The top step pay for a

Mount Vernon police officer is $2,838.  Because Mount Vernon police

officers already enjoy a salary that is higher than paid in the

local labor market, the Arbitrator should award the 3% offered by

the City.

            In contrast to the Guild's position that Bellingham and

Everett are participants in the local labor market, the City argues

they are not in Mount Vernon's local labor market.  The only basis

offered by the Guild for including Bellingham and Everett in the

local labor market was apparently on the ground of mileage between

Mount Vernon and the two cities.  Bellingham and Everett have never

been discussed in bargaining as cities within Mount Vernon's labor

market.  The expert testimony of Dr. Knowles was that Skagit County

was a self-contained labor market which did not include Everett to

the south or Bellingham to the north.  This was supported by the

lack of significant commute patterns across Skagit County lines by

either Skagit County residents going elsewhere to work or non-

residents coming into Skagit County to work.   As Dr. Knowles

pointed out this is a prime indicator of whether the local labor

market is localized or not.  Residency patterns of officers also

support the localized nature of the labor market.   All of the

officers live in Skagit County close to the City of Mount Vernon.

None of the officers live in Snohomish County or Whatcom County.

            Bellingham and Everett are properly excluded from the

local labor market based on the significant difference in size.

The city of Everett has a population of 76,980 and Bellingham to

the north has a population of 55,480.   Everett has a police

department comprised of more than 138 officers and Bellingham

employs 85 officers which is significantly higher than the 27

employed by this City.  Based on population of these two cities and

the size of their police departments, there is no justification for

including them in the list of comparators for establishing Mount

Vernon police wages.

            The City also argues that current economic conditions in

Skagit County do not warrant the Guild's wage proposal.   The

region's  economic  condition  is  painfully  reflected  in  its

continuing stagnant employment rate.  With very few exceptions,

Skagit County unemployment rates have remained in double-digit

figures.   Between May 1992 and May 1993 the unemployment rate

increased one full percentage point from 9.3% to 10.3%.  City Ex.

46.   These unemployment rates have exceeded state and national

levels for the period dated all the way back to 1970.   Skagit

County qualifies as a distressed area, which is a measure of

ongoing unemployment which substantially exceeds the state average.

Skagit County is also designated as a "labor surplus area." All of

the counties which are on the City's proposed list of comparable

jurisdictions are on the labor surplus list.   The bulk of the

Guild's comparables are not.

            Per capita income figures for Skagit County also lag

significantly behind the state average.  The industry make-up in

Skagit County is also troubling in that it has a high proportion of

seasonal employment. This seasonal employment is attributed to the

large agricultural base.  City Ex. 53.  The proposed residential

developments and the opening of Eagle Hardware do not equate to

economic vitality necessary to pay for the Guild's proposal.

            The City's financial condition does not justify the

significant wage proposal of the Guild.  If awarded, the total cost

increase in one year alone for this proposal would be $165,042.  In

base salaries alone this reflects a 15.59% increase.  While the

City is not making an inability to pay argument, the City's own

financial condition does not justify the "exorbitant wage proposal

demanded by the Guild."  The City is also mindful of the clouds on

the financial horizon implicit in Initiative 601-602.   These

initiatives raise the prospect of significantly reducing criminal

justice funding which would undermine the ability to maintain the

Police Department.  Increasing taxes to fund the Guild's proposal

is impractical.   Recent tax levies including a bond issue to

improve the police station and other City facilities have been

rejected by the voters.  In 1992 the Mount Vernon School District

similarly had two budget failures for capital improvements.  The

climate in Mount Vernon is not conducive to tax increases.

            The facts in the record of this case demonstrate the

Department has had no turnover for reasons associated with salary.

No officer has left for other. departments over the last five years.

There is no turnover problem justifying a significant change in the

wage rate.

            Private sector wage increases as reported by the Bureau

of National Affairs reveals first year increases for 1993 were 3%.

Wage increases for public employees ranged from a high of 4% from

1993 to the most common figure of 0% for this City's school

district.  Wage increases by private employers in the area are also

consistent with the increase being offered by the City.  Texaco is

awarding a 0% increase while Christianson Seed has granted 3.7%

increases for 1993.   Adoption of the Guild's 17% proposal is

totally out of character with public and private sector settlements

in the Mount Vernon area.  The City concluded in its post-hearing

brief as follows:

 

                        The City's proposal is fair, equitable

            and consistent with the statutory factors.

            The Guild's request for a 17% increase in one

            year is none of these things:  it is unfair,

            inequitable   and   inconsistent   with   the

            statutory factors.

                                                            Brief, p. 64.

 

V.        DISCUSSION AND FINDINGS

 

            At the outset of this issue a few preliminary comments

about the statutory procedure are in order.  RCW 41.56.460 refers

to the basis on which an interest arbitration award should be

formulated as "standards or guidelines to aid it in reaching a

decision."  The  Arbitrator  is  then  directed  to  take  into

,,consideration'' the factors listed in the provision.  The listed

criteria are not defined in the law.   Arbitral authority has

provided some guidance to the application of the statutory factors

to particular cases.

            Both parties placed into the record numerous interest

arbitration awards in other Washington cases. The Arbitrator found

these decisions helpful in defining the parameters for this award.

As with any labor conflict, this case has its own unique facts

which required your Arbitrator to exercise his judgment on the

particular circumstances of this dispute.

            The  statute  also  provides  that  the Arbitrator may

consider other factors "not confined to the foregoing, which are

normally  or  traditionally  taken  into  consideration  in  the

determination of wages, hours and conditions of employment."  This

phrase allows the parties and the interest arbitrator considerable

latitude in determining what are the relevant facts on which to

base an award to resolve a contract dispute.  The City asserted

several of its arguments should be evaluated under the "catchall"

factor.

            The factors identified in the statute are "standards or

guidelines" which cannot be applied with surgical precision.  The

relative weight to be given to any of the criteria listed in the

statute is not specified.  Further, it is important to note that

this Arbitrator is responsible for applying the evidence to the

statutory factors even if the evidence submitted by the parties is

incomplete, misleading, selective or manipulative.   Recognizing

these problems, it still remains the obligation of this Arbitrator

to apply the record evidence to the criteria set forth in the

statute.  In assessing the evidence and argument on the wage issue,

the Arbitrator has attempted to extract facts from the record

evidence which provide reasonable and credible support for this

award.  The starting point for the analysis of the evidence on the

wage issue in this case is comparability.  Both sides devoted the

majority  of  their  evidence  and  argument  to  the  issue  of

comparability.

            The submission of a dispute to interest arbitration does

not occur in isolation.  It is part of the continuing relationship

between the parties to this Collective Bargaining Agreement.

Arbitrator Carlton Snow wrote in his City of Ellensburg (1992)

decision about avoiding the "charade" of comparability.   Snow

correctly noted that it is reasonable for the parties to negotiate

vigorously  about  the  proper  jurisdictions  of  comparability.

However, he warned against the use of highly adversarial technical

data and studies to support opposite viewpoints.   The opinion

expressed by arbitrator Snow was that the legislative intent was to

"design a principle-based decision making process, not a charade

disguised as a scientifically objective system."

            In the present case both parties offered substantial

economic data, complex studies and expert testimony to bolster

their own respective positions.  Each side vigorously challenged

the evidence offered by the other party as flawed, defective and

not statistically sound.  Because of the methods by which each

party sought to justify its proposed comparators, this Arbitrator

was faced with a record that included little common ground on the

proper approach to selecting the appropriate comparators.  Given

this situation, the Arbitrator felt justified in making greater

changes in the parties' proposed lists of comparators than I would

normally do in an interest arbitration.

 

            A.        Guild Proposal to Change the Wage Grid

 

            The Guild proposed to reduce the current salary schedule

from an eight step schedule to a six step schedule.  The City would

continue the current eight step schedule.  The Arbitrator finds the

current wage grid should remain unchanged for 1993.

            This interest arbitration is limited to the appropriate

wage level for the 1993 contract year.  A reduction from nine years

to five years to reach the top step would be a significant

alteration of the salary schedule.  In the context of a third year

wage reopener, the Arbitrator is not persuaded to award a drastic

change in a wage grid which has existed for over ten years.

            Moreover,  adoption of  the  Guild proposal would be

extremely costly.   Based on the Guild's wage proposal, salary

increases for individual officers would range from 13% to 17%.

City Ex. 57.   Even if a lower wage increase was awarded, the

additional costs to the City of a revised wage grid should not be

imposed by an interest arbitrator in a third year reopener.

            Having rejected the Guild's proposed change for 1993, the

Arbitrator does find there are valid reasons to alter the existing

wage  grid.    However,  any changes  should be  left to  future

bargaining when the entire Collective Bargaining Agreement is open

for negotiation.  A review of the police contracts contained in the

record reveals that an eight step salary schedule which takes nine

years to reach the top is not the norm.

            The subject of changes in the wage grid should be left to

future negotiations.  The Guild's proposal to reduce the eight step

salary schedule to a six step schedule for 1993 is rejected.

 

            B.        Wages

 

            The Arbitrator finds after careful review of the evidence

and argument, as applied to the statutory criteria, that a 5%

increase for 1993 retroactive to January 1, 1993, is justified.

The 5% applied to the existing wage grid will establish a salary

schedule for 1993 to pay:

 

                                                Police Salary

 

                                                                                                Monthly

            Patrolmen                                                                   1993

                                                                                                5%

           

            0 - 6     months                                                            2393.00

            6    mo-1 year                                                             2449.00

            Over    1-2       years                                                   2519.00

            Over    2-3       years                                                   2575.00

            Over    3-5       years                                                   2829.00

            Over    5-7       years                                                   2879.00

            Over    7-9       years                                                   2930.00

            Over    9         years                                                   2980.00

 

            Sergeants

            0-2       years                                                               3096.00

            over 2-4 years                                                                        3201.00

            over  4  years                                                             3306.00

 

 

The reasoning of the Arbitrator is set forth in the discussion

which follows.

            Members of this bargaining unit were paid wages in 1992

on a schedule which read:

 

                                                Police Salary

                                                                                                Monthly

            Patrolmen                                                                  1992

            0-6       months                                                            2278.75

            6    mo-1 year                                                             2331.92

            Over 1-2 years                                                           2398.83

            Over 2-3 years                                                           2452.08

            Over 3-5 years                                                           2693.58

            Over 5-7 years                                                           2741.83

            Over 7-9 years                                                           2790.17                      

            Over  9  years                                                                        2838.42

 

            Sergeants

            0-2 years                                                                     2948.67

            over 2-4 years                                                                        3048.92

            over  4  years                                                             3149.33

                                                                                    City Ex 72.

 

The parties agreed to a 7% increase for 1991 and an additional 3%

for 1992 which established the above salary schedule.

            Two threshold issues developed between the parties over

the issue of determining comparability.   First, the Guild argued

that only jurisdictions with a population above 15,000 should be

used for comparators.  According to the Guild, jurisdictions below

15,000 do not employ "uniformed personnel" as defined by the

collective bargaining law.  As such, they exist in a separate labor

market which cannot be considered as "like employers" under the

law.  In the judgment of this Arbitrator, the statutory definition

of  "uniformed personnel"  does  not  automatically  exclude  all

jurisdictions with population less than 15,000 for purposes of

establishing comparators.   To the extent proposed comparator

jurisdictions are below 15,000,  they may logically affect the

weight to be given to the wages paid in a 15,000 and under

comparator.  In my judgment, the statute does not mandate total

exclusion of a jurisdiction from a list of comparators simply

because the population is below 15,000.

            The threshold population for law enforcement personnel

subject to interest arbitration has been changed by legislation.

The new legislation will reduce the threshold population to 7,500.

However, the change is not effective until July 1, 1995.   The

recent legislative amendment argues against total exclusion from

the comparator list of all jurisdictions of less than 15,000

population.

            The second threshold question concerns the appropriate

benchmark with which to make wage comparisons.  The Guild used the

Step 5 rate of $2,742 per month as the benchmark rather than the

top step.  From the Guild's point of view, using a Step 5 rate

allowed for an  apples to apples" comparison of wages.   The

traditional benchmark for comparing wages is the top step wage.

Adoption of the Guild's approach would compel the Arbitrator to

ignore reality.  Specifically, a Mount Vernon officer at Step 7

earns $2,790 and the officer at Step 8 earns $2,838.  These amounts

are substantially higher than the Guild's purported "top step."

Nine of the 21 patrol officers are on Step 7 or Step 8.

            The Arbitrator holds--under the circumstances of this

case--the top step wage is the appropriate level to make the

initial comparison.  The fact it takes Mount Vernon officers nine

years to reach the top is entitled to some consideration when

making the detailed analysis of the comparator jurisdictions.  If

it takes a police officer in a comparator city five years to reach

the top, and nine years for a Mount Vernon police officer to reach

the top, this fact cannot be totally ignored by the Arbitrator.  As

previously discussed, the parties need to address this issue in

future negotiations.

 

            Constitutional and Statutory Authority of the Employer

 

            Regarding the constitutional and statutory authority of

the City, no issues were raised with respect to this factor.

 

                              Stipulations of the Parties

 

            Regarding the factor of stipulations of the parties,

there were none of any significance presented to the Arbitrator.

 

                                    Comparability

 

            The predominant and defining issue in this case was the

factor of comparability.  The evidence offered by the parties on

the issue of comparability was extensive and the subject of

considerable controversy during the course of this proceeding. The

parties were sharply divided on the methodology which should be

used to select the comparator jurisdictions.  Each side went to a

substantial effort to demonstrate the flaws in the approach used by

the  opposing  party  in  its  effort  to  select  the  comparable

jurisdictions.   The Guild challenged the City's methodology of

relying solely on population, to the exclusion of other factors, as

contrary to the statutory command to compare with "like employers."

The City alleged the Guild's multi-factor regression analysis "is

a results-oriented compilation of jurisdictions which are unlike

Mount Vernon."

            In addition to utilizing totally different methods to

select comparators, both parties to this contract made substantial

changes to the comparators utilized when the contract was first

negotiated.  A review of the jurisdictions used when the contract

was first negotiated in 1990-91 discloses little or no resemblance

to the lists proposed to this Arbitrator in 1993.  No satisfactory

explanation was offered by either party for the dramatic changes in

the comparator jurisdictions to be used as a guide to set Mount

Vernon police wages for 1993.

            The only common jurisdictions on both lists were Aberdeen

and Port Angeles.  In essence, there are no historical comparators

with which to measure police wages in Mount Vernon.  On the issue

of establishing the comparators, this Arbitrator is starting from

the beginning, and not simply fine tuning what the parties have

already agreed to as appropriate comparators for establishing Mount

Vernon wages.

            Regarding the City's methodology, the Arbitrator finds it

is too narrowly constructed to yield a sound base on which to

determine Mount Vernon police wages.   By focusing solely on

population, the City ignores other elements that give insight into

determining "like employers."   The problem is complicated by the

City's automatic exclusion of cities located in Snohomish, King,

Pierce, Thurston and Kitsap counties.

            The  results  of  the  City's  exclusive  reliance  on

population outside of the central Puget Sound region caused four of

its ten comparators to be from eastern Washington.  The four cities

are Pasco, Wenatchee, Pullman and Walla Walla.  Mount Vernon is not

an eastern Washington city.   It is located on the Interstate 5

corridor within the "sphere of influence" of larger metropolitan

areas to the immediate north and south.

            The influence of the metropolitan areas is reflected in

rapid population growth for Mount Vernon.   Mount Vernon had a

population of 14,260 in 1986.   In 1993 the population stood at

20,450.  Since 1989 the population rose by 5,660 to its current

level.  Guild Ex. III, F(3).  The assessed valuation has almost

doubled from $476,118,903 in 1986 to $815,494,595 in 1992.  Guild

Ex. II, E(2).  These figures and others are indicative of a City in

transition, experiencing rapid growth.

            Moreover,   the  City's  methodology  produced  three

jurisdictions with less than 15,000 population.   While I have

previously held automatic exclusion of jurisdictions under 15,000

is not compelled,  it  is my conclusion that utilizing three

jurisdictions out of the ten, with populations under 15,000 gives

too much weight to police units without interest arbitration.

            The Arbitrator holds it is simply unrealistic for the

City to submit a list of ten jurisdictions composed of four eastern

Washington cities and three cities with less than 15,000 population

with which to compare wages and benefits for members of this

bargaining unit.

            Turning to the Guild's proposed list of comparators, the

Arbitrator concludes it is too heavily weighted toward metropolitan

jurisdictions to the exclusion of all eastern Washington cities.

Further, Bremerton has a population of 36,380 which exceeds Mount

Vernon's population of 20,450 by 15,930.  The Guild's own figures

also reveal Bremerton has substantially higher assessed valuation

and retail sales than Mount Vernon.  Bremerton should be excluded

from the list of comparators.  Longview should be excluded for

similar reasons, and by virtue of its distance from Mount Vernon.

Likewise, Des Moines should be deleted because it is in the center

of the Seattle urban area.  While Mountlake Terrace has several

demographic characteristics similar to Mount Vernon, the geographic

location of the city in the immediate Seattle metropolitan area

warrants its exclusion from the list of comparators.  As Mount

Vernon  continues  to  grow,  Mountlake  Terrace  represents  a

jurisdiction which could be added to the list of comparators for

future negotiations.

            The Arbitrator accepts from the Guild's proposed list of

comparators the cities of Puyallup and Lacy.  Both Lacy and Mount

Vernon are equidistance from Seattle.  Lacy has 31 officers in its

police department.

            Puyallup is somewhat larger with a population of 26,140

and a police department of 43 officers.   Like Mount Vernon,

Puyallup is surrounded by rural area and remains far enough away

from Seattle that it cannot be considered a suburb.

            Centralia  is  somewhat  smaller  than  Mount  Vernon.

However, its police department of 25 officers is close to the size

of Mount Vernon.  Because Centralia is a small-town hub in the

center of a rural area and located on the Interstate 5 corridor, it

serves as an appropriate point of comparison for determining Mount

Vernon police wages.

            From the list of comparators offered by the City, the

Arbitrator accepts Centralia, Wenatchee, Anacortes and Oak Harbor.

Anacortes and Oak Harbor reflect the City's local labor market

analysis for determining the comparators.  Both cities are located

in the same geographic area of the state.  Oak Harbor is extremely

close to Mount Vernon in terms of population and size of the police

department.    Even  the  Guild would  accept  Oak  Harbor  as  a

comparable, if two conditions were met.  The two conditions being

a collective bargaining agreement negotiated under the statute, and

a wage scale consistent with industry standards.  In the judgment

of this Arbitrator, neither of these conditions is justification to

exclude Oak Harbor from the list of comparators.

            The Arbitrator selected Wenatchee off the City's proposed

list because it is a rural city located in eastern Washington.

Geographically, it is also the closest eastern Washington city to

Mount Vernon.  In terms of population, size of department, assessed

valuation, retail sales, etc, Wenatchee fits well with Mount Vernon

on the demographic variables.

            The Arbitrator agrees with the parties that Port Angeles

and Aberdeen should be included as comparators.  For all practical

purposes, the third city of Oak Harbor is mutually acceptable to

both parties.  The Guild also conceded that if the Arbitrator were

to use an eastern Washington city for a comparator, Wenatchee is

the most logical choice.  In the judgment of this Arbitrator, the

four jurisdictions of Port Angeles,  Aberdeen,  Oak Harbor and

Wenatchee form the nucleus of the cities on which to determine

Mount Vernon police wages.

            The Arbitrator concludes the eight cities listed below

are appropriate comparators for establishing the wage level to be

paid Mount Vernon police officers.

            City                 Population       Size of Department

            Aberdeen        16,665             36

            Anacortes       12,260             17

            Centralia         12,380             25                               

            Lacy                22,660            31

            Oak Harbor    18,930             20

            Port Angeles   18,270             27

            Puyallup          26,140             43

            Wenatchee     23,000             34

 

            Average without Mount Vernon       18,788             29

 

            Mount Vernon                                    20,450             29

 

            The above list of eight cities provides a balanced group

of similarly sized, like employers.  Anacortes and Oak Harbor are

located in the same labor market.  The parties concur that Aberdeen

and Port Angeles are appropriate points of comparison.  For all

practical purposes, the parties agree Oak Harbor should be on the

list of comparators.  Wenatchee is a small-town hub of a rural

area.  Lacy and Puyallup reflect the sphere of influence of the

Puget  Sound metropolitan area to  give balance to the  local

comparators.  Centralia is a rural hub located on Interstate 5 west

of the Cascades.

            As did the parties, the Arbitrator focused on developing

a list of comparators which will not only be useful in 1993, but in

future negotiations.  While the list of comparators adopted by the

Arbitrator is not perfect, it will serve to establish a solid base

for guidance in future negotiations.  It is recognized some fine

tuning of the comparator list may be necessary in the next round of

bargaining.    Because  the  Arbitrator  developed  his  list  of

comparators from both parties' lists, the salary data was not the

same, or was incomplete.  Based on the best information available

in the record and from what I could discover from the contracts,

the wages for the comparators appear as follows:

 

            City                             1992                1993

            Aberdeen                    3,132               3,227

            Anacortes                   2,859               *2,859

            Centralia                     2,849               2,963

            Lacy                                                    3,259

            Oak Harbor                2,412               *2,412

            Port Angeles               2,917               3,010

            Puyallup                                              3,690

            Wenatchee                 3,135               3,239

 

            Average(6)                 2,884

 

            Mount Vernon            2,838               2,980

 

            Average wage for 1993 including

            cities without a 1993 settlement.       3,082

 

            Average wage for 1993 of six cities

            with 1993 contracts.                           3,231

*Wage not settled at time of arbitration hearing.

 

            Given the absence of complete data, the use of the

average wage  figures  is  not  as  reliable  a measure  as  this

Arbitrator would prefer.  However, the figures do reveal generally

that as the wages stand for all eight jurisdictions it would take

a $244 per month increase to bring Mount Vernon to the average wage

of all cities or $393 per month to reach the average of the six

jurisdictions with 1993 settlements.     While the City is not

arguing inability to pay, this Arbitrator is unwilling to award the

17% to 19% wage increase proposed by the Guild.   The economic

conditions of Skagit County and Mount Vernon simply do not justify

a one-year increase of that magnitude.  Nor is there any evidence

in the record of this case which convinced the Arbitrator of a need

to set Mount Vernon police wages at or near the top of the wages

paid in the comparable jurisdictions.

            The 5% increase will set the top step salary at $2,980.

While this increase is larger than the 1993 increases for both

internal and external comparators, the Arbitrator took into account

it takes nine years to reach the maximum wage under the existing

salary  schedule.    The  5%  increase  is  also  consistent with

negotiated increases of 7% and 3% for 1991 and 1992 respectfully.

            The 5% increase will position members of this bargaining

unit in the middle range of the comparators for 1993.  For 1993 the

top salary will rank number six out of the nine jurisdictions.  The

top step wage of $2,980 per month will put in place a wage schedule

that is competitive and reasonable in relation to the comparators.

The Arbitrator is also mindful of the  fact members of this

bargaining unit continue to enjoy fully paid health insurance for

employees and dependents.

 

                                                Cost of Living

 

            Turning to the criteria of cost of living, the parties

differed in their approach to the issue.   Evaluation of the

evidence presented on this factor is complicated by the fact there

is no established or recognized index for measuring cost of living

changes for Mount Vernon.  Mount Vernon is not included in the CPI

for Seattle or the ACCRA index.  The Guild urged the Arbitrator to

use housing costs in Mount Vernon as the better measure of local

cost of living.

            In contrast to the Guild, the City relied on the CPI as

a more accurate measure of the true impact of inflation on the

members of this bargaining unit.  City Exs. 31-38.  The City also

offered a study by Brent Baker on the subject of geographic cost of

living differences.  City Ex. 39.  Baker also testified regarding

his study and its conclusions.

            With all of its faults and weaknesses, the Arbitrator

must give the greater weight to CPI as an indicator of the impact

of inflation on the members of this bargaining unit.  The December

1991 CPI-U (All U.S. Cities) rose 3.1% from December 1990.  The

December 1992 CPI-U (All U.S. Cities) showed an increase of 2.9%

from December 1991.  The CPI-W (All U.S. Cities) revealed similar

percentage increases for the same periods.  Given the fact members

of this bargaining unit received 10% increases during the first two

years  of  the  contract,  no  conclusion  is  justified  that  a

substantial wage increase is necessary to compensate for the loss

in purchasing power due to inflation.

            Turning to the testimony of Guild real estate expert Tom

Kelly, the Arbitrator accepts the testimony of Kelly to the extent

housing prices have been rapidly increasing in Mount Vernon.

Kelly's study indicated the average sales price of a Mount Vernon

home rose from $57,119 in 1986 to $119,448 in 1993.  His conclusion

that growth and densely populated areas cling to, and expand along

the shoreline and freeways is also sound.

            The Arbitrator cannot adopt the Guild's attempt to use

Kelly's work as the measure of relative cost of living between

jurisdictions.  First, there is no uniformity in the source of the

information in Kelly's cost of living report.  Second, the type of

home sought to be compared was not defined.  Third, housing costs

are only one element of the cost of living.

            In sum,  the testimony and report of Kelly does not

justify the substantial wage increase claimed by the Guild in this

case.  The 5% awarded by the Arbitrator is consistent with recent

increases recorded in the CPI.

 

                                                Changes

 

            On the factor of changes in the foregoing circumstances

during the pendency of this proceeding, the Arbitrator rejected a

Guild attempt to unilaterally submit evidence after the record had

been closed.

 

                                                Other Factors

 

            Turning to the "other factors" which are normally or

traditionally taken into account in the determination of wages, the

Arbitrator finds four factors are worthy of consideration in the

present case.  First, all City employees received a 3% increase for

1993, except the firefighters.  The firefighters negotiated a 4.5%

increase.   Second,  1993 wage increases for public and private

employees in the Mount Vernon area were modest ranging from 0% to

4.5%.

            Third, the low Department turnover rate reveals a wage

level that is sufficiently competitive to attract and retain

qualified police officers.

            Fourth, a 5% wage award for 1993 reflects the fact that

rapidly increasing population is making greater demands on the

members of this bargaining unit for police services in terms of

numbers and types of crimes.

            In  sum,  the  5%  increase  and  the  establishing  of

comparators will put in place a solid framework for negotiation of

the successor Agreement for 1994.

 

                                                AWARD

 

            The Arbitrator awards that a 5% increase be applied

across the board to the existing salary schedule retroactive to

January 1, 1993.

 

                                                                                    Respectfully submitted,

 

 

                                                                                    Gary L. Axon

                                                                                    Interest Arbitrator

                                                                                    Dated:      November 6, 1993