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FIFTH DIVISION
November 26, 2003

Plaintiff, the City of Calumet City (the City), appeals theorder of the circuit court affirming an arbitral award infavor of the Illinois Fraternal Order of Police Labor Council(the Union). The City contends that the arbitration panel'saward was arbitrary and capricious and in excess of itsauthority. The Union cross-appeals the order of the circuitcourt staying the enforcement of the arbitral awardpending appeal. We affirm the arbitral award and lift thestay.

The Union is a labor organization that serves as theexclusive bargaining representative of all peace officers inthe City. The City is a home rule municipality in Cook Countywith a population under 1 million. In the course ofcollective bargaining between the Union and the City overthe terms of the 1999-2002 collective bargaining agreement,the parties reached an impasse with regard to 17 issues. TheUnion then filed a demand for interest arbitrationpursuant to section 14 of the Illinois Public Labor RelationsAct (the Act)(5 ILCS 315/14 (West 2000)). The arbitration panelruled in favor of the Union on 12 of the issues and thecircuit court affirmed.

The City filed this appeal contesting 3 of the 12 issuesdecided in favor of the Union by the arbitration panel. Specifically, the City appeals the arbitration panel's ruling:(1) lifting the residency requirement and providing that theUnion's police officers may reside within a 20-mile radiusoutside the City; (2) providing the officers with the optionof grievance arbitration for any disciplinary action inexcess of five days; and (3) providing that the officers may usetheir official uniforms, indicia and equipment whileengaged in secondary employment with a private commercialemployer.

The Union argues that the City's petition for review ofthe arbitral award was not timely filed in the circuit courtand, thus, that the appeal should be dismissed. Section 14(k)of the Act (5 ILCS 315/14(k)(West 1998)) provides that petitionsfor review must be filed with the circuit court within 90days after the arbitration panel issues its award. The term"issue" means "to publish, put forth, circulate and to give outpublicly or officially." County of Peoria v. AmericanFederation of State, County & Municipal Employees, 167 Ill. App.3d 247, 249 (1988), citing Webster's Second College Dictionary(1972 ed.).

Here, the arbitration panel consisted of a neutralchairman, a City delegate, and a Union delegate. The neutralchairman signed the arbitration award on October 12, 2000,the City delegate signed the award on October 31, 2000, andthe Union delegate signed the award on November 8, 2000. Thus, the earliest date that the award could have beenpublished, put forth, circulated, or given out publicly orofficially (i.e., issued) by the entire arbitration panel wasNovember 8, 2000, the date by which all three panel memberssigned the award. The City filed its petition for review inthe circuit court on January 25, 2001, within 90 days ofNovember 8, 2000. Accordingly, the City's petition was timelyfiled.

Next, the City argues that the arbitration paneldeprived the City of its due process rights by failing tofollow the mandatory procedural provisions of section14(g) of the Act. The Union responds that the provisions ofsection 14(g) are not mandatory.

The interpretation of a statute is a question of lawsubject to de novo review. Poullette v. Silverstein, 328 Ill. App.3d 791, 794 (2002). The fundamental principle of statutoryconstruction is to ascertain and give effect to the intentof the legislature. Poullette, 328 Ill. App. 3d at 794. Thelanguage of the statute is the most reliable indicator oflegislative intent. Poulette, 328 Ill. App. 3d at 794.

Section 14(g) of the Act provides in relevant part:

"At or before the conclusion of the hearing *** thearbitration panel shall identify the economic issues indispute, and direct each of the parties to submit, withinsuch time limit as the panel shall prescribe, to thearbitration panel and to each other its last offer ofsettlement on each economic issue." (Emphasis added.) 5 ILCS 315/14 (g) (West 2000).

By employing the word "shall," the legislature expressedits clear intent to impose a mandatory obligation on thearbitration panel to identify the economic issues in disputeand facilitate the exchange of final settlement offers at orbefore the conclusion of the hearing. See People v. O'Brien,197 Ill. 2d 88, 93 (2001)(holding that the use of the word "shall"in a statute is a clear expression of legislative intent toimpose a mandatory obligation).

The City contends that the arbitration panel violatedthe mandatory provisions of section 14(g) by failing toidentify the economic issues in dispute and preventing theCity from presenting its final settlement offer.

Review of the record indicates that prior to thehearing, the parties stipulated to the economic issues indispute and said stipulation was accepted by the arbitrationpanel. In their prehearing stipulation, the parties statedthat "final offers on each impasse issue shall be exchanged bythe parties and copies of each shall be provided to theArbitrator not later than the start of the arbitrationhearing on February 1, 2000. Such final offers may not bechanged except by mutual agreement of the parties." Therecord of the start of the arbitration hearing on February1, 2000, provides as follows:

"[Counsel for the Union]: We would like toexchange final offers at this juncture of theproceeding.

[Arbitrator]: All right.

[Counsel for the Union]: We are prepared to doso.

(Documents tendered to arbitration panel andcounsel.)

[Counsel for the City]: We had ours set up as aseparate exhibit. I'll give it to you now.

(Documents tendered to arbitration panel.)"

Thus, contrary to the City's argument, the arbitrationpanel accepted the parties' identification of the economicissues in dispute and allowed the parties to exchange finalsettlement offers prior to the conclusion of the hearing. Accordingly, the arbitration panel adequately followed theprocedural provisions set forth in section 14 of the Act.

Next, the City contends that the arbitration panelviolated section 14 of the Act when it denied the City'srequest at the end of the hearing to amend its finalsettlement offer. The City's argument is unavailing, assection 14 of the Act does not provide that the arbitrationpanel must accept amendments to final settlement offersafter they have been exchanged. Further, as discussed above,the parties stipulated that the final settlement offers couldnot be changed except by mutual agreement of the parties. The Union did not agree to the City's amendment, andtherefore the arbitration panel did not err in denying theCity leave to amend.

Next, the City argues that the arbitration panelviolated public policy by failing to comply with themandatory procedural provisions of section 14(g) of the Act. An arbitration award may be set aside if it violates an explicitpublic policy. Equity Insurance Managers of Illinois, LLC v.McNichols, 324 Ill. App. 3d 830, 835 (2001). The City's public policyargument is unavailing, as the arbitration panel compliedwith the mandatory procedural provisions of section 14(g)of the Act. See our discussion above.

Next, the City argues that the arbitration panelexceeded its authority in lifting the residency requirementand allowing the Union's police officers to reside within a20-mile radius outside the City. Specifically, the Citycontends that residency requirements are not a mandatorysubject of collective bargaining and, thus, that thearbitration panel lacked jurisdiction over this dispute.

This same issue was raised in Town of Cicero v. IllinoisAss'n of Firefighters, IAFF Local 717, 338 Ill. App. 3d 364 (2003),where the arbitrator lifted the Town of Cicero's residencyrequirement for its firefighters. On appeal, the town arguedthat residency requirements are not a mandatory subject ofcollective bargaining and, thus, that the arbitrator lackedjurisdiction over this dispute. Cicero, 338 Ill. App. 3d at 370. The Cicero court held (Cicero, 338 Ill. App. 3d at 370) thatwhether a topic is a mandatory subject of collectivebargaining is generally determined according to abalancing test set forth in Central City Education Ass'n v.Illinois Educational Labor Relations Board, 149 Ill. 2d 496(1992), and City of Belvidere v. Illinois State Labor RelationsBoard, 181 Ill. 2d 191 (1998). Pursuant to the test, a matter is amandatory subject of bargaining: (1) if it concerns wages,hours and terms and conditions of employment; and (2) iseither not a matter of inherent managerial authority or isa matter of inherent managerial authority, but the benefitsof the bargaining outweigh the burdens bargaining imposeson the employer's authority. Cicero, 338 Ill. App. 3d at 370.

The Cicero court held that the Central City/Belvideretest was not applicable or necessary to determine thearbitrability of the residency requirement, because section14(i) of the Act, as amended in 1997, specifically provides forthe negotiability of residency requirements. Cicero, 338 Ill.App. 3d at 370-71. Section 14(i) states:

"In the case of peace officers, the arbitrationdecision shall be limited to wages, hours, andconditions of employment (which may includeresidency requirements in municipalities with apopulation under 1,000,000 *** )***." 5 ILCS 315/14(i)(West 1998).

The Cicero court further held that even if the CentralCity/Belvidere test was applicable, each of its prongs weighsin favor of mandatory arbitrability of a residencyrequirement dispute. Cicero, 338 Ill. App. 3d at 371. The Cicerocourt held that as to prong one, the town's residencyordinance (like the residency ordinance at issue here)specifically provides that residency is a term and conditionof employment; as to prong two, the residency requirementdoes not concern a matter of inherent managerial policy;and as to prong three, the benefits of bargaining for Unionmembers outweighs any burdens to the town. Cicero, 338 Ill.App. 3d at 371. Accordingly, the Cicero court held that thearbitrator had jurisdiction to decide the residency dispute. Cicero, 338 Ill. App. 3d at 371.

We adopt the reasoning in Cicero and hold that theresidency of peace officers is a mandatory topic ofcollective bargaining and that the arbitration paneltherefore had jurisdiction to decide this dispute.

Next, the City argues that the arbitration panel'sdecision to lift the residency requirement infringes uponthe City's powers as a home rule unit to impose a residencyrequirement upon its peace officers. In effect, the Citycontends that the residency requirement was the exclusiveprovince of the City and was not properly a subject ofarbitration. We disagree. The City voluntarily entered intoa collective bargaining agreement with the Union, pursuantto which, as discussed above, the residency requirement wasa mandatory subject of bargaining. As a mandatory subjectof bargaining, the residency requirement was subject toarbitration where, as here, an impasse was reached. See 5 ILCS315/14 (West 1998)(providing for arbitration where an impasseis reached on mandatory subjects of bargaining).

Next, the City argues that the arbitration panel'slifting of the City's residency requirement and allowingthe Union's officers to reside within a 20-mile radius outsidethe City was arbitrary and capricious. Section 14(k) of the Actprovides:

"Orders of the arbitration panel shall be reviewable*** but only for reasons that the arbitration panel waswithout or exceeded its statutory authority; the orderis arbitrary, or capricious; or the order was procured byfraud, collusion or other similar and unlawful means." (Emphasis added.) 5 ILCS 315/14(k) (West 1998).

The arbitration panel acts arbitrarily and capriciouslyif it: (1) relies upon factors that the legislature did notintend for the panel to consider; (2) entirely fails toconsider important aspects of the problem; or (3) offers anexplanation for its decision that runs counter to theevidence or that is so implausible that it could not beascribed to a difference in view or the product of thepanel's expertise. Cicero, 338 Ill. App. 3d at 372.

The arbitration panel did not act arbitrarily orcapriciously in lifting the residency requirement andallowing the Union's officers to reside within a 20-mileradius outside the City. The panel first considered whetherthe residency requirement was a "negotiated status quo"that should not be disturbed. The panel determined therewas no long-standing, negotiated status quo on this issue,as the residency requirement was a nonmandatory subject ofbargaining until 1997, when the Act was amended to providefor the mandatory bargaining of the residencyrequirement.

Next, the panel considered several police reports andaffidavits and determined that the safety of off-duty policeofficers and their families had been compromised by theresidency requirement, specifically, that the officers andtheir families had been threatened or harassed by personswho knew their identities and home addresses.

Next, the panel considered the "internal comparables",i.e., it noted that the clerk's unit (Teamsters Local 726) andthe street/alley & water unit (Teamsters Local 142) hadvoluntarily accepted a residency requirement. The panelstated that it ordinarily would be unwilling to break sucha pattern in interest arbitration, but that this case wasdifferent because the City's clerical employees and membersof its street/alley & water departments do not arrestsuspected criminals and therefore are not concerned aboutwhether the "criminal element" knows where they live. Thepanel noted that unlike the other City workers, policeofficers and their families are subject to reprisal from"persons who have demonstrated no respect for the law andlittle regard for human life." The panel concluded that"equity favors [the police officers] here."

Next, the panel looked at "external comparables", i.e., itconsidered whether collective bargaining agreements inother cities contained a residency clause. The panel notedthat the evidence was mixed. The panel concluded that "thecontinuing risk of violent acts of reprisal toward [police]officers and their families is a more importantconsideration than whether or not residency requirementsexist in comparable communities. *** There is just noconclusive evidence in the record to suggest that adoptionof the Union's position on this issue would compromise theDepartment's ability to meet its legitimate operationalobjectives."

Accordingly, the panel lifted the residencyrequirement and provided that the officers could residewithin a 20-mile radius of the City. The panel did not actarbitrarily and capriciously in so doing, as it did not relyon improper factors, fail to consider important aspects ofthe problem, or offer an explanation for its decision thatwas implausible or counter to the evidence.

Next, the City argues that the arbitration panel erred byadopting the Union's proposal giving the police officers theoption of grievance arbitration for any disciplinary actionin excess of five days. The City contends that this rulingconflicts with the Illinois Municipal Code (Municipal Code),which provides that the Board of Police and FireCommissioners is vested with the exclusive authority to heardisciplinary matters involving the removal or discharge ofemployees. See 65 ILCS 5/10-2.1-17 (West 1998). The City contendsthat section 7 of the Act precludes the arbitration panelfrom adopting a Union proposal in violation of theMunicipal Code. Section 7 states in pertinent part:

"The duty 'to bargain collectively' shall alsoinclude an obligation to negotiate over any matterwith respect to wages, hours and other conditions ofemployment, not specifically provided for in any otherlaw or not specifically in violation of the provisions ofany law." (Emphasis added.) 5 ILCS 315/7 (West 1998).

The appellate court has held that section 7 of the Actprevents an arbitrator from adopting a Union proposal thatconflicts with a mandatory statute, i.e., a statute that themunicipality has no authority to change. Illinois FraternalOrder of Police Labor Council v. Town of Cicero, 301 Ill. App.3d 323, 327-331 (1998). The appellate court has further held thatunder the Illinois Constitution (article VII, section 6(a)), ahome rule municipality has the power to pass laws thatconflict with the directives set out in the Municipal Codeconcerning the Board of Police and Fire Commissioners. Police Labor Council, 301 Ill. App. 3d at 331. Thus, for a homerule unit (such as the City here), the Municipal Code isoptional, not mandatory, and therefore section 7 does notprevent an arbitrator from adopting a Union proposal inviolation of the Municipal Code. Police Labor Council, 301 Ill.App. 3d at 331.

The City argues that City of Markham v. State & MunicipalTeamsters, Chauffers & Helpers Local 726, 299 Ill. App. 3d 615 (1998),compels a different result. In Markham, the appellate courtheld that the arbitrator lacked the authority to issue anaward conflicting with the Municipal Code. Markham, 299Ill. App. 3d at 618. Markham is inapposite, as it involved a non-home-rule entity for which the Municipal Code wasmandatory. Markham, 299 Ill. App. 3d at 618. As discussed above,the City here is a home rule unit for which the MunicipalCode is optional, not mandatory; therefore, unlike Markham,the arbitration panel had the authority to adopt the Unionproposal conflicting with the Municipal Code.

Next, the City argues that the arbitration panel'sadoption of the Union's proposal infringes upon the City'spowers as a home rule unit to discipline its police officers. In effect, the City contends that disciplinary matters arethe exclusive province of the City and are not properly asubject of arbitration. We disagree. As discussed above, theCity voluntarily entered into a collective bargainingagreement with the Union, pursuant to which disciplinarymatters were mandatory subjects of bargaining. Asmandatory subjects of bargaining, disciplinary matters weresubject to arbitration where, as here, an impasse was reached. See 5 ILCS 315/14 (West 1998)(providing for arbitration where animpasse is reached on mandatory subjects of bargaining).

Next, the City argues for reversal of the arbitrationpanel's award allowing the Union's police officers to usetheir official uniforms, indicia and equipment whileengaged in secondary employment as private detectives. TheCity contends that by using their official uniforms, indiciaand equipment while engaging in secondary employment asprivate detectives, the officers will be holding themselvesout as agents of the City and in effect transforming the Cityinto a detective agency. The City contends that this willput the City in violation of the Private Detective, PrivateAlarm, Private Security, and Locksmith Act of 2004 (PrivateDetective Act)(Pub. Act 93-438, eff. August 5, 2003 (amending 225ILCS 446/1 et seq. (West 1998))), which provides that privatedetective agencies must be certified by the IllinoisDepartment of Professional Regulation.

The City argues that the arbitral award cannot stand,because the City is not certified as a detective agency by theIllinois Department of Professional Regulation as requiredby the Private Detective Act. The City's argument is not welltaken, as section 5-15 of the Private Detective Act states thatthe "intent of the General Assembly in enacting this statuteis to regulate persons, corporations, and firms licensedunder this Act for the protection of the public." Pub. Act 93-438,