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Title: Washington County and Washington County Police Officers' Association
Date: December 28, 1995
Arbitrator: Philip Kienast
Citation: 1995 NAC 104

In the Matter of Arbitration Between Washington County and Washington County Police Officers' Association. IA-06-95

Opinion

This proceeding is in accordance with Oregon Statute and implementing rules of the Oregon Employment Relations Board. A hearing in this matter was held on October 20, 1995 and the record closed upon receipt by the Arbitrator of post hearing briefs on November 15, 1995. The parties reached an impasse in their negotiations on two issues:

1. Medical coverage

2. Pension contributions

The decision required here is which of the parties' last best offer on both issues as a package should be ordered by the Arbitrator given the directive of OAR 115-40-015(8), which requires the Arbitrator in applying these criteria as follows:

The arbitrator[(s)] shall base his/her findings, opinions and order upon the following criteria, giving first priority to paragraph (a) and secondary priority to paragraphs (b) to (h):

(a) The interest and welfare of the public.

(b) The reasonable financial ability of the unit of government to meet the costs of the proposed contract giving due consideration and weight to the other services, provided by, and other priorities of, the unit of government as determined by the governing body. A reasonable operating reserve against future contingencies, which does not include funds in contemplation of settlement of the labor dispute, shall not be considered as available toward a settlement.

(c) The ability of the unit of government to attract and retain qualified personnel at the wage and benefit levels provided.

(d) The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays and other paid excused time, pensions, insurance, benefits, and all other direct or indirect monetary benefits received.

(e) Comparison of the overall compensation of other employees performing similar services with the same or other employees in comparable communities. As used in this paragraph, "comparable" is limited to communities of the same or nearest population range within Oregon. Notwithstanding the provisions of this paragraph, the following additional definitions of "comparable" apply in the situations described as follows:

(A) For any city with a population of more than 325,000, "comparable" includes comparison to out-of-state cities of the same or similar size;

(B) For counties with a population of more than 400,000, "comparable" includes comparison to out-of-state counties of the same or similar size; and

(C) For the State of Oregon, "comparable" includes comparison to other states.

(f) The CPI-All Cities Index, commonly known as the cost of living.

(g) The stipulations of the parties.

(h) Such other factors, consistent with paragraphs (a) to (g) of this subsection as are traditionally taken into consideration in the determination of wages, hours, and other terms and conditions of employment. However, the arbitrator shall not use such other factors, if in the judgment of the arbitrator, the factors in paragraphs (a) to (g) of this subsection provide sufficient evidence for an award.

Last Offers

Of the Employer:

1. Retirement (Article 29)

The county proposes to maintain the existing language in Article 29, Section A with regard to PERS pick-up.

2. Insurance (Article 30)

The County proposes to modify Article 30, Section 1, Insurance, to read as follows;

"30.1 Medical.

"Effective the first calendar month following ratification of this Agreement, or as soon thereafter as is administratively feasible, the County shall discontinue its PPO and its fee for service health insurance plans and instead shall make available during the then remaining term of this Agreement the Good Health Plan Choice Option and the Kaiser HMO health plans (or plans of other carriers providing reasonably comparable overall levels of benefits). Each bargaining unit employee shall be allowed to choose coverage by one of these plans. The County shall pay up to the full premium costs of the Good Health Plan Choice Option or its equivalent for each eligible employee and his/her dependents, but the employee must pay the difference, if any, between the monthly premium cost of the Good Health Plan Choice Option or its equivalent and the Kaiser plan if the employee selects the Kaiser plan."

Of the Union:

1. Retirement (Article 29)

The Association proposes to modify Article 29, Section A to provide as follows:

"The County will continue to "pick up" the employee contribution to the Public Employees Retirement Fund for the employee members participating in the Public Employees Retirement System. If the Oregon Supreme Court declares that Ballot Measure 8 is valid, then effective the date of that decision, the County "pick up" shall cease, unless an employee voluntarily makes a six percent (6%) payroll deduction to a deferred compensation program, in which case the Counties' [sic] "pick up" shall continue. If such actions would he inconsistent with the Supreme Court decision, the parties will reopen in [sic] this section of the contract if permitted by the Supreme Court decision."

2. Insurance (Article 30)

The Association proposes that the same health insurance plan that was provided under the expired agreement be extended through the term of the new agreement.

Background

Washington County is located in the metropolitan Portland area and has a population of around 350,000 people and employs approximately 1,192 employees of which roughly 370 are organized in four bargaining units. The Sheriff's unit is the largest with almost 200 members.

The parties began negotiating a successor agreement to their 91-94 agreement. Following mediation in the spring of 1995 the parties were able to resolve all issues save the two issues to be determined in this proceeding. The parties stipulated that these two issues are to be decided without consideration of the total compensation package already agreed upon by the parties or other similarly situated parties in comparable jurisdictions.

The crux of the differences between the parties on the pension issue arises from the passage in November 1994 of Ballot Measure 8, which states in pertinent part:

"1) Notwithstanding any existing State or Federal laws, an employee of the State of Oregon or any political subdivision of the state who is a member of a retirement system or plan established by law, charter or ordinance, or who will receive a retirement benefit from a system or plan offered by the state or a political subdivision of the state, must contribute to the system or plan an amount equal to six percent of their [sic] salary or gross wage.

2) *On and after January 1, 1995,* the state and political subdivisions of the state *shall not thereafter contract or otherwise agree to make any payment or contribution* to a retirement system or plan that would have the effect of relieving an employee, regardless of when that employee was employed of the obligation imposed by subsection (1) of this section.

3) *On and after January 1, 1995,* the state and political subdivisions of the state *shall not thereafter contract or otherwise agree* to increase any salary, benefit or other compensation payable to an employee for the purpose of offsetting or compensating an employee for the obligation imposed by subsection (1) of this section." (Emphasis Added (**)) Association Exhibit 3, pages 4-5.

This ballot measure has since been declared unconstitutional by the lower state courts and an appeal is pending before the Oregon Supreme Court. Notwithstanding, prior to January 1, 1995 many cities and counties gave their employees pay raises to offset the six percent (6%) employee contribution they had been paying on behalf of their employees. Specifically, the parties stipulated (E28):

Prior to January 1, 1995, following passage of ballot measure 8, Marion, Lane, and Multnomah Counties all gave their police employees raises of 5.3% to 6.0%, in lieu of the PERS pick-up. With these raises, employees are now making contributions of 6% to their retirements. Clackamas County did not deal with the issue as their contract does not expire until 1997.

In addition, the Employer granted a 5.6% increase prior to January 1, 1995 to its organized and unrepresented employees in lieu of the 6% "PERS pick-up."

Analysis and Conclusion

Oregon public policy as expressed in ORS 243.746 as amended in 1995 clearly mandates the "interest and welfare of the public" be the most heavily weighed single criterion regarding final-offer arbitration decisions. The Arbitrator finds the Employer's last offer is more consistent with this criterion than the Union's last offer. As regards the medical coverage, the Employer's offer provides broader and less costly coverage than the Union's proposal to continue the current medical coverage. The GHP coverage offered by the Employer provides 100% payment of hospital, x-ray and lab costs while the status quo offer of the Union provides only 90% in-plan coverage. Out-of-plan coverage is also better, paying 75% rather than 70% under the current PPO plan. Moreover, their GHP plan also provides for additional paid preventive/wellness services not currently provided under the PPO plan proposed by the Union (E 6&7).

Equally important, the GHP plan is far less costly than the current PPO plan at a cost of $273/month versus $426/month for continuing the PPO plan as proposed by the Union. Also, out of pocket costs to members would not rise for most, and could be lower under the GHP proposal for the majority of unit members.

The Arbitrator is mindful of the Union's expressed concern with the managed care feature of the GHP versus the PPO plan. However, he finds no persuasive evidence that such a feature will result in denial of access to specialists as argued by the Union. In fact, the lower cost of self referral to non-plan specialists provided by the GHP appears to guarantee access to specialists regardless of the decision of a primary care physician.

In the final analysis, the GHP plan better serves the interest and welfare of the public by lowering costs significantly as well as emphasizing wellness over cure. The Arbitrator is aware that a few unit members may incur additional costs in using general practitioners and medical specialists outside the plan, however, this disadvantage to a few cannot be found to outweigh the benefit to the public interest of providing better medical coverage at lower cost to the majority of unit employees

The lower cost of GHP may even benefit unit members in the long run by providing the Employer the ability to raise salary or benefits for unit employees that would have been precluded by the higher costs for the medical plan proposed by the Union. Moreover, the extension of the GHP plan to this bargaining unit will reduce administrative costs associated with operating two different medical plans by the Employer.

The Arbitrator further concludes the Employer's pension proposal better serves the interest and welfare of the public. Unlike the Union proposal, it does not provide for an alternative created in the absence of the Oregon Supreme Court's reasoning on the matter of Ballot Measure B. The Arbitrator finds the parties would be required under the savings clause in the Agreement to negotiate on pensions if the court affirms the constitutionality of Measure 8. This protects the interests of unit members in finding a reasonable alternative to PERS pickup, or arbitrating the matter if unable to agree on new language. In short, the Arbitrator sees no reason to change the language at this time as the Union proposed.

The remaining question is whether the secondary criteria enunciated in ORS 243.746 as amended (1995) requires any change in the conclusions reached above and driven by the primary criterion of the public interest and welfare. The Arbitrator finds the foregoing conclusions are within the financial ability of Washington County to fund (E2) as well as its ability to attract and retain qualified personnel (E27 and 28).

In addition, the Arbitrator finds his decision based on the primary statutory criterion will maintain the overall comparability of the unit's medical coverage with those in similarly situated jurisdictions (E29 and U9-12) while also keeping pace with recent changes in the cost of living (E30). By stipulation, the Arbitrator did not compare total compensation within similarly situated bargaining units. Finally, the Arbitrator finds that other factors (h) need not be considered because attention to criterion (a) through (g) provides a sufficient basis for an award in this matter.

AWARD

1. The Employer's last offer shall be adopted by the parties.

2. Pursuant to Section 10(6) the parties shall each pay one-half the fees and expenses of the Arbitrator.

Philip Kienast

December 27, 1995

Seattle, Washington

For the Union: Jaime B. Goldberg of Hoag, Garrettson, Goldberg & Fenrich

For the Employer: Jim D. Korshoj and Kenneth Bemis of Bullard, Korshoj Smith and Jernstedt

 

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