City
of
And
Interest
Arbitration
Arbitrator: Gary L. Axon
Date
Issued:
Arbitrator:
Axon; Gary L.
Case #: 10376-I-93-00222
Employer:
City of
Date Issued:
IN THE MATTER OF )
) PERC CASE NO.
INTEREST ARBITRATION )
) 10376-1-93-00222
BETWEEN )
) INTEREST
ASSOCIATION, ) OPINION AND AWARD
Union, ) 1992-1994
AGREEMENT
)
and )
)
CITY OF
City. )
HEARING SITE:
HEARING DATES: July 26, 27, 28,
29, 30
August
3, 4, 9, 1993
POST-HEARING BRIEFS DUE: Postmarked
RECORD CLOSED ON RECEIPT OF BRIEFS:
REPRESENTING THE
Lynn
D. Weir
Webster,
Mrak & Blumberg
600
1325
REPRESENTING THE CITY OF SEATTLE: Otto G. Klein, III
Heller, Ehrman,
White & McAuliffe
Cathy
L. Parker
Civil
Division
City
of
600
ARBITRATOR: Gary
L. Axon
1465
Pinecrest Terrace
TABLE
OF CONTENTS
Page
I. INTRODUCTION 2
II. PROCEDURAL
RULING ON
TO
EXCLUDE EVIDENCE 10
III. POSITION
OF
A. Background 14
B. SPMA Proposals 18
C. Cost of Living 21
D. Cost of Living Is Not an Appropriate
Factor
in
Comparative Economic Analysis 22
E. Other
F. Ability to Pay and Spending Priorities 27
G. SPMA's
Overtime Proposals 28
H. Medical Issues 30
I. Emergency Leave 33
J. Duration 34
K. Conclusion 35
IV. POSITION
OF THE CITY
A. Background 36
B. Wage Proposal 38
C. Cost of Living 39
D. Relative Cost of Living Differences in
the
WC
7 Should be Given Substantial Weight by
the
Arbitrator 40
E. Available Indexes Support the Existence
of
the
Cost of Living Differential Between
Seattle
and the WC 7 41
F. Runzheimer
Study 44
G. Benchmark for Comparison 47
H. Medical Premiums 47
I. Uniform Allowance, Differed
Compensation and
Pension
Pick-Up 48
J. Top Step Wages 49
K. Internal Equity 50
L. Public and Private Sector Settlements 51
M. Second Year Wages 52
N. Three Percent Premium Pay for
Precinct
Captains 52
0. Contract Year 53
P. Overtime 53
Q. City Insurance Proposals 55
R. Longevity 58
S. Sick Leave/Family Emergencies 59
T. Conclusion 60
V. ARBITRATOR'S
AWARD - WAGES
A. Background 61
B. Constitutional and Statutory Authority
of
the Employer 69
C. Stipulation of the Parties 70
D. Cost of Living 71
E. Intercity Cost of Living Data 73
F. Comparability 78
G. 1994 Adjustment 91
H. Longevity 92
I. Premium Pay for Precinct Captains 92
J. Changes in Circumstances During Pendency
of
this proceeding 92
K. Other Factors Normally or Traditionally
Taken
Into
Consideration in the Determination of
Wages,
Hours and Conditions of Employment 93
APPENDIX
A - SALARIES 94
VI. ARBITRATOR'S
AWARD - MEDICAL COVERAGE 96
VII. ARBITRATOR'S
AWARD - OVERTIME 100
VIII. ARBITRATOR'S
AWARD -
SICK
LEAVE/FAMILY EMERGENCIES 103
IX. ARBITRATOR'S
AWARD - LONGEVITY 104
X. ARBITRATOR'S
AWARD - DURATION 106
I. INTRODUCTION
This
case is an interest arbitration conducted pursuant
to RCW 41.56.450. The parties to this dispute are the City of
Management Association ( "
are parties to a Collective Bargaining
Agreement that expired on
1992
for a new labor Agreement. The
Collective Bargaining
Agreement covers approximately 62 employees
holding the ranks of
lieutenant, captain and major in the Seattle
Police Department.
The members of this bargaining unit are
generally long-term
employees of the City who hold supervisory
Positions in the Police
Department.
The
City of
522,000 in 1992. The Seattle Police Department is divided into
four main precincts for the purposes of
delivering police services.
The North Precinct extends north from
square miles with a population of
approximately 222,000. The West
Precinct includes the downtown business core
and some community
living areas, with 11.5 square miles and
63,000 residents. The
East Precinct covers from I-5 to Lake
Washington, with 8.5 square
miles and a population of 80,000. The South Precinct covers some
31 square miles of the south end of the City
with a population of
about 152,000.
A precinct
is commanded by a patrol
captain and
supervised by a lieutenant on each of three
8 hour daily watches.
Up to 180 police officers are assigned to a
single precinct, with
a lieutenant typically commanding 50 or more
personnel at one time.
Administratively
the Police Department is divided into
four bureaus, each commanded by an assistant
chief, who is assisted
by a major.
Another major commands all of the patrol captains. In
addition, a major also commands the street
functions which include
traffic, K-9, swat teams and the Harbor
Patrol Unit. Within each
bureau the major manages certain areas of
responsibility and
oversees captains and lieutenants. Some of the majors are assigned
to manage specific police functions such as
vice, narcotics and the
follow-up investigation of crimes.
The
first Collective Bargaining Agreement between the
parties was effective
to interest arbitration before a panel
chaired by arbitrator
Michael
H. Beck. The
parties again resorted
to interest
arbitration in 1984 before a panel chaired
by arbitrator Allen R.
Krebs.
Once again the parties went to interest arbitration in 1987
before a panel chaired by arbitrator
terms of
agreement which took effect on
Concurrently with the proceeding before
arbitrator Snow, the City
also resorted to interest arbitration with
the International
Association
of Firefighters Locals 27
and 2893 representing
bargaining units within the
In
1989 the City and its two firefighter units submitted
to interest arbitration its contract dispute
for resolution before
a panel chaired by arbitrator Phillip Kienast. Following
the 1989
award by Kienast,
the City sued to set the award aside.
The
parties resolved the litigation with a new
Agreement. The City and
the firefighter unions were thereafter able
to negotiate successor
contracts
expiring on
arbitration.
The
parties to this arbitration made extensive reference
to the decisions issued by the other
arbitrators in the earlier
awards.
Each side found support for its respective positions from
the prior interest arbitration awards. The previous interest
arbitration awards were specifically cited
by the parties with
respect to how the other arbitrators dealt
with the issue of the
City's
attempt to introduce
evidence concerning relative
differences in the cost of living among the
various comparator
jurisdictions. Each of the other arbitrators was required
to
address
a private study the City had commissioned from the
Runzheimer
Company on the issue of relative differences in the cost
of living among the seven West Coast
jurisdictions the parties had
used for purposes of comparison.
In
anticipation that the City would seek to introduce the
work of the Runzheimer
Company on the alleged relative differences
in the cost of living among the seven West
Coast jurisdictions, the
differences in the cost of living. The motion was filed prior to
the commencement of the arbitration
hearing. The City filed a
reply asking the Arbitrator to deny the
evidence.
At the beginning of the arbitration hearing, the
announced that it would not seek a ruling
from the Arbitrator on
its motion to exclude evidence prior to the
taking of testimony on
the merits of this case. The
motion in the post-hearing brief, and asked
the Arbitrator to
reject the use of any evidence concerning
relative differences in
the cost of living in coming to an Award in
this case. The
Arbitrator will deal with this issue in the
section entitled
Procedural Rulings.
Concurrently
with the filing of the motion to exclude
evidence, there were a number of unfair
labor practices filed with
the PERC relating to issues placed before
this Arbitrator. In a
memorandum dated
preliminary decision which pulled several of
the subjects the
parties had submitted to interest
arbitration. Based on Schurke's
decision, the Arbitrator took no evidence or
argument on the issues
that had been removed from interest
arbitration by Mr. Schurke.
The
hearing in this case took eight days for the parties
to present their evidence and
testimony. The majority of the
hearing time was consumed on the issues
surrounding the statutory
factor of comparability. The hearing was recorded by a court
reporter and a transcript consisting of
approximately 1,267 pages
was made available to the parties and the
Arbitrator for the
purpose of preparing the post-hearing briefs
and the 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. Each side called expert
witnesses to testify in support of their
respective positions. The
expert
witnesses were knowledgeable
and qualified in
their
respective fields. The parties offered into evidence substantial
written documentation to sustain their
arguments on the issues
submitted to interest arbitration.
The
Arbitrator continued to receive evidence from the
parties
after the last
day of hearing.
The post-hearing
submissions were offered by mutual agreement
in order to complete
the record, and to make the arbitration
record as current as
possible.
Counsel for the parties submitted comprehensive and
lengthy post-hearing briefs to assist the
Arbitrator in corning to
a decision in this case. Both sides also offered numerous interest
arbitration awards issued by other
arbitrators in the state of
entered into a stipulation that this case
would be heard and
decided without the use of partisan
arbitrators specified in RCW
41.56.450.
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 introduction of the issue and
position of the parties, I then will state
the principle findings
and rational which caused the Arbitrator to
make the Award on the
issues in dispute.
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 and argument presented. However, when formulating this
Award the Arbitrator did give careful
consideration to all of the
evidence and argument contained in the
record of this case.
Because of the size and complexity of the
record, the parties
agreed that the Arbitrator would be excused
from the 30-day time
limit prescribed by RCW 41.56.450 for the
issuance of his Award.
In
a letter received on
for the
had settled issues raised by the City's
proposals to define "shift
extension" as two hours preceding or
one hour following the normal
shift, and for a work schedule reopener. As such,
there was no
need for the Arbitrator to address these
issues in the opinion and
Award.
The parties also made the
Arbitrator aware of the
continuing litigation of the unfair labor
practices- during the
course of the Arbitrator's preparation of
the Award.
During
the long bargaining history the parties have
developed a list of agreed upon comparators
for the purpose of
determining wages and working conditions for
the members of this
bargaining unit. The agreed upon list of comparators consists
of
seven West Coast cities. The comparators are referred to by the
parties as the West Coast 7 ("WC
7"). The seven jurisdictions are
as follows:
The
wages and working conditions of command officers
employed in the WC 7 served as the primary
point of reference for
the evidence presented by the parties in
this case.
This arbitration
arises under the Public
Employees
Collective Bargaining Act ("the
Act"). The Act enumerates several
statutory
factors to be considered by the
Arbitrator. The
statutory guidelines to be considered by an
interest 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
*
* *
(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. PROCEDURAL
RULING ON
The
commencement of the arbitration hearing, and
continued during the
course of the arbitration hearing is best
summarized in the
introduction to the
This
motion is based on: (1) 1993
amendments
to
the statutory standards by which Interest
Arbitration Panels
must make their
determinations,
which demonstrate the intent
of
the legislature that such evidence not be
considered
in proceedings such as these; (2)
the dubious
value of analyses
concerning
relative
cost of living and the refusal by
most
arbitrators to consider them in their
determinations;
(3) the high cost and unfairly
disparate
burdens that litigation of such
analyses imposes
on litigants of
unequal
economic resources;
and (4) the
City's
unlawful
refusal to provide the Association
with information needed to prepare for a
hearing
on such issues.
The
City filed a responsive pleading to the
motion to exclude evidence asserting
City's position that such evidence should be
considered by the
Arbitrator.
According to the City, the
a "variety of novel but misguided and
misplaced arguments" to have
the Arbitrator ignore the fact that it costs
more to live in
arbitrators who have resolved disputes
between this bargaining
unit, and the City, and others with whom the
City has contracts,
have uniformly allowed evidence concerning
relative differences in
the cost of living. The City submits the Arbitrator should allow
the evidence, and then make a decision as to
what weight should be
given to the evidence concerning relative
cost of living among the
WC 7.
Regarding
the
not consider the evidence because of the
City's unlawful refusal to
provide the
hearing, the City reasons this claim is the
subject of an unfair
labor practice which is properly resolved by
the
Employment Relations Commission
("PERC"). City of
International Association of Firefighters
Local 1604, 119 Wn. 2d 373
(1992).
The
against the City prior to this
proceeding. Executive Director
Schurke
rejected all of these unfair labor practices by ruling that
as long as each side has provided the other
with a list of
comparables, the other side can do its own
research and make its
own interpretation of the information it
gathered. Since the PERC,
through Executive Director Schurke, has made a determination in
this case that the City does not have to
produce the information
sought by the
whether the evidence is relevant pursuant to
RCW 41.56.450.
The
Arbitrator holds that the
evidence is not well founded and should be
rejected. RCW 41.56.450
states in relevant part as follows:
.
. . The rules of evidence prevailing
in
judicial
proceedings may be considered, but
are
not binding in any oral testimony or
documentary evidence
or other data deemed
relevant
by the chairman of the arbitration
panel
may be received in evidence. . .
This Arbitrator concurs with arbitrator
Snow's decision in 1988
where he held that evidence concerning
relative differences in the
cost of living is relevant to the
determination of wages under the
statute.
City of
The
Arbitrator to exclude all evidence related
to relative cost of
living differentials as a matter of
law. By ruling that the
suggesting the City's evidence concerning
relative cost of living
is credible and should control the outcome
of this case. The task
of the interest Arbitrator in this process
is to determine the
ultimate weight that should be given to the
evidence offered on
relative cost of living. The question of how much weight should be
given to the purported differences in cost
of living among the WC
7 will be discussed later in the wage issue.
Moreover,
the Arbitrator finds that
that
the evidence should be
rejected because the City
has
unlawfully refused to provide the
to prepare for such a hearing is
unpersuasive. The Arbitrator
concurs with the City that the determination
of whether or not the
City has committed an unfair labor practice
is properly one for the
PERC.
Therefore, I am unwilling to deny the City the opportunity
to present its evidence related to the
relative differences in the
cost of living.
In
sum, the
relative differences in the cost of living is denied. The
Arbitrator will examine the evidence and
determine its relevance,
and weight to be accorded in the discussion
on the wage issue.
III. POSITION
OF THE
A. Background
The
evolution and compensation history of
In 1980 the lieutenants base pay was 9.5%
above the average of the
WC 7.
Arbitrator Beck's award in 1983 Positioned the members of
this unit 5.6% above the average for the WC
7. Under the Krebs'
award in 1984 the monthly base salary was
3.5% above the WC 7 and
within 0.4% of the average effective
September 1985. Arbitrator
Snow's award set the base salary effective
September 1, 1986, for
a lieutenant at $3,828 per month, or 1.39%
below average for the WC
7. The
judicial appeal of the 1989 award by arbitrator Kienast
resulted in a settlement which placed the
base monthly salary 7.61% below average for
the WC 7 as of August
31, 1992.
In the view of the
for
lieutenants had fallen
so low that
increases in total
compensation ranging between 12.9% and 20.3%
are required to bring
7.
The
history of the arbitration awards reveals that
arbitrators Krebs, Beck and Kienast refused to accept the City's
position that relative differences in the
cost of living should be
utilized for perpetuating compensation for
personnel below the average of the WC
7. Arbitrator Snow was the
only person who gave any weight to the City's
evidence regarding
relative cost of living.
Turning
to the legislative purpose and intent of the
statutory scheme for resolving contract
impasses between public
employers and unions representing uniform
law enforcement and
firefighter personnel, the
dedicated
and continuous service
of uniform personnel. In
addition, the award must serve as an
effective alternative to the
strike as a means of settling labor
disputes. RCW 41.56.430. The
Union reasons morale suffers when
compensation is disparately low
or hours disparately long. Adoption of the
promote higher morale and dedication to
service, and mitigate
against the ills that the legislature sought
to cure by the passage
of the impasse resolution legislation.
The
statute also directs the arbitration panel to take
into
consideration additional standards
or guidelines when
establishing the wages and working
conditions for employees subject
to the impasse procedure. No issues have been raised in this
proceeding concerning the constitutional or
statutory authority of
the City.
Further, the City has conceded it has the ability to pay
all amounts proposed by the
relevance is the parties' agreement that the
WC 7 are the proper
group of comparable employers for
consideration under Subsection C
of the Act.
It
is the
hours and working conditions of the
employees represented by SPMA
with those of employees of similar rank in
the WC 7 serves as the
basis to establish appropriate compensation
levels.
Regarding
the factor of the average consumer prices for
goods and services, the
comparing relative levels of
compensation. The Consumer Price
Index ("CPI") is not intended to
be used to make relative cost of
living comparisons among the WC 7. The cost of living data best
serves as a measure of changes in purchasing
power during the term
of the Collective Bargaining Agreement by
which wages can be
adjusted. Thus, the Arbitrator should use
actual compensation data
from the comparable cities--to the extent it
is available--to judge
whether members of this unit need to
"catch up" to relative parity
with the other jurisdictions.
Turning
to the "other factors" criteria of the Act, the
to the Arbitrator that it reverse the
erosion of compensation
suffered by members of the SPMA bargaining
unit since 1979. The
statutory
mandate for the
Arbitrator requires that
total
compensation for members of this bargaining
unit be restored at
least to the average of the WC 7.
The
provide guidelines that will assist the parties
to reach negotiated
settlements in the future. From the
award should instruct the parties clearly on
their statutory
obligations,
and articulate fair and consistent standards for
making economic comparisons. This Arbitrator should join with the
other arbitrators who have rejected the
City's attempt to unfairly
adjust total compensation for the WC 7 based
on the Runzheimer
living
cost figures. The
Arbitrator should clearly
and
authoritatively reject the City's attempt to
distort economic
comparisons through these inappropriate
measures.
The
goal of SPMA in this round of bargaining is to
restore parity of compensation between
their WC 7 counterparts. Absent a compelling demonstration of
changed
circumstances justifying a
departure from previous
settlement patterns, the award of this
Arbitrator should take
The
demonstrates the need for "firm
guidance" from the Arbitrator to
assist the parties in reaching future
settlements. The four-month
wage freeze proposed by the City to be
followed by a 2.8% raise in
salary is contrary to the historical
settlement patterns reached
between these parties.
B. SPMA
Proposals
The
September 1, 1992, through
APPENDIX
A - SALARIES
A.1 The classifications and corresponding rates of
pay covered by
this Agreement are as follows. Said rates of pay are effective
First Top
Step Step
Police
Lieutenant $6165 $6433
Police
Captain $7102 $7398
Police
Communications
Director $7102 $7398
Police
Major $8168 $3508
A.2 Effective
Section A.1 shall be increased by an amount
that will cause the
total compensation to be not less than the
average of the seven
West Coast cities used as comparison
cities (
A.3 Effective
in Section A.1 shall be increased by an
amount that will cause the
total compensation to be not less than the
average of the seven
West Coast cities used as comparison
cities (
A.4 The total
compensation calculation will
include all
compensation including wages, employer's
pension fund payment,
premiums for longevity, education, and
certification, holiday pay,
vacation pay and medical and dental
insurance. Calculations of
total compensation will be based on the top
step Lieutenant with
twenty years of service and holding the
maximum level of all
educational and certification requirements.
A.5 There
shall be two wage steps in each rank or position. The
first step shall begin on the date of
promotion to that rank or
position and the top step will begin six
months after the date of
promotion to that rank or position. The first step will have a
basic rate of pay that is 96% of the top step
for each rank or
position.
A.6
The differential between the top step of each rank shall be
15%.
The Director of Communications shall be paid at and receive
all of the benefits and premiums of the Rank
of Police Captain.
A.7 A
longevity premium shall be paid and shall be based on the
top step of each rank, position or
classification and shall be
added to the
salaries during the life of the Agreement
in
accordance with the following schedule.
Longevity Percentage
Completion of ten (10) years of service 4%
Completion of fifteen (15) years of service 6%
Completion of twenty (20) years of service 8%
Completion of twenty-five (25) years of
service 10%
Jt. 4(a) Appendix A.
Regarding
medical insurance plans contained in Article 8,
the
paying full cost for LEOFF II employees and
for dependents for both
LEOFF I and LEOFF II employees, and continue
the current cost
sharing formula for Group Health and pacific
Medical. Jt.
Ex.
4(a).
The
Union next proposed to modify Article 3 to afford
overtime pay for captains and majors for
time worked in excess of
40 hours per week at the rate of time and
one-half. The
would also reduce to one-half hour the
period beyond work in an 8
hour day for which employees accrue
overtime.
Turning
to the City proposals, the
Arbitrator to reject the proposals to modify
Article 3, Employment
Practices;
Article 5, Holidays;
Article 8, Medical Coverage;
Article 10, Sick Leave; and Article 19,
Duration.
The
are evaluated it is demonstrated that
increases between 13.7% and
20.3% in salary and longevity are required
effective September 1,
1992, to restore total compensation to the
average of the WC 7.
Depending on the amount the Arbitrator might
award on longevity,
lesser increases in base salary would be
required. For the second
and third years of the three-year contract,
the
a formula that would be sufficient to
maintain a 20-year
lieutenant with total compensation equal to
the average 6f the WC
7. The
bargaining unit to catch up and keep up with
their counterparts in
the WC 7.
Historically
the parties have used compensation for a
lieutenant with 20 years of longevity as the
benchmark for making
comparisons and determining differentials
between the ranks. In
the current round of bargaining the City now
asserts that 23 years
of service should represent the
benchmark. The Arbitrator should
reject the City's attempt to vary the
benchmark position in order
to make its offer more acceptable. Variation in the standard 20-
year benchmark will only invite constant relitigation of the
benchmark in future bargaining.
The
base salary alone, an increase of at least
7.1% as of September 1,
1992, and 11.1% as of
salary to restore a 20-year lieutenant to the
WC 7 average.
However, it is the position of the
be based on total compensation paid to
members of this bargaining
unit.
The evidence offered by the
total compensation is calculated for hours
worked, the disparities
as of
7. These
disparities increase when the comparisons are made as of
September 1, 1993, the first anniversary of
the new contract. The
increase on the base salary of 19.5% is
necessary to equal the
average of the WC 7.
Moreover,
SPMA has proposed to increase longevity at 20
years of service from 4% to 8%. If the Arbitrator grants this
proposal, then the additional increase on
base salary of 15.5% will
bring
C. Cost of Living
The
guideline for interest arbitration panels to
utilize in making
economic adjustments. Cost of living is best used as a means to
make mid-term economic adjustments. The initial term on the
contract should be resolved by the
comparison of wages, hours and
conditions of employment between Seattle and
the WC 7. Once the
wages are established for the first
year, the CPI should be
employed for mid-term adjustments that
ensure buying power will not
be eroded during later years of the contract
term.
SPMA
has proposed that for 1993 and 1994 the base rate
should be adjusted so the total compensation
is not less than the
average for the WC 7. If the Arbitrator grants the
proposal for a first year increase
sufficient to "catch up" with
the WC 7, then the CPI should be employed
for the second and third
years of the contract.
The
Arbitrator should reject the City's use of a formula
based on 90% of the CPI with the floor of 2%
on a cap of 7% for
future increases. Fractional costs of living adjustments do not
preserve purchasing power when the employer
seeks to shift future
medical premium increases to the
employees. The parties most
recent voluntary settlements required the
use of 100% of the CPI-W.
The City's contracts with the
the firefighter unions use a full cost of
living formula.
D. Cost of Living Is Not an Appropriate
Factor in
Comparative
Economic Analysis
The
City's use of intercity living cost
comparisons in order to
discount the compensation paid to similar
personnel of the WC 7
based on allegedly lower prevailing wages
and cost of living in
intercity cost of living comparisons. This Arbitrator should
follow the previous decisions of arbitrators
Beck, Kienast and
Krebs in rejecting the use of intercity cost
of living comparisons
for determining the appropriate wage level
of SPMA members.
Even
if the Arbitrator does consider such comparisons,
they warrant no reduction in
based on alleged differences in prevailing
wages or living costs.
Evidence presented by the
Federal Wage System surveys of private
sector blue collar wages
published by the Department of Defense, Area
Wage Surveys and the
Occupational Compensation Survey published
by the Bureau of Labor
Statistics demonstrate that
average of the WC 7.
The
by RCW 41.56.460(c). Pursuant to statute an arbitrator may not
properly impose relatively lower economic
status on
safety
personnel within their
community than their
WC 7
counterparts enjoy within their respective
communities. Under such
circumstances the Arbitrator should
disregard the City's relative
cost of living analysis as unsuitable for
consideration in an
arbitration proceeding as a matter of policy
and legislative
intent.
The Arbitrator should also disregard such cost of living
evidence because the City has not cooperated
to permit SPMA
reasonable opportunity to test the
evidentiary soundness of the
City's living cost studies.
The
living evidence is unreliable. The privately commissioned report
by the Runzheimer
Company purported to quantify alleged differences
in wages and living costs in the WC 7 by
which it reduced the WC 7
compensation for purposes of comparison with
studies published by
were
offered to enhance
the credibility of
the Runzheimer
conclusions through a parade of data, all
concededly flawed. The
City's approach that make reliance on the Runzheimer living cost
report inappropriate. The arguments of the
follows:
1. Direct evidence of indicator
occupations
is
readily available and supported by unbiased
government
surveys to measure wages across
cities. The ability to determine prevailing
wage
rates across areas can be done far more
easily,
economically and reliably than one can
measure
the cost of living by private studies
or
other means.
2. Proper inter-area cost of living
studies
are
enormously costly and complex. The BLS
abandoned its
inter-area cost of
living
studies in
1981. Private studies
like
Runzheimer fail to account for other factors
which
can affect the wage levels in different
jurisdictions. Hence, studies like Runzheimer
are
inherently unreliable and should not be
credited
in this proceeding.
3. Runzheimer's
results concerning housing
prices
are inherently flawed because they vary
greatly from
actual home purchase
values
reported
by the City for its police managers
than
those used in the Runzheimer study.
4. The Runzheimer study
is structurally
flawed
because in relies unduly on rigid home
purchase
specifications.
5. The Runzheimer
Report is flawed because it
fails
to differentiate between the consumption
and
investment components of home ownership.
A
purchase of a house cannot be viewed as both
investment
and savings.
6. The City and Runzheimer
have manipulated
the
contents of Runzheimer's report so as to
preclude
SPMA from evaluating the data to
support
the conclusions regarding the housing
element
of the cost of living study.
7. Runzheimer's
methodology for selecting
representative
home purchase transactions must
be
deemed flawed because Runzheimer will not
disclose the criteria for
making its
selections.
8. Runzheimer
has hidden its methodology to
the
point that SPMA was not even permitted to
know
the standard error of any of the data
samples
used in the study.
9. The Runzheimer
Report is structurally
flawed
because it assumes that all police
managers
in Seattle and the WC 7 will drive
the
same automobiles the same distance each
year.
10. The Runzheimer
methodology ignores the
fact
that workers may benefit from state and
local
governmental services financed by taxes.
11. The Runzheimer
study reaches conclusions
that
are contrary to those reached by BLS
experts
who have no stake in the outcome of
this
proceeding. For example, Runzheimer
argues
that food cost at home is lower in
experts
conclude just the opposite, namely
that
food at home costs more in
12. Runzheimer's
market basket of goods and
services
is insufficient to provide accurate
data
when compared to the BLS market basket of
goods
and services for calculating the CPI.
In
sum, the
seriously flawed and should not be used as a
basis to reduce
compensation for
Lastly, the
City's other intercity
cost of living
evidence is likewise unreliable for the same
or similar reasons
stated for rejecting the Runzheimer
study. The other evidence
offered by the City to support its arguments
regarding intercity
cost of living has been judged to be of
"dubious value" and should
be disregarded by this Arbitrator in his
determinations in the
instant case. Even arbitrator Snow who allowed
consideration of
the Runzheimer
Report indicated that he used it only as a source of
guidance,
and not as a precise measure of
cost of living
differences between Seattle and the WC 7.
E. Other
The
City has historically placed a high value on the
experience of
established
in 1980.
The compensation and working conditions established
during these times should not be altered
absent a persuasive
demonstration of circumstances warranting a
reduction in the
relative wage position of this group of
employees.
The
testimony offered by police managers demonstrated
that workload increased tremendously over
recent years as the
result of the greater demand for police
services. Further, the
range and scope of management duties
performed and the activities
undertaken to stop crime and to assist
citizens through the
community policing program has driven the
workload of the members
of this bargaining unit to its highest
levels. Testimony offered
by members of this bargaining unit at the
hearing revealed an
organized and dedicated group of management
employees seeking to
provide the highest level of police services
for the citizens of
F. Ability to Pay and Spending Priorities
It
is the position of the
adequate reserves to pay SPMA's
proposal, and the electorate
strongly supports expenditure of public
funds for public safety.
According to the
but unfounded in view of the evidence that
demonstrates the City is
in good financial health. The City does not dispute its ability to
pay wages
in accordance with the proposal.
Therefore, the
Arbitrator must assume the City is in a
position to restore
relative compensation levels to the average
of the WC 7 as proposed
by SPMA.
The
compensation has declined in relation to
their counterparts in
other areas of City employment. There has been a serious erosion
of parity to comparable fire department
personnel, the mayor and
City counsel members. It will take a 10.3% increase to restore the
1986 relative parity level between a
battalion chief in the fire
department and a police captain.
Adoption
of the City's proposal will also accelerate the
erosion of the relative standing of police
managers among Puget
Sound jurisdictions.
enjoyed
a pay advantage
over local commanders
in smaller
jurisdictions in the
case will not only restore
parity with the WC 7, it will also restore
the superiority of their
compensation over the smaller
G. SPMA's
Overtime Proposals
The
the overtime provision of the current
Agreement In addition, the
City has discretion to award compensatory
time off in lieu of
overtime compensation. Pursuant to the
would have the option to receive overtime
compensation for time
worked in excess of 40 hours per week. The
to one-half hour the period beyond work in
an 8 hour day for which
employees accrue overtime.
While
the
managers and expect to do what it takes to
get the job done, the
current working system for captains and
majors in the
Police Department is unfair and destructive
of bargaining unit
morale.
Employees in these ranks now must routinely work long
hours of overtime each month in order to do
their jobs. A
survey of the membership revealed that
captains work an average of
48 1/2 hours of overtime per month. The majors average over 34
hours overtime per month. The precinct commanders work an average
of 60 to 70 hours per week.
Testimony
from the captains and majors revealed that the
escalation in workload can be traced in part
to the explosion in
the prevalence of violence, drugs and
gangs. Because the community
is concerned and frightened, the City has
sought to respond in part
by becoming involved in community
Policing. The community Policing
concept expands the amount of overtime hours
necessary by command
officers to perform their jobs. Further, internal factors have
also expanded the workloads of the command
officers. The
witnesses explained that due to staff
reductions in other parts of
the
Department, functions such
as training, inspections
and
research have shifted work to command
officers. The
cites the need for a greater command
presence due to the fact
supervision and direction. Police managers routinely take work
home with them in order to complete tasks
necessary to accomplish
the job.
Regarding
the executive leave provision contained in the
present contract, the
program does not adequately compensate
members for their overtime
work.
The overtime work by captains and majors far outstrips the
59 to 60 hours of executive leave available
to the command staff.
According to the
put in by lieutenants
"off-the-clock." The demands
of the job are
so great that these managers cannot take all
of their executive
leave and still accomplish their duties.
Turning
to the City's proposal for a 3% premium pay for
precinct commanders, the
"insult" than a remedy. The 3% premium would only serve to
legitimize the unfair work demands the City
places on police
managers.
Nor would the 3% premium provide the City with financial
incentives
to alleviate the
workload burdens that
overtime
compensation
has historically served
in this country.
All
predictions are for workloads and work hours
of Seattle Police
managers to increase.
The
issue of whether the Fair Labor Standards Act applies
to members of this bargaining unit is the
subject of litigation
between
the City and
the Union. The City
disputes the
applicability of the Fair Labor Standards
Act to the members of
this bargaining unit. For purposes of this proceeding, the
Arbitrator must assume that SPMA will not
succeed in its litigation
on the applicability of the Fair Labor Standards
Act to the members
of this unit.
For
all of the above stated reasons, the Arbitrator
should reject the City's offer and award the
Union's proposal to
modify the
overtime provisions of the Collective Bargaining
Agreement.
H. Medical Issues
SPMA
proposes to continue current medical benefits with
the
City paying full costs for
LEOFF II
employees and for
dependents of both LEOFF I and LEOFF II
employees. In addition,
the Union would have the City continue the
current cost sharing
formula for Group Health and Pacific
Medical. This would result in
an annual cost figure of $4,354 per
employee. Un. Ex. 152.
The
Union vigorously asserts that the City's assumptions.
for calculating the cost for insurance
seriously overstates the
actual cost to the City for members of this
bargaining unit. The
City has computed an annual cost figure of
$7,458 per employee for
medical insurance.
From
the viewpoint of Union, to reduce base year salaries
through a total compensation analysis using
the $7,458 figure not
only seriously overstates the total amount
paid in 1993 but will
compound the inequity over the second and
third years of the
contract.
The reasons offered by SPMA for calculating the cost of
the insurance benefit are summarized as
follows:
1. The use of LEOFF II premium cost best
recognizes
the changing demographics of this
bargaining
unit. The predominance of LEOFF I
members
of this bargaining unit will change
dramatically
during the term of this contract
as
the older officers begin to retire. As
the
LEOFF I
membership rapidly declines,
the
number of
LEOFF II members
will rapidly
increase
within this bargaining unit. Thus,
the
declining percentage of LEOFF I members
makes
any expense differential temporary.
2. The Union's calculation affords the
SPMA
bargaining
unit the
benefit of city wide
pooling
of health care costs
and premium
experience. Use of LEOFF I direct payment
costs
is contrary to pooling principles that
the
City otherwise follows in its approach to
health
care cost and benefit administration.
The
dwindling numbers of LEOFF I police group,
over
time, will only exacerbate the situation.
3. Adoption of LEOFF II premium costs
avoids
having
to come
to terms with the
City's
misleading,
questionable and nonexistent data.
The
premium charge for dependents of LEOFF I
is
overpriced, and the City admits there is no
data
to support the charge. It is now beyond
dispute
that LEOFF I premium no longer bears
any
relation to the cost incurred in this
group.
4. The use of the LEOFF II premium cost
most
fairly
applies the benefit of this bargaining
unit's
share of the $2 million refund and $4
million
premium freeze and premium holiday
received
by the City from King County Medical.
Adoption
of
premium rates in
effect at contract
expiration
will enable prompt
settlement of future
contract
negotiations. To use the 1993 premium amounts in the
total
compensation analysis as suggested by the
City, only provides the
City with an incentive to delay resolution
of the dispute.
The
City has used the annual medical cost figure of
$7,458 in all of its total compensation
exhibits. City Exs.
102,
104, 106.
According to the Union, this figure is misleading and
seriously overstates the medical costs
incurred by the City for
this bargaining unit. The City's approach to the insurance
calculation assumes that all bargaining unit
members are covered by
the LEOFF I program when in fact the City's
exhibit shows that 11
members are not LEOFF I employees. It also incorrectly assumes
that all bargaining unit members will elect
the most expensive
LEOFF I dependent coverage. The Union claims that it would be
seriously unfair to calculate the insurance
cost using the most
expensive numbers in order to drive down
wages for members of this
bargaining unit. SPMA concludes that the proper measure of the
medical cost component of total compensation
is the LEOFF II
premium amount.
Turning
to the remainder of the City's proposal on
medical issues, the Union avers the
Arbitrator should reject, with
one exception,. the City's medical
proposals. SPMA has no objection
to the City's proposal to reduce the
employee share of the group
health premium from 20% to 10% and the
City's proposal to increase
the service co-pays for doctor visits,
prescription drug supplies
and emergency room visits. The Arbitrator should decline to impose
any preferred provider medical benefit
program on the LEOFF II
employees and dependents covered by King
County Medical ("KCM").
The City has not justified this change by
comparison with either
the WC 7 or local comparators. No other bargaining unit of City
employees has agreed to such a plan. SPMA has no objection to a
contract provision that would permit the
City to offer Preferred
Provider Organization ("PPO")
coverage as an option to employees in
this bargaining unit.
The
Arbitrator should also reject the City's attempt to
impose on the employee a share of future
insurance premiums after
1993.
There is no benefit to the City or to the employee from
premium sharing because health insurance
premiums payable by
employees are paid with after-tax
dollars. If all future rate
increases fall on the employee, the City
will have no incentive to
negotiate to keep those premiums down.
I. Emergency Leave
The
Arbitrator should reject the City's proposal to amend
Article 3.13 by limiting release time for
family emergencies to
LEOFF I employees. While LEOFF II employees can use sick leave
for
family emergencies, none of the WC 7 provide
a separate paid family
emergency
leave benefit. The Arbitrator
should reject this
proposal in order to maintain parity within
the bargaining unit.
LEOFF II employees should not have their
personal sick leave
reduced in order to care for family members,
when LEOFF I employees
are not so restricted. Nor has the City demonstrated that any
other LEOFF II employees in the City or the
state must forego sick
leave to handle family emergencies. Therefore, the City's proposal
should be rejected by the Arbitrator.
J. Duration
The
Arbitrator should adopt SPMA's proposal for a three-
year contract with full retroactivity to
September 1, 1992. The
parties have consistently agreed to contract
periods extending from
September 1 until August 31 of the following
year. The Arbitrator
should reject the City's attempt to alter
the term of the contract
from January 1 through December 31. It is the position of the
Union that
the parties had agreed to a
three-year contract
extending from September 1, 1992, until
August 31, 1995. On July
19,
1993, the City
repudiated its agreement
and bargained
regressively by proposing an unlawful term
of three years and four
months, ending December 31, 1995. At the
hearing, the City altered
its proposal and offered a contract of two
years and four months,
ending December 31, 1994, with pay increases
not effective until
January 1,
1993. The changes in the City's
proposals on the
duration of the contract are the subject of
an unfair labor
practice complaint.
The proposed
four-month salary adjustment
period
constitutes a salary freeze that carries
forward year after year
into the future. The City has not justified such a regressive
change.
By altering a change of the Contract term, the members of
this bargaining unit would be placed further
away from the CPI
adjustment, and increase the disparity in
the contract term with
the WC 7 whose adjustments extend from July
1 through June 30~
SPMA is aware of no case where an interest
arbitrator has ever
failed to give full retroactivity to a wage
increase.
K. Conclusion
The
SPMA concluded in its post-hearing brief as follows:
Compensation of
Seattle police management
personnel
relative to their counterparts in
the
comparison cities has steadily eroded each
year
since SPMA commenced bargaining in 1979.
Troubled
financial times for the City provided
an
early explanation, but with the City's
fiscal heath
restored there has
been no
restoration
of appropriate compensation levels
such as precided the crisis.
The SPMA
economic
proposals provide a suitable basis
for
this restoration.
The
statute under which this proceeding is
convened
has as its primary goal to foster the
dedicated and
uninterrupted service of
uniformed
personnel. But such dedication does
not flourish
in the face
of the City's
consistently
regressive bargaining posture.
Nor
ought it be necessary for this small
bargaining
unit to shoulder the burdens of
litigation
for every contract settlement. A
proper award
should facilitate future
settlements.
For
these reasons and the reasons set forth
above
in this brief, the Arbitrator should
award
SPMA's proposals.
Brief,
p. 149.
IV. POSITION
OF THE CITY
A. Background
The
City recognizes that members of the SPMA have
performed admirably in steering the
Department through a course of
change mandated by shifting needs for police
services. However,
the City is unwilling to "hand over the
key to the treasury" as a
reward for police managers having performed
their jobs well. SPMA
believes fairness and equity require that
they be paid at or above
the average of their West Coast comparable
jurisdictions. Pursuant
to the Union's approach all other factors
are to be ignored. The
City avers that all of the statutory factors
must be taken into
account
when setting compensation
for the members
of this
bargaining unit. The Arbitrator must give consideration to the
impact of
an award on the citizens of
Seattle and on the
approximate 10,000 other City employees.
The
City next asserts it is the task of the interest IF
Arbitrator to fashion an award which
constitutes an extension of
the bargaining process. This Arbitrator must reject the notion
that interest arbitration is the place for
the attainment of
unrealistic proposals which would never be
acceptable in the
underlying negotiation process. The Arbitrator should enter an
award which will be as nearly as possible to
what the parties
themselves would have reached if they had
continued to bargain with
determination and good faith. Application of the mechanical
formula proposed by SPMA does not take into
account the full range
of factors which are required under
Washington law.
The
goal of the City in these negotiations is to work
hard to be conscious and fair in its
approach to labor relations
with all of its 50 different bargaining
units which are represented
by over 30 unions. Eighty percent of the City's employees are
covered by collective bargaining agreements. In the Police
Department alone, there are 9 different
bargaining units which must
be considered in the formulation of the
City's labor relations
policy.
The
City reviews a great many factors when determining an
appropriate wage increase for represented
employees. At the outset
the City looks at the CPI to determine what
it will take for
employees to maintain their purchasing
power. For many years the
CPI was the primary factor behind the City's
labor negotiations.
In recent years when inflation has been low,
the public safety
units have tried to shift the focus to
looking at the WC 7 as a
dominant factor for establishing wage rates.
The
City also examines the local labor market to ensure
that its wage and benefit package is
competitive with other Puget
Sound employers. The taxpayers will not support wage increases
which are out of line or inappropriate with
other local public
sector employees. Economic conditions in the City of Seattle
are
also a basic criteria when determining a
wage increase for City
employees.
Another important factor is the relationship to other
bargaining units. Over the last 20 years, the members of SPMA
and
Seattle Police Officers' Guild have received
about the same wage
increase.
The City cannot ignore what is happening with other City
bargaining units when it negotiates with
SPMA.
The
City also examines the relationship of the SPMA to
the stipulated comparables in the WC
7. Pursuant to its
evaluation of the WC 7, the City factors in
differences in the
relative cost of living among the WC 7. The City also reviews the
percentage increases given by the other WC 7
cities and performs a
total compensation analysis. The City submits its approach is
consistent with the statutory framework for
resolution of disputes
under interest arbitration.
The
City argued that SPMA proposals are little more than
"an effort to turn arbitration into
gamesmanship." The Arbitrator
should reject the Union's myopic focus upon the California labor
market." The Arbitrator should draft an award which
instructs the
parties that the statute requires
consideration of many factors,
not just a rigid comparison with the wages
paid in the WC 7.
B. City Wage Proposal
The
City has proposed that members of this bargaining
unit receive a 2.8% increase effective
January 1, 1993. Pursuant
to the City's proposal, wages would be
frozen at their present
level from September 1, 1992, through December 31, 1992.
In
reviewing the City's proposal the Arbitrator
should consider that
the City agreed to absorb the entire 1993
medical cost increase for
the bargaining unit. The cost of that agreement worked out to
approximately $79,000, which is close to 2%
of the salary for this
bargaining unit. While the City does not argue inability to
pay,
the City's financial health dictates a
cautious approach to the'
establishment of wages for the members of
SPMA. The City is not
flush with cash which should be allocated to
a 15% to 30% wage
increase for the members of this bargaining
unit. Declining
revenues and financial uncertainty in the
private sector argue
against adoption of the Union's proposal.
Additionally, the
City has taken
significant and
substantial measures in response to a
slowing economy. The City
has reduced expenditures in order to balance
the budget. The City
imposed a hiring freeze in May of 1991. In the 1992 budget 224
positions were eliminated and another 175
positions were slashed
from the 1993 budget.
C. Cost of Living
The
City takes the position that increases in the cost of
living support the offer of a 2.8% wage increase
for the first year
of the contract and a cost of living
increase for 1994. The U.S.
CPI-W Index increased at an annual rate of
3.1% from September 1991
through August 1992,
which was the last year of
the prior
bargaining Agreement. Since that time annualized increases in the
CPI-W have ranged from 2.8% to 3.2%. Locally, the Seattle area CPI
has increased at about 3.5%. If the CPI medical cost component is
excluded, the CPI increase was 2.8%
effective August of 1992.
Since then the index without the medical
component has seen an
average increase of 2.8%.
The bargaining
history supports a wage increase
controlled by a CPI formula. Three of the four previous contract
years set the wage increase based upon a CPI
formula. The
overwhelming majority of City bargaining
units have agreed upon an
increase of 90% of the CPI for 1993
wages. The City calculates
that since the CPI applicable to this unit
was 3.1%, use of a 90%
figure results in a wage increase of 2.8%.
D. Relative Cost of Living Differences in
the WC 7
Should
be Given Substantial Weight by the Arbitrator
It
is the position of the City that in setting wages for
this bargaining unit the Arbitrator must
take into account the
differences in the cost of living in the WC
7. According to the
City, all of the independent measures which
either party offered at
the arbitration hearing support the
conclusion that the cost of
living is higher in California than in
Washington. Dr. Jonathan
Leonard gave persuasive testimony that wage
differences tend to
reflect the cost of living differences
throughout the country. Dr.
Leonard explained that if you are going to
compare pay levels
across regions or time periods with very
different pay levels, one
has to take into account differences in the
cost of living. In Dr.
Leonard's view, all of the indexes the City
used in this case tend
to correlate with each other. The studies all tell the same story
that the cost of living is higher, in
general, in the
comparison cities than in
unanimous support for the notion the cost of
living is higher in
Even
the Union witness, Mr. Kilgallon concurred with Dr.'
Leonard that wages tend to reflect any cost
of living differences
among the WC 7.
E. Available Indexes Support the Existence
of a Cost of
Living
Differential Between Seattle and the WC 7
Federal
Pay Act. The federal government has
provided by
law a premium differential for certain
specified West Coast cities.
Law enforcement officers in
differential and for law enforcement
officers in
Oakland,
San Jose CMSA
and in the
San Diego CMSA,
an 8%
differential is paid. Law enforcement officers 'employed by the
federal government in
differential. Kilgallon testified
that in
the
intercity cost of living report revealed
that for the first quarter
of 1993,
other West Coast jurisdictions.
AIRINC. AIRINC is an organization which independently
prepares intercity cost of living data. AIRINC collected data
during 1992 for
standard of living used is based on a before
tax income of $50,000.
AIRINC concluded that the cost of living in
Seattle is 15.8% lower
than the average cost of living in San
Francisco and Los Angeles.
If housing is excluded, the differential is
about 12%.
Urban
Family Budget. The Bureau of Labor
Statistics
published
an urban family
budget for many
years before
discontinuing it in 1981. In 1981 the average urban family budget
for West Coast cities (excluding
increase for each location. Using this methodology, the 1992 urban
family budget for
other WC 7 jurisdictions
Housing
Data. The City offered a number of
studies
concerning
the cost of
housing in the
various West Coast
jurisdictions. The Coldwell Banker study revealed that among
all
of the WC 7, only
According to the Coldwell Banker report, the
average differential
between a house in
The
Federal Housing Finance Board prepared data on the
average price of newly built single family
homes subject to
conventional first mortgages. During the first quarter of 1993 the
average price of a home in
six West Coast jurisdictions.
the study.
Information
provided by the National Association of
Realtors from the WC 7 revealed that
25% lower than the average of the WC 7
jurisdictions for the first
quarter of 1993. For the entire year of 1992,
lower than the average of the West Coast
jurisdictions. In sum,
all of the
studies reveal that the cost of
housing in the
Department
of Commerce. The most recent data available
from the Department of Commerce is for
1988. Per capita income in
Department of Commerce also computed the
average annual pay in
large metropolitan areas. For. 1989
average annual pay in the WC 7.
Area
wage Surveys. Both parties spent a
considerable
amount of time compiling data and offering
testimony concerning
wage comparisons in the comparable
jurisdictions. The Department
of Labor's reports were the source of most
of the data on the
subject of area wage surveys. The use of the data was complicated
by the fact the surveys represented
different years for different
jurisdictions. A change in methodology for collecting the
data
also complicated utilization of area wage
surveys. Whatever flaws
may exist in the area wage surveys, the
bottom line is that wages
are higher in the WC 7 than in Seattle.
For
office occupations, Seattle is 5.6% below the WC 7
average.
If one examines professional and technical employees,
Seattle is 5.9% below the WC 7 average. Dr. Leonard testified from
his review of the data that the pattern
generally holds up that
wages tend to be higher in California than
in Seattle.
The
most recent data was released after the hearing and
included in the record of this case by
stipulation. A review of
the job categories reveals that wages are
higher in the West Coast
comparables than they are in Seattle. Administrative occupations
in Seattle are paid 9.1% below the WC 7
average. Technical
occupations in Seattle receive 4.9% less
than the WC 7, and
clerical occupations receive 6.5% less than
the WC 7. A new
category of police officer has also been
included in the Department
of Labor data collection system. In the Seattle police officer
category,
the Department of Labor study demonstrates Seattle
officers are paid 10.9% less than their WC 7
counterparts.
F. The Runzheimer
Study
The
City commissioned a study by the Runzheimer Company
to
compare the cost
of living in
each of the
West Coast
jurisdictions with Seattle. The results of the Runzheimer
Report
are
entirely consistent with the conclusions reached by the
previously described intercity cost of
living studies. Regardless
of who does the study, the results demonstrate
that cost of living
and relative wages are higher in California
than in Seattle. Even
Union witness Kilgallon
admitted that the Bay Area is a "high cost,
high wage" area. This Arbitrator should follow the lead set by
the
most recent arbitration award between the
parties by arbitrator
Snow giving weight to the evidence
concerning intercity cost of
living.
The
City maintains the Arbitrator should give Substantial
credit
to the Runzheimer Report.
The Runzheimer Report
demonstrated the total difference between
the cost of living in
Seattle and the average of the West Coast
jurisdictions is 6.4%.
Another critical fact that is often
overlooked in comparing the
difference between Seattle and the West
Coast jurisdictions is in
state and local taxes. Oregon and California have a state income
tax, Washington does not. The average payment of state and local
taxes for the WC 7 employees is almost
$2,000 at the $62,700 income
level.
The members of this bargaining unit make no similar payment
for state income taxes.
The
Arbitrator should credit the findings of Runzheimer.
Runzheimer
is a well-respected organization with an impressive list
of public and private clients. Public agencies and private
organizations utilize Runzheimer's
city cost of living data to help
them adjust wages in a manner which reflects
differences in cost of
living between various locations.
The
methodology utilized by Runzheimer to examine cost of
living is reliable. Runzheimer
employs demonstrated techniques for
creating
cost of living
information about various
cities.
Runzheimer
methodology examines living costs in the categories of
taxation, transportation, housing, and goods
and services. Annual
family living costs in each category are
totaled and compared with
other jurisdictions in order to arrive at a
total comparative
analysis.
With respect to the Union challenge to the Runzheimer
data based upon its refusal to release the
underlying proprietary
formulas which are used in making its living
costs assessments, the
City argues the position is unfounded. As a private organization
Runzheimer
must protect its proprietary information against those
who
would copy and
erode its Position
in the marketplace.
Runzheimer
produces reports that are relied on by large companies
such as IBM, Weyerhaeuser and Boeing. When it produces these
reports, it does not release all of the
formulas or background
information. The private corporations and
government entities rely
on the information provided by Runzheimer. The
City asks the
Arbitrator to make a decision based upon the
Runzheimer data.
Additionally,
SPMA had ample opportunity to examine the
Runzheimer
Report prior to the hearing in order to prepare for
cross-examination of the Runzheimer
representative. Counsel for
the Union had adequate opportunity to
cross-examine the Runzheimer
representative at the arbitration
hearing. The mere fact that
Runzheimer
retains some underlying formulas as propriety does not
diminish the validity of the report's
conclusions.
The
City does not doubt that there are improvements which
could be made in the Runzheimer
methodology. While Runzheimer
may
not be a perfect report, it does establish
it Costs more to live in F
California than in Seattle.
The
results of the Runzheimer study suggest there is
about a 6.4% differential between living
costs in Seattle and the
WC 7.
That differential should be included by the Arbitrator in
any analysis of the total cost of
compensation. Seattle compares
favorably with the compensation in the WC 7
jurisdictions. City
Exhibit 102 reveals that Seattle police
lieutenants will be 2% over
the WC 7 average if the City offer of 2.8%
is awarded in this
proceeding
and cost of living
differences are appropriately
accounted for. Police captains will be 3% over the West
Coast
average and police majors will be over 6%
above the West Coast
average using similar analysis. In the last interest arbitration
between these parties arbitrator Snow
concluded that a differential
of slightly over 5% between Seattle and the
WC 7 was appropriate.
G. Benchmark for Comparison
The
City takes the position that the 23-year lieutenant
should be the basis for comparison. According to the City, the
historical practice with respect to total
costs of compensation and
longevity has been to use the average tenure
for lieutenants in the
unit at that point in time. The City has used the 23-year
lieutenant as a benchmark for comparison,
while the Union has a 20-
year lieutenant as the point of
comparison. Since 23 years is in
fact the average seniority of lieutenants,
it should be adopted by
the Arbitrator. The averages are easily computed and the
23-year
figure can readily be used in comparison
with the other WC 7
jurisdictions.
H. Medical Premiums
In
making the total compensation analysis, there are two
primary components to this assessment. First, one must look for
the premium cost which is paid to the
provider. For most SPMA
members this is King County Medical. Since the 23-year officer is
a LEOFF I employee, LEOFF I rates have been
used. The
argued for a blended rate to take into
account some members of the
bargaining unit are LEOFF II and pay a lower
rate. The City
objects to using a blended rate at this
time. The use of a blended
rate skews the data and understates
a total compensation analysis. The thrust of the parties' total
cost compensation analysis is to look at a
particular individual as
the average employee for purposes of
comparison. That average
employee in this bargaining unit has 23
years of service and
participates in the LEOFF I program.
The
second issue on the medical premium calculation is to
determine the appropriate year to use as the
basis for making the
computation.
From the viewpoint of the City, the best measure of
insurance costs is its most recent
experience. These are the
actual amounts expended by the City for
LEOFF I employees. They
are not estimates, they are actual
expenditures to be paid for
medical coverage. The Arbitrator should reject the
to ignore the amounts actually paid to King
County Medical for each
LEOFF I officer. The City's figures accurately reflect that
amount
of premium cost. The Arbitrator should also reject any attempt
to
second guess the rate structure established
and charged by third-
party providers.
I. Uniform Allowance, Differed
Compensation and
Pension
Pick-Up
Uniform
allowance should be excluded from the total
compensation analysis because there is no
accurate way to ensure
that a fair comparison can be made between
departments that have
quartermaster systems and those who require
uniforms and provide
equipment.
Deferred compensation programs should also be excluded
from the total compensation analysis based
on the long-standing
practice
of the parties.
The inclusion of
the deferred
compensation
program in the
wage analysis is
fraught with
uncertainty and error.
Regarding
the manner in which to account for the pension
pick-up, the City submits the best way of
determining the' net
impact on the employee is to start with the
total salary paid the
employee and thereafter deduct the actual
contribution which is
required after any pick-up has been made by
the employer. The
impact of this methodology is included in
City Exhibit 100 and
should be used by the Arbitrator as it has
been in previous
arbitrations.
J. Top Step Wages
One
method of analyzing the wage issue is to look simply
at top step wages being received by
employees in question. The
issue for resolution in this case is total
compensation. The base
salary paid in
a significant factor which weighs heavily in
favor of the City's
proposal.
The
salary was only 6.7% behind the WC 7 on
If the City's 2.8% increase is awarded,
behind the WC 7. Given the substantial cost of living
differential
between
the jurisdictions, City
concludes members of
this
bargaining unit are being fairly and
appropriately compensated.
The
WC 7 is inaccurate. The SPMA members stand today in exactly the
same place in relation to the WC 7 as they
did in 1979. Any
changes in the relationship between Seattle
and the WC 7 can be
explained by the fact that inflation has
been running much higher
in
SPMA
members have fared well in comparison to other
employees in the
City's study of
police services and have over 25,000
population demonstrated that
average received by their
captains receive 8% more than their
This comparison strongly supports the City's
position in this
arbitration.
K. Internal Equity
The
City devotes a substantial effort to try and ensure
internal equity for all of its
employees. The vast majority of
contracts effective
with an increase of 3.2%. That increase was arrived at by awarding
90% of the local area CPI to its
employees. Unrepresented
employees received this same increase. The City and SPMA have
historically used the national CPI to
determine the appropriate
wage level.
SPMA members have enjoyed a slightly higher rate based
on the use of the
It is equitable to have members of this unit
receive a slightly
lower rate of increase this year now that
the local area CPI is
increasing at a faster rate. The City's proposed 2.8% increase for
1993 is 90% of the national CPI.
The
only exception to the pattern of 1993 wage increases
is the
Guild wages were about 10% behind their West
Coast counterparts.
Since
SPMA members are
not as far
behind the West
Coast
jurisdictions, an increase of 2.8% is
appropriate. The City's
offer would also retain the differential
between the ranks. On the
other hand, the
differential between the sergeant and the
lieutenant.
L. Public and Private Sector Settlements
The
average increase in the WC 7 jurisdictions for the
contract year July 1992 through June 1993 is
2.5%. City Ex. 87.
Puget Sound jurisdictions which the City
used for comparison are
paying an average increase in 1993 of
3%. City Ex. 124. Double