Non-Union County Employees Face Pay Cut
Washtenaw County Board of Commissioners administrative briefing (May 27, 2009): At Wednesday’s briefing, commissioners heard more details about the county administration’s plan to cut expenses – a plan that will be formally introduced at the board’s June 3 meeting. Also, commissioners appeared to reach consensus on a proposal to cut their own expenses for 2010 and 2011. And a proposed economic development millage was taken off the June 3 agenda.
County administrator Bob Guenzel has proposed that the county’s nearly 300 non-union employees receive pay cuts of 3% and 2% in 2010 and 2011, respectively. In addition, two previously scheduled 1.5% raises in 2010 would be rescinded, and all pay-for-performance incentives would be canceled for 2009 through 2011. Health insurance benefits would also be affected – changes include instituting a $50 medical premium sharing per month, beginning in January 2011.
Guenzel told commissioners that these steps, which require board approval, would save the county roughly $2.3 million. The cuts are part of a broader effort to deal with a projected $26 million deficit over the next two years.
By law, these changes don’t affect elected officials, including commissioners, judges, sheriff, county prosecutor, county clerk and water resources commissioner. Nor do they apply to non-union employees with the sheriff’s department, whose salaries are tied to a separate contract within that department.
In response to a question from commissioner Ken Schwartz, Guenzel said the cuts would connect to negotiations with the 17 bargaining units who represent union employees. (More than 80% of the county’s workforce of 1,350 people are represented by unions.) Those negotiations, aimed at modifying existing contracts, are expected to continue through July.
Cuts to Commissioners’ Expenses
Commissioners have been wrangling over ways to cut their own $600,000 annual budget. At their May 20 board meeting, a proposal by commissioner Leah Gunn – which among other things cut all travel and per diem expenses for 2010 and 2011 – was voted down. A counter-proposal by commissioner Kristin Judge called for a 10% cut to the commissioners’ budget, with details to be worked out later. That resolution was tabled at the May 20 meeting.
On Wednesday, commissioner Conan Smith presented yet another proposal, saying he’d talked individually with each commissioner and thought that this solution could be acceptable. The plan calls for cutting several line items for the 2010 budget, including the amount paid to the lobbying firm Governmental Consultant Services, Inc., led by Kirk Profit – a recommendation originally proposed by Gunn.
The biggest change would be to take a “flex account” approach to several line items, essentially grouping those items into a lump sum and allowing commissioners to spend the money as they choose. Items included in the flex account would be per diem, travel, mileage and fringe benefits, such as health insurance. Some commissioners, for example, use the health insurance benefit while others don’t, and not all commissioners use per diem or travel allowances. The amount per commissioner for the flex account is tentatively $9,900. Funds not spent by commissioners at year’s end are returned to the general fund.
Commissioner Jeff Irwin was a dissenting voice in the proposal, saying he thought it was a silly concept and fraught with all kinds of peril, but that the amount of money involved was so small that it wasn’t worth fighting. Commissioner Wes Prater said he found the proposal acceptable for its symbolic value, but he also said rather forcefully that he didn’t believe commissioners were overpaid and he noted that they have not taken pay increases for several years.
In total, the proposed cuts would reduce the commissioners’ budget by about 6%. The biggest line item – their salaries – accounts for $177,387 and by law can’t be adjusted until the beginning of their next term, in 2011.
Economic Development Millage
The administration had put an item on the June 3 agenda asking commissioners to approve an economic development tax of 0.017 mills. The amount would raise $250,000 and be used to fund Ann Arbor SPARK and SPARK East in Ypsilanti. Guenzel said it amounted to an additional $1.70 tax for every $100,000 in a property’s taxable value.
Commissioner Ken Schwartz found a state statute that would allow the county to levy this tax for the purpose of growing jobs and reducing unemployment. Like a millage passed in October for veterans services, this would not require voter approval. However, several commissioners expressed concern about levying any kind of tax, no matter how small, during the current economic climate. Irwin said he felt that they should hold a public hearing on the issue, and Guenzel agreed to take the item off the June 3 agenda and schedule a hearing for July or August. Guenzel said the county has already committed $200,000 to Ann Arbor SPARK and $50,000 to SPARK East in 2010. Currently, that amount would come out of the general fund. The millage was meant to relieve the general fund of that commitment.
In this economy, when they are cutting staff, salaries and benefits, can’t the board cut its travel budget?
Its pretty pathetic. I know that many board members have used that as a work errr “vacation,” in the past and I find it very offensive.
This is nothing but a $9900 “slush fund” which each Commissioner can use however s/he likes. I am voting “no”. I find this an appalling lack of leadership when employees are being asked to take cuts in pay as well as paying more for their health care.
Please let the Commissioners know what YOU think!
The e-mail to reach all of us is:
l-boc@ewashtenaw.org
I certainly do not support a Commissioner Slush Fund of close to $10,000. I think this plan is shameful. We are asking our county departments to cut between 5% and 20% of their costs (read less services to the vulnerable) and yet a reduction of 6.2% of the BOC expenses is considered admirable. Hardly!
I support a mileage payment when we use our personal cars to attend meetings to which we have been assigned, but that’s it. Our salaries are sufficient to let us travel for education.
And all we hear from the city of Ann Arbor on similar ways to cut costs are crickets chirping.
I agree with (and celebrate) Commissioners Bergman and Gunn, as well as Commissioner Irwin’s comments as reported. I’m sorry to see that Commissioner Conan Smith is facilitating this move to an entitlement amount for commissioners. As I’ve commented before, assigning an actual amount to each commissioner to be spent is qualitatively different from budgeting for certain types of expenditures. Those who have been around budgets much know that when a line item is given a certain value, it tends to be spent.
Leah, you are my commissioner so thank YOU for taking a stand on this. It really says a great deal with the county in such a financial mess, et. al. that our elected officials are complaining about not having a big enough perks ‘slush fund’. Good for YOU Leah and the others who are opposing this move.
Alan, I completely agree!!! Leah and the other Ann Arbor commissioners who are fighting this need to stand strong and insist that the county commission do the right thing.
To say that you (the commissioners) work hard and deserve to not have your salaries or perks cut while asking all other employees to sacrifice is unconscionable. You are implying that these other people deserve to have their salaries and benefits cut. The county employees are sacrificing and the elected officials should sacrifice also.
They are completely out of touch and must be channeling Marie Antoinette,
“The peasants have no bread? Let them eat cake!”
Not to interrupt the love-fest here, but why are there two commissioners making a bigger stink on a message board than at the actual Board of Commissioners meeting.
It seems pretty silly to me and quite obviously a complete failure of leadership that this has even become an issue.
The County lived high when it had 12 percent revenue growth and budgeted as if it would continue infinitely. The Board and the administration was the last to recognize the precipitous decline in revenue and should have been planning for this contingency by setting clear priorities, identifying key services and funding reserves.
I apologize, but I’m not going to congratulate Commissioners for doing something they should have done many months ago and for a paltry response to a clear financial crisis that was evident to everyone but them.
Richard,
You need to focus on individual members who are not doing their jobs if you have issues with ‘a complete failure of leadership’.
I think some members have done a great job, others are political hacks who are clueless, and all of them have a complex and difficult situation that needs to be fixed. The perks issue is largely symbolic and addresses a tiny fraction of the budget crisis. But it’s insane some elected officials are unwilling to look at their own budget without this sense of entitlement.
I’ve responsed to a number of Chronicle stories expressing my…lack of happiness about issues facing the city and county. Occasionally things happen that deserve praise. This is one of them.
Alan,
I meant no disrepect toward you with my comment.
I believe that the lack of “leadership” from the Board has deepened the crisis. When some of the Commissioners finally take a stand on what amounts to a largely symbolic and silly issue, it reeks of condescension and is very frustrating.
It is frustrating because the Board failed to address the fiscal issues the County faced well before the financial crisis hit and acted as if the good times would never end.
The Board and administration threw cash around with very little regard for impact or the needs of the residents. When you have double digit revenue growth, it’s easy to keep everyone happy by just spending more. Had they been fiscally prudent, kept costs down, identified clear priorities and needs, and acted strategically, the depth and harshness of the cuts would not be near what they are today.
The whole Zeeb Road facility is a prime example. The County built a 100,000 or so square foot building that is now largely empty and has become a drain on resources. There are plenty of examples and sadly, very few of them will see the light of day because budgeting is complicated and the lack of leadership on the Board.
Richard,
Don’t worry, I didn’t read any disrepect in your message.
I agree with you, the county didn’t do a great job preparing for this major downturn. But some members were forward looking and others weren’t. My point is we need to praise the ones who were and address the ones who weren’t. The board isn’t all or nothing. But you make several valid points. The Sheriff issue was one Ms. Gunn was out front on, which has has a major impact on the County budget and she deserves some credit for that.
Alan,
I respect Commissioner Gunn, I think she is very intelligent and savvy politician (meant respectfully), though the issue about the Commissioner’s budget is absurd. I understand she is trying to address it but it is still frustrating.
I can’t say I feel the same way about the other Commissioner who commented in this thread, though I’ll leave it at that.
The draft proposal I shared with the board would have cut overall BOC expenditures by more than 11% – directly in line with what we are asking of other departments.
The flex account would have eliminated individual line-items for travel, per diems, conferences and fringe benefits (currently valued around $11,600 per commissioner). Merging these expenditures into a single account would have significantly reduced the non-salary remuneration that commissioners receive by a minimum of 16%. It would have also allowed each commissioner to determine individually how to use the balance of those funds to best serve their constituencies.
I think it is difficult to debate the relative merits of educational conferences vs. mileage vs. per diems as each plays a significantly different role depending on the means and abilities of the commissioner.
Take travel: I have been privileged to use a travel allotment over the past year to learn about the federal global climate change policy — that knowledge allowed me to justify a request of Congressman Dingell to included nearly a billion dollars for local governments in the new legislation. In addition to the remarkable environmental benefits of reduction carbon emissions, Washtenaw now stands to gain in the range of $250K annually from that policy. To me, that’s county money well spent, and I hope my constituents agree.
Or consider per diems: not every commissioner has been well-off financially, and some of them miss work to attend to the obligations of their appointments. I think it is both fair and good policy to provide the per diem to compensate them for that service. Otherwise, only those who can afford to would be able to honestly and completely fulfill the obligations of the office. Ensuring that leadership in our democracy is open to anyone regardless of their economic class is a positive value.
I wholly discount the “slush fund” accusations as specious fear-mongering. First, our board rules allow you to collect per diems or mileage only for meetings to which you have an appointment and which you attend. Similarly, travel is only reimbursed for legitimate county business. Those rules don’t change with the flex account strategy — only the line item allocations. The accountability is the same; the expenditure of funds is simply more easily personalized. This is a 21st century way of ensuring that diverse interests can be met in a fair and equitable manner.
As for transparency, Ms. Armentrout is well-aware that our current system is already a series of “entitlement accounts”. We are allowed a $3,000 for conferences, ~$5,800 for fringe benefits, and per diems and mileage for meetings we attend by right. Worse, our current system allows for direct cash remuneration that may or may not benefit the county residents (e.g., if a commissioner does not use a benefits package, that package is cashed-out into his or her account to the tune of some $400+ per month).
Under the flex account methodology, one would still have the option of applying the account to these same general activities, but if you didn’t expend it the money would accrue back to the general fund rather than as side-pocket pay as happens with fringe benefits.
[For the cynics out there who suggest that any commissioner would blindly spend up to the maximum allowance, historically more than 50% of the travel budget is returned to the general fund as it stands.]
In a budget crisis like the one we face now, we desperately need a new methodology for resolving conflict and allowing anyone in public service to maximize the benefit to the residents with even fewer dollars. Learning to accept flexibility in expenditures while still maintaining a high and appropriate level of accountability is an essential step if we want innovation and creativity to remain the hallmarks of governance in our county.
Conan,
Your long justification for a taxpayer funded expense account is dripping with entitlement. Claiming that your attendance at a conference paid for by Washtenaw County taxpayers directly led to a $1 billion federal appropriation that the County now stands to benefit. Really?
The federal appropriation wouldn’t have occurred but for your presence at this conference? I think the whole point of the discussion just flew over your head.
It is deeply insulting that the Commissioners have such a difficult time cutting their own budget, even symbolically when County residents face far worse economically. Further, if you are indeed a supporter of full transparency, as part of the resolution, shouldn’t the Commissioners be required to post their expenditures on the County website with their bios so the voters can pass judgment on how taxpayer money was spent?
By suggesting that critics of your proposal somehow seek to promote exclusivity in public office is unfortunate and demeaning. As a leader, I would expect that in difficult times you would choose to set the example for the employees, residents and their families whose lives will be impacted by the severe budget cuts the County will be required to make.
You are debating a $9,900 annual expense budget when you already earn a salary of $16,000-$18,000 annually with benefits. I will agree the service is demanding and can be time consuming, but being a public official is about leadership and sacrifice, not about ego and entitlement.
This whole debate is a sad reflection of the current Board of Commissioners and you should be ashamed.
Conan- in many or our workplaces we have the same perks and incentives that are being discussed (per diem when traveling, mileage, health insurance etc.), however, we (as employees) are not allowed to pick and choose which things we want to get reimbursed for. Either it is an option for reimbursement or not. To say that since one does not fully use one benefit that is offered that they should be allowed to transfer those funds or that reimbursement opportunity to something else of their choosing is not how most companies operate. You choose to use it or decline it.
Just because some do not use the benefits at the same rate, that does not justify what many are calling the “slush fund” where they can pick and choose what they want covered. The county commission’s budget decision should be based on whether the benefit, perk or reimbursement should be given at all and at what level it should be given, not based on usage. If travel and education are to be cut, they need to be cut across the board.
For example: Just because I haven’t used maternity leave does that mean it is not a justified benefit for everyone? If someone uses maternity leave 3 times, does that mean I, a person with no children, deserve extra vacation time?
Two Cents: I’m an advocate for more flexibility in staff benefit packages as well. At the organization I run, we use a “total package compensation” model that allows individual employees to modify their salary-benefits combination provided the organizational expense stays within the package limit. I find that this approach is attractive to in-demand talent and that it provides a measure of assured equity that is comforting to the staff. Your example of maternity/paternity leave is one we wrangled with in coming up with this strategy. Someone can justifiably argue that the person taking leave is working less for the same amount of pay. I found it difficult to definitively determine the relative value of parental leave versus, say, leave to care for an elderly relative. We resolve it by giving everyone a generous amount of leave time (vacation, sick, personal, etc) and putting an approval mechanism in place for extended absences.
From the county perspective, that approval mechanism is what complicates the travel/per diem picture. Like most organizations, staff within the county work in a hierarchy that requires approval for travel expenses. The BOC is at the top of that food chain and has eleven coequal partners. I think it would be nightmarish-ly political if we had to approve commissioners’ travel plans (e.g. weighing the relatively higher mileage reimbursements Republican commissioners from western Washtenaw would like versus the travel I would like to accommodate: I live in the city and don’t have a car, so I don’t claim mileage).
I think the best way to resolve those potential conflicts is to ensure equitable treatment of all of the commissioners through the flex-account.
Your suggestions of just setting the line-items and letting the chips fall where they may is what we do now, which is fine. The flex-account discussion was prompted because the relative value of those line-items became a matter of debate (to whom does the benefit really accrue and is it in the best interest of the county to support that activity). Perspectives on that question ranged dramatically based on geography, political persuasion and fiscal philosophy. It was my hope to downplay those issues with the flex-account solution.
Now, what Richard suggests is true: this is just a drop in the bucket of a financial deluge. It does seems strange to spend a lot of time on it, but we are also spending a lot (more, in fact) on the larger issues. While I’ve spent a couple hours in total thinking about commissioner remuneration, I spend 4-5 hours every week just reviewing the financial data that drives the decisions around other budget items, let alone working specifically on program cuts and revenue-side solutions.
The relative weight there is fair given the role that that the commissioner’s budget plays in setting the direction for the rest of the county. It is a bit more than symbolic. If we move to a flex-account, it’s conceivable that the staff at-large would consider increasing the flexibility of compensation. If we cut our remuneration considerably, it sends a signal through the organization that similar cuts are coming. If we trim our total budget by 10 or 15 percent, it validates the administration’s ask of departments to do the same.
In all, I truly feel that every one of the commissioners is taking the entirety of the budget challenge very seriously and weighing issues that have never arisen before. If you believe in the mantra that “we can’t cut our way to prosperity” then some time needs to be made to consider new ways of conducting our business. Even though it may seem frivolous, these exercises are helping to craft a new structure for county governance that is absolutely necessary in an economic environment that is going to continue on a downward trend for several years to come.
Conan,
I certainly appreciate your willingness to address some of the questions and frustration regarding the issue of Commissioner compensation. I think that you know as well as anyone that politics is, to some degree, theater and how you comport yourself as a public servant can be as important as the substantive policy under consideration.
The actions of the Board, in response to the current crisis will have a profound impact all of the employees and their families. The fact that the Board compensation debate has been handled callously does not imbue confidence in the elected leadership at the County.
I still believe that if you were serious about transparency, you and all the other Board members would post your expense records on the County website with your bio. I’m not holding my breath. I have a feeling that if you did, it would do more to curb the spending than any policy change.
Having had experience and knowledge of County operations, I am still frustrated by the Board and the Administration’s failure to address the underlying structural issues related to the budget priorities and funding.
I agree you can’t cut your way out of prosperity, but for too long the County has been the fiscal Santa Claus for any project, program or initiative regardless of the outcomes and overall impact to the County residents.
One example is the weatherization program, which I know you support, I’m curious if you have ever reviewed the overhead and administrative costs for that program? While it may be a good program in theory, the program, previous to the last round of stimulus funding, spent only 55 cents on the dollar to support low-income families. I’m curious if you ever asked for an audit? You might be surprised.
Regardless, I don’t envy the decisions that you have to make and I realize that some of the circumstances were out of your control. My hope is that you will have a greater sensitivity to the individuals and families that will be impacted by your decisions.
Im surprised your County commissioenrs are paid per diums, health insurance and are provided benefits by the taxpayers. I serve as a county commissioenrs here in Rutherford County just 20 miles outside of nashville Tennesse and we are paid only about $8,000 yearly with no benefits whatsoever. The taxpayesr shoudl ask the commissioners to cut their salaries and benefits.