| SACRAMENTO COUNTY DSA PREVAILS
IN INTEREST ARBITRATION By David P. Mastagni & David E. Mastagni Over a year after the Sacramento County Deputy Sheriffs Association invoked interest arbitration to resolve an impasse with the County of Sacramento over a successor contract, the arbitration panel has ruled in favor of the DSA on compensation, vacation and sick leave/overtime disputes. The DSA now must continue to fight for retirement benefits because the county Board of Supervisors voted to place that portion of the award on the November general election ballot for voter approval. The DSA established the right under an amendment to the Sacramento County Charter to arbitrate over compensation and working conditions whenever the DSA bargaining and the County reach impasse in contract negotiations. By comparison, the statewide interest arbitration scheme, SB440, confers a right to public safety members to arbitrate over compensation only. This interest arbitration was the second under Sacramento County Charter section 94. How the Arbitration Panel Was Selected Selection of the arbitration panel is essential to a successful arbitration. The parties agreed on John B. LaRocco as the neutral arbitrator to chair the three-member panel. The DSA appointed its then-president, Jerry Moore, as the party arbitrator whose responsibility was to articulate and advance the deputies' views in closed arbitration sessions. Mr. Moore also had bargained with the County along with the SCDSA bargaining team and MH&A labor negotiator and Ph.D David Swim. Sacramento County selected its director of labor relations and chief negotiator, Steven Lakich, as its party arbitrator. This lengthy interest arbitration involved 33 evidentiary and numerous med-arb days hearings from September, 2002, to the end of June, 2003. The record was over 4,000 pages of testimony and 179 exhibits. The parties filed opening and reply briefs to assist the neutral member of the panel in making a final decision. The arbitration decision itself is 61 pages. Pattern of Negotiations Critical to Arbitration The parties entered the interest arbitration with the last best final offers each had made in the preceding negotiations. Over the course of those negotiations, the disputed issues were winnowed to four: compensation, vacation, sick leave/overtime, and health care. The DSA prevailed in the interest arbitration on the first three issues; while the County did prevail on the fourth issue, health care, the County's last best final offer was one that was agreeable to the deputies in the context of bargaining. The pattern of negotiations is very critical in the arbitration as offers, counteroffers, and the pattern of bargaining itself became a central part of the evidence and ultimate ruling. It is also noteworthy the last final offer submitted by the County was significantly better than any offer the County had made during the actual contract negotiations. This singular fact indicates the effect of interest arbitration actually is to bring the parties closer to agreement. The arbitrator awarded retroactive cost of living adjustments based upon the bargaining history and the time delays. The issue of compensation was the most intensely disputed, litigated and briefed to the three-member panel. During the two-year course of negotiations preceding the arbitration, and the arbitration itself, the presentation of comparables -- compensation paid by other similar agencies -- became the reference by which the party arbitrators and neutral arbitrator decided appropriate compensation levels. Arbitration Panel Relies on Evidence of Comparables Central to the issue of which "last best final offer" would prevail was the issue of comparable agencies in terms of both methodology and selection. The County of Sacramento sought to include rural agencies with different revenue sources and different job functions. The DSA sought to include demographically comparable agencies with similar revenue sources and agencies which, like the Sacramento County Sheriff's Department, included an international airport, a large correctional system, and a diversity of job assignments. The neutral arbitrator did not select specific comparable jurisdictions; however, he indicated in the body of the decision that certain of the County's jurisdictions were not comparable. He opined that the County's comparable expert, by manipulating longevity, was able to juxtapose San Joaquin County and Sacramento County in two different arbitration proceedings. Specifically, in Sacramento County, San Joaquin deputies were paid less than Sacramento deputies while in San Joaquin County, San Joaquin deputies were paid more than Sacramento deputies. Doug Johnson, the County's comparables expert, attributed this phenomena to his selection of data points and the values he assigned to them. Arbitrator Rejects County's "Total Effective Pay" Concept Most importantly, the neutral arbitrator rejected the concept of total effective pay calculated on the basis of what could be compensation without weighting. For instance, the evidence showed about 20% of all represented members received the full incentive pay. When the incentive was weighted, factoring in those receiving it versus those who do not, the total effective pay in Sacramento County was less than the total highest possible effective pay. The arbitrator also rejected using health care benefit costs as an element of total effective pay. This was based upon the fact health care is an in-kind service, varies from jurisdiction to jurisdiction, suffers from intricacies such as co-pays and deductibles, and is subject to geographic variances. The arbitrator also took extensive evidence on recruitment, retention, and work load. Central to law enforcement is recruiting the most qualified candidates, who can pass a background and perform their law enforcement functions with regard to the demographics of their jurisdictions. This issue was litigated and was the subject of multiple expert witnesses on such issues as workload, crime statistics, statewide law enforcement recruitment and backgrounds. Parties Litigated Ability to Pay and Costing The second most litigated issue was costing and ability to pay. Ability to pay is a function of revenue sources and budget expenditures by the public entity. In presenting its case the County took the position that revenue sources were sharply declining and further budget cuts could need to be made. The deputies took the position the two local ballot measures providing for public safety taxes would be passed again and they were. The DSA also argued the County maintained significant financial reserves so that when weighed against the DSA offer, the County had the ability to pay. The deputies found $170,000,000 in tobacco funding, which the arbitrator cited as a source of fertile funding based on the opinion of public sector financial expert Gerry Bacheki. The DSA also located and presented evidence on substantial funding and income sources arising out of the deputies' performance as courthouse security, at the correctional facilities, and at the airport. The issue of costing was analyzed in detail. The County's approach consisted of assigning a value of $1.3 million per percentage of compensation increase. The Deputies' approach was to net the costs of a 1% salary increase by reducing it for income received from the jail, correctional facilities, courts and airport. This resulted in the cost of a percentage of a salary increase to the unit being approximately .9 to .98 million dollars. Further, the Deputies costed the retirement pickup by reducing it by revenues generated. The retirement pickup was not defined as a salary increase and costed 1% of retirement pickup at approximately $670,000. This approach considers the fact "retirement" is not paid retirement pickup. The witnesses for the County were the County Treasurer, the County financial officers, and the County negotiator. Those witnesses were cross-examined extensively and in many instances conceded to the Deputies' contentions. The Parties' Final Offers The final, prevailing offer of the Sacramento County Deputy Sheriffs Association, for a two- year term ending on June 30, 2004, is as follows:
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