November 25, 2010
November 24, 2010
Bill Proposed by Council Vice President Ervin Would Emphasize Montgomery’s Fiscal Picture During Labor Arbitration
ROCKVILLE, Md., November 22, 2010—Montgomery County Council Vice President Valerie Ervin, who represents Kensington, Takoma Park, Silver Spring and Wheaton, will introduce a bill on Tuesday, Nov. 23, to require an arbitrator to place the highest priority on the County’s ability to afford labor contracts before evaluating other factors traditionally used in arbitration decisions. Expedited Bill 57-10 is co-sponsored by all members of the Council.
There are three separate laws that govern the County’s collective bargaining with the unions representing police, firefighters and general government employees. All resolve an impasse through arbitration where the arbitrator selects the entire final offer submitted by either the County or the union.
Under current law, the arbitrator makes an award after considering six factors. These include: past contracts and bargaining history; the wages, hours, benefits, and conditions of employment of other County employees, public employees in the region and the State, and the County’s private sector; and the County’s ability to pay for any changes. Current County law gives none of these factors greater weight than any other.
“The Fiscal Year 2011 budget the Council approved in May, and the six-year balanced fiscal plan the Council approved in June, are stark reminders of the severe short-term and long-term budget pressures the County faces,” said Council Vice President Ervin. “An arbitrator’s assessment of final competing offers should be grounded in this reality.”
The proposed bill would require an arbitrator to give the highest priority to the County’s ability to pay. It would also require the arbitrator to evaluate other factors such as the interest and welfare of County taxpayers and service recipients.
“As one with more than a quarter century on the front lines of the labor movement, I am deeply committed to fairness for County employees,” said Council Vice President Ervin. “But fairness also requires that the County can afford to honor its labor contracts. It also requires equitable treatment for taxpayers and service recipients. This bill will help achieve these goals while protecting fundamental bargaining procedures.”
Under current law, the arbitrator makes an award after considering six factors. These include: past contracts and bargaining history; the wages, hours, benefits, and conditions of employment of other County employees, public employees in the region and the State, and the County’s private sector; and the County’s ability to pay for any changes. Current County law gives none of these factors greater weight than any other.
“The Fiscal Year 2011 budget the Council approved in May, and the six-year balanced fiscal plan the Council approved in June, are stark reminders of the severe short-term and long-term budget pressures the County faces,” said Council Vice President Ervin. “An arbitrator’s assessment of final competing offers should be grounded in this reality.”
The proposed bill would require an arbitrator to give the highest priority to the County’s ability to pay. It would also require the arbitrator to evaluate other factors such as the interest and welfare of County taxpayers and service recipients.
“As one with more than a quarter century on the front lines of the labor movement, I am deeply committed to fairness for County employees,” said Council Vice President Ervin. “But fairness also requires that the County can afford to honor its labor contracts. It also requires equitable treatment for taxpayers and service recipients. This bill will help achieve these goals while protecting fundamental bargaining procedures.”
Middle school students in Germantown tackle gyotaku
Something fishy went on at Roberto Clemente Middle School last week. An odor wafted into the halls from Traci Fairbairn's science class Thursday, as sixth-graders with paint-covered hands stared down at the dead fish on their desks. The students at the Germantown school were making Japanese fish prints, called gyotaku. After using their fingers to paint the fish, they gently patted rice paper on top, creating detailed, colorful prints.
For the last three years, Roberto Clemente has been awarded a grant from the Chesapeake Bay Trust, which helps pay for field trips and frees up funding in other areas, allowing Fairbairn's students to undertake the unique, but pricey, project. Antonella Malca, 11, giggled as she examined the fish.
"It's soft and squishy," she said.
But then she went on.
"It's a spot fish, with countershading," Antonella said, responding to Fairbairn's questions. "A bottom feeder, medium-sized fin."
PICTURE: Sixth-grader Delia Chen, 11 (right), and teacher Traci Fairbairn (left) look on as Antonella Malca,11 (not visible) holds up a spot fish. Students at Roberto Clemente Middle School in Germantown created prints Thursday with paint and dead fish.
SOURCE: Gazette
SEX v. DRUGS: Betts murderer sentenced for 40 years
A 19-year-old who shot well-known Principal Brian Betts was sentenced to 40 years in prison Tuesday after an emotional hearing at which Betts's friends and family said the suspect was just the kind of teenager whose life Betts could have turned around.
"It's truly a shame that the defendant didn't meet Brian earlier in his life," Gary Dwyier, Betts's friend of 15 years, said in court. "He inspired [students] to change the direction in their life from bad to good. . . . Perhaps this horrible tragedy would never had taken place."
As a teacher and principal, Betts helped countless students, and in doing so became a face of school reform efforts in the District. He was killed seven months ago inside his home. Four people were originally charged with murder in the case. Prosecutors have worked out plea deals with Alante Saunders, the man who was sentenced Tuesday; and Sharif Lancaster, 19, who pleaded guilty Tuesday morning to lesser charges of robbery and using a gun in a violent crime. He could face up to 35 years in prison when he is sentenced.
The cases against Joel Johnson and Deontra Gray, both 19, have yet to be resolved. For weeks, it has been clear that Saunders shot Betts. He also appears to have been the one who set up Betts. On the evening of April 14, Saunders called a sex chat line with the intention of looking for a robbery victim. He used a phone belonging to Lancaster's girlfriend at the time, according to information revealed in court Tuesday.
Saunders exchanged messages with Betts and pretended to set up a personal meeting with him. Betts was to leave the front door open and be waiting for him. All four suspects drove to Betts's house in Silver Spring, according to prosecutors.
Saunders went into the house first and went upstairs. Lancaster was the second person in the house and left a fingerprint behind, according to prosecutors. At some point, he went upstairs and saw Saunders, armed with a gun, robbing Betts.
Saunders's attorney, David Felsen, said in court Tuesday that the gun accidentally went off. "There was no intent to commit any type of homicide," he said.
Saunders, who pleaded guilty to felony murder this month, also spoke, apologizing to Betts's family and friends. He said he understood their view that 40 years might be too short of a sentence.
"I didn't go there meaning to harm him in any way," he said. "And it was just over basically getting money for drugs. Drugs was the powerful force in this situation and I am very sorry." SOURCE: Washington Post
"It's truly a shame that the defendant didn't meet Brian earlier in his life," Gary Dwyier, Betts's friend of 15 years, said in court. "He inspired [students] to change the direction in their life from bad to good. . . . Perhaps this horrible tragedy would never had taken place."
As a teacher and principal, Betts helped countless students, and in doing so became a face of school reform efforts in the District. He was killed seven months ago inside his home. Four people were originally charged with murder in the case. Prosecutors have worked out plea deals with Alante Saunders, the man who was sentenced Tuesday; and Sharif Lancaster, 19, who pleaded guilty Tuesday morning to lesser charges of robbery and using a gun in a violent crime. He could face up to 35 years in prison when he is sentenced.
The cases against Joel Johnson and Deontra Gray, both 19, have yet to be resolved. For weeks, it has been clear that Saunders shot Betts. He also appears to have been the one who set up Betts. On the evening of April 14, Saunders called a sex chat line with the intention of looking for a robbery victim. He used a phone belonging to Lancaster's girlfriend at the time, according to information revealed in court Tuesday.
Saunders exchanged messages with Betts and pretended to set up a personal meeting with him. Betts was to leave the front door open and be waiting for him. All four suspects drove to Betts's house in Silver Spring, according to prosecutors.
Saunders went into the house first and went upstairs. Lancaster was the second person in the house and left a fingerprint behind, according to prosecutors. At some point, he went upstairs and saw Saunders, armed with a gun, robbing Betts.
Saunders's attorney, David Felsen, said in court Tuesday that the gun accidentally went off. "There was no intent to commit any type of homicide," he said.
Saunders, who pleaded guilty to felony murder this month, also spoke, apologizing to Betts's family and friends. He said he understood their view that 40 years might be too short of a sentence.
"I didn't go there meaning to harm him in any way," he said. "And it was just over basically getting money for drugs. Drugs was the powerful force in this situation and I am very sorry." SOURCE: Washington Post
Gaithersburg Resident Among 11 Nabbed In Online Sex Sting; plus chief of Staff to congressman
One Gaithersburg resident and a New Jersey congressman's chief of staff were among 11 arrested last week in the city police department's first online sex sting, police said.
Officer Dan Lane, a police spokesman, said the men were all charged with soliciting sex from a minor, a felony offense that carries a penalty of not more than 10 years in prison or a fine not exceeding $25,000, or both.
Kyu Hwan Yeo, 28, of the 100 block of Canfield Hill Drive in Gaithersburg, was arrested on November 18 and charged with one count of sexual solicitation of a minor. He was released after posting a $10,000 bond. Among the 11 was also Robert Decheine, who was Rep. Steve Rothman's chief of staff. Rothman represents New Jersey's District 9, which includes Bergen, Hudson and Passaic counties. Rothman's office issued this statement:
"On Friday, November 19, 2010, at 3:30 pm, the House of Representatives Sergeant at Arms contacted Congressman Steve Rothman personally and informed him that the Gaithersburg Police Department had arrested Mr. Robert Decheine, who was then serving as his Chief of Staff, on a charge of sexual solicitation of a minor. Congressman Rothman immediately consulted appropriate House Counsel and terminated Mr. Decheine's employment, effective November 19, 2010, due to the very serious nature of this charge. Congressman Rothman considers this alleged criminal act to be shocking, appalling and indefensible."
SOURCE: North Potomac Patch
ROBOCALLS: Ehrlich paid Henson $14,000 before election; $111,150 total
The campaign of former Maryland governor Robert L. Ehrlich Jr. (R) reported paying $14,000 in the final days of the race to the political consultant who has taken responsibility for ordering anonymous election-night robocalls suggesting Democrats "relax" and stay home. The payments, included in a finance report made public Tuesday, bring the total Ehrlich spent on the services of Julius Henson to $111,150 this year. Payments were made to two firms run by Henson, Universal Elections and Politics Today. The two most recent payments are dated Oct. 21 and Oct. 29 to Universal Elections.
Maryland Attorney General Douglas F. Gansler (D) has filed a civil complaint in federal court, alleging the more than 112,000 calls -- placed while the polls were still open on Nov. 2 -- were intended to suppress voter turnout and violated federal law. The Office of the Maryland State Prosecutor and the U.S. Justice Department have also made inquiries regarding the episode. Henson, who usually works for Democrats in Baltimore and Prince George's County, has said the calls were "counterintuitive" and meant to inspire voters inclined to vote to Ehrlich to go to the polls. While appearing in the studios of WBAL radio on Saturday as a guest on his wife's radio show, Ehrlich declined comment on the robocalls. He previously said Henson was hired to help with outreach in the African-American community. SOURCEWashington Post
First Lady of Maryland Katie O'Malley on teenage problems
Nice video, but with a weird quote, "Suicide is a permanent solution to a temporary problem."
November 23, 2010
1 in 8 MontCo employees make more than $100k a year
About one in every eight Montgomery County employees -- the majority of them public safety officials -- made more than $100,000 last fiscal year, according to an analysis of county data by the Washington Examiner. One in four fire department employees broke the $100k threshold in fiscal 2009, the data shows.
Fairfax County did not release the overtime pay of its employees. Nearly 800 of its total 14,000 county government employees, including seasonal workers, had base salaries of more than $100,000.
Many midlevel Montgomery County employees supplemented their income with hefty overtime pay. Correctional officer Roger Castell made a total of $116,000 starting with a base salary of $62,000, the data shows. Fire Capt. William Richards earned $104,200 just in overtime last year -- the most in the county, boosting his pay to $205,548,000 and making him one of Montgomery's highest-paid county employees. His boss, Fire Chief Richard R. Bowers, earns $190,000 annually.
The data analyzed did not include public school employees. More than 2,500 Montgomery County teachers currently make more than $95,000 a year, school data shows. Pay for Fairfax's teachers is comparable with Montgomery, though slightly less. Nor did the data include health and retirement benefit plans paid to county employees, which are generous compared with most private-sector plans. Pay raises for most county government employees has outpaced the private sector by 15.5 percent in the last four years. SOURCE: Washington Examiner
Fairfax County did not release the overtime pay of its employees. Nearly 800 of its total 14,000 county government employees, including seasonal workers, had base salaries of more than $100,000.
Many midlevel Montgomery County employees supplemented their income with hefty overtime pay. Correctional officer Roger Castell made a total of $116,000 starting with a base salary of $62,000, the data shows. Fire Capt. William Richards earned $104,200 just in overtime last year -- the most in the county, boosting his pay to $205,548,000 and making him one of Montgomery's highest-paid county employees. His boss, Fire Chief Richard R. Bowers, earns $190,000 annually.
The data analyzed did not include public school employees. More than 2,500 Montgomery County teachers currently make more than $95,000 a year, school data shows. Pay for Fairfax's teachers is comparable with Montgomery, though slightly less. Nor did the data include health and retirement benefit plans paid to county employees, which are generous compared with most private-sector plans. Pay raises for most county government employees has outpaced the private sector by 15.5 percent in the last four years. SOURCE: Washington Examiner
The Universities at Shady Grove presents: Journeys in Engineering, Technology and Science
On Saturday, December 4, The Universities at Shady Grove and Montgomery
College invite Montgomery County Public Schools middle-school students and
their parents to experience a day of fun-filled, hands-on activities in
engineering, technology and science. This is the first time the event is
being held and 30 companies, 450 students and 300 parents are expected to be
in attendance. The event has also been sold out for a few weeks now. The
students will get a chance to meet with engineers and scientists from
Northrop Grumman, Lockheed Martin, Discovery and Microsoft. These companies
are getting involved to engage kids in engineering, technology and science
at an early age.
MoCo Council to receive briefing on budget issues
WASHINGTON - Montgomery County officials this week are expected to learn how their jurisdiction got to the point of facing a projected shortfall of roughly $200 million. The Office of Legislative Oversight will release its executive summary this week detailing what led the county to calling for furloughs, leaving vacant positions unfilled and exploring even deeper spending cuts.
County Council President Nancy Floreen and Vice President Valerie Ervin will hold a briefing on the issue Monday. And as the county grapples with budget problems, officials also must decide how to deal with a recent funding issue. Voters this month rejected ambulance fees backed by County Executive Ike Leggett. Leggett has said the proposal would have brought in $14 million, and the county will have to make up the money in some other way. SOURCE: WTOP
County Council President Nancy Floreen and Vice President Valerie Ervin will hold a briefing on the issue Monday. And as the county grapples with budget problems, officials also must decide how to deal with a recent funding issue. Voters this month rejected ambulance fees backed by County Executive Ike Leggett. Leggett has said the proposal would have brought in $14 million, and the county will have to make up the money in some other way. SOURCE: WTOP
Montgomery detectives make arrests in decades-old rape cases with DNA
Montgomery County detectives have made arrests in rape cases dating to 1981 and 1984, officials said Monday, by tracking down suspects through DNA samples taken from decades-old evidence. One of the suspects, Hubert Allan Marlin, 53, was arrested in Bethesda over the weekend after spending parts of the past 26 years in Michigan, Oregon and Texas, a police spokesman said. Detectives received a tip about where he was staying in Bethesda. They staked out a parked car and arrested Marlin as he tried to get in the vehicle, said Cpl. Dan Friz, a police spokesman.
The second suspect, Joseph Nickens, 54, was picked up by officers in Los Angeles on Nov. 3. Montgomery police flew to California to retrieve him, and by Monday morning he was booked into the county jail, Friz said. Detectives credited a federal grant that is allowing them to use old evidence for new DNA tests.
"That's becoming our bread and butter," said Detective Ed Golian of Montgomery's cold-case squad.
It is unclear whether Marlin or Nickens have retained attorneys. In the 1984 case, according to police, a man approached a woman who was walking home from her job at Montgomery Mall at 10 p.m. He beat and raped her near Democracy Boulevard and Old Georgetown Road. A passing motorist took the woman to a hospital. Detectives investigated but ran out of leads.
Earlier this year, investigators sent evidence away for DNA testing. The results were uploaded to the Combined DNA Index System database, which yielded a match to Marlin, who had given a DNA sample for previous legal trouble, Friz said. SOURCE: Washington Post
The second suspect, Joseph Nickens, 54, was picked up by officers in Los Angeles on Nov. 3. Montgomery police flew to California to retrieve him, and by Monday morning he was booked into the county jail, Friz said. Detectives credited a federal grant that is allowing them to use old evidence for new DNA tests.
"That's becoming our bread and butter," said Detective Ed Golian of Montgomery's cold-case squad.
It is unclear whether Marlin or Nickens have retained attorneys. In the 1984 case, according to police, a man approached a woman who was walking home from her job at Montgomery Mall at 10 p.m. He beat and raped her near Democracy Boulevard and Old Georgetown Road. A passing motorist took the woman to a hospital. Detectives investigated but ran out of leads.
Earlier this year, investigators sent evidence away for DNA testing. The results were uploaded to the Combined DNA Index System database, which yielded a match to Marlin, who had given a DNA sample for previous legal trouble, Friz said. SOURCE: Washington Post
Montgomery County OLO Structural Deficit Report
SOURCE: MOCO govt
At the request of the Montgomery County Council, the Office of Legislative Oversight examined the tax supported revenue and spending trends over the past ten years and projected for the next six years. The purpose of the review, which included Montgomery County Government, Montgomery County Public Schools, Montgomery College, and the Maryland-National Capital Park and Planning Commission, was to:
• Quantify patterns of revenue and spending, and analyze how agency budget growth compared to changes in factors such as inflation and population, and increases in school enrollment.
• Identify past and emerging “cost drivers,” and improve understanding of how previous decisions regarding revenue and spending affect current and future budgets.
• Compile data on the County’s spending “commitments,” defined as items that the County is obligated by law and/or policy to fund; these commitments include debt service, health insurance for active and retired employees, pension plan payments, and contributions to the County’s fund reserves.
• Based on the revenue assumptions contained in the most-recently adopted Fiscal Plan, describe the parameters of the County’s future challenge to achieve a structurally balanced budget.
A. THE STRUCTURAL BUDGET CHALLENGE DEFINED
The cost pressures and difficult trade-offs facing Montgomery County are by no means unique. Vigorous debates are taking place across the country about how to recover from the most serious recession since the Great Depression. With few exceptions, state and local governments are grappling with how to address fiscal projections that show a massive imbalance between expected revenues and desired expenditures. The imbalance today between projected revenues and desired expenditures in Montgomery County, similar to the imbalance in other places, contains both cyclical and structural components. A “cyclical budget gap” is a short-term imbalance between projected revenues and desired expenditures that reflects the ups and downs of the business cycle. In contrast, a “structural budget gap” exists when projections of expenditures exceed projections of ongoing revenues on a persistent and recurring basis. The distinction between the two is that a structural budget gap continues to exist even when revenue growth resumes.
A common ingredient of the budget challenge facing jurisdictions across the country is the increasing portion of tax supported budgets that must be allocated to fixed spending commitments. In Montgomery County, these commitments include debt service, health insurance for active and retired employees, pension plan payments, current revenue contributions to the capital budget (PAYGO), and contributions to the County’s fund reserves. A structural budget problem becomes increasingly evident when the projected cost increases of a government’s commitments exceed its projected revenue growth. This is precisely the situation facing Montgomery County for the foreseeable future.
The traditional scenario for making annual budget decisions no longer works when a jurisdiction faces a structural budget problem. Under the traditional scenario, projected revenue for the upcoming fiscal year is sufficient to: fully fund the current year’s budget (again), absorb growth in the cost of commitments, and pay for new initiatives, such as program expansions and pay increases for employees. In the current climate, revenue growth for the foreseeable future is unlikely to keep pace with the steadily rising costs of the public sector’s spending commitments. Montgomery County, like many other governments, now faces the extraordinary challenge of bringing projected revenues and spending into alignment, which can only be accomplished by raising more revenue or making reforms that bend the future cost curves downward.
B. OVERVIEW OF REVENUE AND SPENDING FY02-FY11
1. From FY02 to FY11, the tax supported agency budgets in Montgomery County collectively increased 59% from $2.1 billion to $3.4 billion. The macro-cost curve shows annual increases of 7-9% between FY02 and FY08. Total tax supported spending leveled off in FY09 and posted actual declines in FY10 and FY11. During the same ten year period, inflation was 29%, the County’s population grew 12%, median household income increased 21%, and the County’s assessable property tax base increased 114%.
2. The County’s increased budgets supported some notable expansions in agency services, including:
Montgomery County Public Schools
• Reduction in class size
• Expansion of full-day Kindergarten
• Enhanced staff development programs Montgomery College
• Expanded services to meet 32% enrollment increase
• Opening of new facilities
County Government
• Additional public safety personnel
• Expanded Ride-On service hours
• More resources for health & housing programs M-NCPPC (Montgomery County portion)
• 12% increase in park land
• Creation of the Legacy Open Space Program
3. The County’s budget growth was funded by a combination of more property tax revenue, higher income and excise tax rates, and substantial growth in State aid (mostly to MCPS). Over the ten years, revenue growth in the County outpaced inflation and population increases by about 20%. The ten year average annual revenue growth rate of 6% (FY02-FY11) is twice the forecast for the next six years, which is for an average annual growth rate of 3%.
4. In FY11, MCPS received 57% of total tax supported agency allocations and County Government received 34%; the balance went to Montgomery College (6%) and M-NCPPC (3%). The allocation among the four tax supported agencies remained largely unchanged during the past decade, although how money is spent within each agency evidenced some shifts. Notable trends included a higher portion of agency budgets spent on employee benefits and a higher portion of County Government resources dedicated to public safety services.
5. Conceptually, debt service can be considered a fifth agency because it must be paid from the same pot of tax supported dollars. During the past decade, debt service payments increased 47% from $177 million in FY02 to $260 million in FY11. If the County issues General Obligation bonds at the rate projected in the most recent CIP ($325 million/year), the cost of debt service will increase to $391 million in FY16, a 50% increase from FY11. By FY16, debt service is projected to cost more than the combined tax supported budgets of the College and M-NCPPC.
C. TRENDS IN COSTS OF THE WORKFORCE (EMPLOYEE PAY AND BENEFITS)
1. Personnel costs (pay and benefits) account for 82% of all tax supported spending. Between FY02 and FY11, personnel costs increased 64% while the total number of workyears increased 10%. The workforces at all four agencies fluctuated during the past decade, but only MCPS and the College workforces are measurably larger today compared to ten years ago. Specifically, from FY02-FY11, MCPS’ workyears increased 14% while MCPS enrollment increased 6%; Montgomery College’s workyear growth of 30% paralleled the College’s enrollment growth of 32%.
2. Between FY02 and FY11, the primary driver behind higher personnel costs was not an increase in the size of the workforce but rather the increase in average costs per employee. Across the four agencies, employee salaries grew by 50% in the aggregate and by higher amounts (up to 80%) for individual employees, while the costs of health and retirement/pension benefits increased upwards of 120%. In FY11, the combined agency cost of employee benefits is almost $740 million, or 22% of all spending. (This total would be higher had the agencies made FY11 payments to their OPEB trust funds.)
3. Another way to track the rise in spending on employee benefits is to calculate their cost as a percent of salary. As one example, for County Government, the aggregate cost of employee benefits as a percent of salary increased from 35% in FY02 to 52% in FY11. This means that for every $1 the County spends on salary, it now pays 52 cents for benefits. The drivers behind these rising costs are the overall rise in health care costs, and major increases in annual pension/retirement plan contributions. Especially noteworthy is that during the past decade, the per employee cost of a defined benefit pension increased at more than twice the rate of a defined contribution retirement plan.
D. LOOKING FORWARD
1. The balanced six-year Fiscal Plan adopted by the Council shows tax supported revenues (within the Charter limit) steadily increasing at about 3% per year. Although these projections show FY16 tax supported revenue that is 16% higher than current year (FY11) revenue, it is important to recognize that the County’s revenue is projected to grow at half the rate it did during the past decade.
2. Looking ahead to FY12-FY16, the County’s budget allocation decisions will increasingly be dominated by costs that are resistant to change. The most striking trend contained in agency cost projections is the steady growth in the total costs of the County’s legal and policy commitments, which by FY16 will sum to about $1.6 billion, or about one-third of all available resources. The calculation of these commitments includes the costs of debt service, health insurance for active and retired employees, retirement/pension benefits, and contributions to the OPEB trust, PAYGO, and County fund reserves.
OLO concludes that the County faces a structural budget problem. The steadily rising costs of the County’s legal and policy commitments, many of which are resistant to change, are projected to exceed the growth in anticipated revenues for the foreseeable future. The magnitude and recurring nature of these costs means that one-time solutions are insufficient to resolve the problem. In order to achieve long-term fiscal sustainability, the County must consider reforms that either raise more revenue or lower the projected cost curves associated with ongoing government operations and future promises.
E. OPTIONS FOR LONG-TERM FISCAL BALANCE
OLO’s Part II report (scheduled for Council release on 12/7/10) will contain options for changes that could help achieve long-term fiscal balance in the County. The report will consist of a series of issue papers on the topics listed below. Part II will also contain some comparative information about reforms being considered by other state and local governments, and a County Attorney’s opinion on the legal issues related to changing employee pay and benefits.
• Salaries and wages
• Pension/retirement benefits
• Health benefits for active employees
• Health benefits for retirees • Workforce size
• Operating expenses
• Debt
• Revenue
At the request of the Montgomery County Council, the Office of Legislative Oversight examined the tax supported revenue and spending trends over the past ten years and projected for the next six years. The purpose of the review, which included Montgomery County Government, Montgomery County Public Schools, Montgomery College, and the Maryland-National Capital Park and Planning Commission, was to:
• Quantify patterns of revenue and spending, and analyze how agency budget growth compared to changes in factors such as inflation and population, and increases in school enrollment.
• Identify past and emerging “cost drivers,” and improve understanding of how previous decisions regarding revenue and spending affect current and future budgets.
• Compile data on the County’s spending “commitments,” defined as items that the County is obligated by law and/or policy to fund; these commitments include debt service, health insurance for active and retired employees, pension plan payments, and contributions to the County’s fund reserves.
• Based on the revenue assumptions contained in the most-recently adopted Fiscal Plan, describe the parameters of the County’s future challenge to achieve a structurally balanced budget.
A. THE STRUCTURAL BUDGET CHALLENGE DEFINED
The cost pressures and difficult trade-offs facing Montgomery County are by no means unique. Vigorous debates are taking place across the country about how to recover from the most serious recession since the Great Depression. With few exceptions, state and local governments are grappling with how to address fiscal projections that show a massive imbalance between expected revenues and desired expenditures. The imbalance today between projected revenues and desired expenditures in Montgomery County, similar to the imbalance in other places, contains both cyclical and structural components. A “cyclical budget gap” is a short-term imbalance between projected revenues and desired expenditures that reflects the ups and downs of the business cycle. In contrast, a “structural budget gap” exists when projections of expenditures exceed projections of ongoing revenues on a persistent and recurring basis. The distinction between the two is that a structural budget gap continues to exist even when revenue growth resumes.
A common ingredient of the budget challenge facing jurisdictions across the country is the increasing portion of tax supported budgets that must be allocated to fixed spending commitments. In Montgomery County, these commitments include debt service, health insurance for active and retired employees, pension plan payments, current revenue contributions to the capital budget (PAYGO), and contributions to the County’s fund reserves. A structural budget problem becomes increasingly evident when the projected cost increases of a government’s commitments exceed its projected revenue growth. This is precisely the situation facing Montgomery County for the foreseeable future.
The traditional scenario for making annual budget decisions no longer works when a jurisdiction faces a structural budget problem. Under the traditional scenario, projected revenue for the upcoming fiscal year is sufficient to: fully fund the current year’s budget (again), absorb growth in the cost of commitments, and pay for new initiatives, such as program expansions and pay increases for employees. In the current climate, revenue growth for the foreseeable future is unlikely to keep pace with the steadily rising costs of the public sector’s spending commitments. Montgomery County, like many other governments, now faces the extraordinary challenge of bringing projected revenues and spending into alignment, which can only be accomplished by raising more revenue or making reforms that bend the future cost curves downward.
B. OVERVIEW OF REVENUE AND SPENDING FY02-FY11
1. From FY02 to FY11, the tax supported agency budgets in Montgomery County collectively increased 59% from $2.1 billion to $3.4 billion. The macro-cost curve shows annual increases of 7-9% between FY02 and FY08. Total tax supported spending leveled off in FY09 and posted actual declines in FY10 and FY11. During the same ten year period, inflation was 29%, the County’s population grew 12%, median household income increased 21%, and the County’s assessable property tax base increased 114%.
2. The County’s increased budgets supported some notable expansions in agency services, including:
Montgomery County Public Schools
• Reduction in class size
• Expansion of full-day Kindergarten
• Enhanced staff development programs Montgomery College
• Expanded services to meet 32% enrollment increase
• Opening of new facilities
County Government
• Additional public safety personnel
• Expanded Ride-On service hours
• More resources for health & housing programs M-NCPPC (Montgomery County portion)
• 12% increase in park land
• Creation of the Legacy Open Space Program
3. The County’s budget growth was funded by a combination of more property tax revenue, higher income and excise tax rates, and substantial growth in State aid (mostly to MCPS). Over the ten years, revenue growth in the County outpaced inflation and population increases by about 20%. The ten year average annual revenue growth rate of 6% (FY02-FY11) is twice the forecast for the next six years, which is for an average annual growth rate of 3%.
4. In FY11, MCPS received 57% of total tax supported agency allocations and County Government received 34%; the balance went to Montgomery College (6%) and M-NCPPC (3%). The allocation among the four tax supported agencies remained largely unchanged during the past decade, although how money is spent within each agency evidenced some shifts. Notable trends included a higher portion of agency budgets spent on employee benefits and a higher portion of County Government resources dedicated to public safety services.
5. Conceptually, debt service can be considered a fifth agency because it must be paid from the same pot of tax supported dollars. During the past decade, debt service payments increased 47% from $177 million in FY02 to $260 million in FY11. If the County issues General Obligation bonds at the rate projected in the most recent CIP ($325 million/year), the cost of debt service will increase to $391 million in FY16, a 50% increase from FY11. By FY16, debt service is projected to cost more than the combined tax supported budgets of the College and M-NCPPC.
C. TRENDS IN COSTS OF THE WORKFORCE (EMPLOYEE PAY AND BENEFITS)
1. Personnel costs (pay and benefits) account for 82% of all tax supported spending. Between FY02 and FY11, personnel costs increased 64% while the total number of workyears increased 10%. The workforces at all four agencies fluctuated during the past decade, but only MCPS and the College workforces are measurably larger today compared to ten years ago. Specifically, from FY02-FY11, MCPS’ workyears increased 14% while MCPS enrollment increased 6%; Montgomery College’s workyear growth of 30% paralleled the College’s enrollment growth of 32%.
2. Between FY02 and FY11, the primary driver behind higher personnel costs was not an increase in the size of the workforce but rather the increase in average costs per employee. Across the four agencies, employee salaries grew by 50% in the aggregate and by higher amounts (up to 80%) for individual employees, while the costs of health and retirement/pension benefits increased upwards of 120%. In FY11, the combined agency cost of employee benefits is almost $740 million, or 22% of all spending. (This total would be higher had the agencies made FY11 payments to their OPEB trust funds.)
3. Another way to track the rise in spending on employee benefits is to calculate their cost as a percent of salary. As one example, for County Government, the aggregate cost of employee benefits as a percent of salary increased from 35% in FY02 to 52% in FY11. This means that for every $1 the County spends on salary, it now pays 52 cents for benefits. The drivers behind these rising costs are the overall rise in health care costs, and major increases in annual pension/retirement plan contributions. Especially noteworthy is that during the past decade, the per employee cost of a defined benefit pension increased at more than twice the rate of a defined contribution retirement plan.
D. LOOKING FORWARD
1. The balanced six-year Fiscal Plan adopted by the Council shows tax supported revenues (within the Charter limit) steadily increasing at about 3% per year. Although these projections show FY16 tax supported revenue that is 16% higher than current year (FY11) revenue, it is important to recognize that the County’s revenue is projected to grow at half the rate it did during the past decade.
2. Looking ahead to FY12-FY16, the County’s budget allocation decisions will increasingly be dominated by costs that are resistant to change. The most striking trend contained in agency cost projections is the steady growth in the total costs of the County’s legal and policy commitments, which by FY16 will sum to about $1.6 billion, or about one-third of all available resources. The calculation of these commitments includes the costs of debt service, health insurance for active and retired employees, retirement/pension benefits, and contributions to the OPEB trust, PAYGO, and County fund reserves.
OLO concludes that the County faces a structural budget problem. The steadily rising costs of the County’s legal and policy commitments, many of which are resistant to change, are projected to exceed the growth in anticipated revenues for the foreseeable future. The magnitude and recurring nature of these costs means that one-time solutions are insufficient to resolve the problem. In order to achieve long-term fiscal sustainability, the County must consider reforms that either raise more revenue or lower the projected cost curves associated with ongoing government operations and future promises.
E. OPTIONS FOR LONG-TERM FISCAL BALANCE
OLO’s Part II report (scheduled for Council release on 12/7/10) will contain options for changes that could help achieve long-term fiscal balance in the County. The report will consist of a series of issue papers on the topics listed below. Part II will also contain some comparative information about reforms being considered by other state and local governments, and a County Attorney’s opinion on the legal issues related to changing employee pay and benefits.
• Salaries and wages
• Pension/retirement benefits
• Health benefits for active employees
• Health benefits for retirees • Workforce size
• Operating expenses
• Debt
• Revenue
November 22, 2010
County Council’s Oversight Report Identifies Structural Budget Challenge On Tuesday, Nov. 23
The steadily rising costs of the County’s commitments, including employee pensions, health care benefits, and debt service, have created a structural budget challenge that must be addressed in order for the County to achieve long-term fiscal sustainability. Those items are identified in a report from the County Council’s Office of Legislative Oversight (OLO) that will be presented to the Council at 2:15 p.m. on Tuesday, Nov. 23, in Rockville.
Council President Nancy Floreen initiated the OLO report earlier this year, during the Council’s deliberations on the FY11 operating budget. The Council requested examination of the County’s tax-supported revenue and spending trends over the past 10 years and projected spending for the next six years. The OLO review includes the budgets of Montgomery County Government, Montgomery County Public Schools, Montgomery College, and the Maryland-National Capital Park and Planning Commission.
The report states: “The traditional scenario for making annual budget decisions no longer works when a jurisdiction faces a structural budget problem.” Further, OLO finds that, “Looking ahead, the County’s budget decisions will increasingly be dominated by costs that are resistant to change.”
On Dec. 7, OLO will deliver the second part of its report that will outline options for changes that could help achieve long-term fiscal balance in the County. In May 2010, in an austere year caused by the deep recession, the Council approved a $4.3 billion total County operating budget for Fiscal Year 2011 that was 4.5 percent less than the approved budget for FY10. It marked the first decrease in a total budget since the adoption of the current County Charter in 1968. To balance the budget, the County had to close a gap of nearly $1 billion.
“The old way of doing things no longer works,” said Council President Floreen. “In June, for the first time in this County’s history, we adopted a six-year fiscal plan that outlines the spending limits needed to achieve balanced annual budgets. But that plan gave us clear warning that there were structural problems we were going to have to address or it would never work. There have been many assumptions of what the problems were and what was broken. The report reveals that quick fixes are not going to resolve this long-term built-in problem. The facts in this report will allow us to start a really meaningful conversation about where we go from here.”
Part 1 of the report concludes that the County faces a serious structural budget challenge and that to achieve long-term fiscal sustainability, major changes must be made. “The steadily rising costs of the County’s legal and policy commitments, many of which are resistant to change, are projected to exceed the growth in anticipated revenues for the foreseeable future,” the report states. “The magnitude and recurring nature of these costs means that one-time solutions are insufficient to resolve the problem. In sum, to achieve long-term fiscal balance, the County must consider reforms that either raise more revenue or lower the projected cost curves associated with ongoing government operations and future promises.”
“We just came through a major mid-term election. The message from the voters was loud and clear, and we are listening,” said Council Vice President Valerie Ervin. “While families across Montgomery County struggle to balance their own shrinking budgets, it is the responsibility of County government to do the same. We can no longer afford to kick the can down the road. Hundreds of governments across the nation are going through this same exercise. Now we need to act. This report will give us options on where we must start making further changes.”
The report shows that from FY02 to FY11, the tax-supported agency budgets in Montgomery County collectively increased 59 percent from $2.1 billion to $3.4 billion. The macro-cost curve shows annual increases of 7-9 percent between FY02 and FY08. Total tax-supported spending leveled off in FY09 and posted actual declines in FY10 and FY11. During the same 10-year period, inflation was 29 percent, the County’s population grew 12 percent, median household income increased 21 percent, and the County’s assessable property tax base increased 114 percent.
The trends in costs identified in the report show that personnel costs (pay and benefits) account for 82 percent of all tax-supported spending. Between FY02 and FY11, personnel costs increased 64 percent while the total number of workyears increased 10 percent. The report states: “Between FY02 and FY11, the primary driver behind higher personnel costs was not an increase in the size of the workforce but rather the increase in average costs per employee.”
The report notes that “across the four agencies, employee salaries grew by 50 percent in the aggregate and by higher amounts (up to 80 percent) for individual employees, while the costs of health and retirement/pension benefits increased upwards of 120 percent…. As one example, for County Government, the aggregate cost of employee benefits as a percent of salary increased from 35 percent in FY02 to 52 percent in FY11. This means that for every $1 the County spends on salary, it now pays 52 cents for benefits. The drivers behind these rising costs are the overall rise in health care costs, and major increases in annual pension/retirement plan contributions.”
Council President Nancy Floreen initiated the OLO report earlier this year, during the Council’s deliberations on the FY11 operating budget. The Council requested examination of the County’s tax-supported revenue and spending trends over the past 10 years and projected spending for the next six years. The OLO review includes the budgets of Montgomery County Government, Montgomery County Public Schools, Montgomery College, and the Maryland-National Capital Park and Planning Commission.
The report states: “The traditional scenario for making annual budget decisions no longer works when a jurisdiction faces a structural budget problem.” Further, OLO finds that, “Looking ahead, the County’s budget decisions will increasingly be dominated by costs that are resistant to change.”
On Dec. 7, OLO will deliver the second part of its report that will outline options for changes that could help achieve long-term fiscal balance in the County. In May 2010, in an austere year caused by the deep recession, the Council approved a $4.3 billion total County operating budget for Fiscal Year 2011 that was 4.5 percent less than the approved budget for FY10. It marked the first decrease in a total budget since the adoption of the current County Charter in 1968. To balance the budget, the County had to close a gap of nearly $1 billion.
“The old way of doing things no longer works,” said Council President Floreen. “In June, for the first time in this County’s history, we adopted a six-year fiscal plan that outlines the spending limits needed to achieve balanced annual budgets. But that plan gave us clear warning that there were structural problems we were going to have to address or it would never work. There have been many assumptions of what the problems were and what was broken. The report reveals that quick fixes are not going to resolve this long-term built-in problem. The facts in this report will allow us to start a really meaningful conversation about where we go from here.”
Part 1 of the report concludes that the County faces a serious structural budget challenge and that to achieve long-term fiscal sustainability, major changes must be made. “The steadily rising costs of the County’s legal and policy commitments, many of which are resistant to change, are projected to exceed the growth in anticipated revenues for the foreseeable future,” the report states. “The magnitude and recurring nature of these costs means that one-time solutions are insufficient to resolve the problem. In sum, to achieve long-term fiscal balance, the County must consider reforms that either raise more revenue or lower the projected cost curves associated with ongoing government operations and future promises.”
“We just came through a major mid-term election. The message from the voters was loud and clear, and we are listening,” said Council Vice President Valerie Ervin. “While families across Montgomery County struggle to balance their own shrinking budgets, it is the responsibility of County government to do the same. We can no longer afford to kick the can down the road. Hundreds of governments across the nation are going through this same exercise. Now we need to act. This report will give us options on where we must start making further changes.”
The report shows that from FY02 to FY11, the tax-supported agency budgets in Montgomery County collectively increased 59 percent from $2.1 billion to $3.4 billion. The macro-cost curve shows annual increases of 7-9 percent between FY02 and FY08. Total tax-supported spending leveled off in FY09 and posted actual declines in FY10 and FY11. During the same 10-year period, inflation was 29 percent, the County’s population grew 12 percent, median household income increased 21 percent, and the County’s assessable property tax base increased 114 percent.
The trends in costs identified in the report show that personnel costs (pay and benefits) account for 82 percent of all tax-supported spending. Between FY02 and FY11, personnel costs increased 64 percent while the total number of workyears increased 10 percent. The report states: “Between FY02 and FY11, the primary driver behind higher personnel costs was not an increase in the size of the workforce but rather the increase in average costs per employee.”
The report notes that “across the four agencies, employee salaries grew by 50 percent in the aggregate and by higher amounts (up to 80 percent) for individual employees, while the costs of health and retirement/pension benefits increased upwards of 120 percent…. As one example, for County Government, the aggregate cost of employee benefits as a percent of salary increased from 35 percent in FY02 to 52 percent in FY11. This means that for every $1 the County spends on salary, it now pays 52 cents for benefits. The drivers behind these rising costs are the overall rise in health care costs, and major increases in annual pension/retirement plan contributions.”
Thanksgiving For A Poolesville Turkey
Five turkeys enjoy a unique life at the Poplar Springs Animal Sanctuary in Poolesville. Rescued from their original fates, these birds are now provided with food, comfort and the chance at a long life. One of these turkeys, Opal, was rescued by two women after falling from a truck on her way to the slaughter house. Although her beak and feet are cut and she suffers from arthritis, staff member Carol Sutton said she still enjoys being around people. The staff keep Opal safe and comfortable in her own house and bring her out to socialize with the other birds during the day. Poplar Springs celebrated the turkeys and other rescued animals at the sanctuary with their annual "Thanksgiving For The Turkeys" event on Saturday. SOURCE: North Potomac Patch
Politics 'n Haiku: Fall in Bethesda
Fall in Bethesda
by Mark Mortin
Twice a year pink white
beautiful cherry blossoms
global warming's gift
Mark is a resident of Bethesda and recently took these amazing pictures of cherry blossoms in mid-Fall in Montgomery County, Maryland
by Mark Mortin
Twice a year pink white
beautiful cherry blossoms
global warming's gift
Mark is a resident of Bethesda and recently took these amazing pictures of cherry blossoms in mid-Fall in Montgomery County, Maryland
Germantown Motorcyclist Dies Near Great Seneca Highway
GERMANTOWN, MD-- (WUSA) Larry Talley of Germantown lost control of his 2004 Suzuki motorcycle Saturday afternoon while he was riding on Mateny Road near the intersection of Great Seneca Highway. The 33 year old died from the injuries he sustained after falling off the bike and possibly striking his head against a parked van. Montgomery County police say Talley was not wearing a helmet and did not have a license to operate a motorcycle at the time of the crash.
Police are waiting for a final accident reconstruction report to determine how fast Talley was travelling before he lost control or what caused him to do so. The riderless Suzuki travelled several hundred feet, struck two vehicles and came to a rest by a light pole on Great Seneca Highway. No one in the cars was hurt. Neighbors who live near the accident scene tell 9 NEWs NOW that many vehicles, including motorcycles, drive much faster than the posted 50 miles per hour limit along that stretch of Great Seneca Highway which is now bordered by townhomes. They say more traffic signals are needed to slow traffic down and avoid future traffic accidents and deaths. SOURCE: WUSA
Police are waiting for a final accident reconstruction report to determine how fast Talley was travelling before he lost control or what caused him to do so. The riderless Suzuki travelled several hundred feet, struck two vehicles and came to a rest by a light pole on Great Seneca Highway. No one in the cars was hurt. Neighbors who live near the accident scene tell 9 NEWs NOW that many vehicles, including motorcycles, drive much faster than the posted 50 miles per hour limit along that stretch of Great Seneca Highway which is now bordered by townhomes. They say more traffic signals are needed to slow traffic down and avoid future traffic accidents and deaths. SOURCE: WUSA
November 21, 2010
One Dead, Several Injured After Silver Spring Crash
SILVER SPRING, MD (WUSA)-- A man is dead after the Ford Explorer he was in was hit head-on by a Van along East Randolph Road at Serpentine Way in Silver Spring Saturday. 46 year old Tarrence Blackwell, Sr. of Hyattsville was riding the back seat of the Explorer. He died on scene. Montgomery County Police say the driver of the Van, Edwin Samuel Barber, 32 of Northwest Washington, was involved in an argument with his girlfriend when a third party called the Police. When Authorities arrived, they learned that Barber, who had just left in the Van, had taken the car and his 11 month year old daughter against her Mother's wishes. They were pursuing Barber with flashing lights when the Van crossed the double yellow line, hitting the Ford Explorer. Officials refuse to say how fast the pursuit was at the time.
Blackwell was traveling with his 23 year old daughter Angela who is in serious but stable condition and his 24 year old son Tarrence, Jr. who is hospitalized with non-life threatening injuries. Blackwell's Girlfriend, Tiffany Lynch, 27 of Hyattsville, was driving at the time of the crash. She is listed in serious condition. Barber has been hospitalized in serious condition. His unidentified daughter is at Children's Hospital with non-life threatening injuries. Police say no charges have been filed at this time, but the investigation is still ongoing. SOURCE: WUSA
Blackwell was traveling with his 23 year old daughter Angela who is in serious but stable condition and his 24 year old son Tarrence, Jr. who is hospitalized with non-life threatening injuries. Blackwell's Girlfriend, Tiffany Lynch, 27 of Hyattsville, was driving at the time of the crash. She is listed in serious condition. Barber has been hospitalized in serious condition. His unidentified daughter is at Children's Hospital with non-life threatening injuries. Police say no charges have been filed at this time, but the investigation is still ongoing. SOURCE: WUSA
County Executive Infrastructure Financing Plan - White Flint
Leggett's report
Attached is a pdf of the County Executive’s proposal for infrastructure financing in White Flint. This proposal is the culmination of months of work to understand the costs and potential revenue sources for infrastructure in White Flint. The County Council debated the proposal at last Tuesday’s work session within the PHED and MFP committee’s. The proposal will be discussed further at the upcoming full Council session on Tuesday November 23rd. Final vote on the financing plan will take place on Tuesday November 30th. Evan Goldman (doing my best to fill the very big shose of Barnaby Zall) SOURCE: White Blint Blog
Attached is a pdf of the County Executive’s proposal for infrastructure financing in White Flint. This proposal is the culmination of months of work to understand the costs and potential revenue sources for infrastructure in White Flint. The County Council debated the proposal at last Tuesday’s work session within the PHED and MFP committee’s. The proposal will be discussed further at the upcoming full Council session on Tuesday November 23rd. Final vote on the financing plan will take place on Tuesday November 30th. Evan Goldman (doing my best to fill the very big shose of Barnaby Zall) SOURCE: White Blint Blog
'Leaked' NFL Nike Uniform Sketches Are Fake
WASHINGTON - In October, the NFL announced Nike will replace Reebok as the official uniform supplier for players starting in 2012. However in recent days, sketches of supposed "leaked" concept Nike uniforms have been floating around on message boards and blogs on the internet, creating a frenzy for fans. These dramatic-looking uniforms feature designs that are a bit similar looking to the Nike "Pro Combat" uniforms designed for 10 college teams for the 2010 season.
NFL spokesman Brian McCarthy has confirmed on his Twitter account that "the artist renderings of NFL uniforms floating around ARE NOT from the league or Nike. stand down." According to Nike, NFL fans should still expect noticeable changes for uniforms in 2012, whenever the real uniform designs are released. Nike's brand president Charlie Denson told CNBC's Darren Rovell: "We plan on changing the NFL jersey dramatically just like we've done with the college programs, using new thinking and the greatest technology available. The NFL program hasn't had the same type of advancement in recent years." SOURCE: FOX
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