Agenda Item 5
October 12,2010
Action
MEMORANDUM
TO:
County Council
FROM:
SUBJECT:
Robert H. Drummer, Senior Legislative Atrorneyf)
Action:
Expedited Bill 42-10, Personnel- Retirement - Furlough
Compensation - Represented Employees
Imputed
Management and Fiscal Policy Committee recommends (3-0) approval of Expedited Bill
42-10 as introduced.
Expedited Bill 42-10, Personnel Retirement - Furlough Imputed Compensation ­
Represented Employees, sponsored by the Council President at the request of the County
Executive, was introduced on July 20,2010. A public hearing was held on September 21,2010
and a Management and Fiscal Policy Committee meeting was held on October 4.
Background
Bill 42-10 would amend the definition of regular earnings and final earnings under the
employees' retirement system and the retirement savings plan to include imputed compensation
not received due to a furlough for calculating retirement contributions and benefits for
represented employees.
Retirement - Furlough
Imputed Compensation,
Expedited Bill 18-10, Personnel
enacted on May 20, 2010 and signed into law on May 29, 2010, provided this benefit for both
unrepresented and represented employees who are furloughed. Article 50 of the recently
negotiated out-of-cycle collective bargaining agreement between the Fraternal Order of Police
(FOP) and the County Executive provides that if a police bargaining unit employee is required to
take any furlough, regular earnings for retirement purposes must include any amount the
employee would have received had the employee not been furloughed. This Bill would
implement this provision of the agreement by clarifying current law to include represented
employees.
Public Hearing
No one from the Executive Branch or the FOP testified at the September 21 public
hearing. There were no speakers.
October 4 MFP Worksession
Stuart Weisberg, OHR, represented the Executive Branch. Marc Zifcak represented the
FOP. Bob Drummer represented Council staff. The Committee (3-0) approved the Bill as
introduced.
 PDF to HTML - Convert PDF files to HTML files
Issues
1.
Is the Bill necessary to protect represented employees?
The personnel regulations, at COMCOR 33.07.01.01 §1-27, define a furlough as "A
temporary, non-pay status for hours when an employee is normally scheduled to work but does
not work for the County or receive pay from the County due to a lack of funds or work, as
determined by the CAO." Article 50, Section C of the collective bargaining agreement with the
FOP defines a furlough as "a permanent relief from duty and loss of pay for hours of services
which would otherwise be performed by members of the bargaining unit and which is required
by the chief administrative officer due to lack of funds or work." Bill 18-10 referred to the
definition of a furlough in the personnel regulations. Bill 42-10 would add a reference to the
definition of furlough in a collective bargaining agreement.
Both Bill 18-10 and Bill 42-10 amend the definition of regular earnings in Code §33-35.
This section provides a definition of "regular earnings" to calculate a pension benefit for both
represented and unrepresented employees.
It
protects an employee's pension benefit if the
employee is furloughed. Bill 18-10 referred to the personnel regulations in order to define the
term "furlough." Although some of the words defining "furlough" in the personnel regulations
and in the FOP Agreement are different, the general meaning of the term is the same. Therefore,
Bill 42-10 is unnecessary to extend the benefits of Bill 18-10 to FOP members.
2. Can the bill be amended to eliminate references to both the personnel regulations and a
collective bargaining agreement?
Placing a definition for "furlough" directly in §33-35 would eliminate the need to refer to
either the personnel regulations or a collective bargaining agreement.
It
would also avoid the
possibility that a collective bargaining agreement could indirectly amend the benefits of Bill IS­
10 in the future by either contracting or expanding the definition of "furlough." Staff
amendment 1 at ©9 would accomplish this. OHR Director Joseph Adler opposed this staff
amendment in a memorandum dated September 23. See ©
1O. Committee recommendation 3­
0): enact the Bill as introduced.
This packet contains:
Expedited Bill 42-10
Legislative Request Report
Memo from County Executive
County Attorney Review Memorandum
Fiscal Impact Statement
Staff Amendment 1
Joseph Adler Memo dated September 23
Circle
#
1
5
6
7
8
9
10
F;\LAW\BILLS\1042 Personnel-Retirement-Furlough-Imputed Comp\Action Memo.Doc
2
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill No.
_4..:..:2::o..-..!-10"'-_.--­
Concerning: Personnel - Retirement ­
Furlough - Imputed Compensation ­
Represented Employees
Revised: July
12, 2010
Draft No.
_1_
Introduced:
July
20.2010
Expires:
January
20, 2011
Enacted: _ _ _ _ _ _ _ _ __
Executive:
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: ...,:N..:..:o=n..,.e'-:-_-:--_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
amend the definition of regular earnings and final earnings under the employees'
retirement system and the retirement savings plan to include certain imputed
compensation not received due to a furlough for certain represented employees;
and
(2) generally amend the law regarding the employees' retirement system and the
retirement savings plan.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-35, 33-113 and 33-128
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
*
*
*
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill 42-1 0
1
Sec.
1.
Sections 33-35,33-113 and 33-128 are amended as follows:
33-35. Definitions
2
3
4
5
In this Article, the following words and phrases have the following
meamngs:
*
*
*
6
7
Regular earnings:
Except as otherwise provided, gross pay for actual hours
worked, not including overtime. To calculate regular earnings for FYIO only, a
Group A, E, or H member who is employed on July 1, 2009 and participates in the
integrated or optional plan must include amounts as if the member had received an
increase of 4.5% in the member's gross pay as of July 1, 2009, except for the
purpose of calculating a member's contribution under Section 33-39. To calculate
regular earnings, for FYIO only, for a Group F member who is employed on July
1, 2009 and participates in the integrated or optional plan must include amounts as
if the member had received an increase of 4.25% in the member's gross pay as of
July 1, 2009, except for the purpose of calculating a member's contribution under
Section 33-39.
To calculate regular earnings, for FYIO only, for a Group G
8
9
10
11
12
13
14
15
16
17
member who is employed on July 1, 2009 and participates in the integrated or
optional plan must include amounts as if the member had received an increase of
4%
in
the member's gross pay as of July 1, 2009, except for the purpose of
calculating a member's contribution under Section 33-39. If a member is required
to take any furlough, as defined in personnel regulations adopted under Section 33­
7(b) or
f!
collective bargaining agreement, regular earnings must include any
amount the member would have received if the member had not been required to
take any furlough. Regular earnings for an elected official is gross pay for services
rendered to the County. Regular earnings must not exceed the limit under Internal
Revenue Code Section 40I(a)(l7), as adjusted by the Internal Revenue Service.
Gross pay must be used to determine benefits even if the County implements a
0LA
W\B
ILLS\
1042 Personnel-Retirement-Furlough-Imputed Comp\BiII LDoc
18
19
20
21
22
23
24
25
26
27
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill 42-10
28
29
pick-up plan under Section 414 of the Internal Revenue Code. Gross pay must be
used to determine benefits even if a member has agreed to a reduction in earnings
under:
(a)
the County's deferred compensation plan under Section 457 of the
Internal Revenue Code; or
30
31
32
33
(b)
any statutory fringe benefit program sponsored by the County and
permitted by the Internal Revenue Code.
34
35
36
37
*
33-113. Definitions.
*
*
In this Division the following words and phrases have the following
meanmgs:
38
39
*
(p)
*
*
40
41
42
Regular earnmgs means gross pay for actual hours worked,
including paid leave, but not including overtime, without
reduction for participant contributions that are picked up under
Section 33-116(a), or contributions to any County deferred
compensation plan or statutory fringe benefit program.
If a
43
44
45
46
participant is required to take any furlough, as defined in
personnel regulations under Section 33-7(b) or
~
collective
47
48
49
bargaining agreement, regular earnings must include any
amount the participant would have received if the participant
had not been required to take any furlough.
50
51
*
33-128. Definitions.
*
*
/3
'~
"-i\LAW\SILLS\ 1042 Personnel-Retirement-Furlough-Imputed Comp\BiI1 1.Doc
7'\
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill 42-10
52
53
54
In this Division, the following words and phrases have the following
meamngs:
*
*
*
55
56
57
58
59
60
Final earnings
means the annual average of the regular salary of an employee less
any shift pay differential for the 18-month period immediately before the disability
or any period of 18 consecutive months, whichever is greater. If a participant is
required to take any furlough, as defined in personnel regulations adopted under
33-7(b) or
~
collective bargaining agreement, final earnings must include amounts
the participant would have received if the participant had not been required to take
any furlough.
61
62
63
64
65
*
*
*
Sec. 2. Expedited Effective Date.
The Council declares that this Act is
necessary for the immediate protection of the public interest. This Act takes effect
on July 1,2010.
Approved:
66
67
68
Nancy Floreen, President, County Council
Date
69
Approved:
70
Isiah Leggett, County Executive
Date
71
This is a correct copy ofCouncil action.
72
Linda M. Lauer, Clerk of the Council
Date
~
"
4 \
:\LAW\BILLS\I 042 Personnel-Retirement-Furlough-Imputed Comp\Bili I,Doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Personnel - Retirement
Expedited Bill 42-10
Furlough - Imputed Compensation Represented Employees
DESCRIPTION:
The requested legislation amends the definition of regular earnings and final
earnings under the employees' retirement system and the retirement savings
plan to include certain imputed compensation not received due to a furlough
for represented employees.
Article 50 of the recently negotiated collective bargaining agreement
between the Fraternal Order of Police and the County provides that if a
police bargaining unit employee is required to take any furlough, regular
earnings for retirement purposes must include any amount the employee
would have received had the employee not been furloughed.
PROBLEM:
GOALS AND
OBJECTIVES:
To implement a provision of the collective bargaining agreement with the
FOP.
COORDINATION:
Office of Human Resources
FISCAL IMPACT:
Office of Management and Budget
ECONOMIC
IMPACT:
EVALUATION:
Fiscal impact statement to be provided at a later date
n/a
F:\LAW\BILLS\1042 Personnel-Retirement-Furlough-Imputed Comp\LRR.Doc
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah '-'''''-'''''"'''
County Executive
MEMORANDUM
June 24, 20 I 0
TO:
Nancy Floreen, President
Montgomery County Council
Isiah Leggett, County Executive
Legislation to Ensure No Loss of Retirement Benefits When Sworn Police Officers
Are Furloughed
FROM:
SUBJECT:
Article 50 of the recently negotiated collective bargaining agreement between the
County and the Fraternal Order of Police, Montgomery County Lodge No. 35, INC (FOP) provides
that regular earnings for retirement purposes must include any amount the employee would have
received had the employee not been furloughed.
I am attaching for Council introduction a bill to implement this provision of the
agreement. The bill would amend the definition of regular earnings under the employees' retirement
system and the retirement savings plan to include compensation not received by sworn police officers
due to any furlough.
This bill is similar in purpose to Bill18-1 0, Personnel Retirement Furloughs
imputed compensation, which was enacted by the Council on May 20, 2010. That bill generally
amended the definition of regular earnings under the employees' retirement system and the
retirement savings plan to include compensation not received due to any furlough. Bill 18-10,
however, defined the term "furlough" by reference to the Montgomery County Personnel Regulations
(MCPR).
The provisions of the MCPR generally do not apply to FOP bargaining unit members
unless specifically referenced in the collective bargaining agreement. The FOP was concerned that
because Bill 18-1 0 defined a furlough by reference to the personnel regulations, it might be construed
in the future as somehow binding the FOP to the furlough provisions of the MCPR as interpreted by
the Merit System Protection Board rather than the collective bargaining agreement which is
interpreted by an arbitrator. Therefore, the FOP sought this clarifying language during collective
bargaining and the County agreed in Article 50 to amend the retirement law so as to eliminate any
confusion in the future.
Attachments
cc: Joseph Adler, Director, Office of Human Resources
J. Thomas Manger, Police Chief
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF THE COUNTY ATTORNEY
lsiah Leggett
County Executive
Marc P. Hansen
Acting County Attorney
MEMORANDUM
TO:
CC:
Wes Girling
Kathleen Boucher
Robert Drummer
Marc Hansen
Edward Lattner
Amy Moskowitz
August 30, 2010
Bill 42-10
THRU:
FROM:
DATE:
RE:
Our office was asked to comment on Bill 42-10. Bill 42-10 amends Sections 33-35, 33-113 and
33-128 of the County Code to amend the definition of regular earnings under the employees'
retirement system and the retirement savings plan and disability plan (for retirement savings plan
participants) to include imputed compensation not received due to a furlough for calculating
retirement contributions and benefits. While Bill 18-10 also amended the same provisions of the
County Code for the same purpose, that Bill defined furlough by referencing the personnel
regulations whereas this Bill defines furlough by referencing the collective bargaining
agreements. Although the Bill 42-10 purports to permit a collective bargaining agreement to
define the term "furlough," this would not amount to an impermissible delegation of legislative
authority because we do not interpret Bill 42-10 as delegating final legislative authority to define
what constitutes a "furlough." The authority to define what constitutes a furlough remains with
the County Council.
There are no legal issues associated with this BilL
101 Monroe Street, Rockville, Maryland 20850-2540· amy.moskowitzrivmontgomerycountvmd.gov
240-777-6793· TTD 240·777·2545· Fax 240-777-6705
(j)
 PDF to HTML - Convert PDF files to HTML files
t.c.
S·B;
058687
OFFICE OF MANAGEMENT AND BUDGET
Isiah Leggett
County Executive
LI-,.
i!.b
0).......0
Joseph F. Beach
Director
MEMORANDUM
September
13,2010
Nancy Floreen, President, County Council
TO:
FROM:
SUBJECT:
JosephF. Beach,
D~
Retirement - Furlough - Imputed Compensation
Expedited Bill
42-10,
Personnel
Represented Employees
The purpose of
this
memorandum is to transmit a fiscal and economic impact statement to
the Council on the subject Jegislation.
LEGISLATION SUMMARY
Expedited Bill
42-10
amends the defmition of regular earnings and
final
earnings under the
employees' retirement system and the retirement savings plan to include certain imputed compensation not
received due to a furlough for represented employees,
as
defmed in the personnel regulations or in a
collective bargaining agreement.
FISCAL AND ECONOMIC SUMMARY
The proposed legislation has neither
a
fiscal nor an economic impact. Expedited Bil1
18-10,
Personnel- Retirement - Furlough - Imputed Compensation, enacted on May 20, 2010, and signed into law
on May
29, 2010,
provided this benefit for both unrepresented and represented employees who are
furloughed. The proposed legislation clarifies current law to include represented employees through
reference to the definition of a furlough f01ll1d in a collective bargaining agreement.
.
The following contributed
to
and concurred with this analysis: Lori O'Brien, Office of
Management and Budget; David Platt, Department ofFinance; and Belinda Fulco, Office of Human Resources.
JFB:lob
c: Kathleen Boucher, Assistant Chief Administrative Officer
Dee Gonzalez, Offices of the County Executive
Jennifer Barrett, Director, Department of Finance
Joseph Adler, Director, Office of Human Resources
Belinda Fulco, Office ofHuman Resources
Dayid
f\att,
Department of Finance
Michael'Coveyou, Department of Finance
Lori O'Brien, Office of Management and Budget
John Cuff, Office of Management and Budget
Office of the Director
.',
."
r-"
I~
...
w
• Rockville, Maryland 20850 • 240-777-2800
www.montgomerycountyrnd.gov
 PDF to HTML - Convert PDF files to HTML files
Bill 42-10
Staff Amendment 1
Add the following after line 5:
Furlough:
A tempOJ:ary.non-pay status and absence from nonnally scheduled duty required by
the CAO due to lack of funds or work.
Amend lines
23-27
as follows:
calculating a member's contribution under Section 33-39. If a member is required to take any
furlough, [[as defined in personnel regulations adopted under Section 33-7(b) or
~
collective
bargaining agreement,]] regular earnings must include any amount the member would have
received if the member had not been required to take any furlough. Regular earnings for an
elected official is gross pay for services
Amend lines
43-52
asfollows:
(p)
Regular earnings means gross pay for actual hours worked, including paid leave,
but not including overtime, without reduction for participant contributions that are
picked up under Section 33-116(a), or contributions to any County deferred
compensation plan or statutory fringe benefit program. If a participant is required
to take any furlough, as defined in [[personnel regulations under Section 33-7(b)
or
~
collective bargaining agreement]] Section 33-35, regular earnings must
include any amount the participant would have received if the participant had not
been required to take any furlough.
Amend lines
58-64
as follows:
Final earnings
means the annual average of the regular salary of an employee less any shift pay
differential for the 18-month period immediately before the disability or any period of 18
consecutive months, whichever is greater. If a participant is required to take any furlough, as
defined in [[personnel regulations adopted under 33-7(b) or
f!
collective bargaining agreement]]
Section 33-35, final earnings must include amounts the participant would have received if the
participant had not been required to take any furlough.
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF HUMAN RESOURCES
Isiah Leggett
County Executive
Joseph Adler
Director
MEMORANDUM
September 23,2010
.TO:
Bob Drummer
Montgomery County Council
Joseph Adler, Director
Office of Human Resources
FROM:
SUBJECT: Comments on Bill 42-10
Thank you for the opportunity to comment on your proposed staff amendment to Bill
42-10, Personnel Retirement Furlough Imputed Compensation - Represented Employees.
Upon careful review of this amendment, the County Executive will not support it
for the following reasons:
(1)
it guts the negotiated agreement with the FOP;
(2) it provides a definition of furlough that differs from that contained
in
Article 50,
Section C of the FOP agreement;
(3) it would arguably be a prohibited practice for the County Executive to support this
staff amendment which is at odds with our negotiated agreement with the FOP;
(4) the amendment provides a definition of furlough that differs somewhat from the
definition contained in the Personnel Regulations (Section 1-27) that was approved
by the Council earlier this year in ER 5-10AM. Therefore, we would need to amend
the Personnel Regulations to make it congruent with the statutory definition.
cc: Walt Bader, FOP
ORR Labor Team