The Montgomery County Council on Tuesday decided to send back proposed union agreements so renegotiations can continue between County Executive Marc Elrich and union leaders.
The majority of the bargaining agreements, which were negotiated before the public health crisis began and the county’s finance projections worsened , include step increases of 3.5%. They also include other pay raises, retirement benefits, stipends, tuition assistance, meal and uniform allowance, and other benefits.
On Tuesday, the council had to approve or reject the proposed agreements as part of the approval process for the collective bargaining agreements. The council unanimously voted to reject them while Elrich and union leaders discuss compromises and new proposed contracts.
Rejecting the contracts triggered a timeline of nine days that the unions and Elrich have to propose new agreements on May 14. The deadline for approving contracts is May 15.
The three unions are the Municipal and County Government Employees’ Organization (MCGEO Local 1994), International Association of Fire Fighters (IAFF Local 1664), and Fraternal Order of Police (FOP Lodge 35).
The council also rejected a proposed contract with the Montgomery County Volunteer Fire and Rescue Association, which it discussed separately from the three others.
Together, the four entities asked for a 1.6% increase in compensation, which was lower than the 2.6% projected revenue growth in Elrich’s proposed budget. But the revenue growth was projected assuming a proposed tax increase of about 5%, which the council has said it won’t allow.
Without the tax hike, revenue might grow 1.3%, according to the council’s staff.
Council staff members previously projected on March 16 that the county could lose $150 million to $600 million in tax revenue combined for this year and next year because of the effects of the pandemic.
County employees said there are three possible tax revenue scenarios for the next fiscal year:
● a short recession and quick recovery (until the end of FY21), with a loss of $90 million to $150 million (0.5% to 1.6% change)
● a short recession with a long recovery (until FY24), with a loss of $200 million to $400 million (2.6% to 6.5% change)
● a deep recession and a long recovery (until FY25 or FY26), with a loss of $300 million to $500 million (4.6% to 8.5% change)
None of the projections considers changes in spending or additional federal or state aid. County staff members have said the first scenario is the least likely.
The total cost of the proposed pay raises, retirement contributions and other costs is $28.02 million, which is $38.22 million annualized. Of that amount, $22.42 million would come from taxes .
The three-year agreements for MCGEO and FOP and the two-year agreement with IAFF include service increments, or step increases tied to the number of years worked, of 3.5% for both union and non-union employees.
General wage raises that help employees keep pace with inflation would be 2.25% for IAFF, 1.25% for MCGEO and non-union employees, and 1% for FOP.
Cumulative pay raises for employees not at the top pay grade in IAFF and FOP would be 5.75% and 8%, respectively.
Aron Trombka, a senior legislative analyst for the county, said revenue generation will be a “critical factor” in assessing compensation costs.
The council is working on assessing the next fiscal year’s budget, which begins on July 1, as a “continuation of services” budget that would not increase most expenses nonessential for the public health crisis. The council will consider other budget requests in the summer or fall.
Council Member Andrew Friedson said at the meeting that balancing potential revenue losses of up to 8.5% and potential pay raises would not be easy.
“We don’t want to make decisions that aren’t responsible today that put us in a more difficult position down the road and force us to have to make even more draconian and challenging decisions later on,” he said.
Revenue losses will be compounded by the need for more government services and programs, Council Member Gabe Albornoz said, beyond millions of dollars the council has appropriated for assisting the community through grants and other programs.
“But that’s just a drop in the bucket compared to the level of enhanced support services we’re going to need moving forward,” he said at the meeting. “That projected revenue fall coupled with the increased demand for services is going to be a very difficult balance.”
Council Member Nancy Navarro said her first priority is preserving jobs. She said she told union leaders, during a meeting with Council President Sidney Katz, that she hoped they could agree on a similar approach to the “continuity of services” budget, possibly with the same terms of the current fiscal year’s contract without raises or other increases.
Navarro said the contracts could be reconsidered in the fall for wages or benefits.
“We might know more; we may not [by the fall],” she said at the meeting. “But perhaps we do that so at least through the craziness of this pandemic,, we ensure that our employees know that they do have jobs, we will continue to fund those contracts and then we can revisit.”
Council Member Hans Riemer said his overall concern is that to the extent that the council approves raises, it would set itself up to have to approve layoffs.
“We don’t want to do that. We are in a position at the moment where we have to be very mindful of where we’ll be in a month, in six months, in a year, and in several years,” he said at the meeting.
Riemer said he was glad the county was providing hazard pay to employees — $10 an hour extra for employees who regularly interact with the public and $3 an hour extra for employees who have to come into the office. The hazard pay is being provided for six pay periods until the end of the current fiscal year or when Gov. Larry Hogan announces the end of the state of emergency.
“As we look to raises next year across the board, I think that’s where it’s more difficult to imagine where the money’s going to come from to be able to make that kind of decision,” Riemer said. “I think we need to be very concerned about approving across-the-board raises while we’re also grappling with layoffs and furloughs. That doesn’t help.”
He said the council has been talking about doing more with fewer employees and has not figured that out.
Council Vice President Tom Hucker said he heard from Elrich’s staff and union leaders that discussions of potential changes have been going well.
He said they are “likely to present us with revised contracts with significant savings by the deadline.”
“It sounds like everybody understands the extraordinary budget pressure that we’re under and the uncertainty around when both the public health emergency and recession will end,” he said.
Council Member Craig Rice said many people in the county don’t have any income, so being able to provide the county employees with their “current compensation” and having consistency would be a “tremendous blessing.”
“I want people to reflect on that and hopefully they understand that we oftentimes have to just step back and think about what our fellow man is going through, as well,” he said.
Friedson said the council should give the unions and Elrich clear guidelines of what it wants in the contracts instead of leaving the negotiations open-ended.
Council Member Will Jawando said he would hesitate to put something “prescriptive” on the negotiations.
“I think that’s what we’re doing here. I think everyone wants the same thing. We want people to keep their jobs,” he said. “We want to keep people safe and be able to fund critical services that our government provides in unprecedented times. I think we should allow them the time and space to do that.”
Glass agreed that the council should keep the door open for providing more support to employees.
Riemer said after the council approves the budget, it will go back to the budget process to approve large-scale cuts.
“What happens if the executive branch comes back with a package that has $10 million, $15 million or $20 million in cost?” he said, adding that cuts would have to be made elsewhere or the county would have to dip into its reserves.
In addition to general wage and step increases, FOP employees who are not at the top of their pay grade would receive salary schedule raises of 3.5%. An additional raise of 1.25% would be given to MCGEO members who did not receive a step increase during the recession of fiscal year 2011.
The MCGEO contract also included a one-time lump sum payment of $1,000 for employees not eligible for step increases. The county’s contribution to retirement would increase by 1% of employee salary and the employees’ contribution would decrease by the same amount. The shift would allow for employees to receive an additional 1% pay bump .
The council also unanimously voted to reject the collective bargaining agreement with the Montgomery County Volunteer Fire and Rescue Association so it could be renegotiated.
The negotiated agreement includes an increase in the operating funds of 22.6%, or $57,752, for a total of $312,789 for the next fiscal year.
The agreement also includes a 3% increase in service awards that would total more than $55,800, and a “nominal” fee increase of up to 14%, for a range of $500 to $800.
The rest of the contract provisions include no changes to funding for a volunteer basic orientation course and training.
Briana Adhikusuma can be reached at briana.adhikusuma@moco360.media.
