## Facts

- Law Enforcement Labor Services, Inc., Local No. 84 (union) was the bargaining representative for 26 sworn police officers employed by the City of Inver Grove Heights (city).
- In 2010 successor collective-bargaining negotiations, the union and the city reached agreement on all contract terms except (1) wage increases and (2) health-insurance plans.
- Under Minnesota law governing police bargaining impasses, the commissioner of the Minnesota Bureau of Mediation Services appointed a neutral arbitrator to decide the unresolved issues.
- On wages, the union proposed a 1.5% wage increase; the city proposed no wage increase.
- On health insurance, several plan options were involved. The key dispute was whether the city should continue paying 100% of premium costs for the most expensive plans or require employees to pay a portion of those premiums.
- The record addressed the effects of the 2008 recession on the city’s revenue, while also showing the city would be able to cover the proposed wage increases.
- Consumer Price Index data showed inflationary increases in the cost of living.
- The record also reflected steep nationwide increases in health-insurance costs and evidence that higher utilization contributes to higher costs; where employees pay part of premiums, utilization is generally lower.

## Issues

1. Should the successor agreement include a wage increase for the officers (union: 1.5%; city: 0%)?
2. Should the city continue paying the full premium for the most expensive health-insurance plans, or should employees be required to pay part of those premiums?

## Decision

- The arbitrator resolved the parties’ impasse in a binding interest-arbitration award issued through the Minnesota Bureau of Mediation Services process in No. 10-PN-1058 (2010).
- On wages, the award provided for a wage increase consistent with the union’s proposal.
- On health insurance, the award required employee premium contributions for the most expensive plan options rather than continued full city payment.
- In reaching these results, the arbitrator relied on evidence that (a) the city could fund the wage change despite recession-related revenue impacts, (b) CPI data showed rising living costs, and (c) health-insurance cost growth was tied in part to utilization, which tends to decrease when employees share premium costs.

## Legal Principles

- Minnesota law permits binding interest arbitration to set terms of a police collective-bargaining agreement when negotiations reach impasse and the dispute is properly submitted to the Bureau of Mediation Services.
- In determining economic terms in interest arbitration, the decision-maker may consider the employer’s ability to pay, cost-of-living measures such as the Consumer Price Index, and evidence about overall compensation and benefit costs.
- For health-insurance disputes, the decision-maker may consider national cost trends and evidence about how employee premium sharing can affect utilization and total plan costs.

## Conclusion

City of Inver Grove Heights, No. 10-PN-1058 (2010), arose from successor bargaining between the City of Inver Grove Heights and its police union where only wages and health insurance remained unresolved; a Bureau of Mediation Services-appointed arbitrator issued a binding award granting a wage increase and requiring employees to contribute toward premiums for the most expensive health plans based on evidence about the city’s ability to fund changes, inflation shown by CPI data, and health-cost growth tied in part to utilization.
