Hawaii’s four counties did little to fight against the state’s police union over a new six-year contract that will cost taxpayers hundreds of millions of dollars over the next four years.
An arbitrator’s decision reviewed by Civil Beat on Thursday shows that when county officials had the opportunity to push back against the State of Hawaii Organization of Police Officers’ demands for more pay and other concessions, they merely deferred to the union or provided incomplete information that didn’t withstand the arbitrator’s scrutiny.
County officials were unavailable for comment late Thursday, but on Wednesday Honolulu Managing Director Ember Shinn told the City Council Budget Committee that she wishes the Caldwell administration could have had another shot at negotiations.
“We were extremely disappointed that in (the arbitrator’s) ruling and in his comments he virtually disregarded the city’s position,” Shinn told the committee. “If I had to do it over again I would do it differently, obviously, but that was not my call at the time.”
Mayor Kirk Caldwell had not yet taken office when the arbitration proceedings were going on. Those hearings occurred in late November when then-Mayor Peter Carlisle was serving out the rest of his term after losing in the 2012 primary.
This doesn’t mean Caldwell didn’t try. In July, he told the Honolulu Star-Advertiser that he and the other county mayors attempted to re-open the discussions with the three-judge arbitration panel, but was told that he was too late.
As a result the counties are now looking for the money to pay for the award. The panel — which is made up of one union representative, one from the employers’ side and a third-party independent voice — decided 2-to-1 in favor of SHOPO’s proposal.
The panel included SHOPO president Tenari Ma’afala and Allison Murakawa, who represented the employers. The third member, and the one who wrote the decision, was Thomas Angelo of California.
The decision is estimated to cost Honolulu an additional $200 million over the next four years in addition to increasing the political friction between the Caldwell administration and the City Council. Budget cuts are expected that will eliminate programs and services.
On the Big Island — where the Hawaii County Council just approved funding for the new contract Wednesday — the financial impact is estimated to be about $35 million over the life of the contract, when fringe benefits are included.
The estimate on Maui, according to council resolutions, is about $28 million.
Kauai County did not have projections immediately available Thursday.
Although the four counties told the arbitration panel that a victory for SHOPO would put them on the “road to bankruptcy,” that argument wasn’t persuasive.
“The public employers presented arguments aimed toward the notion that the union’s proposals constituted a ‘road to bankruptcy,’” Angelo wrote in his 31-page decision. “The union, on the other hand, asserts that each of the public employers has ample resources and can afford the union’s proposals. This is a familiar dance of the parties, and their positions have not changed over several years.”
He went so far as to say that the disparities between the two sides were so great that it “suggest(ed) the parties are referring to different states.”
SHOPO hired a firm to perform an economic analysis to scrutinize the state and the four counties’ finances to prove that the raises the union was seeking were affordable. That analysis relied on city budget information gleaned from annual financial reports and other financial data from the various jurisdictions.
Honolulu was the only county to object to the SHOPO’s economic analysis. But Angelo found that the city “presented conclusionary statements without the kind of objective support” that the union had provided. In some cases, the city even agreed with some of the union’s assertions.
“For example, the (SHOPO) report indicates the City and County has on a somewhat routine basis under estimated revenue and over estimated expenditures,” Angelo said. “The City and County did not dispute this assertion. This suggests to the Panel that the City and County has a habit of being overly conservative in its fiscal assessments. There’s certainly nothing wrong with this approach, but it does cast doubt on the accuracy of the City and County’s predictions of doom.”
Basically, Angelo found that Honolulu as well as the other counties could afford the wage increases SHOPO was demanding. But Maui, Hawaii and Kauai counties did not provide any testimony at all, so there was nothing to dispute SHOPO’s claims that the jurisdictions had the money. The fact that they didn’t protest too much — if at all — must mean that they were “financially capable” of meeting SHOPO’s demands, Angelo found.
Economic conditions in Hawaii are also “sound and healthy,” Angelo wrote, and growth was expected through 2017, which is the year the contract expires.
The counties struggled when trying to prove their officers already earn salaries comparable to their mainland counterparts. According to the arbitration decision, the counties provided data that was “incomplete, possibly inaccurate and not especially well documented.”
Specifically, much of the information came from the internet and written inquiries made to other mainland jurisdictions. That information did not include other collective bargaining agreements.
“Conversely, the union’s information was far more detailed and clearly encompassed relevant wage data,” Angelo said. “The overwhelming weight of the evidence establishes that SHOPO members lag behind the average wage income from jurisdictions by as much as 41%.”
As a result, Angelo said compensation must be increased to prevent the loss of competent officers to mainland jurisdictions. The cost of living in Honolulu was reported to be 31 percent higher than in the comparative jurisdictions.
The counties also argued unsuccessfully that a large award for SHOPO could create “fiscal turmoil” in the state.
Giving SHOPO a larger pay bump than the other public employee unions could lead to future problems, they said.
Angelo dismissed this argument, saying he had “no authority or any inclination to adjust relationships with other labor unions” and that “the remedy for the perceived problem, if any, should be addressed during those parties next foray into the collective bargaining process.”
The four counties are now in the midst of approving the funding for the new SHOPO contract. Honolulu and Hawaii counties have already passed measures indicating they would pay. Maui and Kauai have yet to do so.
Read Angelo’s 31-page decision here: