Loading...
HomeMy WebLinkAboutRESOLUTION - 51-05 - 9/27/2005 - ARBITRATION AWARD ELK GROVE FIREFIGHTERS ASSOCIATION LOCAL 2340RESOLUTION NO. 51-05 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AN ARBITRATION AWARD BETWEEN THE VILLAGE OF ELK GROVE VILLAGE AND THE ELK GROVE VILLAGE FIREFIGHTERS ASSOCIATION LOCAL 2340 INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, AFL-CIO, INC. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Board of Trustees of the Village of Elk Grove Village, Counties of Cook and DuPage, State of Illinois as follows: Section 1: That the Mayor and Board of Trustees hereby accept the INTEREST ARBITRATION AWARD BETWEEN THE VILLAGE OF ELK GROVE VILLAGE AND THE ELK GROVE FIREFIGHTERS ASSOCIATION LOCAL 2340 INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, AFL-CIO, INC. a copy of which is attached hereto and made a part hereof as if fully set forth and the Village Clerk is authorized to attest said documents upon the signature of the Mayor. Section 2: That this Resolution shall be in full force and effect from and after its passage and approval according to law. VOTE: AYES: 6 NAYS: 0 ABSENT: 0 PASSED this 27th day of September 2005. APPROVED this 27th day of September 2005. APPROVED: Mayor Craig B. Johnson Village of Elk Grove Village ATTEST: Ann I. Walsh, Village Clerk By: Margit C. Thompson Deputy Village Clerk AgreementArb itration Fire.doc R In the Matter of Interest Arbitration Between ELK GROVE VILLAGE FIREFIGHTERS ASSOCIATION, LOCAL 2340, INTERNATIONL ASSOCIATION OF FIREFIGHTERS, AFL-CIO, CLC, Union, and VILLAGE OF ELK GROVE VILLAGE Employer. Appearances RECEIVED SEP 0 7 2005 SEYFARTH, SHAW Firefighter Lieutenants' Pay Case No. S -MA -04-262 Tripartite Arbitration Panel Marvin F. Hill, Jr. (neutral) James Baird (employer appointed) Kevin Quinn (union appointed) For the Union: Joel A. D'Alba, Esq. Asher, Gittler, Greenfield & D'Alba, Ltd. 200 West Jackson Blvd. --Suite 1900 Chicago, IL 60606 312-263-1500 For the Employer: R. Theodore Clark, Jr. Seyfarth Shaw LLP 55 East Monroe Street, Ste 4200 Chicago, Illinois 60603 312-346-8000 I. BACKGROUND, FACTS, AND STATEMENT OF JURISDICTION Pursuant to provisions of Section 14 of the Illinois Public Labor Relations Act ("IPLRA"), the parties selected the undersigned as the Interest Arbitrator to decide 12 unresolved economic issues and three unresolved non -economic issues. A hearing was held before the Arbitrator and the Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL Z parties' designated Arbitrators, James Baird, Esq., for the Village and Kevin Quinn for the Union, in Elk Grove Village on September 13, October 13, November 3 and 4, 2004, January 17 and 20, April 6 and 20, and May 20, 2005. On the second day of the hearing, the parties resolved one of the issues previously in dispute, i.e., duration of the agreement. Thus, on October 13, 2004, the parties mutually agreed, as summarized by the Arbitrator, "... the length of the successor agreement will be four years," i.e., from May 1, 2003 through April 30, 2007 (Tr. 57). Moreover, on that same date the parties "agreed that salaries for firefighters would be an issue separate from salaries for fire lieutenants" (Tr. 57-58). The parties thereafter executed on October 13, 2004, a Stipulation of Issues in Dispute, which was received as Joint Exhibit 2. This Stipulation listed 12 economic issues and 3 non -economic issues (JX 2). Thereafter, the parties agreed to exchange their final offers on all of the issues that were then in dispute on October 20, 2004 (Tr. 58-59). The Union's final offers, including its final offer on fire lieutenant salaries, was received into evidence as Joint Exhibit 3A. The Village's final offers, including its final offer on fire lieutenant salaries, was received into evidence as Joint Exhibit 313). Following the exchange of final offers, 11 of the 12 economic issues and all three non- economic issues were resolved either by the parties or the parties' Board representatives. The following chart (excerpted from the Employer's post -hearing Brief) documents the resolution of all these issues: Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 2 ISSUE DISPOSITION Economic Issue 1 — Salaries for As agreed to by the parties' designated Arbitrators and Firefighters (Section 14.1) memorialized by the Chair, the Village's final offer on salaries was accepted (3/28/05 transcript, at 2). Economic Issue 3 — Paramedic Pay The Union requested and the Village agreed that the (Section 14.4) Arbitrator should award the Union's final offer on this issue (Tr. 80-81); the Arbitrator subsequently stated "that the Union's final offer is being awarded (Tr. 107). Economic Issue 4 — Longevity Pay The parties agreed that longevity pay would be increased by (Section 14.5) $50 at the 10 year, 15 year, and 20 year levels effective May 1, 2003, May 1, 2004, and May 1, 2005, and by $25 at each such level effective May 1, 2006 (Tr. 377-79). Economic Issue 5 — Retroactivity Both parties agreed that there was no substantive difference (Section 14.6) between the parties' final offers on retroactivity (Tr. 83); the Arbitrator subsequently stated that he thought that "the parties are.in agreement as to retroactivity" (Tr. 107), to which neither party disagreed. Economic Issue 6 — Hours of Work As agreed to by the parties' designated Arbitrators and and Overtime and Holidays (Articles memorialized by the Chair, the Village's final offer on this XIII and XVIII) issue was accepted (3/28/05 transcript, at p. 2). Economic Issue 7 — Insurance (Article The Union withdrew its final offer on this issue and accepted XV) the Village's final offer to add a new Section 15.9 to Article XV (Insurance) (Tr. 93-94); the Arbitrator noted that it was his "understanding ... that the Union has accepted the employer's proposal" (Tr. 108). Economic 8 — Sick Leave (Section As agreed to by the parties' designated Arbitrators and 17.1) memorialized by the Chair, the Union's final offer to maintain the status quo on sick leave was accepted (3/28/05 transcript, at p. 2). Economic Issue 9 — Emergency Leave As noted by the Arbitrator, "[t]he Union accepts the (Section 17.2) Employer's proposal" on this issue (Tr. 108). Economic Issue 10 — Cost of Training The parties agreed that the Village's final offer on this issue and Equipment for New Employees would be incorporated as part of the Arbitrator's award (Tr. (Section 19.22) 377-79). Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 3 ISSUE DISPOSITION Economic Issue 11 — Reimbursement The Union withdrew its final offer and accepted the Village's of Costs of Providing Information to final offer, to which the Village stated that it had no objection the Union (Tr. 95, 109). Economic Issue 12 — Inoculations and The Union withdrew its final offer and accepted the Village's Medication final offer, which was to not have a contractual provision concerning inoculations and medication (Tr. 95-96, 109) Non -Economic Issue 1 —Layoff The Union withdrew its final offer and accepted the Village's (Section 12.4) final offer, which was to maintain the status quo with respect to Section 12.4 (Tr. 96) Non -Economic Issue 2 — Paramedics The parties agreed that the Village's final offer on this issue (Section 19.16) would be incorporated as part of the Arbitrator's award but with the years of participation as a paramedic changed from 10 years to eight years (Tr. 377-79). Economic Issue 3 — Promotions On May 20, 2005, the parties TA's comprehensive language for a new promotions article, and agreed that it should be incorporated as part of the Arbitrator's award (Tr. 753-54; JX 4). II. ISSUE FOR RESOLUTION One issue remains for resolution, that of pay for Fire Lieutenants. III. POSITION OF THE FIREFIGHTERS The Union's Final Offer On lieutenants' Pay: Section 14.2. --Fire Lieutenants' Salaries and Merit Adjustments. 2003-2004. Effective May 1, 2003, the pay range maximum for fire lieutenants shall be increased by 5.2652'% to $75,489. No lieutenant can receive an annual wage below the minimum of the range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between zero percent and 5.7652 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment of between zero percent and 3.5 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric "exceeds standards" shall receive a merit adjustment of 4.25 percent. Employees whose Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL .4 annual average annual evaluation "far exceeds standards" shall receive a merit adjustment of 4.7652 percent. Employees shall also be given an additional merit adjustment of up to one percent on the basis of an evaluation by the fire chief, which shall consist of four components: Acting Captain or Fire Officer II; Team Leader, Station Officer or Committee Chairman; budget activity, special projects, shift training instructor or CPR; and team member or committee member. A lieutenant shall receive 0.25 percent for participation in any one of these components up to a maximum of 1.00 for participation in all four components. In addition, to the foregoing merit adjustments for the 2003-2004 fiscal year, the fire chief and the village manager shall award a range adjustment of one percent to those lieutenants above the midpoint of the salary range and 2 percent to those lieutenants below the midpoint of the salary range (67025). 2004-2005. Effective May 1, 2004, the pay range maximum for fire lieutenants shall be increased by 3.7590% to $78,327. No lieutenant can receive an annual wage below the minimum of the range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between zero percent and 4.2590 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment of between zero percent and 2.25 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric •"exceeds standards" shall receive a merit adjustment of 2.75 percent. Employees whose annual average annual evaluation "far exceeds standards" shall receive a merit adjustment of 3.2590 percent. Employees shall also be given an additional merit adjustment of up to .one percent on the basis of an evaluation by the fire chief, which shall consist of four components: Acting Captain or Fire Officer II; Team Leader, Station Officer or Committee Chairman; budget activity, special projects, shift training instructor or CPR; and team member or committee member. A lieutenant shall receive 0.25 percent for participation in any one of these components up to a maximum of 1.00 for participation in all four components. In addition, to the foregoing merit adjustments for the 2004-2005 fiscal year, the fire chief and the village manager shall award a range adjustment of one percent to those lieutenants above the midpoint of the salary range and 2 percent to those lieutenants below the midpoint of the salary range (70398). 2005-2006. Effective May 1, 2005, the pay range maximum for fire lieutenants shall be increased by 4.25 % to $81,656. No lieutenant. can receive an annual wage below the minimum of the range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 5 The merit adjustments shall be between zero percent and 4.75 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment of between zero percent and 2.75 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric "exceeds standards" shall receive a merit adjustment of 3.25 percent. Employees whose annual average annual evaluation "far exceeds standards" shall receive a merit adjustment of 3.75 percent. Employees shall also be given an additional merit adjustment of up to one percent on the basis of an evaluation by the fire chief, which shall consist of four components: Acting Captain or Fire Officer II; Team Leader, Station Officer or Committee Chairman; budget activity, special projects, shift training instructor or CPR; and team member or committee member. A lieutenant shall receive 0.25 percent for participation in any one of these components up to a maximum of 1.00 for participation in all four components. In addition, to the foregoing merit adjustments for the 2005-2006 fiscal year, the fire chief and the village manager shall award a range adjustment of one percent to those lieutenants above the midpoint of the salary range and 2 percent to those lieutenants below the midpoint of the salary range (72881). 2006-2007. Effective May 1, 2006, the pay range maximum for fire lieutenants shall be increased by 4.25 % to $85,126. No lieutenant can receive an annual wage below the minimum of the range nor above the'maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between zero percent and 4.75 percent. Employees whose annual average evaluation from their immediate supervisor ori a numeric standard "meets standards" shall receive a merit adjustment of between zero percent and 2.75 percent. Employees whose annual average evaluation from their immediate'supervisor on a numeric "exceeds standards" shall receive a merit adjustment of 3.25 percent. Employees whose annual average annual evaluation "far exceeds standards" shall receive a merit adjustment of 3.75 percent. Employees shall also be given an additional merit adjustment of up to one percent on the basis of an evaluation by the fire chief, which shall consist of four components: Acting Captain or Fire Officer II; Team Leader, Station Officer or Committee Chairman; budget activity, special projects; shift training instructor or CPR; and team member or committee member. A lieutenant shall receive 0.25 percent for participation in any one of these components up to a maximum of 1.00 for participation in all four components. In addition, to the foregoing "merit adjustments .for the 2006=2007 fiscal year,' the fire chief and the village manager shall. award a range adjustment of one percent to those lieutenants above the midpoint of the salary range and 2 percent to those lieutenants below the midpoint of the salary range (75810). Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & . Village of Elk Grove, IL 6 The position of the Union, as outlined in its lengthy post -hearing brief, is summarized as follows: A. The Employer's Offer For Lieutenants' Pay Should Be Rejected Because It Does Not Assure Pay Increases That Are Competitive In the Comparable External Market Average Elk Grove Lieutenant Base Pay Is Near The Bottom Of The Comparables 1. 75% of Comparable Fire Lieutenants Are At Maximum Pay Levels The Union first submits that more than 75 percent of the fire lieutenants in the comparable jurisdictions in 2004 were paid at the maximum level of their respective towns' pay steps. In the Union's eyes, this fact alone demonstrates the major financial problems for Elk Grove's lieutenants. They have a relatively low average annual salary and are not nor will they be paid at the maximum pay level of the fire lieutenants' pay range during the new contract if the employer's final offer is awarded. (See, Union Exhibit 47)(Brieffor the Union at 7). By not placing any lieutenant at the maximum pay level, argues the Union, Elk Grove has driven down -the mean annual salary for its lieutenants compared to other towns. The Union points out that an analysis of fire lieutenants' pay steps in the comparable communities for 2003 and 2004 shows that 69 percent of the lieutenants were paid at top pay in 2003 and 75 percent of lieutenants were paid at top pay in 2004. (Union Exhibit 47). Of the 128 lieutenants in 2004, only 31 were not paid at top. pay, and in 2003, 42 lieutenants out of 137 were not paid at top pay. Int 2003, the mean annual salary for the Elk Grove lieutenants under the employer's proposal would be $68:,712, a very large difference of $6,379 below the maximum salary of $75,091 for fire .lieutenants offered by the employer. The Union notes that the same pattern of not reaching the maximum pay level will be repeated 'in each of the additional years of the collective bargaining agreement for the salary increases proposed by the employer. The 2004 mean annual salary of $71,571 would be 92 percent of top salary; the mean annual salary for 2005 would be 93 percent of top salary, and the mean annual salary for 2006 would be 94 percent of annual salary. The Union notes Elk Grove's mean lieutenant salaries for 2003 and 2004 will be well below the average for maximum base pay for comparable fire lieutenants. Table 5 (Brief at 5) summarizes these differences. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Greve, IL 7 TABLE 5 2003 and 200:4 MEAN FIRE LIEUTENANTS' SALARY The 2003 mean comparable salary is $4,423 greater than Elk Grove's, and the 2004 mean comparable salary is $5,750 higher than Elk Grove's. See Union Exhibits 17(g) and 17(0). In terms of relative rank, for 2004 the Elk Grove mean salary is last and for 2003 it is second to last among the comparables, and for 2004 Elk Grove's mean salary dropped $1,327 further below the mean for all comparables. (Brief at 13). 2. Total Compensation For Elk Grove Lieutenants Is Far From The Top The Union's total compensation charts also demonstrate that the Elk Grove lieutenants' salaries do not rank at the top of the comparables, which is contrary to the analysis offered. by the employer based only upon maximum pay rates. The Union's charts for total compensation, Union Exhibits 17(i) and 17(n) (revised on June 23, 2005), show total compensation based upon maximum base pay, maximum longevity and other compensation, which consists of holiday pay, special team play and incentive pay, as indicated in.the footnotes of each exhibit. These two exhibits represent the salary numbers for 2003 and 2004 and were adjusted based upon employees' healthcare contributions. See, Union Exhibits 60 and 61. Total compensation reduced by healthcare contributions places Elk Grove lieutenants in relative rank six among the comparables. The Elk Grove lieutenants have the second highest health insurance contribution level for any of the comparables. Union Exhibit 61. The range for health care contributions among the comparable employees is zero to $2,090.64 on an annual basis. The average contribution for the eleven comparables for which data is available is $976, which is $673 below the employee contribution for Elk Grove. The comparables' healthcare employee contribution average is approximately two-thirds of the annual Elk Grove employee contribution. This employee contribution in Elk Grove reduces the relative rank for total compensation for 2003 from five to six. Union Exhibits 17(i) (revised 6/23/05) and Union Exhibit 61. For 2004, there is a similar reduction in rank. Union Exhibits 61 and 17(i) (revised 6/23/05). For 2005, the relative rank will drop to seven. See, Table 6 below. TABLE 6 2005 COMPARBLE WAGES, TOTAL COPENSATION INCLUDING HEALTH CARE CONTRIBUTIONS OF EMPLOYEES' Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 8 .-20'03 2004 Mean Fire Lieutenant Max. 73135 77321 Base Salary Mean Fire Lieutenant Salary- 68712 71571 Elk Grove The 2003 mean comparable salary is $4,423 greater than Elk Grove's, and the 2004 mean comparable salary is $5,750 higher than Elk Grove's. See Union Exhibits 17(g) and 17(0). In terms of relative rank, for 2004 the Elk Grove mean salary is last and for 2003 it is second to last among the comparables, and for 2004 Elk Grove's mean salary dropped $1,327 further below the mean for all comparables. (Brief at 13). 2. Total Compensation For Elk Grove Lieutenants Is Far From The Top The Union's total compensation charts also demonstrate that the Elk Grove lieutenants' salaries do not rank at the top of the comparables, which is contrary to the analysis offered. by the employer based only upon maximum pay rates. The Union's charts for total compensation, Union Exhibits 17(i) and 17(n) (revised on June 23, 2005), show total compensation based upon maximum base pay, maximum longevity and other compensation, which consists of holiday pay, special team play and incentive pay, as indicated in.the footnotes of each exhibit. These two exhibits represent the salary numbers for 2003 and 2004 and were adjusted based upon employees' healthcare contributions. See, Union Exhibits 60 and 61. Total compensation reduced by healthcare contributions places Elk Grove lieutenants in relative rank six among the comparables. The Elk Grove lieutenants have the second highest health insurance contribution level for any of the comparables. Union Exhibit 61. The range for health care contributions among the comparable employees is zero to $2,090.64 on an annual basis. The average contribution for the eleven comparables for which data is available is $976, which is $673 below the employee contribution for Elk Grove. The comparables' healthcare employee contribution average is approximately two-thirds of the annual Elk Grove employee contribution. This employee contribution in Elk Grove reduces the relative rank for total compensation for 2003 from five to six. Union Exhibits 17(i) (revised 6/23/05) and Union Exhibit 61. For 2004, there is a similar reduction in rank. Union Exhibits 61 and 17(i) (revised 6/23/05). For 2005, the relative rank will drop to seven. See, Table 6 below. TABLE 6 2005 COMPARBLE WAGES, TOTAL COPENSATION INCLUDING HEALTH CARE CONTRIBUTIONS OF EMPLOYEES' Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 8 Cities Total Salary Max. Longevity Other . Comp. Total. Salary : Health Care Total Comp. Arlington Heights 79,719 1100 476 81,294 1284 80010 Buffalo Grove Des Plaines 82,922 2950 7979 93,851 1492 92359 Elgin 78,297 78,297 Elmhurst 78,297 78,297 Hoffman Estates 77,862 750 1575 80,187 1485 78,702 Lombard, 87,716 87,716 3324 84,392 Mt. Prospect 77,277 700 6653 84,630 948 83646 Northbrook 78,919 1200 8366 88,485 900 87585 Park Ridge . 85,341 2491 87,832 1587 86245 Rolling Meadows 82,255 1400 2600 86,255 .2400 83855 Skokie 76,262 1600 3400 81,262 1596 79,666 Wheeling 79,629 600 2000 82,229 905 81324 Elk Grove Employer Offer 80,051 800 3300 84,151 2255 81896 Elk Grove Union Offer 81,656 800 3300 85,756 2255 83501 Using total compensation and adjusting it by healthcare contributions is a more realistic way of assessing the relative placement of Elk Grove among the comparables. Maximum Pay Cannot Be Reached By Lieutenants The Union further asserts that the maximum pay for the Elk Grove fire lieutenants cannot be reached by any current lieutenant pursuant to the employer's proposal for the four-year contract term. For this additional reason, the employer's salary analysis based upon maximum base pay should be rejected. (Brief at 15-18). 4. - External Comparisons Are Extremely Important The Union points out that the comparison of wages in comparable communities is one of the -key factors the arbitrator is to consider in deciding this case and should be given a dominant role in awarding pay increases sought by the Union. The Union asserts external comparisons were a driving factor, if not the most important factor in the -1999 collective bargaining negotiations that lead to a significant wage increase for firefighters and lieutenants. 'The lieutenants received a 7.2 salary increase for that year "to bring -them up in that range of comparable." (Brief at 19). According to the Union, the Employer's final .offer does not maintain the relative ranking that the Village thought important in 1999. Case No. S -MA -04-262 - Elk Grove Village Firefighters 2340 R. Village of Elk Grove, IL - - 9 B. There Is No Historic Or Agreed -Upon $170 Pay Parity Differential Between The Salaries Of Fire Lieutenants and Police Sergeants According to the Union, no evidence has been presented to support the employer's claims of a $170 pay differential either of a historic or an agreed upon nature between fire lieutenants and police sergeants. In the Union's view, no evidence of a historical pay parity relationship of $170 between fire lieutenants and police sergeants has been presented to warrant internal comparability being used "as a straightjacket which inhibits the consideration of separate needs of particular units." (Brief at 20). C. Comparison Of Final Offers . The Employer Proposes An Unwarranted Breakthrough In the Union's view the employer's final offer departs from the parties' past practice based upon interest arbitration decisions and agreements of granting percentage wage increases. The employer's May 2003 proposal for firefighters is 5.6 percent, but the proposal for lieutenants is 4.7 percent—a difference of -0.9 percent. This is the first time after the commencement of fire fighter collective bargaining in 1992 that the employer, if its offer is accepted, will pay wage increases to lieutenants that are lower thanwage increases paid to firefighters. In all fiscal years since 1993, the lieutenants' wage increases were either equal to or greater than the wage increases paid to firefighters. Although the lieutenants' percentage pay increases were no more than 1.25 percent higher than those granted to firefighters, there has never been an instance since fiscal year 1993 in which the -lieutenants' wage increase percentage was less than that for firefighters. Table 7 below shows the largest difference in percentage wage increases occurred in May 1995, when the lieutenants received a 5.25 wage increase and firefighters received a4.0 percentage wage increase. TABLE 7 Source: Collective bargaining agreements 1993-1996; 1996-1999 and 1999 to 2003. In contrast to this. wage _history. since the first collective bargaining 'agreement, the Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 10.. ?Eire fiters I%tW-age 'Increase • lieutenants; .%"Wage Increase' - Difference May 1993 4.0% 3%+2% 1.00% May 1994 3.25% 3.25% 0% May 1995 4%" 5.25% 1.25% May 1996 3.5% ' . 4.5% 1% May 1997 3.0% 3.0% 0% May 1998 10% 3.0% 0% . . May 1999 3.5%(3.7%) 7.2% 0% May 2000 3.5%'. 4.5% 1 % May 2001 3.5% 4.5% .. 1% Source: Collective bargaining agreements 1993-1996; 1996-1999 and 1999 to 2003. In contrast to this. wage _history. since the first collective bargaining 'agreement, the Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 10.. employer's proposal for May 2003 requests the lieutenants be paid an increase of almost one percent below the increase proposed for the firefighters. The Union contends the employer offers no justification for this departure from the wage pattern, and the employer's proposal for lieutenants to receive a lower percentage wage increase than that granted to firefighters will have the adverse effect of drawing the lieutenants' salaries further away from the fourth rank that had been sought by senior village trustee Petri when he agreed to the 7.2 percent increase for lieutenants in 1999. Also, by proposing to cut by one-half the percentage increase for lieutenants attributed to the fire chief's merit points, the employer also breaks from past practice. Commencing in May 1, 2000, the chief was allowed to grant wage increases of up to one percent based on merit. The chief created a guideline with the Union's president to rate the lieutenants' proficiency in each of four separate areas. The rating system divided the 1.00 percent chief's merit points into four segments. The employer's proposal is to maintain chief points at zero to one percent effective May 1, 2003. However, as.of May 1, 2004, May 1, 2005 and May 1, 2006, the chief's points would be limited to .'a merit adjustment "of up to half of 1% (0.5)." As in the case of the percentage increases for lieutenants; the employer has offered no reason why the chief's points have been reduced by one half, nor has the employer explained why a full 1.0 percent chief's points cannot be maintained. No problems concerning the operation of this merit component have been presented by the employer. Therefore, it has not met its burden of justifying a change. 2. The Union Seeks A Catch -Up In. Wages And To Remedy A Severe Inequality In contrast to the employer's proposal, the Union's final offer maintains the practice of lieutenants' wage increases being equal to or greater than the firefighters' wage increases and does not seek to cut the one percent range for chief's points. See, Table 9. below. The Union's offer is also -nearer than the employer's average percentage wage increases for 2003, 2004 and 2005 for the external comparables. See, Union Exhibit 48. For 2004 and 2005, the employer's proposals are 0.50 and 0.75 below the averages and for 2003, the employer proposal is 0.20 above the average. TABLE 9 UNION'S PROPOSAL Date Firefighters %'Wage s IncreaseIncrease Lieutenants' . %YWage. �. :Difference May 2003 3.5% 5.2652% .5052% May 2004 3.25% 3.7590% .509% May 2005 3.75% 4.25% .5% May 2006 3.75% 4.25% .5% No wage offer, argues the Union, should be granted if it has the effect of reversing the wage movement about which the parties have previously agreed. Case No. S -MA -04.-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 11 Mindful of the general arbitral admonition to maintain the status quo, the Union's proposal to amend the third paragraph of the lieutenant pay section was designed to remedy a very serious problem that is demonstrated by both internal and external comparisons. This is far more modest than a wholesale elimination of the merit pay system, which in itself is warranted by the fact that not one of the comparable contracts- covering fire lieutenants have a merit pay system. . The inequity sought to be remedied by the Union with this proposal lies in the manner in which range adjustment is awarded. Under the current contract, sought to be maintained by the Employer, range adjustment is made at the discretion of the Village manager for an amount "of up to 2%." That adjustment is not an individual amount to be given -to each of the eighteen fire lieutenants because it is distributed from a small pool of money made available by the employer in an amount far less than 2 percent of individual salaries. Instead, the employer has allocated for the term of this new contract, a pool of 0.75 percent for 2003 and 2004 and 1 percent in 2005 and 2006 of the total salaries of lieutenants in each of those years to be allocated for range adjustments. . Maintaining the current system is also inequitable given the relatively large number of police sergeants who received maximum pay. The analysis of police sergeants' maximum pay, Union Exhibit. 52, shows that in 2003 eight police sergeants received salaries within 99 percent of maximum pay. In 2004, five sergeants were paid at maximum pay, and one sergeant was paid within one percent of maximum pay. In 2005, four sergeants were paid at maximum pay and one sergeant was paid with one percent of maximum pay. This relatively large number of sergeants in 2004, six of fourteen -42 percent, demonstrates the disparity in pay between the two groups. For fire lieutenants, maximum pay was not reached in 2002 and will not be reached in 2003 to 2006. See, Tables 1-4, supra. Between 2003 and 2006, the three highest paid fire lieutenants will not be paid within one percent of the maximum level. All three lieutenants will be at least $2,399 to $4,895 below maximum pay, as shown in Table 10 below. Table 10 Analysis of Fire Lieutenants At Maximum Pay 2002,No: of Lieufenants ,2003'.No of` Lieutenants- 2004•No..of. Lieutenants .2005.No. of Lieutenants '2006,No. of Lieutenants $71,173 (Max -0) $75,091 (Max -0) $77,513 (Max -0) $80;051 .(Max -0) $82,653 (Max -0) $69,429 (-2284-1) $72,692 (-2399-1) $77,055 (-2458-1) $77,494 (-2557-1) $80,012 (-2641-1) $67,488 (4225-1) 1 $70,660 (-4,431-1) $72,956 (-4503-1) $75,327 (-4724-1) $77,776 (-4877-1) $67,473 (-4240-1) $70,644 (-4,447-1) $72,940 (4573-1) $75,311 (4740-1) $77,758 (4895-1) The inequity in pay structure between police sergeants . and fire lieutenants is also demonstrated by a comparison of the salary ranges. For 2003 and 2004, the median of the police sergeants' annual salary range was $74,582 and $75,506, respectively. For fire lieutenants, the median number would be $68,259 under the employer's offer for 2003 and $71,815 for 2004.. The fact that fire lieutenants are not at maximum pay has also.been demonstrated by a comparison of the mean annual pay for sergeants and lieutenants which is lower for fire lieutenants because there are no employees close to maximum pay. Case No: S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 12 In the context of internal comparisons, the police sergeants have received during the term of the proposed contract MEP awards in the form of management bonuses. For 2005, the sergeants received $850; in 2004, $800; in 2003, $750. For earlier years, the police sergeants received in 2002, $750; in 2001, $675; in 2000, $650 and $550 in 1999. Union Exhibit 45. Fire lieutenants received no such awards. The employer's claim for pay parity of a $170 difference between police sergeants and fire lieutenants is clearly rebutted given the size of these MEP awards. In 2003 for instance, police sergeants pay at the maximum level would be augmented by the $750 MEP bonus, thereby giving the sergeants at maximum pay much more than $170 above the proposed fire lieutenant's maximum salary. The range adjustment proposed by the Union would reduce the salary inequities and enhance lieutenants' salaries in the same manner that police sergeants' salaries are enhanced by the MEP awards. Under the Union's proposal, employees above the midpoint of the salary range would receive a one percent increase, and employees below the midpoint would receive a two percent increase. No employee may be paid more than the pay range maximum indicated in the Union's proposal. These range adjustments are necessary to move lieutenants closer to maximum pay in order to reach the 75 percent of lieutenants in the comparable communities who were paid at maximum pay. Under the employer's proposal, a new lieutenant receiving top merit, top chief s points and a range adjustment proposed by the Union would not reach maximum pay within the term of -the current collective bargaining- agreement and in all likelihood would not reach maximum pay in the term of the collective bargaining agreement. With this evidence as ' to the lack of a police sergeants' and fire lieutenants' $170 pay differential, the substantial and compelling evidence that more police sergeants are at or near - maximum pay than fire lieutenants, the uncontested fact that 75 percent of the 2004 comparable for fire lieutenants are at maximum pay, and the mean fire lieutenants' comparable annual salary in 2004 is. $5,750 higher than.the Elk Grove's mean fire lieutenants' salary, the Union's claim of inequity is well demonstrated. Although the range adjustment was not intended to be a merit pay component, as found by Arbitrator Berman in the range adjustment pay grievance, there is no evidence that the Union agreed to create a wage system in which the range adjustment would not be used to move senior lieutenants closer to maximum pay. . Although the Union agreed to the word "discretion" for the third paragraph of the lieutenants' pay section, the Union never agreed to a system thatwould minimize opportunities for maximum pay. - The overall affect of the employer's use of "discretion". has been to reduce incentives of a merit. system to reach maximumpay. The -Union seeks an additional change in the lieutenants' compensation section to put in writing a practice that has existed over the allocation of chiefs points. The Union's final offer regarding fire chief s merit points is to add the criteria for how the one percent merit adjustment is to -be allocated. The -Union proposes the agreement that was reached with the prior chief and had been a past practice for granting merit points. A lieutenant is to receive 0.25% for proficiency or participation in each of the following categories: Case No. S-MiA-04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, 1L 13 Acting Captain or Fire Officer II; Team Leader, Station Officer or Committee Chairman; Budget Activity, Special Projects, Shift Training Instructor or CPR; or Team Member or Committee Member. Participation or proficiency in each of the four categories will lead to a maximum of 1.00 chief's merit points for participation. The employer makes no such offer, even though the distribution of components as proposed by the Union has been the stated criteria for chief's merit points. The Average Consumer Prices For Goods and Services, Commonly Known As The Cost of Living. The arbitration panel is to base its decision in part upon the average consumer prices for goods and services, commonly known as the cost of living. This is one of several factors by which the panel is to be guided. The employer has presented evidence challenging the Consumer Price Index of the United States Department of Labor as having an upward bias in an effort to persuade the arbitrator that its economic offer is more consistent with the statutory factor for cost of living. A similar argument was raised to support the employer's offer before Arbitrator Kohn in earlier interest arbitration between these same parties. Arbitrator Kohn's"rejected this argument based upon a holding of Arbitrator Herbert Berman that "the CPI data remains. the best cost- of—living data available at the moment and must be considered by the parties and the arbitrator." Village of Elk Grove V1llage, ISLRB Case No. S -MA -96-86, pp. 11-12 (Arb. Kohn) (1997) citing Cily of Batavia, ISLRB Case No. S -MA -95-15 (Arb. Berman) (1996). For 2005, the employer's 3.25 percent increase in maximum pay for lieutenants is less than the three month compound annual rate of increase of 4.4 percent for May 2005. It is also less than the 3.7 percent seasonally adjusted annual rate of inflation measured during the first five months of 2005. Union Exhibit 66. The Union suggests the arbitrator focus on the U.S. average rather than the Chicago index numbers because the Department of Labor Bureau of Labor Statistics cautions users of the CPI that each local- index has a smaller sample size than a national index, and is, "therefore, subject to substantially more sampling and- other measurement error. As a result, local area indexes show greater volatility than a national index. ` Id. Table 3 and Table 6. For May 2004, the CPI index increased 3.1 percent over May 2003 index. The employer's proposed 3.25 percent increase barely exceeds the CPI number. Stipulation of The Parties The Union submits one of the factors to be considered by the arbitrator under the statute is the nature of stipulations reached by the parties. In the words of the Union: Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 14 The arbitrator has noted on the record a stipulation reached by the parties on March 28, 2005. The transcript of proceeding for that day reflects a telephone call from the panel's chairman to the court reporter in which a stipulation concerning wages, the hours and overtime proposal and sick leave was discussed by the panel members The chairman indicated that on that day the parties reached an agreement on these items, and the Union, with all due respect to the chairman, requests that he not approve the stipulation reached concerning the hours and overtime proposal for the reasons stated below. Pursuant to this stipulation, the employer's final offer in hours and overtime was accepted by the Union, but as in all stipulations, the arbitration panel reserves the right to approve the stipulation, and the parties further agreed that any disputes as to the interpretation or implementation of a stipulation would be resolved by the arbitrator. Transcript, March 28, 2005, p. 2. In the hours of work and overtime proposal the employer seeks a new work reduction schedule consisting of work reduction days to be taken within each 18 duty day cycle, and the scheduling of such days within each 18 duty day cycle is "to be governed by the same policies and practices that were previously applicable to the scheduling of holiday time off for firefighters, with the exception that one work reduction day must be scheduled in each eighteen (18) duty day cycle." Exhibit 3(b) p. 7. The Union has stated the most significant problem for implementation of this schedule is the time selection of these work reduction days. There is no specified time to determine a method when these duty days are to be selected other -than the reference to the policies and practices previously applicable to the scheduling of holiday time off. The Union believes the work reduction days scheduled pursuant to these policies and practices are to be selected after annual vacation or furlough days have been selected. Under the polices in effect for furloughs selection first issued on November 24, 1978 with the last revision on October 19, 1998, furloughs were to be selected prior to the selection of floating holidays. This means that furloughs -are to be selected first and .have priority over the selection of all other time off. The employer's offer recognizes this policy and its governing principles for the selection of furloughs have been in use since 1978. However, the employer has indicated that it really intended for its work reduction days to be selected prior to the selection of furloughs, and here is the essence of the dispute and reason why the stipulation in the opinion of the Union should be rejected. There is obviously a dispute between the parties as to the implementation of this contract section and specifically the time at which work reduction days are to be selected. Even though the panel chairman has been given: authority to interpret disputes over the implementation or interpretation of the why stipulation, the Union believes that this process of reaching an agreement would be best served for both parties to have the matter resolved prior to the commencement of the next calendar year, the time at which the employer's proposal would practically be implemented. The proposal does not contain a starting date, and if the employer sought to impose a new schedule during 2005 after all vacations and floating holidays have been selected, it would clearly cause chaos with respect to already established or. set vacation schedules and holiday schedules. The parties would be best served to have this question resolved now rather than later. Under the current system, furloughs are Case No. S -MA -04.-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 15 generally selected in November and December. The public and the parties would be better served to. have these issues resolved now rather than under the tension created by the furlough and vacation selection process in which employees and managers would be rushing to establish the schedules for 2006 in a very compressed period of time. For these reasons, the stipulation should be rejected and the matter remanded - for additional consideration and mediation for no more than the statutory period allowed under Section 14. III. POSITION OF ELK GROVE VILLAGE The Administration's position, as outlined in its post -hearing brief, is summarized as follows: A. The Village's Final Offer On Lieutenants' Pay: Section 14.2. --Fire Lieutenants' Salaries and Merit Adjustments. The Village's final offer on fire lieutenant salaries is to revise Section 14.1 as follows: Section 14.2. Fire Lieutenants Salaries and Merit Adjustments. Effective May 1, 2003, the pay range maximum for fire lieutenants shall be increased by four and seven -tenths percent (4.7%) to $75,091. No lieutenant can receive an annual wage below the minimum of the range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between 0 percent and 4.7 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment -of between 0 percent and 2.7 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "exceeds standards", shall receive a merit adjustment of 3.2 percent. Employees whose annual average annual evaluation from their immediate supervisor "far exceeds standards" shall receive a merit adjustment of 3:2 percent. Employees whose annual average annual evaluation from their immediate supervisor "far exceeds standards" shall receive a merit adjustment, of 3.7 percent. Employees may also be given an additional merit adjustment of up one percent (1.0%) on the basis of an evaluation by the Fire Chief. In addition to the foregoing merit adjustment for the 2003-2004 fiscal year, the Fire Chief may, with the prior approval of the Village Manager, award a range adjustment of up to 2 percent. - Effective May 1, 2004, the pay range maximum for fire lieutenants shall be increased by 3.25% to $77,531. ' No lieutenant can receive an annual wage below the minimum of the Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 16 range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between 0 percent and 3.25 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment of between 0 percent and 2 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "exceeds standards" shall receive a merit adjustment of 2.375 percent. Employees whose annual average annual evaluation from their immediate supervisor "far exceeds standards" shall receive a merit adjustment of 2.75 percent. Employees may also be given an additional merit adjustment of up to half of one percent (0.5) on the basis of an evaluation by the fire chief. In addition to the'foregoing merit adjustments for the 2004-2005 fiscal year, the Fire Chief may, with the prior approval of the Village Manager, award a range adjustment of up to 2 percent. Effective May 1, 2005, the pay range maximum for fire lieutenants shall be increased by 1. 5% to $80,051. No lieutenant can receive an annual wage below the minimum of the range nor above the maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between 0 percent and 3.25 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard ."meets standards" shall receive a merit adjustment of between 0 percent and'2 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "exceeds standards" shall receive a merit adjustment of 2.375 percent. Employees whose annual average annual evaluation from their immediate supervisor "far exceeds standards" shall receive a merit adjustment of 2.75 percent. Employees may also be given an additional merit adjustment of up to half of one percent (0.5) on the basis of an evaluation by the fire chief. In addition to the foregoing merit adjustment for the 2005-2006 fiscal year, the Fire Chief may, with the prior approval of the Village.Manager, award a range adjustment of up to 2 percent. Effective May 1, 2006, the pay range maximum for fire lieutenants shall be increased by 3.25% to $82,653. No lieutenant can receive an annual wage below the minimum of the .range nor above the'maximum of the range. All lieutenants shall be paid a salary that is at least 5% higher than the top step salary of firefighters. The merit adjustments shall be between 0 percent and 3.25 percent. Employees whose annual average evaluation from their immediate supervisor on a numeric standard "meets standards" shall receive a merit adjustment of between 0 percent and 2 percent. :. .. Employees whose annual average evaluation from their immediate supervisor on a numeric Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 17 standard "exceeds standards" shall receive a merit adjustment of 2.375 percent. Employees whose annual average annual evaluation from their immediate supervisor "far exceeds standards" shall receive a merit adjustment of 2.75 percent. Employees may also be given an additional merit adjustment of up to half of one percent (0.5) on the basis of an evaluation by the fire chief. In addition to the foregoing merit adjustment for the 2006-2007 fiscal year, the Fire Chief may, with the prior approval of the Village Manager, award a range adjustment of up to 2 percent. B. - THE ARBITRATOR SHOULD USE THE SAME GROUP OF COMPARABLES THAT WERE USED IN THE PRIOR TWO INTEREST ARBITRATION CASES Management submits at the outset of the arbitration hearing the parties agreed to use the same 14 comparables that had been established by Arbitrator Harvey Nathan in the initial interest arbitration proceeding between the parties (UX 3, at pp. 28-40) and thereafter used by Arbitrator Lisa Salkovitz Kohn in the second interest arbitration proceeding between the parties (VX 28, at pp. 5-6) (Tr. 4-5). The jurisdictions that the parties mutually agreed to continue to use areas follows: Arlington Heights Bensenville Buffalo Grove Des Plaines Elgin Elmhurst Hoffman Estates Lombard Mount Prospect' Northbrook Park Ridge Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 18 Rolling Meadows Skokie Wheeling Subsequently, the Union sought to withdraw from the parties' prior agreement on the comparables, contending that Bensenville should no longer be considered as a comparable on the asserted ground that Bensenville now has "a public safety department in which firefighter jobs and police officer jobs have been combined." (Tr. 62). The Village objects to the -Union's effort to withdraw from the stipulation (Tr. 164-66). C. Recent Collective Bargaining History With Respect to Lieutenants' Pay In support of its position, the Administration offers the following background information regarding prior arbitration decisions between these parties: 1. The 1997 Kohn Interest Arbitration Case When the parties were .unable to mutually agree to :the terms for their second collective bargaining agreement, the parties took two dozen issues to Arbitrator. Lisa Sakolvitz Kohn for decision; including salaries for fire lieutenants (VX 28). In seeking to eliminate the pay system lieutenants, the Union argued that lieutenants were underpaid vis-a-vis police sergeants and that lieutenants -could not reach the maximum salary. With respect to the latter contention, the Union asserted; as Arbitrator Kohn noted, that "[i]n 1995-1996, the Village did not pay any lieutenant the m maximuallowed under the contract, which was almost $1,000 higher than the salary of the highest -'paid lieutenant" (UX 28, at P. 16). The arbitrator, however, rejected the Union's final offer and awarded the Village's final offer for fire lieutenant salaries, relying in significant part on the fact that Elk Grove Village's maximum base salary under the Village's final offer would rank the Village "at seventh out of the 13 other communities for which 1996-1997 figures are in the record." (VX 28, at p.20). 2. The 1999 Voluntary Agreement In 1999 the parties reached voluntary agreement on a new four-year contract. In addition to re-establishing a parity relationship between police and fire by setting the top step firefighter salary as of the first year of the contract at $170 below the top -step police -officer salary, the parties also agreed' to increase the maximum of the salary range for fire lieutenants by 7.2% so that it likewise was exactly $170 below the maximum of the salary range for police sergeants as of the first year of the contract. In addition to increasing the salary range maximum by 7.2%, the parties also agreed'that for the 1999-2000 fiscal year all fire lieutenants would receive an across-the-board salary increase of :7.2% above the salaries they received the year before. This voluntary agreement necessarilymeant that no fire lieutenant who was not previously at the top of the salary range would Case No. S -MA -04-262 . Elk.Grove Village Firefighters 2340 & Village of Elk Grove, IL 19 move any closer to the top of the range. And, in fact, on an absolute dollar basis, any fire lieutenant who was not at the top of the range would be further from the top than they were in the 1998-1999 fiscal year. If the parties in 1999 had intended to move lieutenants closer to the top of the salary range they could have agreed to increase the maximum of the range by, say 5%, and provide for the same across-the-board salary increase of 7.2% as long as it did not exceed the. maximum salary. (Brieffor the Employer at 10-11). For the three remaining years of the 1999-2003 contract, the parties agreed to continue merit pay plan that provided specified increases based on performance evaluations, 0% to I% based on the Chief's evaluation, and 0% to 2% for range adjustments. 3. The Berman Rights Arbitration Case Following the initial implementation of the up -to -2% range adjustment provision for the 2000-2001 fiscal year based on the Village's policy of using the range adjustment to give newer lieutenants a jump start in the range, the Union filed a grievance challenging the Village's implementation (UX 36). The grievance was subsequently appealed to arbitration and heard by Arbitrator Herb Berman. In its brief to Arbitrator Berman, the Union argued that range adjustments were discriminatorily being granted, as the Union stated in its brief to Arbitrator Berman, to "the newest lieutenants and least proficient" (UX 39,.at p. 12). In denying the grievance, Arbitrator Berman reasoned as follows (VX 31, at p. 33; emphasis in original): The range adjustment was not merit pay. To the contrary, the final sentence of Section 14.2 not only makes the "up to 2%" range adjustment discretionary, it clearly distinguishes range adjustments from merit adjustments. Under Section 14.2, the Fire Chief/Village Manager could award range adjustments "in addition to the foregoing merit adjustments. " Had the parties intended to establish an equivalence between range adjustment and merit pay, they would not have distinguished merit adjustments from discretionary range adjustments. On its face, the language in question give the Fire Chief/Village Manager discretion to award a 0-2% pay increase to employees without regard to merit .... (Emphasis mine).. As for the Union's contention that the parties agreed to the range adjustment language in order . to move senior lieutenants "closer to the top," Berman concluded that "the evidence did not establish . that the parties agreed that range adjustments would actually — as. opposed to possibly.- `move the lieutenants up to higher salaries"' (VX 31, at p 36). Moreover, Berman ruled that "[t]he contract did not preclude the Village Manager from determining the amount of money available for range adjustments and then distributing it within his sound. discretion consistent with the range adjustment . scale," noting that the "up to 2. percent". language "necessarily included- the,discretion.to determine.. (for sound business reasons) that. less than 2 percent was available for range adjustments" (VX 31, at p. 36). In summary, he concluded that "the contract did not restrict the Village's discretion to award range adjustments within a zero to.two,percent range" (VX 31, at p. 39). Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 8c Village of Elk Grove, IL 20 D. Economic Issue 2 — Fire Lieutenant Salaries (Section 14.2) 1. The Arbitrator Should Accept the Village's Final Offer on Salaries Since it is More Reasonable than the Union's Final Offer a. Internal Comparability Considerations Support Acceptance of the Village's Final Offer Here Management points out that in Elk Grove Village the parties, in the last round of negotiations, established a parity -type relationship between the maximum -of the salary ranges for the Village's fire lieutenants and police sergeants. Thus, in the first year of the parties' 1999-2003 contract, the -parties voluntarily agreed to an adjustment of the maximum of the range for fire lieutenants. that brought the maximum to exactly $170 less than the maximum of the range for police sergeants. -Even a cursory review of the parties' final offers in this case shows that only the Village's final offer. will: maintain to integrity of the parity relationship between fire lieutenants and police sergeants that was established in the last round of negotiations. (Brief at 16). -Significantly, this parity -type relationship is virtually identical to the parity -type relationship that was established in 1999 between firefighters and police officers (i.e., the top step firefighter salary is .$1.70 :less than the top step police officer) and will be maintained by the incorporation of the Village's. mal salary offer for firefighters that was agreed to by the parties' designated Arbitrators. _ - .. ..In addition to Quinn's.testimony in the Berman case (infra, this opinion), Trustee Petri testified in the instant case that while external comparability was also a primary consideration, it was "absolutely" -the case that a primary consideration in 1999 was to bring the maximum of the fire lieutenant range to within $170 of the police sergeant salary maximum (Tr. 733, 740-41). Finally, Union -witness McVeigh acknowledged on cross examination that the parties in 1999 discussed the relationship- of fire lieutenant salaries to police sergeant salaries (Tr. 728). As McVeigh stated, "Always in negotiations, you always do the comparison, Ted, as you know, to find a pay raise between police sergeants and fire lieutenants ..." (Tr. 726). - It's simply incredulous to think, as the Union would try to have the Arbitrator do, that it was a, mere.,coincidence that the voluntarily negotiated maximum of the fire lieutenant salary range that ended up being exactly $170 less than the maximum of the police sergeant salary range as of May 1, :2003. The testimony of Kevin Quinn in the Berman case that is quoted above, as well as the testimony of Trustee Petri in this case, shows that it was more than pure happenstance. According to Management, this internal parity relationship unquestionably makes the Village's final offer the -more reasonable of the two final offers and it should be accepted as such by the Arbitrator. -While it may be understandable that the Union wanted fire lieutenants to be paid more in line :.with police: sergeants, as Kevin Quinn testified in the Berman rights arbitration case, it is an entirely Case No. S -MA -04-262 - ' ' Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL . - - - 2I different matter for the maximum of the fire lieutenant salary range to be significantly above the maximum of the salary range for police sergeants. The record evidence in this case clearly establishes that while the maximum.base salary for fire lieutenants in a few jurisdictions may be equal to police sergeants, there is no jurisdiction where the maximum fire lieutenant salary is above the maximum police salary, as the following chart based on Village Exhibit 40 undeniably shows: JURISDICTION FIRE LT. AS OF 5/1/03 POLICE SGT. AS OF 5/1/03 Arlington Heights $74,399 $83,167 Bensenville $64314 $70)195 Buffalo Grove N/A $75,631 Elgin $66,648 $78,840 Elmhurst $72,390 $81,169 Hoffman Estates, $71)624 $76,528 Lombard $71,904 $71,904 Mt. Prospect $70,899 $73,847 Northbrook N/A N/A Park Ride N/A N/A Rolling Meadows $74,939 $74,939 Skokie - $70,317 $74)252 Wheeling $73,977 $74,885 Elk Grove Village (police sergeant) N/A $75,271 Average for the 10 comparables (excluding Elk Grove Village) with maximum base salary data for both lieutenants and sergeants $71,141 $75,973 Village Final Offer $75,091 Union Final Offer $75,489 Notwithstanding the fact that none of the comparables for which data. is available provides a maximum base salary for fire lieutenants that is more than the maximum base salary for police sergeants, the Union's final offer would result in the maximum base salary for Elk Grove Village fire lieutenants being by increasingly larger margins more than the maximum base salary -for Elk -Grove Villagepolice sergeants for fiscal years=2003; 2004, and 2005. This would constitute a dramatic breakthrough for which there is absolutely no supporting internal or external comparability justification. To the contrary, the internal comparability evidence conclusively establishes that the maximum base salary of fire lieutenants in Elk Grove Village has historically been less than the maximum base salary of police sergeants. Similarly, the external comparability evidence conclusively establishes that no comparable jurisdiction has a maximum base salary for fire lieutenants that is higher than the maximum base salary of police sergeants. Indeed, the external comparability evidence establishes the average maximum base salary for police sergeants as of May 1, 2003 was $4,832 more than the average maximum base salary for fire lieutenants! Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 22 One final aspect of internal comparability needs to be discussed, i.e., the negotiated wage adjustments for the Village's other two bargaining units. As noted at the hearing, the Village's police officers are represented by the Metropolitan Alliance of Police and the Village's public works employees are represented by the International Union of Operating Engineers, Local 150 (Tr. 607-08). The Village has negotiated a collective bargaining agreement with MAP that covers both the 2003-04 and 2004-05 fiscal years (VX 24), as well as a collective bargaining agreement with Local 150 that covers all four of the fiscal years the will be covered by the parties' new contract in the instant case (VX 23). The following chart summarizes the negotiated wage increases for these two contracts (VX 26): '.BARGAINING UNIT MAY 1, 2003 MAY 1, 2004 MAY 1, 2005 38837 POLICE 3.5% 3.25% N/A N/A PUBLIC WORKS 3.0% 3.5% 3.5% 3.25% FIRE— FIREFIGHTERS 5.6% 3.25% 3.25% .3.25% FIRE— LIEUTENANTS 4.7% 3.25% 3.25% 3.25% The foregoing voluntarily negotiated percentage salary increases definitely are in line with the Village's"final offer. On the other hand, the Union's final offer provides for salary increases that are substantially higher, not by just a little bit, but by several percentage points per year. To suggest that havoc that would be caused if the Union's final offer were accepted is to only state the obvious. Accordingly, the voluntarily negotiated salary adjustments with MAP and Local 150 unquestionably support acceptance of the Village's final offer. See City of Waukegan and IAFF Local 473, Case No. S -MA -00-141 (Arb. Marvin Hill, March 26, 2001) (City's final salary offer awarded; "1 also find that the: City's' salary offer is fair when compared to the increases that other units in Waukegan have received in the past"). Case No..S-MA-04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL. 23 b. External Comparability Data Supports Acceptance of the Village's Final Salary Offer that Will Maintain Essentially the Same Rank Among the Comparables that the Parties Voluntarily Agreed to in the Last Round of Negotiations In Management's view, a good starting point to judge what is reasonable in terms of comparability data, as Arbitrator Goldstein observed in City*of DeKalb and IAFF Local 1236 (June 6, 1988), is what the parties themselves believed was reasonable and appropriate in prior negotiations. Thus, it is appropriate to consider as an approximate benchmark for external comparability comparisons in this proceeding where Elk Grove Village stood in.terms of fire lieutenant salaries as. of May 1, 2002,.the last year of the parties' 1999-2003 collective bargaining agreement. Thus, as of May -1;-2002, the negotiated Elk Grove Village maximum base salary for fire lieutenants was $71,713, which ranked fourth out of the 15 comparable communities, including Elk Grove Village (VX 35). In this regard, it is important to keep in mind that the parties' 1999-2003 contract was voluntarily agreed to, unlike the parties' first two contracts. Based on the Village's final offer of a 4.7% increase in the maximum base salary effective May 1;' 2003, Elk Grove Village's rank will move up to second out of 15, as the following chart demonstrates (VX 36): Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 24 JURISDICTION MAXIMUM BASE SALARY AS OF MAY 1, 2003 Park Ride $82,616 ELK GROVE VILLAGE $75,084 based on the Village's final offer Des Plaines $74,877 Lombard $74,780 Rolling Meadows $74,197 Wheeling $73,977 Arlington Heights $73,662 Northbrook $73,318 Elmhurst $72,390 Hoffman Estates $71,624 Mount Prospect $70,899 Skokie $70,317 Elgin $66,648 Bensenville N/A Buffalo Grove N/A RANK 2/15 -In short, as of May 1, 2003, based on the Village's final offer, Elk Grove Village actually -moves up two'notches above where Elk Grove Village stood as of the last.year of the parties' 1999-2003 contract. . Also, as of May 1, 2004, under the Village's final offer, Elk Grove Village will maintain the exact same, rank that it had as of the May 1, 2002, i.e., fourth out of 15, as the following chart shows (VX 37): JURISDICTION MAXIMUM BASE Park Ride $86,796 Lombard $77,584 Rolling Meadows $77,562 ELK GROVE VILLAGE $77,531 (based on Village's final offer Des Plaines $77,498 Wheeling $76,751 Arlington Hei Dghts $76,631 Northbrook $76,067 Elmhurst $75,467 Hoffman Estates $74,668 Skokie $73,683 Mount Prospect $73,380 Elgin N/A Bensenville N/A Buffalo Grove N/A RANK 4/15 Case No. S -MA -04-262. . Elk Grove Village Firefighters 2340 & Village of Elk Grove, 1L 25 Finally, as of May 1, 2005, Elk Grove Village's rank will slip one notch to be fifth out of the 15 external comparables: JURISDICTION MAXIMUM BASE SALARY AS OF MAY 112005 Park Ride $89,834 Rolling Meadows $81,079 Lombard $80,493 Des Plaines $80,210 ELK GROVE VILLAGE $80,051 (based on Village's final offer Wheeling $79,629 Arlington Heights $79,217? Northbrook $78,920 Elmhurst $78,297 Hoffman Estates $77,841 Mount Prospect $77,653 Skokie $76,262 Elgin N/A Bensenville N/A Buffalo Grove N/A RANK 5/15 The foregoing charts unquestionably support acceptance of the Village's final salary offer, especially when the addition of longevity pay and paramedic pay is added to the equation, as it surely must. Significantly, in the 1997 Kohn case, Arbitrator Kohn specifically relied on the Village's rank in terms of maximum base salary among the 14 external.comparables in awarding the Village's final offer on fire lieutenant salaries (VX 28, at pp. 19-20). She commented that the Village's final offer "would create a maximum base salary of $55,249, $600 above the average and ranked seventh out of the 13 other communities for which 1996-1997 figures are in the record" (VX 28, at p. 20). In considering the relevance of the Kohn award, it is important to note that the Union argued, in the same way that it has in this case, that in "1995-1996, the Village did not pay any lieutenant the maximum allowed under the contract, which was almost $1,000 higher than the salary of the highest- paid lieutenant" (VX 28, at p. 16). Moreover, Arbitrator Kohn observed that "the Village's current merit.pay award practices are consistent with its historic administration of merit systems" (VX 28, at p. 17). The exact same comment is applicable to the instant case. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 26 C. The Village's Final Salary Offer Is Definitely More Reasonable Based on the Known Percentage Adjustments for the External Comparables In terms of judging the reasonableness of the parties' final offers vis=a -vis the external comparables, it is useful to examine at the percentage adjustments that have been negotiated for 2003, 2004, 2005, and 2006, i.e., the years covered by the term of the contract at issue in this case (see Union Ex. 48, as revised, infra, this opinion). Since'the Union's final offer for fire lieutenant salary increases based on maximum merit plus .a minimum range movement of 1% come to 6.7652% for 2003, 5.2559% for 2004, 5.75% for 2005, and 5.75%'. f6r- 2006; the 'Union's final salary offer is unquestionably. the outlier among all the comparables. On an uncompounded basis for the three years for which enough external salary_ comparability data is available, the Union's final salary offers comes to 17.77%! That is nearly 6% above the uncompounded average percentage increases for the three years in question. In the instance case, the. overall size of the Union's final salary offer "is clearly beyond the bounds of reasonableness." Id. :: Another way of analyzing the Union's final offer over the three years in question is to compare the total percentage increase based on the parties' final offers with the total percentage increase for all of the comparables for which data is available for the same three years, as the following chart does (UX 48 as revised 7/5/05; see footnotes 19 and 23, supra): Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL - 27 JURISDICTION CALENDAR YEAR 2003 CALENDAR YEAR 2004 CALENDAR YEAR 2005 3 -YEAR TOTAL PERCENTAG E INCREASE Arlington Heights 4.0% 4.0% 3.0% 11.0% Buffalo Grove 4.0% 4.5% 2.5% 11.0% Des Plaines 5.37% 3.5% 3.5% 12.37 Elmhurst 4.0% 4.25% 3.75% 12.0% -H6ffman Estates 5.96% 4.25% 4.25% 14.460/. Lombard 3.75% 3.75% 4.0% 11.5% Mt:•Prospect 3.5% 3.0% 3.0% 9.5% Northbrook 3.75% 3.75% 3.75% 11.25 Park Ridge -4.7% 4.34% 4.77% 13.81 Rolling Meadows 4.0% 4.5% 5.0% 13.5% Skokie 4.25% 3.75% 3.5% 11.5% Wheeling 3.75% 3.75% 3.75% 11.25 ELK GROVE VILLAGE'S FINAL OFFER 4.70% 3.25% 3.25% 11.2% ELK GROVE VILLAGE -UNION 'S FINAL OFFER 6.7652%. , 5.2559%. 5.75% 17:77% The foregoing chart unquestionably establishes. the Village's final salary offer is•the more reasonable of the two final offers.- The three.year total for .the Union's final offer of 17.77.% is" . 3.3% more.than the three year total for Hoffman Estates, the comparable. with the highest three year total of the 12 comparables for which fire lieutenant salary data is available for:all three years. And it is almost a full 6% above the average for the -12 comparables.. On the other hand, the.three year total of 11.2%.based on the.Village's final offer is well within the range of three year totals for the 12 comparables, in;.question, and only six tenths of one. percent.below: the average of 11.8% for the 12 comparables over the -three years in question. By any. measure of comparison, the Village's final offer is clearly.more reasonable than the Uniori's final offer: ' . Case No. S -MA -04-262 Elk Grove Village Firefighters 2340& Village of Elk Grove, IL 28 d. The Fact That Police Sergeants and Fire Lieutenants Have Been Covered by the Same Range Adjustment Policy Supports Acceptance of the Village's Final Offer ... The record in the instant case establishes that the same range adjustment policy, including the philosophy and the way it is administered, is applicable to both police sergeants and fire lieutenants. Thus, the Village's attorney stated that "[t]he same philosophy, policy, practice and method of implementation for police sergeants is what is incorporated in the Village's final offer with respect to fire -lieutenants" (Tr..644).. Ee- further stated that the Village was willing to stipulate that the :. Berman "award captures from the Village's perspective the manner in which it has.been implemented and that continues to be the current philosophy of the Village" (Tr. 664). That philosophy is to administer the range adjustment pool so as to move newer, less senior lieutenants up in the ..range,.- rather than to move more senior lieutenants closer to the maximum of the range. Sign.ificantly,._the parties stipulated that same philosophy is applied in administering the range adjustment pool for police sergeants (Tr. 665-66). Whereas the Village's final offer would maintain the status quo, the Union's final offer would constitute: a marked departure from the Village's range adjustment policy applicable to both police sergeants and -fire lieutenants. Rather than giving the Village Manager the discretion to determine the. pool and. to approve the disbursement of that pool among eligible employees, the Union's final.offerwould eliminate all such discretion. Thus, any lieutenant below the midpoint of the range evould- be : guaranteed a 2% range adjustment and any lieutenant above the midpoint would be guaranteed a l% range adjustment. Significantly, the Union did not offer any quid pro quo for this breakthrough item. In summary, the Union's final offer constitutes the dismantling of a fundamental part of the fire lieutenant• salary program and would result in fire lieutenants being covered by one program and police sergeants by a different program. It is submitted that this fact strongly supports rejection of the Union's final offer. °Moreover, the magnitude of the guaranteed range adjustments, which are only subject to the salary -range maximum, when considered together with the substantially above-average merit increases already discussed, makes the Union's final offer even more unreasonable.. With a guarantee of I% or. 2% depending on placement within the range, the average range adjustment will, in all likelihood; be at least 1.5% for all four years of the contract. This will further demolish the parityAype relationship with police sergeants. For each of the first three years for which range adjustment data is available for police sergeants, the amount that fire lieutenants would receive under .-the Union's. final offer would dwarf the average range adjustment percentage received by police sergeants;... -Thus, for both 2003-04 and 2004-05, the average range adjustment percentage for fire lieutenants' would double what police sergeants received, i.e., an assumed minimum of at least 1.5% ; . for-.lieutenatiO versus 0.75% for sergeants. And for 2005-06, the average amount would be 0.5% Case No. S -MA -04 -262, - Elk Grove Village Firefighters 2340 & Village of Elk Grove; IL 29 higher, i.e., 1.5% versus 1.0%. When this aspect of the Union's final offer is considered along with radical change in the range adjustment policy, it further establishes the unreasonableness of the Union's final offer. In order to maintain the status quo with respect to range adjustments, both policy - wise and cost -wise, the Arbitrator should accept the Village's final offer. e. The Additional Compensation that Lieutenants Will Receive for Longevity, Paramedic Pay and Overtime Likewise Supports Acceptance of the Village's Final Salary Offer Management submits that in assessing the reasonableness of the parties' final offers on. fire lieutenant salaries, it is important to consider the additional economic consideration that the fire lieutenants will receive based on the following economic issues that have already been resolved: 1. Paramedic pay for lieutenants who are paramedics will increase $100 per contract year, i.e., from $3,000 as of the end of the 1999-2003 contract to $3,400 as of May 1, 2006. 2. Longevity pay for lieutenants, as well as firefighters, will increase as follows: YEARS OF SERVICE 2002-03 Eff. 5/1/03 Eff. 5/1/04 Eff. 5/1/05 Eff. 5/1/06 10-15 yrs. $400 $450 $500 $550 $575 15-20 yrs. $500 $550 $600 $650 $675 Over 20 yrs. $650 $700 $750 $800 $825 Effective the first pay period following issuance of the Arbitrator's award, lieutenants will be paid [3] time and one-half for required training and attendance at departmental meetings that occur outside their scheduled hours of work; previously, as FLSA exempt employees they were not paid overtime for required training or attendance at departmental meetings that occurred on non -duty days (Tr. 633; JX 1, Section 13.5, at p. 25). Parenthetically, it should be noted that under Village personnel policies, police sergeants do not receive overtime unless it is an emergency hire -back or is done for staffing purposes (Tr. 633; VX 39). Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 30 Village of Elk Grove, IL Effective January 1, 2006, [4] the hourly rate for both firefighters and lieutenants will be calculated on the basis of the 52.88 hour work week rather than the current 54.16 hour work week. The net effect of this is that the hourly rate for any :given salary will increase by 2.42%. For example, the hourly rate for a lieutenant whose annual salary is $75,000 will increase from $26.63 to $27.27. And the overtime rate will increase by 96 cents per hour, i.e., from $39.95 per overtime hour to $40.91 per hour. The foregoing significant compensation improvements that fire lieutenants will be the beneficiaries of definitely enhances the overall reasonableness of the Village's final offer for fire :.:.:...:lieutenant salaries and should be considered by the Arbitrator in the assessing the overall reasonableness of the parties' final offers. Case No. S -N A-04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 31 f. The CPI Data Support Acceptance of the Village's Final Salary Offer. Among the criteria the Arbitrator is required to consider is "[t]he average consumer prices for goods and services, commonly known as the cost -of -living." 5 ILCS 315/14 (h)(5). During the course of this proceeding, both parties submitted CPI data (VX 12-17; UX 57-59, 66). Careful analysis of this data unquestionably supports acceptance of the Village's final salary offer for fire lieutenants. g. The Ease in Attracting Qualified Applicants and the Virtually Non -Existent Voluntary Turnover Rate . Support Acceptance of the Village's Final Salary Offer- The ffer The Administration asserts that among the criteria used in interest arbitration cases to determine salaries is the relative ease or difficulty in attracting qualified applicants, as well as the turnover rate among employees involved. Significantly, the unrebutted evidence presented by the Village during the hearing conclusively demonstrates that the Elk Grove Village Fire Department has not experienced any difficulty in terms of either attracting qualified applicants or in retaining police officers. h. Other Collective Bargaining Settlement and Economic Data Support Acceptance of the Village's Final Salary Offer The national data concerning collectively -bargained wage increases for state and local government employees likewise clearly supports the conclusion that the Village's final salary offer for fire lieutenants is the most reasonable. This data taken from Village Exhibits. 20 and 21 shows the following: YEAR WEIGHTED AVERAGE. AVERAG E MEDIAN 2003 2.2% 2.9% 3.0% 2004 2.0% 2004 3.0% In summary, the foregoing settlement and wage rate adjustment data further substantiates the conclusion that the Village's final salary offer is clearly the most reasonable since it will provide for salary increases significantly above what is occurring in the economy at large as measured by first year negotiated wage increases for state and local government employees and the most recent 12 - month ECI wage increase percentage for state and local government employees. There is simply no Case No. S -MA -04-262 Elk Grove Village Firefighters .2340,& Village of Elk Grove, IL 32 - justification for the Union's final salary offer which would provide for increases in salaries for fire lieutenants that approximately double what can be supported by either national or local settlement data. i. The Interests and Welfare of the Public Support Acceptance of the Village's Final Salary Offer Section 14(h)(3) of the Illinois Public Labor Relations Act provides that "[t]he interest and welfare of the public and the financial ability of the unit of government to meet those costs" is to be taken into•account in interest arbitration proceedings. 5 ILCS 315/14(h)(3). Relevant in this regard afe the comments of Arbitrator Edward Clark in City of Gresham and IAFF Local 1062 (September 5,..1984): Having observed that the City has the ability to pay an increase does not mean that the City ought to pay an increase unless it is satisfied that there will be some public benefit from such expenditure. The City exists for the service and benefit of its residents not for the benefit of its employees. The careful management which characterizes the City of Gresham in matters such as this is confirmed by the high bond ratin . from Moody's, the widely respected financial rating service. Residents need _ many services such as police, parks, street repairs, court, in addition to fire services. -.In our system, the elected representatives of the people of _Gresham make policy decisions on the apportionment of funds -among a variety of public services based upon recommendations of.its professional staff. The City must also consider the salary expectation of other employees besides fire fighters and the reciprocal impacts from decisions relating to one classification of employee compared to another. Decision at 2-3. (Emphasis added.) :The -Village is not making a pure inability to pay argument in this case. Nevertheless, as the ... arbitrator properly observed in City of Gresham above, the fact that a public employer "has the ability to pay:an-increase does not mean that the [Village] ought to pay an increase unless it is satisfied that there will be some public benefit from such expenditure," noting further that a public employer "exists for the service and benefit of its residents and not for the benefit of its employees." Id. Case No. S-MA704=262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 33 E. THE UNION'S ARGUMENTS IN SUPPORT OF ITS FINAL OFFER THAT WOULD PROVIDE SALARY INCREASES THAT WOULD CONSERVATIVELY AVERAGE WELL OVER 20% ARE TOTALLY WITHOUT MERIT AND SHOULD BE REJECTED BY THE ARBITRATOR 1. The Union's Total Compensation .Analysis Is Fatally Flawed Because It Does Not Represent What Any Firefighter Actually Receives in Take Home Compensation The Union introduced a series of exhibits in an effort to try to suggest that on a total compensation basis Elk Grove Village fire lieutenants did not compare favorably with the external comparables: (UX 17-I, 174, 61). There are serious flaws with respect to these exhibits that render them virtually useless for any legitimate purpose in the instant proceeding, the most serious of which are discussed below. Norte of the exhibits show that any fire lieutenant in any of the comparables actually receives the total compensation listed .on the Union's exhibits. That's because. the Union's "total compensation'.' exhibits list all the various salary benefits, including salary benefits that only one. employee or just a few employees maybe receiving, and then equally weights that amount with every. other benefit in order to come up with what the Union labels "total salary." 2. Contrary to the Union's Assertion, the Salaries Paid to the Village's Police Sergeants Do Not Support the Union's Final Offer on Fire Lieutenant Salaries. To the extent that the Union argues that the salaries paid to the Village's police sergeants support the Union's final offer on lieutenant salaries, that argument is totally without merit. In the first place, to rely on the salaries paid to police sergeants that are based on administration of the Village's merit compensation plan to. support the Union's final offer which -would establish entirely different parameters for range movements, among other things, is a non -sequitur. But,.in any event, the record. evidence does not support the Union's argument. At -the outset, it is important to note that the Union's attorney is in error when it asserts while the.maximum base salary is admittedly competitive, "but the problem in this town is that no lieutenant has ever reached that number" (Tr. 76). For example, the facts show that Lt. Denna as of May 1, 2002, was.at the maximum base salary of $71,713 for fire lieutenants (UX 41, p. 3; Tr. 479, 576). Moreover, Village Exhibit 4,8 shows that between 1991 and 2003 more fire lieutenants than police sergeants have been at the that of the salary range (41 lieutenants verses 36. sergeants).: The fact is that top -paid lieutenants tend to be promoted, like Denna who was promoted in November 2002 "(Tr. 490). Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL .34 The actual salaries being paid to police lieutenants for the 2003-04 fiscal year ranges from a low of $67,951 to a high of $75,071 for the 15 police sergeants (UX 27). Based on the Village's final offer for fire lieutenants, and assuming that all lieutenants receive an at least "meet standards" evaluation and.that the top paid lieutenant receives a 4.7% salary adjustment, the range for fire lieutenants will be from $65,875 (Blackaller and Ferguson) to $72,692 (Guglielino). Thus, the difference or spread on the low end is $2,374 and $2,378 on the high end. These facts, however, do not support the Union's contention. Management notes that the salaries for police sergeants, on average, are somewhat higher than the salaries for fire lieutenants on average, as is the case for the external bench -marks. Thus, when ..the Village originally used the Hay Compensation System to establish its merit pay program, the :,number:of points assigned to the police sergeant position (331 points) was higher than the.number of points assigned to the fire lieutenant position (307 points) (UX 31). Asa result, salaries for police sergeants -have traditionally been somewhat higher in Elk Grove Village than the average salaries for fire lieutenants. Apart from the observation of Arbitrator Nathan that because of "differences in group size. and -seniority;" average salary exhibits "offer little guidance," another reason why the average-fire:lieutenant salaries may be somewhat less than average police salaries is because the ..differential between a top -step police officer and a newly promoted police sergeant is 8% (Tr. 483), i.e., 3% more than the 5% differential between a top -step firefighter and a newly promoted:fire; lieutenant. It stands to reason if newly -promoted police sergeants start out higher than newly promoted fire.lieutenants, the average salaries for police sergeants, all other things being . ...equal, will be higher. Similarly,- it stands to reason, all other things being equal, that police sergeants will be closer to the top of the salary range than fire lieutenants. This difference, however, is based on the parties' mutual agreement over the years to set the minimum of the fire lieutenant salary range at 5% above the top step firefighter salary. This 5% differential was included in the parties' first collective agreement that resulted from the Nathan award (UX 3, at pp. 63-64), it was continued as. a result of theKohnaward (VX 28, at pp. 14-20), and it was mutually agreed to in the parties' 1999- 2003 collective bargaining agreement (JX 1, Section 14.2, at pp. 30-31). Moreover, both parties' final offers in the instant case continue to set minimum of the fire lieutenant salary range at 5% above the top step firefighter salary (JX 3-A; JX 3-13; Tr. 492-93, 579). Accordingly, it is submitted that any difference in -average police sergeant and fire lieutenant salaries that is the product of the different percentage figures used to establish the minimums of the police sergeant and fire lieutenant salary ranges should not be considered as supporting the Union's position in this case because any such difference is the result of the parties' mutual agreement, which neither party is seeking to change. 3. Contrary to the Union's Assertion, Past Practice Does Not Support Granting Fire Lieutenants a Greater Percentage Increase Every Year Than Firefighters Receive Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL - - 35 Here, Management points out the .Union asserted that there has been a past practice of providing greater annual percentage salary increases to fire lieutenants than are granted to firefighters (Tr. 75, 611). While the Union's exhibit shows that in four of the seven fiscal years between 1996-97 and 2002-03, the maximum base salary for fire lieutenants was increased by I% more than the across- the-board salary increases for firefighters, in the remaining three years the percentage increases for both lieutenants and firefighters were exactly the same (UX 17-A). It is also important to note that during this period of time the parties were closing the gap between the maximum base salary for fire lieutenants and police sergeants. Since the Village's final offer wiII-maintain, in effect, the same parity relationship in the maximum base salary for fire lieutenants and police sergeants, there is simply no need to provide higher annual percentage increases for fire lieutenants. Nor does the Union's contention that lieutenants should receive annual percentage increases thdCare higher than what firefighters receive supported by the external comparability evidence. If the Village had offered to increase the maximum base salary for lieutenant by 5.6% for the 2003-04 fiscal year, i.e., the same percentage that the Village offered for firefighters in the first year of the contract, it would have resulted in the lieutenants having a higher maximum base salary than police sergeants, something that would be at odds with the historic practice in Elk Grove Village, as well as at odds with the practice among the 14 external comparable communities. * * * In summary, the Village's final offer is cast in the same footprint of what was previously established through interest arbitration before Arbitrators Nathan and Kohn and subsequently through the voluntary agreement by the parties in the 1999-2003 collective bargaining agreement. It provides for percentage increases that are well within the range of the external comparables. Moreover, it maintains the parity -type relationship between the salary'range maximums for fire lieutenants and police sergeants. Om the other hand, the Union's final offer constitutes a not -so -subtle dismantling of the previously established merit system. Moreover, the overall cost of the Union's final offer is absolutely staggering! For the three years for which external salary data is available, the average percentage increase encompassed in the Union's final offer is nearly 6% above the average for the external comparables! What this Arbitrator said in City of Waukegan, supra, is even more applicable in this case, i.e., " ..: the.Union's proposal is clearly outside the bounds of reasonableness. Moreover, the Union's final offer would result in the fire lieutenant salary range maximum being set well above the police sergeant salary range maximum, contrary to the historic,practice in n6t only Elk Grove Village but in all the external comparables for which maximum base salary data was available for both police sergeants and fire lieutenants. Accordingly, based on the facts, precedent, and arguments contained in this post -hearing brief, the Village respectfully requests that the Arbitrator award the Village's final offer on fire lieutenant salaries. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & - Village of Elk Grove, 1L 36 V. DISCUSSION A. PRELIMINARY MATTERS— THE STATUTE The. parties agree that the arbitration panel is directed by Section 14 of the IPLRA (5 ILCS 315/14(h)) to decide each of the disputed issues in accordance with the following criteria: (g) As to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in subsection (h). The findings, opinions and order as to all other issues shall be based upon the applicable factors prescribed in.subsection (h)• (h) Where there is no agreement between the parties, or where there is an agreement but the parties have begun negotiations or discussions looking to a new agreement or amendment of the existing agreement, and wage rates or other conditions :....:: of employment under the proposed new or amended agreement are in dispute, the arbitration.panel shall base its findings, opinions and order upon the following factors, as -applicable: (1) The lawful authority of the employer. (2) Stipulations of the parties. ::. .(3) The interests and welfare of the public and the financial ability of the unit of government to meet those costs. (4) . Comparison of the wages, hours and conditions of employment of the employees involved in the arbitration proceeding with the wages, hours and conditions of employment of other employees performing similar services and with other employees generally: (A) In public employment in comparable communities. (B) , In private employment in comparable communities. (5) The average consumer prices for goods and services, commonly known as the cost of living. (6) The overall compensation presently received by the employees, : including direct wage compensation, vacations, holidays and other excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment and all other Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL: 37 benefits received. (7) Changes in any of the foregoing circumstances during the -pendency of the arbitration proceedings. (8) Such other factors, not confined to the foregoing, which are normally or traditionally taken into consideration in the determination of wages, hours and conditions of employment through voluntary collective bargaining, mediation, fact-finding, arbitration or otherwise between the parties, in the public service or in private employment. . Because Section 14 of the IPLRA provides that the decision be based on the factors only "as applicable," some of the factors enumerated in the statute may not be relevant or controlling. Further, under the IPLRA, other factors not enumerated may be relevant to the disposition of the case. B. The Effect of the Arbitrators' "Settlement Agreement" The Union cited a number of arbitration decisions at the hearing in support of its position that the parties' settlement agreement especially on hours should not be accorded any weight in this proceeding. To this end the Village argues that those decisions do not stand for such a proposition. Rather, like all decisions, they are correctly understood in relation to their facts. See, e.g., Waterloo and Illinois FOP Labor Council, ISLRB, S -MA -97-198 (Perkovich, November 1999); Oak Brook and Teamsters Local 714, ISLRB, S -MA -96-73 (Bene, August 1996); and Peru and Illinois FOP Labor Council, ISLRB S -MA -93-153 (Berman, March 1995). In the Peru decision, Arbitrator Herb Berman did not find that the facts of the dispute warranted ascribing importance to the tentative agreement, but nonetheless held that "[a] tentative agreement may be considered, but it is not dispositive. The weight to be given a tentative agreement necessarily varies with circumstances, but it does not have the same weight as the facts set out in Section 14(g)." Id. at 18. In the Oak Brook decision Arbitrator Edwin Benn properly accorded a rejected TA weight. The fact that the tentative agreement was not ratified by the union merely mitigated against the employer's burden of proof. In Arbitrator Benn's view: "the parties' well - framed arguments which are supported by authority serve to negate each other — the Village argues that the Union's bargaining team agreed; the Union argues that the Village -must demonstrate why a change in the status quo is required." Id. at 5. Finally, Arbitrator Perkovich did not reject the importance of tentative agreements in the Waterloo decision. He simply remarked that the TA was not relevant in that case, because - "there is no evidence in this record -that the Union acted for this purpose [to seek more than it agreed to] or in some other -fashion indicative of bad faith." Id. at 3. 'Arbitrator Peter Meyers, in County of Sangamon, S -MA -97-54 at 6-1 (February 12, 1999) recognized the inherent paradox that would be created if one relied on- a tentative agreement as evidence of the hypothetical agreement that the parties would have reached if left to their own devices: Case No. S -MA -04-262 Elk Grove Village Firefighters 2340.& Village of Elk Grove, IL 38 Tentative agreements reached during the course of collective bargaining sessions are just what their name suggests, tentative. A tentative agreement on an issue has been reached by the parties' bargaining representatives does not represent the final step in the collective bargaining process; such an agreement instead is more of an intermediate step. For a tentative agreement .to acquire any binding contractual effect, it generally must be presented to the parties themselves, ratified, and ultimately executed before it may be imposed as binding upon the parties' relationship. Arbitrator Meyers went on to assert that tentative agreements cannot be given weight in a subsequent proceeding: [T]he tentative agreements cannot be given great weight, or even any weight at all, because they do not necessarily represent what the parties would have agreed to if they had successfully negotiated a complete collective bargaining agreement. The so-called "busted TA's'.' therefore will not be considered in the resolution of the impasse issues presented in the proceeding. Arbitrator Meyers' blanket position does not reflect what I believe to be the better weight of arbitral -authority. In Village -of Schaumberg and Schaumberg FOP Lodge No. 71, S -MA -93-155 (Fleischli, September 1994), Arbitrator George Fleischli held that in certain circumstances tentative agreements may be relevant in assessing the reasonableness of a party's offer. In this context, the inquiry -focuses on what the surrounding facts tell about the reasons_ for a party's rejection of a TA. His words are instructive in this proceeding: -It would be clearly inappropriate, under the law, to treat the terms of the tentative =. agreement as controlling. As the Union points out, both parties understood that the terms of that agreement were tentative in the sense that it was subject to ratification by both parties. However; the Village does not argue that the terms of the tentative agreement should be treated as controlling herein. Instead, it argues that they should be given great weight. In dealing with this aspect of the dispute, a balance must be.struck. On the one hand, it is important that.the authority of the parties' collective bargaining team not be unnecessarily undermined. Specifically': in the case of the Union, its bargaining team ought not to be discouraged from exercising leadership. Some risk taking must occur on both sides, if voluntary collective bargaining is to work and arbitration avoided, where possible. Clearly, the Union's membership had the legal right to reject the proposed settlement. However, the Union's membership (and the Village board) must understand that, while it is easy to second guess their bargaining teams, whenever a tentative agreement is rejected, it undermines their authority and ability to achieve voluntary settlements. :. -.On the other hand, serious consideration should be given to the stated or apparent reasons for either party's rejection 'of a tentative agreement. If, for example the evidence Case No. S -MA -04-262 . Elk Grove Village Firefighters 2340 & Village of Elk -Grove, IL 39 were to show that there was a significant misunderstanding as to the terms or implications of the settlement, those terms ought not to be considered persuasive. Under those circumstances, there would be, in effect, no tentative agreement. However, if the terms are rejected simply because of a belief that it might have been possible to "do a little better," the terms of the tentative agreement should be viewed as a valid indication of what the parties' own representatives viewed as a valid indication of what the parties' own representatives considered to be reasonable and given some weight in the deliberations. Id. at 33-34 (emphasis supplied). Arbitrator Fleischli subscribed to the view that interest arbitration is merely a continuation of the bargaining process, and, therefore, that "the function of the arbitrator should be to try and approximate the agreement the parties would. have or:should have reached themselves, knowing that either party could force the impasse into an interest arbitration proceeding." Id. at 34. I am convinced that Arbitrator Fleischli makes the better argument regarding the weight to be accorded tentative agreements. Like Mr. Fleischli, I am on record as concluding that an interest Arbitrator should strive to award a position the parties would have reached if both parties were left to their own devices, including, but not limited to, a strike. See, Marvin Hill and Emily `Delacenserie, Interest Arbitration Criteria in Fact -Finding & Arbitration, Evidentiary & Substantive Consideration, 74.MARQ. L. REV. 399 (1991)(hereiri "Hill & Delacenserie"). A tentative agreement indicates what the parties, or their duly -appointed representatives, thought was a result otherwise conducive to their interests. They are the insiders and presumptively know the environment and numbers better than any neutral. While certainly not dispositive (nor "res judicata") of a specified result in an interest arbitration, a party would be hard-pressed to argue that a tentative agreement should be ignored by an arbitrator. It is from this prospective, as outlined by Arbitrator Fleischli above, that the parties' final offers are analyzed. Applying the above principles, where does this leave the parties? At all times, and unlike the situations in the above cases, what happen in this case was a bona fide stipulated award executed between two of the designated panel arbitrators. As the parties know, the neutral member of a panel can always be trumped by a decision of the other two.' This, alas, is exactly what happen in this case. While at an executive session on .March 29, 2005, _ at .a local .restaurant, Arbitrators Baird and Quinn reached an accord on economic issue #1 (salaries for firefighters), economic issue #6 (hours of work), and economic issue 8 (sick leave). While this may look like a mere settlement agreement between advocates, in this case it was one step beyond that. This was a settlement between two designated arbitrators. As such, any notion that the agreement ' This result is not at all uncommon in airline system board cases where, after hearing all the evidence, the employer -appointed arbitrator and the union -appointed arbitrator decides how the case is -to be resolved and directs the neutral to execute a written opinion reflecting the decision of a majority of the arbitration board. Other common examples include a decision by the employer -appointed -arbitrator and the union -appointed arbitrator after the evidence record is completed, but before a draft award is.issued by the neutral arbitrator. Case No: S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL .40 should be rejected is misplaced. Once two panel members reached a settlement, not a tentative agreement,Z the neutral's role is really (in effect) functus officio. This issue was considered and addressed by the National Academy of Arbitrators in the recent text, The Common Law of the Shop: The Views of Arbitrators (second edition)(BNA Books, 2005) as follows: May an arbitrator ignore a settlement agreement? The Sixth Circuit has declared: "It is not arbitration per se that federal policy favors, but rather final adjustment of differences by a means selected by the parties." Bakers Union Factory Local 326 v. ITT Continental Baking Co.,. 749 F.2d 350, 353, 117 LRRM 3145 (6' Cir. 1984)(quoting Mine Workers v. Barnes & Tucker Co., 561 F.2d 1093, 1096 (3d Cir. 1977)). When a party claims that a prior settlement agreement controls the parties' obligations, the policy in favor the finality of arbitration must yield- to the broader policy in favor of the parties' chosen method of nonjudicial dispute resolution. The court reasoned that otherwise a party who became unhappy with a settlement would have every incentive to breach the agreement and then submit the controversy to an arbitrator. Even if a settlement agreement is not final and binding in the _sense.that it can be enforced in federal court without first having been submitted to an arbitrator, the settlement is binding on the arbitrator. See,�Maivin R Hill, Jr., Remedies in Arbitration, in The Common Law of the Shop, supra, at 362-363. Asking the neutral to reject "the stipulation" reached by a majority of the arbitration panel entirely misses the point. As noted, Messrs. Baird and Quinn were functioning as board members, -read "arbitrators," albeit not in a neutral capacity. I have'no authority to reject a resolution voluntarily reached by panel arbitrators simply because a party subsequently argues that .a unilateral mistake had been made.' The settlement was memorialized to a stipulated There was nothing tentative about the settlement agreement. Indeed, when acting as a scribe, the neutral member asked Mr. Quinn if he wanted to "sleep on it," that he could wait and talk things over with his attorney. He declined the invitation, confident that the result was exactly what the Union desired. ' I have characterized the Union's reason for requesting the arbitrators' "stipulation" be rejected as a "mistake" theory. The evidence record indicates that after Messrs. Baird and Quinn reached agreement, counsel for the Union advanced numerous reasons for requesting that the stipulation be ignored, including the following: (1) a condition to an agreement was additional information to be supplied by the employer -designated arbitrator, Mr. Baird, and (2) (incredibly) absence of legal counsel to the union -appointed Arbitrator, Mr. Quinn, during the executive session. The record indicates that immediately after an accord was reached with Mr. Baird, Mr. Quinn was asked by the neutral member whether he wanted to.present the agreement to the Union for ratification (upon reflection, ratification would have no effect since the accord was reached between two arbitrators, not two advocates, although to an extent they functioned in this matter). Mr. Quinn indicated that he did not, that the agreement was to be a stipulated award (of course, it would be, given that two arbitrators agreed to this outcome). Mr. Quinn was also asked by the neutral member whether he wanted to "sleep on it" for a day and talk over the matter to counsel. This option was also rejected. Mr. Quinn was convinced that the Employer's hours offer "would not work," which is to say, it would not save the Village any money. Indeed, under all scenarios the Union would "make out" in the sense it would,reap significant overtime gains. Mr. Baird's position was (in so many words), "fine, if that's the case, so be it. The Village should understand the ramifications of what it proposes." --Gear.and simple, the result was a stipulated award executed and agreed to by two panel arbitrators, a result that the.neutral member cannot logically or ethically reject. The deal was done and complete with the neutral acting Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 41 award which was dictated to the court reported by the undersigned. At this point the matter was at an end. ° Having. said the above, there is merit in remanding the. matter to the parties prior to the commencement of this award. A critical aspect of the hours provision is the schedule of selection of work reduction days. Management has taken the position, both at the hearing and in the March executive session, that so-called Kelly Days must be assigned first, then vacation and furlough days.' The Union, of course, takes the opposite position. "This means that furloughs are to be selected first and have priority over the selection of all other time off." (Brief for the Union at 39). I agree with the Union that the parties need to work this out and, hopefully, resolve the entire matter short of another hearing. C. Relevant Bench -Mark Jurisdictions After agreeing to a group of comparables used in prior arbitration cases, the Union now seeks to revise that stipulation regarding the relevance of Bensenville. In the Administration's view, the facts do not substantiate the Union's asserted reason for seeking to exclude Bensenville as an external comparable. As pointed out by the Administration, while it is true that police officers are being trained to perform some firefighting functions, apparently firefighters are not being trained to perform police functions (Tr. 591). Rather, Bensenville still employs full-time. firefighters to perform firefighting functions as they always have. Whatever changes have occurred in Bensenville have been on the police side, not the fire side. Moreover, Bensenville firefighters are represented by the IAFF and are covered by a collective bargaining agreement. Since Bensenville is a contiguous neighboring community that has been used in the past two interest arbitration cases between the parties, I hold that Bensenville should continue to included in as scribe for Messrs. Quinn and Baird. At the same time, in retrospect, I have no doubt that Mr. Quinn believed he had made a mistake after counsel briefed him on ramifications that, perhaps, he did not consider or understand when executing the agreement. Again, I have no jurisdiction to not honor an agreement by two panel arbitrators who executed an accord on hours (and other provisions that were not challenged by the Union) in an arms -length transaction. " If the above is not sufficient, there is this: Section 14 (Security Employees, Police Officer and Firefighter Disputes), subsection (d) of the statute provides, in relevant part: Majority actions and rulings shall constitute the actions and rulings of the arbitration panel. Enough said. ' At the March executive session, the Union -appointed Arbitrator, Mr. Quinn, took the position that even if Management's hours offer incorporates selection of Kelly Days first, then the other days,'such as vacation days, the hours provision would still favor the Union in that overtime expenditures would increase. Thus, acceptance of the; Villages' hours offer would benefit the firefighters and lieutenants. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 42 the group of communities used for external comparability purposes. I find no compelling reasons to exclude Bensville as a comparable. In the alternative, even if Bensville were excluded as a comparable, the end result would be the same. D. Decision on the Merits 1. :The Parity Argument. While the Union contends that there is no parity relationship .'between. the salary ranges for police'sergeants and fire lieutenants (Brief for the Union at 20), the Administration takes the opposite view. Relevant here is the testimony of Union President Kevin Quinn in the range -movement rights arbitration case before Arbitrator Herb Berman. Union President Quinn testified on cross examination as follows: -Q. [By .Mr. Clark] Now, the comparison of police sergeant salaries to fire salaries -was something the Union advanced in the case before ... Kohn, and the negotiations for the contract, is that correct? MR. D'ALBA: That's not relevant to this case. THE ARBITRATOR: Overruled. I will let you continue. THE WITNESS: I don't know anything about Harvey Nathan's case. I wasn't involved in that one. Q. In terms of the Kohn. case and the last round of negotiations.- A. egotiations:A. Correct. Q. And the general proposition was we believe we should be paid more in line with police sergeants. A. Correct. Q. Both relatively speaking and in terms of how quickly you could move through the range. .,-A. On the basis that the Village keeps telling us the lieutenants are compared to the police sergeants. Q. Well, you were making comparisons to police sergeants, were you not? A. Yes. Because of the Village's stance on internal comparables with the police sergeants. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 43 Q. [B]ut the primary proponent of looking at police sergeant salaries was the Union, was it not? A. I don't know what the groundwork was for the first contracts. We followed the first contracts. I don't know how that came about. But I know we used police sergeants but we also used outside comparables. In view of this testimony, the Union's current contention that there is no parity -type relationship between the salary ranges of police sergeants and fire lieutenants is difficult to square with the evidence record. (Brief for the Employer at 17-18). I also credit the testimony of Village Trustee Petri regarding the parties' goal of bringing the maximum fire lieutenant range to within 170.00 of the police sergeant salary maximum. (R. 733; 740- 741). To assert, as the Union did, that there is no evidence of a pay parity relationship between police and -fire is to distort the record. There may not be a one-to-one, dispositive -type historical parity relationship, operative for a number. of years, but police salaries for sergeants have traditionally been higher in Elk Grove than average salaries for fire lieutenants. 2. Internal Comparability. Both parties have advanced arguments with respect to internal and external criteria, with the Administration asserting that internal comparisons should be given more weight than external comparisons, especially with respect to panty relationships. (See, Brief for the Employer at 23-24). How significant is internal and external comparability as criteria in interest proceedings? In Elk Grove Village & Metropolitan Alliance of Police (MAP)(Goldstein, 1996), Chicago Arbitrator Elliott Goldstein noted that "the factor of internal comparability alone required selection of the Village's insurance proposal." Arbitrator Goldstein stressed that arbitrators have "uniformly recognized the need for uniformity in the administration of health insurance benefits." Similarly, in Will County, Will County Sheriff& AFSCME Council 31 (Fleischli, 1996)(unpublished), Wisconsin Arbitrator George Fleischli observed that when an employer has established and maintained a consistent practice with regard to certain fringe benefits, such a health insurance, it "takes very compelling evidence" in the form of external comparisons to justify a deviation from that past practice. While recognizing that comparisons are sometimes fraught with problems, and that one should not use comparisons as the single determinant in a dispute (the statute precludes this result), Arbitrator Carlton Snow nevertheless noted the value of relevant comparisons in City of Harve v. Firefighters, Local 601, 76 LA (BNA) 789 (1979), when he stated: Comparisons with both other employees and other cities provide a dominant method for resolving wage disputes throughout the nation. As one writer observed, "the most powerful influence linking together separate wage bargains into an interdependent system is the force of equitable.comparison." As Velben stated, "The aim of the individual is to obtain parity with those with whom he is accustomed to class himself" Arbitrators have long used Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 44 comparisons as a way of giving wage determinations some sense of rationality. Comparisons can provide a precision and objectivity that highlight the reasonableness or lack of it in a party's wage proposal. Id. at 791 (citations omitted; emphasis mine). Other considerations equal, I agree with those arbitrators who, with rare exceptions, find internal comparability equally or more compelling than external data. To this end, I find merit in the. Village's position that internal comparisons are more relevant in this case than reference to external comparisons, especially where a number of Elk Grove units have already reached an accord. 3. The Village's final offer versus the Union's offer and their effect on parity relationships. Only the Village's final offer continues the same panty -type relationship that the parties voluntarily agreed to the 1999-2003 contract, i.e., the range maximum for fire lieutenants being slightly below the range maximum for police sergeants in the first year of the contract, as the following chart establishes based on the parties' final salary offers (JX 3A, 313; VX 30). To this end Management offers the following comparative table (Brief at 21): YEAR MAX SERGEANT SALARY RANGE VILLAGE MAX LIEUTENANT SALARY RANGE UNION MAX LIEUTENANT SALARY RANGE 2003-04 $75,271 $75,091(-$180) $75,489 (+$218) 2004-05 $77,905 $77,531(-$374) $78,327 (+$422 2005-06 $80,332 $80,051 (4280) $81,656 (+$1,324) Clearly; the Village's final offer maintains the basic parity relationship between the salary range maximums for Elk Grove Village police sergeants and fire lieutenants (approximately). The Union's final offer results in the maximum of the fire lieutenant salary range being above the maximum of the police sergeant salary range. And, it is not only above the maximum of the police sergeant range. for the first year of the parties' contract, but it escalates for the next two years based on the salary range maximums for Elk Grove Village police sergeants for the 2004-05 and 2005-06 fiscal years. Indeed, by the 2005-06 fiscal year, the last year for which police sergeant salary data is available, the salary range maximum for fire lieutenants would be $1,324 above the salary range maximum for police -sergeants if the Union's offer were accepted. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 45 I find it significant that the evidence record indicates no jurisdiction where the maximum fire lieutenant salary is above the maximum police salary (see, Village Ex. 40): _The'same trend holds true for base salaries. Indeed, an examination of external data reveals that the maximum base salary for police sergeants as -of May 1, 2003, was $4,832 more than the average maximum base salary for fire lieutenants. 4. Percentage Increases of External Bench -Mark Jurisdictions. Perhaps the most telling exhibit is Union Ex. 28 as revised 7/05-05)(see, Brieffor the Employer at 29): Although no salary information is available for calendar year 2006, the following are the percentage increases for .fire lieutenants for calendar years 2003, 2004, and 2005, i.e., the first three years of the parties' four-year contract under the parties' offers (see, UX 48 as revised 7/5/05): CALENDAR CALENDAR CALENDAR CALENDAR YEAR 2003 YEAR 2004 YEAR 2005 YEAR 2006 BENCH -MARK COMPARATIVE JURISDICTION AVERAGE 4.16% 3.95% 3.73% N/A ELK GROVE VILLAGE FINAL OFFER 4.70% 3.25% 3.25% 3.25% ELK GROVE UNION'S FINAL OFFER 6.76% 5.25% 5.75% 5.75% The three-year total for the Union's final offer is 17.77% while the Employer's offer constitutes 11.2% (see Union Ex. 48 as revised 7/05/05) indicating, other things equal, the Employer's final offer is more in line with the external jurisdictions that the Union's final offer and presumptively more reasonable. And while the Employer's offer represents a lower overall percentage increase relative to the Elk Grove firefighters (.9% less in May of 2003, but equal otherwise, see Table 8, Brief for the Union at 26), this is de minimus and hardly represents holding back the lieutenants.' Further, I credit the Employer's argument that there is no past practice of It's Math 101, but an across-the-board percentage increase of the same magnitude will always result in the lieutenants gaining on the firefighters since the lieutenants start from a higher base. This, of course, is why the poor will always be with us because they have no starting capital base comparable to the wealthy. Contrary to the allegations of the Union, the Employer's wage proposal will'not result is a lesser overall salary increase than the Case. No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 46 granting annual percentage salary increases to lieutenants that are greater than fire fighters (see, Brief for the Employer at 54-56). When maximum base salaries are considered, and compared to the external bench -mark comparative group (see, VE 36, 37 & 38, reprinted supra at 25-26, this opinion), in May of 2003, the Lieutenants move up two notches to second in ranking (maximum base $75,084) to Park Ridge ($82,616). Likewise, in May of 2004, the unit will be at the exact same ranking as it occupied in May of 2002 (supra, this opinion, at 25), fourth (4th)out of 15 comparables with a maximum base salary of $77,531. In May of 2005, the lieutenants slips one notch to 5th out of 15 with a maximum base of $80,051 (Id. at 26). What of the Union's argument that no lieutenant reaches the maximum (Brieffor the Union at 15-18; "the problem in this town is that no lieutenant has ever reached that number" (R. 76)? As. pointed out by the Employer, Village Exhibit 48 shows that between 1991 :and 2003 more fire lieutenants than police sergeants have been at the maximum of the salary range (41 versus 36). Additionally, what may explain some of the concerns expressed by the Union is this: the top -paid lieutenants tend to be promoted (R. 490). 5. Other Considerations Related to the Parties' Salary Offers — The Merit System. The details regarding the so-called discretionary point system and lieutenants' pay is outlined with specificity in the positions of the parties and their respective post -hearing briefs and, as such, need not be re -printed and over analyzed here. Suffice it to say the Union's final offer constitutes the dismantling of a fundamental part of the fire lieutenant salary program and would result in fire lieutenants being covered by one program and police sergeants by a different program. It is submitted by Management that this fact strongly supports accepting the Employer's final offer. . Moreover, under the Village's final offer, the range adjustment pool for fire lieutenants will be the same as the range adjustment pool for police sergeants, i.e., 0.75% for FY 2003-04, 0.75% for FY 2004-05, and 1.0% for FY 2005-06 (VX 42). Furthermore, the range adjustments for police sergeants are based on the same 0% to 2% that is included in the Village's final offer (VX 42). This outcome, along with the internal and external considerations noted, favors the Employer's proposal over the Union's. 6. "Cost -of -Living" and "Interests -and -Welfare of the Public" Criteria. As the parties know, the statute mandates consideration of numerous criteria by an interest neutral (supra at 37-38). I have studied the record including the lengthy exhibits and post -hearing briefs of the parties. The parties have asked for an opinion, not a book, and this effort is already too long. All statutory criteria have been weighed and considered. Simply because a criterion was not specifically elaborated on in this opinion does not mean it was not considered. firefighters. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 &. Village of Elk Grove, IL 47 As a final note, I agree with the comments of Arbitrator Edward Clark in City of Gresham arjd IAFF Local 1062, regarding ability -to -pay arguments. (Clark, City of Gresham, reprinted supra, at 38). Rarely, if ever, will ability -to -pay be a dispositive factor in an interest arbitration. Public -sector spending is, in all respects, a matter of priorities. "Should the public employer build a pavilion in the park or buy a new fire truck or increase the range of lieutenants' salaries,?" are common questions that arise in public -sector bargaining and interest proceedings. Simply because payment of a higher salary range is possible does not end the analysis, at least under any semblance of common sense and this statute. VI. AWARD The final offer of the Village regarding Lieutenants' Salaries is awarded. The entire matter of the hours provision, including the effective time and order of selecting days, is remanded to the parties for possible resolution. If no agreement is reached by September 5, 2005, regarding the hours provision, this award (on salaries and hours) will become effective Tuesday, September 6, 2005, unless otherwise agreed to by the parties.' Dated this 16°i day of August, 2005, at DeKalb, IL 60115 QIP Baird Appointed Arbitrator y] Marvin Hill, Jr., neutral Kevin Quinn Union -Appointed Arbitrator ' This, of course, will leave the unresolved issues, specifically the order of selection, for another day. The parties are urged to avoid this Draconian choice. Case No. S -MA -04-262 Elk Grove Village Firefighters 2340 & Village of Elk Grove, IL 48