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IA-08-06
In the Matter of the Arbitration Between BAKER COUNTY and BAKER COUNTY LAW ENFORCEMENT ASSOCIATION. IA-08-06.
INTEREST ARBITRATION
A hearing was held in the above-captioned case pursuant to ORS 243.7 on November 13, 2006, in Baker City, Oregon. At the hearing both parties had the opportunity to present evidence, examine witnesses and make arguments.
The Baker County Law Enforcement Association (herein the Association or the Union) was represented by Steven O. Schuback, attorney, Garrettson, Goldberg, Fenrich & Makler, 638 NE 5th Street, McMinnville, Oregon 97128. Baker County (herein the County or the Employer) was represented by Mike Snyder, S C I, 1410 Clipperton Avenue, Henderson, Nevada 89014. The timeline for issuance of the award herein was extended by agreement of the parties.
ISSUES
Pursuant to ORS 243.746 the parties submitted final offers with the following issues outstanding:
Wages, (salary scale and DPSST Premium Pay), Article 8 (Compensation and Wage Scale).
Health Insurance, Article 9(Health and Welfare).
RELEVANT STATUTORY PROVISIONS
The Oregon statute governing the interest arbitration process, ORS 243.746(4), provides as follows:
(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 the subsection and secondary priority to paragraphs (b) to (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 with 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 that 325,000, "comparable" includes comparison to out-of-state cities of the same or similar size;
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 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.
WAGE PROPOSALS-LBOs
The Association. On the issue of wages the Union seeks the following across the board pay increases:
Effective July 1, 2005 – 4.5%
Effective July 1, 2006 – 4.5%
Effective July 1, 2007 – 4%
The Union also seeks the following DPSST certification premium pay rates:
Intermediate: 2% base pay per month
Advanced: 4% base pay per month
(maximum DPSST premium pay of 4%)
The County. The County proposes the following wage increases:
July 1, 2005 – 3%
July 1, 2006 – 3.5%
*July 1, 2006[sic] – 4%
BPSST Certifications:
Intermediate: 2%
Advanced: 2%
(maximum of 4%)
____________________
* Seediscussion of disputed typographical error in LBO, infra.
 
HEALTH AND WELFARE PROPOSALS--LBOs
The Association. The Association proposes the current Pacific Source health plan with full employer payment of premiums through all three years of the contract (effective July 1, 2005). The Association proposes the addition of employer-paid orthodontic benefits under the Pacific Source plan effective August 1, 2007. The Association proposed also provides that effective August 1, 2007, should the monthly full family premium cost for bargaining unit members exceed the highest full family premium cost for any other County employer, the bargaining unit employees are to pay the excess cost up to a limit of 5% of the total Pacific Source premium.
The County. The county proposes continued employer payment of the Pacific Source plan premiums for bargaining unit members through July 31, 2007. Effective August 1, 2007, the County would pay Pacific Source premiums up to the level of the maximum amount paid for non-presented employees under their CCIS Blue Cross plan or95% of the Pacific Source Plan (with 5% pick up by bargaining unit members).
A change to the Blue Cross plan would have to be made by the bargaining unit as a whole.
THE STATUS QUO
The parties’ current labor agreement (2004 - 2005) contains the following provisions:
Article 8 – Compensation
Employees shall be compensated in accordance with the wage schedule which is attached to this Agreement, as Schedule A. New employees will normally be paid at Step 1 of the appropriate salary range. Eligibility for advancements to higher steps will be made annually based on satisfactory performance. Any denial of a step increase will be subject to the grievance procedure.
Step increases will be effective the first day of the month following the employee’s anniversary date, unless the anniversary date is the first of the month.
Health Insurance, Article 9 (Health and Welfare)
Article 9 – Health and Welfare
9.1 Benefits – Effective August1, 2004, the County will contribute up to the following amounts for medical, pharmacy, dental, vision and chiropractic/alternative care under Pacific Source ($300/$20 deductible with $2 million lifetime max.)
Employee only - $300
Employee/Spouse - $675
Employee/Children - $556
Family - $849
The above premium amounts are guaranteed by Pacific Source through July 30, 2005.
The County will contribute $100 per employee to a Section 125 plan no later than August 31, 2004.
9.2 Part-Time – Employees working more than 20, but less than 40 hours per week on a regular scheduled basis will receive prorated insurance benefits.
9.3 Life Insurance – The County will provide $10,000 of full life insurance covering employees against both occupational and non-occupational related death. In addition the County will provide $10,000 of life insurance covering the full-time employee for occupational death as at present.
9.4 Long Term Disability – The County will maintain a long-term disability policy that will pay at least 50% of the employee’s wages after a 90-day elimination period.
PARTIES FINAL PROPOSALS--TEXT
Pursuant to ORS 243.746 (3) the parties submitted the following final proposals:
The Association:
8.1 Salary Scale:
Employees shall be compensated in accordance with the wage schedule which is attached to this Agreement, as Schedule A. New employees will normally be paid at Step 1 of the appropriate salary range. Eligibility for advancements to higher steps will be made annually based on satisfactory performance. Any denial of a step increase will be subject to the grievance procedure.
Step increases will be effective the first day of the month following the employee’s anniversary date, unless the anniversary date is the first of the month.
Effective and retroactive to July 1, 2005, employees shall receive a 4.5% pay increase across the board.
Effective and retroactive to July 1, 2006, employees shall receive a 4.5% pay increase across the board.
Effective July 1, 2007, employees shall receive a 4% pay increase across the board.
8.2 DPSST Premium Pay:
Effective July 1, 2007, employees with the following DPSST certificate will receive the additional compensation:
Intermediate: 2% base pay per month
Advanced: 4% base pay per month
(Maximum DPSST Premium Pay is 4%)
Article 9 – Health and Welfare
9.1 Benefits
The County agrees to provide and maintain the insurance benefits in place from Pacific Source as of July 1, 2005, for employees and dependents, including medical, dental, vision and pharmaceutical benefits. Orthodontic coverage, as provided by Pacific Source, will be provided starting August 1, 2007. (Pacific Source Plan Preferred 300 +20, Dental 25/1500, Orthodontic, Vision Plus, Tiered RX 10/20/40, and Chiropractic 20/500 as found in Appendix "X" (see attached))
Effective August 1, 2007, should the monthly full family premium cost for the above listed insurance benefits provided by Pacific Source exceed the highest full family monthly premium cost for insurance benefits (medical, dental, vision and pharmaceutical) paid for by the County of any other County employee, the Association employees will pay the excess cost up to 5% of the total premium for Pacific Source.
Effective August 1, 2004, the County will contribute up to the following amounts for medical, pharmacy, dental, vision and chiropractic/alternative care under Pacific Source ($300/$20 deductible with $2 million lifetime max.)
Employee only $300
Employee/Spouse $675
Employee/Children $556
Family $849
The above premium amounts are guaranteed by Pacific Source through July 30, 2005.
The County will contribute $100 per employee to a Section 125 plan no later than August 31, 2004.
9.2 Part Time
Employees working more than 20, but less than 40 hours per week on a regular scheduled basis will receive prorated insurance benefits.
9.3 Life Insurance
The County will provide $10,000 of full life insurance covering employees against both occupational and non-occupational related death. In addition the County will provide $10,000 of life insurance covering the full-time employee for occupational death as at present.
9.4 Long Term Disability
The County will maintain a long-term disability policy that will pay at least 50% of the employee’s wages after a 90-day elimination period.
Article 11 – Paid Leave
Association proposes current language.
Article 23 – Term of Agreement
This agreement shall become effective upon signing, and shall remain in effect until June 30, 2008. This agreement shall be automatically renewed from year to year thereafter unless either party provides notice of intent to negotiate this agreement no later than the fifth (5th) day of March of the expiring year.
The County:
In accordance with ORS 243.746(3), Baker County is modifying its final offer as set out below:
Wages: July 1, 2005 – 3%; July, 2006 – 3.5% and July 1, 2006[sic] – 4%
Certification – 2% for Intermediate DPSST Certificate, and an additional 2% for an Advanced DPSST
Certificate – 4% total with an Advanced DPSST Certificate.
Insurance – Baker County will pick up the premium expense of the current Pacific Source plan through July 31, 2007. Effective August 1, 2007, the County will pick up insurance premiums to a maximum amount of those paid to non-represented employees under the current CCIS Blue Cross plan or the premium expense of the current plan for the Sheriff’s Association with Pacific Source at a 95% employer contribution and 5% contribution by employees that is deducted automatically from the paycheck. The Association must select which option they prefer for the bargaining unit as whole. This provision does not require employees to change to the CCIS plan, it only requires that the Association make a choice based on the premium the County is obligated to pay. Moving the Association to the same CCIS plan as the non-represented employees is an option available to the unit. Under this provision the Association may not change or increase benefits of the Pacific source plan unless there is no additional expense to the County.
OPINION
Baker County is a small jurisdiction in eastern Oregon with a population of around 16,000. The bargaining unit involved in this case comprises Sheriff’s department employees working in patrol, corrections, and dispatch functions. There are approximately thirty employees in the bargaining unit. In the patrol section there is a sergeant and eight road deputies. In corrections (the County jail) there is a sergeant, three corrections corporals, and nine corrections deputies. The County’s dispatch center (911 service for county police, fire and forest service personnel) is staffed by a director and eight dispatch employees. The County also has a supplementary volunteer reserve deputy corps as well as search and rescue volunteers (all non bargaining unit personnel).
The bargaining unit had previously been represented by the Teamsters union. In 2004 the employees formed the Association and became the exclusive bargaining representative, separating from the Teamsters. A one year interim contract was signed, for the most part maintaining the status quo (except for the insurance plan, discussed infra). In 2005 the parties began negotiations for a subsequent longer-term agreement. After mediation (in 2006) the parties reached impasse and the matter resulted in the present interest arbitration.
The issues presented for interest arbitration are wages and insurance. In summary, the parties’ proposals are as follows:
WAGES
Union –eff. July 1, 2005 – 4.5%
eff. July 1, 2006 – 4.5%
eff. July 1, 2007 – 4.5%
County –eff. July 1, 2005 – 3%
eff. July 1, 2006 – 3.5%
eff. July 1, 2007 – 4%
(subject to procedural dispute)
INSURANCE
Union – Continued full payment of Pacific Source health plan throughout life of contract with addition of employer-paid orthodontic benefit. Effective August 1, 2007, employees liable for 5% co-pay iffull family premium cost exceeds highest full family premium cost for any other County employees.
County – Continued full payment of Pacific source premiums through July 31, 2007. Effective August 1, 2007, County to pay Pacific source premiums up to the maximum amount paid for non represented employee insurance (under CCIS plan) or95% of Pacific Source Plan (5% employee pick-up).
Procedural Issues Regarding The County’s LBO
The Association makes two strong objections regarding the County’s LBO and its presentation at the hearing. With respect to the County’s wage proposal, the Union asserts that the LBO must be read literally as written, i.e. calling for two wage increases in 2006 (3.5% and 4% for a total of 7.5%) and none in 2007. The County argues that the LBO contains an obvious typographical error and should be read, as intended, to provide for a 3.5% increase in 2006 and a 4% increase in 2007 (not 2006).
It is the Association’s position that the scrivener’s error in the County LBO was not necessarily obvious to the Union and moreover, that the arbitrator has no authority to correct any "errors" in LBOs and would violate ORS 243 in attempting to do so. The Association notes that the statute provides that "…neither party may change its last best offer package" except by stipulation of the parties or within the 24 hour period after the 14-day deadline (ORS 243.746(3)) and that "…the arbitrator shall select only one of the last best offer packages submitted by the parties…" (ORS 243.746(5)).
With respect to the County’s insurance proposal, the Association argues that the County has in effect "changed" its proposal by offering at hearing an interpretation or implementation methodology that is not apparent in the actual language of the LOA. At issue is the method for determining the rates to be used in calculating the 95/5 split provided for in the County proposal. The language of the County LBO itself does not mention what rates are to be used for calculating the 95/5 split on the Pacific Source plan (or CCIS) proposed to go into effect on August 1, 2007. In the Union’s view, logic would suggest that the determination should be made on the basis of the Pacific Source and CCIS rates as of August 1, 2007. The County’s presentation at hearing called for the use of a composite rate to calculate the contribution rates.
It is the Union’s position that since the County LBO states nothing regarding composite rates, the County is in effect unilaterally interpreting the terms of the LBO beyond what the plain language provides and offering a new methodology for the LBO that is beyond the arbitrator’s authority to adopt. The Union argues that the County has made an impermissible change in the LBO at hearing.
The question of whether an interest arbitrator has the authority to correct a scrivener’s error in an LBO appears to be without firm precedent. There is ample arbitral dicta stating that arbitrators can choose only between the parties’ two LBOs, but those comments mostly appear in the context of differentiating interest arbitration under ORS 243.746 from other statutory schemes (or the previous Oregon statute) under which arbitrators might freely pick individual items from each party’s proposal in awarding a final contract. Arbitrators operating under ORS 243.746 have also made clear that the statute prohibits the parties from making substantive amendments of proposals at hearing. All of that is readily apparent from the face of the statute.
What appears to remain unaddressed is the question of whether an arbitrator has the authority to overlook an obvious typographical error and award contract terms that are deemed to be what the parties should reasonably have understood to be the intent of the proposal. Similarly unclear is the extent to which the statute permits "explanations" of LBOs at hearing that arguably add to from the exact wording of the proposal. Despite a pragmatic arbitrator’s inclination to overlook "harmless" typographical errors and to allow some latitude in explaining at hearing the intended operation of LBO proposals, it may well be that the Employment Relations Board and the Oregon courts will read ORS 243.746 as a strict and simple rule that limits arbitral awards to the exact letter of the parties’ LBOs without correction or interpretation. It is important to bear in mind that these are strictly questions of statutory interpretation and not matters on which the ERB or the courts would be expected to give substantial deference to an arbitrator’s judgement. Therefore, an arbitrator’s award in favor of a "corrected" or "clarified" LBO will carry a cloud of uncertainty and the distinct possibility of further dispute and litigation. The fact that there may be genuine cause for a challenge to the validity of an award favoring "clarified" aspects of the County’s LBO in this case must be weighed in the ultimate decision herein. An award including terms that lack clarity and finality does not best serve the interests and welfare of the public.
STATUTORY CRITERIA
The statutory criteria of ORS 243.746 (4) may have different applications to each of the contract terms in dispute. Some matters regarding those criteria, however, have general applicability and can be stated at the outset.
ORS 243.746(4) (e), Comparator Jurisdictions.
The parties have stipulated that the appropriate comparator jurisdictions are Jefferson and Morrow Counties.
ORS 243.746 (4), The CPI- All Cities Index, Cost of Living.
In their presentations the parties have used differing All-Cities CPI figures. The County uses the CPI-U January-to-January and the Association uses the CPI-W annual. The differing figures are shown below:
                              CPI-W Annual              CPI-U Jan.-Jan.
      2004                        2.6%                             3.0%
      2005                        3.5%                             4.0%
                    Total          6.1%                             7.0%
ORS 243.746 (g), Stipulations of the Parties.
The parties stipulated at hearing that the arbitrator’s award should include all tentative agreements between the parties as reflected in Association exhibit #5 and County exhibit #21 (identical).
Overall Compensation in Comparator Counties
As might be expected, the parties have used differing analyses in comparing the overall compensation rates between Baker County and the two comparator counties. The Union’s analysis differs most significantly from the County’s in that the Union’s calculations do not include employer contributions for insurance. The Union argues that the amount spent for insurance does not reliably reflect the benefits received by employers. The arbitrator does not wholeheartedly agree with the Union’s blanket assertion that for purposes of comparing overall compensation the dollar amount spent by an employer "is not relevant to the compensation received by the employee." The fact that there is not a 100% co-relation between insurance costs and insurance benefits does not make the insurance costs wholly irrelevant. There is, more often than not, a general co-relation between the two that makes insurance costs of some relevance in an overall comparison. That generalization is, of course, subject to rebuttal in many particular instances. Further, the statute itself lists insurance as an element for consideration along with "all other direct or indirect monetary benefits received". ORS 243.746(4)(d).
In the present case, however, there are specific facts that lend strength to the position that a simple lumping of insurance contribution amounts in with other forms of compensation could lead to a somewhat distorted analysis. Specifically, the evidence shows that the Pacific Source plan found by the Association provides what the bargaining unit feels is a supervisor benefit at a substantially lower price. (Full cost of Pacific Source is currently still less than 95% of the cost of CCIS). Similarly, the Teamster "FW" plan in place in Morrow County provides excellent benefits at a below market price in part because it is subsidized by the Teamster Union. Thus, in the present case there is evidence to support the Association’s argument that the raw cost of employer insurance contributions should be somewhat discounted in comparison of overall compensation. The Union’s analysis of overall compensation among the comparators (using 5, 10, 15 and 20 year marks) shows an aggregate result of a negative 12.2% for Baker County as compared with the other jurisdictions.
The County’s comparability analysis also varies somewhat from the norm in that it compares the overall compensation of the jurisdictions using the Baker County compensation rates from the County’s LBO. This, on its face, would appear to differ from the statutory criterion of "overall compensation presentlyreceived by the employees." ORS 243.746 (4) (d)[emphasis supplied]. Still, there is some merit to the County’s approach because of the unusual fact that two years of the three-year contract being negotiated have already elapsed. It is undisputed that under either party’s proposal, the employees will be receiving retroactive wage increases covering those first two years. Thus, the simple comparison of "present" pay rates would indeed somewhat distort any comparison by making present Baker County compensation rates appear artificially low in the overall comparison.
The County’s comparability analysis uses figures as of July/August 2006, under the County’s LBO. Using levels of experience at five year intervals, the County’s comparisons show the following:
 Baker County vs. Comparators (under LBO)
Level of ExperienceVs.Comparators
5 years                         -0.74%
10 years                       -5.04%
15 years                       -6.05%
20 years                       -5.59%
ORS 243.746 (4) (b), County’s Ability to Pay
The County has acknowledged that it will have sufficient funds to pay for either party’s proposal. The evidence shows that the County has maintained a very responsible budgeting and spending process. The County tends to carry over a 30% ending fund balance each year, to be applied to the following year’s initial expenses. Extra discretionary funds are, however, limited.
ORS 243.746 (4) (c), Ability of the Employer to Attract and Retain Personnel
The record shows that the County has had a high degree of bargaining unit employee turnover in recent years. Since 2001, the County has lost some 22 employees in the patrol and corrections sections (in an overall bargaining unit of about 33). The Union argues that strong economic improvement is required to recruit and keep high quality employees.
The evidence paints a somewhat complex picture. Of the 22 employees involved in the recent turnover cited above, ten left as the result of terminations rather than employee choice (for economic or any other reasons) and four were transfers. Two left the law enforcement field altogether and three left because of differences with the prior sheriff’s office administration. The evidence shows that the County does not have difficulty attracting a good number of applicants for advertised positions.
There is no doubt that the rate of bargaining unit employee turnover is not an enviable one. The arbitrator does not, however, find that fact to be of primary significance in the present case, when viewed in light of the overall circumstances. Baker County is a rural area in far eastern Oregon. The ordinary rules of supply and demand (an expectation that an increase in pay and benefits will have a direct and significant effect on the number and quality of job applicants) may not have full application here. People tend to live in areas like Baker County for reasons often unrelated to economics, e.g. family, the rural lifestyle, origins in the region. It is doubtful that even an immediate large wage increase would cause many individuals from the Western Oregon cities to quickly pick up and move to Baker County. Further, as noted by the arbitrator at the hearing, the present arbitration involves a contract that has only one remaining year. Therefore, it is doubtful that the differences in the parties’ third year proposed contract terms will have a significant impact on employee recruitment and retention. For those reasons, the arbitrator finds that the criterion of ability to attract and retain employees does not strongly mitigate in either party’s favor, although the County’s current compensation rate (below that of both nearby comparators) must necessarily have some long term negative effect on employee recruitment and retention.
Primary Issues—Pay and Insurance.
The Association’s LBO package calls for a 13% wage increase over the three year term of the contract and new incentive pay increases for DPPST certifications. The first two years of the Association proposal would provide a 9% wage increase as compared to a 6-7% CPI increase for that period (final third year CPI figures are not yet available). The County proposes a 10.5% wage increase over the three years of the contract and new DPPST certification incentive pay benefits functionally identical to those proposed by the Union. The first two years of the County’s proposed wage increase would equal 6.5%, as compared to the CPI increase of 6-7%. In effect, the County’s pay proposal would keep pace with the CPI and for the most part maintain the bargaining unit’s relative position vis- -vis the two comparator jurisdictions. (Baker County’s wage scale is currently some 5-6% below that of the comparators). The Association’s proposal would increase the bargaining unit’s position relative to the comparators and the CPI by about 2-3% over the life of the contract. That is a very substantial gain over the term of a single collective bargaining agreement.
With regard to health insurance, the Association’s proposal would continue the existing plan (Pacific Source) and add dental benefits. The additional cost of the dental plan is approximately $15 per month per employee, or $495 per month for the entire bargaining unit. The Association proposal would also call for an employee 5% premium contribution in the third year of the contract (the year beginning a few months from the date of this award) if the cost of the Pacific Source premiums comes to exceed that of the plans covering other County employees. The parties appear to be in agreement that an increase of approximately 8% is expected for premiums under both plans in the third contract year.
The County’s LBO proposes that in the third year of the contract the County will pay 95% of the Pacific Source premium cost (with a 5% employee pick-up) or an amount equal to the maximum paid to the non-bargaining unit employees under the CCIS Blue Cross plan. The police bargaining unit as a whole would have a choice between the two plans. There is a dispute between the parties regarding how the "amount…paid" for premiums would properly be calculated under the terms of the County’s LBO. The County argues that an employee co-pay of insurance benefit costs is appropriate in light of universally increasing insurance rates and notes that employees in comparator jurisdictions have a co-pay system. The Association objects to a change in the current employer-paid insurance benefit because bargaining unit employees greatly prefer the Pacific Source plan and because the Pacific Source plan, even at 100% employer payment, is less expensive than the CCIS plan. The Union argues that the introduction of an employee insurance contribution would amount to a wage decrease that would put the bargaining unit at an even greater disadvantage as compared to other jurisdictions. The evidence shows that the bargaining unit employees are currently at least 6% behind the comparators in overall compensation.
There are fairly well-known circumstances under which interest arbitrators are inclined to award a change from a fully employer-paid insurance benefit to an employee cost-sharing plan. The most common is when there has been a dramatic increase in the cost of insurance that places an undue financial burden on the employer. That situation has become increasingly common in the last decade but is not the case in the present arbitration. The insurance costs for the County have not increased dramatically in recent years or during the prolonged period of the parties negotiations. In fact, the County’s insurance proposal is not based primarily on economic necessity but appears to be part of an overall move, at the direction of the County commissioner, to uniformly place all County employees on a 95/5 insurance cost split, regardless of the economics of any particular employee subgroup. There is, of course, nothing wrong with an employer desire to reduce costs by implementing employee pick-up on insurance premiums. In the context of bargaining and interest arbitration, however, such a change is expected to be justified in terms of necessity or in terms of the overall quidproquoof bargaining. It is noteworthy that when non-represented County employees were recently moved to a 95/5 insurance system, an extra 2% wage increase was added specifically to offset the employee insurance cost.
In the present case there has been no offer of any pay or benefit to offset the cost to bargaining unit employees of a change to a 95/5 plan. Nor is such a change warranted by pure economics. In fact, the evidence shows that the current Pacific Source plan is significantly less expensive than the insurance plans covering other County employees. Pacific Source is some 16% less expensive than CCIS. Pacific Source coverage at 100% payment is still significantly less expensive to the County than the CCIS plan at 95/5. This is true even with the orthodontic benefit added to the Pacific Source plan
Under these circumstances, the arbitrator does not find a substantial basis for awarding a change from the status quo to a 95/5 insurance cost split. Such a change would decrease employee overall take-home pay and would not serve to bring the bargaining unit’s overall compensation closer to that of comparator jurisdictions. Such a change would also be likely to have a strong negative effect on morale within the bargaining unit. It is in the interest of the public to have a fairly compensated and well-motivated work force of law enforcement employees. The interest and welfare of the public also benefit when an employee group, such as the Association, takes the initiative to search out and find an insurance plan that provides both a level of benefits highly regarded by employees and a cost savings to the employer.
While the Association’s wage proposal is higher than the arbitrator would otherwise be inclined to award, the County’s proposal, particularly with the shift to a 95/5 insurance system, is in the final analysis less appropriate for adoption under ORS. 243.746. For these reasons and in light of all of the statutory criteria discussed above, the arbitrator will award the Association’s LBO.
AWARD
Based upon the foregoing and the record as a whole, it is ruling of this arbitrator that the Association’s last best offer package shall become the parties’ collective bargaining agreement, together with all of the tentatively agreed-upon contract provisions reflected in Association exhibit #5 and County exhibit #21.
The arbitrator will retain ongoing jurisdiction for sixty days following the date of this award to resolve any questions or disputes regarding the interpretation and implementation of this Award.
It is so ordered.
DATED THIS 11th day of March, 2007.
John Hayduke, Arbitrator