Monday mornings Commissioners Court is said to be forming a Budget Reduction Committee that will be run by Tax Assessor and Collector J.R. Moore. The Committee is being formed to find a way to cut costs before the mid-summer budget hearings.
Judge Sadler sent a letter to the Tax Collector last week telling him what he would like the committee to review and what cuts for this current and the upcoming fiscal years he would like to see. This is to include department elimination potential, department privatization potential, furloughs for all employees not in the Montgomery County Sheriff’s Department and benefits. Furloughs mean that employees will take unpaid holidays such as the city of Houston recently implemented.
Cuts in the retirement benefits would mean that instead of the county putting $2.50 for every dollar the employee has in the fund it would be cut to $2.00. For long term employees this means little. It is the short time employees that will see the difference in the future.
According to Judge Sadler if everyone took one day of furlough the savings would amount to close to $400,000.
Since the tax rate has remained as it’s current level over the past 3 years there is also a possibility of a tax rate hike. Even though property valuations for last year are up only 4.16%the current budget is almost 11% more than the previous year.
Joe Ashton, President of the Montgomery County Law Enforcement Association said the association fully understands the stress the current economy may place on the county budget.
However, he continues that they are requesting the county not to balance the budget on the backs of the current employee’s. He say that the current benefits package for county employees is as lean and as cost effective as any in the state.
The employee’s bear a sometimes enormous portion of their healthcare costs.
Salaries lag behind salaries of other similar localities and the urban center to our south, he said.
Harris County Ed Emmett makes $160,900 a year for a county with a population of just over 4.7 million people.
Montgomery County Judge Saddler is making $137,000 for a county with a population of just under 500,000.
Montgomery County has almost 2,000 employees. Most of those employee salaries are decided on by supervisors etc.
The County Judge and Commissioners vote on their own salaries and car allowances.
Two weeks ago this same situation unfolding here happened in Harris County. A document which was sent to every department head is attached below:
Employees sometimes erroneously believe that they can use a budget crisis to “clean house” or “get rid of dead wood” without documentation to support the decision making. But the truth is that jurors demand that employers treat employee’s fairly and offer legitimate, non-discriminatory, non-retaliatory reasons for firing someone, even under a reduction in force. Those reasons must be evidenced by contemporaneous documentation.
An employer considering a RIF should proceed with caution and be prepared to defend every decision from a claim that the RIF was only a subterfuge for illegal discrimination or retaliation.
Identify the business reason(s) for the RIF, gather documentation and develop a responsive plan.
If one unit of the department is not profitable, then the employer may decide to eliminate that entire unit.
The current budget crisis may provide a legitimate business reason to eliminate positions. However departments must still be able to identify why it chose to eliminate a particular position(employee) over another position(employee). The remaining steps will help you reach this goal.
Be sure to factor into the financial analysis that any person terminated in an RIF will get paid for unused vacation, unused comp time, and in the vast majority of cases, unemployment benefits. The payout of unused vacation and unused comp time is made directly from your salary budget on the second pay period after the termination date. When the unemployment payments will hit your budget depends upon when the affected employees apply for benefits. The amount of payment depends upon the affected employees’ salaries and how long they collect unemployment benefits. Generally for each employee whose salary was at least $38,500 per year, you should budget at least $10,790 ($415 per week maximum benefit for a maximum of 26 weeks). Benefits in the past have normally run for 26 weeks; however, employees may be eligible for State Benefits Extensions as regularly approved by the federal government. Such extension benefits will also be deducted from the departments budget. Therefore, departments should plan for 26 weeks plus at least one occurrence if not more of approved extensions.
Generally the auditor posts the 4th quarter of the previous year and the 1st quarter of the current year to your budget in June. The posting for the second quarter is made in September and the 3rd quarter is made in December.
Identify positions in the organization that can be eliminated
Which functions can be stopped completely
Which functions can be re-distributed to one or more other positions?
Ultimately, the department should have a “before” and “after” organization chart before ever considering WHO will lose his/her job.
Decide when the positions should be eliminated.
Identify who is going to make the decision on which employees will be laid off
Having multiple decision makers decreases the chance that discrimination will be a factor.
Diversity among the decision makers can also be helpful
Identify the factors to be used to make the decision
The more objective the factors, the better.
length of service (last in-first out)
Attendance (other than FMLA-protected absences)
Some semi-objective factors will probably included
Performance evaluations need special scrutiny because some criteria are subjective. The more subjective the criteria, the more chance of discrimination creeping into the decision.
Using the factors identified in step 4, train the decision makers on how to apply them.
Identify the employees slated for layoff based on the criteria established.
Conduct disparate impact analysis with help of the County Attorney’s Office.
The fewer people laid off, the less significant this analysis will be.
Ideally, the department will be able to maintain open communications with employees about the situation, releasing information in steps.
Announce that layoffs may be necessary, but assure staff that changes short of layoffs are being considered and implemented too.
When the date for a layoff is identified, consider releasing the information.
If sabotage is a strong potential, it may be necessary to conduct the layoff with no notice.
If the target date is the end of a month and some employees on the list are eligible for retirement, contact IIRRM a few weeks in advance so they can be prepared to process TCDRS paperwork at the last minute.
Make final preparations, including preparing the layoff letter with help from the County Attorney’s Office.
Appoint enough staff to deliver the news.
If the employees’ are getting no notice, be sure to have boxes available for them to remove their personal items.
Block access to the computers
Consider having EAP representatives on site.
Alert HRRM so they can be prepared with info on applying for unemployment benefits, retirement, etc.
This is just a brief summary of the steps necessary in conducting a true RIF. The County Attorney’s Office is available to discuss these steps further.