AGENDA ITEM
1
&
7A
October 22, 2013
ADDENDUM
MEMORANDUM
October 21, 2013
TO:
FROM:
County Council
.
Josh Hamlin, Legislative Attorn
Robert H. Drummer, Senior
Le~~
Attorney
f
!!U
Compensation
iJ'-ht
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SUBJECT:
Addendum:
Bill 28-13, Elected Officials
After the packet for Agenda Items 1
&
7A,
Bill
28-13, Elected Officials - Compensation,
was distributed, we received the attached fiscal and economic impact statements from Jennifer
A.
Hughes, Director, Office of Management and Budget, and Joseph F. Beach, Department of
Finance.
F:\LAW\BILLS\1328 Elected Officials Compensation\Addendum to PH-Action Memo.Doc
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ROCKVILLE, MARYIAND
MEMORANDUM
October 21,2013
TO:
FROM:
Jennifer
A.
Hug es, D rector, Office
ofManag~~
Budget
Joseph F. Beach, Director, Department of Finan(1"
<l"
Bill 28-13, Elected Officials - Compensation
SUBJECT:
Please fmd attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:ha
c: Fariba Kassiri, Assistant Chief Administrative Officer
Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices of the County Executive
Joy Nurmi, Special Assistant to the COlmty Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
Michael Coveyou, Department of Finance
Robert Hagedoom, Department of Finance
Joseph Adler, Office of Human Resources
Corey Orlosky, Office ofManagement and Budget
Henri Apollon, Office of Management and Budget
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Fiscal Impact Statement
Council Bill 28-13, Elected Officials - Compensation
1.
Legislative Summary.
This bill would increase the compensation of the County Executive, County Council,
Sheriff, and State's Attorney in each of the next four years. This bill reflects the
recommendations of the Committee to Study Compensation.
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies used.
The bill would increase salary and benefit expenditures for elected officials. There would
also be increases for FICA costs (7.65%) and County retirement benefit contributions
(percentages vary by position), calculated on the amount of increased salary.
It
would be
expected that another compensation study would take place before the 2018 election,
which would likely impact the estimates for FY19 and 20. This analysis assumes no
change in retirement rates for FY19 and 20. This bill would have no impact on County
revenues.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
From FY15 through FY20, the proposed bill would result in an estimated additional
expenditure of$1,814,935. There is no expected revenue change.
Variance (includes FICA and retirement contribution)
FY15
FY16
FY17
$3,261
$9,214
County Executive
$15,283
Councilmember (x8)
$86,071 $186,312 $218,255
$25,617
$11,834
$30,009
Council President
$2,693
$8,259
$14,737
Sheriff
State's Attorney .
$10,851
$19,361
$3,538
$107,398 $240,253 $297,644
Subtotals
FY18
$22,486
$256,165
$35,221
$22,425
$29,462
$365,759
FY19
$26,312
$276,302
$37,990
$26,509
$34,828
$401,940
FY20
$26,312
$276,302
$37,990
$26,509
$34,828
$401,940
4. An actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
Not applicable.
5. Later actions that may affect future revenue and expenditures if the bilI authorizes future
spending.
Not applicable.
6. An estimate of the staff time needed to implement the bill.
Staff time needed to implement the bill would be minimal. The only step needed would
be to adjust individual records to reflect new salaries as appropriate.
7. An explanation of how the addition of new staff responsibilities would affect other duties.
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Not applicable.
8.
An
estimate of costs when an additional appropriation is needed.
Not applicable.
9. A description of any variable that could affect revenue and cost estimates.
The compensation increase for the final three years of the four year term is based on
estimated CPI increase. If the CPI varies
high
or low from the estimate, the cost
estimates would reflect that change.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
The estimated CPI is likely to change slightly. A variance of .5% in estimated CPI would
result in up to a $65,000 change in the 6 year estimate, depending on which year the
variance from estimate occurred.
11. If a bill is likely to have no fiscal impact, why that is the case.
Not applicable
12. Otller fiscal impacts or conunents.
Not applicable.
13. The following contributed to and concurred with this analysis: (Enter name and
department).
Corey Orlosky, OMB
Lori O'Brien, OMB
bIt.~/1.s,~lU<b
Office of Management and Budget
Date
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Economic Impact Statement
Bill 28-13, Elected Officials - Compensation
Background:
This legislation would:
• Modify the compensation ofthe County Executive and County Council;
• Clarify the County Code provisions governing annual adjustments of the County
Executive, County Council, Sheriff, and State's Attorney; and
• Generally amend the law relating to compensation of elected officials
Bill 28-13
(Bill)
reflects the recommendations ofthe Committee to Study Compensation
of the County Executive, County Council, Sheriff, and State's Attorney. The Bill would
increase the compensation of the County Executive and County Council as follows:
• County Executive's compensation would increase from $180,250 (effective
December 3, 2012) to $190,000 beginning December 1,2014 and adjusted by the
Consumer Price Index for All Urban Consumers for the Washington-Baltimore
Consolidated Metropolitan Area (CPI-U) over the next three years.
• Compensation for County Councilmembers, excluding the Council President,
would increase from $104,022 (effective December 3,2012) to $125,000
beginning December 1,2014. The rate would be adjusted annually by the CPI-U
• Compensation for the County Council President would increase from $114,425
(effective December 3, 2012) to $137,500 beginning December 1,2014. The rate
would be adjusted annually by the CPI-U.
• Compensation for the Sheriff would increase from $154,000 (effective December
3,2012) to $160,929 beginning December 1,2014. The rate would be adjusted
annually by the CPI-U.
• Compensation for the State's Attorney would increase from $199,000 (effective
January 7,2013) to $208,320 beginning January 5, 2015.
The total increase in compensation from December 3, 2012 for the County Executive,
County Councilmembers, County Council President, Sheriff, and the State's Attorney
from January 1, 2013 would be $216,898 beginning December 1,2014.
Based on the Department ofFinance's estimate for the County's wage and salary income
for calendar years 2013 and 2015, the increase would represent a very insignificant share
of total increase in County wage and salary income (0.006%).
1.
The sources of information, assumptions, and methodologies used.
• Economic assumptions prepared by Finance for the FY20 14 Approved Operating
Budget
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Economic Impact Statement
Bill 28-13, Elected Officials - Compensation
2. A description of any variable that could affect the economic impact estimates.
Not applicable
3. The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
Based on the estimate provided in Section 1, the Bill would have no material
economic impact on the County's economy.
4.
If
a Bill is likely to have no economic impact, why is that the case?
The estimate on the total amount of wage and salary income is very insignificant (see
Section 1) and therefore will not have a measurable impact on economic activities in
the County.
5. The following contributed to and concurred with this analysis:
David Platt and
Rob Hagedoom, Finance;
~tDrre~
Department of Finance
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