International Association of Fire Fighters,
Local 1296
And
City of
Interest
Arbitration
Arbitrator: Alan R. Krebs
Date
Issued:
Arbitrator:
Krebs; Alan R.
Case #: 12633-I-96-00274
Employer:
City of
Date Issued:
IN THE MATTER OF
CITY OF
AND
INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS,
LOCAL 1296
AAA No. 75 300 00225 96
Date Issued:
INTEREST ARBITRATION OPINION
AND AWARD
OF
ALAN R. KREBS
Appearances:
CITY OF
lNTERNATIONAL
ASSOCIATION OF FIREFlGHTERS
LOCAL 1296 Alex
J. Skalbania
PROCEDURAL MATTERS 2
APPLICABLE STATUTORY
PROVISIONS 4
ISSUES 6
NATURE OF THE EMPLOYER 7
COMPARABLE JURISDICTIONS 9
COST OF LIVING 19
OTHER CONSIDERATIONS 23
Ability to Pay 23
Settlements With Other Bargaining Units 26
Turnover 28
PARAMEDIC COMPENSATlON 28
TRAINING COMPENSATION 30
SPECIALTY PAY 33
WAGE DIFFERENTIAL FOR LlEUTENANTS 34
WAGE DIFFERENTIAL FOR CAPTAINS 39
LONGEVITY AND STEP INCREASES 42
1) Longevity 42
2) Step Increases 44
HEALTH INSURANCE 49
DEFERRED COMPENSATION 56
WAGES 58
IN THE MATTER OF
CITY OF
AND
INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS
LOCAL 1296
OPINION OF THE NEUTRAL
CHAIRMAN
PROCEDURAL MATTERS
In accordance with RCW 41.56.450, an interest arbitration
hearing involving certain
uniformed personnel of the City of
three persons. City of
its designee on the Panel. International Association of
Firefighters, Local 1296
appointed Ricky Walsh as its designee on
the Panel. Arbitrator Alan R. Krebs was selected as the
Neutral
Chairman of the Panel. The hearing was held in
The Employer was represented
by Roy Wesley, Labor Relations
Consultant to the city of
by Alex J. Skalbania
of the law firm Cline & Emmal.
At the hearing, the testimony of witnesses was taken under
oath and the parties presented
documentary evidence. A court
reporter was present, and,
subsequent to the hearing, a copy of
the transcript was submitted
to the Neutral Chairman.
The parties agreed upon the submission of post-hearing
briefs. The Neutral Chairman received the briefs on
July 3 and
7, 1997. In view of the lengthy record, the parties
agreed to
waive the statutory
requirement that the interest arbitration
award be issued within 30 days
following the conclusion of the
hearing. It was agreed that the Neutral Chairman would
present a
draft of his Award by
Arbitrator and the
Union-appointed Arbitrator, and then would
issue his decision after
receiving their input. The Neutral
Chairman distributed an
initial draft of his Opinion and Award to
the other Panel members on
1997, the Neutral Chairman met
with the other Panel members in
Kennewick, Washington, in
order to receive their input. As a
result, the Panel requested
additional briefing. Supplemental
briefs were submitted on
APPLICABLE STATUTORY
PROVISIONS
Where certain public employers and their uniformed personnel
are unable to reach agreement
on new contract terms by means of
negotiations and mediation,
RCW 41.56.450 calls for interest
arbitration to resolve their
disputes. In interest arbitration,
an arbitrator or arbitration
panel adjudicates a resolution to
contract issues regarding
terms and conditions of employment,
which are at impasse following
collective bargaining
negotiations. The parties agree that RCW 41.56.450 is
applicable
to the bargaining unit of
firefighters involved here.
RCW 41.56.465 sets forth certain criteria which must be
considered by an arbitrator in
deciding the controversy:
__________
RCW 41.56.465 Uniformed personnel--
Interest arbitration panel--Determinations--
Factors to be considered.
(1) In making its
determination, the panel shall be mindful of
the legislative purpose enumerated in RCW
41.56.430 and, as additional standards or
guidelines to aid it in reaching a decision,
it shall taken into consideration the
following factors:
(a) The constitutional and statutory
authority of the employer;
(b) Stipulations of the parties;
(c) (i) . .
(ii) For employees listed in RCW
41.56.030(7) (e) through (h), comparison of
the wages, hours, and conditions of
employment of personnel involved in the
proceedings with the wages, hours, and
conditions of employment of like personnel of
public fire departments of similar size on
the west coast of the
However, when an adequate number of
comparable employers exists within the state
of Washington, other west coast employers may
not be considered;
(d) The average consumer prices for
goods and services, commonly known as the
cost of living;
(e) Changes in any of the circumstances
under (a) through (d) of this subsection
during the pendency of the
proceedings; and
(f) Such other factors, not confined to
the factors under (a) through (e) of this
subsection, that are normally or
traditionally taken into consideration in the
determination of wages, hours, and conditions
of employment. ...
***
RCW 41.56.430, which is referred to in RCW 41.56.465, reads
as follows:
RCW 41.56.430 Uniformed personnel--
Legislative declaration.
The intent and
purpose of this 1973 amendatory act is to
recognize that there exists a public policy
in the state of Washington against strikes by
uniformed personnel as a means of settling
their labor disputes; that the uninterrupted
and dedicated service of these classes of
employees is vital to the welfare and public
safety of the state of Washington; that to
promote such dedicated and uninterrupted
public service there should exist an
effective and adequate alternative means of
settling disputes.
ISSUES
The Union represents about 63 of the uniformed employees in
the Employer's Fire
Department, up to and including the rank of
captain. The Union and the Employer are parties to a
collective
bargaining agreement which
expired on December 31, 1995. They
were unable to reach an
agreement on a new contract despite their
efforts in negotiations and
the assistance of a mediator. In
accordance with 41.56.450, the
executive director of the
Washington State Public
Employment Commission certified that the
parties were at impasse on a
number of issues. The statutory
interest arbitration
procedures were invoked. The issues at
impasse in mediation which
were certified as appropriate for
interest arbitration are:
1. Article 11 - medical
and dental
2. Salaries; 1996, 1997,
and 1998
3. Deferred compensation
4. Paramedic
compensation
5. Wage differential for
lieutenant
6. Wage differential for
captain
7. Lieutenant and
captain wage increase
upon promotion
8. Longevity
compensation; including the
number of steps and time between steps
9. Training compensation
NATURE OF THE EMPLOYER
Kennewick is located in southeastern Washington. It lies
immediately adjacent to two
other cities, Richland and Pasco.
Together the three cities are
co to mmonly referred to as the Tri-
Cities. The Tri-Cities are considered to be a
metropolitan
statistical area by the Bureau
of the Census. There are no other
metropolitan areas within 50
miles of the Tri-Cities. Kennewick
has a population of 48,010,
Richland's is 36,270, and Pasco's is
22,500. Kennewick is the regional shopping hub for
the Tri-
Cities, but has very little
industry. Farming and food
processing are significant
sectors of the regional economy.
Nevertheless, the economy of
the Tri-Cities has to a considerable
extent been dependent on the
Hanford Nuclear Reservation and
associated enterprises. Robert Kelly, Kennewick's city manager,
testified that Hanford has
historically employed about 25 percent
of the work force in the area,
but because of the high wages paid
there, Hanford represented
about 42 percent of all wages paid in
the area. The local economy has had economic cycles of
boom and
bust, largely dependent on
Hanford's situation. Economic
difficulties in the 1980s were
followed by boom conditions in the
early 1990s as the federal
government poured money into
environmental cleanup at
Hanford. That cleanup is expected to
continue over the next 25 to
30 years. The boom peaked in about
1995, and then the economy
fell as the federal government
announced that it would reduce
spending on cleanup at Hanford.
Approximately 5600 jobs were
eliminated at Hanford during 1995
and 1996. Another 750 layoffs are anticipated in
1997. The Tri-
Cities unemployment rate
jumped to 10.1 percent, about twice the
state average. Housing prices which had been growing at a
fast
pace, dropped sharply. Dean Shau is an
economics instructor at
Columbia Basin College and, as
regional economist for the state
Employment Security
Department, keeps track of economic events in
southeastern Washington. Mr. Shau, who was
an expert witness
called by the Union, testified
that the Hanford layoff situation
has caused non-farm employment
in the area to drop by about 6 or
7 percent. Mr. Shau testified
that he would be "cautious" about
the economic future of the
Tri-Cities because of the impact of
federal money on the community
and the uncertainty of what would
happen at Hanford.
The Kennewick Fire Department provides not only fire
suppression and prevention
services, but also provides emergency
medical services. All firefighters must be certified as an
emergency medical technician
(EMT) within one year of joining the
Department. Some firefighters elect to take additional
medical
training in order to receive
paramedic certification. The
Department operates four
stations. There are four ambulances,
four pumpers,
and a ladder truck. All the firefighters
may be
assigned to drive the pumpers or the ambulances.
Lieutenants
supervise the stations, while
captains are the shift commanders
During the past ten years, the
number of employees in the
Department has increased by 74
percent while the number of fire
and ambulance responses has
more that doubled.
COMPARABLE JURISDICTIONS
One of the primary standards or guidelines enumerated in RCW
41.56.465 upon which an
arbitrator must rely in reaching a
decision is a "comparison
of the wages, hours, and conditions of
employment of personnel
involved in the proceedings with the
wages, hours, and conditions
of like employers of public fire
departments of similar size on
the west coast of the United
States." The statute requires the use of comparable
employers
within the state of Washington
if an adequate number of in-state
comparable employers exists.
The parties agree that three Washington cities are
appropriately comparable to
Kennewick: Longview, Richland, and
Yakima. There appears to be substantial agreement on
Bremerton
as well. While Bremerton was not proposed by the
Union, Lt.
Corey Edden,
who is the Union president, testified that it does
meet the Union's own criteria
for designation as comparable to
Kennewick, and he could not
explain why it was omitted from the
Union's proposed list.
The parties disagree as to other comparable jurisdictions,
though they agree that
selection should be confined to the state
of Washington. The Employer suggests that Pasco and
Wenatchee
are also comparable. The Union urges the use of ten additional
comparable jurisdictions,
consisting of nine cities and one fire
district:
Vancouver
Bellingham
Lakewood
Renton
Kirkland
Puyallup
SeaTac
Olympia
Auburn
King County Fire District No. 4 (Shoreline)
The Employer chose its proposed comparable jurisdictions by
examining five criteria for
each city in the state of Washington:
population, assessed valuation
of the area served by the
department, assessed valuation
per capita, retail sales tax
receipts, and retail sales tax
receipts per capita. The Employer
excluded from its list of
comparators each city which did not
fall within a range of 50
percent above or 50 percent below that
of Kennewick for each of its
five suggested criteria. The
Employer did not consider fire
districts, reasoning that cities
and fire districts are not
like employers since they have
different responsibilities and
taxing authority. Utilizing the
Employer's suggested criteria,
Pasco would not have been included
since its population and
assessed valuation were less than 50
percent that of
Kennewick's. The Employer contends that
Pasco
should be selected as a
primary comparator based on its proximity
to Kennewick. The Employer urges that Pasco and Richland
should
be afforded special
consideration as comparators not only because
they are in the same labor
market as Kennewick, but also because
of the close cooperation
between the three jurisdictions
comprising the Tri-Cities.
The Union selected its proposed comparators by examining
four criteria: population, assessed valuation, bargaining
unit
size, and the number of square
miles served for fire protection
purposes. The Union has chosen a comparison range of 50
percent
below to 100 percent above the
size of Kennewick for each of the
four suggested criteria. The Union applied its suggested
criteria to both cities and
fire districts. The Union contends
that Pasco is too small to be
compared with Kennewick, and, at
most, should be given half of
the weight of other comparators.
The Union contends that the
Employer's attempt to utilize
Wenatchee as a comparable
jurisdiction is flawed for a number of
reasons, including that the
geographic area served by Wenatchee
is too small, that the size of
the Department is too small, and
that Wenatchee is unlike
Kennewick in that it does not operate an
EMT service. The Union argues that the Employer has chosen
an
inadequate number of
comparable jurisdictions to allow a valid
comparison of working
conditions to be made.
The Employer argues that the Union's list of comparators
should be rejected since 1) it
excludes two lower paid
jurisdictions which meet the
Union's own criteria, namely,
Bremerton and Clark County
Fire District No. 6, 2) four of the
suggested jurisdictions are
ineligible by the Union's own
standards, namely, Renton,
Vancouver, SeaTac, and Kirkland, 3)
its proposed 50/100 percent range
is heavily unbalanced, and 4)
11 of the Union's 13 proposed
comparators are located on the west
side of the state where there
is a higher cost of living and
generally higher salaries.
While the governing statute requires a comparison with
public fire departments of
similar size, it does not define how
"similar size" is to
be determined. Interest arbitrators
generally determine which
criteria should be relied upon in order
to compare the size of fire
departments. In making this
determination, interest
arbitrators have been constrained by the
nature of the statistics which
the litigants have placed into
evidence. The most commonly referenced criteria are the
population and assessed
valuation of the communities served.
Another criteria that has
sometimes been utilized is the size of
the bargaining unit or the
department work force. I have
considered each of these
factors. I have not considered the
square miles covered by the
department or the sales tax receipts.
I find no basis in precedent
or in logic to compare fire
departments based on square
miles. Reliance on sales tax
receipts is more supportable,
but is unnecessary here to reduce
the number of comparators.
I have selected six cities as comparable jurisdictions.
Five of the six represent all
Washington cities which have a
population and assessed
valuation of communities served which are
both within 30 percent of the
figures for Kennewick. Where a
city has a contract to provide
the fire suppressions services for
neighboring areas, I have
utilized population and assessed
valuation figures for the
entire serviced area. The six selected
comparable jurisdictions are:
_________
City Population1 Assessed Valuation2
Longview 33,650 $1,402,235,857
Richland 35,990 $1,853,434,677
Yakima 62,670 $2,390,575,503
Bremerton 38,370 $1,223,940,521
Olympia 37,960 $2,366,460,061
Pasco 22,370 $ 599,388,864
Kennewick 48,010 $1,849,692,296
_____
1 Source:
State of Washington Office of Financial Management.
2 Source:
Washington State Department of Revenue.
_________
Only cities have been
considered. Fire districts have not been
considered primarily because
the data presented is insufficient.
The Employer pointed out,
without contradiction, that Clark
County Fire District No. 6 met
the unions proposed criteria, but
was not on the Union's
proposed list of comparators. Union
representatives explained that
Clark County Fire District No. 6
was omitted because that
department does not provide EMT
services. That explanation does not comport with the
Union's
advancement of two other
suggested comparators, Yakima and
Longview, which also do not
provide EMT services. No specific
information was provided with
regard to the demographics of Clark
County Fire District No. 6
other than it met the Union's proposed
criteria. No information was provided regarding the
wages and
benefits provided by Clark
County Fire District No. 6 other than
a the monthly firefighter
wage, which was significantly below the
wage provided by King County
Fire District No. 4 which was
advanced by the Union. Based on the incomplete data provided
regarding fire districts, I
have excluded King County Fire
District No. 4 (Shoreline) ,
without consideration of the
Employer's argument that
cities and fire districts are inherently
not comparable.
Olympia has been included as a comparator. Not only does it
have an assessed valuation and
population which are within 30
percent that of Kennewick, its
63 member bargaining unit exactly
matches that of
Kennewick. Moreover, the city of Olympia
and its
firefighter union in a
memorandum of understanding attached to
their collective bargaining
agreement agreed that Kennewick would
be considered a comparable
jurisdiction to Olympia for the
purpose of setting their wages
in 1998.
Pasco has been included as a comparator even though it has
less than half the population
and assessed value of Kennewick,
because of its proximity to
and special relationship with
Kennewick. Pasco, Richland and Kennewick comprise a
single
metropolitan area with the
same labor market. Their fire
departments not only must
compete for the same pool of employees,
they have negotiated to have a
combined recruitment and testing
of applicants, though final
agreement has not yet been reached.
They also have mutual aid
agreements such that ambulances and
fire units are dispatched to
each other's jurisdiction where the
need arises. In these circumstances, it is particularly
understandable that the
employees of each would be aware of the
contractual benefits paid by
their neighboring cities, and that
such awareness would affect
their expectations. Neighboring
jurisdictions are often given
special consideration when
determining comparables. While a disparity in size may serve to
reduce or eliminate that
special consideration, the difference
between Pasco and Kennewick is
not so great as to preclude a
comparison. Indeed, in previous interest arbitrations in
the
Tri-Cities, Pasco, Richland,
and Kennewick have generally been
considered comparators for one
another: City of Richland (Beck,
1987) ; City of Pasco (Levak, 1990) ; City of Pasco (Krebs, 1990);
City of Pasco (Wilkinson,
1994) . Several arbitrators have given
half-weight to both Richland
and Kennewick when used as
comparators to Pasco, since
both- are larger than Pasco. While I
do not agree with this
approach, it is not at all clear that
those arbitrators would have
half-weighted the single
jurisdiction of Pasco if the
jurisdiction at issue was either
Richland or Kennewick.
Wenatchee was excluded because it is barely half the size in
population and assessed value
of Kennewick, has less than half as
many firefighters, and as an
isolated rural community is only
about one-fifth the size of
the Tri-Cities. In two previous
interest arbitrations
involving Richland, which is a less
populated Tri-Cities
jurisdiction than Kennewick, Wenatchee was
not utilized as a comparator,
presumably because it is too small.
City of Richland (Beck, 1987);
City of Richland (Revelle, 1988).
Many of the cities proposed by the Union are located in the
Seattle metropolitan
area. They have been rejected because
they
do not meet the 30 percent
test which has been adopted.
Moreover, the Tri-Cities is
isolated in a rural part of the state
and is hurting economically,
while the Seattle metropolitan area
is much more densely populated,
is thriving economically, and
according to evidence
presented by both parties, has a much
higher cost of living. As Mr. Schau
testified, King County,
where Seattle is located, is
so unique relative to the smaller
metropolitan areas in the
state, that any comparisons would be
problematic.
Selecting only six comparable jurisdictions approaches the
borderline of a minimal number
of comparators which would provide
an ample basis for
comparison. Nevertheless, in the
circumstances here, the six
comparators selected are sufficient.
They represent a reasonable
balance, with three jurisdictions
east of the mountains and
three west. In addition to the four
jurisdictions which the
parties essentially agree are comparable
to the Employer, one
jurisdiction suggested by the Employer and
one suggested by the Union
have been selected. Kennewick ranks
second out of the seven in
population and fourth out of seven in
assessed valuation.
COST OF LIVING
RCW 41.56.465(d) requires consideration of "[t]he average
consumer prices for goods and
services, commonly known as the
cost of living." The parties agree that the panel should focus
on the change in the CPI-W
West Coast-C for the July to July
period. This consumer price index is published by The
United
States Department Of
Labor Bureau of Labor Statistics. It
measures the increase in the
cost of consumer goods for urban
wage earners and clerical
workers in cities of 50,000 to 330,000
in population on the west
coast of the United States. It
reflects the following annual
increases in the cost of living:
__________
Year
Ending CPI-W West Coast-C Index
July
1995 4.1 %
July
1996 3.6 %
__________
The Employer contends that the Panel, when comparing
salaries, should take into
account the higher cost of living that
exists on the west side of the
state. In this regard, it offered
the telephonic testimony of
Charles Kasdorf, the director of the
ACCRA Cost of Living Index, a
quarterly publication which
produces living cost
comparisons for more than 300 places in the
United States, the great
majority of which are metropolitan
areas. Those living costs are determined from
samples collected
predominantly by volunteers
associated with universities or local
chambers of commerce. The index published by ACCRA measures the
cost of living of a particular
locality on a percentage basis
compared to the national
average which is pegged at 100.0. The
ACCRA index is geared towards
the spending pattern of mid-
management personnel, and is
often used by companies to establish
salary levels in different
parts of the country. The ACCRA index
for the third quarter of 1996
contains indexes for only the
following localities in
Washington: Bellingham, Bremerton,
Richland-Kennewick-Pasco,
Seattle-Bellevue-Everett, Spokane,
Tacoma, Yakima, and
Pullman. Dr. Richard Parks, a professor
of
economics and an economist in
private practice, utilized the
ACCRA data to adjust the wages
of comparators to reflect the
percentage differences in the
cost of living between the
comparators and
Kennewick. Mr. Schau,
in his testimony, while
acknowledging that King County
has a higher cost of living than
the Tri-Cities, challenged the
reliability of the ACCRA data.
In making wage comparisons, I have determined not to make
wage adjustments based on
differences in the cost of living
between Kennewick and the
various comparators. By excluding all
jurisdictions in the Seattle,
Tacoma, Bellingham, and Vancouver
metropolitan areas, there is
less reason to make adjustments. Of
course, there is no
significant difference in the cost of living
between Kennewick, Richland,
and Pasco. ACCRA publishes no data
for two other comparators,
Olympia and Longview. Dr. Parks
provided a "guess"
that the cost of living in those two
communities would be similar
to Tacoma and Vancouver,
respectively, because those
are the two closest metropolitan
areas. However, Dr. Parks could not reliably state
that as fact.
Moreover, ACCRA data was
collected in Olympia until the first
quarter of 1994. ACCRA data in 1992 and 1993 indicates that
Olympia and Kennewick were
almost identical in their cost of
living. The ACCRA index for the third quarter of 1996
indicates
that the cost of living in
Bremerton is 11.6 percent higher than
in Kennewick. This difference is mostly accounted for by a
21.8
percent difference in housing
costs. This may be attributed to
the recent sharp drop in
housing prices in the Tri-Cities.
Employees in the Tri-Cities
who purchased housing a few years ago
would still be paying mortgage
payments based on higher prices.
Their cost of living has not
gone down because housing prices
have recently dropped. ACCRA data for Yakima reflects a cost of
living which is 7.3 percent
higher than Kennewick. Again, this
difference is attributed to a
27.4 percent difference in housing
costs. These figures are called into question by
data published
by the Washington Association
of Realtors which indicates that
housing prices in Yakima
County during the fourth quarter of 1996
were considerably cheaper than
in Benton County where Kennewick
is located. Also, ACCRA data shows that Kennewick
consistently
had a higher cost of living
than Yakima during 1992, 1993, and
1994. In these circumstances, there is insufficient
basis to
complicate matters by making
cost of living adjustments for the
comparators selected here.
OTHER CONSIDERATIQNS
In addition to the specific criteria set forth in RCW
41.56.465(a) - (e), RCW
41.56.465(f) directs the Panel to
consider "such other
factors ... that are normally or
traditionally taken into
consideration in the determination of
wages, hours, and conditions
of employment." Such factors, which
are discussed below, have been
considered, but with lesser weight
than that which is given to
the specifically enumerated criteria
of comparability and cost of
living.
Ability to Pay
A factor frequently raised in contract negotiations and also
considered by arbitrators is
the ability of the employer to pay
wage and benefit increases.
The Employer does not contend that it is unable to pay a
reasonable and fair increase. However, it does request that its
difficult financial situation
be considered. Janet Paetel,
the
Employer's finance manager,
testified that the major layoffs at
Hanford have flattened
revenues for the city. Sales tax
receipts, which represents
about 20 percent of revenues declined
during 1996. In 1996, several of the Employer's positions
that
became vacant were not filled
and were ultimately eliminated.
During 1997, 11 vacant
positions were not filled and three
employees were laid off by the
Employer. The Employer considered
but rejected raising taxes in
order to avoid personnel
reductions. While the comparators had reserves as a
percentage
of the general operating
budget which, on average, were close to
10 percent, the Employer's
reserves were about 5 percent. As a
result, when the Employer
requested that Moody's Investors
Service raise its bond rating
of Baa 1, Ms. Paetel testified that
the Employer's request was
denied because of its downturn in
operating revenue and because
its reserve level was too low given
the volatility of its
operating revenues. The.Employer
presented
statistics establishing that
it already devotes a higher
percentage of its general
operating fund to fire department
operations than any of the
comparator jurisdictions. 3
_____
3 No
information in this regard was presented regarding the situation in the city of
Olympia.
The Union argues that the Employer's failure to assert an
inability to pay should
essentially end the inquiry. I do not
agree. In interest arbitrations, arbitrators
generally take into
account difficult economic
conditions in the community. City of
Kennewick, (La Cugna, 1985); City of Pasco, (Krebs, 1990); City
of Pullman, (Axon, 1991).
Janet Hardy is a professional assistant employed by the
International Association of
Fire Fighters. Ms. Hardy's
work
duties included frequent
review of municipal financial documents.
Ms. Hardy testified
telephonically that she reviewed the
Employer's financial
documents, and she concluded that the
Employer was in pretty good
shape, with increasing revenues,
moderate debt and an adequate
fund balance. Ms. Hardy testified
that her review of the
Employer's finances did not extend beyond
1995. Thus, Ms. Hardy was unaware of the Employer's
change in
economic circumstances during
1996 and 1997.
The Union suggests that the Employer's participation in
plans to build a convention
center indicates that it has
available money. City Manager Kelly testified that these
plans,
which had not yet been
finalized, involved a public-private
partnership which would not
involve the expenditure of any more
City funds than was already
being spent subsidizing an existing
facility, the Coliseum, which
would be part of the new project.
Thus, these plans appear to
have negligible significance here
since they are tentative and
do not necessarily involve
expenditure of any additional
City funds.
The Employer admittedly can afford some reasonable
compensation increase for its
firefighters. However, the
community's difficult economic
situation and the caution that
warrants must be kept in mind
when determining the appropriate
amount of wage increases.
Settlements With Other Bargaining Units
From the standpoint of both the Employer and the Union, the
settlements reached by the
Employer with other bargaining units
are significant. While those settlements are affected by the
peculiar situation of each
individual bargaining unit, still
there is an understandable
desire by the Employer to achieve
consistency. From the Union's standpoint, it wants to do
at
least as well for its
membership as the other Employer unions
have already done. At the bargaining table, the settlements
reached by the Employer with
other unions are likely to be
brought up by one side or the
other. Thus, it is a factor which
should be considered by the
Arbitrator. Moreover, every year
since 1981, the wages of
firefighters and police officers have
been very similar.
The Employer has reached agreement with all of its other
bargaining units for 1996
through 1998. The Employer's
collective bargaining
agreement with its police officers, who are
also entitled to utilize
interest arbitration, calls for a 3
percent wage increase on
January 1, 1996, a 1.5 percent deferred
compensation match4
on July 1, 1996, a 3.24 percent wage increase
on January 1, 1997, a 1998
wage increase corresponding to 90
percent of the CPI increase,
and another 1.5 percent deferred
compensation match on
September 1, 1998. The International
Union
of Operating Engineers, which
represents the Employer's
maintenance employees,
received the same settlement as the police
officers except that they did
not receive a deferred compensation
match in 1998. The Oil, Chemical, and Atomic Workers Union,
which represents the police
clerical employees, as well as the
Police Management Association,
the management employees, and the
non-represented employees, all
received a 3.5 percent wage
increase in 1996 and a 1.5
percent wage increase and a 1.5
percent deferred compensation
match in 1997. A 2 percent wage
increase for 1998 has been
proposed for these employee groups in
the budget. All employee groups other than the one which
is
party to this proceeding, have
agreed to accept the Employer's
proposal to modify the health
plan.
_____
4 Deferred
compensation matches will be explained in a later section.
Turnover
Terry Walsh, the Employer's human resources manager,
testified that turnover in the
department has been low, with only
five bargaining unit members
resigning in the past 20 years in
order to join other fire
departments. Only three other employees
resigned after the
probationary period during that lengthy
period. The Employer received 539 applications for
firefighter
positions during 1996. The low turnover and high application
rate indicates that the wages
and benefits paid by the Employer
are sufficient to attract and
retain employees.
PARAMEDIC COMPENSATION
Eighteen firefighters and lieutenants who are certified as
paramedics currently receive a
premium of $250 in addition to
their base wage. That amounts to a 7.16 percent premium for a
top-step firefighter and a
6.38 percent premium for a top-step
lieutenant. The Union proposes that the premium for
firefighters
and lieutenants be raised and
converted to a percentage of the
monthly salary for top-step
firefighters. The Employer agrees,
but only as part of the total
economic package. The Employer
asserts that if pay and
benefit changes are awarded which are
materially larger than it has
proposed, the paramedic premium
should be reduced by a like
amount. Thus, the Employer and the
percent effective
January 1, 1997, and 10
percent effective 1998.
An increase in the paramedic premium from the current fixed
amount of $250 per month is
awarded consistent with the tentative
agreement of the parties. According to a detailed analysis
provided by the Employer of
the increased costs associated with
this amended provision, it
would result in an increase in wage
costs of about 0.4 percent in
1996, and an additional 0.4 percent
in 1997. Presumably, in 1998, with the increase to a
10 percent
premium, there would be an
additional 0.4 percent increase
These increases shall be
considered when determining the other
appropriate wage and benefit
levels which shall be awarded.
TRAINING COMPENSATION
Section 20.2 of the Agreement currently reads:
Section 20.2 The
obligation to train personnel in the methods
of medical service training and agrees that
the employees shall participate in pre-
scheduled courses.
When training classes or
instruction courses are required by the City
to be taken on off-duty time, the employee
shall be compensated at the overtime rate as
stated in Appendix "A". In consideration of
this, the
level of Emergency Medical Technician shall
be maintained by all employees as a condition
of employment.
The
Section 20.2:
Compensated training shall be any training
that is required for the employee to maintain
a certification, a recognized specialty
position, or a rank.
Subject to the approyal
of the Department, training that is not
offered on duty will be paid at the overtime
rate in Appendix A when the classes are taken
on scheduled days off.
When the above training is available on a
duty day, the Department will allow the
employee to attend such training and to call
back personnel as needed to maintain the
manning levels established by the Department.
Call back personnel will be paid pursuant to
the overtime schedule as shown in Appendix A.
In an effort to provide the community with
paramedic quality care, the City agrees to
pay tuition and books for the accepted
applicant into an approved program for the
initial certification period. The City also
agrees to provide authorized leave or stand
in coverage for the Employee while attending
classes. The
student will be responsible for
making his class schedule available in
advance to minimize scheduling conflicts.
Any student who drops the program will
reimburse the City the cost of books and
tuition for a one year period via garnished
wages.
Understanding the investment by the City, the
employee completing the program agrees to
maintain their certification for a period of
four years. It is
also the understanding
between the City and the Local that captains
are not eligible for this training at this
time.
The Union offered no supporting evidence of its own
regarding this proposal and
only very briefly summarized it in
the testimony of Lt. Edden. The Union
relies on documentary
evidence provided by the
Employer which indicates that Richland,
paramedic training. I could find no such provision in the
services, and, therefore, they
obviously do not provide paramedic
training behefits. Only the
provision calling for stand in
pay related to parainedic training
The
compensation provides the
Panel with flexibility in providing a
compensation level that is
commensurate with compensation levels
that have been achieved by
comparable jurisdictions.
The Employer opposes these proposed changes. It points out
that the
necessary, much less
justified, nor did it present information
illustrating what its own
proposed comparables offer. The
Employer presented evidence
that the projected cost of the
paramedic. Kevin Furguson, the
Assistant City Manager, testified
that the
taking paramedic training
would actually become or remain a
paramedic. The Employer points out that it has already
agreed to
increase paramedic
compensation, which should address any real
concerns in this area.
I conclude that there should be no change in the language of
Section 20.2. Employees with paramedic training are already
receiving a very significant
increase in compensation in the new
contract. While there is some support among the
comparable
jurisdictions for providing
tuition and book expenses for
paramedic training in
appropriate circumstances, this is not the
appropriate time for such a
new benefit given the substantial
additional premium which will
be provided to paramedics in
increasing amounts each year
as a result of this Award.
SPECIALTY PAY
The Employer maintains a hazardous materials (Hazmat) team
which responds to hazardous
materials accidents. It also
maintains a technical rescue
team, whose members are trained in
the use of low angle and high
angle ropes, in confined space
rescue and in trench
rescue. Currently, members of the Hazmat
team and the tactical response
team each receive a premium of $80
per month.
The Union proposes that the specialty pay premium
be
increased to 3 percent above
the monthly pay for a top-step
firefighter. The Union justifies this proposal as an
alternative
method of ensuring that bargaining unit members are brought up
to
the same level of compensation
as employees of the comparable
jurisdictions.
The Employer opposes this proposal. It points out that most
of the Union's own proposed
comparable jurisdictions do not offer
such a benefit, and that no
need for a change has been shown.
No change in specialty pay shall be awarded inasmuch as the
evidence presented does not
justify a change from the current
practice.
WAGE DIFFERENTIAL FOR
LIEUTENANTS
The expired agreement contains a salary schedule which sets
the salary for lieutenants at
a designated dollar amount for each
of three steps. That agreement does not set the lieutenants'
wages at a fixed percentage
above firefighters' wages.
Currently, lieutenants are
paid as follows:
__________
hire 1 year 2 years
$3511 $3664 $3816
__________
This compares with the current
top-step firefighter wage which is
$3492. The current percentage difference in pay
between a top-
step firefighter and a
top-step lieutenant amounts to
9.3 percent. The hire rate for a
lieutenant is only 0.5 percent
above the top-step firefighter
wage. After one year the
differential increases to 4.9
percent. The lieutenant inspector
is the only lieutenant
position eligible for a three-year step
which would add $100. The training lieutenant receives
3.25 percent added to each
step.
The Union proposes that effective January 1, 1996, wage
increases for lieutenants
would be based on a percentage above
the wages paid to a top-step
firefighter:
__________
hire 1 year 2 years
9% 12% 15%.
__________
The Union proposes that the
lieutenant inspector receive a three
year step 18 percent above the
wage of a top-step firefighter.
The Employer agrees that lieutenants' wages should be fixed
on a percentage basis above
that which is received by top-step
firefighters. Effective January 1, 1996 it would set these
percentage amounts as follows:
__________
hire 1 year 2 years
4% 8% 11%
__________
Effective
to:
__________
hire 1 year 2 years
4% 8% 12%
__________
Effective
__________
hire 1 year 2 years
4% 9% 14%
__________
The Employer proposes to
maintain extra pay for the lieutenant
inspector at $100.
The
proposing are more than
justified by the data concerning the pay
that is received by
lieutenants in comparable jurisdictions.
It
asserts that the Employer's
proposed wage differential for
lieutenants will not allow
them to be paid in a manner which is
commensurate with the pay that
is received by lieutenants in the
departments that either party
has determined to be comparable;
The
step proposals that it made at
the hearing. The
that prior to the hearing, the
Employer proposed a specific
percentage increase for a
top-step lieutenant but only proposed
to "continue the current
practice" between the parties regarding
initial wage increases for
lieutenants. If new lieutenants were
to receive only the wage
provided in the expired agreement they
would receive a wage increase
of nine cents per hour.
The Employer contends that its proposal dramatically
increases the wage
differentials for lieutenants over the course
of a three-year
agreement. It points out that the
lieutenants'
wage differential would
increase from 9.3 percent to 14 percent,
a 51 percent increase. It would place the Employer near the
median of the comparable
employers. The Employer asserts that it
has also made a significant
concession by moving to a percentage
driven wage differential which
will have a significant cost
impact in the future. The Employer asserts that there is no
basis for increasing the
lieutenant inspector wage to 18 percent
above the top-step
firefighter, particularly since the $100
premium for the inspector
position was just established in
negotiations about three years
ago.
The percentage differential between top-step firefighters
and top-step lieutenants in
the comparable jurisdictions during
1996 are reflected below:5
__________
Richland 23.2%
Yakima 22.1%
Bremerton 12.3%
Olympia 10.0%
Longview 9.9%
Pasco 9.2%
average 14.45%
median 11.15%
__________
5 The
percentage differentials are derived from a chart submitted by the Employer
with the exception of Olympia
where the data was obtained directly from the collective
bargaining agreement. The Union did not contest the
differential percentages presented by the Employer for
these cities
The Employer's offer to increase the wage differentials for
lieutenants over the course of
the three-year agreement and to
maintain the existing pay
differential for the lieutenant
inspector is adopted. It appears to be reasonable in that it
brings lieutenants above the
median and close to the average
differential provided by the
comparators. Kennewick would rank
fourth out of seven in
relation to the comparators, right in the
middle. The Employer's offer also provides
significant increases
for lieutenants at the hire
and first-year steps. No evidence
was presented which would
support an increased pay formula for
the lieutenant inspector. The Employer provided a detailed
analysis of the cost of its
proposal to increase the differential
for lieutenants. It calculated that cost to be 0.6 percent in
1996 when the differential
jumps from 9.3 percent to 11 percent
and an additional 0.2 percent
increase in 1997 when it increases
from 11 percent to 12
percent. The Employer provided no
figures
for 1998, but it appears that
the increase from 12 to 14 percent
would add at least 0.4 percent
to its wage costs. These
additional costs will be
considered when determining appropriate
overall wage increases for the
bargaining unit.
Regarding the
position on wage increases
upon promotion, there is no basis for
disregarding that offer since
there has been no harm to the
the current practice. The current practice would have been to
provide a very small (0.5
percent) increase upon promotion of a
firefighter to lieutenant. At arbitration the Employer offered
to provide a 4 percent
increase upon promotion. This is not a
situation where a party has
offered a regressive proposal in
arbitration. I am aware of no basis for disregarding an
employer's offer to improve
its monetary offer at arbitration
The wage increases awarded for lieutenants are certainly a
large improvement for
them. New lieutenants will receive a
larger percentage increase in
wages than will top-step
lieutenants.
WAGE DIFFERENTIAL FOR CAPTAINS
Similar to the situation with the lieutenants, the expired
agreement sets the salary for
captains at a designated dollar
amount for each of three
steps:
__________
hire 1 year 2 years
$3993 $4050 $4230
__________
The percentage difference in
pay between a top-step firefighter
and a top-step captain is 14.3
percent at hire, 16 percent after
one year, and 21.1 percent at
the top step.
The
increases for captains would
be based on a percentage above the
wages paid to a top-step
firefighter:
__________
hire 1 year 2 years
20 % 23 % 26 %
__________
The Employer agrees that captains' wages should be fixed on
a percentage basis above that
which is received by top-step
firefighters, but would phase
in its proposed increase over a
three-year period. It would set these percentage amounts as
follows:
__________
hire 1 year 2
years
Effective January 1, 1996 15% 18% 22.3%
Effective January 1, 1997 16% 20% 24%
Effective January 1, 1998 18% 22% 25%
__________
The arguments made by the parties in support of their
respective positions regarding
the wage differential for captains
are virtually identical to the
arguments they made regarding the
differential for lieutenants.
The percentage differential between top-step firefighters
and top-step captains in the
comparable jurisdictions during 1996
are:
__________
Yakima 38.5%
Richland 35.5%
Longview 29.1%
Olympia 20.0%
Bremerton 19.3%
Pasco 17.1%
average 26.
6%
median 24.5%
__________
The Employer's proposal to gradually increase the wage
differential for top-step
captains from a set dollar amount
amounting to 21.1 percent to a
fixed 25 percent is adopted. It
is a substantial increase
which will maintain the Employer's
position at fourth out of
seven in relation to the comparators,
but will move it closer to the
average and median figures. The
hire and first year rates
proposed by the Employer also represent
increases for captains and
shall be adopted. The added cost of
the increased differential for
captains according to figures
provided by the Employer is
about 0.2 percent each year as the
percentage differential
increases.6 This additional
cost will be
considered when determining
appropriate overall wage increases
for the bargaining unit.
_____
6 During
the arbitration hearing, the Employer proposed for the first time that the pay
procedures for temporary
upgrades be modified. This specific issue had not been
discussed by the parties during negotiations or mediation.
The panel ruled that it does not have jurisdiction to
deal with this Employer proposal since it was not among the
issues which had been certified by the Executive Director
of the Public Employment Relations Commission.
LONGEVITY AND STEP INCREASES
1) Longevity
Section 20.7 of the current agreement provides that
employees who are not
receiving education incentive pay shall
have $40 per month included as
part of their base wage upon
completing 15 years of service
and an additional $40 per month
after 20 years. The Union proposes that bargaining unit
members
receive longevity compensation
as part of their base salary that
is equal to 2 percent of the
top-step firefighter salary for each
five years of service. The Employer proposes no increase in the
longevity benefit.
The Union reasons that while not all comparable
jurisdictions offer longevity
compensation, those that do, offer
significantly more pay than is
currently offered by the Employer.
The Union suggests that
awarding an increase in longevity
compensation is one method by
which the Panel can assist the
employees to achieve a level
of compensation that is more
comparable to the level of
compensation that is enjoyed by the
comparators.
The Employer argues that it prefers to pay employees on the
basis of their achievements,
rather than time in grade. The
Employer points out that the
firefighters are the only group of
employees within the City
which receives longevity pay. The
Employer asserts that most of
the Union's suggested comparators
do not offer longevity
pay. With regard to its own suggested
comparators, the Employer
contends that it compares very well and
that it is one of only a very
few who offer both an education
incentive or longevity
compensation.
The comparable jurisdictions provide longevity pay as
follows:
__________
5 yr. 10
yr. 15 yr. 20 yr.
Pasco 0 $ 67 $101 $134
Richland 0 0 0 07
Longview $10 $ 35 $
50 $ 70
Bremerton 0 $ 37 $
74 $111
Yakima $56 $112 $168 $224
Olympia 0 0 0 0
average $11 $ 41 $
65 $ 90
median 0 $ 36 $
62 $ 90
Kennewick 0 0 $
40 $ 80
_____
7 Richland
firefighters who were hired prior to 1977 are eligible to receive 5 percent
longevity pay after 25 years.
__________
The Employer offers an
education incentive of $50 for an AA
degree and $100 for a BA
degree. However, employees receiving
education incentive pay are
not eligible for longevity pay. Only
two of the comparable
jurisdictions offer an education incentive.
The Employer calculated the
cost of implementing the Union's
longevity proposal as adding
an additional 3.1 percent to wages.
No increase in longevity pay is awarded. With the increases
already awarded in the
paramedic premium and the lieutenants' and
captains' differential, this
is not an appropriate time to
provide additional longevity
pay. Also, the longevity:pay
sought
by the Union is just tbo costly given the Employer's financial
situation. Instead, as discussed below, a reduction in
the time
required by firefighters to
reach the top step shall be awarded.
2) Step Increases
As previously indicated, in accordance with State statute,
the executive director of the
Public Employment Relations
Commission (PERC) certified as
one of the issues appropriate for
interest arbitration,
"[l] ongevity compensation, including the
number of steps and time
between steps." One of PERC's
regulations, WAC 391-55-220,
requires parties to an interest
arbitration proceeding in
advance of the hearing to
... submit to the members of the panel and to
the other party written proposals on all of
the issues it intends to submit to
arbitration.
Accordingly, the Union
proposed to the Panel in advance of the
hearing that longevity pay be
increased as previously discussed.
The Union's proposal did not
reference "the number of steps and
time between steps," so
it must be presumed that the Union
requested no change in the
steps. The Employer proposed to the
Panel in advance of the
hearing the following proposal regarding
this certified issue:
1. No additional
pay for longevity
2. Instead, top
step for firefighter
reached after three years of service
with Kennewick Fire Department instead
of four years.
During the arbitration hearing, the certified subissue
involving steps was not
specifically discussed by the parties.
Neither was this subject
referenced in the parties' briefs. The
subject came up again during
post-hearing deliberations by the
Panel. The Panel members agreed to request
additional briefs
from the parties on this
subject.
The Union in its supplemental brief urged that the Panel
decrease the number of steps
needed to reach top step firefighter
in accordance with the
Employer's offer, so that a firefighter
would reach top step in 36
months rather than the current 48
months. The Union expressed concern about whether a
panel could
award less than that which was
offered by either side on a
particular issue. The Union asserts that the financial impact
of
such a change on the Employer
in the relatively near future would
be minimal because the
Employer is not hiring, and has not hired
during the past two
years. The Union observes that the vast
majority of bargaining unit
members have already reached the top
step and would not be affected
by the change. The Union notes
that in the neighboring
comparator of Richland firefighters reach
top step in 36 months, rather
than 48 months as is currently the
case for the Employer.
The Employer expresses surprise that this issue is being
raised at this point. The Employer argues that it has never
agreed to change from a
four-year salary schedule progression to
three years. It contends that its proposal which it
submitted to
the Panel in advance of the
hearing was its mediation package
proposal. The Employer asserts that it assumed that
both sides
would submit their positions
in mediation, but that the Union
instead reverted to earlier
proposals. The Employer argues that
it merely did the same with
respect to its step proposal, which
is only fair. The Employer asserts that its proposal on
steps
was conditioned upon the Union
dropping its proposal for
additional longevity pay. The Employer asserts that the Union's
rejection of the Employer's
linked proposal regarding longevity
and steps meant that that
offer was no longer on the table. The
Employer points out that the
Union's proposal embraced the four-
year salary schedule since it
proposed to adjust the existing
salary schedule, which is a
four-year salary schedule. During
the hearing, the Employer's
exhibits indicated that it was
seeking a four-year salary
schedule. The Employer asserts that
the Union provided no evidence
or rationale for a change in steps
during the hearing.
It is awarded that top step for firefighter shall be reached
after three years, with steps
being awarded at 12-month
intervals. That was the written proposal made by the
Employer
which it submitted to the
Panel in advance of the hearing It is
a much less costly proposal
than the one that the Union made
regarding longevity. The bargaining unit members here are
somewhat behind in longevity
pay when compared with the situation
in the comparable
jurisdictions. It is therefore
understandable
that the Employer offered a
less costly improvement regarding pay
steps. For the reasons previously stated, the
Union's longevity
proposal was rejected. In these circumstances, it is appropriate
that the Employer's far less
costly alternative be awarded.
The Employer's suggestion that the proposal on longevity and
steps which it submitted to
the Panel in advance of the hearing
is meaningless since it was
not accepted by the Union, is
rejected. That proposal was required by State
regulation to
reflect the Employer's
position on the issue in arbitration.
The
Union's position is well-taken
that ordinarily it would be
unreasonable for the Panel to
award on an issue less (or more for
that matter), than was
proposed by either party coming into
arbitration.
The Employer asserts that it was justified in retreating
from its initial proposal
advanced to the Panel because the
Union's proposals backtracked
from its proposals made during
mediation. During the hearing, the Panel found that
there was an
understanding during mediation
that the parties could revert to
their positions prior to
mediation, when they reached the
arbitration stage. While it is not evident what the Employer's
position on this issue was
prior to mediation, when the Employer
reached the arbitration stage,
its position was that there be no
longevity pay increase, but
that instead there should be a
reduction in the time to reach
the top step for firefighters. It
was because the Employer had
taken this position that PERC
certified "the number of
steps and time between steps" as part of
the longevity issue to be
decided by the Panel. The Employer's
position on this issue, which
it expressed to the Panel in
advance of the hearing is
adopted, effective January 1, 1996.
HEALTH INSURANCE
Currently, the Employer pays the entire health and dental
insurance premium for the
firefighters and their dependents. The
cost of that premium this year
is $335 per month. The plan
includes an annual deductible
of $50 per person and $150 total
per family. In 1993, the Union agreed to go to an
"80/20" plan
whereby after the deductible
is satisfied the insurance picks up
80 percent of the cost and the
employee pays 20 percent until a
"stop loss" figure
is reached, after which the insurance company
picks up 100 percent of the
cost. Previously, the insurance
company had paid the entire
medical cost after the deductible was
satisfied.
The Employer proposes three changes in the health benefits.
It proposes to increase the
annual deductible to $100 per person
and $300 per family. It proposes to institute a copayment of $25
for each visit to an emergency
room where the individual is not
admitted to the hospital. The Employer also proposes to provide
a new benefit for prescription
drugs. Employees would be able to
obtain generic brands with a
$5 copayment, and brand name drugs
with a $10 copayment.
Mr. Ferguson testified that all other bargaining units in
the City have agreed to
implement the three changes that the
Employer has proposed here. Mr. Ferguson testified that if the
Panel awarded a continuation
of the existing medical plan for the
firefighters, the Employer
would have to administer two plans and
have to deal with resentment
from the other bargaining units.
Mr. Ferguson testified that
the Employer has agreed to continue
to pay the entire medical and
dental insurance premium. The
monthly premium cost per
employee was $318 in 1995, $372 in 1996,
and $335 in 1997. Mr. Ferguson testified that for the first two
months of 1997, costs exceeded
premiums by 35.5 percent, so that
a significant premium increase
in 1998 is likely. Mr. Ferguson
testified that since 1981, the
medical premium has increased from
$74 to $335, at a rate many
times the rate of inflation. Since
1981, the $50/$150 deductible
for the bargaining unit has
remained unchanged. Mr. Ferguson testified that the emergency
room copayment
is needed to encourage employees to utilize less
costly alternative service
providers.
Lt. Vincent Beasley is a member of the Union's negotiating
team. Lt. Beasley testified that firefighters are
in a risky
profession and need insurance
coverage to protect them and their
families. Mr. Ferguson testified that any injuries or
illnesses
caused by the job are covered
by state workers' compensation, and
that the workers' compensation
assessed rate for firefighters,
which is based on experience,
is no higher for the firefighter
bargaining unit than it is for
the Employer's Police and
Operating Engineers bargaining
units. Lt. Beasley testified that
the firefighters are still
incurring the cost of its concession
in the last round of
bargaining, when they agreed for the first
time to pay 20 percent of
medical costs. Lt. Beasley pointed out
that if a preferred provider
doctor is not utilized by the
firefighter, then the employee
cost may exceed 20 percent. Mr.
Ferguson testified that in
1993 when the Union agreed to the
80/20 plan, Union members
received improvements in their dental
plan. In 1988, the Union agreed to other cost
containment
measures including second
surgical opinions, outpatient
surgery, pre-certification for
hospitalization, and pre-admission
testing. The Union also agreed at that time to limit
weekend
hospital admissions and to
restrict emergency room usage.
During the 1993 negotiations, the Union was offered vision
insurance and disability
insurance. Police employees have this
insurance, at a cost to the
Employer of $16 per month for vision
and $22 per month for
disability. The Union rejected the
vision
and disability insurance and
chose to have the costs of those
items added to their base
wages.
No evidence was presented regarding the practice of the
comparators with regard to copayments for emergency room visits.
With regard to deductibles,
the comparators require the
following:
__________
Deductible
__________
In some of the comparable
jurisdictions, firefighters must share
in the cost of the monthly premium:
__________
premium
cost share
Richiand $36.30
_____
8 In
Olympia, the employer initially pays the entire premium. Any increases in medical or dental premiums
for
dependents are shared between the employer and the
employee on a 50/50 basis, but the employee share of the
premium for depending coverage is not to exceed 15
percent.
__________
Olympia, Longview, and
The Employer argues that the moderate medical plan changes
which it proposed and which
have been accepted by its other
bargaining units, are
needed. It relies on the 17 percent
premium increase which
occurred in 1996. It contends that it
must take measures to end
abuse of the emergency room benefit.
The Employer maintains that a
majority of the comparators require
premium cost sharing by
employees, have higher deductibles, or
both. The Employer contends that to require it to
administer two
separate plans increases
administrative costs and the chance of
error.
The
insurance should be
maintained. It contends that the
parties'
recent bargaining history
reflects that the Employer has already
wrung significant concessions
from the
medical insurance
benefits. The
firefighting is obviously a
dangerous profession and that there
is a resulting concern which
they have about the security of
adequate, affordable medical
insurance. The
the lack of vision insurance
coupled with the fact that the
medical insurance benefit is
not overly generous when compared
with the comparable
jurisdictions, supports a rejection of the
Employer's proposal.
The changes in medical benefits which were requested by the
Employer shall be
awarded. Those changes have already been
agreed to and implemented for
all of the other City bargaining
units including those which
are also eligible for interest
arbitration. With the changes, the bargaining unit will
generally be comparable to the
situation existing among the
comparable jurisdictions
regarding the out-of-pocket expenses
incurred for medical expenses,
when premium cost sharing and
deductibles are both
considered. Among the comparators, only
proportion of medical costs as
risen since the last contract
by an average of 11 percent for the
years 1996 and 1997 over the
1995 level. The Employer has agreed
to continue paying the entire
premium. The deductible paid by
the employees has not risen in
at least 16 years, while medical
costs have soared. The
substantial additional medical
costs is significant and has been
considered. Nevertheless, considering the premium
increases, and
the situation among the
comparators and among the other City.
employees, the changes
requested by the Employer are justified.
The
insurance, which are benefits
received by other employees of the
City, for increased wages will
be considered when an appropriate
wage level for the
firefighters is determined later in this
Award.
The Employer's proposed changes in health benefits shall be
effective as of January 1,
1998.
DEFERRED COMPENSATION
There is no provision in the expired agreement for a
deferred compensation
match. The Employer proposes to include
the firefighters in its
deferred compensation program by matching
the employee's contribution,
up to 1.5 percent of the employee's
base pay, effective September
1, 1998. Mr. Ferguson explained
the nature of the deferred
compensation match. He described it
as similar to a 401-K plan in
the private sector. The
contributions to the plan are
tax deferred until taken out. The
individual accounts are
portable to other public employers who
have a similar program. Contributions by employees are fully
voluntary, though the Employer
contributions are dependent upon
the employee making a
contribution which would be matched. Mr.
Ferguson testified that the
Employer does not have to pay some of
the "rollup" benefit
costs for employees on its contributions to
the plan. Other bargaining units in the City are
participating
in the deferred matching
plan. The Employer's experience with
the plan is that over half the
police employees have participated
as well as almost all the
employees in the Operating Engineers'
bargaining unit. Mr. Ferguson testified that it was the
Firefighters Union which
initially proposed a deferred matching
plan during negotiations. Lt. Edden testified
that the Union
eventually decided that it has
no interest in the deferred
compensation program because
the Department has younger
firefighters who would like
the money up front in the wage
package. Of the comparable jurisdictions, only
Bremerton and
Yakima offer deferred
compensation match as a benefit.
The Employer argues that deferred compensation is justified
based on internal parity with
other of the City's bargaining
units as well as on logic. The Employer asserts that a deferred
compensation match allows the
City to place more money into a
total economic package,
without incurring a significant "hit" on
an already tight budget. The Employer contends that the program
is in the best long-term
interest of the employees.
The Union urges the Panel to reject the Employer's proposal
regarding deferred
compensation, and to instead provide the
general wage increases to
which the employees are entitled. The
Union observes that most
comparable jurisdictions do not provide
a deferred compensation
benefit. The Union argues that such a
benefit would place
significant restrictions on the manner in
which the employees could
utilize their compensation.
No deferred compensation benefit is awarded. There is
little support for such a
benefit among the comparable
jurisdictions, with only
Bremerton and Yakima having a deferred
compensation plan. There is insufficient reason for imposing a
benefit on employees who are
not interested in it. The probable
cost to the Employer of its
offered deferred compensation match
will be considered in the
determination of the appropriate wage
level.
WAGES
The Union proposes the following wage increases for all
members of the bargaining
unit:
__________
Effective January 1, 1996 6.6%
Effective January 1, 1997 6.1%
Effective January 1, 1998 2.5
% plus 100 % of the
CPI-W West
Coast C
July - July
1997.
__________
The Employer proposes the following wage increases:
__________
Effective January 1, 1996
3.5%
Effective January 1, 1997 3.24%
Effective January 1, 1998 90
% of the CPI-W West Coast
C July -
July 1997
Effective September 1, 1998 1.5
% deferred compensation
match
__________
The Union contends that its proposal should be implemented
in order to bring the
bargaining unit's wages up to a level that
is similar to the average of
the comparators. It notes that the
Employer's firefighters have
in recent years fallen behind the
wages paid in Richland and
that the "historical balance" should
be restored to ensure that
Kennewick firefighters are again
receiving a higher level of
pay than its Richland neighbors. The
Union suggests that the
firefighters' steadily increasing volume
of work should be
considered. The Union asserts that the
Employer admittedly does have
the financial resources to pay the
wage increases that the Union
is requesting. It reasons that the
wage increases that it seeks
will only serve to bring the
Employer up to the approximate
average of the comparable
jurisdictions.
The Employer argues that its proposed wage increases are
justified in light of the
local economic stress, the internal and
local labor market
comparisons, and especially considering the
number of other specialized
pay increases which it has also
offered. The Employer points out that it has already
reached
settlements with its other
bargaining units which are similar or
less than the offer made to
the Union. The Employer asserts that
the historical relationship
between the top step pay levels for
Kennewick police officers and
firefighters also supports its wage
proposal. The Employer urges that the average wages
paid by
Pasco and Richland to its
firefighters should be determinative
since they represent the local
labor market. The Employer
contends that the Union's wage
proposals are excessive and
unjustified both in comparison
with the local labor market and
with the comparators. The Employer urges consideration of its
declining economic climate and
its stringent current budget. The
Employer asserts that over the
years, firefighter salaries have
far outpaced inflation. It contends that its proposed 90 percent
CPI formula is reasonable
given the fact that the firefighters
will not be impacted by
medical and dental premium increases
during the life of the
agreement and that housing prices have
been declining.
Below are listed the top-step wages for firefighters in the
comparable jurisdictions. The parties were generally in
agreement regarding these
figures, except for two of the
comparators. The Union would add the special driver
premium to
the base wage which is paid in
Longview. The Union reasons that
all Kennewick firefighters are
required to drive. I have decided
to add half of the driver
premium to the Longview base wage for
comparison purposes. Only a fraction of the Longview
firefighters receive the
driver premium, though it is not clear
from the record what that
fraction may be. The Union would also
add a 1 percent deferred
compensation payment that the city of
Yakima made to all bargaining
unit employees on a monthly basis
in 1996. This deferred compensation payment is
considered to be
part of base wages by the
state of Washington for the purpose of
calculating retirement
benefits. No matching payment by the
employee is required in order
to obtain the payment by Yakima of
the 1 percent into the
individual employee's deferred
compensation account. In these circumstances, it is appropriate
to add the 1 percent employer
contribution to base wages in
Yakima. With these adjustments, the top-step monthly
wages paid
to firefighters in the
comparable jurisdictions during 1996 are
listed below:
__________
Yakima $3779
Longview $3753
Olympia $3749
Bremerton $3708
Richland $3630
Pasco $3352
average $3662
median $3730
__________
The Employer's base wage of $3492 in 1995 is below the
average of the comparators by
4.86 percent. It is below the
median by 6.8 percent.
Given the unique current circumstances of the Tri-Cities'
economy and the effect that
those circumstances would likely have
on the revenue available to
the local governments, recent wage
increases negotiated between
Pasco and Richland and their
firefighters are particularly
relevant. Richland firefighters
received a 3.2 percent
increase in 1996, and a 3 percent increase
in 1997. Pasco firefighters received a 3 percent
increase in
1996 and a 3.8 percent
increase in 1997. The Employer presented
evidence that since 1981, the
base wages paid to the Employer's
firefighters have tracked
extremely closely to the wages paid to
Richland firefighters.
For the reasons previously stated, the wage settlements
reached by the Employer with
its other bargaining units have also
been considered. Most significant is the settlement reached by
the Employer with its police,
a unit which is also entitled to
interest arbitration. The police received a 3 percent increase
and a 1.5 percent deferred
compensation match during 1996. The
cost to the Employer of the
deferred compensation match based on
usage appears to be about 0.75
percent. In 1997, the police
received a 3.24 percent
increase, and in 1998, they will receive
an increase based on 90
percent of the CPI change, plus a
deferred compensation match in
September 1998 of 1.5 percent,
which again adds about 0.75
percent in costs. The Employer also
presented statistics reflecting
that the wages paid to the
Employer's top-step police
officers and firefighters have closely
matched over the years.
I have considered the relevant CPI change of 4.1 percent for
1995 and 3.6 percent for
1996. Also considered, for the reasons
previously stated, are the
Employer's difficult economic
situation, its low turnover,
and its high number of applicants
for firefighter
positions. All these factors are in the
Employer's favor. On the other hand, the employees' increasing
productivity has also been
recognized in the Union's favor.
Weighing the various factors, a wage increase of 4 percent
is awarded retroactive to
January 1, 1996. An additional
4 percent will be awarded
retroactive to January 1, 1997. For
1998, the employees are
awarded a cost of living increase equal
to 90 percent of the CPI-W
West Coast-C index for the July to
July 1997 period. This will bring the firefighters' top-step
wage to $3631 in 1996 and to
$3776 in 1997. This Award will set
the firefighters' wage within
1 percent of the average of the
comparable jurisdictions. It helps to restore parity with the
Richland firefighters who will
have a base wage of $3630 in 1996
and $3739 in 1997. It will also help to restore parity with the
Kennewick police who will earn
$3659 in 1996 and $3776 in 1997.9
The increases awarded are not
overly out of line with the
increases awarded to other of
the employee groups within the
City, inasmuch as the
firefighters will not be receiving a
deferred compensation
match. The increases in compensation
each
year of the new agreement
will, in total, be higher than the
increase in the cost of
living, particularly given the
significant increases already
awarded regarding the paramedic
premium, and the wage
differentials for lieutenants and captains
Those increased monetary
benefits add about a total of 1 percent
each year to the wage costs
incurred by the Employer. Also
significant in this regard is
the Employer's commitment to pay
any increases in the premiums
for medical and dental benefits.
In view of these compensation
increases over and above the base
wage increase, the awarded
1998 base wage increase of 90 percent
of the cost of living is part
of a total compensation package for
that year that will actually
cost the Employer significantly more
than 100 percent of the cost
of living. While not raising the
wages of bargaining unit
employees precisely to the average among
the comparable jurisdictions
this award has been strongly
influenced by that
figure. It has also been influenced by
factors which tend to moderate
the increase in wages, such as the
cost of living index, internal
parity, the adverse economic
conditions in the community,
and the favorable turnover and
application rates.
_____
9 These
figures include the cost of vision and long-term disability insurance which the
firefighters have given up in
return for equivalent wages.
In sum, the base wage increase awarded is as follows:
__________
Effective
Effective
Effective
increase
in the CPI-W West
Coast-C
index - July - July
1997
__________
Dated:
Alan
R. Krebs, Neutral Chairman