By Adam Pagnucco.
Confronting one of the worst recessions in its history, the MoCo government is projecting a loss of $190 million in revenue this fiscal year and over $1 billion over the next six fiscal years. With such dire financial projections, one would think that the county would be looking for ways to save money above and beyond the low-hanging fruit it has already plucked. Instead, the county has created a new spending stream with no obvious way to pay for it.
What is this new spending stream? On April 10, County Executive Marc Elrich announced that he had reached an agreement with the three county employee unions (MCGEO, the fire fighters and the police) to provide their members with COVID-19 differential pay. The extra pay applied to two categories of employees.
Front Facing Onsite: work that cannot be performed by telework, involves physical interaction with the public and cannot be performed with appropriate social distancing. These employees would get an extra $10 per hour.
Back Office Onsite: work that cannot be performed by telework and does not involve regular physical interaction with the public. These employees would get an extra $3 per hour.
The extra pay was retroactive to the March 29 pay period and was supposed to be in effect for six pay periods “or until the Maryland State of Emergency is lifted.” At the time, county council staff estimated that the extra pay would cost the county $3.2 million per pay period. As of this writing, I am told that the COVID pay continues. (Note: this pay arrangement does not apply to MCPS or other agencies legally separate from county government.)
My sources tell me that the county’s COVID pay program is one of the most generous in the United States. It is far more generous than the state’s COVID pay, which was an extra $3.13 per hour for some classifications of public safety, juvenile center and healthcare employees plus $2.00 more for those working in quarantine areas. (The $3.13 per hour ended on September 8 while the quarantine pay continues.) The generosity of the county’s program can further be seen by its cost: $3.2 million per pay period versus the state’s $3.3 million. MoCo has roughly 10,000 employees while the state has more than 80,000.
Elrich painted this extra pay as a financial win for the county. His press release stated, “The County Executive noted that under provisions of existing county bargaining agreements (which were negotiated years ago), the unions could have insisted on much larger benefits, but they understood the importance of the ongoing fiscal health of the county.” So according to Elrich, by giving the unions something less than what their agreements gave them, he was saving the county money.
In retrospect, that was a dubious claim. The unions are indeed entitled to double pay during emergencies under their agreements. However, a careful examination of the county’s collective bargaining agreements with MCGEO, the fire fighters and the police shows that their emergency pay provisions relate to weather emergencies. The emergency pay provision in the police agreement is actually labeled “Snow Emergency-General Emergency Pay.” All three agreements contain this language:
“General emergency” for the purpose of this agreement is defined as any period determined by the County Executive, Chief Administrative Officer, or designee to be a period of emergency, such as inclement weather conditions. Under such conditions, County offices are closed and services are discontinued; only emergency services shall be provided.
The county suspended some (but not all) services early during the COVID crisis but many of them are being provided now. The county even said as far back as March 13, “While schools and public facilities will be closed, Montgomery County offices remain open for business and operations are continuing.” This status does not qualify as a general emergency under the contract language.
MCGEO’s agreement contains this additional language:
Implementation of General Emergencies shall be in accordance with Administrative Procedure 4-21, dated July 12, 1991. In addition to the above, before making a determination whether to declare a General Emergency, the CAO or designee will consider recent weather reports regarding the amount of precipitation already accumulated, as well as the forecast for further accumulations during the succeeding 8-hour period. Other considerations that the CAO or designee will take into account include whether the major roadways of the County are passable and safe for travel and whether the County public schools have been closed for the day and what actions other public sector jurisdictions in the Washington Metropolitan Region take. The decision whether to declare a General Emergency shall be based on the cumulative of all these factors and no one factor shall be conclusive or determinative. The County Executive or CAO should attempt to give employees the earliest notice of whether a general emergency or liberal leave period will be declared.
Again, this clearly relates to a weather emergency.
Either Elrich knew all this and granted concessions anyway or he didn’t bother to read the union contracts and was out-negotiated by MCGEO’s shrewd president, Gino Renne. If the latter, he is not the first executive to be cleaned out at the bargaining table by Gino! The unions were quite upset to see the council cancel $28 million of compensation increases last spring, but they have already earned more than that in COVID pay.
It’s important to note that the county council had no role in this. Normally, the council would approve economic elements of a new collective bargaining agreement inside county government. But in this instance, a renegotiation occurred of an existing agreement. Elrich did not ask for council approval and the council did not bless it.
The issue here isn’t whether employees should get COVID pay. Of course they should. If you were a police officer, a fire fighter, a correctional officer, a Ride On bus driver or another employee interacting with the public for hours on end, you would want it too! The issue is whether the county has a way to pay for it, especially given its troubled financial condition. And that’s where the matter gets complicated.
One place where the county can turn for COVID expenses is federal grant funds, especially those disbursed under the CARES Act. To date, the county has received $223 million in federal grant funds during the COVID crisis. The status of those funds is a bit murky, but my quick and dirty math from examining the county council’s spending resolutions is that close to all of that money has already been appropriated. Last summer, the county was hoping a deal in Congress would produce more federal funds but it didn’t happen. Now there is talk of covering at least part of the COVID pay through a FEMA reimbursement but who knows if that will occur. Looming over all of this is the question of how long the payments will continue.
If federal funds are not available, the county’s options for financing its COVID pay program are difficult ones. It could make offsetting spending cuts although most county spending is tied to labor in one way or another. (How crazy would it be to pay employees more and then furlough them?) It could dip into reserves, which might impact its AAA bond rating. It could raid retiree health care funds yet again (something that was hinted at in July), which has already earned it a rebuke from Wall Street. Or it could raise taxes.
Readers, what would you do?
