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IA-16-97
In the Interest Arbitration Between: Clackamas County Peace Officers Association, and Clackamas County. IA-16-97
 
OPINION AND ORDER
 
Issue
 
In collective bargaining the parties settled all but one of the issues concerning the wording of their successor 1997-2000 Agreement. That issue is the wording of Section 1, Wages and Classification Schedule, of Article XII, Wages.
 
As required by ORS 243.746(4). the parties submitted to the Arbitrator their last best offer packages concerning the wording of Article XII-1. Hence the sole issue is:
 
Applying the criteria stated in ORS 243.746(4), which last best wage offer should the Arbitrator select, that of the association or that of the county?
 
The Parties' Conflicting Last Best Wage Offers
 
The county proposes that the bargaining unit members receive a 3% wage increaser retroactive to July 1, 1997; a 2.5% increase on July 1, 1998 and an additional 2.5% on July 1, 1999.
 
The association seeks a 3.5% wage increase, retroactive to July 1, 1997; a 3.3% increase on July 1, 1998 (based on the known change in the Portland CPI-W from December 31, 1996 to December 31, 1997) and a minimum of 2.5% and a maximum of 4% on July 1, 1999 (based on the change in the Portland CPI-W from December 31, 1997 to December 31, 1998).
 
The Parties' Position and Argument
 
The County's Position and Arguments
 
The county contends that the Arbitrator should accept its last best wage offer because it meets the statutory criteria. It argues:
 
One, the 1995 Legislature clearly intended to establish a standard whereby arbitrators defer to public policy choices made by public officials and by the people. This interpretation of the law gives meaning to the statute's direction that arbitrators place primary reliance on the "interest and welfare of the public," a concept which cannot be demonstrated through the use of hard data.
 
In a case such as this where the wage offers are so similar, the interest and welfare of the public, as given expression by the County Commissioners in the County's last best wage offer, should receive deference and be granted by the Arbitrator.
 
Two, the county's reasonable financial ability to pay is constrained by Ballot Measure 50 losses and competing priorities. It would be more financially prudent for the Arbitrator to award the wage increases proposed in the county's last best offer than to award the greater wage increases proposed in the associations last best offer.
 
Three, the county has no trouble attracting and retaining qualified personnel at the current wage and benefit levels. This fact supports an award of the wage increases proposed by the county.
 
Four, using Multnomah, Washington, Lane and Marion Counties as the "comparable communities," and adjusting for both PERS pickup (which Washington and Clackamas County have, and Lane, Marion and Multnomah Counties do not have) and for deferred compensation (which only Clackamas County has), yields the following results (Employer's Exhibits 10-14):
 
- The county's Deputy Sheriffs are paid: at the top step, 7.4% above the average; at the bottom step, 7.7% above the average.
 
- The county's Detectives are paid: at the top step, 7.3%above the average; at the bottom step, 20.5% above the average.
 
- The county's Sergeants are paid: at the top step, 7.5% above the above average; at the bottom step, 19.1% above the average.
 
- The county's Corrections officers are paid: at the top step, 8.8% above the average; at the bottom step, 9.8% above the average.
 
Five, the cost of living index specifically referred to in ORS 243.746(4)(f)) is the "CPI-All Cities Index." There are two all-city indexes, the CPI-U and the CPI-W. The over-the-year percentage increases, reported January 1998, were only 1.6% for the CPI-U and 1.3% for the CPI-W.
 
Moreover, the trend in these statutorily mandated indexes has been a long steady decline.
 
Six, the county's offer of a 3% wage increase the first year, and additional wage increases in subsequent years, was in addition to other items for which the county agreed in the parties' December 19, 1996 Stipulations (Employer's Exhibit 2) to pay over the life of the parties' successor contract.
 
The most significant among these items is the county's agreement to pay the full cost of all health insurance premiums from July 1, 1997 through June 30, 2000 (found in Section 2, Medical-Hospital [Insurance] of Article XI, Health and Welfare [Benefits], of the parties, 1997-2000 Agreement; pages 3 and 4, Union's Exhibit 2). With medical inflation often exceeding the overall inflation rate in recent years, this is a significant financial commitment on the county's part.
 
Mike Webby, the county's Director of Employee Services, testified that this year's medical premium increase was higher than the overall CPI. Thus the county's agreement to cover health insurance premiums for the life of the parties' successor contract reduces the need for a wage increase that matches the overall inflation rate, because the overall inflation rate includes a component for increases in medical costs.
 
For all of the above reasons, the Arbitrator should select the county's last best wage offer and reject the association's.
 
The Association's Position and Arguments
 
The association contends the statutory criteria require the Arbitrator to select its last best wage offer. It argues:
 
One, the statute identifies the primary criteria for the Arbitrator's considerations as "The interest and welfare of the public."
 
Arbitrators have uniformly agreed, however, that "the interest and welfare of the public" can only be determined by applying the secondary criteria found in ORS 243.746(4) (b) through (4) (h) to the specific facts in each case.
 
When these secondary criteria are applied to the facts in this case, the conclusion is inescapable: The last best wage offer of the association is in the interest and welfare of the public.
 
Two, the county has the reasonable ability to pay for the Association's LBO. The Association's proposal represents only a modest increase over the county's LBO.
 
During bargaining the county did not argue an inability to pay; it showed only an unwillingness to pay.
 
Moreover, for 1997-1998 the association's LBO is .5% greater (or $85,662 more) than the county's LBO; for 1998-1999 the association's LBO is .8% greater (or $229,963 more) than the county's LBO and for 1999-2000 the association's LBO ranges from an increase of 2.5% greater (or $235,401 more) than the county's LBO to an increase of 4.0% greater (or $510,158 more) than the county's LBO. These differences are not large, considering that the total personnel budget ]is over $2l,OOO,OOO per year.
 
Furthermore, the Association analyzed the long term trends of the county's finances. The county has sustained steady growth in population, assessed property valuation, per capita income and tax revenues. Per capita income increases have outpaced salary increases for bargaining unit members.
 
Three, the association's LBO would maintain the county's comparative position in total compensation with comparable jurisdictions.
 
The association chose to compare itself with the other large enforcement agencies in the Willamette Valley labor market -- including the Portland Police and the Sheriff Offices in Washington, Multnomah, Marion and Lane counties.
 
This was entirely proper because the statute requires comparisons with "other employees performing similar services with the same or other employees in comparable communities." The association chose three communities which were larger and two which were smaller than Clackamas County.
 
Moreover, because of the requirement that the comparison be with "other employees," to be accurate the comparison should be weighted according to the number of personnel in each jurisdiction.
 
Four the comparison of the wages of the members of the bargaining unit with the other employees in comparable communities shows that the association members would need a 4.5% raise for 1997-1998 to catch up to the average of those employees. (U-A-VII- 23)
 
The county's LBO would only bring the Association members to within 1.5% of the average while the association's LBO would bring its members to within 1.0% of the average.
 
Five, the award of the Association's LBO would not change the bargaining unit members' position in comparisons of wages or total compensation.
 
Its members would still be in the same relative position -- below the City of Portland at the top step for deputies but ahead of the other jurisdictions in unweighted comparisons of wages. (C- 24) In the weighted total compensation comparisons, again the Association members would be behind Portland but ahead of the other jurisdictions in total compensation. Thus there would be little change, from a comparability stand point, with an award of either LBO.
 
Six, above all, the association's LBO is a reasonable proposal which the County can well afford and follows the traditions established with this bargaining unit regarding wage increases based upon the Portland CPI-W.
 
It will not move the members of the bargaining unit ahead of other comparable employees in comparable communities but instead will simply maintain their position relative to those employees.
 
Finally, it is in the best interest and welfare of the public to have well paid and competent law enforcement employees. Accordingly, the Association members request that their modest proposal for wage increases over a three-year period be granted by the Arbitrator.
 
The Arbitrator's Discussion
 
"The Interest and Welfare of the Public"
 
The parties agree that ORS 243.746(4) requires the Arbitrator to give "first priority," to "the interest and welfare of the Public" in making his choice between the associations and the county's competing last best Wage offers. However, they disagree on what this "first Priority" requirement means, in general, as well as in this particular case.
 
The Arbitrator must agree with the analysis of Assistant County Counsel Anderson:
 
"[The] 1995 legislature intended to establish a standard of deference by arbitrators towards the public policy choices made by public officials and by the people. Exercising some measure of deference to the public interest as pronounced by democratic institutions does not mean an abdication of the role of arbitrators. The integrity of interest arbitration as an institution for independent decision making must he maintained, as observed by Arbitrator Bethke, so that it does not become a rubber stamp for decisions made by public officials. But it is appropriate for arbitrators operating under this law to consider what public officials have decided is in the public interest, and to give some deference to those determinations ... In a close case, the arbitrator should defer to public officials or to the expression of the electoral process. In this case, where the last best offers are so similar, the Arbitrator should defer to the policy choice express by the County's last best offer, as the clearest expression of the 'interest and welfare of the public.'" (Pages 5-61 County's Post-Hearing Brief)
 
Accordingly, the Arbitrator's analysis starts with the assumption that the county"s last best wage offer is in the interest and welfare of the public and his consideration of the secondary criteria will be limited to whether the association's interpretation and application of any of these criteria must force him to a different conclusion.
 
The County's "Ability to Pay"
 
The county contends its wage offer takes into consideration the constraints of Ballot Measure 50 and the future needs of the Sheriff Is Department (identified in the detailed testimony of Chief Deputy Pat Detloff).
 
The association contends that Ballot Measure 50 will have little effect on the county's finances; that the increasing population in the county will continue to bring in new revenue and that with its increased revenue the county should increase the wages of the members of the bargaining unit, as proposed by the association in its last best offer.
 
In essence, the association's position appears to be that since the county can afford its wage proposals the Arbitrator should favor them. The Arbitrator disagrees that this is what the "ability to pay" criterion requires of him.
 
The County's Ability to Attract and Retain Qualified Personnel
 
The County's Ability to Attract and Retain Qualified Personnel The association concedes that the county's Sheriff's Department, like most law enforcement agencies, has little trouble attracting applicants. However, it maintains that its LBO would best insure the county's continuing ability to attract and retain qualified personnel, and therefore the Arbitrator should select its last best wage offer.
 
The Arbitrator finds that there is no evidence to show that the association's wage proposal, as opposed to the county's wage proposal, will materially increase the county's ability to attract and hold qualified personnel.
 
Overall Compensation Comparisons
 
On the issue of "overall compensation" comparisons and "comparable communities" the Arbitrator notes:
 
There is not a single word in the statute which implies that overall compensation" comparisons must be based on "weighted averages." Moreover, the statue expressly provides that "comparable (communities]" are limited to "communities of the same or nearest population range within Oregon."
 
Thus the Arbitrator agrees with the county's determination that Washington County (population 376,500), Lane County (population 305,800) and Marion County (population 262,800) are the counties within the "population range" of Clackamas County (population 313,200).
 
The Arbitrator also agrees that while Multnomah County (population 636,000) is too large to be considered in the same population range with Clackamas County, nevertheless because the parties have traditionally compared the wages paid by Multnomah County to its law enforcement personnel with the wages paid by the county to the members of the bargaining unit, that county can properly be considered a "comparable county" in this case.
 
The Arbitrator likewise agrees with the county that the City of Portland (508,000) is obviously too large to be considered in the same population range with Clackamas County and that Portland is a fundamentally different type of community -- it is entirely urban, while seven-eights of Clackamas County is rural.
 
Accordingly, the Arbitrator finds that the unweighted average comparisons (using only Washington, Marion, Lane and Multnomah County wage data) made by the county were entirely proper under the statute. The Arbitrator also finds that the statute does not require him to consider the weighted average comparisons (using wage data from the City of Portland, along with wage data from Washington, Marion, Lane and Multnomah Counties) offered by the association.
 
The CPI-All City Indexes vs. The Portland CPI Index
 
The association does not dispute that the CPI-All Cities Indexes have each shown a declining trend for a number of years.
 
Instead, the association argues that since for a number of years the parties had used the Portland CPI-W (and the county is still using that index in its contracts with other bargaining units) the Arbitrator must use that index in deciding if the association's or the county's last offer wage proposal will best protect the members of the bargaining unit from the ravages of inflation.
 
To begin with, the statute specifically refers to the "CPI-All Cities Index." It does not refer to the Portland CPI-W Index. Thus, while the Arbitrator could consider this Portland Index the statute does not require him to do so.
 
Above all, the county is correct: Its agreement to pay for the cost of health insurance for the next three years is a financial commitment which gives the members of the bargaining unit considerable protection against the ravages of inflation. This fact supports the county's position that its offered wage increases are adequate and that the higher wage increases sought by the association are not necessary to protect the members of the bargaining unit from inflation.
 
The Arbitrator's Specific Finding of Fact
 
Accordingly, the Arbitrator finds that the last best wage offer of the county is in the "best interest and welfare of the public" in Clackamas County, Oregon.
 
Conclusion
 
Applying the criteria stated in ORS 243.746(4), the Arbitrator selects the last best wage offer of the county.
 
Order
 
Section 1, Wages and Classification Schedule of Article XII, Wages in the parties' 1997-2000 Agreement shall read as follows, as proposed by the county in its last best offer (Joint Exhibit 2-B):
 
"Employees shall be compensated for fiscal year 1997-98 in accordance with the wage schedule attached to this Agreement and marked Appendix 'A,' which represents a 3% wage increase. Employees shall be compensated for the fiscal year 1998-99 in accordance with the wage schedule attached to this Agreement and marked Appendix 'B,' which represents a 2.5% increase. Employees shall be compensated for the fiscal year 1999-2000 in accordance with the wage schedule attached to this Agreement and marked Appendix 'C,' which represents a 2.5% increase."
 
May 1, 1998
 
William H. Dorsey, Arbitrator
 
Representing the Association: Richard C. Black, Esq.
 
Representing the County: David W. Anderson, Esq.