Testimony given Sept. 15, 2010, by Yale Wiesberg, Treasurer of The Montgomery County Taxpayers League, to the Organizational Reform Commission:
“The Montgomery County Taxpayers League appreciates the Organizational Reform Commission allowing us to comment on our recommendations to save the County millions of dollars to address the structural deficit between $600 million – $1 billion.
The Taxpayers League fully supports the creation of this Commission and is impressed with the quality of its members. There needs to be a recommendation to the Executive and Council that this Commission be called at least every ten years.
The League believes that the scope given to the Commission to consolidate functions performed by the County government and County-funded agencies is much too narrow in scope and will not address the larger structural deficits facing the County. The League believes that the Commission should submit to the Executive and Council three tiers of recommendations with the first tier addressing the scope given to the Commission; the second tier addressing expenditures and revenues to reduce the structural deficit; and the third tier would include recommendations not related to the first two tiers.
Tier I – Some suggestions for Tier I recommendations might include:
· Consolidation of all training (excluding public safety) to be performed at Montgomery College or a training facility to be constructed. This facility could also include employees of the school system.
· Transportation needs of both the county and school system could be consolidated.
· Procurement of both the county and school system could be consolidated.
· State legislature needs to enact legislation to allow the Inspector General more power to look into issues which affect the school system.
· Process for negotiating contracts with the various unions needs to be changed. Presently, there is a clear conflict of interest whereby the Human Resources Department fully participates in the negotiating process with the unions. The results of the contracts directly affect their compensation and benefits. The Executive needs to appoint a negotiator who represents the citizens of the county and has no vested interest in the contracts.
Tier II – Recommendations
The Commission is aware that the current County budget is approximately $4.2 billion (including the school system). The school budget represents 58% of this amount. Compensation and benefits represent 80% of the school budget and approximately 70% of the County budget.
Last year the County Council appointed me to Chair the Compensation Committee for the elected officials. The Committee also examined the fringe benefits given to the elected officials. I scrutinized the health benefits of both school and county employees. For county and school employees, their families, retirees and their families, the county’s budget consumes approximately 500 million dollars. The health benefits given to county and school employees far and away exceed those given to federal employees and retirees. County employees pay either 20% or 24% for their premiums while federal employees pay 28% and private employees pay 30% for their premiums. School employees only pay 5% or 10% for their premiums. The benefits of county and school employees far exceed those given to federal employees. County and school employees have no deductibles, no hospital admission fee, 100% of tests and surgeries are covered and prescription drugs cost between $5-$10 for a name brand medicine for a 90-day supply (no incentive to get a generic brand). Federal employees having the standard Blue Cross/Blue Shield plan pay a $200 hospital admission fee, pay 15% for tests and surgeries, a $300 deductible and pay $65 for a 90-day supply of a name brand medicine. Federal employees pay a $20 copay for a doctor’s visit and $30 for a specialist. County and school employees usually pay only a $10 copay for any doctor’s visit.
The Taxpayers League believes that major changes need to be changed for health benefits. A savings can be made of at least $100 million a year and still allow county and school employees to have better health benefits than federal employees.
Another issue relating to health benefits is for school employees who pay 35% for their health benefits when they retire. This is a disincentive for them to retire which means we cannot replace them with lower paid employees. Finally, part-time school employees need to pay a higher percentage than full-time employees.
Tighter scrutiny needs to be given to the amount of overtime spent. How much money is spent by all agencies for overtime? When overtime for an employee reaches a certain amount, it needs to be approved by a higher level of management. When an employee receives more than $20,000 a year in overtime, it needs to be approved directly by the County Executive or Chief Administrative Officer.
Phil Andrews told me that the County spends at least $100 million a year for gasoline. Gasoline (oil) is now around $70 a barrel. The County should seriously consider entering into oil futures contracts to lock into a price per gallon.
There are many contracts for construction projects which exceed the contract price. We need to consider more fixed price contracts and since we are in a recession and companies are seeking work, we need to look into locking in prices for long-term contracts.
The County has recently lost millions of dollars in revenues due to the enactment by the State relating to speed cameras. Basically, fines can only be imposed by a jurisdiction when exceeding at least twelve miles per hour and can only be used in school and work zones. Improvement in this law, requiring state approval, would be to have a two-tier system where speeding between 12-19 MPH would remain at $45 and speeding 20 mph or more would increase to $90.
Tier III – Recommendations
1. Recommend to hire an outside consultant to perform management audits on some of the larger departments, i.e. Health and Human Services and public Works. This consultant has the expertise to look at and reduce the expenses of the department and increase its efficiency.
2. Election of a Council President by the voters. The advantages would have consistency to the Council over the four years and would take the politics out of voting for a president each year. The argument against this is it might dilute some of the power of the Executive.