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IA-02-97
 
In the Matter of the Interest Arbitration Between Lincoln City and Lincoln City Police. IA-02-97
 
This interest arbitration dispute came before Catherine Harris, Esq.,a neutral arbitrator mutually selected by the parties to render a final and binding decision(1).
 
Don Schaefer, Senior Labor Relations Consultant, Local Government Personnel Institute, appeared on behalf of Lincoln City ( herein "the City"). Also present for the City were Bob Mack, City Manager and Delane Engelstad, Human Resources Officer.
 
Lincoln City Police Employees Association(herein "the Union") was represented by Jaime B. Goldberg, Esq. , Hoag, Garrettson, Goldberg & Fenrich. Kenneth W. Krause, the Union's president; Matt Duncan, the Union's Vice-President; Kathy Manning, the Union's Secretary; and Bud Lane, the Union's Treasurer, also attended the hearing.
 
PROCEDURAL HISTORY
Until March of 1996, the exclusive representative of employees in certain classifications employed by the City's Police Department was the Oregon Public Employees Union.(2) After the filing of a petition and a disclaimer of interest, the Union became the bargaining agent for the City's police employees. Currently, the bargaining unit is comprised of two (2) Police Sergeants, three (3) Detectives, five (5) Senior Police Officers, one (1) Dispatcher
Supervisor, six (6) Dispatchers, eight (8) Police Officers, and one (1) Police Department
Secretary.
 
Negotiations for a successor agreement began on June 12, 1996. After eight bargaining sessions, the parties failed to reach an overall agreement and unresolved issues were submitted to mediation. A mediation session on January 16, 1997 did not produce an agreement.(3) There was no change in the parties' positions subsequent to the mediation. The parties then pursued all of the steps necessary to initiate interest arbitration and this hearing followed. Both parties agree that all jurisdictional and procedural requirements have been satisfied so that their last best and final offer packages (herein "LBOPs")are properly before the Arbitrator.
 
Hearing was held on June 11, 1997 at City Hall, Lincoln City, Oregon. At the hearing, each party was given the opportunity to present testimonial and documentary evidence, to cross-examine the other party's witnesses and to make argument to the Arbitrator(4) On June 27, the record was closed and the matter was taken under submission.(5)
 
RELEVANT PROVISIONS OF ORS 243.746 AS AMENDED BY SB 750
(4) Where there is no agreement between the parties, or where there is an agreement but the parties have begun negotiations or discussions looking to a new agreement or amendment of the existing agreement, unresolved mandatory subjects submitted to the arbitrator in the parties' last best offer packages shall be decided by the arbitrator. Arbitrators shall base their findings and opinions on these criteria giving first priority to paragraph (a) of this subsection and secondary priority to subsections (b) to (h) of this subsection as follows (Emphasis supplied):
 
(a) The interest and welfare of the public.
 
(b) The reasonable financial ability of the unit of government to meet the costs of the proposed contract giving due consideration and weight to the other services, provided by, and other priorities of, the unit of government as determined by the governing body. A reasonable operating reserve against future contingencies, which does not include funds in contemplation of settlement of the labor dispute, shall not be considered as available toward a settlement.
 
(c )The ability of the unit of government to attract and retain qualified personnel at the wage and benefit levels provided.
 
(d) The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays and other paid excused time, pensions, insurance benefits, and all other direct or indirect monetary benefits received.
 
(e ) Comparison of the overall compensation of other employees performing similar services with the same or other employees in comparable communities. *As used in this paragraph, "comparable" is limited to communities of the same or nearest population range within Oregon *...(Emphasis supplied**).
 
( f) The CPI-All Cities Index, commonly known as the cost of living.
 
( g) The stipulations of the parties.
 
( h) Such other factors consistent with paragraphs ( a) to ( g) of this subsection as are traditionally taken into consideration in the determination of wages, hours, and other terms and conditions of employment. However, the arbitrator shall not use such other factors, if in the judgment of the arbitrator, the factors in paragraphs (a) to (g) of this subsection provide sufficient evidence for an award.
 
The listing of factors to be taken into consideration and the priority to be given such factors is reiterated in the Oregon Administrative Rules, Chapter 115, Division 40.(6)
 
DISPUTED ISSUES
Both parties agree that when their respective "LBOPs" are lined up side by side, they are not separated by interplanetary light years but by mere earthly distances to be measured painstakingly by the Arbitrator. Indeed, the parties' repeated mutual assertions that their LBOPs are not that far apart have not eased the Arbitrator's burden, i.e., to make a final and binding selection of one of the packages in accordance with the above-quoted statutory criteria.
 
The Wage Differential
 
The narrow magnitude of the parties' differences is illustrated by their respective positions regarding a final wage package. For the first year of the contract, the Union has proposed a 3.1 % increase whereas the City has proposed a 2.9% increase. For the second year of the contract, the City has proposed a wage increase in the amount of the U.S. CPI-W (Mar-Mar) which, by the time of the hearing, had already been determined to be 2.7%.Likewise, for the second year of the contract, the Union has proposed a wage increase in the amount of U.S. CPI-W (May to May). Although that figure was not available on the day of the hearing, it became available shortly thereafter and has been computed at 2.1%. Thus, the cumulative differential between the two proposals as of July 1, 1997 is only 0.4%.
 
For the third year of the agreement, the City has proposed a wage increase in the amount of 2.5% whereas the Union has proposed a wage increase in the amount of U.S. CPI-W (Mar-Mar) with a minimum of 2.5% and a maximum of 5%.(7) The following table reflects the respective positions of the parties as to proposed wage increases for the duration of the proposed three-year agreement:
 
City Proposals Union Proposals
 
7/1/96 2.9 % Retroactive 7/1/96 3.1% Retroactive
 
7/1/97 2.7 % 7/1/97 2.1%
 
7/1/98 2.5% 7/1/98 (2.5% to 5.0 %)
 
Thus, assuming that the U.S. CPI-W were to remain at or below 2.8 in the third year of the contract, total cumulative advancement in wages over the course of the three-year agreement would be slightly greater under the City's wage proposals. On the other hand, under the Union's proposal, unit employees fare slightly better (.2%) during the first year of the three-year agreement, fall slightly behind (.4%) during the second year, and will probably rebound in the third year subject to market forces.(8)
 
Incentive Pay
 
Under the agreement which expired June 30, 1996, officers with an intermediate or advanced BPSST(9) certificate receive a monthly premium of $35.00. Both parties now propose to increase the monthly premium from $35.00 to $50.00 and to extend the premium not only to the sworn personnel but also to the dispatchers. The parties are in disagreement only as to the effective date of the change. The City proposes to implement the change on July 1, 1998 whereas the Union proposes that it be implemented on September 1, 1997.
 
The City has proposed to upgrade vision insurance coverage on August 1, 1997 and educational incentive pay in 1998-99.Thus, the City seeks to stagger the start dates of these increases. In urging an earlier effective date for the agreed upon change in incentive pay, the Union has pointed out that the premiums provide an incentive for employees to continue training. The Union also argues that more highly trained employees reduce the exposure of the
 
City to liability.
 
Health and Welfare
 
The only health and welfare issue which separates the parties concerns the consequences of a greater than 15% increase in the total of medical, dental and vision insurance premiums for the period August 1, 1997 to August 1, 1998.(10) The City proposes that in the event of such an increase, employees would be required to make co-payments as follows:
 
Single Employee $7.50 per month
 
Employee with 1 dependent $12.50 per month
 
Employee with 2 or more dependents $15.00 per month
 
At the hearing, the City indicated to the Arbitrator that its increase in costs due to vision coverage, effective August 1, 1997,will be approximately $8.00 per month for family coverage.
 
The Union, on the other hand, proposes that in the event of such an increase, the City may, at its option, reopen on the issue of insurance only. However, according to the Union's proposal, should the City choose to reopen bargaining on the issue of insurance, the Union may also reopen on the subject of wages. The Union feels strongly that when the City asks for a mandated co-pay, this is tantamount to a reduction in wages.(11)
 
Vacation Accrual
 
The Union presented evidence at the hearing that the City is overpaying in two out of the four categories of eligibility for vacation benefits. Whereas the expired agreement provides for payment of eight (8) hours per month of vacation to employees with 13 through 96 months of service, evidence establishes that employees in this category have been accruing 11.33 hours per month. Similarly, although the expired agreement provides for payment of 11.3 hours per month to employees with 156 through 168 months of service, employees in this category have been accruing 13.3 hours per month.(12)
 
The following table illustrates the differences in the parties' respective proposals regarding vacation accrual:
 
Tenure of Employee City Proposal Union Proposal
 
1 to 8 years 8 hours per month 10 hours per month
 
8 to 14 years 1.33 hours per month 12 hours per month
 
14 to 25 years 13.33 hours per month No change
 
25 + years 16.7 hours per month No change
 
Thus, the Union is proposing a change in the rate of accrual in two categories in which overpayments have occurred while the City proposes to maintain the existing schedule.
 
Sick Leave
 
The dispute as to sick leave usage involves the definition of immediate family. The agreement which expired June 30, 1996, specifically Article 12, Section 3, provides as follows:
 
Section 3. Immediate Family. The family shall be the employee's spouse, children (natural or foster), brothers, sisters, parents or grandparents, any relative so related by marriage, and any relative living in the employee's immediate household.
 
The City's LBOP seeks to maintain current language while the Union proposes the following modification to the existing language:
 
The family shall be the employee's spouse, children (natural or foster), brothers, sisters, parents or grandparents, current mother-in-law or father-in-law, grandchildren, and any person living in the employee's immediate household.
 
Thus, the Union seeks to add grandchildren and non-related cohabitants while deleting brothers-in-law and sisters-in-law not living in the employee's household. (13)
 
The Layoff Issue
 
The City proposes a continuation of the current contract language in Article 7, Section 1 which provides in pertinent part:
 
In the event of layoff, employees shall be laid off in the inverse order of seniority *within the classification series to which the employee is currently assigned* (Emphasis supplied**).
The current agreement contains no provision allowing for "bumping" into lower classifications.
The Union has proposed new contract language which would permit bumping among "fully qualified" sworn officers based on seniority. The language proposed by the Union is as follows:
 
In the event of a layoff, bumping shall be allowed among sworn officers provided that the employee to be retained is fully qualified to perform the duties of the remaining position. Bumping shall be in the order of the highest sworn classification to which the employee has bumping rights down to the lowest sworn classification. The order of highest to lowest sworn classifications is as follows: Sergeant or Detective, Senior Police Officer, and Police Officer. For example, a Sergeant to be laid off could bump into the classifications of Senior Police Officer or Police Officer, provided that the Sergeant was fully qualified to perform the duties of Senior Police Office (sic) or Police Officer.
 
As of the date of the hearing before the Arbitrator, there was no evidence that the City is presently planning any layoffs of sworn officers. However, the City has asserted that due to certain property tax limitations passed by Oregon voters, i.e., Ballot Measure 47 as amended by Ballot Measure 50, there may be financial problems in the future. For this reason, the City asserts that layoff is a significant issue.
 
At the hearing, Detective Charles Lane testified that if his detective position were to be eliminated, he would want to return to his previous position as a Senior Police Officer. According to Lane, there is a progression in the Police Department from Police Officer, to Senior Police Officer, to Detective to Sergeant. Having gone through this progression, he believes that he would be fully qualified to return to Senior Police Officer, or if none of these positions were available, to Police Officer. In the same vein, Sergeant Danny Krishevsky, testified that in the event of a Sergeants' layoff, he believes that he should be entitled to return to a lower position for which he is qualified, having spent thirteen (13) years of his law enforcement career as a Police Officer and Senior Police Officer. Officer Tracy Burt, the City's most recently hired Police Officer, testified that he believes that such a seniority system is fair even though in the event of any layoffs of sworn personnel, he would be the first to be impacted.
 
Application of Statutory Criteria to the Disputed Issues
Pursuant to SB 750, the legislature has changed the list of factors to be considered by interest arbitrators."Interest and welfare of the public" is now the criterion of first priority and other listed conditions are of secondary priority. The criterion of first priority is much more general in scope than the six listed secondary criteria: ability to pay, recruitment and retention, overall compensation, comparability, the CPI and the parties' stipulations. Moreover, by the express terms of the statute, an interest arbitrator is precluded from using "other [unlisted] factors" if the listed factors, in the judgment of the Arbitrator, provide sufficient evidence for an award.
Although the decision in this matter must ultimately turn on which of the two packages better serves the "interest and welfare of the public," this issue cannot be finally resolved without a full consideration of all of the listed secondary criteria. After the Arbitrator has considered all of the secondary criteria, the final outcome must still be judged in terms of its impact on the public interest and welfare.
 
Ability to Pay
 
The City does not claim that it is unable to fund the Union's LBOP. Nonetheless, the City presented the testimony of Ron Tierney, who has served as its Finance Director since June of 1994.Tierney testified that the only source of funding for wages and benefits of employees in the police bargaining unit is the General Fund and the Asset Forfeiture Fund.(14) According to Tierney, the City's payroll burden is currently approximately seventy per cent ( 70%)of the General Fund and fifty-two per cent (52% ) of the General Fund is derived from property tax revenues. Due to Ballot Measure 47,as amended by Ballot Measure 50, property taxes will be rolled back to 95-96 levels minus 10%.Consequently, whereas the City was formerly permitted to increase property taxes 6% per year, the City is only allowed to increase valuation 3% per year effective July 1, 1997.Tierney calculates that property taxes will now be supplying only 44% of the General Fund and that there will be a payroll factor of 75%.(15) Notwithstanding the unknown impact of the ballot measures, Tierney characterized the present financial condition of the City as "good" and conceded that"they are two for two going to the voters to ask for money."
 
The Union presented evidence that in March of 1997 (subsequent to enactment of Ballot Measure 47) the Lincoln City Budget Committee restored $130,000 in funding to the Police Department by using room tax dollars once designated for the Visitor and Convention Bureau to fund a full-time police officer position and a half-time dispatcher position.(16) Moreover, the Union presented documentation from the City which reflects that since 1991 and continuing to date, revenues derived from rentals of hotel and motel rooms have shown a pattern of steady increase. Indeed, the City does not dispute that the impressive growth of the Portland Metropolitan area, less than a three-hour drive from the Oregon coast, has contributed to the City's expanding tourist economy.
 
In sum, the City is not asserting inability to pay as a reason why its package should be preferred over the Union's package. Rather, the City relies on the testimony of its Finance Director as a means of demonstrating that the issue of layoffs may arise in the next round of negotiations. Thus, while the City is asserting the impact of recently enacted property tax limitations as a check or control on its ability to incur added payroll and benefit burden in the future, the City does not dispute that its financial condition is presently good, that its economy is currently expanding, and that it is financially able to fund the Union's proposals.(17) In the judgment of the Arbitrator, the City's ability to pay, standing alone, does not compel
acceptance of either the City or the Union's package.(18)
 
Ability to Attract and Retain Qualified Personnel
 
At the hearing, the City presented uncontroverted testimony that there is a low rate of turnover in the police bargaining unit and that only two sworn officers have left the employ of the Police Department. Neither of these officers resigned in order to accept a more highly paid law enforcement position and only one of the officers left to accept employment with another police agency. The Union presented no evidence that the City has been unable to attract qualified personnel at the wages and benefit levels that are presently being offered. The lack of any showing that the City is unable to attract and retain a qualified work force is some evidence that the wages and benefits currently being offered are competitive with other jurisdictions. In the opinion of the Arbitrator, an examination of this factor favors the City's package.
 
Overall Compensation Presently Being Received by Unit Employees
 
The Arbitrator has reviewed the expired agreement for the purpose of evaluating the overall compensation presently received by unit employees, including wages, vacations, holidays, paid time off, pensions, insurance benefits and other monetary benefits.(19) The Union has called the Arbitrator's attention to the fact that, until the new contract is put into place, the City is one of the few jurisdictions in the state which does not have "sick leave fold in."(20)
Comparison of the Overall Compensation of Employees in Comparable Communities
The City's comparators include seven coastal communities: Astoria, Seaside, Newport, Florence, Reedsport, North Bend and Brookings which span the entire length of the Oregon Coast from Astoria at the mouth of the Columbia River to Brookings approximately 400 miles to the south near the California border. The largest of these comparators are Astoria with a population of 10,050, North Bend with a population of 9840,and Newport with a population of 9075.The smaller comparators are Florence with a population of 6005, Seaside with a population of 5655, Brookings with a population of 5100 and Reedsport with a population of 4865. Brookings and North Bend are located more than 100 miles to the south of the City.
 
These jurisdictions, prior to July 1, 1997, were paying from $2538 to $2956 as the top step of the Police Officer classification. For the three (3) out of seven (7) jurisdictions who have a Senior Police Officer classification, a top step wage from $2665 to $2994 was being paid as the top step of the Senior Police Officer classification prior to July 1, 1997.(21) Under the agreement which expired June 30, 1996, the City pays from $2297 to $2793 in the Police Officer classification.. The City correctly notes that adding the 2.9% (retroactive to July 1, 1996) increase it is proposing in the first year, the City pays significantly more than its comparators. The parties agree that certain of the City's comparators will increase wages, effective July 1, 1997, as follows: Astoria (3%), Seaside (5%), Newport (3.2%), Reedsport (3%), and North Bend (3%)(22) These wage increases are incorporated into the following table which depicts a comparison of the salaries paid per classification by the City's comparators, as of July 1, 1997, with the salaries paid by the City:(23)
 
City Sergeant Detective Sr. P.Ofcr. P. Ofcr. Dispatcher Secretary
 
Astoria 2983-3627 2759-3355 None 2504-3045 1994-2302
 
Seaside 2933-3566 2346-2994 2463-3144 2234-2851 1930-2346
 
Newport 3238-4191 2839-2883 None 2233-2773 None 1683-2179
 
Florence None None None 2227-2788 1753-2195
 
Reedsport 2516-3186 2516-3186 2064-2634 2064-2634 1627-2078 1901-2404
 
No. Bend 2532-3253 None None 2191-2831 1705-2200
 
Brookings None 2302-2938 2088-2665 1989-2538 1718-2192
 
the City 2683-3426 2487-3022 2398-2915 2297-2793 1990-2419 1758-2243
 
The figures for wages paid by the City, as reflected in the above table, have not been adjusted to reflect either party's proposed wage increases for July 1996 (2.9% versus 3.1%) or for July 1997 (2.7% or 2.1%).
 
The Union has presented three different sets of comparators for the Arbitrator's consideration. The Union relies on various Wilamette Valley communities as its first set of comparators: Forest Grove with a population of 14, 295; Mc Minnville with a population of 20, 995; Milwaukie with a population of 19, 930; Newberg with a population of 14,700; Oregon City with a population of 17,545; Tualatin with a population of 17,450 and Woodburn with a population of 15, 235. All of these communities are within a 100 mile radius of the City. These jurisdictions currently pay from $3185.00 to $3289.00 as the top step wage in the police officer classification. Moreover, Mc Minniville and Milwaukie will increase wages by 3.5% effective July 1, 1997. Effective July 1, 1997, Newberg will implement a 3% increase and Tualatin will implement a 2.97% increase. The following table depicts Total Compensation Comparison, Top Step Wage, Police Officer Classification as presented by the Union for its first set of comparators:
 
Jurisdiction Top Step Incentives Insurance Retirement Disposable
 
Contribution Contribution Income
 
Forest Grove $3289 $0.00 $33.68 0.00% $3255.32
 
Mc Minnville $3234.00 $0.00 $0.00 0.00% $3234.00
 
Milwaukie $3377.00 $0.00 $0.00 0.00% $3377.00
 
Newberg $3254.00 $0.00 $0.00 6.00% $3058.76
 
Oregon City $$3241.00 $32.41 $22.27 0.00% $3251.14
 
Tualatin $3264.00 $0.00 $0.00 0.00% $3264.00
 
Woodburn $3185.00 $0.00 $0.00 6.00% $2993.90
 
AVERAGE $3204.87
 
the City 2793.00 $0.00 $0.00 0.00% $2793.00
 
% Difference -14.75%
 
The Union offers a second set of comparators using only the communities of Tigard(24) and Tualatin. The following table depicts Total Compensation Comparison,Top Step Wage, Police Officer classification for the Union's second group of comparators:
Jurisdiction Top Step Incentives Ins. Cont. Ret. Cont. Disp.Income
 
Tigard $3485.00 $69.70 $0,00 6.00% $3345.60
 
Tualatin $3264.00 $0.00 $0.00 0,00% $3264.00
 
AVERAGE $3304.80
 
the City $2993.00 $0.00 $0.00 0.00% $2793.00
 
The Union posits that the above table depicts a percentage difference of -18.32% when the City's top wage for Police Officer is compared with the top wage for the same classification in
Tigard and Tualatin.
 
The Union's third set of comparators includes four (4) out of seven (7) of the City's comparators, i.e., Astoria, Florence, Newport and Seaside. Additionally, the following seven cities are also included: Canby with a population of 10,405, Dallas with a population of 10,545, Gladstone with a population of 11,325, Lebanon with a population of 11,450, Silverton with a population of 6170, St. Helens with a population of 7945 and Troutdale with a population of 10,495. All of these comparators are located within a 100 mile radius of the City. The following table depicts a Total Compensation Comparison, Police Officer
Classification using these comparators:
 
Jurisdiction Top Step Incentives Ins. Cont. Ret. Cont. Disp.Income
 
Astoria $2948.00 $57.52 $14.52 6.00% $2814.12
 
Canby $3086.00 $0.00 $19.20 0.00% $3066.80
 
Dallas $2937.00 $0.00 $0.00 0.00% $2937.00
 
Florence $2715,00 $0.00 $0.00 6.00% $2552.10
 
Gladstone $2959.00 $0.00 $0.00 6.00% $2782.46
 
Lebanon $3038.00 $0.00 $0.00 0.00% $3038.00
 
Newport $2687.00 $0.00 $23.98 0.00% $2663.02
 
Seaside $2715.00 $0.00 $0.00 0.00% $2715.00
 
Silverton $2960.00 $0.00 $0.00 6.00% $2782.40
 
St. Helens $3148.00 $30.00 $49.74 0.00% $3128.26
 
Troutdale $3336.00 $66.72 $0.00 6.00% $3202.56
 
AVERAGE $2880.07
 
the City $2793.00 $0.00 $0.00 0.00% $2793.00
 
% Difference -3.12%
 
The Union argues that assessed valuation of property is an economic indicator which supports its selection of the above jurisdictions for purposes of comparison. The Union has presented assessed valuations of jurisdictions contained within its third set of comparables which range from $315,366 to $1, 261, 464.(25) The City does not challenge the accuracy of these statements.
 
In order to further support the use of its comparators, the Union has presented evidence that while the City may have an official full-time population of only six thousand (6000), that the true measure of its population is more than a "sign on the road."To this end, the Union presented evidence that city officials have publicly stated during the year 1994 that comparisons to Seaside, Astoria and Florence are misleading given the City's large part-time population and rapid pace of development. City officials have also stated that the City has the service demands and other responsibilities of much larger cities such as Tigard and Tualatin. In the same vein, the Union presented unrebutted evidence that as recently as March 27, 1996, City Manager Bob Mack reported that the City's activity level is "probably representative of a much larger community" and probably a community with as many as 30,000 residents.
 
The Union also presented a video tape of Highway 101 taken by Officer Ken Krause from the air between 2:30 and 3:00 p.m. on a weekday during the month of August of 1996.(26) The videotape was presented to corroborate Krause's testimony, i.e., that while it may be true that he works for a town of only 6000 permanent full-time residents, if part-time residents and tourists are included, the population of the town is probably closer to 15,000 during the week and 20-25,000 on weekends. He and his fellow officers patrol approximately seven miles of coastline, which is only a mile wide at its widest point and approximately one-hundred (100) yards wide at its narrowest point. The Union asserts that the City's status as a popular tourist destination, coupled with its high population density, contributes to the level of service calls. Officer Krause also testified that new commercial ventures, i.e., the opening of the Chinooks Winds Casino in June of 1996, the new factory stores, and new hotels(27) are continuing to draw more tourists and residents.(28) Consistent with the testimony of Officer Krause, Dispatcher Merry Dooley, who has been employed by the City for approximately 5½ years, testified that while it used to be slower in winter, now "it's like summer all the time."
 
Officer Mark Hopkins, who has acted as staff advisor to the Traffic Safety Committee, testified that traffic counts in some locations have gone as high as 8400 in areas where the previous reports were of only 400 vehicles. According to Hopkins, traffic citations have decreased due to other service demands being placed on him and his fellow officers.
In sum, the City relies on coastal communities along Highway 101 with populations ranging from approximately 5000 to 10,000 as its comparators. The Union focuses on growing communities located in the Wilamette Valley region with populations ranging from 6000to 21,000 which, while in closer geographical proximity to the City, are not necessarily coastal communities. The dilemma for the Arbitrator is which of these sets of comparators satisfies the requirements of the statute, thus enabling the Arbitrator to compare overall compensation of other employees performing similar services with the same or other employees in comparable Oregon communities. For reasons explained herein, the Arbitrator has chosen the Union's third set of comparables as the most appropriate jurisdictions for comparison purposes.
 
First of all, the Arbitrator does not feel compelled to restrict her comparisons to coastal communities only. There is no such requirement in the statute and to read such a requirement into the language would be to exceed the interest arbitrator's jurisdiction. Moreover, the statute does not require that a city be identically equal in population to its comparator. Rather, it must be "in the same or nearest population range within Oregon."In the Arbitrator's judgment, the third list of communities presented by the Union, as well as the list of communities presented by the City, both fall within the same or nearest population range so as to satisfy the requirements of the statute. The Union's comparators ( Set #3) range from a high of 11, 450 (Lebanon)to a low of 5655 (Seaside), i.e., a range of 5795.Similarly the City's comparators range from a high of 10,050 (Astoria) to a low of 4865 (Reesport), i.e., a range of 5185.Not only are the ranges very similar but in both sets of comparators the difference in population between the smallest and largest communities is less than the City's small population. Thus, the question becomes which list is more appropriate based on other considerations besides population.
 
To be sure, the comparability criteria limit the comparison to police departments located in "comparable communities within the same population range within the state of Oregon."However, the language of the statute does not provide that similarity of population is the only factor to be determined in determining comparability of communities. To the contrary, once the appropriate range has been identified, nothing precludes the Arbitrator from determining that one or the other of the sets of comparators is more appropriate due to geographical proximity or other factors. In other words, population is only a threshold limitation. If a community is within the population range, other factors may be considered; if not in the appropriate range, then it does not matter how similar geographically or econmically the community may be, it is not an appropriate comparator.
 
Given that both the third set of the Union's comparators and the City's comparators fall within the appropriate population range, other factors such as geographical proximity may be considered. "Comparable" as used in the statute is a broad term and reasonably includes, at a minimum, geographical proximity. Where, as here, population ranges used by the City and by the Union in its third set of comparables are strikingly similar, the Arbitrator is of the view that communities within a 100 mile radius of the City provide a better basis for wage and benefit comparisons. As an additional basis for this choice of comparators, the Arbitrator notes that only the Union has compared "overall compensation" as required by the statute.(29)
 
Comparing the top wage paid to Police Officers by the City ($2793.00) to the top wages paid to Police Officers in the comparable communities, i.e., Astoria, Canby, Dallas, Florence, Gladstone, Lebanon, Newport, Seaside, Silverton, St. Helens, and Troutdale, wages paid to Police Officers in the City are within the zone of reasonableness. The City's overall compensation is higher than overall compensation paid to Police Officers in Newport, Florence, Seaside, Silverton and Gladstone and lower than overall compensation paid in Astoria, Canby, Dallas, Lebanon, St. Helens and Troutdale. Even assuming a maximum co-payment for health insurance in the third year of the agreement, i.e., $15.00 per month, the City still would be paying more in overall compensation than Newport, Seaside and Florence. Thus, the Arbitrator concludes, under the circumstances presented here, considerations of comparability favor the City's proposal.(30)
 
CPI-All Cities Index (Cost of Living)
 
The parties stipulated to the annual cost of living adjustment provided by the U.S.
CPI-W as follows: The U.S. CPI-W for 1997 (Mar-Mar) is 2.7% and the U.S. CPI-W for 1997 (May to May) is 2.1%. Consideration of the CPI-W, in a pattern of decline as of the date of the hearing, favors the City's proposal.
 
Stipulations of the Parties
 
As discussed above, the stipulations of the parties include cost of living and population figures. Moreover, each party's LBOP specifies that all other tentative agreements and current language will be part of the new agreement.
 
The Interest and Welfare of the Public
 
Having reviewed the secondary criteria, the Arbitrator must address what is the principal and overriding factor, i.e., which of the two packages better serves the interest and welfare of the public. The decision in this regard is complicated by the fact that the total value of the Union's package depends on how market forces impact the third year of the Union's proposal. If the Union's package is implemented, this is one more uncertainty, along with the consequences of Ballot Measure 50, to be managed by the City's Budget Committee and Finance Director. On the other hand, the chance that the City's proposal may, in fact, yield a greater cumulative wage increase over the duration of the three-year agreement must be weighed along with the fact that the Union's package contains a reopener in the event of possible increases in the cost of health benefits.
 
In the Arbitrator's view, the lack of predictability of the third year increase in the Union's package and the lack of predictability of increases in health costs are the two issues that have the greatest potential for affecting the interest and welfare of the public. In assessing these issues, the Arbitrator has examined all of the possible scenarios under both the City and Union packages and, in all cases, has revisited the same conclusion: Based on the record presented to the Arbitrator, it cannot be found that unit employees are being unfairly paid vis-a-vis comparable jurisdictions so as to warrant selection of the Union's package with its possible 5% increase in the third year and possible reopener. The potential mandatory co-payments are not so burdensome that the Union's proposed reopener must be preferred over the City's proposal. Even assuming the mandated co-payments, this would not drive real wages downward to such an extent that the City's wages would be outside the zone of reasonableness. Moreover, bargaining for a new agreement would be commencing almost concurrently with the imposition of the co-payments. Finally, the fact that the City is financially able to fund the Union's package, even at its optimal 5% in the third year, does not compel selection of the Union's package under the statutory criteria.
 
Turning to the remaining issues, there are three other significant issues with financial implications: the Union's proposals for changes in sick leave and vacation accrual and the parties' respective proposals for the effective date of incentive pay. Nothing in the record has persuaded the Arbitrator that these non-wage proposals are supported by the secondary criteria or that the interest and welfare of the public would be better served by their implementation. As to the layoff proposal, the Arbitrator may prefer the Union's proposal; however, there is no authority to selectively choose various items from each of the packages for inclusion in the contract. Thus, none of the non-wage proposals compel selection of the Union's package under the statutory criteria. Moreover, in the judgment of the Arbitrator, the factors contained in paragraphs (a) through (g) of ORS 243.746 (4) provide sufficient evidence for an award such that it is not necessary to base any findings or opinions on other factors not listed in the statute. For all of the above-stated reasons, it is found that the public interest and welfare will be better served by the Arbitrator's selection of the City's LBOP.
 
AWARD
 
The new language shall include the language proposed by the City.
 
July 26, 1997
 
CATHERINE HARRIS


 
Footnotes:
 
1. The neutral arbitrator was selected from a list supplied by the Employment Relations Board of the State of Oregon.
 
2. Represented classifications include Dispatchers, Dispatcher Supervisor, Police Officers, Senior Police Officers, Detectives, Police Sergeants, and Police Department Secretary.
 
3. Agreement was reached during mediation as to the effective date of an upgrade in the vision plan, i.e., August 1, 1997.
 
4. At the close of the hearing, the parties agreed to submit simultaneously by June 25 legal authorities to assist the Arbitrator in interpreting and applying Oregon's new "last best offer/total package" interest arbitration statute. Accordingly, both parties' submissions (consisting of legal articles and interest arbitrators' decisions)had been received by the Arbitrator by June 27.
 
5. It was further agreed that the Arbitrator would have thirty (30) days from receipt of both parties' post-hearing submissions in which to issue her decision.
 
6. A reading of the statute and rules discloses that the arbitrator is required to select only one of the last best offer packages submitted by the parties. Thus, the arbitrator is precluded
from resolving the dispute on an issue by issue basis.
 
7. The City wanted definite and certain amounts for all three years but compromised its
position, i.e., proposing an increase tied to the cost of living in the second year.
 
8. Using the top wage of Police Officer under the expired agreement and assuming a 2.8% increase in the third year under the Union's proposal, the top step would be at $2909.48 after three years under the City's wage package and at $2906.59 under the Union's wage package.
 
9. These initials stand for Board of Public Safety Standards and Training, a state agency charged with the responsibility of raising standards and training of law enforcement personnel.
 
10. Although the parties' LBOPs also address premium increases from August 1, 1996 to August 1, 1997, this period of time is no longer at issue. Prior to the hearing, the City was informed by its insurance carrier that there would be a decrease in medical and vision premiums and no change in dental premiums for this time period.
 
11. The requirement of co-payments in negotiated amounts tied to a percentage increase in health costs is not new to this round of contract negotiations. Language providing for such co-payments exists in the current expired contract.
 
12. This was demonstrated by the unrebutted testimony of Charles Lane, Matt Duncan and Larry Ford.
 
13. Officer Kenneth Krause testified that he has voluntarily undertaken the care and supervision of his grandson. Although he is not a legally recognized adoptive parent, for all practical purposes, he acts as the child's father. Recognizing Officer Krause's situation and the situation of others like him, the Union takes the position that grandchildren are more important than in-laws.
 
14. Approximately $5000.00 per year from the Asset Forfeiture Fund is used to pay overtime.
 
15. According to Tierney, transfers from other funds have increased just enough to cover the loss of eight per cent (8%) from property tax revenues. However, he expects a legal challenge on the transferring of hotel motel tax receipts into the General Fund.
 
16. At the hearing, the City presented evidence that it had decided not to fill the vacant police officer position.
 
17. Assuming that the Union's proposal were implemented and a 5% increase were implemented in the third year of the agreement, the top wage of a Police Officer would be $2968.79 ($59.31 more per month than the top wage of a Police Officer in the third year under the City's package). In essence, the City speculates that if this were to occur, it might not be able to continue to employ the same number of Police Officers.
 
18. While the inability of a public jurisdiction to fund a proposal may provide a basis for resisting upward pressure for wage increases, ability to pay does not necessarily drive wages up absent a showing of wage inequities vis-a-vis comparable communities.
 
19. Under the expired agreement, all regular full-time employees accrue one (1) holiday per month and eight (8) hours of sick leave for each full calendar month of service. Employees covered by the contract are also entitled to health coverage, a twenty thousand ($20,000.00) fully-paid group term life insurance policy and long term disability benefits. The City also pays the employee contribution to the retirement system.
 
20. Whichever package is selected, sick leave fold in will become a negotiated benefit.
 
21. The City also presented evidence that for all Oregon cities (15 out of 18, not counting Lincoln City), populations 5000 to 9999, who participated in a survey by Local Goverment Personnel Institute, the following averages apply: Police Sergeant (2811-3423); Police Officer (2233-2777) and Dispatcher ( 1707-2056).
 
22. As of the date of the hearing, Brookings was still negotiating and Florence was proposing that wages remain at the same level due to Ballot Measure 47.
 
23. Figures in this table have been rounded to the nearest dollar.
 
24. Tigard has a population of 33,730 according to the January 1997 Oregon Criminal Justice Directory.Although the parties dispute the meaning of the term "same or nearest population range" as used in the statute, they do not dispute each other's population statistics.
 
25. The Union's figures are from Oregon Property Tax Statistics Fiscal Year 1995-96, Table H, p. 58 et seq. in which the City's assessed valuation is reported as $697, 327.
 
26. This videotape was originally made by Officer Krause for his own private use and enjoyment and not for purposes of this interest arbitration proceeding.
 
27. Although no hard data was presented, the Union estimated the number of hotel and motel rental units at approximately 2500. The City did not question this estimate.
 
28. Kathy Manning, the Police Department's Secretary, testified that on Sunday June 8, a few days prior to the hearing, she made a video of North Bend and Reedsport. The Arbitrator viewed this video which presents less well-traveled sections of Highway 101 in both of these communities.
 
29. Although such an explicit comparison was not made, it must be noted that under the expired agreement, the City makes the employee contribution to the retirement system, thus enhancing employees' disposable income. The Arbitrator has noted that the statute requires that comparability analysis be undertaken in terms of the "overall compensation" of the employees being compared. ORS 243.746 (4)(e).
 
30. Notwithstanding the credible testimony of Union witnesses, i.e., that the City has many of the attributes of a town of 15,000 to 25,000 residents, the Arbitrator has seen fit to use population statistics in her analysis. In the Arbitrator's judgment, every jurisdiction has part-time residents, tourists, non-resident employees, shoppers etc. who swell the ranks of the general population. Therefore, the Arbitrator has no basis for weighting the City's population that would take into effect similar factors in other jurisdictions.