| OMAHA POLICE UNION, | | | CASE NO. 233 |
| LOCAL NO. 1, | | | |
| | | ||
| Plaintiff, | | | |
| | | ||
| v. | | | OPINION |
| CITY OF OMAHA, NEBRASKA, | | | AND ORDER |
| A Municipal Corporation, | | | |
| | | ||
| Defendant. | | |
Appearances:
For the Plaintiff: Maynhard H. Weinberg
For the Defendant: Kent N. Whinnery
Before: Wall, P.J.; Green and McGinley, J.J.
This case brings before us the wage dispute of the City of Omaha and its Police Union. We find that we have jurisdiction of the parties, and of the Subject matter of the dispute.
The plaintiff union has presented a detailed analysis of nine cities, their police duties, skills and working conditions. The defendant City of Omaha has presented minimal wage information as to six cities, chosen as the three next higher in population and three next lower in population in the Census Bureau's North Central Region. The plaintiff has provided us with job descriptions and a detailed examination of those job descriptions to include a job analysis performed by a recognized firm doing job classification throughout the United States. The plaintiff has provided detailed information as to social and demographic data, degree of industrialization, unionization, employment, unemployment and other factors which might influence wages in a given area [1]. The defendant apparently relies for comparability on the population figures, as noted above. The defendant also ignores factors of comparability specified by its own Police Chief, and which factors have become part of the accumulated expertise of this Court: that cities in the range of 250,000 to 500,000 population have similar problems, working conditions and police functions, and that police forces of between 400 and 1,000 members have similar structures, work skills and working conditions. The city proffered testimony that any increase beyond 4% would exceed its budget. This is, of course, unfortunate, but is not a limiting factor. The Legislature has determined that public employees are to be paid wages comparable to the prevalent for similar work, skills and working conditions. If a public entitly chooses to ignore this duty of compensation in accord with the prevalent as imposed by the Legislature, and instead allocate its resourses other than as directed by the Legislature, then it will have to reallocate to meet the legislative mandate if its judgment is successfully challenged in this Court. Since the beginning of adjudication of cases under the legislative mandate of ยง 48-818, R. R. S. 1943, this Court has carefully and fully enunciated its reasons and factors considered in arriving at its judgments. The object has been to permit the parties in the future to determine for themselves the wage level likely to be found to be comparable to the prevalent. The Court has become fairly predictable in wage determination matters. We do not deem a choice by a public body to ignore the legislative mandate on wage levels as either a defense or an excuse in an 818 determination.
The Plaintiff has suggested, and the evidence of the defendant would support, an approach that examined only maximum salary levels, rather than either minimums or the totality of the wage structure. We find that comparing maximums on the evidence before us to be extremely difficult at the Police Officer level because some of the cities have intermediate grades below the rank of Sergeant which blur the true maximum comparable, and also indicates that officers in those cities with such intermediate grades may not perform in the higher skills as do the Omaha police. We, therefore, construct our schedule for Police Officers primarily on the minimum salary, although reference to the maximum has been made where the evidence is not so blurred and where the reference can be of use in checking the statistics. We have traditionally worked with the bottom end of a salary schedule in beginning our analysis, and so long as we take into account all of the factors, see no reason to change our approach at this time.
In Lincoln Fire Fighters Assn. v. City of Lincoln, 198 Neb. 174, 252 N. W. 2d 607 (1977), the Supreme Court agreed with our method of selecting comparable employers of paramilitary forces. The method used was that previously used to give some assurance of comparability of work, skills and working conditions for firefighters - geographic proximity, similarity of population, density, force size, and weather conditions. However, the compared-to forces were in eight cities averaging twice as much manufacturing, more presumed unionization, and generally higher median income than Lincoln. The court held that the economic dissimilarity of the cities containing the compared-to-forces and it incorrect to make a direct comparison, and that an adjustment should be made for manufacturing, unionization, and median income if they have a bearing on prevalent wage rates.
By Exhibit 42, defendant apparently attempts to show some economic dissimilarities. Page 1 of the exhibit is a summary of 1970 Bureau of the Census data on items which might show economic dissimilarities (per cent of manufacturing, etc.) between Omaha and the defendant's proffered array. The data is stale, it has none of plaintiff's array in it, and the defendant's expert testified that it had nothing in it directly relatable to Omaha, and that he didn't use it in making the calculations in the rest of the exhibit, T.p. 361:15-21.
The rest of Exhibit 42 is devoted to mean hourly wages in the six city employers preferred by the defendant, in six categories - manufacturing, durable goods, machinery and transportation equipment, non-durable goods, food, and printing and publishing. The wages used are averages, non medians, and are not weighted so that we could determine if manufacturing were affecting the result as we are required to do. The data is stale, coming from 1975 B'S figures and from impeached third quarter 1976 ACCRA statistics. No attempt was made by the defendant to correlate police wages with any of the other data. No attempt was made to analyze the cities containing the plaintiff's compared-to forces. The witness testified that he made no attempt to determine comparable duties or skills or "that sort of thing." T.p. 376:5-13. There is no testimony from defendant as to the effect manufacturing, unionization or median income would have on prevalent wage rates, if any.
We are unable to establish any correlation between raw numbers on the presence of manufacturing on one hand and police wages on the other. Arraying the data from the plaintiff we find no meaningful relationship. Omaha (Ex. 34) has 483 manufacturing establishments, 32,100 employed in manufacturing, and a beginning police officer wage of $12,216.00. Long Beach has fewer establishments, 406, slightly more employees, 38,700, and a beginning wage of $15,732.00. Sacramento has far fewer establishments, 278, about one-third the employees, 11,700, and a beginning wage of $14,400.00. Minneapolis has more than twice the number of establishments, 1,027, less than twice the employees, 57,900, and a beginning wage of $14,092.00. St. Paul has fewer establishments than Omaha, 477, almost as many employees at Minneapolis, 51,l00, and a beginning wage of $13,627.00. Rochester has 644 establishments, almost three times the number of employees, 90,000, and a beginning wage of $13,394.00, lower than St. Paul, Minneapolis, Sacramento, or Long Beach. Akron has 391 establishments, 50,000 employees, and a beginning wage just above Rochester's, $13,470.00. Cincinnati has 960 establishments, 68,200 employees, and a beginning wage of $13,509.00, just above Akron. Toledo, with 662 establishments and 55,800 employees, pays more than Cincinnati, $13,892.00. Portland, with 1,048 establishments but only 40,300 employees, pays $14,061.00 to start. The plaintiff's personnel expert testified these figures were irrelevant. We admitted them on the basis of Lincoln, supra , to see if we could find a pattern. We find them useless as far as making any adjustment. One last time, we will indulge the presumption in favor of the defendant that an increase in the presence of industry affects the wages of paramilitary forces, but as explained hereinafter, we will not do so in the future. The plaintiff presented no evidence on median income or on degree of unionization, though it did present evidence on gross hours and earnings of production workers, labor force and unemployment, average earnings of production workers, assessed valuation, tax rate, sales tax, per capita income, population density, non-worker/worker ratio, poverty percentage, percentage 25 and over, median years of education, and housing. Again, plaintiff's expert testified this evidence was irrelevant if the work, skills and working conditions were shown to be similar. Again, we can find no discernible pattern on which to base an adjustment.
We believe the time has come to clarify the procedural aspects of the issue of comparability and we set forth the following for guidance in future cases. The plaintiff has the ultimate burden of persuasion. However, its initial burden of evidence is satisfied by showing that work circumstances (work, skills and working conditions) are comparable. If plaintiff proves work comparability, it makes out a prima facie case. A defendant may answer such a case either with contrary evidence on work circumstances or with evidence of divergence of economic circumstances that would require adjustment in applying the figures from plaintiff's array. On the issue of economic conditions in compared communities, the defendant has the burden of going forward with the evidence.
A defendant's evidence on economic circumstances may fall into one of three categories. It may show that economic circumstances in a particular community vary so greatly from the community where the litigants are located, that the first community cannot be utilized in a wage array. Second, it may establish a rigorous model of the impact of varient economic circumstances on wages, in which event we would be provided with an appropriate deflator, which would enable us to reduce wages to an economically neutral base. Third, it may simply show a divergence in economic circumstances, not great enough to justify exclusion or not documented sufficiently to provide a precise deflator, yet important enough to be taken into account by adjustment.
The evidence offered by defendant in this case would fall into the third class if it were directed to plaintiff's array. Where a defendant's evidence is in this class, it does not defeat plaintiff's right to use the array it has presented. Neither does it enable us to directly deflate cities to account for diversity of economic circumstances. Such evidence enables us to make only the qualitative judgment that there are or are not divergencies that must be taken into account. We take these factors into account by adjustments to the figures derived from the plaintiff's evidence. That we do by declining to give the full wage increase that would be justified by a direct application of our traditional mid-point of an appropriate array method developed in teachers' pay cases.
The data proffered by both parties is basically 1977 wage levels, while we are to set 1978 levels. The plaintiff has shown that in its comparables, there will be approximately a 5.8% increase or overlap above the 1977 levels shown, by the time 1978 arrives. As noted below, we find this significant for adjusting for any possible upward deviation of the samples caused bv greater industrialization, higher levels of unionization, or other factors which might affect wages in other areas, but not Omaha.
We note particularly Chief Anderson's testimony that his police officers are the best in the nation, and have higher educational and skill levels than are generally found among police in the United States. This is certainly reflected in the clearance levels of crimes in Omaha, as compared to the national level - Omaha having a 30% rate, 150% of the national average of 20%. We find from the testimony, and from the evidence of no intermediate grade between Police Officer and Sergeant, that we are dealing with a higher skill level in the Omaha Police than we are in the other samples. This again assures us as we construct a statistical universe from which we may infer the proper pay levels for the Omaha Police, that we will be erring in all instances on the side of conservatism.
The parties have stipulated to the resolution of all disputes by collective bargaining, other than the economic issues. We approve the stipulation, Appellate Exhibit "A", and incorporate it as part of our Order settling the dispute.
The plaintiff's array of minimums is as follows:
Long Beach $15,732.00
Sacramento $14,400.00
Minneapolis $14,092.00
Portland $14,061.00
Toledo $13,892.00
St. Paul $13,627.00
Cincinnati $13,509.00
Akron $13,470.00
Rochester $13,394.00
Under the Hay[2] system of job classification, as signing Points for know-how, problem solving, accountability, and working conditions, the police officer job description in these cities range from a point total of 264 to 297. Omaha's point total is 274. This is certainly within the range of comparability intended by the Legislature, and used by this Court for similarity of work, skills and working conditions.
This careful analysis, item by item, of each element of the work, skills and working conditions of the jobs sought to be compared, is a far greater assurance to us of ultimate comparability than the relatively unsophisticated techniques which we have used in the past. While our previous tests are still valid and useful, and have been used herein to check and compare results, the detailed analysis of each job is most helpful in the situation we have here, where we cannot duplicate another employer hiring paramilitary employees, located in an essentially agricultural High Plains setting, two to five hundred miles from the nearest other population center, and where we must in essence infer the proper remuneration from a hypothetical universe much as an appriaser infers the value of a unique item of real or personal property.
The median of this array is $13,892.00 and the mean is $14,020.00. An increase of the Omaha minimum to the median would dictate an increase of 13.7%. An increase to the mean would result in an increase of 14-8%.
This same set of cities arrayed as to maximum officer salaries is as follows:
Long Beach$19,476.00
Portland $18,845.00(plus rank of Detective)
St. Paul $18,427.00 (plus rank of Detective)
Minneapolis$18,266.00 (plus rank of Detective)
Sacramento$17,496.00
Akron $16,036.00
Rochester $15,599.00(plus rank of Detective)
Toledo $15,408.00
Cincinnati$15,143.00(plus rank of Specialist)
The median of this array is $17,496.00, which would result in an increase of 17.7%. The average of this array is $17,184.00, which gives an increase of 15.6%. The information gained here is blurred, as we noted above, because of the intermediate ranks between Police Officer and Sergeant in the arrayed cities. We decline to attempt to interpolate the figures were the intermediate ranks included as an extension of the police officer maximum salaries. We know, however, that such interpolation, which would be required for full analysis, would only serve to increase the disparity between the sample and the City of Omaha.
Plaintiff has also tendered some minimal information on salaries in Phoenix, Denver and Buffalo. Defendant has tendered minimal information on Wichita, Minneapolis, Des Moines, Kansas City, Lincoln and St. Louis. As Exhibit 56, plaintiff proffered the Fraternal Order of Police survey of several hundred police departments across the country. This data is stale, since it represents mostly 1976 information, but does afford us the opportunity to cross check the information available and our conclusions from it.
The defendant tendered data from the American Chamber of Commerce Association as some indication of comparability. This data is supposed to substitute for Consumer Price Indices in those cities not in the CPI. We have rejected CPI information as meaningless for our purposes, and find the ACCRA information to be in the same class. In addition, we find the ACCRA data to have been so seriously impeached as to its statistical integrity that we could not use it if we desired to.
We find that Wichita, with some adjustments, may be useful in our consideration. Plaintiff's testimony is that it now exceeds the 250,000 population minimum, that the Wichita's Lieutenant may be compared to the Omaha Sergeant, and the Wichita Captain to the Omaha Lieutenant.
We reject Kansas City because it exceeds our size limitations, because its multiplicity of ranks makes comparison difficult, if not impossible, and because its salaries are set by a Board appointed by the Mayor, an apparently political, rather than economic process. We reject Des Moines because it is outside our size parameters and because of the existence of the rank of Senior Police Officer which, as pointed out above, makes the true maximum pay statistically blurred. We reject St. Louis because it is outside our size guidelines, because it partakes of many of the labor characteristics of Southern cities, which we have traditionally rejected, and because its wages are set by an essentially political process - lobbying the Legislature. We reject Lincoln for direct comparison purposes, but find it a sometime useful guide in cross-checking our reasoning when coupled with the unrebutted testimony that its wage rates run 20-25% below Omaha.
If we then add Wichita with a minimum of $9,327.48 and a maximum of $12,365.88 to the arrays for the Police Officer rank, we arrive at a median for the minimum salary of $13,850.00 and a mean of $13,550.75, or increases of 13.4% and 10.9% respectively. Adding Wichita to the array of maximum salaries, we arrive at a median of $16,766.00 and a mean of $16,702.19, or increases of 12.8% and 12.3% respectively.
Since Akron Police have the option of choosing either a CPI increase or going into bargaining, we find that its figures may well be tainted by the CPI, which we have rejected, rather than by the market-place. Using both Minneapolis and St. Paul may be skewing the data by counting the same market twice. If we delete Minneapolis and Akron while continuing to use Wichita, we have an increase of 11.7% at the median and 10.5% at the mean of the minimums. We note that Long Beach continually skews the sample upward. A look at the map shows it to be basically a part of the Los Angeles metropolitan complex rather than a separate entity. If we delete it from our already depleted sample, we have an increase in the minimum of 11.6% at the median and 7.8% at the mean.
A 20% differential applied to Lincoln gives us the minimum of $14,124.82 and the maximum of $16,335.21, both figures closely approximating the amounts arrived at by our other approaches. A scatter chart of the percentages thus developed centers heavily in the 11.3% area and we deem it to be the appropriate increase for the Police Officer rank. We have specifically not made the addition of the 5.7 or 5.8% 1978 increases in the salaries shown by the evidence, in order to assure that we have made the necessary adjustments downward to offset any possible influence on the sample by higher industrialization, unionization or other economic factors which might affect the sample, but not affect Nebraska.
Turning then to Sergeants and using Wichita Lieutenants as Sergeants, the median of the minimum is $16,833.00 and the mean is $17,339.47, or increases of 7.2% and 10% respectively. The median of the maximums is $19,347.00 and the mean is $19,430.65, or increases of 18.2% and 18.7% respectively. If we then make the same computations without Wichita, we find the median increase at the minimum to be 7.6% and the mean increase at the minimum of 12.5%. The computations at the maximum show the increase at the median to be 22.8% and the increase at the mean to be 21.4%.
Deleting Akron and Minneapolis from the array, we find the increase of the minimum to be 7.2% for the median and 9.7% for the mean. Without Long Beach, the increase of the minimum is 6.7% at the median and 4.7% at the mean. The increase of the maximum without Akron and Minneapolis is 17.2% at the median and 18.8% at the mean. The increase at the maximum without Long Beach is 9.6% at the median and 14.9% at the mean. A scatter chart shows two diverse central points - approximately 8.7% at the minimum and approximately 15.2% at the maximum. If we compare to Lincoln with a 20% additur, we find a minimum of $12,975.00 and a maximum of $16,182.24 and an obvious anomaly. The anomaly could be caused by any number of factors-lack of comparative strength of commnand officers within a bargaining unit, lack of competition (testimony shows that officers are reluctant to take the exam for Sergeant because of the apparent necessity to return to less desirable shifts if promoted), true lack of comparability of the jobs because of the vast divergence in size of the Lincoln and Omaha Police forces, or any other as yet unverbalized or undetected factor. We therefore, based on an informed legislative judgment, increase the minimum 8.7%, the maximum 15.2% and spread the differential over another step.
In comparing the salaries of Lieutenants using Wichita Captains as Lieutenants, we find the median of the minimums to be $19,409.00 and 12.6% difference. The mean of the minimums is $19,797.85, or 14,8% The median of the maximums is $21,099.50, or 18.1%. The mean of the maximums is $22,120.26, or 23.8%. Without Wichita, the figures are 13.1% and 17.6% for the minimums and 20.7% and 26.7% for the maximums.
Deleting Akron and Minneapolis from the array[3], we find the increase of the minimum to be 12.4% for the median and 13.8% for the mean. Without Long Beach, the increase of the minimum is 12.1% at the median and 9.2% at the mean. The increase of the maximum without Akron and Minneapolis is 22.4% at the median and 25.0% at the mean. The increase of the maximum without Long Beach is 15.5% at the median and 20.5% at the mean.
Using Lincoln plus an additur of 20% as a check, we find the minimum to be 4.2% and the maximum to be 10.9%. A scatter chart shows a central point for the minimums to be about 10.9% with a heavy concentration at 12.l% to 12.6% and for the maximum to be about 18.8% with a concentration from 18.1% to 20.7%. In order to assure ourselves that we err on the side of conservatism we, therefore, fix the increase of the minimums at 11.0%, the increase of the maximums at 18%, and spread the differential over an intermediate step.
Turning finally to Captains, we find the increase for the median of the minimums to be 19.5% and mean of the minimums to be 23.8%. The median of the maximums is 21.2% and the mean of the maximurns is 32.1%. Unfortunately, we have no Wichita to add to the hypothetical universe we have been using if we desire a figure on the mean. We can, however, determine the median on the assumption that Wichita would continue to be the lowest of the sample. The median of the minimums thus constructed would be $22,400.00, or an increase of 19.4%. The median of the maximums is $23,638.00, or an increase of 20.8%.
Deleting Akron and Minneapolis from the array, we find the increase of the minimum to be 19.5% for the median and the increase of the maximum to be 21.2%. Without Long Beach, the increase of the minimum at the median is 13.4% and the increase of the maximum at the median is 21.0%.
Checking again with Lincoln, plus an additur of 20%, we find a minimum of $16,776.00 and another anomaly and a maximum of $21,336.00, or an increase of 9%. A scatter chart shows a central point of 18.6% with a heavy concentration at the 19.5% level for the minimum and a central point of 20.6% with a heavy concentration at the 21.2% level for the maximum. Bearing in mind our reluctance to grant full credit to data 20% to be required, we fix the increase of the minimum at 18%, the increase of the maximum at 20%, and spread the differential over an intermediate step.
Again, in order to adjust for any possible influence on the array of manufacturing, industrialization, unionization or any other factor which might produce an upward skewing of the data base provided us by the parties, we iterate that we are using 1977 data to set 1978 wages, and have not added in the 8% average increase (which results in an overlap increase of 5.7-5.8%) shown to be forthcoming for the compared-to police forces. As noted above, the parties knew that we need data which can be translated into adjustments in figures, so that we can in turn adjust the rates, if necessary. In order to be conservative, we have indulged the defendant in this case with the perhaps unwarranted presumption that the adjustments should be downward. We will not do so in the future. Future defendants will have to carry the burden of presenting evidence to support their cases, rather than hoping we will indulge them in a beneficient, though probably foundationless, presumption.
In order that we may consider the total range of compensation, we now turn to fringe benefits. In this area, the defendant has supplied us with no comparables, and the union evidence is uncontradicted. The compilation of these items, which is Exhibit 21, has been reduced to the cost in Omaha-that is, if an insurance policy would cost $100.00 in St. Paul, but only $50.00 in Omaha, the figure shown on Exhibit 21 is the Omaha cost of $50.00.
Health Insurance. We find no departure from the prevalent, and direct the continuation of the present 100% dependent coverage.
Health Insurance, Retired Members. We find no departure from the prevalent, and leave retired members without coverage.
Dental Insurance. We find no departure from the prevalent, and leave the members without coverage.
Life Insurance. We find no departure from the prevalent and direct the continuation of $5,000.00 coverage paid by the defendant.
Uniform Allowance. We find no departure from the prevalent and direct the continuation of the payment of $250.00 per year.
Holidays. The city considers that it may not be in the mainstream of this item. The median in our hypothetical universe is 11, the mean 11.17. We direct an increase to 11 from 9.
Sick Leave. The defendant is above the median and mean on sick leave days per year and we, therefore, direct no change. It is significantly below the prevalent as to the number of sick leave days which may be accumulated, however. The median is an unlimited accumulation. We determine to err on the side of conservatism, if at all, and direct an increase to the agreed level of 100 days, with the privilege of converting a portion to vacation days, as agreed to by the parties at Article XIII of the Stipulation. We direct no change in the practice of not paying for unused sick leave or retirement.
Longevity. The plaintiff's evidence shows a depature of the defendant on this issue from the prevalent. The defendant urges us to increase this item as a benefit to the city. Since the evidence shows a departure, but not the exact extent of the departure from the prevalent, we increase longevity pay as suggested by the defendant: To $200.00 per year for officers having 7 to 14 years of service; to $410.00 per year for officers having 14 to 21 years of service; and to $590.00 per year for officers having more than 21 years of service.
We have considered the amount and cost of pensions as a part of the fringe benefits in determining total compensation, as well as the availability of injured-on-duty pay in the same context, though neither is before us as an issue in itself. Based upon a careful analysis of all of the items making up the compensation package, we determine the percentage pay raises as hereinbefore set forth, together with the changes in fringe benefits as ordered herein, to make the total compensation of Omaha police officers comparable to the prevalent, were ordinary market forces permitted to operate. We again iterate that we are setting 1978 wages based on 1977 data and that we are inferring the value of the services from an admittedly imperfect statistical base. We do not purport to set the value of those services by direct reference, but have weighed and considered all items, whether verbalized or not, which might affect the sample and reached a final determination in the exercise of our informed legislative judgment or expertise.
The steps for Sergeant, Lieutenant, and Captain are set forth at Appendix "A" hereto.
ORDERED that the dispute between the parties be determined as hereinabove set forth.
___D___ ___E___ ___F___
Sergeant $1,427.00 $1,504.00 $1,571.00
Lieutenant $1,595.00 $1,676.00 $1,757.00
Captain $1,844.00 $1,901.00 $1,957.00
[1] This court has, in the past, indulged in the common assumption that public employee wages are somehow related to manufacturing and possible consequent unionization. This assumption does not always hold true. See, e.g., Clinton J. dissenting in Lincoln Firefighters Ass'n v. City of Lincoln , 198 Neb. 174, 252 N.W.2d 607, 612, (1977). See also, Nebraska Statistical Handbook 1976-1977, Nebraska Department of Economic Development, p. 108, which shows Douglas County to have more than 2 l/2 times as many manufacturing establishmens as Lancaster County, and the latter to have three times as many as its nearest competitior, Hall County. Pages 61-64 of the same reference show that none of those three counties are anywhere near the county having the highest per capital personal income in the state, which is Banner, a county not listed as having any manufacturing. The same reference at p. 60 shows Nebraska to be ahead of the other Plains States in per capita income and only slightly behind the national per capita income.
[2] This system is certainly useful for those desiring to quantify job comparison and works well in comparing the same type of job. Its developers claim that it can be used to compare almost any job to any other job, a claim on which we find personnel experts in disagreement, and about which we have reservations.
[3] We use the Toledo maximum for Sergeant as the minimum for Lieutenant, and likewise the maximum for Lieutenant as the minimum for Captain, on the basis that most probably only senior Sergeants are promoted to Lieutenants and only senior Lieutenants are promoted to Captain.
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