|
In re
City of Hugo, Oklahoma
and
The Fraternal Order of Police
Lodge
104
120
LA (BNA) 540
FMCS
Case No. 040528/55105-6
October
22, 2004
Stephen M. Crow, neutral
arbitrator, selected through procedures of the Federal Mediation and
Conciliation Service; Dalton “Red” Erwin, employer arbitrator; Bill Young,
union arbitrator
Issues for the Arbitration Board to Address
Which last best offer should the Arbitration Board select, that of the
City or that of the FOP?
Relevant Guidelines
The Oklahoma Fire and Police
Arbitration Act (FPAA) provides that the factors to be
given weight by the arbitrators in arriving at a decision shall include:
1. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with prevailing wage
rates or hourly conditions of employment of skilled employees of the building
trades and industry in the local operating area involved;
2. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with wage rates or
hourly conditions of employment maintained for the same or similar work of
employees exhibiting like or similar skills under the same or similar working
conditions in the local operating area involved;
3. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with wage rates or
hourly conditions of employment of fire departments or police departments in
cities, towns or other political subdivisions of comparable size and economic
status both within and without the State of Oklahoma;
4. Interest and welfare of the
public and revenues available to the municipality; or
5. Comparison of peculiarities
of employment in regard to other trades or professions, including
specifically:
a. hazards of employment,
b. physical qualifications,
c. educational qualifications,
d. mental qualifications, and
e. job training and skills.
FOP Position 1
The City of Hugo and the FOP
bargained for several months, but were unable to reach a final agreement. The
unresolved issues were wages and the City’s share of contributions to the
police officers’ retirement system. The City’s last offer during negotiations
was to roll the prior years’ contract forward without change.
The Oklahoma Fire and Police Arbitration Act requires
the parties to make a last best offer on the unresolved issues and the
Arbitration Board must select one or the other without modification. If the City’s offer is selected, that decision is binding
on the FOP. If the FOP’s offer is selected, the City has the option of
implementing the FOP offer or submitting the same two offers to a vote of the
people.
The FOP’s last best offer was to increase police wages by 6% and
necessary date changes setting the contract’s effective dates. The City’s last
best offer was to maintain police wages at there current level, reduce the
officer’s uniform provision, and remove several employees from the bargaining
unit and contract coverage.
The City’s offer fails the
fundamental test of a good faith, reasonable and just settlement of the
contract disputes on several fronts. First, the City had withdrawn its proposals
to reduce the frequency of providing new uniform shirts. Similarly, the City
proposed eliminating new officers from the bargaining unit during negotiations,
but withdrew that provision toward the end of negotiations. The City’s final
position during negotiations was to roll the existing contract forward for the
new fiscal year.
The City’s withdrawal of the
probationary issue and the reduction in uniform provision from the table is
significant evidence that those proposals, even in the City’s view, were not
necessary or justified. To accept the City’s last best offer would run afoul of
arbitration law that interest arbitration should find the contract agreement
that the parties would have made had they been able to reach an agreement.
In the previous contracts
between the FOP and the City, probationary employees have not been excluded
from the bargaining unit and have been entitled to the full protection of the
contract terms. It is patently unfair to now remove three existing employees,
like Patrol Commander Bullard, from the bargaining unit after he has been a
member of the unit since his date of hire. The City has never indicated that
allowing probationary employees to be members of the bargaining unit has caused
any problems and at the arbitration hearing did not articulate any
justification to now remove certain probationary employees from the unit. The
City fails to justify the need to eliminate a well established and
long-standing term of the parties’ agreement, that probationary employees are
members of the bargaining unit.
As noted already, the City’s
offer also seeks to reduce the provision of uniform shirts for officers. The
City’s offer will reduce that benefit by providing uniform shirts only every
other year. The City did not provide any evidence or testimony to support this
reduction in benefit.
Finally, the City’s offer fails
to provide necessary date changes to allow its offer to form a proper contract.
As noted, the City’s last best offer contains “effective” dates that are
already expired and past. The City argued at the hearing that the lack of
proper effective dates was really meaningless. However, the City’s last best
offer proposes that its contract “shall remain in full force and effect until
June 30, 2004.”The duration of the terms of the contract are an important
element of the contract and this defect in the City’s offer cannot be remedied
now. The FPAA provides, “The arbitration board may not modify, add to or delete
from the last best offer of either party.” If the City’s offer is selected, the
City will argue that no contract even exists because it has expired on its own
terms.
Measuring the Two Offers by the Statutory Standards
Not only should the City’s offer
be rejected because the City failed to justify the reductions and changes it
proposes and because of the failure to propose proper date changes, but the
City’s offer also fails the statutory elements necessary to allow selection of
its offer. The Oklahoma Fire and Police Arbitration Act (FPAA) provides that the factors, among others, to be given weight
by the arbitrators in arriving at a decision shall include:
1. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with prevailing wage
rates or hourly conditions of employment of skilled employees of the building
trades and industry in the local operating area involved;
2. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with wage rates or
hourly conditions of employment maintained for the same or similar work of
employees exhibiting like or similar skills under the same or similar working
conditions in the local operating area involved;
3. Comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with wage rates or
hourly conditions of employment of fire departments or police departments in
cities, towns or other political subdivisions of comparable size and economic
status both within and without the State of Oklahoma;
4. Interest and welfare of the
public and revenues available to the municipality; or
5. Comparison of peculiarities
of employment in regard to other trades or professions, including
specifically:
a. hazards of employment,
b. physical qualifications,
c. educational qualifications,
d. mental qualifications, and
e. job training and skills.
In general, the first three
factors compare police officer wages and other benefits with those of other
police officers and other workers in the local operating area and in other
states. The City presented no evidence of factors 1, 2, or 3. As such, the FOP’s
wage and benefit comparisons stand un-rebutted.
Factor 1—The City of Hugo Police Pay Compared to Pay of Skilled
Employees of the Building Trades and Industry in the Local Operating Area.
A Hugo non-supervisory police officer earns $9.80 per hour compared to
the average rate of $12.91 per hour for non-supervisor skilled workers
statewide. The evidence demonstrates that the
hourly rate of a Hugo police officer is 31.73% behind the hourly rate of their
counterparts in the skilled trades and industries. The annual rate of pay for a
Hugo police officer is 48.88% behind the annual rate of pay for skilled trade and
industry workers statewide. The source of the hourly rates for eastern Oklahoma
is the AFL/CIO which publishes the rates of pay for skilled union workers in
counties in the eastern half of Oklahoma. A union boilermaker in Choctaw
County, Oklahoma earns $22.64 per hour. The average hourly rate of skilled
trade and industry workers in the local operating area is $18.97 per hour. Hugo
police officers earn $9.80 per hour and are 93.57% behind the wage market. The
City did not present any evidence to rebut the FOP’s factor one comparison. The
FOP’s offer of a 6% wage increase is fully supported and justified by factor
one.
Factor 3—Comparison of Hugo Police Pay to the Rate of Pay
for Police Officers in Cities of Comparable Size and Economic Status within and
without the State of Oklahoma.
Total compensation for a Hugo police officer is $29,809.00 annually.
Hugo officers are 31.25% behind in total compensation and are 35.40% behind the
level of benefits provided in other police departments. In wages only, Hugo
officers are 29.33% behind their counterparts in other police departments.
Statewide, Hugo police officers
are 34.99% behind their counterparts at median pay. Hugo officers lag 74.28%
behind statewide police wages. Second, Hugo police officers are 43.69% behind
the mean wage rate for all police officers in the state. Lastly, Hugo officers
are 55.45% behind the wage rate of police officers in surrounding states
(Louisiana, Texas, and Arkansas).
The FOP’s 6% wage increase offer
is amply supported and justified by factor three evidence.
Factor 4—Interest and Welfare of the Public and Revenues
Available to the Municipality.
Factor four contains two
considerations, interest and welfare of the public and revenues available to
the municipality. The FOP will address each part of factor four in separate
sections.
Interest and Welfare of the Public—In the past year, several
officers left the Hugo Police Department, after they became certified police
officers, because they were able to find higher paying jobs with other
employers. One officer left Hugo to work a security job which paid twice the
pay of the Hugo Police Department. Losing trained officers because the rate of
pay is too low is a concern because the City of Hugo will not gain the benefits
of a seasoned and experienced police force. That is not in the welfare of the
public. Additionally, the cost of training an officer is high and it is not in
the interest of the public to spend money to train an officer and then lose the
officer because the rate of pay is too low.
Hugo officers are paid so low
that they have Oklahoma food stamp cards. One officer’s children are on the
Oklahoma health insurance subsidy because of his low income level. It can
hardly be argued that it is in the interest and welfare of the public to have
Hugo police officers on food stamps and state health care subsidies. The public
welfare requires a well trained and experienced police department to provide
the public safety needs. That necessarily requires competitive pay for police
officers in order to retain skilled employees and attract qualified candidates.
The FOP wage offers helps to improve the working condition of Hugo officers to
assist in achieving this goal.
Revenue Available—Implementing
the FOP’s 6% wage increase will cost $24,593.00 for the entire year. The City
has no evidence to dispute this cost calculation. Considerable and overwhelming
evidence was presented at the hearing that the City has ample revenue to move
around to implement the 6% increase.
Factor 5—Comparison of Peculiarities of Employment
including Hazards of Employment, Physical Qualification, Mental Qualifications
and Job Training and Skills.
It is not disputed that police
work is dangerous and hazardous. However Hugo police officers are experiencing
a rapid increase in hazardous conditions. The FOP’s wage increase offer is
necessary to help compensate Hugo officers, in part, for the increasing dangers
they face. For that reason, factor five will be addressed.
There has been a large increase
in the number of violent felony crimes committed in the most recent year
compared with the previous year. Assaults on Hugo officers are also on the
increase. Additionally, the City of Hugo is experiencing an increase in drug
trafficking and trade.
Hugo officer pay is uncommonly
low when the level of training and requirements they must have are considered.
Hugo officers must be at least 21 years old with no felony record and before
they can be hired they must pass the state’s police pension physical
requirements, strength and endurance testing. Officers also must complete
police training, known as CLEET (Council on Law Enforcement Education and
Training) training, a nine week residency police academy, in order to gain
status as an Oklahoma certified police officer. After that, the officer must
complete and pass field training with the Hugo police department.
The FOP’s last best offer is
supported by the evidence that Hugo officers are experiencing increasing
hazards and are required to have a high level of training but yet are severely
below the market in wages.
Conclusion
The FOP’s offer must be selected
as the contract of the parties for fiscal year 2004-2005. The City’s offer
seeks without justification to disrupt the nature of the bargaining unit and to
reduce a fundamental benefit for police officers, a uniform. If one were so
inclined, the City’s offer can be said to be taking the shirt off of the
officers’ backs. The City’s offer is invalid because, by its terms, the
contract effective date has already come and gone. That will give rise to litigation
over the viability of the contract. The FOP’s contract offer requests a 6% wage
increase for police officers. Hugo officers are 29.33% behind in wages when
compared to their counterparts in local cities. The FOP’s wage increase will at
least move Hugo officers a little closer to the acceptable pay rates for police
officers. Hugo officers are required to be highly trained and are facing an
increasingly dangerous environment.
While the City of Hugo has
various expenditures, like most cities do, Hugo has the available revenue
through various sources to fund the FOP’s wage offer. As stated during the
hearing, the City Council can choose to fund the FOP’s offer if the FOP’s offer
is selected by the Arbitrators. Simply because Hugo has chosen not to provide
the officers a pay raise does not mean the City does not have the available
revenue pursuant to the FPAA. The FOP respectfully requests the Arbitration
panel select the FOP’s last best offer as the contract of the parties for
2004-2005.
City Position 2
Last Best Offer
The City’s last best offer is
collectively the terms and offers contained in its arbitration statement. The
FOP would have the Board deny the City’s last best offer as a legal offer. The
FOP argues it cannot be accepted as a legal contract because its terms have
already expired. However, as a matter of law, the attachment, the 2003-2004
Collective Bargaining Agreement, has not expired and continues in full force
and effect.
The FOP implies that the
acceptance of the City’s last best offer would necessitate the Board to amend
or supplement the offer, contrary to 11 O. S. §51-108(A)(4).
The City is not asking the Board to amend its offer. It is asking the Board to “adopt”
the 2003-2004 Collective Bargaining Agreement between the City and the FOP with
the amendments as listed in the Arbitration Statement as the 2004-2005
Agreement. The definition of the word “adopt” is to accept formally and put
into effect, which is precisely what the City requests the Board to do.
Adoption of the previous Agreement does not require the Board to modify, add to
or delete from its last best offer.
Oklahoma statute 11 O.S.
§41-108(a)(2) does not require the parties to submit
an actual Collective Bargaining Agreement as their last best offer. If that
were the case, the Board could not accept the FOP’s last best offer either.
Although the FOP carefully substituted the date of the fiscal year the
Agreement is to take effect, it does not provide an acknowledgment page for the
parties. Oklahoma law requires a city clerk to attest and affix the seal of the
City to documents as required by law or by ordinance. Furthermore, the mayor
shall sign all written obligations of the City as the Council may require; to
date the Council requires the mayor to sign the Collective Bargaining
Agreement. Again, the Board may not modify, add to or delete from the last best
offer of either party.
The City argued in its opening
statement that the FOP’s contention the City’s last best offer cannot be
accepted as a legal contract exalts form over substance. If one accepts the FOP’s
argument, it follows that neither party has submitted a valid last best offer,
which the Board should decline to do. The Oklahoma Legislature intended the
parties to submit only unresolved issues to arbitration as provided by the
plain language of 11 O.S. §51-106. It is preposterous to assume the date of the
new agreement is an unresolved issue. Agreements which are reached as a result
of selection by the arbitration board or by election shall be effective on the
first day of the fiscal year involved regardless of the date of the final
selection.
Consequently, the terms and
offers in the City’s arbitration statement, which are collectively its last
best offer, may be accepted by the Board. The effective date of the new
Agreement is not at issue. The City’s last best offer is simply to adopt last
year’s Agreement with the noted amendments.
Good Faith Bargaining
The FOP puts forward the
proposition that the City did not uphold its statutory duty to bargain in good
faith with the FOP. It argues the arbitration statement containing the City’s
last best offer is in reality a regressive offer; that is, it is worse than the
last offer made during negotiation. Officer Josh Braziel, a member of the FOP’s
negotiation team, testified that the City proposed the two changes contained in
its last best offer during negotiations, provided the FOP a written proposal,
and confirmed March 31, 2004 as the date of the City’s written proposal. He
also testified that the City withdrew the two proposed changes.
Nevertheless, Officer Braziel
could not recall the date of the alleged withdrawal. Moreover, the officer
testified the alleged conversation concerning the withdrawal was not at
scheduled negotiation meeting. He further testified the City did not provide
written documentation of the alleged withdrawal of the proposed changes as it
had when the changes were proposed.
Officer Braziel’s testimony is
the FOP’s sole evidence of its alleged bad faith bargaining by the City.
However, the City maintains his testimony does not show bad-faith bargaining on
the part of the City. He admits the alleged conversation did not occur during a
scheduled negotiation meeting. Furthermore, the officer’s inability to recall
the exact date of the alleged withdrawal calls into question the reliability of
his memory. There is no written documentation the City withdrew its offers
regarding probationary officers and uniforms even though it was the City’s
practice to document its offers. In short, without written documentation or
corroborating testimony on the alleged withdrawal, there is no basis for the
Board to find that the City did not bargain in good faith.
Selection of Last Best Offer
The relevant Oklahoma statute 11
O.S. §51-109 sets forth the five disjunctive, exclusive factors the arbitrators
may use is selecting the City’s last best offer or the FOP’s last best offer.
The statute allows the arbitrators to allocate the given weight of each factor
in arriving at their decision. The first factor is comparison of wage rates,
insurance, retirement, other fringe benefits or hourly conditions of employment
of the fire department or police department in question with prevailing wage
rates or hourly conditions of employment of skilled employees of the building
trades and industry in the local operating area involved.
The FOP introduced FOP exhibit
1, page 1 and presented testimony by Darrel L. Hatfield regarding factor number
one. FOP exhibit 1, page 1 compares skilled workers statewide. According to the
exhibit, Hugo policeman are 31.73%, or $3.11 per hour, below the median wage of
skilled trade workers statewide. The FOP further introduce
FOP exhibit 1, page 2 and testimony by Mr. Hatfield regarding the mean wage of
skilled trade workers statewide. According to the exhibit, Hugo policeman are
48.88% or $9,963.00 per 2,080 hours, below the mean wage of skilled trade
workers statewide.
However, the above analysis
ignores the requirement of factor number one that the comparison wage rates of
the police department in question is to be made to skilled employees of the building
trades and industry in the local operating area involved. Factor number one
does not allow a comparison made on the state level. It plainly states the
comparison is to be made to local operating area involved. If the Legislature
had intended factor number one to include comparisons of state wages, it would
have so stated. Accordingly, for purposes of factor number one, exhibit 1 pages
1 and 2 and the attendant testimony should be disregarded by the arbitration
panel.
Lastly, the FOP introduced FOP
exhibit 1, page 3 and presented testimony by Darrel L. Hatfield regarding
factor number one. This comparison is the average wage rate of trade workers in
eastern Oklahoma to the wage rate of the Hugo police department. This exhibit
shows Hugo policemen are 93.57%, or $9.17 per hour, below the average wage of
skilled trade workers in eastern Oklahoma.
The FOP argues the eastern half
of Oklahoma is within the local operating area as required by factor number
one. However, Mr. Hatfield freely admits the trade workers are out of Tulsa or
Muskogee. The city of Tulsa has a population of 393,049. Muskogee has a
population of 38,310. Obviously, the FOP is comparing two metropolitan areas of
the state to the rural city of Hugo, the population of which is 5,536.
The City asserts a more
representative local operating area is the southeastern portion of the state,
which is largely rural, as is Hugo. However, no evidence was presented
regarding the southeastern Oklahoma. Nevertheless, the City urges the Board to
give less weight to the FOP’s evidence regarding factor number one than it
would if wage rates of trade workers in a truly representative local operating
area had been given.
The second factor the Board may
consider in reaching its decision is a comparison of wage rates, insurance,
retirement, other fringe benefits or hourly conditions of employment of the
fire department or police department in question with wage rates or hourly
conditions of employment maintained for the same or similar work of employees
exhibiting like or similar skills under the same or similar working conditions
in the local operating area involved. Neither the FOP or
the City presented evidence on factor number two. Therefore, the arbitration
panel should ignore factor number two.
The next factor the Board is to
consider is a comparison of wage rates, insurance, retirement, other fringe
benefits or hourly conditions of employment of the fire department or police
department in question with wage rates or hourly conditions of employment of
fire departments or police departments in cities, towns or other political
subdivisions of comparable size and economic status both within and without the
State of Oklahoma.
The FOP presented FOP exhibit 2
which purported to list a comparison of wage rates of police officers in
comparable-sized cities. However, the exhibit and indeed, initially, Mr.
Hatfield’s testimony did not introduce any evidence regarding the population of
the cities listed in the exhibit. Moreover, no evidence was presented regarding
the economic status of these cities. Upon redirect examination, Mr. Hatfield
did provide the Board with the population of the cities and the general fund
balance of those cities listed in FOP exhibit 2. Conversely, FOP exhibit 3, does not show any evidence as to population or economic
status of the comparable cities within and without the State of Oklahoma.
Although, it is instructive to
the Board to have the population of the cities being compared to Hugo, without
noting the economic status of each city, the FOP does not give sufficient
information to the Board for it to make the kind of analysis that is required
under factor number three. Merely reciting the population of a city and the
balance of its general fund does not clearly portray its economic status.
Moreover, the cities of Ada and McAlester should be excluded from the
comparisons, as each of these cities has a population of nearly three times the
population of Hugo.
Consequently, the City urges the
Board to give little or no weight to the evidence presented by the FOP
concerning factor number three. To do otherwise results in
the proverbial comparison of apples to oranges. The Oklahoma Legislature
obviously desired the comparison to be made to like cities with comparable size
and comparable economic status and without that information,
the Board cannot comply with the requirements of factor number three.
Certainly, FOP exhibit 3 should be discounted entirely because it does not
comply with the requirements of factor number three regarding comparable size
and economic status of the cities to which the comparison is made.
The fourth factor the Board is
to consider is the interest and welfare of the public and revenues available to
the municipality. The first portion of this factor may be somewhat difficult to
determine in that the interest and welfare of the public is such a vague term
and subject to competing interpretations. The only explicit evidence the FOP
offered on this point was through the testimony of Josh Braziel. He testified
that it would be contrary to the interest and welfare of the public if Hugo is
not able to retain experienced officers and if the police officers have to
resort to food stamps, both because of salary limitations. There is competing evidence
whether or not the City’s revenues are increasing or decreasing.
On the other hand, the City
presented evidence through its exhibits and its offered testimony that
increasing of the wages of the Hugo police is impliedly contrary to the interest
and welfare of the public due to the outstanding debts of the City. The City
offered uncontroverted testimony that they will have to reduce the workforce.
The City has a constitutional mandate to have a balanced budget and it is
struggling to reduce its outstanding indebtedness carried over from the
2003-2004 fiscal year. Increasing the wages of the FOP will only add to its
current fiscal troubles.
The City is doing everything it
can to decrease its expenditures, including asking the FOP to accept a reduction
in the uniform allowance. At the same time, revenues for the Hugo are less than
expected. No one in the employ of the City received pay increases for the
fiscal year 2004-2005 with the exception of the fire department. However, the
money for the firefighters’ increase was provided by the Choctaw County
Ambulance Authority. The City advocates that the Board find it contrary to the
interest and welfare of the public to increase the FOP wages at this time.
Finally, the last factor for the
Board to review is the comparison of peculiarities of employment in regard to
other trades or professions, including specifically: hazards of employment,
physical qualifications, educational qualifications, mental qualifications, and
job training and skills. The City does not dispute the peculiarities of its
police officers’ employment as compared to other trades or professions.
In summary, the City
respectfully requests the Board accept its last best offer as the agreement
between the City and the FOP. In doing so, the City is asking the Board to give
greater weight to factor number four than the other factors, as it is allowed under
statute 11 O.S. §51-109. The interest and welfare of the public are best served
by a City whose budget is balanced as required by the Constitution. Accepting
the FOP’s last best offer will place an even greater burden on the City’s
finances. It is extremely unfortunate for all of the citizens of Hugo,
especially those who work for the City, to have the financial difficulties it
is experiencing. Perhaps, Councilperson Wanda Logan expressed it best when she
told the Board.
You have no excess money, whether
you be a city, a person or anything else, until all
your bills are paid; and if we could afford to do so, we’d be more than happy
to give a raise to all of our employees. I think they deserve it. But when you
come to a point where you can’t pay your bills, you’ve got to do something,
even though it might be unpleasant.
DISCUSSION AND AWARD
The Arbitration Board must
select one of the last best offers of the parties, as a package, without
modification. The Board’s decision will be final with one exception. If we
decide in favor of the FOP, the City has the option of submitting the same two
offers to a vote of the citizens of Hugo. If we decide for the City, the FOP is
bound by our decision without fight of appeal.
As the neutral member of the Board, I agree with most of the FOP’s
arguments. More specifically, I was persuaded that to serve and protect the
citizens of Hugo, the City must find a way to attract and retain competent
police officers. Under its present pay policies, the City cannot make that
promise to the people who depend on the city for their security. The
officers pay rates are not competitive locally or regionally. Attracting and
retaining competent officers is a problem today for the City of Hugo and can be
expected to worsen as time goes by. I understand that the City is in dire
financial straits. The City’s attorney was persuasive in that regard. However,
the City needs to find a way to raise funds in some way, either by changing the
priority of allocating revenues or through a local tax, to better protect the
citizens of Hugo. It seems to me that the best way to do that is to give the
citizens an opportunity to voice their opinion on this issue.
On October 22, 2004, Arbitrator
Bill Young agreed with the FOP’s arguments; Arbitrator Dalton “Red” Erwin
agreed with the City’s arguments. I find in favor of the FOP and instruct the
City to exercise their option to submit the best final offers of the FOP and
the City to the citizens of Hugo and let the people decide.
Notes
1 From the FOP brief with
significant editing.
2 From the City’s
brief with editing.