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SUMMARY OF FY22 RECOMMENDATIONS

A. SUMMARY OF AGENCY REQUESTS

Montgomery County Public Schools (MCPS): The MCPS workforce for FY22, as recommended by the Board of Education (BOE), is 23,636.606 FTEs, or 240.116 FTEs greater than the Board of Education adopted FY21 workforce of 23,396.490 FTEs. MCPS has undertaken informal discussions with the public schools' bargaining units, the Service Employees International Union (SEIU), the Montgomery County Education Association (MCEA), the Montgomery County Association of Administrators and Personnel (MCAAP), and the Montgomery County Business and Operations Administrators (MCBOA). The potential impact on the FY22 budget is unknown. For more information on compensation and workforce changes, please see the Board of Education's FY22 requested budget document.

Montgomery College (MC): The College and its Board of Trustees has proposed a maintenance of effort budget that continues its current staff complement. The FY22 Current Fund decrease in personnel costs of roughly $2.2 million maintains wages at a fair, reasonable, and sustainable level but achieves cost savings through cautionary hiring and compensation practices, employee retirements, and reductions in temporary student assistance. Negotiations with the bargaining units are ongoing, however, and merit and general wage adjustment increases are not known at the time of this publication. For more information on compensation and workforce changes, please consult the Adopted FY22 Montgomery College Operating Budget Request, available on the College's website.

Maryland-National Capital Park & Planning Commission (M-NCPPC): The net impact on the M-NCPPC workforce for FY22, as recommended by the Planning Board, is an increase of 18.01 FTEs. The Commission's requested budget includes an increase in personnel costs of $5.1 million. The increase also includes retirement and group insurance adjustments, a compensation placeholder (to address collectively bargained compensation increases and pass-through costs) and a reclassification placeholder. For more information on compensation and workforce changes, please see the M-NCPPC FY22 requested budget document.

Montgomery County Government (MCG): The net impact on the County government workforce for FY22, as recommended by the Executive, is an increase of 83 positions.

The recommended budget contains an increase in total personnel costs of $36.6 million, or 3.2 percent. In March 2021, the County Council approved a supplemental appropriation to provide compensation adjustments in FY21 not included in the original FY21 approved budget; these increases accounted for $28.1 million, or 2.4 percent, which is more than 75 percent of the total FY22 increase. The increase in FY22 related only to FY22 compensation adjustments totaled $16.8 million, or 1.5 percent. The primary factors in these changes are:

FactorMillions
General Wage Adjustment$2.0
Increase in required retirement contribution$0.8
Increase in group insurance
$3.0
Service increments and longevity$8.0
FY21 Compensation Adjustments approved March 2021$28.1
Other FY22 Compensation Adjustments$6.8
New positions in FY22$8.1
Position eliminations in FY22-$4.9
Other changes in personnel costs, including turnover savings and annualization of positions-$15.2

The recommendations in the remainder of this section are for the County Government and are based upon the bargained agreements with the United Food and Commercial Workers, Local 1994 (Municipal and County Government Employees Organization - MCGEO); the International Association of Fire Fighters (IAFF); Local 1664, the Fraternal Order of Police (FOP), Lodge 35; and the Montgomery County Volunteer Fire and Rescue Association (MCVFRA). Certain provisions of the agreements have been extended to unrepresented employees, as noted below.


B. COUNTY GOVERNMENT SALARY AND WAGES

General Wage Adjustment: The Executive recommends the following general wage adjustments (GWA) in FY22: 2.5 percent effective the first full pay period after January 1, 2022 for all employees in the Police bargaining unit; 1.5 percent effective the first full pay period after June 19, 2022 for all employees in the Fire and Rescue bargaining unit and Fire and Rescue uniformed management; $1,684 effective the first full pay period after June 19, 2022 for all employees in the Office, Professional, and Technical (OPT), and Service, Labor, and Trades (SLT) units, as well all employees on the Deputy Sheriffs and Correctional Officers Uniform Salary Schedules, and all non-represented employees, including Management Leadership Service (MLS) and Police Leadership Service (PLS) employees.

FY22 salary schedules can be found on the County's website at:
http://www.montgomerycountymd.gov/HR/compensation/Compensation.html.

Lump-Sum Payments: The Executive recommends a lump-sum bonus payment of $600 for employees in the OPT and SLT units, as well as on the Deputy Sheriffs and Correctional Officers schedules, who are not eligible for a service increment in FY22.

Service Increments: The Executive recommends service increments of 3.5 percent for all eligible employees.

Longevity Increments: The Executive recommends longevity increments in FY22 for all eligible employees.

Performance-Based Pay: The Executive recommends $3,000,000 in the Compensation Adjustment and Employee Benefits NDA to fund performance-based pay increases for MLS and PLS employees.

C. COUNTY GOVERNMENT: EMPLOYEE BENEFITS

The following employee benefits are funded in the Executive's recommended budget through a combination of lump sum or payroll-based contributions.

  • FICA (Social Security & Medicare)
  • Workers' Compensation
  • Group Insurance
  • Employees' Retirement System
  • Retirement Savings Plan

Social Security and Medicare: Contributions are collected from County departments and agencies each payday based on actual payroll. Since contribution rates and salary maximums change at the start of the calendar year, figures used in the recommended fiscal year budget represent an average of the rates set for 2021 and projected changes for 2022. The employer rates of 6.2 percent for social security and 1.45 percent for Medicare are not expected to change.

Workers' Compensation: This is handled through the County's Risk Management program under the Department of Finance. Departments with significant non-tax revenues make annual contributions to the Liability and Property Coverage Self-Insurance Fund. A lump sum contribution to the Fund for insurance for the remaining County departments is made annually through the Risk Management (General Fund portion) Non-Departmental Account. Participating County agencies also make annual lump sum contributions. Contributions for all members are set each year based on an actuarial valuation of exposures and past and projected claims experience along with administrative expenses.

Group Insurance Benefits : The contributions for health insurance are based on an actuarially determined Countywide average fixed rate of $13,295 per position, and the contribution for life insurance is based on fixed rates per coverage amounts based on an employee's salary.

It is projected for the long term that the annual cost of group insurance for the County, including active employees and retirees, could increase an average of approximately seven percent annually between FY22 and FY27. Contribution rates during this period will be set based on various factors, including the fund balance in the Health Insurance Fund and claims cost experience.

Consolidated Retiree Health Benefits Trust: Beginning in FY08, the County implemented a plan to set aside funds for retiree health benefits, similar to the County's 50-year-old practice of pre-funding for retiree pension benefits. Due to exponential growth in expected retiree health costs, the County had determined the cost of funding these benefits, which were being paid out as the bills came due, would become unaffordable. Setting aside money now and investing it in a Trust Fund, which is invested in a similar manner as the pension fund, not only is a prudent and responsible approach but will result in significant savings over the long term.

County agencies develop current estimates of the costs of health benefits for current and future retirees. These estimates, made by actuarial consultants, concluded that the County's total future cost of retiree health benefits if paid out today, and in today's dollars, is $2.1 billion - approximately 32.8 percent of the total FY22 budget for all agencies.

imageThe County's approach to address retiree health benefits funding is to determine an amount which, if set aside on an annual basis and actively invested through a trust vehicle, will build up over time and provide sufficient funds to pay future retiree health benefits and any accrued interest on unfunded liability. This amount, known as an Actuarially Determined Contribution or "ADC", is estimated at $79.7 million. This amount normally consists of two pieces - the annual amount the County would usually pay out for health benefits for current retirees (the pay as you go amount), plus the additional amount estimated to fund retirees' future health benefits (the pre-funding portion). The pay as you go amount can be reasonably projected based on known facts about current retirees, and the pre-funding portion is estimated on an actuarial basis.

The County's policy is to pay the full amount of ADC each year. In FY11, the County Council enacted Bill 17-11 which established the Consolidated Retiree Health Benefits Trust. The Bill amended existing law and provided a funding mechanism to pay for other post employment benefits (OPEB) for employees of MCPS and MC. In FY15, the County and all other agencies implemented the Medicare Part D Employer Group Waiver Program for Medicare eligible retirees/survivors effective January 1, 2015. This has reduced retiree drug insurance costs and the County's OPEB liability. The County achieved full pre-funding in FY15, consistent with Council resolution No. 16-555. In FY21, these contributions were budgeted at $12.3 million (County General Fund), $69.4 million (MCPS Consolidated Trust), and $5.5 million (MC Consolidated Trust).

A detailed breakdown of FY22 recommended contributions to the Consolidated Retiree Health Benefit Trust for County government tax supported agencies, participating agencies, MCPS, and MC is displayed in the table above. The Executive is recommending that the Retiree Health Benefits Trust provide $27.2 million to MCPS for the payment of retiree health insurance claims in FY22.

Retirement Benefits: Montgomery County Government maintains a system of retirement pay and benefits for its employees which are intended to provide income during their retirement years. The Employees' Retirement System, which currently provides benefits to approximately 6,783 retirees and survivors, is administered by Montgomery County Employee Retirement Plans (MCERP). MCERP oversees all facets of the retirement plans including investments, administration, and accounting. Retirement plan design changes occurring through the collective bargaining process and by other means are coordinated with MCERP in consultation with the Office of Human Resources, the County's actuaries, the Finance Department, and the Office of Management and Budget.

Retirement Plans: Montgomery County Government maintains three retirement plans for its employees: a defined benefit pension plan, a defined contribution plan, and a deferred compensation plan for its employees and participating agencies.

  1. The Employees' Retirement System (ERS), a defined benefit pension plan, was established through legislation in 1965 and is described in the Montgomery County Code, Section 33. As of June 30, 2020, there were 6,783 retirees and survivors and 6,204 active members, including 2,521 in the Guaranteed Retirement Income Plan (GRIP). Retirement plan design changes occurring through the collective bargaining process and by other means are coordinated by the MCERP staff, in consultation with the County's actuaries, the Office of Human Resources, the Finance Department, and the Office of Management and Budget.

    The ERS consists of four plans including a Mandatory Integrated Retirement Plan, an Optional Non-Integrated Retirement Plan, an Optional Integrated Plan, and a Guaranteed Retirement Income Plan. The GRIP is a Cash Balance Plan that began in FY10 as a result of negotiations between Montgomery County and UFCW Local 1994 MCGEO. Eligibility to participate has been passed through to non-represented employees and participants of participating agencies. All full- and part-time non-public safety employees hired before January 1, 2009 enrolled in the RSP were eligible to make a one-time irrevocable election to transfer to the GRIP by June 1, 2009. Eligible employees hired after January 1, 2009, have the option to participate in either the RSP or the GRIP. As with the RSP, the County and employee each make contributions at a set percentage of pay. The salient feature of the GRIP is that the plan provides guaranteed annual earnings of 7.25%, credited monthly.

  2. The Retirement Savings Plan (RSP), a defined contribution plan, was established for all new OPT/SLT (non-public safety) and non-represented employees hired on or after October 1, 1994. Eligible employees hired after January 1, 2009, have the option to participate in either the RSP or the GRIP. Eligible employees in the ERS are allowed to transfer to the Retirement Savings Plan. Both regular full-time and part-time employees can participate. Under this plan, the County and employee each make contributions at a set percentage of pay. These monies are deposited into employee accounts and invested based on each employee's selection of an investment vehicle(s) established by the Board of Investment Trustees.

  3. The Montgomery County Deferred Compensation Plan (DCP) was established by the County to make a deferred compensation plan available pursuant to Section 457 of the Internal Revenue Code. Employee contributions are made on a voluntary basis with the monies deposited into employee accounts and invested based on each employee's selection of an investment vehicle(s) established by the Board of Investment Trustees. In FY 2005, the County established the Montgomery County Union Employees Deferred Compensation Plan for employees covered by a collective bargaining agreement. This Plan is administered by the three unions representing Montgomery County employees.

The Board of Investment Trustees manages the assets of the ERS through its investment managers in accordance with the Board's asset allocation strategy. The Board also administers the investment program for the Retirement Savings Plan and the Montgomery County Deferred Compensation Plan. The Montgomery County Union Employees Deferred Compensation Plan is administered by the three unions representing Montgomery County employees. The Board currently consists of 13 trustees including: the Directors of Human Resources, Finance, and Management and Budget; the County Council Executive Director; one member recommended by each employee organization; one active employee not represented by an employee organization; one retired employee; two members of the public recommended by the County Council; and two members of the general public.

Change in Retirement System Membership: The number of active non-public safety in the ERS decreased by 95 and the number of public safety employees increased by 29, for a combined total active enrollment of 3,683 in FY21. GRIP membership increased by 201 employees, to 2,521 in FY21. The RSP had 52 fewer active employees enrolled in FY21 than in FY20, for a total FY21 enrollment of 3,328.

Funds for the County's contribution to the ERS for each member employee are included in the appropriate County government departmental budget or agency budget. The County uses multiple contribution rates designating the percentage of payroll for the various employee groups to determine the retirement contribution.

County contributions are determined using actuarially sound assumptions to assure the financial health of the Fund. Factors that affect the County's contributions include the impact of compensation adjustments, changes in the size of the workforce, investment returns, and collectively bargained benefit changes. The ERS contribution rates reflect projections of revenues and expenses to the fund. Revenues include County and member contributions which are set at fixed percentages of salaries and investment income which is driven by both earnings in the various financial markets and the size of the Fund balance invested.

Expenses of the Fund include pension payments which are affected by mandated cost-of-living increases and changes in the number of retirees and survivors; administrative and operational expenses of the Fund managers and financial consultants; and charges for services provided by the MCERP staff, as well as staff from Finance and Human Resources.

COLLECTIVE BARGAINING

Fire and Rescue Bargaining Unit: The current agreement became effective July 1, 2020, and expires on June 30, 2022. A limited scope reopener agreement will become effective July 1, 2021 and expire on June 30, 2022. The agreement's salient economic terms include:

  • General Wage Adjustment. A 1.5 percent GWA will be paid the pay period starting June 19, 2022.
  • Service Increments. A service increment of 3.5 percent will be paid in FY22 up to the maximum base salary for the grade for eligible unit members.
  • Longevity step increases. Longevity step increases will be paid to eligible employees.
  • Sick Leave Crediting. An adjustment to allow accumulated sick leave to be credited to employee's deferred compensation account, up to 176 hours, upon exiting the Deferred Retirement Option Plan.

MCGEO Bargaining Unit: The current agreement became effective July 1, 2020, and expires on June 30, 2023. A limited scope reopener agreement will become effective July 1, 2021 and expire on June 30, 2023. The original agreement's salient economic terms include:

  • Sick leave payout program. A sick leave payout program will be created in FY22 for eligible unit members leaving County service with at least 10 years of service.
  • Resident Supervisors. Eligible unit members in the Resident Supervisors job classification in the Department of Correction and Rehabilitation will be moved from Group J retirement to Group E retirement.
  • Holiday Pay. An adjustment of the requirements to receive holiday pay from "normal" day to "work" day.
  • Shift Differential. An adjustment to the shift start time and amount of the shift differential from $1.40 per hour for shift starts between 2:00PM and 10:59PM, and $1.56 per hour for shift starts between 11:00PM and 5:00AM to $1.42 per hour for shift starts between 12:00PM and 7:59PM, and $1.87 per hour for shift starts between 8:00PM and 5:59AM.
  • Field Training Pay Differential. An addition in the job classifications eligible for field training pay differential.
  • Transit Subsidy. An increase in the Get-In Program transit subsidy from $75 per month to up to $265 per month.
  • Crisis Center Stipend. A stipend of $1,500 will be paid in FY22 to eligible unit members in the Health and Human Services Crisis Center.

The limited scope reopener agreement's salient economic terms include:

  • General Wage Adjustment. A $1,684 GWA will be paid the pay period starting June 19, 2022.
  • Service Increments. A service increment of 3.5 percent will be paid in FY22 up to the maximum base salary for the grade for eligible unit members.
  • Deferred Service Increment. A service increment of 3.5 percent for any eligible bargaining unit member who was scheduled to receive a service increment in FY11, but which was not funded by the County Council, was split into three phases; the second phase of 1.25 percent will be paid in FY22 to eligible unit members the first full pay period following July 1, 2021.
  • Longevity step increases. Longevity step increases will be paid to eligible employees.
  • Lump sum payment. A $600 lump sum payment for eligible unit members who are not eligible for a service increment in FY22 will be paid the first full pay period following July 1, 2021.
  • Seasonal Wage Adjustment. A $0.50 an hour adjustment will be provided effective the first full pay period after July 1, 2021 for seasonal employees not affected by the County minimum wage increase.
  • Stand By Pay. An increase in the stand by pay rate for Fire Marshals only from 15 percent of regular hourly salary to 30 percent, or 50 percent on Saturday through Sunday and holidays.

Police Bargaining Unit: The current agreement became effective July 1, 2020, and expires on June 30, 2023. A limited scope reopener agreement will become effective July 1, 2021 and expire on June 30, 2023. The agreement's salient economic terms include:

  • General Wage Adjustment. A 2.5 percent GWA will be paid the first full pay period following January 1, 2022.
  • Service Increments. A service increment of 3.5 percent will be paid in FY21 up to the maximum base salary for the grade for eligible unit members.
  • Longevity step increases. A longevity step increase will be paid to eligible employees.

Volunteer Fire and Rescue Bargaining Unit: The current agreement became effective on July 1, 2020, and expires on June 30, 2023. The agreement's salient economic terms include:

  • Nominal fee. A nominal fee increase will be paid in FY22. The nominal fee for eligible volunteers increases in July 2021 to $525 and to $900, depending on level of service.
  • Association funding. Funding for the Association will increase to $281,178 on July 1, 2021.
  • Training. Funding in the amount of $21,000 will be provided for Volunteer Basic Orientation Course training, and $15,000 will be provided for training and Pro-Board certification.
  • Length of Service Award Program (LOSAP). An increase in LOSAP of 2.5 percent will be made for certain active members, on July 1, 2021.

WORKFORCE ANALYSIS

Basis: Workforce analysis has been performed on changes to tax supported and non-tax supported full-time equivalent (FTE) positions in the Executive's Recommended FY22 Operating Budget for the County government.

Overall changes are calculated in comparison to the Approved Personnel Complement for FY21, which began on July 1, 2020. Changes shown reflect such factors as the addition of grant-funded positions; abolishments and creations to implement approved job sharing agreements; and other miscellaneous changes. Changes recommended by the Executive for FY22 are in three categories: current year position changes due to supplemental appropriations or other actions; new fiscal year position changes scheduled to take effect July 1, 2021; and technical changes.

Summary: The recommended budget includes funding for 9,829 full-time positions, a net increase of 96 from the approved FY21 Personnel Complement of 9,733 full-time positions. Funding for 986 part-time positions is also included, a net decrease of 13 positions from the approved FY21 Personnel Complement of 999 positions. FTEs increased by 79.2 to 10,598.1.


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Detailed below are the significant net changes in the number of positions in the FY22 Recommended Budget.

Workforce ChangesPosition Change

Health and Human Services - Change is related to the conversion of contractual brokers to merit staff, additional therapist staff, staff to enhance support to several programs, staff to address the implementation of Kirwan, and staff to support the implementation of the Mobile Health Clinic.

61
Community Engagement Cluster - Change is due to the establishment of multicultural/multilingual communication efforts, and the conversion of temporary support to merit staff.17

Fire and Rescue Service - Change is due to positions added to reduce the need for overtime while firefighter/rescuers are engaged in full-time paramedic training, and other operational improvements.

11

Police - Change is due to the reallocation of positions to better utilize available resources and improve service delivery.

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