Employee Benefits and Relations

Volunteer Fire & Rescue Services: A Collaborative Approach At #MACoCon

Kevin Kinnally County News, Employee Benefits and Relations, Labor, MACo Events, Public Safety and Corrections, Winter Conference

All of Maryland’s twenty-four jurisdictions depend on some level of volunteers for the delivery of fire and rescue service. The evolution of volunteer fire companies presents both challenges and opportunities for county governments.  At this year’s annual MACo Winter Conference, learn how Maryland counties are collaborating with volunteer fire companies to protect lives, property, and the environment.

Together We Respond: A Collaborative Approach to Volunteer Fire & Rescue Services

Description: All of Maryland’s twenty-four jurisdictions depend on some level of volunteers for the delivery of fire and rescue service. As volunteer fire companies continue to evolve, it is critical for local governments to strengthen their relationships with local volunteer firefighters. This session will provide an overview of the challenges and best practices related to the volunteer fire service in Maryland. Speakers will discuss challenges in oversight and authority, recruiting and retaining volunteers, and funding for both volunteer companies and county governments.

Speakers:

  • Richard Devore, Director of Emergency Services, Allegany County
  • Tom Owens, EFO, Director/Chief, Division of Frederick County Fire & Rescue Services
  • Michael Faust, Second Vice President, Maryland State Fireman’s Association
  • Clarence “Chip” Jewell, Director/Deputy Chief, Frederick County Division of Volunteer Fire & Rescue Services

Date/Time: Thursday, December 7, 2017; 3:30 pm – 4:30 pm

The MACo Winter Conference will be held December 6-8, 2017 at the Hyatt Regency Chesapeake Bay Hotel in Cambridge, Maryland. This year the conference’s theme is “The Power of Partnership.”

Learn more about MACo’s 2017 Winter Conference:

Finance Committee Holds Briefing On Controversial Collective Bargaining Bill

Kevin Kinnally Bill Hearing, County Budgets, County News, Education, General Assembly News, Labor

A panel of representing several Maryland community colleges voiced their objections over proposed legislation that would mandate a one-size-fits-all form of collective bargaining during a briefing held by the Senate Finance Committee. The briefing focused on failed legislation (SB 652/HB 871) from the 2017 General Assembly Session.

At the briefing, MACo Policy Associate Kevin Kinnally explained that the move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support. Bernie Sadusky, Executive Director, Maryland Association of Community Colleges (MACC) told the Committee that the State has not been living up to its funding obligations, and that the added costs of collective bargaining would fall on counties and/or students, in the form of higher tuition rates.

State Senator Stephen Hershey expressed frustration with the proposal, telling fellow Committee Members that his constituent counties would be unable to afford the added costs resulting from mandated collective bargaining. Senator Hershey also addressed the lack of State funding for community colleges, he asked:

How can we pass a bill when we have no idea how to pay for it?

MACo opposed the 2017 legislation.

Representatives from the Service Employees International Union (SEIU), Maryland State Education Association (MSEA), American Federation of State, County and Municipal Employees, Maryland/DC American Federation of Labor and Congress of Industrial Organizations (AFL–CIO), and Communication Workers of America (CWA) testified in support of the legislation.

Useful Links

HB 871/SB 652 of 2017

Previous Conduit Street Coverage

County Government Considers Offering Retirement Incentive

Robin Clark Eilenberg County News, Employee Benefits and Relations
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Jason Bennett, Allegany County Finance Director. 

The move could help Allegany County with its budget deficit.

From the Cumberland Times-News:

In an effort to cut costs and stabilize the county workforce, Allegany County commissioners are considering offering retirement ready employees cash incentives to call it quits beginning Jan. 1.

“Now is probably the time to start looking to at least stabilizing our workforce, or reducing it ever so slightly by offering an incentive,” said Jason Bennett, county finance director. “This helps us out a little bit.”

Flat revenues left the county with a nearly $1 million deficit in the fiscal year 2018 budget, Bennett said Monday, forcing commissioners to fill the gap with money from the fund balance.

MACo’s county budget and salary surveys offer comparative information of Maryland county finances and workforce. MACo is currently assembling fiscal year 2018 surveys. Information from prior years is available on MACo’s website.

For more information about Allegany County’s program, see County may offer buyouts to dozens of employees from The Cumberland Times-News.

What’s Going On With Tax Reform? Part 3

Barbara Zektick Employee Benefits and Relations, Finance and Procurement, NACo and Federal Issues, Taxes and Revenues

Yesterday, Steven M. Rosenthal of the Tax Policy Center opined on a potential element of tax reform that understandably has received less attention from local government advocates than elimination of the deductibility of state and local taxes (SALT) and the tax exemption for municipal bonds. Yet, White House National Economic Council Director Gary Cohn has argued that this element of tax reform will most benefit “the policemen … the firemen and the teachers.”

What is it? Is this true? And as employers of the policemen, the firemen and the teachers, should local governments care?

Cohn was referring to potential tax relief to U.S. corporations for reincorporating their off-shore earnings into the U.S. tax system. This provision would allow corporations holding off-shore profits to repatriate previously untaxed foreign earnings with a U.S.-based parent firm at a special low rate. Cohn argued that this tax relief would benefit the “biggest owners of equities in the world,” the “biggest public pension funds” – and, therefore, the beneficiaries of those pension funds, like public safety officers and teachers.

But, Rosenthal says this isn’t actually the case:

Now for some pension background: There are two basic forms of retirement plans—defined benefit (DB) plans which are typically thought of as traditional pensions and defined contribution (DC) plans, which include 401(k) plans and IRAs.  Defined benefit plans pay annuities to retired workers but these payments are promised by employers and based on years of work and earnings – they do not depend on the returns on assets held by the plan or by the employer directly.  (However, the windfall from a reduced tax rate on accumulated offshore earnings might increase the likelihood that employers meet their promised retirement obligations to their employees). By contrast, the returns on assets held in DC plans and IRAs flow directly to the beneficiaries.

At one time, private and public employers mostly provided defined benefit plans, but now most DB plans are provided by public employers for public servants, like those police officers, fire fighters, and teachers.  ….

A retroactive tax cut for U.S. corporations goes solely to existing shareholders. The Tax Policy Center estimates that 76 percent of the benefits, including the benefits through retirement plans, of a retroactive cut in corporate taxes would go to people in the top fifth of the income distribution (those with annual incomes above $150,000) and 40 percent to the top 1 percent (above $725,000).

Cohn is correct when he says retirement plans would benefit from a lower tax rate applied to accumulated foreign earnings, since they hold a large share of stock in US corporations. But, the DB plans do not pass additional returns through to police officers, fire fighters, and teachers. Only DC plans pass additional returns through to beneficiaries.

Bottom line: this tax break could potentially help counties meet their retirement obligations. But, according to Rosenthal, our retired police officers, firefighters and teachers with traditional pensions shouldn’t start spending all their nest eggs quite yet.

Would State Block Grants Deliver Health Insurance Reform?

Michael Sanderson Employee Benefits and Relations, Health and Human Services, NACo and Federal Issues

With the US Senate again considering a fast-track vote on legislation to repeal the Affordable Care Act (ACA), much national attention has focused on a key notion in the proposed Graham-Cassidy Amendment: offering states “block grants” to offset health care costs, but without the prescriptive elements of the ACA.

Don Kettl, Professor at University of Maryland’s School of Public Policy, offers his take on this matter in an article on the Route Fifty website:

There’s a basic assumption in the Graham-Cassidy health care bill. It would slash federal cash for the states that didn’t expand their Medicaid programs under Obamacare by $180 billion, or 11 percent, by the year 2026. It assumes that new block grants for the states would allow them to find enough efficiencies to make up the difference.

That is a very, very tall order. What’s the evidence that the states would prove more efficient managers of health care funding than the feds?

…

Two things seem certain. One is that it’s going to be impossible for the states to make up the shortfall with greater efficiencies. The other is that we’ll end up with greater disparities in the health coverage that citizens get, as different states go down different roads to cope with the cuts.

Those favoring repeal-and-replace are deep in a corner from which there are few escape routes. But before pursuing the block grant strategy, which would load all the tough decisions onto the states, it’s worth looking carefully ahead at where this road would lead.

Looking specifically at the effect on Maryland, a state that expanded Medicaid eligibility based on the strong federal funding provided through the ACA to do so, Governor Hogan has opposed the current proposal in the Senate. From the Baltimore Sun coverage:

The governor released a statement emphasizing that the current law needs to be fixed, but he rejected the repeal measure sponsored by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana.

“Unfortunately, the Graham-Cassidy bill is not a solution that works for Maryland. It will cost our state over $2 billion annually while directly jeopardizing the health care of our citizens,” Hogan said. “We need common sense, bipartisan solutions that will stabilize markets and actually expand affordable coverage.”

This high-profile issue is pressing in several ways. Sources differ on the likelihood of a Senate floor vote being called next week, and the prognosis for the proposal’s passage remain very unclear. After the end of September (and the close of the federal fiscal year), the process of budget “reconciliation” closes, and a full 60-vote margin (to overcome an expected filibuster by opponents) would be practically required to enact any changes to federal health care law.

Deadline Approaches for Input on Overtime Rule, Experts Predict Revisions

Robin Clark Eilenberg County News, Employee Benefits and Relations

The Department of Labor’s comment period on a rule that would expand overtime benefits for county government employees closes on September 25th.

According to the National Association of Counties, in June, the Department of Labor dropped its defense of a lawsuit joined by against the rule. The rule, proposed under the Obama Administration, would have required employers to pay overtime to more employees by raising the salary threshold for those exempt from existing overtime rules. The threshold under the proposed rule would have almost doubled, from $23,660 ($455 per week) to $47,476 ($913 per week).

The National Association of Counties has commented on the proposed regulation,

County governments are a major employer and economic engine for workers across the U.S., employing more than 3.3 million people and providing services to over 305 million county residents. Counties provide health benefits to nearly 2.5 million employees and nearly 2.4 million of their dependents. For health insurance premiums alone, counties spend an estimated $20 to $24 billion annually.

NACo’s comments reflect our concerns about the proposed rule to increase the threshold amount for “white collar” employees’ exemption from overtime pay and the potential impact that the proposed rule could have on county budgets and administration.

The key concerns include:

  • Changing the overtime pay exemptions threshold;
  • Automatic annual adjustments/increases;
  • The need for additional time needed for public comment.
aHolstrom
Amelia J. Holstrom, attorney

Experts quoted in coverage from HR Advisor predict the Department of Labor to revise the rule with a lower salary threshold for the exemption. From HR Advisor,

Amelia J. Holstrom, a contributor to Massachusetts Employment Law Letter and attorney with Skoler, Abbott & Presser, P.C., in Springfield, Massachusetts, also expects a new rule to have a lower salary threshold than the rule issued during the Obama administration.

“I anticipate that the DOL will get a lot of comments from the business community indicating that the Obama-era rule would have been too burdensome to comply with,” Holstrom says. “I also think you will see the majority of employers agree that some increase in the salary threshold is necessary, and I anticipate most will support an increase consistent with inflation.”

For more information, see Time Running Out to Comment on Long-Stalled Overtime Rule from HRAdvisor and DOL drops defense of overtime pay rule change.

 

MACo OPEB Trust Gains Over $3 Million For Participants

Michael Sanderson Employee Benefits and Relations, Finance and Procurement

money-2696228_960_720The MACo OPEB Trust – an investment pool for counties and other governments with long-term retiree health care obligations – has already delivered on its promise to member counties. In less than three years of operation, the Trust has reported gains of more than $3 million from growth in assets, plus interest and dividends.

Under Maryland law, OPEB assets must be separated into a Trust in order to be invested with long-term strategies, including stocks and bonds. MACo developed the OPEB Trust as a ready-to-go option for counties, municipalities, community colleges, and libraries to use — allowing a member-guided investment strategy while sharing the various overhead costs of operating a guiding organization. The results have proven very beneficial for the ten Trust members — the investments have kept pace with market forces, while limiting investment risk, and have reached substantial gains unreachable without the Trust structure.

The following summary comments were assembled by the Trust’s investment advisors, GYL Financial Synergies:

• The MACo OPEB Trust was initially funded in April 2015 and charged with the task of providing participating entities with returns consistent with the target allocation while taking lower levels of risk.

• The Trust had a market value of $28.8 million as of August 31st, and returned 5.9% since the inception date of April, 2015. The custom benchmark returned 6.1% over the same time period.

• The target asset allocation is 65% equities, of which 38% is currently invested in index funds, and 35% fixed income

• Given the large relative cash flows since inception, Trust funds are being methodically invested (dollar-cost averaged) into the markets. Consequently, while the OPEB Trust has matched its custom benchmark since inception, it has done so while experiencing approximately 27% less volatility as measured by the Beta statistic.

• Over the past two years and five months, the Trust has appreciated by $3.2m through a combination of realized and unrealized gains plus interest and dividends.

• The Trust returned 2.1% for the past three months, with the custom benchmark returning 2.3%. For the year to date, the returns are 8.6% and 9.0% respectively.

Learn more about the MACo OPEB Trust by contacting MACo Executive director Michael Sanderson, who sits as an ex-officio Trustee.

Civil Engineering Pays

Barbara Zektick Employee Benefits and Relations, Transportation and Public Works

salarysurvey17disciplinesThe median pre-tax income of civil engineers has increased 4-5 percent since 2014, to $101,000, according to a new study by the American Society of Civil Engineers (ASCE).

Unsurprisingly, the study finds that increased earning potential is directly linked to attainment of advanced degrees and licensure:

• Those with a bachelor’s degree have a median salary of $93,000.
• Those with master’s degrees have a median of $101,000.
• Professional licensure increases the median salary to $108,000.
• Those with doctoral degrees earn the most on average, with a $110,000 median salary.

The “typical” survey respondent was a male in his early 40s, with a bachelor’s or advanced degree, and about 17 years of professional experience.

The study also found that a pay gap continues to persist for women and minorities. The median salary for women is $83,000, compared with $101,400 for male respondents. Hispanic and African American respondents earned median incomes of $83,600 and $87,800, respectively.

Unemployment Below 4% For First Time Since 2008

Barbara Zektick Economic Development, Labor

For the first time since 2008, Maryland’s unemployment rate fell below 4 percent in August – just below, to 3.9 percent. The state gained 14,200 jobs, with the private-sector adding 9,700 jobs. August is the fifth month this year to post over-the-month job gains.

The national average unemployment rate is 4.4 percent, placing Maryland ahead of the curve.

Governor Larry Hogan stated:

From day one, a top priority of our administration has been growing our private sector and creating more jobs and we have made incredible progress. In just two and a half years, Maryland has added more than 10 times more private sector jobs than were added in the previous 8 years, and the unemployment rate is at the lowest it has been in nearly a decade. We pledged to put our state on a new path and turn around our economy, and we are doing exactly that.

Maryland Labor Secretary Kelly M. Schulz said:

August’s job gains are the second-highest in the past seven years. Our regulatory reform and workforce development programs are creating opportunities for both business owners and job seekers, and the numbers reflect that. The Department of Labor is proud to do its part to ensure our citizens have jobs.

Government jobs increased by 4,500 positions. Leisure and hospitality suffered the largest decrease, losing 1,100 jobs.

Useful Links

State’s press release

Baltimore Business Journal coverage

Bureau of Labor Statistics (BLS)

Charles Commissioners Expand County Wellness Initiative

Kevin Kinnally County News, Employee Benefits and Relations, Health and Human Services

The Charles County Commissioners on Tuesday approved a resolution to boost the county’s employee wellness initiative. 

According to a press release,

On Tuesday, Sept. 12, the Board of Charles County Commissioners unanimously approved a resolution to expand healthy drink and snack options offered in vending machines in county-owned buildings used by employees and residents. The Commissioners’ action supports an idea brought forth by the Charles County Wellness Committee employees.

The draft policy proposed by the County Administrator would require that at least 50 percent of items in machines meet American Heart Association-recommended nutrition standards for sugar, salt, fat, and other measures, and that every drink machine offer bottled water.

“We thank the Commissioners for voting to prioritize the health of our residents and workers,” said Shawn McIntosh, executive director of Sugar Free Kids Maryland. “This helps the county continue moving towards a culture of health.”

This resolution is designed to help the county promote health, save lives, and reduce the costly effects of medical conditions like type 2 diabetes and heart disease. Chronic diseases are significantly affecting the lives of Charles County residents and leading to large health care costs. This builds on recent momentum in the state of Maryland where, since 2015, similar pieces of legislation that ensure healthy drinks and snacks in vending machines have been passed by Baltimore City, Howard County, Montgomery County, Prince George’s County, and the Maryland National Parks and Planning Commission.

Read the full press release for more information.