Okaloosa County BOCC — 2013 meeting #1123 (date undetermined) — Budget Policy Document FY14 — reading text

staff recommends a 3.0% market adjustment for employees. This increase in compensation equates to approximately $1,903,460, including constitutional offices, of which $444,838 represents enterprise or proprietary funding. For discussion purposes, a 1.0% increase or decrease in compensation equates to approximately $634,487, including constitutional offices, of which $148,279 represents enterprise or proprietary funding. Note that although the Board would not fund the merit program under this proposal, the program’s associated performance reviews would continue to be conducted on employees’ anniversary dates. An alternative to providing an across the board employee wage increase would be to offer a one-time lump sum payment. This option provides the County some savings in retirement contributions as employer and employee contributions are not due on this type of lump sum payment. Also, because this alternative occurs once, it does not compound the County’s liability for future years. A comprehensive discussion of furloughs is included in a white paper entitled Potential Budget Reduction Strategies included with this document. Furloughs are a planned event by an agency and are designed to absorb reductions necessitated by downsizing, reduced funding or any other event which requires an agency to save money. These programs are generally implemented to resolve immediate, short-term funding shortages and unless implemented year after year until funding returns, do not fully address the shortfall. For discussion purposes, each five days (40 hours) of furlough equals approximately 1.9% reduction in pay to employees and represents $651,686 in savings to the Board. Retirement Contributions. On July 1, 2011, the Florida Retirement System (FRS) began requiring most employees to contribute 3.0% toward their retirement. This change along with significantly reduced employer contributions equated to over a 52.0% decrease in the cost of retirement or an annual savings of $2,184,346. On July 5, 2011, the Board approved a 3% pay increase for employees affected by the new FRS requirement, effective the fourth quarter of Fiscal Year 2011 and the entire Fiscal Year 2012, which has remained in place. Page 18 A lawsuit was filed challenging the Florida Retirement System’s mandatory 3.0% employee contributions effective July 1, 2011 and reduction in the 3.0% cost-of-living adjustment for Pension Plan members retiring on or after July 1, 2011. On January 17, 2013, the Florida Supreme Court, in a 4-3 decision, ruled in favor of the state thus allowing for the continued collection of the 3.0% employee contribution. Staff will continue to follow current legislative activity that could affect the contribution rates and other provisions of the FRS. Benefits and Other Insurance. The current contract for group health insurance with Florida Blue is scheduled to expire at the end of Fiscal Year 2013. Staff recommends that the County renegotiate a contract with Florida Blue for new rates and coverage options. Under the current contract, if the County attempts to rebid or cancel the health insurance contract prior to September 30, 2013 or January 31, 2014, respectively, the County will forfeit any ProShare refund monies. The current ProShare refund is expected to be received in Fiscal Year 2014. For discussion purposes, we anticipate the health insurance premium rates to decrease by approximately 10.0%. Based on the anticipated decrease for Fiscal Year 2014, staff anticipates decreasing the per employee cost for health insurance benefits from $9,667 to $8,701. This 10.0% decrease represents a savings of approximately $699,384 annually including participating constitutional offices. As last year’s 3.0% increase was offset by the ProShare refund, a budgetary savings of $496,085 could be anticipated. Utilizing the ProShare refund monies received for the first three years of the program, the $40 per month employee contribution was offset in Fiscal Years 2012 and 2013, and could again offset the $40 per month employee contribution for Fiscal Year 2014. Last year, the Board approved transferring the dental insurance to United Concordia and the life and long term disability insurance to PRISM/Symetra. These changes resulted in approximately $115 per employee annual savings for Okaloosa County. There will be no change in the premiums for these insurance products for Fiscal Year 2014 as the contracts have a minimum rate guarantee of 2 years. Staff recently recommended and the Board approved changing the County’s renewal date of the property insurance from October 1st to April 1st and extending the County’s current property coverage for an additional six months. This will allow the County to renew coverage without the fear that weather events may negatively impact rates or cause insurers to not bind coverage leaving the County vulnerable to catastrophic losses. Premiums will increase 5.0% and therefore will cost approximately $468,429 for the additional six month extension due October 1, 2013. In April 2014, a full year’s premium will be due and is estimated to be $1,005,350. Therefore, it is projected that expenses in Fiscal Year 2014 for property insurance will be $1,473,779 (October 2013 and April 2014 payments). The remainder of the insurance program, including coverage such as liability and excess workers’ compensation, will continue to renew annually on October 1st. Assuming a 5% increase, the premiums for these insurance products are estimated to be $502,611 for Fiscal Year 2014. In total, Fiscal Year 2014 premiums for other insurance are projected to be $1,976,390. Estimated premiums for Fiscal Year 2015 will return to prior levels of premiums in the area of $1.5 million. Staff will continue to work closely with brokers to negotiate an acceptable renewal including options that will allow Okaloosa County to continue its effective protected insurance program. Page 19 Staffing Board of County Commissioners Positions. Staffing needs are considered on an annual basis prior to budget review. Personal service costs comprised 17.4% of the Fiscal Year 2013 budget. Over the past six budget years, the Board has eliminated a total of 137 positions through three voluntary separation incentive programs (VSIP), layoffs and attrition, and added 48 new positions, for a net decrease of 89 positions. For Fiscal Year 2013, the number of budgeted positions is currently 819 (743 full-time equivalents). Of the 48 new positions, the Board has added 12 of those during the current Fiscal Year. These positions include: 10 Airport Police Officer (Relief) to augment the Airport Police Division; 1 Finance, Administration & Compliance Manager to help provide a higher level of oversight to the Tourist Development Department's fiscal reporting activities; and 1 Restore Act Coordinator to work with the Restore Advisory Committee and contracted consulting firm to develop and implement the County's multi-year plan. The County is also reviewing request for proposals (RFPs) for internal auditing services which will enhance the County’s internal auditing functions as well as act as the Board's Auditor General Office (AGO) compliance officer following deficiencies recently noted in the Tourist Development Department. The proposed budget includes the deletion of the following positions: 1. Court Services – 1 Domestic Violence Case Monitor (PT) due to a reduction in funding. 2. Growth Management – 1 Growth Grant Project Coordinator currently staffed through a temporary staffing agency. The proposed budget includes the addition of the following positions: 1. Fleet Operations – 1 Lead Equipment Technician and 1 Equipment Technician to maintain the aging fleet. 2. Human Resources – 1 Human Resources Specialist to replace the position deleted last year and support the reorganizational shift of internal operations. 3. Public Safety, 911 Division – 1 911 Call Taker to provide adequate staffing on all four shifts. 4. Tourist Development – 1 Security Guard to increase overall security and reduce contracted security services and 1 Marketing Coordinator to successfully market the Emerald Coast. 5. Water & Sewer – 1 Master Painter for on-going and preventative maintenance. The Facility Maintenance Department estimates the Board should anticipate the addition of 5 new positions to support the renovation and occupancy of the Courthouse Annex. The Corrections Department will require the addition of 8 Correctional Officer I positions: 5 to reopen the upstairs housing and 3 to provide backup to current staff and conduct additional transports as the jail population increases. The Board has also discussed enhancing the County’s Legal Services Department to handle more legal matters in-house necessitating the hiring of additional staff. As the Patient Protection and Affordable Care Act (PPACA), otherwise known as ObamaCare, is implemented in 2014, the County will be required to offer insurance to employees who work 30 hours or more per week. The Page 20 Board has relief employees in the Emergency Medical Services and Airport Police divisions and temporary, seasonal employees in the Beach Safety Division that may be affected by PPACA. Staff is currently working with these divisions to ensure that they have adequate staffing levels and ensure the county is in compliance with the PPACA. In Fiscal Year 2012, the overall county structure was reorganized in an effort to streamline the number of department directors for greater efficiency and cost effectiveness. Significant cost savings were realized through the reassignment of duties and elimination of high level positions such as the Assistant County Administrator and Corrections Director as well as nearly the entire Administrative Services Department. Compensation considerations for positions affected by the reorganization were delayed until Fiscal Year 2014 budget discussions. Voluntary Separation Incentive Program (VSIP). In Fiscal Year 2008 and in Fiscal Year 2010 the Board of County Commissioners approved the offering of a VSIP to help reduce positions and balance the budget. In July 2011, legislators amended Florida Statute 215.425, thereby affecting the County’s ability to offer the same type of VSIP to employees. The Statute amendments eliminated bonuses not specifically tied to performance and capped severance pay to an amount not greater than 20 weeks of compensation. In an effort to continue to shrink operations, a new VSIP was developed and implemented in April 2012 that provided increased annual and sick leave payouts, and a total of 2 employees applied and were approved for the program. Policy Recommendation. While additional staffing requirements have been identified, without revenue enhancements further staffing reductions will be necessary to meet the fiscal challenges in Fiscal Year 2014. Staff recommends augmenting revenues or identification of priorities among county services, as much as is possible, to facilitate budget formulation. For Fiscal Year 2014, staff recommends the Board consider a 3.0% market adjustment to partially defray employees’ cost of living increases experienced during the past several years. However, based on final budget estimates, this plan could be modified to include other market increase considerations, a lump sum payment to employees or, if necessary, a decrease in compensation through salary reductions or furloughs. Staff recommends a decrease from $10,070 to $9,102 in per employee health, life and dental benefits. Operating Expenditures Department of Juvenile Justice (DJJ). The Department of Juvenile Justice (DJJ) is currently funded by each county paying the costs of predisposition detention services for youths who are residents of the