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IA-09-97
Interest Arbitration Between Woodburn Police Association and City of Woodburn.
 
IA-09-97.
 
This interest arbitration case involving the Woodburn Police Association (Association) and the City of Woodburn (City) arose under ORS 243 .742 after the parties were unable to negotiate a complete collective bargaining agreement to commence July 1, 1997. This arbitrator was selected and a hearing was held pursuant to ORS 243.746. All preliminary requirements established by statute, or rule were complied with and the parties acknowledge that the entire matter is properly within my jurisdiction.
 
After extensive bargaining prior to the initiation of arbitration and further agreements made contemporaneously with the arbitration hearing, the parties remain in disagreement concerning seven issues: wages, life insurance, overtime as it relates to court appearances, vacation cancellation provisions, scheduling of mandatory training, incentive pay for bi-lingual officers, and the ten-n of agreement language.
 
ORS 243. 746(5) states that "* * * the arbitrator shall select only one of the last best offer packages submitted by the parties and shall promulgate written findings along with an opinion and order." ORS 243.746(4) includes criteria upon which findings are to based, with the "first priority" to be given to "the interest and welfare of the public" and "secondary priority" to other listed criteria. As have other arbitrators, I conclude that a full analysis and application of the first criterion must, to a large extent, be predicated on the findings made concerning the secondary criteria. For this reason, those secondary criteria will be analyzed first and the interest and welfare of the public will be considered as a first priority factor in making the determination of which last best offer (LBO) should be implemented. What next follows, therefore, are findings concerning paragraphs (b) through (h) of the statute.
 
Findings Relating to Statutory Criteria
 
"(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."
 
The major cost difference between the Association and the City LBOs is caused by the different wage proposals. The Association proposes that the salary steps for police officers be increased five percent for each of three years, while the City proposal would increase steps by three percent for each of three years. According to Section I-D of the City exhibits, the current average officer pay is $2993 per month. The two percent difference between the proposals therefore amounts to $59.86 per month per officer in the first year (1997-98) of a three-year contract.(1) There currently are 16 employees in the Association bargaining unit, so the total monthly difference would he $957-56 (16 x $59.86) and the yearly extra cost would be $11,492.12 ($976.56 x 12). Assuming an increase in other payroll expenses (e.g., employer contributions to retirement and social security) of 25 percent, the unbudgeted difference between the two proposals for the first year is about $14,365.
 
The additional costs mandated by the Association's bilingual incentive pay and increases in life insurance premiums amount to approximately $3640 per year. Thus, the total unbudgeted difference in the first year is about $18,000. If the distribution of the employees on the salary schedule remains about the same, the difference in cost for pay and insurance would be slightly more, in actual dollars, for each of the following two years because the percentage figures would be applied to a higher basis. The total expenditure by the City, over the three years of the proposed contract, would be approximately $100,000-110,000 more under the Association's proposal than under the City's LBO.(2)
 
The City's 1997-98 adopted budget projected general fund property tax revenues (excluding the collection of delinquent taxes) of $1,458,590. According to City Manager Chris Childs, however, the actual amount levied by the assessor, based on information obtained in November of 1997, is $1,631,180, an increase in revenue of more than $170,000 for the current fiscal year. This "new revenue" of course far exceeds the estimated cost of funding the Association's proposal for 1997-98, and in fact is substantially more money than would be needed to pay for the entire three- year package.
 
For the 1998-99 fiscal year, according to Childs' memo of January 7, 1998, to the City Council, the City can anticipate an increase in general fund property tax revenues of about $82,000, which amounts to approximately five percent more than the $1,631,180 levied for the current year.
 
Although there are no projections in the record for 1999-2000 (the last year of the proposed contract), it is logical to assume that the City will realize a similar increase in general fund property tax revenues for that fiscal year; that is, three percent pursuant to the tax limitation established by Ballot Measure 50 and two percent as a result of new construction in the City's taxing district (a total dollar increase of about $85,650).
 
The City also may realize increased general fund revenues in the next two years from fees, fines and the hotel/occupancy tax.
 
The increases in revenues discussed above do not appear to be needed for the City to maintain a reasonable operating reserve against future contingencies. The 1997-98 budget includes a contingency fund of $128,743 (a "standard" amount, according to Childs) and an additional unappropriated balance of $100,575 (characterized by Childs as a "reserve" fund). Because the City will receive the unanticipated revenue discussed above for the current fiscal year, it is highly unlikely that the contingency and reserve funds will have to be exhausted or that the City will not be able to include similar "prudent person" line items in its next budget.
 
"(c) The ability of the unit of government to attract and retain qualified personnel at the wage and benefit levels provided."
 
In 1997, five members of the City's police force resigned, with all the officers taking positions with other law enforcement agencies. This was an unusually large number, according to Chief of Police Ken Wright, who testified that the City generally experiences one or two resignations per year. Even more unusual, Wright testified, is that two of the officers were very experienced: Craig Cunningham, a nine-year veteran, and John Coggins, a member of the Woodburn department for 17 years. It is more common for officers who leave to have had four or fewer years of experience at Woodburn, Wright stated. This observation is borne out by City exhibits which show the following experience levels for those officers who resigned in recent years:
 
Jim Don: Left in 1996 to join the Portland Police Department after three years at Woodburn.
 
Cunningham: Left in 1997 to become a Marion County deputy after nine years.
 
Coggins: Hired in 1997 as an investigator for the Marion County District Attorney after 17 years.
 
Scott Hogan: Resigned in 1997 to join the Gresham Police Department after three years.
 
Eric Losness: Joined the Lake Oswego Police Department in 1997 after four years.
 
Chris Schweigert: Left in 1997 for the Washington County Sheriff s Office after two years.
 
Mark Bowman: Resigned in 1998 for a position in Portland or Hillsboro after less than two years.
 
It is not disputed that all seven of the above officers are paid more in their new positions than they would have earned in Woodburn. Even so, Chief Wright credibly established that higher pay was the primary motivator for only two of the transferees: Cunningham and Hogan. It appears that for five of the former officers, other reasons for moving to a different department were at least as important, perhaps more important, in motivating their decisions to leave.
 
One common non-economic motivator, for example, is the opportunity-in other police agencies-to engage in more diverse duties and advance professionally. In Woodburn, every officer is a patrol officer-there are no specialists. Thus, a career officer in Woodburn knows that he or she will perform the same job-albeit not a mundane one-throughout his or her tenure. Chief Wright believes this staffing situation will not change. In Chief Wright's opinion, the all-patrol nature of the Department also affects recruiting to a greater extent than does the City's salary schedules.
 
The City has been able to attract pools of candidates for openings in recent years, although the number of applicants has decreased in the last two years. In 1995, 62 out of 85 applicants passed the written examination and the City needed to fill just one opening. In 1996, 69 out of 91 applicants passed the entry examination. However, in August of 1997, there were 43 applicants, of whom 33 passed the test (there were two openings to be filled), and in January of 1998, 30 out of 41 applicants passed (with three openings expected).
 
"(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 (sic) in comparable communities. As used in this paragraph, 'comparable' is limited to communities of the same or nearest population range within Oregon."
 
It seems clear from the wording and structure of the statute that criterion (d) primarily is intended to define the term "overall compensation" as it is used in criterion (e). It also appears that the second use of the term "other employees" in criterion (e) is a typographical error, and should read "other employers." In this reading of the statute, an arbitrator is directed to compare the overall compensation (as defined in (d)) received by the subject employees with that of other employees who perform similar services for the same employer (but who are in a different bargaining unit, perhaps) or with the compensation of employees who perform similar services for other employers in comparable communities.(3) There are no other patrol officers employed by the City, of course, so the examination of criterion (e) must consider the compensation of police officers employed by departments in comparable communities.
 
As is common in these cases, the parties differ as to which departments are comparable under the terms of the statute. The City contends that the statute expressly requires as comparators all communities in Oregon with the same or nearest population range. The Association argues that it is more appropriate to use as comparators those communities in the same population range as Woodburn that also are in the same geographical area. I agree with the Association. I read the second sentence of (e) as expressing a limitation rather than a prescription-that is, it limits consideration to those communities in the same population range but does not require consideration of all cities with that characteristic. Especially considering the statute's direction in criterion (c) to consider recruitment and retention of employees, it seems logical to favor comparisons to those public employers that will be competing with the City for the same employees; in this case, those that are in the same geographic area and that have other similarities, such as being incorporated cities within proximity of the state's major city, Portland.
 
The City and the Association agree on two cities as appropriate comparators: Forest Grove and Newberg. The one other comparator proposed by the City that I find to be appropriate, in light of the discussion above, is Troutdale. The other comparators proposed by the Association are Canby and McMinnville, which I also find to be appropriate. These cities vary in population from 11,430 for Canby to 22,880 for McMinnville, so all are within a reasonable range of Woodburn's 15,780. All are located less than 50 miles from Woodburn.
 
I have considered the materials submitted by the parties concerning the various benefits 1 provided by the comparator cities. While there are differences among them in areas such as vacations, holidays and insurance benefits, those differences either are not substantial or tend to "even out" when considered in total. For example, some (like Woodburn) offer bilingual incentive pay and all provide education/certification incentives in varying amounts. Woodburn ranks about in the middle for the amount of money contributed by the employer for health insurance coverage. The major compensation expenditures for all the cities, and where the significant compensation differences are found, are for scheduled monthly salaries and pension contributions. Following is a comparison of those items for the selected cities:
 
CITY TOP STEP* RET. PU** TOTAL
 
Canby $3179.00 $190.74 $3369.74
 
Forest Grove $3279.00 $239.53 $3508.53
 
McMinnville $3259.00 $195.54 $3454.54
 
Newberg $3351.00 -0- $3351.00
 
Troutdale $3469.00 -0- $3469.00
 
AVERAGE TOTAL $3423.00
 
Woodburn $3281 -0- $3281.00
 
$ DIFFERENCE FROM AVE. ($142.00)
 
% DIFFERENCE FROM AVE. ( 4.2 % )
 
* 1997-98 schedules, for Woodburn includes City's 3 percent proposal for current year.
 
**Amount paid by employer for employee's retirement contribution.
 
As can be seen from the chart, the City will rank last in monthly combined salary and retirement contribution, even with the implementation of the City's salary proposal. Considering salary alone, the City will rank ahead, however, of those cities that provide a retirement pickup, but still $26 per month behind the average salary of $3307 for the five comparators.
 
The comparators' contracts provide for 1998-99 salaries as follows:
 
Canby - Contract expires June 30, 1998, so will be subject to renegotiation.
 
Forest Grove - Wage reopener for 1998-99.
 
McMinnville - Wage reopener for 1998-99.
 
Newberg - Salary schedule increase of 3.0 percent.
 
Troutdale - Salary schedule increase of 2.5 percent.
 
"(f) The CPI-All Cities Index, commonly known as the cost of living."
 
The most recent data in this record shows a cost-of-living increase from Nov.-1996 to Nov.- 1997 of 1.8 percent.
 
"(g) The stipulations of the parties."
 
The parties did not stipulate to criteria to be used by the arbitrator that are not included in the statute itself.
 
"(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."
 
It may be appropriate to consider a factor such as the general practices in labor relations in attempting to determine the merits of a non-economic proposal. I will do so if necessary in analyzing specific provisions of the parties' LBOs
 
DISCUSSION OF PARTIES' PROPOSALS
 
Term of Agreement Provision
 
Both parties propose a three year agreement to remain in effect until June 30, 2000. They differ, however, in their implementation language.
 
Association Proposal
 
"This Agreement shall be effective retroactive to July 1, 1997, and shall remain in full force and effect through June 30, 2000. This Agreement shall not be modified in whole or in part by the parties except by instrument, in writing, duly executed by both parties, and shall replace the previously negotiated 1994-97 agreement. This Agreement shall remain in full force and effect during negotiations for a successor agreement."
City Proposal
 
"This Agreement shall be effective upon the date of signing except that wages shall be retroactive to July 1, 1997, and shall remain in full force and effect through June 30, 2000. This Agreement shall not be modified in whole or in part by the parties except by instrument, in writing, duly executed by the parties."
 
There are two substantive differences between these proposals. First, the City proposes making the contract effective when signed, with only wages to be retroactive; while the Association proposes making the entire contract retroactive. Second, the Association proposes the addition of an "evergreen clause" under which the entire agreement would remain in effect during any
 
negotiations for a successor agreement that take place beyond the June 30, 2000 expiration date.
 
There is merit to the City's argument that the Association's blanket retroactivity clause may lead to contract disputes. For example, it may not be possible to retroactively apply all contract provisions-even economic ones, such as life insurance coverage. In addition, total retroactivity arguably could put the City in the position of having violated a contract provision by actions taken before the contract is executed; that is, before the City had knowledge of what it was required to do.
 
The Association argues that the evergreen clause will provide stability of labor relations during post-contract bargaining. The Association also points out that without the clause the City can cease making agency fee deductions, as it did when the last contract expired June 30, 1997. Among the comparator cities, only Canby clearly has a comprehensive evergreen provision in its contract. McMinnville's contract has language that probably is intended to have an evergreen effect,(4) while the contracts in Newberg, Forest Grove and Troutdale do not include any such provision.
 
Under the Public Employee Collective Bargaining Act (PECBA), the City of course is obligated to maintain all conditions of employment (i. e., mandatory bargaining subjects) during post-contract negotiations.(5) The Association's proposal would require continuation also of any contract provisions dealing with so-called "permissive" topics as well as agency fee deductions, which under the PECBA can only be made while a contract is in effect. Other than the agency fee issue, however, the Association points to no problems that have arisen since July 1, 1997, because the contract was expired.
 
On balance, particularly because of possible problems with the Association's blanket retroactivity language, I find the City's proposal on this issue to be preferable to the Association's.
 
Overtime for Court Appearances
 
The Association proposes to amend Article 12, section C ("Duty-Connected Court Appearances") as follows, with new wording underlined (here bracketed):
 
"A duty-connected court appearance shall be considered work- time, and any expenses associated therewith shall be reimbursed,
 
"All witness fees, mileage allowance, and related remuneration paid to the employee for appearance , in court proceedings shall be turned over to the City. *It is the intent of the parties that there shall be no 'make work' assigned to employees who are called back to work for court appearances unless the employee receives an additional callback for such work.*"
 
The City opposes the amendment.
 
This proposal is designed to discourage the City's practice of designating as court bailiff an off-duty officer. Generally, the officer so selected is present in court to give testimony. The practice was begun in response to a request from the municipal judge for some security measures in the court. The effect on the officer designated to be bailiff usually is that he or she must return for the entire court session (1:30 p.m. until court adjourns-which ranges from one to three hours, depending on the docket) even if his or her testimony is completed earlier. Officers called to testify now receive a minimum of four and one-half hours of callback pay; the proposal would double that amount for an officer designated as bailiff.
 
In its brief at p. 26, the Association contends:
 
"The City's practice of assigning off-duty officers is extremely disruptive of sleep patterns of the officers, it presents a significant safety risk. When an officer is required to come in to Court, to lengthen the period of time in which the officer must remain, reduces the opportunity for the officer both to rest and for the officer to maintain a personal life."
 
The Association's argument would be more persuasive if the called-back officer did not, as apparently is usually the case, have to be present in court to testify, anyway. Once the officer's sleep or other personal activity is disrupted for one or two hours in order to testify, the additional time the assigned bailiff is required to be present does not seem to be such a degree of additional inconvenience that it merits a doubling of the callback pay.(6) On balance, the City's opposition to this proposal seems more reasonable than Association's position.
 
Cancellation of Vacation
 
The Association proposes the following amendment to Article 14, section C ("Cancellation of Vacation"), with new matter underlined (here enclosed in asterisks) and omitted matter in italics (here bracketed):
 
"In the event an employee is involuntarily required to work during his/her vacation, he/she shall receive time-and-one-half for all time worked and shall have the option of receiving vacation pay for the time involved (for a total of two-and-one-half times the regular hourly rate) or having the vacation time reinstated to his/her vacation account for use at a later time.
 
"In addition, if an employee's [seniority-bidded] vacation is canceled by the City for reasons that are not beyond the control of the City, and if the employee has [made non-refundable deposits that must thereby be forfeited] *incurred expenses that are not recoverable (travel, hotel reservations and the like,* he/she shall be eligible for reimbursement subject to the following. At the time of the notification of vacation cancellation - which must be hand-delivered to the employee - the employee must advise the City of the fact that certain [non-refundable deposits *non-recoverable expenses* may have [been made] *occurred* and the nature thereof. Within seventy-two (72) hours of receipt of the notice of vacation cancellation, the employee must submit appropriate documentation to verify any [non-refundable deposits] *non-recoverable expenses.* The provisions of this section shall not prevent an employee from voluntarily canceling and/or rescheduling a vacation without the payment of a premium for the time involved."
 
The City opposes the proposed amendments.
 
The Association's proposed amendments are intended to do two things: (1) Apply the second paragraph of the section to all vacations and (2) allow recovery from the City of all otherwise non-recoverable expenditures, rather than just non-refundable deposits.
 
The Association's proposal seems reasonable. Other non-recoverable expenses-e.g., a non- refundable airline ticket-produce the same kind of financial hardship for the employee as does a non-refundable deposit, which the City already has agreed to recompense. In addition, any expenditures under this section are entirely in the control of the City-that is, only where the City, for reasons within its control, causes a vacation to be canceled will it incur any liability.
 
The City notes that other contracts do not contain this kind of provision. It is true that none of the contracts in the comparator cities includes such a section; but this argument does not carry the same weight that it would have if the Association were attempting to add such coverage to the contract. Here, the Association simply is trying to clarify by amendment an existing contract article.
 
The circumstances discussed above militate in favor of the Association's proposal.
 
Pay for Mandatory Training
 
The Association proposes to amend Article 21 ("Mandatory Training"), section C by adding certain words (underlined text (here bracketed)):
 
"Notwithstanding other provisions of this Agreement and to the extent permitted by law, the City shall have the right to pay employees at their straight-time hourly rate for training activities that the employee is required to attend which do not fall within the employee's regularly scheduled hours of work and *are in conjunction with the employee's regularly scheduled hours of work. In the event such training does not occur in conjunction with the employee's regularly scheduled hours of work (i.e. a gap of ten (10) minutes or more) then the employee shall he paid at the overtime rate for all such work and call backs apply.*
 
"When a particular class or training activity is to be offered at two or more different times, and when there is a choice between scheduling an employee to attend the training during his/her regular work hours or outside his/her regular work hours, the employee shall, to the extent permitted by the City's reasonable operating needs, be scheduled to participate in training during his/her regular work hours."
 
The City opposes the new language.
 
The City changed its training schedule about a year ago. Monthly training generally is offered in two blocks of two or three hours beginning at 8 a.m. and 2 p.m. The starting and stopping times usually are scheduled for the convenience of the instructors, according to Lieutenant Paul Null. In addition, there are one-hour training lectures available on videotape.
 
The major problem with the new training schedule cited by the Association concerns graveyard shift officers, whose shift ends at 7 a.m. These officers must either wait an hour (unpaid) after their shift for the 8 a.m. session or come back in the middle of their off-duty time for the 2 p.m. session.
 
I sympathize with the graveyard officers' plight. But, as Lt. Null testified, no matter when the training is scheduled "some shift will be inconvenienced." In addition, the City makes a valid point in its brief at p. 19 where it states that employees as well as the City benefit from training and thus have a mutual interest in minimizing the cost and thereby maximizing the potential for training opportunities." (Perhaps it was because of agreement with this concept that the Association previously agreed that officers would be paid straight time for training.)
I find that the City's position is the preferable one regarding this issue.
 
Language Incentive Pay
 
The City currently provides premium pay (2 percent of salary) to officers who demonstrate written oral proficiency in Spanish or Russian. The Association proposes to increase the premium to 3 percent, which the City opposes.
 
The City has a significant Hispanic population (about one-third of the residents). As veteran police officer and Association official Craig Halupowski testified, it often is necessary to call on a Spanish-speaking officer in order to obtain reliable official statements from suspects or witnesses. Of the 16 current officers, five receive this incentive pay, and two more are expected to qualify, according to Halupowski.
 
Three of the comparator cities also offer such pay, Canby at 3 percent, McMinnville at 2.5 percent, and Newberg at 5 percent.
 
Proficiency in Spanish obviously is a valuable trait for members of the Woodburn police force. Incentive pay is a logical measure to encourage officers to maintain or achieve the necessary proficiency. In addition, a competitive rate of incentive pay should help the City in its efforts to recruit Spanish-speaking officers. The current 2 percent premium is below the rates of Canby, McMinnville and Newberg-with which the City presumably competes for prospective officers.
 
The Association proposal of 3 percent seems reasonable and desirable, considering the circumstances discussed above. At the same time, however, the cost of implementing the proposal would be significant-amounting to a 1 percent salary increase for nearly half the members of the bargaining unit. Although it appears to be in the City's interest to thus encourage the recruitment and retention of bi-lingual officers, the cost of this proposal - combined with that of other proposals - must also be measured by the overall interest and welfare of the public in determining which LBO should be implemented.
 
Life Insurance
 
The City currently provides employer-paid life insurance coverage for officers as follows: $10,000 in term insurance, an additional $10,000 for a death on duty, and $1000 in double-indemnity accidental death and dismemberment (AD&D). The Association proposes increasing all three coverage amounts to $20,000. The City opposes the increases.
 
A review of comparator contracts shows the following provisions:
 
Canby: Life and AD&D coverage in effect when contract signed; amounts not specified.
 
Forest Grove: Life insurance in an amount equal to employee's annual salary.
 
McMinnville: Life of $25,000 and AD&D of $25,000,
 
Newberg: Life at 1.5 times the employee's base salary.
 
Troutdale: Life at $10,000.
 
City Recorder Mary Tennant estimated in her testimony that it would cost $5.46 per month for each employee (a total of $1,048.32 per year for the current unit members) to purchase the increased insurance coverage proposed by the Association. In terms of overall compensation costs, this is not a significant amount. In addition, implementation of the Association proposal would put the City at about the mid-range of the comparators for such coverage. On its individual merits, the Association proposal on this issue is the more reasonable of the parties' positions.
 
Salary Schedule
 
As explained earlier, each party proposes an across-the-board increase in the salary schedule for the three years of the contract: the City at 3 percent and the Association at 5 percent.
If the salary issue is viewed individually, and only with regard to comparability with the figures for the comparator jurisdictions, the Association proposal does not appear unreasonable, particularly concerning the first year of the proposed contract. The additional 2 percent in salary for the current fiscal year, as proposed by the Association, would increase the top monthly pay to $3347-third among the comparators, but still some 2 percent below the total average compensation (including retirement pick-up) among the group.
 
It is reasonable to assume, however, that the 5 percent proposal for each of the following two years would increase the Woodburn schedule at a significantly higher rate that likely will occur in the comparator cities. This assumption is predicated on the following circumstances: (1) In the two departments with established increases for 1998-99, the salary schedules will rise 3 percent (Newberg) and 2.5 percent (Troutdale); and (2) in the other three comparator jurisdictions, the labor organizations will be bargaining over salary increases at a time when the increase in the CPI is running below 2 percent annually; making it highly unlikely-experience tells us-that they will obtain through negotiations (or in arbitration) pay raises of the magnitude proposed by the Association here.
 
The Association rightfully points out that some "catch-up" is necessary to make Woodburn salaries more competitive with the comparators' compensation figures. Because of the circumstances discussed above, however, it is at least likely that even the City's proposed 3 percent per year increases will provide a degree of "catch-up"-that is, a 3 percent adjustment will exceed Troutdale's 2.5 percent and probably will be higher than the increases obtained by one, two or all three of the labor organizations that will be negotiating over wages for the next couple of years.
 
Analysis: "Interest and Welfare of the Public"
 
ORS 243.746(4) directs an arbitrator to analyze the parties' LBOs according to the criteria already discussed, but "giving first priority" to the criterion of the "interest and welfare of the public." In its post-hearing brief at p. 24, the Association contends that selection of its LBO is in the best interests of the public because "[c]learly it is in the interest and welfare of the public for the City of Woodburn to have a well trained, professional police department, and to be able to retain those individuals." The Association also contends that the City has the financial resources to pay for the Association's LBO.
 
One can hardly quibble with the Association's statement about the public's interest in having good law enforcement. It also is true that, considering only the total resources available to the City in this and coming years, the City could meet the costs of the Association's LBO. But "the interest and welfare of public" is a broad statement, implicating matters beyond law enforcement; and a governmental entity's "ability to pay" must be adjudged in light of factors in addition to just gross available resources. As paragraph (b) of the operative statute states, financial ability must be determined by "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."
 
What the legislature established in paragraph (b), then, might be termed a relative ability to pay criterion; in other words, the ability of the agency to pay for the proposed contract in relation to the need to support other of the entity's services and to pay for projects deemed desirable by its governing body. The City of Woodburn showed that, for the current fiscal year, it had found it economically advisable to make some staff reductions, including the elimination of two full-time secretarial positions in the police department. The City also showed it will have to make major expenditures in the area of "information technology" (replacing a 20-year-old telephone system and up-grading computer equipment) and for various maintenance projects, and will need to budget funds to replace a federal COPS grant that currently subsidizes three police positions. There thus are other City services as well as projects of some importance that are-and in the future will be-competing with the Association's members for the City's resources, even for additional or unanticipated revenues.
 
Even so, it might be in the best interests of the Woodburn citizenry for the City to cut other programs or defer certain projects in order to finance the Association proposal if a failure to do so would harm the law enforcement function significantly, for example by fostering an undesirable and unwarranted degree of turnover in the Police Department.
 
The Association established that it is costly for the City to "qualify" a new officer for patrol duty-about $60,000 for the officer's salary, the time of a training officer, and other expenses.(7) In addition, it is Chief Wright's opinion that it then takes at least three years of experience for a patrol officer to become "fully effective." It is, therefore, very desirable for the City to retain those officers it recruits and qualities for duty. Even setting aside 1997-both because of the number of officers who left the department and because two of them were very experienced-as an unusual year, the department averages one or two resignations a year, usually by third- or fourth-year officers, according to Chief Wright. This constitutes an annual turnover rate of 6-12 percent for patrol officers-certainly not a desirable situation, considering the costs of recruitment and training. For this reason, it could be in the public interest to implement the Association wage proposal if, in fact, that action alone would significantly decrease the turnover rate.
 
Based on all relevant Circumstances, however, it is not reasonably probable that imposition of the Association salary increase will have that effect. To the contrary, and as discussed earlier, officers move on to other police agencies for a variety of reasons, of which increased pay is just one-and in most cases is not the primary-reason. Even if an increase in salary were the major motivator for those officers who resigned in the past few years, it is significant that they all transferred to police agencies that are much larger-and apparently as a consequence of that status pay more-than the Woodburn Department. In no cases did Woodburn lose officers to the comparator departments, which are the very agencies the statute instructs us look to in making an award.(8)
 
It is in the public interest, regardless of other considerations, for the City of Woodburn to pay its police officers fairly, and to accord them other reasonable benefits-monetary and otherwise in a collective bargaining agreement. In this context, there is merit in much of the Association's last best offer-in particular, the first-year salary increase, the change in bilingual incentive, additional life insurance coverage, and the vacation cancellation amendments. At the same time, the Association's proposals concerning term of agreement, double pay for bailiff duty, and scheduling of training are much less supportable for the reasons discussed earlier; and its proposed pay increase in the second and third years of the agreement may significantly exceed those obtained in the comparator departments. In this situation, I empathize with Arbitrator George Lehleitner, who stated in IAFF Local 2091 and Winston-Dillard Fire District (Interest Arbitration Award, 1995) at p. 28:
 
"This case illustrates the difficulty of having to select or reject the entire package of one side or the other as distinguished from dealing with each proposal on an issue by issue basis. Were the latter avenue still available, I would unquestionably fashion an award that is somewhat different than what each side is proposing. However, times change and that option is no longer available to me."
 
Most troublesome about the Association's LBO is the financial commitment it mandates in the second and third contract years. The 5 percent schedule increases, which would be compounded by the increase in bilingual incentive pay and by the costs of hiring, training and employing additional police officers, would constitute a major liability on the part of the City. The proposed raises would substantially exceed the current and projected CPI increases and, most likely, any salary adjustments negotiated by officers in the comparator departments. At the same time, the City's 3 percent proposal is not an unreasonable one in light of the statutory criteria; and, in fact, probably will provide the Woodburn officers with some "catch-up" in compensation relative to the comparators. In addition, other proposals of the Association, as discussed above, have the potential of creating administrative difficulties or interpretation disputes which prospectively outweigh any benefits to bargaining unit members that would be achieved if they were implemented. Under these circumstances, I do not find that it would better serve the interest and welfare of the public to adopt the Association's LBO.
 
After considering all the statutory criteria, and giving first priority to the interest and welfare of the public, I select the last best offer of the City and will order that it be implemented.
 
Order
 
The last best offer of the City is selected and ordered to be implemented, pursuant to ORS 243.746(5).
 
Respectfully submitted February 16, 1998,
 
Allen M. Hein, Arbitrator
 
For the Association: Daryl Garrettson, Attorney at Law
 
For the City: Donald Scott, Labor Relations Consultant
 
Footnotes:
 
1. The City has budgeted money to fund its three percent proposal.
 
2. The total dollar amount will be considerably more, of course, when the City hires two or three new officers to fill vacant positions, as is currently planned.
 
3. If the assumption of a typographical error is not correct, then the sentence would seem to say that an arbitrator should compare the compensation of unspecified "other employees" with that of "other employees in comparable communities," without any reference to "the employees" who are subject to the arbitration and are referred to in criterion (d).
 
4. The agreement shall "continue in full force and effect until June 30, 1999, or until a successor agreement has been agreed to by the parties." Article 36, section A.
 
5. In addition, ORS 243.756 requires that "* * * all wages and benefits shall remain frozen at the level last in effect before the agreement expired * * *during the pendency of arbitration proceedings.
 
6. According to the City, callback pay amounts to $77.67 for an officer earning the average salary. The Association proposal would double that amount $155.34 for an officer assigned to be a bailiff.
 
7. Chief Wright testified that he had made only one "lateral transfer" hire in recent years, an officer from the Aurora Department.
 
8. There is no evidence in this record concerning turnover in the comparator departments: e.g., the annual percentage or number of resignations, the experience levels of those resigning, the type or location of the positions for which the officers departed. Consequently, it is not possible to determine whether Woodburn's unwelcome status as a "training ground" for larger departments is shared by similar jurisdictions.