Furlough Letter 08 by tek31120


                                OFFICE OF THE COUNTY EXECUTIVE

                                             September 15, 2008

Dear Fellow Employees:

        Recently I advised you of the difficult financial situation facing our County. The General Fund
(the principal operating fund for the County Government supported by County taxes, fees, and charges
which support the operation of basic County services) revenues have continued to decline, primarily
related to the deteriorating housing market and lower income tax collections. I previously told you
that we were taking aggressive steps to address a $48 million FY2009 budget gap. Based on data that
was received as recently as September 5, this number has increased to $57 million based upon July and
August receipts of transfer and recordation taxes, reflecting the national trend of a huge slowdown in
home sales. I recently transmi ed to the County Council legislation to reduce the County’s FY2009
budget to address the fiscal problem.

       As you can see from the list below most of the $57 million revenue shortfall ($37 million) will
be made up from sources other than General Fund employee compensation. In fact, approximately
two-thirds of the total savings will come from reductions outside employee base compensation. The
proposed plan involves an across-the-board furlough plan for eighty (80) hours, which will yield
$20 million in savings. The cost reduction plan includes cost savings/revenue adjustments as follows:

         EXPENDITURE ITEMS ($ in millions)
         J    Reduced County Contribution to the Board of Education                     $14.0
         J    Employees Compensation Reductions                                         $20.0
         J    Agency Cost Savings Incentive Program                                      $6.0
         J    Public Safety Overtime                                                     $4.2
         J    Capital Projects                                                           $3.0
         J    Defer Public Safety Hiring                                                 $2.0
         J    Foreclosure Program                                                        $1.0
         J    Other Savings                                                              $1.0
         J    Other savings across the government                                        $2.7
         J    County Council Savings                                                     $0.1

                                                                  Subtotal              $54.0

         REVENUE INCREASE ($ in millions)
         J   MNCPPC Reimbursements                                                       $2.0
         J   Revenue Authority Reimbursements                                            $1.0

                                                                  Subtotal               $3.0

                                             TOTAL SAVINGS/REVENUE                      $57.0
      It is important to note that meeting the budget shortfall is essential to retaining the County’s
AAA bond rating. This rating is based on strong financial leadership, strong fiscal discipline and
tremendous economic development activities. This AAA bond rating allows us to borrow money for
County Capital Projects at a low rate of interest which helps to keep us fiscally sound and solvent and
provides substantial savings to our tax payers.

        I want you to know that we tried very hard to negotiate the COLA elimination for FY09 and
to keep the merit intact and thereby completely avoid the need for furloughs. When it became clear
that we would not be able to eliminate the negotiated FY09 COLA’s, we had to address the needed
compensation reduction through furloughs. A er careful consideration, it has been determined that
as a part of this cost reduction plan it will be necessary to initiate furloughs for approximately 5,900
General Fund funded employees.

        I have submi ed a proposed Furlough Plan (the Plan) to the Council that will require active
employees (those entitled to earn annual leave) to take eighty (80) leave without pay furlough hours
prior to June 20, 2009. We intend to implement these furlough hours as follows:

       IMMEDIATE FULL PARTICIPATION (Eighty (80) leave without pay furlough hours)
       J   County Executive’s Senior Staff
       J   County Management Level Employees (Exempt, Directors, Deputy Directors, etc.)
       J   All Full-Time Employees who are entitled to earn annual leave and who are 100% funded
           by the General Fund or Internal Service Funds (Fleet and Information Technology Fund) -
           Salary Schedules A, D, E, G, H, L, P, Q, W, X, Y, Z, C-O, F-O, P-O, W-O.

       REDUCED PARTICIPATION (Leave without pay furlough hours prorated)
       J   Part-Time Employees (Based on work hours)
       J   Positions Partially Funded by General Fund (Based on percentage of General Fund funding)
       J   Match Grant Funded Positions (Based on percentage of General Fund Match funding)
       J   Employees who leave the employment of Prince George’s County before the end of FY2009
           will be required to take prorated leave without pay furlough hours.
       J   Employees who are hired with Prince George’s County a er the effective date of the
           legislation will be required to take prorated leave without pay furlough hours.

       J    100% Non-General Fund Match Grant Positions (including LTGF)
       J    100% Enterprise Funded Positions
       J    100% Non Grant State Funded Positions
       J   Any Other Employee Who Does Not Earn Annual Leave.
       Department/Agency Heads will be given as much latitude as possible in scheduling employees’
required leave without pay furlough hours. Each Department/Agency Head will prepare an
operating plan to maintain core services to our citizens.

 I am proposing that full-time employees be credited with up to a maximum of twenty-four
(24) hours of annual leave if they elect to take furlough hours on designated holidays and part-time
employees can receive up to eight (8) hours of annual leave. This annual leave credit will be posted to
the employees’ new annual leave balance at the beginning of the 2010 leave year and upon satisfaction
of the required leave without pay furlough hours.

         The details of the Plan will be provided to your Department/Agency Head upon County
Council approval. It is my desire to implement the Plan with as li le disruption to County services
as feasible.

       Now, more than ever, we must pull together to continue our professionalism and ensure that
we continue to meet our service needs. I know I can count on your continued support and hard work
despite this difficult challenge.

      Thank you for your cooperation.


                                               JACK B. JOHNSON
                                               County Executive

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