MFP Item 1
October 4,2010
Worksession
MEMORANDUM
TO:
FROM:
Management and Fiscal Policy Committee
Robert
H.
Drummer, Senior Legislative Attorney
Q
SUBJECT:
Worksession:
Expedited Bill 42-10, Personnel Retirement - Furlough
Imputed Compensation - Represented Employees
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.
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.
Expedited Bill 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. 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.
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 and absence from normally scheduled duty required by the CAO due
to lack of funds or work." 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
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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 18­
10 in the future by either contracting or expanding the definition of "furlough." Staff
amendment 1 at ©9 would accomplish this.
Council staff recommendation:
amend the Bill to
add a separate definition of "furlough" and delete references to the personnel regulations and a
collective bargaining agreement.
This packet contains:
Expedited Bill 42-10
Legislative Request Report
Memo from County Executive
County Attorney Review Memorandum
Fiscal Impact Statement
Staff Amendment 1
Circle
#
1
5
6
7
8
9
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Expedited Bill No. _4::;:2=,,-..1.;1
O~
_ _ __
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:
(l)
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:
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Expedited Bill 42-10
1
Sec.
1.
Sections 33-35, 33-113 and 33-128 are amended as follows:
33-35. Definitions
2
3
4
5
6
In this Article, the following words and phrases have the following
meamngs:
*
*
*
Regular earnings:
Except as otherwise provided, gross pay for actual hours
7
8
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
9
10
11
12
13
14
15
16
17
18
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
~
19
20
21
22
23
24
25
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
i2'~
'-;J\LAW\BILLS\\o42 Personnel-Retirement-Furlough-Imputed Comp\BiIl LDoe
26
27
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Expedited Bill 42-10
28
29
30
31
32
33
34
35
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
(b)
any statutory fringe benefit program sponsored by the County and
permitted by the Internal Revenue Code.
*
33-113. Definitions.
*
*
36
37
In this Division the following words and phrases have the following
meamngs:
38
39
40
41
42
43
44
45
*
(p)
*
*
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
participant is required to take any furlough, as defined in
personnel regulations under Section 33-7(b) or
£!
collective
bargaining agreement, regular earnings must include any
amount the participant would have received if the participant
had not been required to take any furlough.
46
47
48
49
50
*
33-128. Definitions.
*
*
51
o
3
L
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Expedited Bill 42-10
52
53
In this Division, the following words and phrases have the following
meanmgs:
54
*
*
*
55
56
57
58
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.
59
60
61
62
63
64
*
*
*
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:
65
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
0LAW\BILLS\\042 Personnel-Retirement-Furlough-Imputed Comp\BiII
J
,Doc
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LEGISLATIVE REQUEST REPORT
Personnel
DESCRIPTION:
Retirement
Expedited Bill 42-1 0
Furlough Imputed Compensation - Represented Employees
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
nJa
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
June 24, 2010
TO:
Nancy Floreen, President
Montgomery County Council
Isiah Leggett, County Executive
Legislation to Ensure No Loss of Retirement Benefits \\t'hen Sworn Police Officers
Are Furloughed
FROM:
SUBJECT:
Article 50 of
t~e
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 provi.sion 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 Bill 18-10, 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 ofthe MCPR generally do not apply to FOP bargaining unit members
unless specifically referenced in the collective bargaining agreement. The FOP was concerned that
because Bi1118-1 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
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OFFICE OF THE COUNTY ATTORNEY
Isiah 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· amv.moskowitz:iVmontgomerycountvrnd.gov
240·777·6793· TTD 240·777·2545' Fax 240·777·6705
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t..'"
S·B';'
058687
OFFICE OF MANAGEMENT AND BUDGET
Isiah Leggett
County Executive
Joseph F. Beach
...
L-L
TSb
Dl...
D
Director
MEMORANDUM
September 13,2010
Nancy Floreen, President, County Council
TO:
FROM:
SUBJECT:
JosephF. Beach,
D~
Expedited Bi1l42-1 0, Personnel- Retirement - Furlough - Imputed Compensation ­
Represented Employees
The purpose ofthis memorandum is to
transmit
a fiscal and economic impact statement to
the Council on the subject legislation.
LEGISLATION SlJMMARY
Expedited BiIl42-1 0 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, as defined 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 Bill IS-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 defmition of a furlough found 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 ChiefAdministrative Officer
Dee Gonzalez, Offices of the County Executive
Jennifer Barrett, Director, Department of Finance
Joseph Adler, Director, Office of Human Resources
Belinda Fulco, Office of Human Resources
David
f\att,
Department of Finance
Micbael'Coveyou, Department of Finance
Lori O'Brien, Office of Management and Budget
John Cuff, Office ofManagement and Budget
Office of the Director
101 Monroe Street, 14th Floor· Rockville, Maryland 20850 • 240-777-2800
www.montgomerycountymd.gov
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Bill 42-10
Staff Amendment 1
Add the following after line 5:
Furlough:
A teII'lPorarv. non-pay status and absence from normally scheduled duty required by
the CAO due to lack of funds or work.
Amend lines
23-27
asfollows:
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
as follows:
(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 I8-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
ii!
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.