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IA-06-96
In the Matter of the Interest Arbitration Between Malheur County, Oregon And Oregon Public Employees Union. IA-06-96.
 
EXHIBITS
 
Employer
 
1. Blue Book information on comparables
 
2. County Resolution - Hiring Freeze
 
3. New Hires and Terminations
 
4. Costing of both proposals
 
5. Costing of insurance increases
 
6. Cost difference between the two proposals
 
7. Comparable wage comparisons
 
8. The effects of Measure 47
 
9. Update to costing figures for Measure 47
 
10. Current budget information
 
Union
 
1. LERC Monograph: After Senate Bill 750
 
2. Oregon Statute 243-752
 
3. Union comparators
 
4. Populations for Oregon counties included in comparators
 
5. Final offer of Union
 
BACKGROUND
 
The Oregon Public Employees Union (OPEU or the Union) represents employees of the Malheur County (the County) Sheriff's Department. The parties negotiated a new 3-year contract to begin in fiscal year 1996-1997. The parties successfully resolved all issues except the wage provision of the contract during their negotiations. As required by ORS 243.746, the parties formulated their final offers and submitted the unresolved wage issue to "last best offer" arbitration in accordance with statutory guidelines. Also, during the
 
preheating conference, the parties stipulated that there were no other issues, besides wages, still in dispute.
 
At the close of the hearing the parties agreed to file written briefs to be submitted on March 31, 1997. The County's brief was timely received. On March 31, 1997, the Arbitrator received notice from the Union representative that he had suffered a personal injury and would file his brief on April 1, 1997. The Union's brief was received by the Arbitrator by way of facsimile on April 1, 1997.
 
On April 3, 1997, the Arbitrator received a request from the County's representative:
 
I have received the Union's post-hearing brief in this matter and must respectfully request that you disregard it. March 31, 1997, was the date that the parties were required to submit their briefs. No extension of that time requirement was requested or granted.
 
The County submitted its brief as required and faxed a copy to the Union on the same date - March 31, 1997.
 
While the Arbitrator agrees with the County's representative that the Union's brief was not timely filed, in this case he does not find the one-day delay in filing the brief to be sufficient cause to disregard it. This conclusion is based first on the fact that the Arbitrator received timely notice of the Union's
 
representative's need to file the brief one day after the due date, and that this notice contained good cause for the one-day delay.
 
Second, the Arbitrator carefully reviewed the County's and the union's briefs and could find no evidence that the Union was advantaged by filing its brief one-day late, having received a facsimile copy of the County's brief the day prior. Had the Arbitrator found evidence that the Union was advantaged by filing its brief one day late, then he would have ruled otherwise.
 
The Arbitrator closed the hearing effective April 1, 1997.
 
Conventional interest arbitration for Oregon's public employees was replaced in 1995 by "last best offer package" interest arbitration as a result of Senate Bill 750. Senate Bill 750 created statutory amendments revising the arbitration process for unresolved bargaining disputes. ORS 243.746 (4) now sets forth the following guidelines:
 
(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) through (h) of this subsection as follows:
 
(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, Notwithstanding the provisions of this paragraph, the following additional definitions of "comparable" apply in the situations described as follows:
 
(A) For any city with a population of more than 325,000, "comparable" includes comparison to out-of-state cities of the same or similar size; and
 
(B) For counties with a population of more than 400,000, "comparable" includes comparison to out-of-state counties of the same or similar size; and
 
(C) For the State of Oregon, "comparable" includes comparison to other states.
 
(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 the 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.
 
In reaching his recommendations, the Arbitrator has been particularly mindful of these criteria and has given careful consideration to the testimonial evidence, documentary evidence, the arguments, and the briefs submitted by the parties.
 
ISSUE, ANALYSIS AND AWARD
 
ISSUE 1: SALARY
 
Proposal of the Union: The Union's final wage increase proposal to the County
 
during the contract negotiations is as follows:
 
a. In the first year (July 1996 to July 1997) the salary schedule will increase by 6 percent.
 
b. In the second year (July 1997 to July 1998) the salary schedule will increase by 6 percent.
 
c. In the first year (July 1998 to July 1999) the salary schedule will increase by 6 percent.
 
Proposal of the County: The County's last best offer to the Union on the issue of wage increases is as follows:
 
a. Effective July 1, 1996, the salary schedule will be increased by 2.7 percent.
 
b. Effective July 1, 1997, the salary schedule will be increased by 3 percent.
 
c. Effective July 1, 1998, the salary schedule will be increased by 3 percent.
 
Position of the Union:
 
The Union contends that the County should increase the wages of the Sheriff's Department employees to the levels given in the Union's "last best offer" for two primary reasons. The first reason is that the higher wages sought by the Union would best serve "the interest and welfare of the public," the criterion specified as the most important under ORS 243.746 (4). To support this claim, the Union points to two other factors that must also be considered under the statute - i.e., how the wages paid by the County compare to wages for similar positions in "comparable communities" [ORS 243,746 (4) (e)], and the ability of the County to attract and retain qualified employees at proposed wage rates (ORS 243.746 (4) (c)].
 
In Union Exhibit #3, salary ranges, including a PERS (Public Employee Retirement System) cost addition, for positions similar to those in the Sheriff's Department are shown for eight other Oregon counties with population sizes close to that of Malheur County. The data show that at the top step of each job category, the County pays less than the comparator counties by $164 to $888 per month, or an average of 10 to 23 percent less than the other counties, depending on the job category. This is clearly a striking inequity that supports the Union's proposal for higher wage increases than have been offered by the County. Three counties with populations smaller than that of Malheur County also have been included with the list of comparator counties to point out that even these counties pay more to their employees than does the County.
 
The County has argued that the list of comparators used by the Union to asses the County's wage rates somehow exaggerates the wage disparity between the County and its counterparts by including communities in other geographic regions of the state. However, OPS 243-746 (4) (e) specifically provides that the term "comparable communities" as used in the statute "is limited to communities of the same or nearest population range within Oregon." In LERC (Labor Education and Research Center) Monograph No. 14, several experts in the field of labor relations analyzed the impact of Senate Bill 750. As shown in an excerpt of the monograph (Union Exhibit #l), the "comparable community" portion of the bill has clearly been interpreted as decreeing that:
 
the only factor to be considered in selecting comparable Oregon communities is population - not geography, not similarity of function, not whether the community is rural, urban, or suburban, and not whether the other communities are in the eastern, central, southern, coastal, or valley region of the state. Only population.
 
The Union further notes that Nancy Moore, the County's Administrative Officer, conceded in her testimony that Sheriff's Department employees have historically been, and continue to be, paid lower than employees in similar positions in other counties - even if only compared to counties within the same region of the state. For this reason, the Union argues, if the County does not use the current contract negotiation process to "catch up" by increasing the Sheriff's Department wages to be within the range of wages paid by other counties in the state, it will soon lose the ability to attract and retain high-caliber employees. This effect would certainly be against the public's best interest and would be detrimental to its welfare of the public. Conversely, adopting the Union's wage increase proposal would have the effect of strengthening the County's ability to attract and retain well-qualified employees in the sheriff's Department by raising the wage scales to levels on par with other comparable counties. Adopting the Union's proposal, then, would clearly best serve the public interest and welfare.
 
The other main reason the Union gives to support its wage increase proposal is that the County currently has the ability to fund the proposal. The Union's proposal thus meets another criterion that must be considered under ORS 243.746 (4) (b). Analysis of budget figures for the current fiscal year (Union Exhibit #6) indicates that the County is in solid financial condition. The budget data, as well as the testimony of County representatives, indicate that there is an available reserve operating fund ("cash on hand") of more than $500,000. This figure exceeds the approximately $450,000 that Ms. Moore testified was needed by the County to fund operations until tax receipts come in.
 
The Union further takes issue with the County's argument that it cannot fund the Union's wage increase proposal because of measure 47 (the property tax limitation measure passed by voters in November 1996), which, the County claims, will result in deep cuts into County revenues. However, a re-write of this measure will soon be brought before the voters and has a good chance of passing. The expected impact of the re-written measure on County revenues would be significantly less severe than the cuts projected to occur under the original version.
 
In summary, the Union argues that the County has the ability to fund the Union's wage increase proposal. Given this ability to pay, there is no excuse for the County to deny its Sheriff's Department employees wages on par with those being paid to employees in similar positions by other counties of comparable population in the state. Failure to adopt the Union's proposal will result in attrition of high-caliber employees in the Sheriff's Department and, thus, be detrimental to the interest and welfare of the public of Malheur County.
 
Position of the County:
 
The County argues that the Union's proposed wage increase for Sheriff's Department employees is too high. The County addresses each of the pertinent criteria specified in Senate Bill 750 to support its argument. The County's argument addresses the first and most important criterion, the "interest and welfare of the public," after a consideration of the other criteria because, the County reasons, it encompasses many of the other criteria.
 
The first statutory criterion to consider, then, is subsection (b) of ORS 243.746 (4), "the reasonable financial ability of the government to meet the costs of the proposed contract..." The County addresses this criterion in terms of its current financial situation, the expected impact of Measure 47, and the costs associated with the wage increase proposals of both parties.
 
According to the County, its financial situation for the current fiscal year (1996-1997) is stable. After this fiscal year, however, the prospects for its financial situation are clouded by the uncertainties surrounding Measure 47's impact. According to the numbers presented in Employer Exhibit #8, Measure 47 will result in a budget shortfall for the County of more than $560,000 in revenue in the coming fiscal year, compared with its budget under current property tax revenue rates. Employer Exhibit #9 indicates that the estimated revenue loss will be somewhat less (approximately $458,000), yet still staggering, if the legislature's re-write of Measure 47 is approved by voters.
 
For this reason, the County is taking serious measures to conserve as much money as possible. Evidence of the County's efforts to this end is found in Employer Exhibit #2, which is a County resolution that instituted a hiring freeze, a freeze on capital expenditures, and a directive to department heads to voluntarily conserve in all areas of their budgets. This resolution has already resulted in diminished employment levels at the County.
 
The County has offered and budgeted a 2.7% wage increase for Sheriff Department employees for the current fiscal year. The County's proposed 3% wage increase for each of the following two fiscal years is based on the current CPT-All cities Index, also known as the cost of living index. As shown in Employer Exhibit #4, the Union's wage increase proposal will cost the County an additional $146,000 over the term of the 3-year agreement beyond what the County has offered.
 
Funding the Union's wage increase proposal would require the County to create reductions in the patrol force and/or in other critical County services.
 
The County contends that these factors considered together - i.e., the projected severe revenue loss from Measure 47 and the high cost of the Union's wage increase proposal - show that the County does not have the ability to fund the Union's proposal.
 
ORS 243.746 (4)(c) provides that the parties' proposals must be considered in terms of "the ability of the unit of government to attract and retain qualified personnel at the wage and benefit levels provided." To address this criterion, the County presents Employer Exhibit #3, which lists the numbers of employees that have been hired or terminated, and the number of new positions filled within the categories of dispatcher, Deputy Sheriff and Corrections Officer for the period of July 1993 to December 1996.
 
The numbers shown in Employer Exhibit #3 indicate that turnover levels within the Sheriff's Department have been relatively minimal during the term of the last agreement, with only two to four terminations within each of the separate position categories. in addition, Nancy Moore testified that two of the four terminations within the category of Deputy Sheriff were expressly due to factors other than wages. These two terminations resulted from resignations of employees who were assigned to an extremely remote area of the County and quit because of the hardship caused by their isolation.
 
Thus, the figures show that the County is able to attract and retain qualified personnel at the current wage and benefit levels.
 
The County also addresses the provision specified in ORS 243.746(4) (e) that consideration must be given in interest arbitration to the "comparison of the overall compensation of other employees performing similar services with the same or other employees in comparable communities. "The County argues that its compensation to Sheriff Department employees is nearly in line with wages in comparable communities.
 
Despite the analysis of this provision presented in the LERC Monograph (Union Exhibit #I), in which the authors concluded that the language of the statute restricts criteria for selecting "comparable" communities to population size only, the County contends that, in this case, population alone will not allow a reasonable comparison. Geographic proximity is an important factor that should also be considered.
 
ORS 243.746 (4) (h) specifically allows the arbitrator to consider factors other than those mandated in subsections (a) through (g) in an interest arbitration case. in this case, the County argues that geographic proximity should be considered along with population when comparing wages to "'comparable"' communities because communities that are in the same region share a common "labor market." Thus, the list of comparators selected by the County, which are exclusively from the eastern part of the state, is not only valid, but provides a more logical basis for comparison of wages from county to county than the list used by the Union, which includes counties from all regions of the state.
 
In addition, since the adoption of SB 750, at least two other arbitrators have agreed that geographic area must be included with population size in determining comparability.
 
When considered among the County's list of comparable communities, it becomes evident that the wages paid by the County to its Sheriff Department employees are close to those paid by the comparator communities.
 
The average base salary rate for County employees is less than 2 percent lower than in the comparator communities, while the County is behind less than 5 percent if all other compensation factors are considered.
 
The Union's wage increase proposal calls for more than a 9-percent increase in wages above the estimated cost of living index over the term of the agreement. This proposal clearly is not justified on the basis of existing wage rates in the County and comparable communities.
 
The County contends that, in addition to the criteria specified in ORS 243.746 (4), and as allowed under subsection (h), the Arbitrator also should consider in this case two other factors.
 
The first is the increased insurance benefits that the County agreed to provide the Sheriff Department employees. The negotiated change in the insurance formula resulted in an effective average wage increase of 1.22 percent, making the total increase in compensation for bargaining unit members of 3.97 percent under the County's proposal.
 
The second factor that should be considered is that the County's wage offers to the Sheriff's Department bargaining unit is identical to the offer that was agreed upon by the other bargaining unit within the County. In addition, managers and other non-represented employees are also receiving the same wage increases.
 
Finally, the County argues that a consideration of all the above-mentioned factors reveals that the most important criteria, "the interest and welfare of the public," is best met by denying the Union's wage increase proposal.
 
It has been shown that the County has the inability to pay the wage increases sought by the Union. If the Union's proposal is adopted, the interest and welfare of the public will be affected negatively because it is very likely that layoffs would occur in the Patrol Deputy classification. It is mandated by law that the Corrections capacity be maintained, so layoffs could not occur in that classification. Additionally, it is likely that other necessary County functions would be negatively impacted by the extra cost of the increased salaries to the Sheriff's Department.
 
The County maintains that it has protected the interest and welfare of the public by paying reasonable wage increases to its employees, and that it has been able to attract and retain qualified employees in this manner. It concludes that adoption of its "last best offer" will most effectively continue to protect the interest and welfare of the community it serves.
 
ANALYSIS
 
The Arbitrator begins his analysis of the parties' wage-rate dispute by considering the parties' proposals and arguments in terms of the criteria specified in ORS 243.746 (4). The first criterion, specified in subsection (a), is the "interest and welfare of the public." As noted by both parties, this factor, which the statute mandates be given the most weight in the arbitrator's decision, is inextricably linked to one or more of the secondary criteria [subsections (a) through (h)) provided in the statute. In the case of the instant dispute, the County"s ability or inability to fund the Union's proposal, the wages paid in comparable counties, and the County's ability to attract and retain high-caliber employees are the most significant factors to consider in terms of the relative effects of each party's proposal on the "interest and welfare of the public." For this reason, the Arbitrator will evaluate the "interest and welfare of the public" criterion only after the secondary criteria have been considered.
 
Ability of the Unit Government to Meet Contract Costs:
 
Subsection (b) of ORS 243.-746 (4) states that consideration must be given to the "reasonable financial ability of the unit government to meet the costs of the proposed contract." The Union argues that its assessment of the County's budget (Union Exhibit #6) indicates that the County currently has solid financial standing. Nothing presented by the County appears to contradict this finding. The testimony of the County's Administrative Officer and the budget figures appear to indicate that the County has amassed somewhat of a surplus of funds in its operating reserve (approximately $50,000 more than the amount required to keep operations going prior to its receipt of tax revenues). As the Administrative Officer indicated, the surplus "cash on hand" builds when the amount of money spent by the County is less than budgeted. From the parties' discussion of the County's budget standing for the current fiscal year and the County's apparent ability to save at least a little money over what has been budgeted, the Arbitrator concludes that it would not be an unreasonable burden for the County to fund the first year of the proposed contract under the terms offered in the Union's wage increase proposal.
 
The question to be resolved in this matter, then, is whether a reasonable assessment can be made as to the County's ability to fund the second and third years of the contract under the Union's wage increase proposal. As argued by the County, this assessment is made particularly difficult by the certainty (but unknown magnitude) of revenue cuts due to the impending enactment of either Measure 47 or a revised version of this property tax limitation measure. Given the severity of the estimated revenue losses that are being faced by every local government in the state, it is clear that the County has not exaggerated the potential impact of this factor. The County also has presented convincing data to indicate that the State's transfer of inmates to the County corrections facilities will present an additional drain on the Corrections budget by increasing the County's prison population while at the same time decreasing the amount of total funds available per prisoner. Against these harsh fiscal realities, it appears to the Arbitrator that the Union's request for additional 6-percent increases in both the second and third years of the contract creates the prospect of a progressively greater and more untenable burden on the County budget.
 
Ability to Attract and Retain Qualified Personnel:
 
The next factor to evaluate is the "ability of the unit government to attract and retain qualified personnel at the wage and benefit levels provided" (ORS 243.746 (4) (c)]. The Union argued, and the County conceded, that the wages paid to Sheriff's Department employees have historically been - and currently remain - lower than the wages paid in neighboring counties for similar positions. The Union argues that if this situation continues, the County will not be able to attract or retain high-caliber personnel in the Sheriff's Department. The County, on the other hand, presented testimony and documentation of hiring and termination figures for term of the last 3-year contract(Employer Exhibit #3) that are intended to show that employee retention has not been a problem. Employer Exhibit #3 also documents yearly cost-of-living wage increases ranging from 2.75 to 5 percent between 1988 and 1995. No testimony or other evidence was included in the record by which the Arbitrator could evaluate the more subjective question of the relative qualifications or caliber of the Sheriff Department employees.
 
The County"s proposed 2.7-percent wage increase for the current fiscal year and 3-percent increases for the following two fiscal years are based on the current and projected rise in the cost of living. The proposal also assumes that wage increases in other counties also will generally rise in accordance with the cost of living. In the Arbitrator's opinion, given the above assumptions, it does not make sense that the County will at some arbitrary point in the near future suddenly be unable to retain qualified employees, given the fact that the County"s wage rate has "historically" been lower than in other counties and that it has offered resonable annual wage increases for several years to keep up with the cost of living. In other words, he sees no intrinsic reason why, if there has not to date been a problem attracting or retaining qualified personnel (assuming this is the case), this situation would change. Thus, with the caveat that the there is limited information to evaluate in considering this criterion, the Arbitrator concludes that the County will continue to be able to attract and retain qualified employees in its Sheriff's Department under either the Union or County wage increase proposal.
 
Comparable Communities:
 
ORS 243.746 (4)(e) mandates that there must be a "comparison of the overall compensation of other employees ... in comparable communities." In the instant dispute, much discussion has been given over to the issue of how the comparator counties are selected to make a meaningful comparison in wages with respect to those paid by the County. The Union contends that the language of the statute precludes the consideration of any factor other than "nearest population range" in selecting comparator communities within the state. In support of its position, the Union pointed to expert analysis of Senate Bill 750 (the LERC Monograph, Union Exhibit #1) in which there is presented the clear interpretation that "only population"' - not geography, urban versus rural character, industry profile or any other criteria - matters in selecting comparator communities under the revised statute.
 
The County, on the other hand, maintains that the statute does not prohibit factoring other criteria, most importantly geographic proximity, into the selection of comparator communities. The County refers to two post-Senate Bill 750 decisions in which the arbitrators concluded that geographic proximity should be included together with population size in selecting comparator communities [International Association of Firefighters, Local 2091 v. Winston-Dillard Fire district 45 (August 1995) and Marion County Law Enforcement association v. Board of Commissioners and sheriff of Marion County, Oregon (November 1995)]. The difference in the present case, however, is that, unlike in the prior two cases, the County has included in its list of comparators (Employer Exhibit #7) counties that are not within the "nearest" population range (i.e., Harney and Grant counties). The County also referred to a third decision in which the arbitrator stated that "it is logical to compare apples with apples" in determining which communities are meaningful comparators [Bend Firefighters' Association v. City of Bend, Oregon (February 1996). While the Arbitrator certainly agrees that it makes more sense to compare "apples to apples,"' the fact of the matter is that the language of Senate Bill 750 clearly provides that population range must be the factor used in selecting comparator communities.
 
The Arbitrator thus concludes that the Union's list of comparator counties (Union Exhibit 43) more clearly complies with ORS 243.746 (4) (e) than does the County's selection of comparators. The difference between the two in terms of their respective wage rate comparisons is significant. Adopting the County's list of comparators indicates that the wages paid to Union members by the County fall, on the average, only 2 to 5 percent less than wages for similar positions in comparable counties. However, adopting the union's list of comparators results in the determination that the County falls short by more than 10 percent relative to the wages paid by comparable communities. Accordingly, the Arbitrator will consider this higher level of wage disparity to be the more valid basis for comparison to "comparable communities" under the language of the statute.
 
Cost of Living:
 
Consideration of the cost of living index must be included in interest arbitration under ORS 243.746 (4) (f). The parties stipulated to the annual cost of living measurement provided in the CPI-All Cities Index as follows: the annual rise in cost of living was 2.7 percent for 1996 and an estimated 3 percent for 1997 and 1998.
 
Stipulations of the Parties:
 
In "last best offer"' interest arbitration, the arbitrator also is required to consider the stipulations of the parties, per ORS 243.746 (4) (g). As discussed above, the stipulations of the parties, include the cost of living figures for the three years of the agreement. Further discussion or consideration of these stipulations is not pertinent at this point.
 
Other Factors:
 
Under ORS 243.746 (4)(h), the arbitrator is allowed to consider factors other than those that are provided as mandatory in arriving at a decision in a contract dispute. The County has requested that the Arbitrator consider the following additional factors supplementary to the mandatory criteria listed in subsections (a) through (g): 1) the County's position that geographic proximity be included as an important criterion in determining which counties should be used as comparators; 2) the fact that the County has agreed to an increased insurance benefit to bargaining unit employees; and 3) the fact that the wage increase that has been offered to the Union is the same wage increase that was offered to and agreed to by the County's other bargaining unit. The Arbitrator considered all of the above arguments and finds that as a group the provide mild support for the final offer by the County.
 
Also, while the Arbitrator does find that the fact that the County negotiated the same wage scale increase to its other bargaining unit indicates that there is relative wage parity within the County, again, he does not find that this issue is particularly pertinent to the instant dispute. Thus, the Arbitrator concludes that consideration of the criteria given in subsections (a) through (g) of ORS 243.746 (4) is sufficient in arriving at a finding and award in this dispute.
 
Interest and Welfare of the Public:
 
Finally, the Arbitrator must consider and give priority to "the interest and welfare of the public," as per ORS 243.746 (4) (a). As noted above, in the instant dispute, this criterion is best evaluated through consideration of the County's ability to fund the Union's wage increase proposal, the wages paid in comparable counties, and the County's ability to attract and retain qualified personnel at the current wage and benefit levels.
 
The Arbitrator has found that the Union's list of comparator counties is more valid than the County's under the language of ORS 243.746 (4) (c), and thus has adopted the Union's wage comparison figures. These figures indicate that the County pays the bargaining unit members wages that are, on the average, at least 10 percent lower than wages paid for similar positions in the comparator counties. Given this situation, the Arbitrator concludes that the Union is justified in seeking a wage increase greater than the simple cost of living increase being offered by the County.
 
It further appears to the Arbitrator that during the current fiscal year, the County could probably make available the approximately $24,000 in required first-year funds for its Sheriff's Department wages to "catch up" with wages in comparable communities under the Union's proposal. However, considering the budget figures and outlook presented by the County, it has a convincing argument that its budget could not reasonably absorb the total costs that would be incurred during the subsequent two years of 6-percent per annum wage increases under the Union's proposal. In light of the nearly certain prospect of deep revenue cuts under either the original or revised version Measure 47, adoption of the full 3-year term of the Union's wage increase proposal could certainly be expected to result in reductions in either the patrol force or in other critical County services or both. The Arbitrator is unpersuaded by the Union's claim that failure to adopt its wage increase proposal will be more detrimental to public interest than the alternative. In his opinion, it is more likely that significant cuts in public services will result if the Union's proposal is adopted than it is that the Sheriff's Department will be unable to attract or retain qualified employees if the Union's proposal is not adopted.
 
Based on this analysis, the Arbitrator concludes that the interest and welfare of the public of Malheur County would not be best served by funding the Union's proposal over the 3-year term of the contract.
 
Award: Based on the above analysis the Arbitrator awards the language as provided in the County's last offer:
 
a. Effective July 1, 1996, the salary schedule will be increased by 2.7 percent.
 
b. Effective July 1, 1997, the salary schedule will be increased by 3 percent.
 
c. Effective July 1, 1998, the salary schedule will be increased by 3 percent.
 
Respectfully submitted on this the lst day of May 1997 by
 
Timothy D.W. Williams Arbitrator
 
REPRESENTING THE COUNTY: Michael Snyder, Snyder's Consulting, Inc.
 
REPRESENTING THE UNION; Roger Bouch, OPEU