Arbitration gives big boost to police pay

An arbitration award for Maui County police officers will cost $2.75 million more this fiscal year and a grand total of $26.6 million more over four years, according to Budget Director Sandy Baz.

The county has no choice but to pay.

“We have to,” Baz said, because Maui County, just like the state’s other four counties, must pay what an arbitration panel decided in early July for base pay and other benefits for members of the State of Hawaii Organization of Police Officers.

In Maui County, there are 332 sworn, uniformed police officers. They had been working without an updated contract since July 1, 2011. The arbitrated award covers the six years from July 1, 2011, to June 30, 2017. There was no pay increase for the first two years of the contract, but there are across-the-board pay hikes in subsequent years. Other benefits are increased in the new contract.

The costs to the county include base pay increases for officers, higher “standard of conduct” differential pay for their work while off-duty, a hike in the officers’ gun allowance and additional costs for health benefits, Baz said.

The overall additional costs per fiscal year, when compared to last fiscal year, break down like this:

* $2.75 million for fiscal 2014, from July 1, 2013, to June 30, 2014.

* $5.1 million for fiscal 2015, from July 1, 2014, to June 30, 2015.

* $8 million for fiscal 2016, from July 1, 2015, to June 30, 2016.

* $10.76 million for fiscal 2017, from July 1, 2016, to June 30, 2017.

The County Council’s Budget and Finance Committee will consider the police officers’ pay raises as budget cost items during a meeting beginning at 1:30 p.m. Thursday in the eighth-floor Council Chambers of the Kalana O Maui building.

This fiscal year, Maui County has budgeted enough to cover the higher raises and benefits for officers, Baz said. For subsequent years, the county may need to look at reducing its costs or increasing revenue.

Mayor Alan Arakawa said there are numerous factors to be considered to determine how the county will afford the higher labor costs.

And those are not only for police officers, he pointed out. The county also is awaiting the results of new employee contracts for firefighters and members of the Hawaii Government Employees Association’s Unit 13, which are white-collar office workers, he said.

“We have those contracts yet to be completed,” he said. “We don’t know what the final numbers are going to be, even for this year.”

Hopefully, the county already has budgeted enough money to cover all employee wages and benefits, Arakawa said.

The county’s current budget for the year is more than half a billion dollars ($559 million), and each budget-drafting cycle takes into account overall costs and revenue, the mayor said.

The county’s revenue base for next fiscal year remains unknown, but whatever the cost of salaries, “we’re going to have to make that adjustment,” the mayor said. “We’re going to go through a whole budget process.”

Those drafting the county’s budget will need to assess its obligations and then prioritize spending, he said.

“We don’t know, and we won’t know until next year,” he said. “It’s very hard to predict.”

Meanwhile, Arakawa said the county is making strides to reduce its costs by, for example, installing photovoltaic electric systems that draw power from the sun and reduce electricity bills.

Another cost savings could come from plans for a trash-to-energy program, he added.

The county may need to delay equipment purchases, he said. Or, the county may need to raise fees or property taxes.

However, island real estate prices are rising, which would lead to higher property valuations and more money for the county that could offset additional costs, Arakawa said.

“I know what the trends are,” he said. “(But) they are merely trends and projections. They’re not real numbers I can hang my hat on.”

He noted that economists believe that Maui County has some “very good years in the near future.”

And, “Maui County is in better shape (financially) than any other county in the state,” he said.

Elsewhere in the state, other counties have “challenges greater than ours,” he said.

There was no immediate comment from SHOPO representatives.

* Brian Perry can be reached at