June 19, 2009
Impact on Board Compensation
On Thursday, a Board member asked for clarification on how the approved budget impacts the compensation of Board members who choose to be covered under the County’s health insurance plan. As is the case with employees, Board members who choose to be covered under the County’s insurance plan will experience a decrease in total compensation. This decrease is due to the lack of merit increases and increased costs for health insurance.
Consistent with the Board’s expressed intent, the approved budget ordinance specifies that the current pay, expenses, travel allowance and technology allowance for Board members remain the same in FY 2010 as in FY 2009, as follows:
- Salary: $22,370 ($27,962 for the chairman)
- Expenses: $7,200 ($7,800 for the chairman)
- Travel Expense: $3,528
- Technology Allowance: $2,900
Since employees will receive no merit increases in FY 2010, maintaining the current pay for Board members also is consistent with the Board’s revised policy on setting its compensation in alignment with changes in employee compensation.
As a matter of clarification, market adjustments are different from merit increases. Merit increases, when funded, are provided to employees based on actual performance as measured against established standards.
Market adjustments, on the other hand, change the market rate set for each job classification. These changes are based on setting market rates for each job at the average of what is paid for similar jobs in the market place. When market rates are changed, the employee’s actual pay is compared with the new market rate. If the employee’s actual pay is less than 95% of the revised market pay, the actual pay will be adjusted to this threshold (actual pay is considered “at market rate” if it falls between 95% - 105% of the market rate). Therefore, while the market rate will be adjusted for approximately half of the County jobs, only those whose actual salary “falls” below the 95% threshold will see their pay adjusted to this level. Board members will recall that approximately 35% of County jobs have market rates below the average pay for those jobs in the market.
Unlike the question of pay, changes in medical premiums will impact Board members who choose to be covered by the County’s health insurance plan. Board members who choose to be covered under the plan pay the same costs employees pay. Therefore, Board members who choose individual coverage will pay $650 more in premium costs annually. Those who choose to cover dependents will pay 5% more in premium costs. Actual costs will vary according to coverage choices (covering only a spouse versus covering spouse and children).
Board members with additional questions should contact the County’s Human Resources Director Chris Peek at 704-336-3138 or Chris.Peek@MecklenburgCountyNC.Gov
FY2009 Revenue Update
On June 11, 2009, the County received $11,862,036 of sales tax distribution for retail sales taxes reported in April, 2009. This is $682,932 less than the distribution received in May, 2009 and $6.9 million less than the amount budgeted for the period. As a result, we have reduced our estimate of sales tax revenue for the current fiscal year to $174 million from the previous estimate of $177 million.
The above information has been considered in preparing the estimate of fund balance for the year ended June 30, 2009, based on activity through May 31, 2009. Therefore, the current fund balance for June 30 is projected to be $326.3 million. This anticipates drawing down $35.8 million in fund balance to cover expenditures in excess of revenues for FY 2009. Our goal has been to draw down $30 million or less in fund balance to maintain an adequate fund balance for future years. We will have two more months of sales tax distributions for the current fiscal year. Therefore, we will provide updates to the Board as we receive these distributions.
Fleet Analysis Nets Savings
When asked to identify potential cost savings ideas earlier this year, several employees suggested redeploying underutilized County vehicles to replace more costly older vehicles still in use. In response to these suggestions, we researched vehicle use among all County departments and agencies. The research was conducted by the Office of Strategic Organizational Improvement (SOI) and the Real Estate Services Department (RES), which oversees fleet use and the maintenance services agreement provided by the City of Charlotte. The analysis of the study identified 169 vehicles driven less than 6,000 miles a year.
Each department using these low-mileage vehicles was provided an opportunity to justify the continued need for these vehicles. Reasonable justification included ongoing need to transport equipment and other materials, staff and/or customers/clients, despite limited miles of travel. For example, there are specialty vehicles in the Park and Recreation Department, Land Use & Environmental Services and the Sheriff’s Office that are used to carry equipment but which travel short distances between facilities. Although the miles traveled are not extensive, there is a demonstrated need for vehicles to haul materials (and transport staff) rather than requiring employees to provide their own vehicle.
After reviewing each department’s justification, we were able to redeploy approximately 10% of the vehicles initially identified. This enabled replacing vehicles that are at least 10 years old and/or higher mileage (more than 100,000 miles), thereby reducing maintenance costs. In addition to this redeployment, 16 vehicles assigned to the Land Use and Environmental Services Agency (LUESA) also will be redeployed as a result of reduced service demand.
Most of the older vehicles replaced will be decommissioned and sold at auction. Some may be placed in the fleet pool that is made available to departments on an as-needed basis. The net impact will reduce the size of our fleet and reduce fleet maintenance costs by approximately $100,000 per year beginning in FY2010.
Panel Discussion on Council-Manager Form of Government
On Wednesday, June 24, 2009 from 5 – 7 p.m., I will participate in a panel discussion in Greensboro on the practice and effectiveness of the council-manager form of government. The discussion will focus on the characteristics of this form of government, the benefits to the community and potential pitfalls. As part of this event, panel participants were asked to provide an op-ed article to be published that day in the Greensboro News and Record.
Other panelists are: John Alexander, former president of the Center for Creative Leadership, and former editorial page editor of the Greensboro News & Record; and Mike Smith, dean of UNC Chapel Hill School of Government. The moderator will be Ruth DeHoog, chair of the Political Science Department at UNC Greensboro, and former director of the UNC Greensboro MPA program.
- Harry L. Jones, Sr., County Manager