GO AGENDA #1
February 28,2011
Worksession
MEMORANDUM
TO:
Government Operations and Fiscal Policy Committee
FROM: .
~
Michael Fa?e.n, Seni?r
L~gislative Attom~r
~
Amanda Mlhlll, LegIslatIve
Analystu~~/lJ'.J?
SUBJECT:
Worksession:
Expedited Bill 51-10, Administration
Council Budget Office
Expedited Bill 51-10, Administration
Council Budget Office, sponsored by
Councilmember Knapp, Council Vice President Ervin, and Council President Floreen, was
introduced on October 12, 2010. Bill 51-10 would create a Council Budget Office, authorize the
appointment of a Director and staff of the Office, and specify the functions and duties of the
Office. Under Bill 51-10 as introduced, the Council Budget Office would have the following
functions:
• assess the fiscal impact of proposed policy changes, including revisions to laws and
regulations;
• review the County budget to assure that Council priorities are adequately reflected;
• coordinate with Council staff, the Office of Management and Budget, and the Department
of Finance to track the County's overall fiscal status;
• analyze the cost-effectiveness of County programs and recommend ways to increase their
productivity and efficiency;
• review short- and long-term fiscal implications of grants the County has applied or may
apply for;
• monitor the use of special use funds;
• monitor County-funded agency budgets;
• prepare or review fiscal indicators for the County Public Schools; and
• monitor the capital budget and track the relationship between the capital and operating
budgets.
A public hearing was held on October 26 at which the only speaker, Judith Koenick,
opposed the Bill. The Council also received a letter from former Councilmember Esther Gelman
opposed to Bill 51-10 (©23).
Background
How is legislative branch budget staff currently structured?
For a detailed description
of the budget analysis performed by existing legislative branch staff, see the memo from Council
Staff Director Steve Farber and Office of Legislative Oversight (OLO) Director Karen Orlansky
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on ©9. In summary, both the Council Office staff and the analysts in OLO do budget analysis.
©9 provides a helpful summary of the budget-related analysis performed in the Council Office
year-round, including review of spending affordability guidelines, the 6-year Fiscal Plan, cross­
department or cross-agency measures, as well as the annual budget work that analysts perform.
©1O-11 detail the budget-related analysis that OLO performs. The most recent example
is OLO's comprehensive report on the County's structural deficit. During the first half of Fiscal
Year 2011, the entire OLO staff was engaged in budget-oriented research arid analysis, and for
the balance of the fiscal year, more than half of OLO's staff will continue that work. Other
examples of OLO budget analysis include its work on fiscal impact statements, furlough and
buyout proposals, and the fiscal impact of compensatory leave awards.
As Mr. Farber and Ms. Orlansky noted, analysis by Council staff and OLO often results
in modification of Executive proposals to address Council concerns and priorities. For example,
each year the Council makes significant changes to the Executive'S proposed operating and
capital budgets. Other examples in 2010 include establishing a progressive furlough for County
government employees and eliminating the imputed general wage adjustment for calculating
pensions (see ©10 for additional examples).
Mr.
Farber and Ms. Orlansky will be available to
review the current 5
th
floor staffing structure at the Committee worksession.
Issues for Committee discussion
1) What is the fiscal impact of Bill 51-10?
OMB's fiscal impact statement on ©7
correctly notes that the fiscal impact of Bill 51-10 depends on how the Council would staff the
Office. Estimates range from $0 (if the Council does not hire additional staff or reassign current
staff) to $1,146,175 (for a 7-person office) or more.
2) What is the primary goal of Bill 51-10?
Put another way, what perceived need does
this Bill fill, or to what question is it the answer? After reviewing the current legislative branch
budget staffing structure, we think Committee members should use this first worksession to
assess the goals of and need for this Bill. To guide today's discussion, Council staff has
identified some relevant questions:
• Is there a gap in service to the Council that needs to be filled? What additional budget­
related work needs to be performed? What additional information does the Council need
that it isn't receiving?
• Does any added service require an additional legislative branch office? Can the needed
service be provided by more staff in either the Council Office or OLO? Can this service
be provided by reassigning existing staff to do more budget-related work?
• How would the added office created by Bill 51-10 fit in the current fiscal climate calling
for consolidation and efficiency of government operations (e.g., recommendations of the
Organization Reform Commission)?
3) What options could the Committee consider?
Council. staff identified the following
broad options for legislative branch budget staffing, many of which are presented in the
Farber/Orlansky memo on 12-13. After the Committee's discussion, Council staffwill develop
more specific options to consider at a future worksession.
2
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a) Direct existing staff, or hire new staff, to do additional budget analysis.
The
Council could direct its central staff to perfonn more budget analysis on issues Councilmembers
deem necessary. The Council also, or alternatively, could assign OLO additional budget-related
work when the Council adopts the OLO work program. Or the Council could hire additional
staff, in either the Council Office or OLO, to perfonn additional budget work.
b) Retain private sources to perform in-depth budget analysis as needed.
If
the
Committee is not interested in hiring additional staff and does not want to reassign existing staff,
the Council could hire an outside expert or consulting finn to perfonn budget work as needed.
The Farber/Orlansky memo noted that the Council occasionally retains expert consultants, such
as for actuarial analysis of alternative funding options for OPEB and fiscal analysis of some
specific projects (see ©13).
c) Increase Council involvement in revenue projections.
The Farber/Orlansky memo
noted that Councilmembers have raised questions about the best way to improve the Council's
capacity to independently assess County revenue projections. If this is a primary Committee
concern, members could discuss the options listed on ©12, including adding an economist
trained in this area to Council staff, hiring an outside economist or financial advisory finn, or
creating a joint Executive branch/legislative branch body (similar to the state Board of Revenue
Estimates shown on ©24-26) to develop or review revenue projections.
d) Create a separate legislative branch office, as Bill 51-10 proposes.
If the
Committee is interested in pursuing this option, the Committee should carefully review Bill SI­
lO, including the method of staffing the Office as well as the proposed Office's duties. Some
duties of the proposed Council Budget Office may overlap with OLO's duties (see ©22 for a
comparison chart). The County Attorney also suggested several clarifying amendments to Bill
51-10 (see ©20) that the Committee should review at a future worksession if the Committee is
interested in creating a Council Budget Office.
This packet contains:
Expedited Bill 51-10
Legislative Request Report
Fiscal Impact Statement
Memo from Steve Farber and Karen Orlansky
County Attorney memo
Comparison of 0 LO and proposed CBO duties
Letter from fonner Councilmember Gelman
State law on the Board of Revenue Estimates
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Expedited Bill No.
51-10
Concerning: Administration - Council
Budget Office
Revised:
10-18-10
Draft No. 4
Introduced:
October
12,2010
Expires:
April
12. 2012
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
-!..!.No.::.:n~e'---~
_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Knapp, Council Vice-President Ervin, Council President Floreen, and
Councilmember Navarro
AN EXPEDITED ACT
to:
(l)
(2)
(3)
(4)
create a Council Budget Office;
authorize the appointment of a Director and staff ofthe Office;
specifY the functions and duties of the Office; and
generally amend County law related to structure of County Government and
administration.
By amending
Montgomery County Code
Chapter lA, Structure of County Government
Sections lA-203 and lA-204
By adding
Chapter 2,
Admini~tration
Article IV, Subdivision III, Council Budget Office
Boldface
Underlining
[Single boldface brackets]
QQyQj!3
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:
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ExPEDITED BILL
NO.51 -10
1
Sec.
1.
Sections lA-203 and lA-204 are amended and Article IX of
Chapter 2 is added as follows:
lA-203.
(b)
2
3
4
Establishing other offices.
*
Council Budget Office
*
*
5
6
Legislative Branch.
These are the offices of the Legislative Branch:
7
8
9
Office of the County Council [[Charter section 101 et seq.]]
Office of the Inspector General
Office of Legislative Oversight [[section 29A-5]]
Office ofthe People's Counsel
Office of Zoning and Administrative Hearings
10
11
12
13
*
lA-204.
(b)
*
*
*
*
Supervision of offices and appointment of heads.
14
15
16
17
*
Legislative Branch.
*
ill
Council Budget Office.
(A)
*
*
18
19
A majority of Councilmembers in office may appoint the
Director ofthe Council Budget Office.
20
21
{ill
{g
The Director is not
f!
merit system employee.
The term of the Director is
.1
years. There is no limit to the
number of terms that
f!
Director may serve.
If
the County
Council has not appointed
f!
successor when
f!
Director's
term expires, the Director continues to serve until
f!
successor is appointed and takes office.
serves for the unexpired part of the term.
The successor
22
23
24
25
26
E3.;J
~
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ExPEDITED BILL
NO.51 -10
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
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51
52
@
The County Council may dismiss the Director for good
cause before the end of the Director's term. Before doing
so, the Council must tell the Director the Council's reasons
for the dismissaL If the Director requests g hearing, the
Council must hold g hearing and issue g written decision to
the Director.
.em
®
The Director must appoint and supervise all employees of
the Office.
The Office and its employees may operate independently
but should coordinate its activities with, the Council
staff and the Office ofLegislative Oversight.
Chapter 2. Administration.
*
*
*
*
*
*
Article IV. Legislative Branch.
*
*
2-83.
(ill
Division 2. County Council.
*
Subdivision III.
Council Budget
Office.
Powers and duties.
Findings.
The Council finds
f!
need for increased capacity to monitor
the County's fiscal situation, effectively evaluate the fiscal and budget
impact of proposed legislation and regulations, and examine structural
issues and inefficiencies in County government and County-funded
agenCIes.
Functions.
In addition to any other power or duty specified
12v
law, the
fhl
Council Budget Office must:
ill
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ExPEDITED BILL
No. 51
-10
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
ill
ill
ill
assess the fiscal impact of proposed policy changes, including
revisions to laws and regulations;
review the County budget to assure that Council priorities are
adequately reflected;
coordinate with Council staff, the Office of Management and
Budget, and the Department of Finance to track the County's
overall fiscal status;
ill
ill
®
analyze the
cost-effectiveness of County programs and
recommend ways to increase their productivity and efficiency;
review short- and long-term fiscal implications of grants the
County has applied or may
.rumlv
for;
monitor the use of special use funds;
monitor County-funded agency budgets;
prepare or review fiscal indicators for the County Public Schools;
and
[2}
m
ill
monitor the capital budget and track the relationship between the
capital and operating budgets.
f.£}
Access to records and information; retaliation.
ill
The Office is legally entitled
~
and each department or office in
County government and each agency that receives County funds
must promptly give the Office, . any document or other
information. concerning its operations, budget, or programs that
the Office Director requests. The Office must comply with any
restrictions on public disclosure of the document or information
that are required
Qy
federal or state law.
ill
The Office Director must immediately notify the Chief
Administrative Officer and the President of the Council if any
~
~.
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ExPEDITED BILL NO.51 -10
80
81
department, office, or agency does not provide any document or
information within g reasonable time after the Office requests it.
82
83
ill
An
employee of the County, any instrumentality of the County,
or any County-funded agency, must not be retaliated against or
penalized, or threatened with retaliation or penalty, for providing
information
:ill,.
cooperating with, or assisting the Office m
connection with any activity ofthe Office under this Section.
84
85
86
87
88
89
90
91
92
93
94
@
Contracts authorized.
The Director may, subject to appropriation,
.
retain project staff or consultants by contract. The Director may, with
the agreement of the head of any other government department or
agency, temporarily detail an employee of that department or agency to
the Office.
Division 3. Advisory Boards and Committees.
Subdivision I.
Reserved.
[2-83] 2-84-2-87. Reserved.
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
the date when it becomes law.
95
96
97
98
99
100
Approved:
Nancy Floreen, President, County Council
101
Date
Approved:
102
Isiah Leggett, County Executive
Date
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LEGISLATIVE REQUEST REPORT
Expedited Bill 51-10
Administration - Council Budget Office
DESCRIPTION:
Expedited Bill 51-10 would create a Council Budget Office,
authorize the appointment of a Director and staff of the Office, and
specify the functions and duties of the Office.
The Council has a need for increased capacity to monitor the
County's fiscal situation, effectively evaluate the fiscal and budget
impact of proposed legislation and regulations, and examine
structural issues and inefficiencies in County government and
County-funded agencies.
To create a Council Budget Office to increase the Council's fiscal
oversight capabilities.
County Council
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney (240) 777-7905
Amanda Mihill, Legislative Analyst (240) 777-7815
N/A
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
NI
A
f:\law\bills\1051 council budget office\lrr.doc
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..
£)\LL-
S \ -
10
059258
OFFICE OF MANAGE:tvlENT AND BlIDGET
..
AM
...
cc.
SBF
LL
Isiah Leggett
County Executive
MEMORANDUM
October 26, 2010
Joseph F. Beach
. Din::ctor
TO:
FROM:
SUBJECT:
Expl'ldited Bill 51-10, Administration - Council Budget Office
The purpose of this memorandum is
to
transmit a fiscal and'economic impact statement
to the COIlllcil on the subject legislation.
LEGISLATION SUl'rlMARY
, The Bill would create a Council Budget Otiice;
autbori:tetbe
appointment ofa Director
and staff of the
Office,
and specify the
functions and duties ofthe Office.
FISCAL SlJIVIMARY
The fiscal impact of
the
legislation is dependent upon actions the, Council takes
in
establishing the Budget Office. The number of staff created for the Office, the
level
of expertise and
compensation, and scope of responsibilities will affect the estimated personnel
costs
ofthe operation.
In
addition to personnel costs, other operating costs will be necessary for the Ofiice to function, including
furniture, office space, personal computers, telecommunications, training, contract services, and other
miscellaneous
expenses
and
supplies.
Below is a range of possible mUlti-year costs of the proposed Council Budget Office. Under
the
assumptions listed below the potential fiscal impact could range from $4.2 million to $6.4 million over sLx
years.
Tela!
vearS
~
Council Budget Office
Item
Estimates: three Analysts, grade
27,
mid-point salary .
.~
mr..4
Yllid.
~
~
Personnel
Costs:
Director (M1
J
OfflCe Sercives
Coord. -
one (gr 16 mid point)
Anaiy$l$ - three (gr 27 mid point)
Subtotal Pmonnei Cosb>
Pef$Ooal Computers (5 @1,425)
Fumiture (one-lime)
Leased Space
Communications Services
196,000
64,350
32b53O
581,880
195,000
195,000
64,350
64,350
322,530 _322,530
51J1,880
581,880
195,000
64,350
322,530
581,880
195,000
64,350
322,530
581,880
7,125
5,000
52,500
127,500
52,500
52,500
5,000
5,000
5,000
5.000.
15,000
Contract S8IVices
15,000
15,000
15,000
2,000
Training
2,000
2,000
2,000
24,300
Other Mlsc. Operating expenses
24,300
24.300
24,300
680,680
_680
Total Office
Costs
767,305
680,680
(personnel Costs: M1
j
50,000 base,
esc
49,500
base, Analyst
82,
700 base, plus 30% benefits estimate)
52,500
5,000
15,000
2,000
14,300
680,580
1,170,000
195,000
64,350 . 385,100
1,935,180
322,530
3,4'$1,280
581,880
14,250
7,12S
5,000
390,000
52,500
30,000
5,OCO
90,000
15,000
12,000
2,000
145.800
24,300
4,178,330
681.305
Office of the Director
101 Meum\:) Stred. 14th Flom • R<)cKviIle. Ma:-yland 20850 • 240-777-1800
www.montgoillerycountyrnd.gov
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Council Budget Office
Estimatt!$:
"VII
AnalYSts,
grade
21,
maximun salary
Total
lttml
""""onnel Costs:
Oireclllr (M1)
Ollia Sere;,,!!" Coof<l. - one
(gt 16
max)
,A.naiysts • live
(9T
21
max)
Subtotal l'ImIonnel Costs
Peraooal Computers (1@1,425)
Fumitu", (one-time)
Lea"eo Space
Communiea.l!orl$ Sefl/lce$
Contract Serlice$
ltUU.
195,000
79,950
__
71 ,450
13
946,400
9,915
7,000
136,500
5,DOO
15,1300
2,000
24,3(]0
llm.l
195,000
79.950
571,450
946,400
!lfiU
195,000
79,950
~4.
:m.ru:Jl.
195,000
19,950
WL!i
195,000
19,950
571,450
946,400
9,915
~
511,4-50
94i,4ll0
195,000
79,950
611,450
946,400
1.110,000
479.700
4,02~700
671.450
S4IJ,4DO
Training
Other Mise. Opel'3ting expenses
61,500
5,000
15.000
2,000
24,3QO
61,500
5,000
15,000
2,000
24,300
61,5GO
5,000
15,000
2,000
24,300
61,500
S,OOIl
15,000
2.000
24,300
5,678,400
19,950
1,000
444,COO
61,500
30,000
5,000
90,COO
15,000
12.000
2,000
__..1..
45 ,800
24,300
Total Office Costs
1,146,115
1,054,200
(p!!r:soonal Collts:
M11S0,OOO
bas".
OSC
61.500
bl!l~,
Analyst
103.3/''() base,
1,054,200
1,D54,200
plU$
30%
beflalJl3 eflJfmals)
1,054,.lO0
1,064,175
6,4%7,150
Salary Assumptions:
M1Wmi!1!
Mill!imYm
Mi
(O!I~med
fiat)
150,OQO
150,000
Offlce SeNlces Coerdinator
("al
Qr:ldEl
1<1)
49.500
61.500
AnalylSts
(sal gI1!I<le 27)
82,700
103,300
Berlefltlll$Sumed al 30% o(
ba~
aalarf
OperatinG Coat
Al!:$umptlcfl'$:
Personal
Computer
costli"
FY12l'er seat
cost
or $1.425
<tach, assume 5 year replacement
Furniture" assumed $1,OCiO start up per person (chairs,
til..
cabinets,
de$K 'NOr\<
space)
Leased SPaaI " IIrst
year
incl. buUdcut $25,000,
ccmmlmieatioM
set
up SSO,OO(J. Annual rent is
$301s(.
Communications
Sefllicas "
assumed
$5.000
per year for tel8!7hooe, other
eomm.
device$
(OlO
FY11 I!pp""",d)
Contract Sefl/lces '" assumed
$1:'5.000
contractcr support per year.
120
hours
@
$125 per hour (oolslde studies, l'e8')arcn, 610:)
Training
~
assumed $2,000 I'eryear
(OLO
FY11 approved)
.
Other Mite Oper. '" assumed $24,300 peryeatfbtequip rental, repairs, printlnjJ (OLO FY11 approved)
The legislation
will
have no economic impact on the OJunty, as
it
is internally focused on the
fiscal management and
oversight
of
County
finance and
adminis~ation.
The following contributed
to
and concmred with this analysis:
Ale-x
Espinosa and John Cuff:
Office of-Management and Budget; Mike COyeyou; Department ofFinance; and Cynthia BreCUlernan.
Department
of
General
Services.
J1<'B;jc
c:Kathleen
Boucher, Assistant
Chief
Administrative
Officer
Dee Gonzalez, Office of the County
Executive
Jennifer
Barrett,
Director,
Department
of Finance
Mike
Coveyall, Department
ofFinance
Cynthia Brenneman, Department of General Services
Alex Espinosa, Office ofManagement and Budget
John Cuff, Office
ofMallagement and
Budget
®
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MEMORANDUM
February 24,2011
TO:
FROM:
Government Operations and Fiscal Policy Committee
Stephen B. Farber, Council Staff Director ,."..
Karen
Orlans~Director,
Office of Legislative Oversight
Bill 51-10 - Administration, Council Budget Office
SUBJECT:
Bill 51-10 would create a new Council Budget Office for the stated purpose of "increasing the
Council's capacity to monitor the County's fiscal situation, effectively evaluate the fiscal and budget
impact of proposed legislation and regulations, and examine structural issues and inefficiencies in County
Government and County-funded agencies." As currently organized in the Legislative Branch, fiscal,
policy, and legal analysis of County budget issues is conducted collaboratively by 5
th
floor staff the
Council Office's legislative analysts and attorneys and the Office of Legislative Oversight's analysts.
We recommend that the Committee's consideration of Bill 51-10 begin with a review of the
budget-related work currently performed by Legislative Branch staff, followed by a discussion of the
additional budget information and analysis the Council feels it needs and a review of options on how best
to provide
it.
This memo is intended to support the Committee's work on these important issues.
Council Office's Budget Work
The budget work of the Council Office's legislative analysts and attorneys, in conjunction with
the Council's six Committees and the full Council, takes place year-round. It includes staff work
associated with the following Council actions and related products:
Spending affordability guidelines for both the capital and the operating budget;
The balanced six-year Fiscal Plan and updates to it, including economic indicators;
Overview of the operating budget, including issues of priority concern and budget options;
Analysis of individual department and agency budgets and compensation issues;
Analysis of cross-cutting measures (e.g., Smart Growth Initiative, ParkJRec, police merger);
Analysis of revenue issues and proposals;
Analysis of supplemental appropriations;
Analysis of mid-year budget savings plans;
Capital and operating budget tracking throughout the budget process;
Preparation of Intensive Budget Review and Base Budget Review projects on request;
Fiscal analysis of Councilmember initiatives (e.g., importation of prescription drugs from Canada); and
Fiscal analysis of master plans, other land use issues, labor agreements, IG reports, regulations, and task
force reports (e.g., Organizational Reform Commission, Agricultural Policy Working Group).
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This work, often performed in collaboration with OLO, results in both the modification of
Executive proposals and the adoption of Council proposals. Examples from 2010
~
apart from the
Council's significant changes to the proposed capital and operating budgets for schools, transportation,
public safety, HHS, and other functions - include a progressive furlough for MCG employees, the
County's first approved balanced six-year fiscal plan, elimination of the imputed COLA for calculating
pensions (saving $7 million in FYII and $280 million over 40 years), restructured increases for energy
and cell phone taxes, and initiation ofOLO's structurally balanced budget project.
Office
of Legislative
Oversight's Budget Work
The Council adopts the Office of Legislative Oversight'S work program by resolution, a practice
that affords the Council the opportunity to decide the topics and scope ofOLO's assignments on a regular
basis. Over the years the projects assigned to OLO have reflected Councilmembers' wide range of public
policy interests and related requests for research, evaluation, and analysis.
OLO's enabling legislation identifies the conduct of "special program or budget analyses on
selected operational units, programs, functions, and activities" as one of the Office's "powers and duties."
In recent years the Council has called on OLO to do more budget work in two ways:
• The Council has assigned OLO an increasing number of projects that include a budget focus; and
• The Council has explicitly allocated OLO staff time to working collaboratively with central Council
staff to conduct analysis related to the Council's decision-making on the operating budget.
FYll assignment on the County's structural budget deficit.
During the first half of FYI I the
entire OLO staff was engaged in budget-oriented research and analysis related to the Council's two-part
assignment on achieving a structurally balanced budget in Montgomery County. For the balance of
FYll, more than half ofOLO's staff resources remain assigned to the "Budget Team."
In
addition to completing follow-up assignments from OLO Report 2011-2, the work of OLO's
Budget Team will expand in March to include assisting with central Council staffs review and analysis of
the FY12 operating budget. As in past budget seasons, the Council Staff Director and OLO Director will
work collaboratively to identify the specific budget reviews/analyses to be undertaken by OLO staff.
Examples of OLO's budget-related work.
The table on the next page lists examples of the
OLO reports since FY07 that have focused on budget/fiscal issues and examples of the memos produced
during the past several years that related directly to the Council's operating budget worksessions.
2
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EXAMPLES OF BUDGET-RELATED
OLO
REPORTS
(FY07- FYll)
2011-2
20 I 0-1 0
2009-9
2009-8
2009-7
2009-4
2008-1
2008-4
2008-5
2007-3
2007-5
2007-6
2007-8
Achieving a Structurally Balanced Budget in Montgomery County
Part I, Revenue and Expenditure Trends
Part II, Options for Long-term Fiscal Balance
• Fiscal Impact Statements for Legislation
~~--------------------------------------------~
Research Brief on Furloughs and Buyouts
Department of Economic Development: A Review of Budget and Strategies
Organization of Recreation Programs across the Department of Parks and Department of Recreation
Cost and Performance of Montgomery County Public School High School Consortia
• Base Budget Review ofthe Division of School Plant Operations, Montgomery County Public Schools
i
Study of County Road Project Cost and Schedule Estimates
Overview of Revenues, Expenditures,
&
Other Financial Data for Municipalities
&
Special Taxing
• Districts in Montgomery County
The Presentation of Workforce Information in Budget Documents
Key Fiscal Indicators for Montgomery County Public Schools
Base Budget Review of the Montgomery County Fire and Rescue Service, Phase I
Base Budget Review of the Montgomery County Fire and Rescue Service, Phase II, Net Annual Work
· Hour Analysis of First Responders
Inventory of Internal Service Functions Performed by Five County Government Departments
I
Fiscal Impact of Compensatory Leave Awards (7/26/10)
Examples of state/local actions to close budget gaps (4/9/10)
Review and fiscal analysis of the Executive's proposed FYll furlough, FYII reduction-in-force, and 2010
Retirement Incentive Program (4/15/10)
Comparative examples of reductions to local park and recreation budgets (4115/10)
Characteristics of local school system furlough structures (4/27/10)
Response to Committee Request for FYll Alternative Furlough Scenarios (5/2110)
Fiscal analysis of Expedited Bill 15-10, Taxation - Fuel-Energy Tax
fueVenergy tax rates (April-May 2010)
Rate Resolution to change
• Series of memos containing fiscal analysis of Executive's FYIO Proposed Retirement Incentive Program
(April-May 2009)
Analysis of library staffing to identify savings from reducing library hours (4/24/09
&
5/4/09)
Fiscal analysis of the Department of Recreation's FYlO fee structure (4/27/09)
3
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Options for Additional Budget Information
As noted above, we recommend that the Council decide what additional budget information and
analysis it needs and then consider options on how best to provide it. We have suggestions in two areas:
• Add capacity for independent review of revenue projections and fiscal and economic impact
statements prepared by the Executive Branch. The revenue projections in the Executive's
recommended operating budget are a critical building block of the budget.
In
the course of conducting
the structurally balanced budget report,
aLa
staff reviewed the Department of Finance's revenue
projections over the past 30 years. As summarized in the memo attached at ©
I, aLa
found that:
• Since FY81, actual tax revenues have exceeded the projections in two out of three years and have
fallen below the projections in one out of three years;
• Over the 30 years, the average annual variation (either positive or negative) between projected
and actual revenues was 3.9%; and
• The variations in projected and actual revenues differed by tax type, with a higher annual
variation associated with projections for income tax vs. property tax revenue.
The question some Councilmembers have raised - given the importance of revenue projections in the
budget process - is how best to enhance the Council's capacity to independently assess them. Options
include the following:
• Add an economist trained in this area to the Council staff with the responsibility to routinely
assess Finance's methodology and conclusions on revenue projections; or
• Contract with an economist or a financial advisory firm for this purpose.
Another approach, building on one ofthese options, is to have the Council and the Executive jointly issue
revenue projections. Under this approach, we would establish for the County a version of the State's
Board of Revenue Estimates, or alternatively the State's Consensus Revenue Monitoring and Forecasting
Group.! One advantage of this approach is that it would yield one set of projections rather than,
potentially, two competing sets.
As for fiscal and economic impact statements, last year the Council enacted legislation to strengthen
and standardize such statements prepared by the Executive Branch for proposed legislation. An
economist added to the Council staff (suggested as one option above) could complement the work of our
analysts to independently assess these statements.
The Board of Revenue Estimates consists of the independently elected Comptroller, the Treasurer (appointed by
the Legislature), and the Secretary of Budget and Management (appointed by the Governor). The Board projects
revenues three times a year. In September it issues preliminary estimates for the Governor's use in budget planning.
In December it issues the estimates the Governor uses in the budget he releases in January. In March, before the
Legislature completes action on the budget, it updates its estimates. If the County were to establish a Board of
Revenue Estimates, the members could be, as one example, the Finance Director, the Council Staff Director, and a
County resident with expertise in revenue projections.
I
The Board's staff support comes from the Bureau of Revenue Estimates in the Comptroller's Office. The Bureau's
Chief chairs the Consensus Revenue Monitoring and Forecasting Group. Other members are the Deputy
Comptroller for tax administration and staff from the Treasurer's Office, the Department of Budget and
Management, the Department of Transportation, and the Office of Policy Analysis in the Department of Legislative
Services. The Bureau must provide the Group with monthly updates on revenue collections and advance drafts, for
review and comment, of any work product that the Bureau is to publish.
@
4
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• Consider retaining a financial advisory firm for targeted fiscal analysis as needed. Over the years
the Council has made productive use of expert consultants as short-term advisers on specialized legal,
actuarial, fiscal, engineering, transportation, and technology issues. Examples include actuarial analysis
of alternative funding options for retiree health insurance (OPEB) and fiscal analysis of such projects as
the SoccerPlex, the Music Center at Strathmore, Silver Spring redevelopment, and MCDC reuse.
We will continue to retain such specialized advisers on future issues. We could also retain, on a standby
basis, a financial advisory firm to advise the Council as needed on issues like reserves policy and credit
ratings. Last year the firm Public Financial Management (PFM), retained by the Finance Department,
provided expert assistance on these issues when the County's AAA bond rating was under scrutiny. If the
Council considers it necessary at any time to obtain an independent view on such issues, having such a
firm on retainer would be useful.
We welcome the opportunity to work through these issues with the Committee.
Attachment:
Memo
(2/21111)
from OLO staff on review of Department of Finance's revenue projections
5
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MEMORANDUM
February 22,2011
TO:
FROM:
SUBJECT:
Karen Orlansky
Sue
Richa~
Aron Trombka
111
Summary ofOLO's Review of the Department of Finance's Revenue Projections
This memo responds to your request for a written summary of our review of the Department of
Finance's revenue projections. As part of our background work related to OLO Report 2011-2
(Achieving a Structurally Balanced Budget in Montgomery County), we reviewed annual revenue
projections prepared by the Department of Finance. This memo summarizes the findings of our
reVIew.
Department
of
Finance
Revenue Projections:
The County's Department of Finance prepares
projections offuture County tax revenues. The County Executive and the County Council rely on
these projections for a variety of purposes, including their annual budget decision making.
Staff in the Department of Finance have developed several models that estimate future year tax
revenue based on economic forecasts prepared by outside entities including the Federal Bureau of
Economic Analysis, the State Board of Revenue Estimates, and Moody's Analytics. The Department
of Finance uses data from these economic forecasts, along with historic County tax generation data,
to estimate future tax generation.
Comparison
of
Estimated
and Actual Revenue:
Last Fall, we reviewed the Department of
Finance's revenue projections for Fiscal Years 1981 through 2010; specifically, we looked at the
projections that were incorporated into the approved operating budget for each year. We compared
those projections to the actual tax revenue collected as reported after the end of each fiscal year. For
our review of revenue projections, we examined 30 years of data (as opposed to the ten-year history
we used for most other budget trends in the report) in order to capture the upturns and downturns in
revenue generation from multiple economic cycles.
For each fiscal year, we tracked the percent difference between projected and actual tax revenues.
Next, we calculated the average variation over the 3D-year time period. In calculating the average,
we used the absolute value (difference from zero, whether positive or negative) ofthe annual
variations for each fiscal year. We used absolute values in our average variation calculations to
avoid the "canceling out" effect of positive and negative variations.
l
an example, assume a case where
in
one year actual revenue exceeded projected revenue by four percent (+4%)
and
in
a second year actual revenue fell short of the projection by four percent (-4%). The mean average ofthese
two variations equals zero ([4-4]/2). This calculation implies that actual revenue met the projection in both years.
In contrast, the mean average of the absolute value of the two variations equals four ([4+4]/2), reflective ofthe
actual average difference between projected and actual revenue.
1
As
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Summary
of Findings: OLO's comparison of projected and actual revenues over the 30-year period
. (FY 1981 through FY201 0) yielded the following findings:
• Actual tax revenues exceeded the projections in two out of three years since FY81; actual tax
revenues fell below projections in one out ofthree years.
• Over the 30-year period, the average annual variation (either positive or negative) between
projected and actual revenues was 3.9%.
• The variations in projected and actual revenues differed by tax type. The average annual
variation for property tax revenue was 1.6% while the average annual variation for income
tax revenue was 6.6%.
Department
of Finance Assessment: In 2007, then Councilmember Marilyn Praisner requested that
the Department of Finance summarize their revenue forecasting methodology and describe the
accuracy of past revenue projections. The response from the Finance Director is attached.
Similar to OLO's finding, the Finance Department concluded that projections underestimated
revenue in two out of three years and overestimated revenue in one out of three years. Unlike OLO,
the Department of Finance used the average of both positive and negative annual variations in their
calculation to measure the accuracy of their revenue forecasts. As a result of the different
methodologies, the mean variations computed by Finance were smaller than those computed by OLO.
To be specific:
• The Department of Finance concluded that the average annual variation between actual and
projected revenue was 1.8% (for
Fis~al
Years 1981 through 2006).
• OLO concluded that the average annual variation between actual and projected revenue was
3.9% (for Fiscal Years 1981 through 2010).
Attachment
2
0.,
c
J
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DEPARTMENT OF FlNANCE
Isiah
Leggett
County Executive
MEMORANDUM
Jennifer
E.
Barrett
Director
April 26, 2007
TO:
Marilyn
Prais~er,
President
County CouncIl
(~\
t.
n ,
/a;G
FROM:
Jennifer E. Barrett, Direct6t._<d1,·
Department of Finance
J
County Revenue Issues
tA)[]JJY
SUBJECT:
Pursuant to your request, I am hereby providing additional information to the
Montgomery County Council, based on various questions from Councilmembers, and pertaining
to the County's revenue structure and revenue forecasting methodology.
Revenue Structure
Montgomery County has a broad portfolio of revenue sources, including taxes,
charges for services, fines and fees, prior-year reserves, and intergovernmental aid. A current
breakdown shows that taxes make up roughly 75% of tax-supported funds, with governmental
aid - at 15% - the next largest category.
In
fact, intergovernmental aid is the third largest
revenue source for the County, after the income (34%) and property (32%) taxes.
Within the broader tax group, there are the income tax, property tax, real estate
transfer
&
recordation taxes, telephone tax, fuel/energy taxes, hotel/motel tax, and admissions
tax. The State of Maryland administers the income and admissions taxes, while the County
handles all other taxes.
Since these diverse revenue sources are affected by different economic trends
and/or State
&
County laws. they create a diversified revenue portfolio that ensures growth with
long-term stability. For example, a dramatic shift in the real estate market will have an
immediate impact on the real estate transfer
&
recordation tax revenues, but, because of the
tri­
annual reassessment cycle and the homestead tax credit, the impact on the property tax will be
minimal in the short-term. Similarly, changes
in
employment conditions and capital gains
recognition from the stock market will have a lagged impact on the County's income tax revenue
collections due to a distnbution formula used by the State Comptroller that is baSed on prior year
receipts. On the other hand, changes in activity pertaining to, for example, excise taxes, building
permits, and other charges for services impact the collection stream immediately.
Office of the Director
------l-O-l-M-o-nr-o-e-S-tre-e-t,-l-Sth-F-:-"lo-o-r-.
-=R-o-ckv~il-:-le-,M~ary·land 208S-0-'-2-4-0--7-7-7--8-86-0-.-24-0--7-7-7--8·-g-S7-P-AX---~7'i
'lq)=tb"T
www.montgomerycountymd.gov
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Marilyn Praisner
April 26, 2007
Page 2
As such, the revenue portfolio for Montgomery County is not unlike an
investment portfolio that aims to take advantage of growth in the technology sector while
ensuring stability through value stocks and bond funds. This diversification is also found in our
revenue portfolio with property taxes representing bonds, and income and real estate
transfer/recordation taxes representing more aggressive growth stock funds. Over reliance on
anyone sector, jeopardizes the budget forecast and triple-A bond rating we have come to rely on.
Accuracy of Revenue Estimates
One way to look at the stability of the revenue sources is to review the
predictability ofthose revenues. A smaller variance between estimate (projected in March and
adopted in June) and actual (not finalized until after June of the subsequent year) would suggest
such stability. For example, one would assume that the multi-year phase-in of property
assessments results in high predictability - and therefore low variance.
On
the other hand, the
real estate market is sensitive to overall economic conditions and the interest rate environment,
and would be more volatile and therefore have a high variance. The numbers support such
assumptions. Based on a comparison for the period 1981 through 2006 (fiscal years), the
average variability between budget estimate and actual is only 1.8% and broken down as
follows: property
tax
(0.7%), income tax (4.0%), transfer
&
recordation taxes (16.3%), other
taxes (3.2%), licenses
&
permits (4.8%), charges for services (-2.6%), intergovernmental aid
(0.7%), and fines
&
miscellaneous revenues (6.6%).
These numbers indicate that, over the long-term, the forecast for the total revenue
base is more than 98% accurate and that actual revenues come in just 1.8% higher than estimated
some 15 months earlier. Specifically, between 1981 and 2006, total revenues were
overestimated 1I3
rd
of the years and underestimated the remaining 2/3
M •
Moreover, total
revenues were overestimated (i.e., indicating a shortfall in budget resources) by as much as 6.0%
and underestimated as much 5.9%. This indicates that, while the mean variance is only 1.8%, in
anyone year, the variance can be much higher. One way to check how much our outcomes
differ from the mean is to compute the standard deviation. A smaller standard deviation
indicates that the mean is a reasonable indicator. Such is the case with the total revenue which
has
a standard deviation ofjust 3.2%. Measured for individual revenue sources, the same story
holds true as before.. The property tax has a standard deviation of only 2.3% (indicating very
little volatility), income tax 6.8%, and a number that jumps to 24.0% for the transfer
&
recordation taxes.
Methodology
The next issue is how Finance estimates revenues.
In
all cases, revenues are
estimated using the underlying economic/financial basis. For the property tax, that is a
projection of changes in the real property assessable base, adjusted for the homestead
tax
credit,
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Marilyn Praisner
April 26, 2007
Page 3
other tax credits, prior year activity, and changes in the personal property base. The respective
bases are adjusted for changes in both commercial and residential real estate activity pertaining
to market valuation and new construction: For the income
tax,
the County uses a sophisticated
tax
simulation model that incorporates actual historical aggregated data for all residents in
Montgomery County. These data provide a detailed breakdown ofthe taxable income for such
components as: wages
&
salaries, interest
&
dividends, capital gains, itemized and standard
deductions. Using estimates for such variables as employment, wages, interest, and capital
gains, the County projects changes in taxable income (i.e., Maryland Adjusted Gross Income) by
these components. Applying the appropriate County
tax
rate provides an estimate oftax liability
by calendar year. A subsequent distribution ofthese revenues, using historical shares by
monthly and quarterly distributions, provides a revenue estimate by fiscal year. Similarly, the
underlying number and price of residential and commercial real estate sales provides
the
basis
for the forecast of transfer
&
recordation taxes, while the number of telephone lines (land and
wireless), incorporating information on future household expansion, provides the basis for the
telephone tax. The forecast for the hotel/motel taxes uses variables obtained from that specific
industry such as number of available hotel rooms, average price of a room, and occupancy rates.
Other information, such as special events (national golf events and national elections), and
inflation are incorporated into the forecast.
In
these aforementioned revenue sources, as well as
all others, Finance always forecasts the underlying basis for taxation never revenues based on
recent collections.
Policy Issues
Since, at times, actual revenues exceed the estimate, some observers have
expressed concern that Finance may intentionally underestimate revenues. Despite the variances
described above, which in aggregate and over a longer period of time amount to less than 2%,
there is no explicit or implicit policy to reduce estimates. What does happen, however, is that
some economic variables that create the analytical framework for the respective forecasts, are
adjusted at a later stage. Important variables, such as employment, personal income, population,
and new household formation, are frequently adjusted at both the national and regional level.
Moreover, while some indicators, for example stock market returns, can appropriately be used
for the average household, considering the highly concentrated wealth in Montgomery County,
there are years when total capital gains recognition diverge significantly from the average stock
market returns. A recent article
in
BusinessWeek (April 23, 2007) illustrated the same problem
for the federal Government with income tax revenues exceeding the underlying economic growth
for the third consecutive year.
Another question raised by Council was related to capital gains and how many
times this was the basis for a revised income tax forecast. Unfortunately, there are no recent
historical data on capital gains that would appropriately address this question. The latest data
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Marilyn Praisner
April 26, 2007
Page 4
(Statistics of Income) from the State Comptroller that provides infonnation on capital gains in
Montgomery County is 1997. Hence, any changes ill forecasts for subsequent years are, at times,
believed to be partially contributed to capital gains, in addition to changes
in
such variables as
employment, interest, dividends, and personal income. In short, Finance cannot confinn the
actual impact that income from capital gains
has
on recent revenue revisions.
A final issue that was raised, and partially addressed at the Council hearing on
SAG, relates to the frequency of revenue estimates. The practice in Montgomery County is to
prepare and publish forecasts semi-annually: in March for the Budget and
in
November for SAG.
As explained above, these estimates are based on an analytical framework using annual
economic and financial data that are revised, at most, once a year. Therefore, remaining with the
semi-annual forecasting schedule is preferable. Moreover, requests for greater frequency would
only result in greater volatility of forecasts - not necessarily greater accuracy. The following
example can be used to illustrate this point: several years ago, it was determined that an income
tax distribution in May was $10 million greater than projected. A subsequent request by one
Councilmember to add this amount to the available resources was rejected by the full Council.
This was a prudent action in terms ofnot adjusting revenue estimates based on collections, which
was confmned the next month when the distribution of income taxes was $10 million short of the
estimate.
It also illustrates the perils of using collections as a basis for forecasting revenues
especially
in
the income tax. First of all, quarterly distributions are based on the share of
income taxes due to the County in the prior year. Therefore, collections this year could be either
higher or lower than what is distributed. Secondly, the County would not even know what we
are forecasting since even the most basic breakdown ofwithholdings and estimated payments are
not available at the County level. While for some jurisdictions - especially those that rely
exclusively on employment growth - revenue estimators can rely on personal income growth and
the latest collections to forecast revenues, injurisdictions such as Montgomery County with a
large and diverse economy and concentrated wealth, revenue estimation requires detailed
analyses.
It
is this high-level analysis that illustrated a few years ago that roughly 50% of
Maryland's capital gain comes from this County, as well as over 1% of the nation as a whole.
It
also provided a basis for the 40% estimated drop in capital gains following the steep declines in
the stock market in the early part ofthis decade - a projection that proved to be prudent that year.
As a final note, revenue estimation is highly technical and challenging. By
definition, projecting into the future is a perilous exercise. However, given the many unknowns
and
data
limitations, it should give Councilmembers great comfort that, usillg a 25 year time
period, estimated resources to fund the County budget are underestimated by less
than
2%.
While that may not result in a life-time membership ill the revenue forecaster's hall of fame, it, at
minimum, should make Finance a permanent nominee.
cc:
Timothy Firestine, CAO
Joseph Beach, OMB
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OFFICE OF THE COUNTY ATTORNEY
Isiah Leggett
County Executive
Marc P. Hansen
Acting County Attorney
MEMORANDUM
TO:
Joseph Beach, Director
Office of Management and Budget
Marc P. Hansen
/'J1u"",,-
Acting County Attorney
October 22,2010
Expedited Bill 51-10, Administration - Council Budget Office
FROM:
~~
DATE:
RE:
At the request of the Office of the County Executive, I have reviewed Expedited
Bill 51-10, Administration - Council Budge Office, for legal sufficiency. Although I find Bill
51-10 generally legally sufficient, there are three legal issues that should be addressed by the
Council:
1.
Bill 51-10 (Jines 27-32) provides that the Council may dismiss the
Director of the Council Budget Office fot "good cause."
In
the event of dismissal, the Director
is entitled to request a hearing before the full Council, and the Council must issue a written
decision to the Director.
In
the context of this type of hearing, the Council
will
be sitting
in a
quasi-judicial capacity. The Director will be entitled to call witnesses, be represented by
counsel, present evidence, and engage in cross-examination.
The Council should consider adding to this provision that the
Administrative Procedures Act
(see
Article I, Chap. 2A, Montgomery County Code) would
apply to the dismissal hearing. The Administrative Procedures Act would address such issues as
notice, rules of procedure for the hearing, and provide for judicial review.
BiB 51-10 (lines 71-77) provides that the Council Budget Office is
2.
entitled to obtain records from County departments and "each agency that receives County
funds." The Council Budget Office "must comply with any restrictions on publi<f disclosure of
the document or information that are required by federal or state law." This provision raises two
sub-issues:
marCthansen@montgomerycQuntymd.gov
101 Monroe Street, Rockville,
Maryland
20850-2540
240-777-6740· TID 240-777-2545' Fax 240-777-6705
"
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'f'r
t"
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Joseph Beach, Director
October
22,2010
Page 2
A.
Some of the agencies that receive County funds are state
agencies, like Montgomery College and the Montgomery County Public_Schools. Access to
records ofthese state agencies is governed by state law. The County cannot force a state agency
to provide infonnation to the Council Budget Office records or infonnation beyond that which is
provided for under state law.
B.
The Maryland Public Infonnation Act (MPIA) provides
that acustodian of records must decline disclosure of certain types of records and may decline to
disclose other types of records (e.g., records protected under the ExecutivelLegislative privilege,
attorney-client privilege, certain investigative records, etc.). Thus, under the MPIA, there is both
a mandatory denial of disclosure ofrecords and a pennissive denial of disclosure. The Council
should consider amending this provision to provide that the Council Budget Office must comply
with restrictions on infonnation that are both "reqUired" and "permitted" under federal or state
law.
The Inspector General law (§ 2-151) contains a similar
prOVISIOn. The Office of the County Attorney has concluded that the Inspector General is legally
entitled to review material protected from disclosure under the MPIA, because the Inspector
General has a need to have access' to the records in order to perfonn the Inspector General's
statutory mission. The same rationale would apply to the Council Budget Office. However, the
Council should understand that this is an area of the law that has not been fully settled.
3.
Bi1151-10 (lines 82-86) provides that an employee of the County
or "any County-funded agency" must not be retalIated against for providing infonnation or
cooperating with the Council Budget Office. As previously discussed, some County-funded
agencies, like Montgomery College and Montgomery County Public Schools, are state agencies.
The County lacks the legislative authority to affect the conditions of employment for employees
of state agencies.
If you have any questions regarding this advice, please let me know.
cc:
Kathleen Boucher, Assistant Chief Administrative Officer
Michael Faden, Senior Legislative Attorney
Amanda Mihill, Legislative Analyst
MPH:tjs
1:\GJ\HANSEM\Bill 51-1
O=m=j,
beach.doc
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Council Budget Office
(Bi115I-IO)
Functions
1. Assess the fiscal impact of proposed
policy changes, including revisions to
laws and regulations
2. Review the County budget to assure
that Council priorities are adequately
reflected
3.
Coordinate with Council staff, the
Office of Management and Budget, and
the Department of Finance to track the
County's overall fiscal status
4. Analyze the cost-effectiveness of
County programs and recommend ways
to increase their productivity and
efficiency
5. Review short- and long-term fiscal
implications of grants the County has
applied or may apply for
6.
Monitor the use of special use funds
7.
Monitor County-funded agency budgets
8.
Prepare or review fiscal indicators for
the County Public Schools
9. Monitor the capital budget and track
the relationship between the capital and
operating budgets.
Office of Legislative Oversight
(Code §§ IA-204(b)(2),
29A-l to 29A-1O
Powers and Duties
1. Review and evaluate financial controls and accountability, efficiency of
management and utilization of resources, internal controls, and effectiveness of
program results of the various departments, agencies and entities using funds
appropriated or approved by the county council.
2. Report on conditions found, identify weaknesses, and suggest ways and means for
improvement of financial and operating management, including prescribed
principles and standards of accountability and internal controls.
3.
Evaluate new legislative proposals and requests for appropriations in terms of
availability and effectiveness of existing resources to meet the needs and to fulfill
the purposes of the new proposals.
4. Conduct special audits, surveys and investigations at the Council's request.
5. Conduct special program or budget analyses on selected operational units, programs,
functions, and activities.
6.
Structure the review and evaluation program ofthe office so as to avoid duplication
of effort and to make maximum use of all available resources.
7.
Allocate resources to those areas known or considered to be of direct interest to the
Council in accordance with the Council-approved work program.
8.
Report to the Council and to the general public its findings and recommendations in
the manner provided in §29A-9.
9. Administer contracts with the certified public accountant employed by the council to
conduct the annual audit of county transactions pursuant to the county charter.
10. Develop uniform review and evaluation procedures, guidelines and regulations for
the conduct and explanation of audits, surveys and investigations under this chapter.
Regulations that may be issued pursuant to this chapter shall be adopted under
method (2) of section 2A-I5 of this Code.
11. Employ consultants and technical advisors as might be necessary to carry out the
purposes of this chapter in accordance with funds appropriated by the county
council.
12. Review all post audit reports by certified public accountants hired by other public
county and bi-county agencies and request comments from agency directors on the
certified public accountant's findings.
13. Review all executive branch internal audit and program evaluation reports and
request comments from agency directors.
14. Report to the Council on contract administration and performance, using a random
sample of county contracts.
~
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/OILL
f5/-ID
Page 1 of 1
14'r\)
Delgado, Annette
From:
Sent:
To:
Floreen's Office. Councilmember
------------­
Thursday, October 14,
2010
1
:02
PM
Montgomery County Council
Subject:
FW:
New bill on budget office
059074
-----Original Message----­
From:
Esther Gelman [mailto:esthergelman@verizon.net]
Sent:
Thursday, October
14, 2010 12:45
PM
To:
Floreen's Office, Councilmember
Subject:
New bill on budget office
PLEASE DISTRIBUTE TO ALL COUNCILMEMBERS. THANK YOU.
I
read that a bill has been introduced to create a Council Budget Office. What a terrible idea!
It
goes counter to our
Charter and to any hope of running a smooth gov't.
Why have
2
offices? Expensive, unnecessary and certain to create a constant battle.
The Council can question any appropriation, add or subtract; so why duplicate efforts?
Thank you for NOT passing this bill.
Esther Gelman
E~the!:G~..Lm...an@Y~rl~QnJIE;!.t
10114/2010
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Page I
LexisNexis®
I of6 DOCUMENTS
Annotated Code of Maryland
Copyrightt© 2011 by Matthew Bender and Company, Inc., a member of the LexisNexis Group
All rights reserved.
***
Current through all Chapters of the 2010 Regular Session
***
***
with updates for sections effective through January 1,2011
***
***
Annotations through December 29,2010
***
STATE FINANCE AND PROCUREMENT
DiVISION L STATE FINANCE
TITLE 6. REVENUES
SUBTITLE I. STUDiES AND ESTIMATES
§
6-101. Definitions
(a) In general. -- In this subtitle the following words have the meanings indicated.
(b) Board. -- "Board" means the Board of Revenue Estimates.
(c) Bureau. -- "Bureau" means the Bureau of Revenue Estimates.
(d) Chief. -- "Chief' means the Chief of the Bureau.
§ 6-102. Board of Revenue Estimates
(a) Established. -- There is a Board of Revenue Estimates.
(b) Composition. -- The Board consists of the following 3 ex officio members:
(I) the Comptroller;
(2) the Treasurer; and
(3) the Secretary of Budget and Management.
(c) Treasurer's designee. -- The Treasurer may appoint, as the Treasurer's designee, a deputy treasurer to serve on
the Board.
(d) Executive secretary. -- The Chief is the executive secretary of the Board.
§
6-103. Bureau of Revenue Estimates
(a) Established. -- There is a Bureau of Revenue Estimates in the Office of the Comptroller.
(b) Chief. -­
(l) The head of the Bureau is the Chief.
(2) Subject to the supervision of the Comptroller, the Chief has. administrative control of the Bureau.
(3) Unless the Comptroller, with the approval of the Board, detennines that an alternative structure is appropriate,
the Chief shall be subject to the supervision of the Deputy Comptroller with responsibility for tax administration.
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(c) Removal of Chief; appointments.-­
(I)
Except as otherwise provided by law, subject to the approval of the Board, the Comptroller shall appoint the
Chief.
(2) The Chief may be removed only by a majority of the Board for incompetence or other good cause.
(3) The Chief shall appoint other employees of the Bureau in accordance with the provisions of the State Person­
nel and Pensions Article.
§ 6-104. Duties of Bureau
(a) Reports and information. -­
(1)
After the end of each fiscal year, the Bureau shall submit to the Board a report that:
(i)
contains an itemized statement of the State revenues from all sources for that fiscal year; and
(ii) includes any recommendations of the Bureau.
(2) In December, March, and September of each year, the Bureau shall submit to the Board a report that contains
an itemized statement of the estimated State revenues from all sources for the fiscal year following the fiscal year in
which the report is made.
(3) The Bureau shall provide to the Board any other information that the Board requests.
(4) Notwithstanding any other provision oflaw, the reports required under paragraphs
(1)
and (2) of this subsec­
tion shall include an itemized statement of:
(i)
revenues or estimated revenues distributed to the Transportation Trust Fund, including the motor fuel taxes
imposed under Title 9, Subtitle 3 of the Tax - General Article and motor vehicle titling taxes imposed under Title 13,
Subtitle 8 of the Transportation Article; and
(ii) revenues from the State transfer tax imposed under Title 13, Subtitle 2 of the Tax - Property Article.
(b) Studies. -- In addition to these reports, the Bureau shall continually conduct studies of State revenue sources to:
(1) determine the amount of revenue produced; and
(2) devise and recommend new methods and sources for improved efficiency, equity, and economy in production,
collection, and estimation of revenue.
(c) Tax incidence study reports. -­
(1) On or before December 1, 2008, and December 1 of every third year thereafter, the Bureau shall submit to the
Governor and, in accordance with
§
2-1246
o/the State Government Article,
to the General Assembly a tax incidence
study measuring the burden of all the major taxes imposed by the State and how that burden is shared among taxpayers
of different income levels.
(2) The Bureau shall prepare and submit the statistics of income report required under
§
10-223 ofthe Tax
-
Gen­
eral Article.
§ 6-105. Consensus Revenue Monitoring and Forecasting Group.
(a) "Group" defined. -- In this section, "Group" means the Consensus Revenue Monitoring and Forecasting Group
established under this section.
(b) Group established. -- There is a Consensus Revenue Monitoring and Forecasting Group.
(c) Membership. -- The Group consists of:
(I) the Chief and staff of the Bureau as designated by the Chief;
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(2) the Deputy Comptroller with responsibility for tax administration and staff as designated by the Deputy
Comptroller with responsibility for tax administration;
(3) staff of the Office of the Treasurer as designated by the Treasurer;
(4) staff of the Department of Budget and Management as designated by the Secretary of Budget and Manage­
ment;
(5) staff of the Department of Transportation as designated by the Secretary of Transportation; and
(6) staff of the Office of Policy Analysis of the Department of Legislative Services as designated by the Director
of the Office.
(d) Chair. -- The Chief shall chair the Group.
(e) Duties of Group..- The Group and its constituent units shall:
(I)
review and analyze attainment of revenues on a monthly basis; and
(2) advise and collaborate with the Bureau:
0)
in the development of revenue forecasts and any necessary revisions to those forecasts; and
(ii)
in the performance of any pertinent studies or analyses as requested by the Chief or as directed by the
Board.
(f)
Duties of Comptroller and Bureau. -- To assist the Group in performing its function, the Comptroller and the
Bureau shall:
(1) within 7 calendar days after the end of each month, provide to members of the Group detailed data on revenue
collections; and
(2) before any document relating to the work ofthe Bureau is published, provide a draft of the document to the
members ofthe Group for review and comment.
§
6-106.
Board
(a) Studies. -- The Board shall:
(1)
study the information that the Bureau provides; and
(2) consider the recommendations of the Bureau.
(b) Report. -­
(1)
In December, March, and September of each year, the Board shall submit to the Governor and, in accordance
with
§
2-1246
ofthe State Government Article,
to the General Assembly, a report that:
(i) contains an itemized statement of the estimated State revenues from all sources for the fiscal year following
the fiscal year in which the report is made; and
(ii) includes any recommendations of the Board.
(2)
(i)
Subject to subparagraph (ii) of this paragraph, the Governor shall state the most recent estimates of reve­
nues reported by the Board in the proposed budget and any supplemental budget submitted to the General Assembly.
(ii) If the Governor uses different estimates of revenues in the formulation of the proposed budget and any sup­
plemental budget submitted to the General Assembly than those reported by the Board, a statement providing an expla­
nation as to the differences shall be included together with those submissions.
3