IN INTEREST ARBITRATION BEFORE

 MICHAEL E. CAVANAUGH, J.D.,

ARBITRATOR

 

 

KING COUNTY, WASHINGTON,                             and,     KING COUNTY CORRECTIONS GUILD,   ( 2012 Wage Reopener)

: : : : : : : : : : : :

INTEREST ARBITRATOR'S DECISION AND AWARD

 

For the Employer:

 

Ian B. Coleman

Labor Negotiator

Office of Labor Relations

King County Executive’s Office

500 Fourth Avenue, Room 450

Seattle, WA 98104

 

For the Union:

 

David Snyder

Snyder & Hoag LLC

3759 NE MLK, Jr. Blvd

Portland OR  97212

 

I.                   INTRODUCTION

The sole issue in this interest arbitration, which is before me pursuant to RCW 41.56.450,[1] is the size of a wage increase, if any, for the King County Corrections Guild bargaining unit for 2012. Negotiations between the parties in late 2010 for a successor Agreement to their 2007-10 CBA resulted in the Guild’s acceptance of a wage freeze for 2011, but with an adjustment to longevity pay that resulted in the equivalent of a 0.71% increase in compensation.[2] The parties also agreed to a wage reopener for 2012, and when they were unable to reach agreement on wages under the reopened contract, these proceedings followed.

At a hearing held in Seattle on October 31 and November 1, 2012, the parties had full opportunity to present evidence and argument, including the opportunity to cross examine witnesses. Counsel filed simultaneous electronic post-hearing briefs January 15, 2013, and with my receipt of the briefs, the record closed. Having carefully evaluated the evidence and argument in its entirety in light of the statutory standards, I am now prepared to render the following Interest Arbitration Award.[3]

II.                STATUTORY CRITERIA

In reaching my Award, I am required to apply the following standards:

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, the panel shall consider:

 

     (a) The constitutional and statutory authority of the employer;

 

     (b) Stipulations of the parties;

 

     (c) The average consumer prices for goods and services, commonly known as the cost of living;

 

     (d) Changes in any of the circumstances under (a) through (c) of this subsection during the pendency of the proceedings; and

 

     (e) Such other factors, not confined to the factors under (a) through (d) of this subsection, that are normally or traditionally taken into consideration in the determination of wages, hours, and conditions of employment. For those employees listed in *RCW 41.56.030(7)(a) who are employed by the governing body of a city or town with a population of less than fifteen thousand, or a county with a population of less than seventy thousand, consideration must also be given to regional differences in the cost of living.

 

     (2) For employees listed in *RCW 41.56.030(7) (a) through (d),[4] the panel shall also consider a 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 like employers of similar size on the west coast of the United States.

 

RCW 41.56.465(1). The “legislative purpose” referenced in the introductory paragraph quoted above is as follows:

The intent and purpose [of the interest arbitration statute] 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.

 

RCW 41.56.430.

III.             FACTUAL BACKGROUND

King County is the largest county by population in Washington (or Oregon), and in fact, it is one of the most populous counties in the United States. The employees in this unit are Corrections Officers and Corrections Sergeants working in the King County Corrections Facility in downtown Seattle and the Maleng Regional Justice Center in Kent, Washington.[5] As is the case with corrections officers generally, these employees work in close contact with offenders, some of whom are mentally ill, have infectious diseases, and/or exhibit a propensity for violence. Within the secure perimeter of the facilities, they are usually unarmed, although when escorting prisoners off-site, e.g. to court or to receive medical care, they carry firearms.[6] A number of years ago, the jail officers were included in the same bargaining unit as “road deputies" and received the same pay. They continued to receive the same pay for a time even after they were split into two separate units, although the corrections officers eventually fell behind by approximately 4% as a result of a more generous contract settlement awarded the Deputies in interest arbitration. Tr. 217 (Karstetter). The Guild thereafter consistently attempted to restore wage parity, and in 1990, the County Council adopted Motion No. 8005 declaring it was the “sense of the Council” that Corrections Officers should receive “the same negotiated wage increases” as received by employees under the Sheriff’s Deputies’ Agreement.” Exh. U-34.[7] Despite Motion No. 8005, however, the lack of perfect parity continued, and the gap widened substantially when the County agreed in 2008 to give 5% annual wage increases to the King County Police Officers Guild (KCPOG) unit for five successive years, apparently in exchange for the agreement of the KCPOG to accept a civilian review process.

Although the County enjoys a AAA bond rating and is in relatively good financial shape, “structural deficits” caused by statutory limitations on property tax increases require that annual “efficiencies” be achieved in order to provide the same level of services with financial resources that cannot grow at a rate sufficient to keep up with inflation and an increasing population.[8] Nevertheless, the County has reserves, some of which are specifically set aside to fund the cost of new labor agreements. Thus, says the Guild, the County can afford the increases in compensation for Corrections Officers that it says are called for under the statutory criteria given that the Officers have fallen far behind their statutory comparators on the West Coast, as well as their internal comparators who perform similar duties, such as the KCPOG. The Guild points as well to the County’s non-uniformed Classification Specialists[9] with whom unit members work on a daily basis in the jail. In addition to these “comparator” arguments, the Guild observes that the purchasing power of the current wages has been eroded by inflation since the unit’s last general increase in 2010, awarded under an interest arbitration award rendered by Arbiter Howell Lankford, a highly respected arbitrator in the Pacific Northwest and a long-time member of the National Academy of Arbitrators.[10]

The County counters, on the other hand, that an analysis of the wages and benefits of these officers, evaluated in light of the six comparator West Coast counties the parties have historically utilized in bargaining, establishes that the Officers’ wages and benefits are above market and thus do not justify a wage increase for 2012, even though these Corrections Officers received no general wage increase in 2011.

Additional pertinent facts will be developed in the course of the analysis that follows.

IV.             POSITIONS OF THE PARTIES ON WAGES

The County has proposed a zero COLA for 2012, whereas the Guild proposes a 5% across the board wage increase.

V.                DISCUSSION

A.    Selection of Statutory Comparables

Given the statute’s direction that interest arbitrators take into account “the wages, hours, and conditions of employment of like personnel of like employers of similar size on the west coast of the United States,” it is little wonder that in this case, as in most interest arbitrations, the issue of an appropriate set of “comparable” jurisdictions has touched off a major battle between the parties. The County argues that I should utilize the same group Arbiter Lankford used in 2009,[11] arguing that stability in the bargaining relationship is fostered by continuity of comparables from one negotiation to the next. The Guild, on the other hand, argues—as it did in 2009—that the list should be augmented with Sacramento and San Bernadino Counties, each of which is closer in population to King County than the four Pacific Northwest Counties the parties agree should be utilized in the analysis.[12]

As background, everyone recognizes that King County occupies a unique place in Washington interest arbitration because there are no Washington Counties, or even Pacific Northwest Counties, falling within the band of 50-150% of the population of the County, the “standard” method interest arbitrators have developed as a guide to determining whether an employer is similar in “size” within the meaning of the statute. In light of that fact, the County has little choice but to agree that at least some California jurisdictions should be included in the list of comparables. Therefore, the County accepts Riverside and Santa Clara Counties as appropriate comparables here, i.e. the California Counties used by Arbiter Lankford. Nevertheless, it seems to me beyond dispute that comparisons across state lines are problematic, and comparisons to California Counties are particularly so because of differing legal and economic structures, as well as the fact that those Counties lack “proximity” to the Pacific Northwest.[13] On the other hand, the statute specifically mentions “west coast” employers, and in light of that fact, the Guild draws the conclusion that an interest arbitrator must consider California Counties—and argues that given the complete lack of Pacific Northwest Counties of an appropriate size, I ought to consider additional Counties beyond the list utilized by Arbiter Lankford. Guild Brief at 21-31.

With respect to the statute’s reference to West Coast Counties, I think it most likely that the statute defines the West Coast as the outer geographical limit for an interest arbitrator’s selection of comparables, and does not necessarily reflect an injunction to use California Counties in every case. In other words, I think the statute leaves it to the arbitrator the parties have mutually selected to determine which other employers—going no farther than the West Coast—are sufficiently “like” the employer at issue, in light of the facts unique to each case, to be fairly considered in carrying out the required statutory analysis. I also agree with those Pacific Northwest interest arbitrators who have expressed a strong preference for focusing on Washington and Oregon jurisdictions whenever possible. But that approach carries its own difficulties here in light of the absence of Pacific Northwest Counties with populations similar to King County.

That is, as the Guild points out, the average population of the Pacific Northwest Counties utilized by Arbiter Lankford is only 35% of the population of King County. Exh. U-76, Table 1. Using those Counties as comparables, then, risks making these smaller Counties—presumably with fewer financial resources—the standard for judging the appropriate compensation for employees of King County, despite King County’s potentially greater ability to pay. Thus, while I understand the County’s argument that it is unfair to the County to allow remote and perhaps financially more prosperous California jurisdictions to dominate the comparability analysis, it seems to me it would be no less unfair to the Guild to allow smaller Pacific Northwest jurisdictions to drive the compensation of its members simply because those Counties are “local.” The question remains, however, whether the inclusion of the two California Counties Arbiter Lankford utilized, Riverside and Santa Clara, is sufficient to balance the analysis, or whether, as the Guild argues, it would improve the reliability of the data to add Sacramento and San Bernadino Counties to better counteract the undue influence of the smaller Pacific Northwest jurisdictions.

The County responds that Sacramento and San Bernadino are not appropriate comparators because the employees the Guild points to in those counties for comparison are “deputies,” not “corrections officers.” In general, law enforcement officers such as deputies are unlimited commissioned peace officers, with the authority to exercise those functions 24 hours a day whether on duty or off, and anywhere within the state, whereas Corrections Officers, although they might perform the same or substantially similar duties to some extent, only exercise their powers while on duty and only within the facility. Thus, argues the County, Corrections Officers and Deputies are simply not “like employees.”[14]  In response, the Guild points to Arbiter Lankford’s observation that—whether formally designated as deputies or something else—if Sacramento and San Bernadino Counties employ career corrections employees, it would be difficult to say they would not be “like employees” within the meaning of the statute. Award at 7. Relying on the testimony of the Presidents of the respective Unions representing the Sacramento and San Bernadino deputies, the Guild contends that the evidence here (as opposed to the record before Arbiter Lankford) establishes just that.

But as I read his Award, Arbiter Lankford rejected Sacramento and San Bernadino not simply based on the lack of “career corrections” positions, but also because “there is no suggestion in the record that Corrections Officers perform these duties in the far reaches of a large County, as Deputies ordinarily do, or that those duties (for Corrections Officers) account for the great majority of their work time, as they do for Deputies.” Award at 6. Nor is there such a record here. I would also add that, while the testimony before me established that “some” or “many” Deputies in these California Counties choose to make a career in corrections, it is also clear that there is substantial interchange between the two different “Deputy” assignments. For example, in San Bernadino, all Deputies now must be “patrol certified,” which requires them to transfer out of the jail and be trained and serve as a patrol officer for a period of time, exercising the powers of an unlimited commission law enforcement officer. Tr. 254-55. There is no similar requirement in King County, of course, nor is it even possible, as I understand it, for King County Corrections Officers to transfer back and forth between being a CO and being a “road deputy.” Thus, even if it is true that San Bernadino Corrections Deputies perform the same functions as King County CO’s, they are required to maintain a level of commission for the uniformed services above that required of King County CO’s. Consequently, it is not clear to me that the record here is sufficient to reach a different conclusion than Arbiter Lankford reached with respect to whether Sacramento and San Bernadino Counties are appropriate comparables for this bargaining unit.

Nor does it seem to me that the difficulty of finding appropriate comparable jurisdictions for King County is necessarily solved by adding more jurisdictions to the six the parties have used in the past, when virtually all of them, new and old, could be said to be inapt for one reason or another. That is, the additional proposed jurisdictions simply present the interest arbitrator with a different set of distinctions that must be kept in mind in determining what weight to give them. In the end, however, it does not seem necessary to me to answer the question definitively here. Paraphrasing Arbiter Lankford, perhaps “the best we can do is to keep in mind several perspectives, one of which is these six Washington, Oregon, and California Counties,” Award at 7, and another of which is the broader set of comparables—for whatever they are worth—utilized by the Guild in its analysis.[15]

In this context, it is also important to remember that the statute empowers an interest arbitrator to consider factors beyond strict notions of “comparability.” In fact, in terms of the order in which the factors to be considered are set forth in the statute, comparability appears after the legislative purpose of “promot[ing]  .  .  .  dedicated and uninterrupted public service [by providing]  an effective and adequate alternative [to strikes as a] means of settling disputes,” and also after the “such other factors, not confined to the factors under (a) through (d) of this subsection, that are normally or traditionally taken into consideration in the determination of wages, hours, and conditions of employment.” One of those “such other factors,” of course, is internal equity. In any event, whether or not the primacy of the various considerations is reflected in the order in which the statute mentions them (a matter I do not decide), in a case in which the “comparability” analysis is so difficult because of the unique status of the employer, it may well be that these statutory considerations beyond external comparability will play a greater role in the arbitrator’s decision than they otherwise might —and might even come close to overshadowing the external comparables altogether. Nevertheless, I will begin the discussion with issues of comparability.

B.     Comparability Analysis

The external comparables, depending on which jurisdictions are included in the analysis, as well as which elements of compensation are included, either show that Officers are substantially above market (County’s analysis) or that they are substantially below market (Guild’s analysis). In considering that question, the parties agree that net hourly pay is the appropriate standard, i.e. appropriate elements of compensation should be added together and divided by regularly scheduled hours in order to determine a net hourly rate.[16] They also agree that top step base wages and longevity pay should be included in the calculation, but differ over some of the other compensation elements, e.g. retirement pick up,[17] medical benefits,[18] firearms certification[19] and educational incentives. In fact, it is clear that the Guild’s calculations establish that the compensation deficits it sees for Officers are due primarily to the inclusion of certification bonuses and educational incentives in the analysis. See, Exh. U-76, Tables 9-11. That is, without those educational and certification bonuses, the top net hourly wage at 5 years for Officers is a -3.21% (including Sacramento and San Bernadino in the analysis), whereas with those bonuses the deficit rises to -6.41% with an intermediate certificate and a -9.38% with the advanced. Id. Washington does not have a certificate requirement, however, and thus the Guild’s analysis tends to give credit to the Officers for something the County does not necessarily benefit from.[20] Nevertheless, even without those features, the Guild’s computations show an approximately 3% deficit at the 60-month Officer level (when Sacramento and San Bernadino are included), and approximately the same deficit for Corrections Sergeants. Exh. U-76, Table 12. I will weigh that evidence, along with the County’s evidence to the contrary, in light of the other considerations the statute requires me to take into account in rendering my Award.

C.                 Cost of Living

The County asserts that this unit has received wage increases since 2001 that exceed inflation during that same period. County Brief at 19-20. Thus, says the County, “The Guild’s claim that itys member’s wages have lost purchasing power is simply without merit.” Id. The Guild replies that the unit’s wages have lost purchasing power since their last general wage increase in 2010 given that inflation since September 2009, as measured by the CPI-W, has been 5.8% (1.4% from September 2009-September 2010, plus an additional 4.4% September to September 2010 to 2011). Guild Brief at 19-20.[21] While the statute does not specify precisely how I am to factor in the “the cost of living,” and thus does not preclude me from accepting the form of analysis the County suggests here, I think the Guild has the better of the argument, at least under these precise circumstances. The sole question before me is whether an increase in the wage rate is appropriate now—or more precisely, retroactively for last year. In the context of a bargaining unit that reluctantly accepted a wage freeze in 2011 to assist the County with its financial difficulties (even though it had a contractual right to receive a 3% increase that year),[22] the relevant time frame to consider the effect of changes in the cost of living is the recent past rather than a historical trend measured over more than a decade. As the Guild persuasively argues, “if the Guild has been successful in convincing the County to agree to increases in excess of the increases in the CPI-W (or convincing an arbitrator to award such increases), there is no basis for undoing that bargain and depriving the Guild of its benefit.” Brief at 20. I agree. Consequently, a substantial increase in the cost of living since 2010, only partially offset by a small increase in longevity pay in the unit, is a factor I must consider in reaching my decision.

D.                Internal Comparability

It is clear that the County’s 2008 deal with the KCPOG, resulting in an increase in pay for Deputies of more than 25% (when compounded over the course of five years) continues to rankle in Corrections, a unit which has long considered itself entitled to pay equal to that of general law enforcement officers. The County dismisses the Guild’s argument as an attempt to “resurrect outdated historical parity with police officers.” Brief at 37. Moreover, notes the County, the KCPOG settlement preceded the “Great Recession,” was concluded by an administration different from the one responsible for the County’s finances today, and was made in consideration of perceived needs of the County that are very different from what is at issue here, i.e. in exchange for civilian oversight of the Deputies. Id. The County also points out that Arbiter Lankford rejected the Guild’s argument for wage increases based on the 2008 deal with KCPOG, Award at 14-15, but I would say that is only partially true.[23]

Without taking a position on the question of full parity with KCPOG, it is clear to me (as it was no doubt clear to Arbiter Lankford) that even if an interest arbitrator granted the Guild’s position on wages, Corrections wages would not be restored to the historical parity the Guild apparently seeks.[24] Thus, the question before me is not precise parity between the Guild and KCPOG, nor whether parity in wages is the appropriate result as a matter of policy, but rather whether the size of the current disparity is a factor I should take into account in determining the Guild’s appropriate wage increase, if any, for 2012. There can be no doubt that there are significant differences between the work of Deputies and Corrections Officers, just as the County contends. There can also be no doubt, however, that there are substantial similarities—indeed, both units are comprised of members of the uniformed services, and if there is another unit in the County to which Corrections could be more appropriately compared for internal equity purposes, the record does not disclose what it would be. Therefore, I believe it is proper to consider the current size of the disparity between KCPOG and Corrections—not, as the County suggests, as a matter of revisiting perceived slights of the past[25]—but rather as a matter of determining whether this unit, in light of its similarity to KCPOG, should continue to be at such a steep (and growing) comparative wage disadvantage.

The other internal comparable the Guild cites is the Classification Specialist position represented by Local 21-AD of the Washington State Council of County and City Employees (WSCCCE). According to the testimony, these employees make approximately $4.00 per hour more than Corrections Officers, although much of their work used to be done by CO’s, and Corrections Officers think of them as support staff, not as a “promotional opportunity” as the County sees it. These employees, too, seem to me to be an appropriate internal comparable given that they work in the jail with CO’s and do work that CO’s used to do.[26] Again, the question is not necessarily one of parity, but rather whether the comparative compensation between these two classifications that work together should be taken into account. Without making any judgment at present about how, if at all, the relative compensation of the two groups might affect the outcome here,[27] I believe it is something I should consider in reaching my decision.

Similarly, I believe the fact that most County bargaining units have accepted the new COLA formula, see Exh. E-47, is an internal comparability factor that should be taken into account. While this issue is intertwined with the “ability to pay” or “financial responsibility” issue I will turn to later, it is also reflects an internal comparability aspect. That is, if most bargaining units (in addition to groups of employees who do not engage in collective bargaining) are covered by a less generous COLA provision than the one the Guild seeks, that is the kind of matter that is traditionally taken into account in determining wages, hours and working conditions—as it should be, because as the Guild well understands, substantial differences in wage increases between groups of County employees can sow seeds of discord within the work force, particularly when the employees regularly interact during the course of the workday. Consequently, if a formula gains traction as the widely accepted manner of calculating COLA within the County, departures from that formula should be supported by a very good reason demonstrated in the record.

E.                 Ability to Attract and Retain Employees

Interest Arbitrators often consider whether a specific level of compensation is sufficient to attract and retain qualified employees for the position(s) at issue. At present, however, the County is in something of a contraction mode given declining ADP as a result of fewer contract inmates from other government agencies. While the Guild would like the County to aggressively seek new sources of contract work, and the County has expressed interest in doing so, unless and until ADP begins to increase again, the parties are more focused on doing what they can to avoid further reductions in FTE’s within the jails, not recruiting new employees to fill vacant positions. In addition, the parties agree that the overwhelming majority of current Officers are at the top step, a fact that seems clearly to indicate that retaining employees is not a problem at this time. Consequently, I do not find that this factor adds substance to the specific issue before me.

F.                  Financial Responsibility Issues

While the County does not (and could not) plead a strict inability to pay what the Guild asks, it notes that its relative budget health may be traced to implementation of the sound fiscal policies required to maintain County services in the face of structural deficits that limit the County’s ability to raise revenue. As a central feature of those policies, County employees have been asked to provide the same level of service year after year by finding 3% annual “efficiencies,” i.e. ways to spend the taxpayers’ money more wisely to achieve the same results despite projected deficits. It appears that much of the County’s projected budget deficit for 2013 can be traced to declining revenue from reduced ADP in the jails—$10 Million for 2012 and an additional projected $13 Million for 2013. A focus on marketing these empty beds may (or, in light of budget difficulties besetting the potential customers just as such difficulties face the County—may not) result in lower than projected revenue loss from lower ADP. In addition, because of the recent recession, assessed property valuations continue to decline, and sales tax revenues are not yet rebounding to pre-recession levels.[28]

Nevertheless, there is much good news. The County’s bond rating continues at the highest level, which lowers the County’s cost of borrowing, and reserves are increasing (which protects the high bond ratings), although some reserves are dedicated to specific needs (e.g. the Rainy Day Fund, set aside for expensive emergencies such as natural disasters). Nevertheless, there is also a reserve fund set aside specifically to fund contract settlements and interest arbitration awards, which is an important factor here. That is, the “Salary and Wage Reserve Fund” was $1.6 Million for 2012,[29] and the 2013 budget increases that amount to $5.1 Million, with the fund projected to rise to $7.3 Million in 2014 and to $10 Million by 2015. Exh. U-62.[30]

In any event, against this background, the County costs the Guild’s 2012 5% wage increase demand at $2.67 Million, calculated by taking total payroll for 2011 (regular pay, overtime, and retirement contributions) and multiplying by a factor of 1.05. See, Exh. E-52. According to the County, this amount constitutes the equivalent of the annual cost of hiring an additional 29.5 Officers. Id.[31] But in evaluating whether the Guild is entitled to a wage increase for 2012, I must take account of the budgeted increases in the Salary and Wage Reserve in the period 2012-15. The higher numbers in the out years may well reflect a higher number of open contracts, as the County argues, but the level of projected reserves—and the County’s conservative budgeting assumptions that typically lead to higher than forecast surpluses— suggests that the County has access to sufficient funds to pay higher wages to this unit if increases are indicated by the statutory criteria.

G.                Arbitrator’s Analysis

After carefully considering all the relevant statutory criteria outlined above, I conclude that a wage increase for 2012 is appropriate for this bargaining unit. I reach that conclusion based not so much on the external comparables—which seem to me to indicate, at best (at least when inappropriate elements of compensation have been removed from the calculation), that these employees are slightly behind their comparators only at the 60 month level and for Corrections Sergeants. But there are other aspects of the analysis that point to a general increase. First, comparing the Corrections unit to their closest internal comparators, Sheriff’s Deputies, there is a disparity in pay substantially beyond what one would reasonably expect given the differences—and similarities—in job duties, qualifications, and working conditions.[32] That is, while significant differences unquestionably exist between these two uniformed classifications, those differences are not sufficient to completely overcome the many similarities between them. Consequently, while I am not in a position to say on the basis of this record whether a differential of just under 7% (as it apparently existed in 2007)[33] would have been unreasonable, I do find that the current differential of roughly 22% is out of line in light of the similarities between the two units.

Second, there has been a 5.8% increase in CPI-W since this unit’s last across the board raise in 2010, while the Corrections employees have only received the 0.71% longevity pay increase during that period.[34] The Guild notes that it would have received a 3% increase in 2011 under the Lankford formula and 4.18% in 2012 for a total of 7.18% (or 5.51% ignoring the Lankford 3% minimum for 2011), but the County counters that the Guild bargained away its 2011 increase in the MOU. I agree, but there is still a substantial increase in the cost of living in 2012, a year for which the Union bargained for a reopener and is now entitled to argue for an increase based on CPI data showing that the cost of living went up 4.4% in the relevant period.[35]

Third, however, there is another internal comparability issue that must become part of the discussion, and it tends to point in the opposite direction—specifically, the fact that the County’s new “standard” COLA formula resulted in increases of just 1.63% in 2012. It is true, of course, that many interest arbitrators refuse to limit arbitration eligible units to the increases received by employees who are not permitted to present their demands in interest arbitration, but at least one of the County units that accepted the new COLA is Amalgamated Transit Union, Division 587, which is eligible for interest arbitration (and which also appears to be the largest unit in the County). Exh. E-47. Like the other units agreeing to that formula, ATU received a 1.63% COLA increase, not the 4.4% (or some percentage of that increase in the CPI-W) that the Guild suggests should be utilized in calculating its wage increase. Thus, if a large arbitration eligible unit accepted the new standard COLA, that is a fact I must weigh in determining the appropriate wage increase for this unit. It is also significant, while in no way controlling, that the Classification Specialists, a unit the Guild asks me to consider for purposes of internal comparability, also agreed to the new COLA formula and received just 1.63% in 2012. Exh. E-47.

Fourth, while I agree that the County can afford some reasonable increase for this unit without abandoning its obligation to manage the County’s finances responsibly, the relatively stable economic condition of the County appears to have been carefully constructed through prudent budgeting, skillful and innovative handling of the formerly skyrocketing costs of employee health insurance, and a commitment to find 3% efficiencies year after year. But whether these approaches will continue to succeed is not entirely dependent on circumstances the County can control. The recovery could slip back into recession, a distinct possibility according to many economists in light of the federal budget Sequester. Those compounding annual 3% efficiencies may or may not be possible indefinitely into the future once the “low hanging fruit” has been picked. And even with conservative budgeting at the 65% confidence level, there is still a greater than one-in-three chance that budget projections will turn out to have erred on the down side. Thus, a measure of caution is appropriate here.

As noted at the outset of this Analysis, taking all of these considerations into account, including the legislative purpose of the interest arbitration statute for uniformed employees cited above, I have concluded that the Corrections unit should receive an across the board wage increase for 2012. The floor for that increase, in my view, would be measured against the 1.63% other bargaining units received under the County’s new COLA formula—and arguably, it might even be the 1.63% less the 0.71% Corrections received in 2011 when most units received zero COLA. In light of the substantial and continuing disparity between this unit and the similar KCPOG uniformed unit, however, the Guild is still “too far behind to accept the same COLA deal” as the other units. cf., Lankford Award at 15. Therefore, I will award an across the board increase of 3.5% for 2012. This increase is slightly more than halfway between the 5% received by KCPOG and the 1.63% received by most other units in 2012.[36] While this wage increase takes account, as it must, of the gap between this unit and KCPOG—just as with Arbiter Lankford’s Award, my award only serves to reduce, by a small amount, the continuing increases in that gap from 2008 through 2012 arising from the Deputies’ cumulative wage increases during that period of more than 25% compounded.[37]

I acknowledge the County’s argument that because of the 2011 longevity pay increase, even an increase of 1.63% for Corrections employees would unfairly give them a larger increase than the units that accepted the new standard COLA, and I suspect the County would add that the larger increase I have awarded here compounds the unfairness. I disagree. While it is true that most other units that had settled as of the time of the hearing in this matter agreed to accept the new standard COLA, those other units, as I understand it, did so in an effort to reduce the number of FTE’s eliminated from their units. In Corrections, however, FTE’s were being reduced over time primarily because of reduced ADP, so Corrections is not entirely in the same position.[38] In addition, few—if any—of those other units appear to be entitled to claim some consideration of internal comparability with the Deputies. On the other hand, KCPOG is the closest internal comparator for the Corrections employees. Once again, the other units simply are not similarly situated to Corrections for these precise purposes. Thus, I am not convinced that it is “unfair” to treat the Guild differently in light of its different situation.

I award an across the board increase in wages of 3.5%.

AWARD

Having carefully considered the evidence and argument in its entirety, I hereby render the following Interest Arbitration Award:

1.      The King County Corrections Guild unit shall receive an across the board wage increase of 3.5% for 2012;

 

2.      The parties shall attempt to agree on appropriate language and/or tables to include in their Agreement to implement this Award, and I will reserve jurisdiction to resolve any disputes in that regard that the parties are unable to resolve on their own; either party may invoke this reserved jurisdiction by fax or email sent, or letter postmarked, within ninety (90) days of the date of this Award (original to the Arbitrator, copy to the other party) or within such reasonable extensions as the parties may mutually agree (with prompt notice to the Arbitrator) or that the Arbitrator may order for good cause shown; and

 

3.      The parties shall bear the fees and expenses of the Interest Arbitrator in equal proportion.

 

Dated this 11^th day of March, 2013

                                                               

 

 

                                                                Michael E. Cavanaugh, J.D.

                                                                Interest Arbitrator