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HomeMy WebLinkAbout1998-03-18 adj0000'78 March 18, 1998 (Adjourned Meeting) (Page 1) An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on March 18, 1998, at 1:00 p.m., Room 235, County Office Building, McIntire Road, Charlottesville, Virginia. This meeting was adjourned from March 12, 1998. PRESENT: Mr. David P. Bowerman, Ms. Charlotte Y. Humphris, Mr. Forrest R. Marshall, Jr., Mr. Charles S. Martin, Mr. Walter P. Perkins and Ms. Sally H. Thomas. ABSENT: None. OFFICERS PRESENT: County Executive, Robert W. Tucker, Jr., County Attorney, Larry W. Davis, Deputy County Executive, Richard E. Huff, II, and Assistant County Executive, Roxanne W. White. Agenda Item No. 1. The meeting was called to order at 1:00 p.m. by the Chairman, Mr. Marshall. Agenda Item No. 2. WQRK SESSION: 1998-99 COUNTY OPERATING BUDGET: School Division, Dr, Kevin Castner, Division Superintendent and Mr. John E, Baker, Chairman, School Board. Mr. Marshall invited Mr. Baker to make the presentation. Mr. Baker said he would like to underscore several points for the Board to consider as it takes the School Board's proposal under advisement: (1) The County Executive's budget message currently reads: "For the third straight year the School Board has proposed an unbalanced budget with a $0.888 million shortfall over allocated revenues of $2.947 million, or a 6.4 percent increase over FY '98." Mr. Baker said the School Board would prefer a statement reading: "For the third straight year, the School Board has proposed a preliminary budget that asked for an additional allocation of projected revenues for Fiscal Year 1988-99." He said the School Board feels that is a more proper public statement of the budget process status. Of course, the School Board's budget will be balanced, as required by law, when revenues are finalized in April. (2) Mr. Baker said he would like to review some compelling needs which the School Board addressed before the Supervisors received the budget. Some additional 812 students have been enrolled in County schools in the past three years; 218 in 1996-97; 300 in 1997-98; and, 295 projected for 1998-99. It is a continuing trend as evidenced by the 1200 students who have joined the Albemarle School System since 1992. He said visible evidence is apparent when one goes by the school yards and sees some 50+ trailers in those school yards. The opening of Monticello High School with almost $900,000 as recurring costs is a need the School Board places before the Supervisors. The planning and implementation of the State Standards of Accreditation, which the School Board hopes the Supervisors understand, are not cost neutral. They will, in fact, have cost impact on the School Division. Other long-deferred needs such as health clinicians, remedial services, gifted programs, just to name a few. (3) Another item had to do with benefit and salary increases for employees. The School Board believes this has been misstated to the Supervisors at hearings in the past. The first point is that additional funding will not increase VRS (Virginia Retirement System) employee benefits. March 18, 1998 (Adjourned Meeting) (Page 2) 000079 Albemarle County agreed in 1981 to pay 100 percent of the VRS benefit, and he has been told that by law, this cannot be revoked. Over 90 percent of the school divisions in the State pay 100 percent of this payment for their employees; five percent have their own systems; and, five percent share the costs with their employees. The proposed salary increase is the lowest in the region. The School Board does not feel that passing on the cost of VRS or the health insurance increases would be appropriate at this time. (4) Mr. Baker said he would give examples of cuts which have been applied by the School Division and the School Board so that it could be in alignment with projected revenues. His transmittal letter to the Board indicated that is the direction in which the School Board started at the beginning of this process. The School Board's instructions to the Superintendent was to prepare a budget based on the projected revenues. Some things happened. The School Board proposed a modest, competitive salary increase for employees. It realigned the bus schedule to save transportation costs and bus replacement costs. It reassessed the differentiated funding formula for schools which have a higher percentage of youngsters who need services. The formula was altered from one the School Board proposed last year. It entered into a temporary agreement with Martha Jefferson Hospital for clinicians to come to the elementary schools, part-time. It limited the number of computer technicians, not by the School Board's design because the Division is forward looking in terms of having computers in the classroom, but now by the State Standards of Accreditation. He said all will be surprised at what fifth graders will be required to do in terms of their computer expertise when the accreditation standards are applied. In that regard, the School Board cut back the number of technicians and support services and training services that could be afforded by the technicians. Currently there are 3200 computers in the schools. The computers and the software must be maintained. · It adjusted class sizes. It scaled back the acquisition of new furniture for a brand new, state-of-the-art high school and said it would use some of the "C-class" furniture currently in trailers, so it could have the equipment needed for the students to work. It proposed cuts to the athletic program. It has again deferred purchase of textbooks. It has proposed increased user fees for the elementary, middle and high schools. It has deferred building improvements which are not even in the CIP (Capital Improvement Program) at this point. It planned the implementation of a seven-period high school day without funding enough positions to maintain the current high school class size. March 18, 1998 (Adjourned Meeting> 000080 (Page 3) (5) In preparing to administer some 37 tests compared to the current 11 they are doing in the schools, that stretches the budget to the point where it just about snapped, but that is what the School Board offers to the Supervi- sors. They feel that all are in this together. The decrease in State support is one the School Board finds appalling. Since the 1995-96 budget year, the percentage of State funding has decreased from 36 percent to 33 percent. The severity and impact of the absence of this support was the subject of a recent newspaper article by the Assistant County Executive. The article brings into clear focus the shared problem with State assessments for school divisions, and accounts for a decrease for Albemarle County and its ability to serve its children. Of course, Virginia's rank as one of the lowest in the country in support of schools is something that does not help the County. Mr. Baker said that in spite of what he has said, and how the School Board has stretched, he would like to underscore the progress that Albemarle County Schools continue to make and why the Supervisors should be proud to be supporting it as it has done in the past. (6) Albemarle County is meeting the challenge and the citizens of Albemarle County are getting their educational money's worth. Albemarle's current goals are consistent with the Virginia Standards of Accreditation. Albemarle was already there in areas such as programs, assessment, strategic planning and progress reports, even before they were introduced under the Standards of Quality. Albemarle has documented a strong performance in academic areas, thanks to the efforts of the School Division, and the Supervisors' support in the past. An average SAT score of 1077 by 70 percent of the students taking the test is something to be proud of. The Eleventh Grade Stanford 9 tests ranked Albemarle as the third highest in the State. Eighty percent of Second Graders, an increase of 50 percent over just the past three years, are reading at or above grade level. One hundred percent placement in jobs, or going on to higher education, of CATEC graduates. It is evidence of the Supervisors' support in the past. Albemarle Schools have established accountability. The Progress Report is a first for this region. It positions the Division well for implementation of the Standards of Quality and Standards of Accreditation requirements as they become applied to the Division in the future. It means that the Division has an effective business operation in addition to an effective educational operation on-going in Albemarle County. A strong, written curriculum throughout the Division. Copies are provided to every parent who come to the School Division. This is a plus for the Division. These documents did not exist a few years ago and, again, it places the Division as one of the most forward-looking divisions in the State of Virginia. (7) Mr. Baker said they know there is still work to be done. The needs are great for the students to achieve their best. Some students are not performing at their fullest capability and need intervention to build their basic skills. The School Board believes that summer school will become an option for many of the current students and for future students. As the Standards are imposed, all of the children will not be capable of reaching, in a given period of time, certain levels of achievement or academic March 18 1998 (Adjourned Meetihg) (Page 4) oooos: understanding. Summer school will facilitate that. Remediation will have to be on-going for some of those youngsters because we want them to be successful. · Technology and technology support must be on-going. There are implications of the Standards of Learning. Testing, remediation, staff development and technology are examples of things the Division will have to be vigilant of so that when the Standards of Quality are applied, Albemarle will fair well. This is no longer reading, writing and arithmetic.- This is math at a required level that none have been used to in the past, or that none have experienced in the past. It includes science into biology and chemistry that none were used to in the past in terms of a requirement for all of the youngsters in the School Division. Languages were optional. In cases where they are selected now, three years are required if there are two languages. That did not exist as a standard before. Any comparison of reading, writing and arithmetic to experiences in the past would simply not be proper in evaluating what the Standards of Quality and expectations will be for the children. (8) Mr. Baker said the Standards of Quality have been heralded by the State Department of Education as a measure of the school division. He thinks they will be a measure of the community. The measure of the schools will be to a larger degree a measure of the community. The School Division's Performance Report Card, and the performance report card of the individual schools will be published. The ~Community Report Card" delineating how well it is meeting its obligations to its young people will be the most important report card that Albemarle County will receive. Having a strong School Division is attractive to the region for its economic vitality and demonstration of having an educated work force. Mr. Baker said that in conclusion he would like to quote from a memorandum to the Board of Supervisor dated January 9, 1985. It said ~the final dollar limit should not be established until the total budget submittal is reviewed. The initial appropriation should be limited and used as a planning figure." Mr. Baker said he would submit and recommend that that be the policy now. He asked that the Supervisors consider the School Board's request to provide the funds it has asked for. He offered to answer questions. Mr. Marshall said it was an eloquent presentation and suggested the Board members ask questions. Ms. Thomas said she would find it helpful to have some further discussion of the items that make up the $888,000 in items "left on the cutting room floor" that the School Board wants the Supervisors to pick up. Dr. Kevin Castner, Division Superintendent, said the first issue from the staff, the community, and the School Board, was the growth issue. When expected revenues were announced in December with the addition of the $257,000 Mr. Tucker allowed, growth was one of the first items discussed. At that time, they were 4.5 teachers short, so a lot of time was spent with the Elementary School Task Force. Although results of those meetings are preliminary, in order to make sure there is equity in staff in art, music and P.E., 2.5 positions were added. There are a number of issues the School Board wanted addressed, and one of those had to do with high school athletics. What they found was that just opening the new Monticello High School did not mean there would be fewer coaches at Albemarle High School and Western Albemarle. Funding was allocated based on the number of students, so even if those two schools lost over 400 students, then the same programs needed $37,000 additional funding. CATEC is a priority of the School Board, and after that the School Board more or less alphabetized what they felt were legitimate priorities and then pared down some of the items the Superintendent had in his recommended budget. March 18, 1998 (Adjourned Meetihg) (Page 5) 000082 Dr. Castner said that year after year, requests are received for nurses in the schools. He has proposed a three-year phase-in of such a program if there are sufficient funds. At this time, with support from Martha Jefferson Hospital, there is a catalyst to get that program. He does not want to take funds from instruction because some of the schools need to Put all of their efforts on instruction. The gifted and the talented program has the same number of staff available that it had five years ago, and yet the Division has identified twice as many eligible students. Dr. Castner said the textbook issue is one the Division might be able to handle with one-time funds. If it is not addressed in this budget, it will be a top priority for any carry-over funds. In addition, Capital Improvements have been scaled back. Instructional moneys were scaled back. The School Board reduced approximately $750,000 in Central Office funding for the schools. Of the $888,000 shortage, the textbook issue might be handled with one-time only funds. Of the other things mentioned, they kept funds for instructional support for the computers. The number of people and computers they have to provide services for is amazing. He would to have more training on the local level and have the people become knowledgeable enough to solve the problems. He would rather see a more literate staff give some support in the schools. In the long run, he thinks that is the way it should be done. Dr. Castner said he does not believe either he or Mr. Baker can say how the School Board would prioritize beyond the items he mentioned. Those items add up to about $442,000. One thing Mr. Tucker mentioned is that the Schools have about $270,000 in Reserve that remains undesignated at this time. The School Board has not discussed the Reserve. He said this is the toughest year they have had to face in the 1990's. He doesn't see another year having some of these same challenges, They would like the Board's consideration for additional funding. Mr. Martin asked if the $270,000 included the carry-over funds. Dr. Castner said "no". Another thing that makes this budget work is that they are dealing with $680,000 in carry-over funds, so that is an addition to that amount. Staff knew this was going to be a tough budget year, so funds were held back. It there had been just 200 new students, maybe they could have gotten by with five or six percent new money. They were actually expecting 295 new students plus the new standards of accreditation. There is a need for far in excess of six percent new money. They were not able in this budget to keep class sizes at the same level in the high schools. Because of the standards of accreditation, next year's ninth graders will be under a 24- credit system as opposed to 21-credit system needed for an advanced diploma this year. Ms. Thomas asked if this budget already takes into account the $680,000 carryover. Dr. Castner said ~yes". Mr. Martin asked if it is already built into it. Dr. Castner said ~yes" Mr. Martin said he knows the decision about teacher assistants was probably made on the school level, but, obviously it is financially driven. What is going on with the loss of all the TA's in the elementary schools? To him, this seems to be the most important instructional time. Mr. Baker said it is interesting to note that there are no State requirements for TA's. Any TA's in this School Division are there because it recognizes their importance in the classroom. Speaking from the School Board perspective, it is important to retain site-based decision-making based on the culture and demographics of each individual school. Amy TA's are pluses in the School Division, but the reallocation of resources, whether it be for librarians, or teachers, or music teachers, or reading instructors, or that sort of things, is a decision of the principal. Dr. Castner said because the issue of staff size is a critical issue, there was a Staffing Committee composed of the principals to determine some general standards. In some schools there could be one TA for every 75 students, while in other schools, it could be one TA for every 100 students. They tried to arrive at an average and put it into a standard. The principals had to make some value judgments on the impact of having more TA's or another classroom teacher and affect class size that way. There were also some issues to do with differentiated funding. Using some of the definitions, there is a different class size in a school that has more students on free, and reduced lunches. Limits of 21 were put in the elementary school to a range down to 16. It was an individual school decision whether to keep the TA allotment. They tried to do some of the internal, responsible problem-solving without March 18, 1998 (Adjourned Meeting) (Page 6) 000083 extra money. They tried to do it for an instructional reason. When the pie is only one size, they have been trying to impress upon the Supervisors that they can't just stay status quo. In the individual schools that have more challenges, a lower class size is going to help some of those youngsters do better. He asked if that answered the question. Mr. Martin said ~no, not really.~ He guesses Dr. Castner is saying that decisions are being made by the individual schools. He asked for an example of funding that gets a school into that situation. Dr. Castner said full funding of growth, or full funding of the Elementary Task Force's 2.5 recommendation. Mr. Martin said he knows what is in the elementary classrooms. He knows there is everything from the gifted student to the average student, to the special ed student, all in that one classroom. To him, 25 students with a TA may well be better than 20 students without a TA. He would like to get at that issue. Ms. Thomas said she sat through one school work session when they were going through their personnel budget and how to divide it up. That is an experience she would not wish on all, but it was very instructive. They certainly were spending a lot of time and thought on the value of TA's, particularly in this community where TA's often have Master's Degrees. Weighing whether this meant the art teacher came every third week or every second week versus having than more one TA was the sort of thing they were weighing. She had never sat through that before and she thought it was site- based management at its best. She appreciated the dilemma's they were solving, not just saying ~we have limits here." She left feeling the school staff had really thought it all the way through even if they didn't come out with the decision you might wish on them. Mr. Martin wondered if the Board of Supervisors has the opportunity to change how many funds each individual school has to make its decision. That's the pie that he thinks needs to be increased. Dr. Castner said on the list of unfunded priorities, are the items where money goes directly to the schools. It is not often that anything new comes out this late in the budget process. It has already been filtered down and come through the leadership team process. A lot of what Mr. Martin said came out loud and clear at the public hearing. The citizens want some additional support given at the school level. Mr. Marshall said both Mr. Baker and Dr. Castner know how he feels about getting an unbalanced budget. He was very disappointed, and feels like he has to say this. For the third year in a row, the Board of Supervisors got a budget from the School Board that was unbalanced. The Supervisors have always given the Schools all the funds it had to give. He asked that Mr. Baker convey that to the School Board. He asked for a list of unfunded priorities and the School Board chose not to do that. They chose to come in with an unbalanced budget, and he feels it puts him on the spot with the people in his district. It makes him look like he is anti-education if he questions any of the budget. He does not like being put in that spot. Mr. Baker said that was not the intent. Mr. Marshall said ~I know, and I appreciate your's and Steve's support in asking the Board to do that." He felt it was necessary for him to make that statement so the other Board members will hear it. There might be other Board members present who feel the same way. He does not understand a lot of the expenses he looked at. The VRS funding is 8.5 percent this year, and the Supervisors the 8.5 percent has to be funded, but it is actually 13.5 percent which is being funded. He asked if that was correct. Also, he was disappointed to see that $68,000 was cut from the list of unfunded priorities for the children at Yancey School for the extra programs needed. In his opinion, these children need the funding more than any other school in the County. Dr. Castner said the School Board is still receiving additional information on that program. When it was discussed in the budget process, they had not had some of the meetings involving the Yancey community. The School Board hasn't tabled that program yet. That is a area where he wants to affect more instructional change. That amount, he has been told, might be a little lower, He has talked to at least two organizations trying to get some March 18, 1998 (Adjourned Meeting) (Page 7) 000084 corporate sponsorship. The fact that it will come back to the School Board for additional discussion suggests it is not finalized at this point. Mr. Marshall said he would like to see textbooks funded. He feels it could be done with some of the savings on gasoline and energy costs, or from some of the carryover funds. He does not like children taking home notes from school asking the parents to put pressure on the Board of Supervisors. He does not think it is right. He thinks it is bad politics. Things have been pointed out to him in this budget that don't add up. He asked if the School System provides buses for after-school programs. Ms. Thomas, Mr. Martin and Ms. Humphris said they believe they have always done this. Dr. Castner said they are talking about the activities bus. Mr. Marshall asked if buses are provided for the after-school program. Dr. Castner said they are not. Mr. Marshall also questioned the number of employees in the Transportation Department. Dr. Castner asked if Mr. Marshall wished a response now, or would he rather have it in writing at a later time. He said he feels it is fair that Mr. Marshall brings up these points, but there are answers to them. The different budget lines answer different questions. He feels Mr. Marshall will find, particularly in the area of transportation, that they are trying to save $1.0 million in the CIP over the next few years by changing bus times. Mr. Thomas said she has a constituent who wrote 59 questions about the budget. She appreciates the time the staff spent helping her get answers to the ones she felt were significant. There were lots of things that had answers. She actually started looking at budget documents back in the days when local governments were not required to reveal anybody's salary. They were told point blank that it was not anybody's business. She generally finds this a budget you can find your way around in and she appreciates the way it is put together, although there are still questions. She thinks the thing called an ~unbalanced budget" is in fact the School Board doing its responsibility. She does not think the Board will ever find the money to fund what is regarded as the overage, but she thinks it is the School Board's responsibility to tell this Board what is necessary to run the School System it is pressured to run. She appreciates knowing the School Board's best judgement as to where the money would go if there were more money. She is not distressed by anything other than the term ~unbalanced budget" which she thinks is a very unfair charge. She appreciates the budget the School Board brought to the Board of Supervisors this time. Ms. Humphris said she would echo those comments. A lot of people have asked her if she is upset because the School Board turned in an unbalanced budget. She always responds by saying she does not regard it as an unbalanced budget but just as a document that shows the Board of Supervisors what the School Board, after great thought and deliberation, thought it needed to bring to the Board's attention. Mr. Martin said from his perspective it doesn't matter which way it is done. The main thing is that the Board of Supervisors see the needs. Then, it is the Board's job to get the School Board as much in revenues as possible. Dr. Castner said School staff attended the Chamber of Commerce's meeting today. They were talking about the many regions around the State where there are severe problems. That is not true in Albemarle County. This Board has always supported the School System, which is in good shape. Albemarle will have the opportunity to see that in practice with the new Monticello High School. There are a lot of things involved other than just the operating budget before the Board today. Mr. Marshall said he doesn't disagree with the job the School Board is trying to do, and he appreciates what the other Board members said, but he will stand by his statement. He feels that when he gets an unbalanced budget from the School Board, in lieu of getting a budget that is balanced, with a list of unfunded priorities, the political pressure is shifted from the elected School Board members to the Supervisors and he does not appreciate that. Mr. Bowerman said he thinks it is important that any agency or department live within the budget priorities that are established at the out set. He does make a distinction in this case. It may be ~splitting hairs" March 18, 1998 (Adjourned Meeting) (Page 8) 000085 that within the budget guidelines the School Division was given, it was not able to present the Supervisors with a balanced budget, and then with the list of unfunded needs Mr. Marshall felt were important. Mr. Bowerman said he would prefer to receive a budget set out that way. The decision as to how much total money to allocate is the Supervisors', but when talking about questions of policies and goals, those decisions are not made by the Supervisors, but are made by the School Board. He thinks it is important that the School Board, as an elected body, have both the responsibility and the accountability, and they be held accountable as this Board is held accountable for these decisions. He sees his role as trying to take an educated look at making that allocation to the School Board, and then the School Board is responsible for the actual expenditures. He knows the School Board has a difficult task, and rightly so because it is using public funds. He thinks that is where the accountability should lie. That is why he liked Mr. Baker's initial suggestion that some other way be looked at to fund the schools to more accurately represent the fact that closer to 70 percent of the total General Fund dollars wind up with the School Board, rather than 60 percent. He will be looking at a way to provide the School Board with the resources it feels are necessary. He does not think it is his responsibility to micro- manage what goes on at individual schools and make judgments about that, nor to make judgments about what the School Board has determined to be their priorities. If there are mistakes in the budget, it is the School Board's responsibility to explain those. When they are identified they can be corrected. He does not believe they would change the bottom line figure. Mr. Baker said the cooperation between the County Executive and the Division Superintendent is very positive. The increased opportunities for the Board of Supervisors and the School Board to meet and talk through issues are very positive. The only time the Boards get into a dialogue is when there is a potential for confrontation. There was a recommendation in that 1985 memorandum for the joint meetings. Mr. Marshall said he thinks those meetings are important, and he appreciates the rapport the County Executive and the Superintendent have with each other. This was the end of the work session with the School Division. There was no further discussion at this point. Work Session: Proposed FY 1998-99 Capital Improvement Program (CIP) Budget. Ms. White said staff would not discuss any specific projects today. Ail of the projects which were discussed and which were the subject of the public hearing in February are in the CIP. There are full descriptions in the budget document itself of the projects which will be funded next year. She then proceeded with slides for a visual presentation of the financial figures. The total of the CIP is $11.1 million, with 47.7 percent of that amount going to the Schools ($5.3 million), 32.4 percent going to Public Safety projects , and the remainder for various other projects: General Government ($5.2 million); Tourism projects funded by tourism revenues ($214,000); Stormwater projects ($110,000); and General Government Debt Service ($263,000, mostly for the Juvenile Detention Home, and the 800 MHZ radio system). The next slide concentrated on the reductions in the planned General Fund transfer to the CIP. In 1998-99, there was $427,000 reduced from the General Government CIP, $150,000 from the Schools, for a total reduction of $577,000. The $1.5 millio~ total amount which was deferred from fiscal years 2000 through 2003, for a total of deferred projects over the five-year period of $2.0 million. The next slide shows the impact of that on the General Fund transfer to the CIP for FY 1999-2000. Next year, based on all of the projects included in the CIP, staff is projecting a transfer of $2.9 million, bringing that up to about 2.8 percent of the General Fund. The transfer amount will be an additional $577,000 in FY 1999-2000. What was deferred in 1998-99 ($577,000) will repeat itself as the increase in the transfer in FY 1999-2000. The next slide shows the relationship of the CIP Transfer to the General Fund revenues. Back in FY '95, it began at 2.2 percent of the General Fund as a transfer to the CIP. A decision was made at that time to gradually increase the use of General Fund revenues. The high point was in FY '97 at 3.1 March 18, 1998 (Adjourned Meeting) (Page 9) 00O086 percent, with a dip down to 2.3 percent for FY '99 because of the level funding. It will be gradually going up until the year 2003 to about 3.4 percent. The next slide shows the reductions in the planned debt service. In FY 1998-99, $300,000 in debt service was deferred. In FY 2000-01, another $1.7 million was deferred for the total amount which must be paid in debt service of $2.0 million. The FY 1998-99 budget was reduced by $877,000. That was one of the reductions done this year, and it is the same amount that the budget will be increased by next year. Debt service for next year is about $8.6 million. That increases in FY 1999-2000 by about $228,000. The budgeted General Fund increase which goes from $7.4 million to $7.7 million, will only be a $300,000 increase, the same amount in debt service that was cut out of the current budget. She pointed out that in order to fund that increase, $1.1 million of reserves were used this year, and another $1.0 million of reserves will be used next year. It is important to note that $2.0 million in reserve moneys will be used which was put aside in order to pay the increase in debt service (mainly for Monticello High School). Otherwise, an additionai $1.3 million would be paid next year. At the end of the year 2000, there will still be almost $539,000 remaining in reserve to be able to balance the General Fund transfer. Ms. White said that was the end of her presentation which was made so as to focus on the financing of the CIP rather than the actual projects. Ms. Thomas said this is what she believes the public should be upset about the Board doing, and nobody even came to the hearing. She thinks when there is a policy of putting aside three percent of the budget for capital needs, that was a wise policy and it is broken at the Board's peril. She hopes all know what they are doing. She appreciates being reminded of what the Board has done in this matter. Mr. Bowerman said, in past years, the Board has reserved making the final decision until everything was in front of it at one time. Mr. Tucker said that is correct. Years ago, the Board adopted the CIP budget, and then realized that was not a good policy because it needed to have its operating budget for the next fiscal year before it first. There being no questions for staff, this matter was concluded. Compensation/Benefits/Compression. Mr. Rick Huff and Ms. Roxanne White. Mr. Huff said he would begin by reviewing the County's current pay/ classification system and some of the premises upon which the system was built. The Hendrix model was implemented in July, 1996, along with the new pay/ classification system. It began with a market study where employees were paid at ranges which were competitive with other localities and the local market. An open-range pay plan was implemented and it did not have ~locked" steps as the old plan did. Also implemented was a policy of taking a salary to mid-point ratio where there is a minimum, a mid-point and a maximum on the ranges. Salary increases in this system are based entirely on performance. There is no cost-of-living (COLA) adjustment unless the Board should chose to do a scale adjustment in a given year. The goal in the Hendrix model was to accelerate movement toward the mid-point, and decelerate after the mid-point. Mr. Hendrix, in his review, said the County was about ten percent behind the market and recommended an initial merit pool of about ten percent. Fiscal constraints did not allow for that, and the County funded a four and one-half percent pool in that first year. Mr. Huff said that currently 25 percent of the classified employees are at, or above, the mid-point. In the Hendrix model, these employees must achieve a score on their performance evaluation of 95 or better to earn a 1.9 percent to a 3.0 percent increase, when a three percent merit pool is used. A well above average employee could get a performance evaluation score of 90+ and earn much less than three percent depending on where that employee is on that scale and how far away from mid-point. At a $25,000 salary with a three percent merit pool, it equates to a $45.00 per month increase for cost-of- living and performance, after taxes. If the CPI is 2.2 percent, the employee's perceive that eight-tenths of one percent is what they are competing for in the performance pool. March 18, 1998 (Adjourned Meeting) (Page 10) 00008'7 Mr. Huff asked that the Board not forget Mr. Koleszar's proposal to do both a one percent scale adjustment and three percent merit, i.e., go ahead and raise the minimum salary of all the scales by one percent trying to keep up with the market. The money would be put into a three percent merit pool based on mid-point. The cost to do that, above what was budgeted, for both schools and local government, is a small amount of money, approximately $11,000. Ms. White then showed a slide giving a comparison of salaries from 1991 to 1999. She pointed out that the CPI increase is 2.2 percent. The real annual increase adjusted for inflation in FY '99 would be 0.9 percent increase. Mr. Bowerman said part of the CPI includes health care costs. That is a significant portion of that figure. Mr. Marshall said he would like to know what the total compensation package is for this example when everything is added in. Ms. White said she has another slide to show that later. This slide is just for historical comparisons. It shows that over that nine-year period, the employee earns 0.9 percent, or $242 in a real wage increase in FY '99. That average over a nine-year period would be a 0.5 percent real annual percentage increase each year. In dollars, it would be approximately $125 per year. MS. White said the next few slides compare the average salary of an Albemarle resident to the average salary of an Albemarle County employee. These are figures collected by the Virginia Employment Commission each year. She said this comparison actually compares "apples to oranges." It is not really a fair comparison because of the way the information is collected. She pointed out a note on the slide saying ~VEC does not adjust for occupation or number of hours worked" so it does not represent the wage of a typical worker. That is a quote from John Knapp at the Weldon Cooper Center for Public Service. One major reason they cannot be compared is due to the way VEC collects its information. The Albemarle County part-time employees would be counted as a full-time employee by the VEC when they calculate their average wage. An individual who was a 0.5 percent FTE is counted as none" by VEC. They also count retirees who are receiving retiree benefits from the County. They count substitute teachers even though they may work little during a year. They count all teaching assistants regardless of the number of hours they may work. They count the aides, the bus drivers and the cafeteria works as a 1.0 FTE although these people work less than full-time hours. They take into account all part-time, temporary workers. They count seasonal employees; parks and maintenance, lifeguards, etc. They take the total payroll, and count the bodies as one person. Mr. Bowerman said that would tend to lower the average salary. Ms. White said that was correct. Ms. White said the next slide shows the difference between how County staff calculates the average salary as opposed to the way VEC does it. The General Government average counts only full-time equivalent positions, or FTE's. For example, for the Registrar, he employees three full-time and one part-time staff. That would be considered as 3.6 FTE's. So when the County does the calculation, it would take the total wages for that department of $97,803 and divide that by 3.6 and come up with an average salary of $27,168. The VEC would take the same total wages and divide it by four and come up with a salary of $24,451. It is just a different way of counting it, so it really can't be compared. Ms. White said in talking with people at VEC, County staff was advised that the County not use a quarterly report but an annualized average wage because it is more accurate in reflecting what happens over the year. During each quarter there are seasonal employees in different fields. When just comparing ~apples to apples", and looking at the industry average and the VEC average for 1996, it is $27,196. When looking at ~local government", VEC shows $24,284 for an annualized average salary. In their comparison, they show local government as being less than the industry average. In fact, local government is really only higher than the agriculture, the transportation, the trade retail and the services components. When VEC compares local government with State employees, it is below the state average in government, below what is paid in Albemarle County to Federal workers and also, comparing local government in Albemarle County against what local government pays across the state, is lower than that average. The point of all this information is to show that you cannot compare the way Albemarle County calculates a salary with the way VEC makes the same calculation. But, when taking just the way VEC calculates a salary on an annual basis, then Albemarle County's salaries are lower than the average salary of an average Albemarle County resident. March 18, 1998 (Adjourned Meeting) (Page 11) 000085 Mr. Marshall asked about the County employee's contributions to 401k's and all the other benefits. Ms. White said that is the next slide. What she has showed to this point is purely a comparison between wages to show that there is no way to make that comparison. If you used VEC's data, which is just compensation, it shows that Albemarle County's local government is less. Ms. White said the next slide will address some of Mr. Marshall's questions. It shows for General Government and the School Division, the average salary plus benefits. It shows the average salary County staff arrived at, $24,960 as wages only, plus the three percent merit, that salary would be $32,139 or a three percent increase. Then add in the two health and dental costs and then the increase is 4.18 percent. Subtotal to show there are some costs over which there is control, and some of those increased costs can be passed on to the employee, or they can be in the employee's share. The next two lines show the VRS and life insurance benefits which are paid for that individual. Those are mandated benefits. The County does not have a choice on those benefits. The General Government side actually had a reduction in its VRS payment, so the bottom line shows a general government overall increase of 4.05 percent. Ms. Thomas asked if that was because the county prefunded its COLA increase all at one time. Ms. White said it was because it was funded and then the actuarial figures went down a little. Ms. Thomas asked if school boards were given the option of prefunding their COLA. Mr. Tucker said the Albemarle County School Board chose to fund theirs over a period of time. Mr. Zimmerman said that for professional employees, school divisions were not given the choice to prefund the COLA, and that is the vast majority of school employees. Ms. White said for general government there is a three-percent total salary increase, and after adding in benefit increases, it is a four- percent increase. In the School Division there is a different story, which has to do with the mandated COLA. When adding in the three percent merit and what was estimated to be the average stipend, a salary of $38,039 was a 2.9 percent increase in actual compensation. Adding in health and dental costs, that figure goes up to a four percent increase in total benefits that the County has some control over. Then there is the mandated COLA (a 13 percent increase in VRS) . That COLA was implemented last year, and the schools have four years in which to pay that increase. That is about $400,000 in additional payments in each year. That is the significant increase in the School Division. Mr. Marshall said he is lost over these figures. He asked if the mandate for VRS is 8.5 percent this year. Ms. White said that is the state's share. It is mandated, and the County is mandated to pay the whole amount and the employee's share. There is no option on paying the employee's share. At the public hearing, Mr. Wright said the County had the option to just pay what the State requires, and not the employer's share, but it does not have the option of not paying the employee's share either. Mr. Tucker said that will come up later in this presentation. It is what Mr. Baker said. In 1980 or 1981, the County chose to start funding the employee's share of VRS. Once that option was chosen, the County cannot back out because it would mess up the actuarial for VRS. Mr. Paul Wright thought the County was only required to pay the State's share, but once a county takes that option, it can't go in and out. Mr. Bowerman asked if the County could charge the employee for that. Ms. White said uno". Mr. Bowerman said once the County commits to making that payment, it is not just that the payment has to be made for actuarial reasons, it can't be made by the employee for the employer. Ms. White said that burden cannot be put back on the employee. Ms. Thomas said that is the employee's share and the Board is locked into that because of a decision made about 1980. How about the employer's share? Can the Board require an employee contribution into that? Mr. Tucker said he did not know the answer. Ms. White said it is a total actuarial rate the County is required to pay in order to totally fund VRS. The County pays the five percent employee share, and then the rest of it is the actuarial payment. Ms. Thomas asked that staff check for an answer to her question. She said if that is all that is growing the next four years, and things go well actuarially, and in terms of investments VRS is making, this may not rise to astronomical heights. The point was to see if there is any portion of that which can be paid by the employee. March 18, 1998 (Adjourned Meeting) (Page 12) 000089 Mr. Michael Thompson, Human Resources Director, said the number they consider the County's part is the 8.5 percent, and then the employee's share which is five percent and the County has little control over that. In the future, the 8.5 number will continue to increase. The General Assembly is looking at a ~defined contribution retirement plan" which would be like a 401k where the County could have control over that, and ultimately it might be a better retirement benefit for a new person coming to work now. Mr. Bowerman asked if the State is saying the County has to have an actuarial rate of 13.5 percent or 8.5 percent which it has to fund. Ms. White said the rate for the School Division is 13.5 percent, for General Government, it is 8.5 percent. Mr. Bowerman asked what portion of each figure the County committed to pay in 1981. Mr. Bob Brandenburger said the VRS contribution rate is made up of two components. The employer's share and the employee's share is five percent of base salary. So, five of the 12 percent in the current year represents the employee's portion which the Board elected to pay in 1980 and all future years on the employee's behalf. A little over one-half of the current contribution is the employee's portion, which the Board is paying. Mr. Bowerman asked the rate for classified employees working in the Schools. Mr. Brandenburger said there are two different rates because some classified employees are considered to be professionals. Ms. White suggested the Board members look at the next page of the handout which shows the VRS rates for General Government and for the School Division. Mr. Bowerman said he was confused by the statement Ms. White made that the rates were 8.5 percent for General Government and 13.5 percent for the School Division. Ms. White said she believes that is what Mr. Wright had suggested. General Government is actually at 11.61 percent this year, and will be at 11.22 percent for FY 1998-99. For the School Division, professionals are at 12.28 percent this year, and will be at 13.49 percent for FY 1998-99. For non- professionals in the School Division, the current rate is 9.3 percent and they will be at 9.52 percent in FY 1998-99. Ms. Thomas said there are two things going on; one is a percentage rate for the employees, part of which could have been paid for by employees, but it is paid by the employer. Then there was the payment that had to be made of almost $0.5 million for several years in order to take care of the prepayment of the COLA and the Harper settlement, and some other things. She thought the two things were separate, one being driven by the employee rate, and the other driven by what she saw as things the state was putting on the County. She does not believe that was the correct picture, and asked for an explanation. Ms. White asked if Ms. Thomas was speaking about the Local Government or the School Division. Ms. Thomas said it is mostly about the school division for the typical salary which does include that large payment. Ms. White said next year's rate will go up again to include that VRS COLA, and because the schools are on that five-year payment plan, each year until the end of the five-year period, the VRS rate will jump until that COLA payment is made. Ms. Thomas said that does not increase the benefit to the employee; he does not get a richer retirement payment at the end. It just keeps the system healthy because they are now required to pay the COLA, and maybe a portion of the Federal employee's who were involved in the Harper settlement. There are several reasons why there is the big payment. Her question is, ~is there any portion of that the employee's could be paying?" Mr. Brandenburger said he will check, but believes the answer will be ~no" since it is called the employer's share. He does not believe any of that can be passed directly to the employees. Mr. Martin said there is one thing that makes the numbers easier to understand. If looking at the 11.6 percent or the 12.28 percent or the 9.3 percent for the schools, the employee's share of each of those numbers is five percent. He assumes that the nonprofessionals from the schools is less than ten percent because they had paid in the past. Mr. Brandenburger said it is an actuarial projection of the long-range retirement projections. There are fewer people in those occupations who stay long enough to retire. Ms. White said the health insurance rate is increasing from an employer contribution of $2000 in 1997-98 to a contribution of $2445 in FY 1998-99. The dental insurance has increased by $10 going from $63 to $73 a year. The VRS Life Insurance rate increases from 0.35 percent to 0.72 percent for both General Government and the Schools. March 18, 1998 (Adjourned Meeting) (Page 13) OOO09O Mr. Marshall asked about the County's health insurance. Mr. Huff said the plan year runs from October 1 through September 30. When staff began work on the budget last December, there were only two months of claims data to use in projecting the increase for next year. QualChoice will not project next year's rates based on only two months of data. The budget is built on an increase of $43 per month per employee. Last year, staff used $541,000 in the current plan year that began in October, 1997 from the Health Care Reserve that must be made up next year. Of that $43 a month increase, $22 is for the reserve that has to be made up for recurring claims. Staff projects a claims increase of 15 percent for next year. This projection may be a little conservative. Health insurance will be put out for bids soon. Mr. Bowerman asked if the 15 percent is the total dollar amount, or is it averaged over the total number of employees. Mr. Huff said it is based purely on claims. A Request for Proposal (RFP) should go out within 10 days. Staff hopes to get the information to the two boards in early June for a final decision. Staff does not know what to expect, but from reading materials in the trade industry and in the news media, QualChoice will realign its pricing structure if they happen to be the successful bidder. A new health care consultant has been employed this year. They are very experienced in looking at the whole HMO concept, and are familiar with QualChoice's pricing structures and have insights into their financial information that the County did not have from its other consultants. They are involved with a coalition of jurisdictions in the Valley, as well as Augusta Hospital. Whether or not the County gets a better price from another bidder, or whether QualChoice comes back as the low bidder, staff will be looking at their performance, i.e., payment of claims. In the current contract, there are performance penalties. If they do not pay claims on time, or clear up problems within a certain amount of time, there are performance penalties. The consultants will furnish the County with an audit to assure that QualChoice is doing what it contracted to do. That will be presented to the Board in June. It should help the Board understand what is happening to the health care industry in the Albemarle County area. Mr. Marshall said he would like to have some input into that process. It is something he has been dealing with every day on the State and local level. Mr. Bowerman said the County pays for actual claims, plus administrative costs. Mr. Huff said that is correct. Mr. Bowerman asked if QualChoice has plans where they simply set a rate. Mr. Huff said ~yes." Mr. Bowerman said the difficulties QualChoice is in from the organizational level that he read about in the newspapers are not due to them quoting "bad rates" to the County. They have no cost from the County. Mr. Huff said that is more true of the current year than the past year. Last year there was an aggregate cap on the total amount of claims the County would be self-funded for because staff thought they may have under projected the number of claims. The County did not want to be responsible for setting a premium rate and then get clobbered when all the claims came in. There was an aggregate cap, and QualChoice paid a substantial penalty when the County exceeded their projection. They gave up all of their administrative fees on the County's contract last year. When their audit is completed, staff predicts that they did not make any money on the County's contract last year based on them not hitting their projections. QualChoice increased that aggregate cap this year. Mr. Bowerman asked if the County pays the insurer for that cap. Mr. Huff said it is built into the premiums so the County does pay it. It was $38,000+ for that aggregate cap. Last year, their exposure will have been over $400,000, so that was money well spent by the County. There is an aggregate cap again this year, but staff thinks their projection was more realistic. That is why there was a substantial increase this year, much of which was funded out of Reserves, but claims keep coming, so staff will be looking at lowering the coverage or trying to determine why claims are going up. Staff does not know if this increase will prevent the employee from having to pick up more of the cost than they pay now. At this time, employees on a single-only policy pay $10 a month. The $10.00 was passed to the employees this year, as well as reducing four of the benefits. Mr. Bowerman said the only thing that should affect Albemarle County is the administrative charge because the County is already self-funded so will experience whatever it experiences. Mr. Huff said that was correct, except that what QualChoice is paying the doctors may be out of line. If they pay their doctors out of line, that cost will get passed to the County in terms of 00009 March 18, 1998 (Adjourned Meeting) (Page 14) higher claims. That is where the bidding process will be helpful. If another insurer has a ~better handle" on what they are paying the doctors, that should be a benefit to the County. Mr. Bowerman said QualChoice could raise the County's self-insured costs by the benefits they pay providers. Mr. Huff said that is correct. Mr. Marshall said that is where it gets tricky. He has been dealing with this for four years on the state level. Four years ago, someone could come into Virginia and set up a managed health care organization, and all that person had to do was get a license from the State Corporation Commission, set up a computer, and that person was in business. What has happened is that there is another layer between the patient and the health care provider, and it increased the cost considerably. Most of the problems that QualChoice has had in the past have been administrative, but one problem they have not had is providing service to people. He can attest to this because of his heart surgery, and they pay as good or better as anyone else, but most importantly, QualChoice is an organization run by health care professionals who look out for the individual's health care needs first and are not just in it for the money. He has seen a lot of the other companies coming into Virginia say they can provide health care for ~x" number of dollars, and then the patient has no health care. There is a primary care physician practicing dermatology, or practicing orthopedics, and so forth. The State Department of Health has looked at it carefully and is writing regulations for health care organizations so they must not provide for diagnostic aids which are essential for making a diagnosis. All of these things are important, so one cannot just buy the cheapest plan. It has to be something which provides quality insurance for the employee. Mr. Huff said health care is a very complex issue in some ways. He asked if there were questions as to why staff had budgeted the recommended amount. Ms. Thomas asked if it is possible that there could be an increase in the employee's share. She remembers the Board discussed, months ago, that it would try to cover the same percentage of the health insurance and the dental insurance as in the present year, rather than putting an increase on the employee. She said that was a decision the Board made as guidance to staff in drafting this budget. Mr. Huff said this is staff's best guess at what amount will be needed to cover these costs. He does not want to create the expectation that because this is such a large increase that there is no way more of it will have to be passed to the employee. At this time, staff does have an answer to that question. For employees who carry family coverage, there will be additional monthly costs above and beyond the employer contribution. Mr. Huff said if there were no further questions about health insurance, he would mention dental insurance. He said this has not been discussed a lot in years past. That will go out on the same RFP. The Board contribution built into the budget is $6.08 a month per employee, an increase from the current year of $5.25 a month per employee. That is an annual payment of $73.00 toward dental insurance. Staff tried to hold the line on the employer's share of the dental and there has only been a $13.00 increase annually since FY '87. The County's dental plan is a bare bones plan. It does not cover caps, crowns, and other things which a lot of people consider normal dental work. Staff will price that to see if it is something that can be obtained at a reasonable cost. It has not been in years past. Ms. White said the next slide concerns the VRS benefit. It shows that the County may not withdraw from VRS. The County opted to pay the five- percent employee share in 1980 and once committed to paying that employee share, the County may not withdraw or reduce its contribution. As a comparison, 90 percent of the Virginia school districts and political subdivisions pay their employee's share. On the VRS Life Insurance, the rate increased from 0.35 percent to 0.72 percent. Back in 1995, the rates stayed around 0.6 or 0.7 percent. In FY '96 the state reduced the rate to 0.35 percent, and in FY '97 the state said they were taking a VRS Holiday, and reduced the rate to zero percent. Now, in FY '98 it jumped back up to 0.35 percent, and for FY '99 they are going back to historical levels. That had to do with the State also wanting to save some money. The rate increase maintains a constant employee benefit. There is no increase in the benefit by that change in the rate. The cost to the County is about $48,956. It is a minor expenditure. March 18, 1998 (Adjourned Meeting) (Page 15) 000092 Mr. Huff said the next issue has to do with ~Compression", which he will go through quickly, and then the Board can decide how much detail they want. The total cost of the compression issue is estimated to be $742,326. The formula presented to the Board earlier establishes ten increments to midpoint, and 20 increments beyond midpoint, and that no salary would, as part of the compression/decompression formula be increased beyond the 75th percentile of the scale. The committee did not feel it was appropriate to place employees at the top of the scale as a result of decompression, and they subsequently be ~topped out" and receive no further increases. The exception to that is the Police Department who have a different retirement system, who can retire earlier than local government or school employees. There are 15 increments beyond midpoint for a total of 25 for them, and 30 for all other employees. Staff estimates that the decompression formula will affect 23 percent of all classified employees. Over 50 percent of the dollars on the local government side of this issue will be attributable to the Police compression and will go toward employee salaries in the Police Department. The recommendation is that 33 percent of the funds required be provided for General Government ($196,240), with $24,372 going to the School Division. The Schools part of this expense was built early in the budget process so only provides 20 percent of the cost. If it needs to be at 33 percent on both sides, the School Division will need to come up with extra money, or take it out of any additional money the Board gives the. He estimates that another $15,000+ is needed to bring them up to the 33 percent figure. Mr. Huff pointed out a chart showing the rise in a salary to the 10th increment which is the midpoint of a scale, and then 20 increments beyond that point. There is a formula based on years of service both in the current job, as well as credit for other service in the County. It takes merit into consideration, and it determines where this salary should be, based on this formula, and the current position on the scale. That is the total amount that is due under the decompression formula. Staff attempted to fund one-third of that amount. Mr. Bowerman asked if when the Board first started talking about this issue over a year ago, the estimated cost of decompression was significantly larger, as much as $2.0 million. Mr. Huff said that was correct. At that time, staff only had data from the Police, Finance and Building Services departments. It was said that if it was the same for all other departments, that $2.0 million would be the total liability. Then, staff found that the Police were 70 percent of the dollars for local government and the problem was not as wide spread in many of the other departments. That number came down significantly once numbers were received from every department for every employee. Mr. Bowerman asked Mr. Huff to prioritize the departments that are the most affected, Police being first. Mr. Huff said it is not prevalent for custodial staff. It is somewhat prevalent for teacher assistants, somewhat for bus drivers, but their total exposure, dollar-wise is fairly small. From there, it is scattered. Mr. Bowerman asked if the policy in place now for scale adjustments would prevent this from recurring as long as the Board stays with the policy. Mr. Huff said it will minimize it, he can't say it will be totally eliminated. Any time the scale is adjusted, as long as everybody is moved by that amount, it will clearly minimize it to a great degree. Ms. Thomas asked if moving the scale one percentage point will prevent this from being a problem that keeps occurring even after this adjustment has been made. Mr. Huff said that is correct. If a three percent merit pool is used, everybody gets at least one percent. If anybody got less than one percent, their salary would be compressed. He has looked at examples, and except for people at the very top of the scale, they will still get the one percent, so that will not be an issue. If the scale is not moved, it would decrease the starting salary, and that would be an issue. Mr. Bowerman asked if to the extent that compression within a pay grade is caused by lack of merit increases, how does it affect the people where they are at because they have not performed like their peers? Mr. Huff said using merit as a piece of the formula takes part of that into account, the number of years of service is driving the formula stronger so it is conceivable they could reap some benefit from their years of service. Some people could argue they don't deserve that because of their merit score, but it is minimized by the extent to which merit is used as part of that formula. 000093 March ~8, ~99~ (~d~ourned Meeting) (Page 16) Mr. Bowerman said he remembers that discussion. How many parts are there? Mr. Huff handed out a copy of the formula. He said there are three components: years of service in the employee's current grade, years of service with the County, and the relationship of the employee's last three years of merit versus the merit pool they are in. If the employee is a better performer than the pool he is in, it helps. If the employee is a poorer performer than the pool he is, it hurts him in the calculations. Ms. Thomas asked why the Police have the 15 steps after midpoint and other employees have the 20 steps. Mr. Tucker said it is because of their retirement plan. Mr. Huff said it recognizes that they can retire after 25 years depending on their age. They can retire earlier than other government employees, so they asserted that it is not right to decompress them on a 30 year scale when they can retire in 25 years. Ms. Thomas asked if that is part of how to deal with compression, or has that been the situation since the new pay scale was adopted. Mr. Huff said the Police have always been able to retire earlier than local government employees. Ms. Thomas said she was talking about the 15 steps. Mr. Tucker said these steps are all based on compression. Ms. Thomas said the 15 steps are new. Mr. Huff said there are no steps in the pay/classification system. They were artificially inserted just to have a way to recognize where to put people on the scale to decompress their salary. The notion of increments and steps is entirely a function of a decompression formula that has nothing to do with how the pay/classification is administered. Mr. Bowerman said he hopes that in the future any compression, if the Board keeps with its policies, will be based upon lack of performance, and not subject to policy review by this board, or personnel. It will simply be that people are there because they have not lived up to their expectations. Mr. Martin said it is not just lack of performance. It is also exceptional performance. He said exceptional performance will create compression because it pushes one salary up against the next one Mr. Bowerman said with that caveat, that is what he thinks the Board is trying to accomplish. Mr. Huff said the other caveat inserted in the presentation made back in the Fall, is that with promotions, in this system that is an automatic ten percent increase. That may put that salary up against somebody with more years of service in that new classification. A way to recognize additional responsibilities that come with that promotion was needed. Some people may argue that again creates compression. Mr. Marshall said there is good compression, and there is bad compression. Mr. Huff said 90 percent of the concern in the organization comes from moving scales significantly and not moving people by a like amount. There will be a small number of cases, but by and large, this fixes the problem that was brought to this Board last budget season. Ms. Thomas said a lot of work must have gone into this, because a lot of work had already gone into it when it was brought to the Board some months ago. That is a hidden amount of work, so she thanks the staff for that work. Mr. Marshall asked if the Board was done with compensation and compression. Mr. Tucker said that completes the staff's presentations for today's work session. Next Monday, they will present a listing of all those items that the Board asked to be considered that were not funded in the County Executive's recommended budget. There are a few other questions that the Board has raised. He asked if there are other issues for the staff to look at. Mr. Bowerman said he had talked to Mr. Tucker about this, but has not mentioned it to the Board members. He asked that staff look at the three percent merit pool in terms of what it would cost against a two and one-half percent merit pool. He suggested that it may be more helpful to the Board members if the increase were done in tenths of a percent. Mr. Tucker said staff will give the Board cost figures for a tenth of a percent in increments. Mr. Marshall asked that staff start at two percent, and give cost figures up to three percent. Mr. Perkins made the same suggestion. March 18, 1998 (Adjourned Meeting) (Page 17) 000094 Ms. Thomas said that after the School Board presentation, she was left feeling there are a couple of items on the list that adds up to the $888,000 that the Schools could handle in some other way in their budget. Mr. Tucker said staff will identify the one-time costs in the $888,000. Ms. Thomas said that is what she wanted. Agenda Item No. 3. Other Matters Not Listed on the Agenda from Board Members. Mr. Marshall said this item is on the afternoon agenda, and also on the agenda for night. The night meeting is going to be rather lengthy. He asked if anyone wanted to speak now rather than tonight. Ms. Humphris said she ran across a request dated February 20 that the Board members fill out a survey form about growth management. She went ahead and asked Mr. Tucker to fill out the form for the Board. Mr. Tucker said a couple of Board members did hand in some requests and he used those. Mr. Bowerman said Ms. Humphris was on vacation and the form was needed back in a short time. Ms. Humphris said he knew the Board members were concerned about proffers and impact fees. Mr. Tucker said he took care of it, but he used his own judgment. Ms. Humphris asked Mr. Tucker to keep reminding the Board members that they are going to Fredericksburg on June 19. Mr. Tucker said when there is a final agenda for that meeting, he will forward a copy to the Board. It is supposed to be an all-day event at Mary Washington College. Ms. Humphris said it seems to be getting some publicity and she feels it is going to be valuable not only to the Board, but in the Board's relationship with the General Assembly after this. It is becoming more and more obvious that the State is getting the benefit of this economic boom in their revenues, and the County is getting the responsibilities and the money is not coming here. This forum has a major bearing on this Board. Agenda Item No. 4. Adjourn. At 4:00 p.m., with no further business to come before the Board, the meeting was adjourned Approved by the Board of County Supervisors Initials ~