PERB
The Final Sessions The Final Sessions

This is the latest in the series of informational pieces designed to update you on the status of the PERB proceedings.  This information will supplement information being provided to the PBA board members and delegates on a regular basis as developments occur, in an effort to keep each of you well informed.

 The final sessions of the PERB Arbitration testimony were heard at two very long sessions on Monday, May 6 and Tuesday, May 7.

May 6, 2002

As you may recall, the last two sessions were reserved for rebuttal arguments.  The City opened the rebuttal phase of the hearings on May 6, with testimony from Mark Page, Director of the NYC Office of Management and Budget (OMB), and David Rubenstein, OMB's Deputy Director.  Both Page and Rubenstein painted a very bleak picture of the state of the City's finances in an attempt to counter the compelling testimony of the PBA's expert economists, Carol O'Cleireacain, Ph.D and Matthew Drennan, Ph.D, who testified at the last session regarding the state of the City and Federal economies.  O'Cleireacain had testified that notwithstanding the City's depiction of the financial state of the City, the credit rating agencies still rated the City at the highest possible level.  Incredibly, Mark Page tried to deflect O'Cleireacain's testimony by stating that the City was "cut a break" by the rating agencies because of the September 11 attacks.

The next City witness was Professor David G. Blanchflower, Economics Professor at Dartmouth University.  The aim of Professor Blanchflower's presentation was to rebut the testimony of Professors Harry Katz and David Lipsky, the PBA's expert Labor Economists from Cornell University, who testified that cost of living differences must be considered when comparing the salaries of New York City Police Officers with the salaries received by their counterparts in other national jurisdictions.  Professor Blanchflower attacked as "flawed" the Bureau of Labor Statistics ("BLS") derived cost of living index developed by Professors Katz and Lipsky.  However, when confronted on cross examination with an excerpt from a book that he authored (The Wage Curve, published in 1994) which supported the methodology utilized by Katz and Lipsky, he offered implausible testimony stating that "we used the cost-of-living index [in the book], we really didn't believe it, we didn't trust it." Professor Blanchflower also gave testimony in an attempt to rebut the methodology utilized by the PBA in its comprehensive comparability analysis prepared for the PBA by Linn & Green Associates. Addressing the PBA's private sector analysis, Professor Blanchflower stated that NYC police officers are more appropriately compared to security guards. He also stated that "if a market adjustment were required, I would expect to see an inability to hire the requisite numbers of high quality officers, also resignation rates would be high in both absolute terms and in relation to the past - and a significantly higher incidence of absenteeism." He concluded by stating "there exists no convincing evidence to suggest that a special 'market adjustment' above the pattern settlement is required for New York City Police Officers."

The City then put on Professor Anne Bartel, Economics Professor at Columbia University.  The thrust of Professor Bartel's testimony was that salary is not the only thing that prospective police recruits consider when deciding whether to take a position with the New York City Police Department.  Professor Bartel testified that the benefits received by New York City Police Officers are rich and act as a counterbalance to the lower salaries received as compared to other jurisdictions with lesser benefits.  She cited the following examples of  benefits that prospective officers consider when deciding to take the job as a police officer: excellent training, excitement of the job, promotion opportunities, and the prospect of  second careers upon retirement.  However, Professor Bartel's testimony was undermined on cross examination and in the direct examination of PBA witnesses when she was unable to explain away an article that she wrote ("Wages, Nonwage Job Characteristics, and Labor Mobility," published in 1982) that supported the methodology of deflating pay based on the cost of living, which the PBA utilized in its comparability analysis, and when former NYC Police Officer Michael Kline testified why he left the job — money — and that the same benefits to which Bartel testified and others were available at the PAPD.

Pulling out all of the stops, the City next called upon The Mayor of the City of New York, Michael Bloomberg, to present testimony on the fiscal state of the City.  Mayor Bloomberg stated that the City's offer to the PBA was fair and is "much more generous than the City could afford if [the bargaining] was just starting out."  The Mayor added that the City was a "victim of the downturn in the economy," and the "terrible tragedy of 9/11."  He reiterated the points raised by Mark Shaw and David Rubenstein regarding the economy and echoed the sentiments expressed by Labor Commissioner Hanley with respect to the importance of pattern bargaining and parity on the City's continued financial stability.  In addition, relying on the prior testimony of police officials, he denied that the City was experiencing any difficulty recruiting qualified police officers.  The Mayor ended his testimony by stating to the panel: "It's a wonderful city, do a good job."

     PBA Witnesses

Robert W. Linn, the PBA's Chief Negotiator, put on a powerful presentation using the City's own figures as a sword against them to demonstrate that New York City Police Officers are grossly underpaid vis- a- vis their counterparts both nationally and regionally.  The charts told a sad story about what happened to NYC police officers' salaries in the 1990's, a decade in which NYC police officers produced historic crime reductions and national cities as well as regional jurisdictions received substantial raises above the Consumer Price Index (CPI), while police officers in New York City received raises below the CPI.   Mr. Linn informed the panel members that notwithstanding the City's reliance on pattern bargaining, there exists more than one pattern in this round.  Linn stated, "in fact, there are four patterns so far."  He then led the panel on a virtual tour of the various settlements reached in this round, including the civilian, librarian, uniformed coalition agreements, and the recent recommendation handed down by the panel in the United Federation of Teachers ("UFT") fact finding proceeding. Mr. Linn concluded his testimony by urging the panel to adopt "a fifth pattern that recognizes . . . the absolute necessity for a market adjustment . . . ."

PBA President Patrick J. Lynch (Excerpts from my testimony)

I began my testimony identifying myself as the President of the Patrolmen's Benevolent Association, and "more importantly I am New York City Police Officer."  I informed the Panel that "the single key ingredient to the rebirth of New York City since the dark days of record crime and murder has been the work of police officers of the NYPD," noting that it was because of the hard work of New York City police officers — "the City's greatest single asset" — that New York is "one of he safest, most liveable big cities in the nation."

Attempting to put a face on the average New York City police officer, I described in detail the unique dangers of our job, the cause of our low morale, and the difficulties that we face trying to make ends meet with the salaries we are paid.  Echoing the testimony of our expert witnesses, I discussed the crisis that we face with regard to recruitment and retention advising the panel that "on June 5, 1999, when I was entrusted with the Presidency of this organization, I was proud to represent 26,500 police officers . . . . and now have just over 23,000 police officers." Focusing on the recruitment and retention crisis, I warned that "our ranks have thinned and will continue to thin because of retirements and losses to other much better compensated police departments," unless the Panel awards an adjustment to bring our salaries in line with the market.

A 1998 report of the findings of Mayor Giuliani's own Task Force on police/community relations, which was comprised of thirty-three prominent community leaders, stated that the NYPD was "a demoralized and dispirited group" and that "the main source of discontent is low pay." The Task Force report recognized the unique nature of police work and recommended that police officers should be properly compensated for the work they do. Characterizing the New York City Board of Collective Bargaining ("BCB"), the Task Force described it as a "joke" and "a stacked deck," pointing to the City's 27-0 record against unions in interest arbitrations before the BCB.

  Expressing our frustration with the NYC collective bargaining process I stated, "the police officers of the PBA have walked in the desert for over a decade seeking a fair hearing."  Looking back on the travesty of the arbitration awards of the 1990's and our fight to have our hearings heard by the PERB, I told the Panel that we have swallowed hard and were forced to accept two OCB decisions that we believe were patently unfair, and we have suffered through the scorched earth litigation tactics by the City.

"Even during the boom years of the 90's when the City generated record surpluses and could have addressed the economic hardships of police officers, it chose not to." While their neighboring Police Departments have realized more appropriate levels of compensation, the New York City Police Department's salaries have been virtually frozen in time. Unfortunately, the trend has been that New York City spends vast amounts of money to recruit and train police officers only to have them leave for better paying jobs. Thus, New York City has become the nation's job fair for police." 

Although we were never paid for the sacrifices we made — including the loss of many heroes — "cops continued to do their jobs."  Commenting on the nature of our commitment and the City's lack of appreciation for the work that we do, I said, "The world and I watched as my members ran into the World Trade Center, some for the last time . . . . They have risen to the occasion time and time again.  But when the smoke cleared, they heard the praise but were greeted by the same song . . . 'we cannot afford to pay.'"

"The time has come to pay those hero police officers for the work they've done, the work they continue to do, and the work I know they will do in the future. The time has come to relieve our police officers from the need to hold down that second job.  The time has come for this City to help itself retain its most valuable asset, the men and women who have earned the right to be called New York's Finest . . . ."

Former Chief Allan Hoehl testified about the unique nature of police work in New York City.  With over 40 years experience in the NYPD when he retired in March, Chief Hoehl was the Department's most senior Chief.  Chief Hoehl testified extensively about all aspects of policing in New York City that make our job one of the most difficult in the country, including the increased responsibilities police officers face in the wake of the terrorist attacks and the continued threat of future terrorist acts.  As for police morale, Chief Hoehl informed the panel that "currently the overall morale is very strongly affected by the low pay that they receive." Chief Hoehl expressed great concern for the quality of officers that the Department will be able to attract given the current salaries stating that "without the appropriate salary, we will not be getting the same quality."  He left the panel with the following thought: "if the quality of the people coming into to the Department is reduced, I'm concerned that we will not be able to provide the same services that we have been providing that have turned the City around and made for the economic viability that exists." 

Former NYPD Police Officer Michael Kline testified that after proudly wearing his father's shield for nearly 5 years, he rolled over to the Port Authority Police Department because of the money.  Officer Kline's sincere and honest testimony about the difficulties of trying to live on a cop's salary, in his father's basement, seemed to hit home with the panel.  You could hear the emotion in his voice when he told the panel that his father retired as a police officer from the NYPD after 23 years of service, how he wore his father's shield and how it broke his heart to turn it in.  His moving testimony depicted the unfortunate reality that New York City Police Officers are confronted with - leaving a job that they otherwise love to better provide for their families.  Police Officer Kline effectively contradicted the testimony of Professor Bartel when he stated the only reason he left the NYPD was because of the low pay.

Session Ended - took approximately 12 1/2 hours.

May 7, 2002

      PBA Witnesses

The PBA continued its rebuttal case on May 7, starting with testimony from two heavyweights in the law enforcement community —Thomas Constantine, Former Superintendent of the New York State Troopers and Administrator of the Drug Enforcement Agency ("DEA"), and William J. Bratton, former Police Commissioner of the City of New York.  Both Constantine and Bratton gave impressive testimony about various aspects of policing, the unique nature of police work in New York City, and their expert opinions regarding police officer salaries and recruitment and retention issues.  Mr. Constantine testified about his analysis of the cost savings to the citizens of New York attributable to the crime reduction during the period 1994-1998.   According to Constantine, there were just over 750,000 fewer victims of serious crimes in New York City during the period, which conservatively translates into a direct savings for each crime victim of approximately $1,000 for an aggregate total of $750 million dollars.  He testified that he knows of "no other police agency or any location in the United States that has been as successful as the City of New York" in reducing crime.  He also explained that, unlike today where NYS Troopers make more than New York City Police Officers, when he became Superintendent of the NYS Troopers in 1986, Troopers were paid below New York City Police Officers and other police agencies in the metropolitan area. Discussing recruitment and retention issues, Mr. Constantine testified that as head of the DEA, he hired "a significant number" of former New York City Police Officers; the DEA pays its Special Agents in New York approximately $85,000 per year. Mr. Constantine concluded by stating that NYC Police Officers "need to have a fair salary."    

Former Police Commissioner William J. Bratton testified passionately of his belief that "New York City police officers were . . . the only losers in the 1990's in New York City."  He explained further that he, Giuliani and everyone around them benefitted from the successes of the New York City Police Department in the 1990's.  Bratton stated emphatically, "everybody won except for cops."  He quoted from a scene from his favorite movie "The Magnificent Seven" in which Yul Brenner said "they will always win and we will always lose" as an analogy to what police officers felt after they received the double zeroes contract.  Bratton eloquently characterized the travesty suffered by police officers in the 1990's:

"They lost.  They lost big time.  They got lip-service and pats on the back, 'great job fellas.'  But when it came time to benefit economically, and if ever there was a time to benefit economically in this City, it was certainly during that era . . . . But if those 24,000 cops were not out there plugging away every day, making those arrests, putting their lives in danger, going the extra mile, reducing their sick time, reducing their injured-on-duty time . . . . They gave. They gave early, they gave often and they continue to give.   What have they gotten in return?  Zero . . . . The city reneged on a commitment that you work hard and you benefit.  They worked damn hard.  Did they benefit? Not at all. Not at all."

Commissioner Bratton concluded that because of the high value that he placed on the work of New York City Police Officers, he believed that the PBA's 21.9 % wage proposal could and should be reached.

The PBA's next witness was Ms. Eva Jacobs, the PBA's expert Economist, who rebutted Professor Blanchflower's testimony by opining that the BLS derived cost of living index created by Professors Lipsky and Katz was "not only a perfectly valid index, but one that could be used to deflate wages."

Professors Harry Katz and David Lipsky, the PBA's expert Labor Economists from Cornell University, discussed their analysis of the pay received by police officers in the 21 largest cities compared to the pay of New York City police officers concluding that, when adjusted for the cost of living, New York City Police Officers are ranked near the bottom of the list of these cities.  Rebutting the testimony of the City's witnesses, who refused to adjust the salaries contained in their comparability studies based on inter-city cost of living differences, Professor Katz said:  "it defies economic views and common sense to compare New York City and other national cities, including Jacksonville, Memphis and others, in terms of the pay they provide to police officers and other employees . . . . without accounting for inter-city cost of living differences."  Moreover, Katz stated, "no matter how you cut it, New York City has the highest cost of living across the 21 national cities and exceeds the cost of living in the average of the next largest 20 cities by a consistent amount."

 In addition, Professors Katz and Lipsky testified as to their analysis of whether, and to what extent, pattern bargaining exists between police and public sector white collar employees in a sample of large cities that they surveyed, concluding that when employers adhere to strict pattern bargaining, certain employees often fall out of the salary market, which leads to problems in areas of recruitment and retention.  Professor Katz testified "we continue to believe that there is an acute recruitment and retention problem," which he characterized as a "crisis."  Lipsky and Katz predicted that the uniformed force of the NYPD would shrink to approximately 35,792 by December 31, 2002 (down from 40,069 as of December 31, 2000) even assuming the anticipated appointment of 1,200 new police officers in July.  Professor Lipsky buttressed Katz's testimony pointing out that the outflows of police continue to exceed the inflows resulting in a significant retention problem for the NYPD.   Finally, Professor Katz stated that it would be "inappropriate to say there is a 'pattern' in this round.   Katz ended his testimony stating that pattern bargaining is not valuable to the parties when "it produces outcomes that are far out of line with market forces."

      City Witness

The City called as its last rebuttal witness, James F. Hanley, Commissioner of the Office of Labor Relations.  Commissioner Hanley moved quickly from subject to subject, reiterating his earlier testimony regarding the importance of adhering to the pattern and the consequences that will result if the panel renders an award that breaks the pattern and disrupts the parity relationships that exist between many uniformed bargaining units.  His testimony was peppered with criticisms of the testimony of PBA witnesses.  He said that pattern bargaining is a "reality" and "to destroy it, . . . would create a nuclear meltdown."  In closing, Commissioner Hanley testified in support of the OCB Arbitration process and against the perception that it was a "stacked deck" stating, "it was always a gentlemanly scholarly approach."

     Panel Urged Agreement Between Parties
      to Expedite an Award

At the end of the hearing, Dana Eischen, the Chairman of the Panel, expressed the Panel's unanimous interest in quickly issuing an award.  Addressing the Declaratory Ruling Petition Before PERB, Chairman Eischen implored the parties to remove from the Panel's jurisdiction any matters "still in an unfinished state before PERB or other forums."  The Panel "strongly urged" the parties to comply with their recommendation because to do otherwise would prevent them from issuing a timely award on the wage issues presently before them. Therefore, in order to insure a speedy award, the parties agreed that the Panel would issue a decision on wages and health and welfare benefits, along the timetable set out below.  

The Panel announced the following briefing schedule:  post-hearing briefs are due by June 14 and reply briefs on June 28.  An award is expected sometime thereafter.

Session Ended - took approximately 13 1/2 hours.

Declaratory Ruling by PERB Administrative Law Judge

Since we last wrote, a decision was rendered in the Declaratory Ruling Proceeding that was proceeding on a separate track at PERB (see January Newsletter). The Administrative Law Judge ("ALJ"), Philip L. Maier, rendered a decision, which is subject to appeal to the full board at PERB. He found effectively that non-mandatory provisions of our expired Collective Bargaining Agreement ("CBA") convert to mandatory subjects and cannot be removed unilaterally from the contract by either party, which was of great importance to the PBA. However, because of the Police Commissioner's power granted under the NYC Administrative Code, the ALJ concluded that provisions of our CBA relating to discipline (including the so-called 48-hour rule contained in the Bill of Rights Section of the CBA) are prohibited subjects of bargaining, consistent with a prior ruling affecting the other police unions.  We disagree with the ALJ's ruling in this respect and will appeal to the full PERB Board.  Most importantly, our decision to appeal the ALJ's decision will not delay the Panel's award.

Conclusion

The end is in sight for this round of bargaining. It began over two years ago on May 4, 2000, when we filed our demands. The City has fought us every step of the way. We had to win a year's worth of court battles just so we could have our case heard before a PERB appointed arbitration panel.  Throughout our struggle, we worked methodically and diligently with our professionals to construct a powerfully convincing case. Over the past several weeks, we have presented a very credible and compelling case - by all accounts, the most comprehensive case ever presented by the PBA. However, our job is far from over.  The PBA's team of professionals is preparing our post-hearing briefs fully detailing the strong arguments already presented at the hearings.  Barring any unforeseen circumstance, we should have a decision by mid-summer.  In addition, believe it or not, the next round of bargaining is already upon us and we are hard at work preparing our demands for the next round.

We thank you for your continued patience and support. We will keep you informed as developments occur.

Fraternally,

Patrick J. Lynch
President