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Commissioners authorize up to $3.5 million from OPEB trust and direct staff to model pay-parity options
Summary
The St. Mary's County Board of Commissioners authorized staff to use up to $3.5 million from the county's OPEB trust in the FY2020-21 budget process to address pay parity and other compensation items, and directed the county administrator and finance staff to return with market-adjustment figures for sworn personnel.
The St. Mary's County Board of Commissioners on Feb. 25 gave staff authority to use up to $3.5 million from the county's Other Post-Employment Benefits (OPEB) trust as a budget option and directed staff to develop market-adjustment figures for sworn personnel and to model impacts of pay-parity options.
During the budget work session, finance staff presented Bolton actuarial scenarios and a range of options for drawing money from the OPEB trust. Commissioners debated the timing and prudence of using trust assets versus general-fund resources and asked staff for scenarios that would show the budgetary trade-offs. Several commissioners cited turnover costs and the potential fiscal benefit of reducing turnover through compensation adjustments.
Outcome and next steps
Commissioners reached consensus to give staff latitude up to $3.5 million from the OPEB trust to include in budget-model scenarios. The board also directed the county administrator and finance staff to return next week with market-adjustment numbers for sworn salaries that would be backdated or forward-dated to a March effective date and to incorporate those changes in the budget module so the board can see full-year impacts.
Why it matters
Using OPEB trust funds in the short term affects the county's retirement-related reserves and how much room there is in the general fund for other priorities, including Board of Education requests. The board framed the decision as a way to give staff flexibility to propose compensation adjustments and to weigh those against other requests as the budget process proceeds.
Board of Education funding conversation
Board of Education representative Dr. Smith told the board the BOE will transmit its full, final budget request the next day; that package totals about $7.3 million above current funding, the BOE said. Commissioners discussed working from a $5 million estimate to model county responses, but several said they were not ready to commit to that figure without seeing the BOE's full submission. Dr. Smith said a $5 million allocation would allow the BOE to work back from its $7.3 million ask to create a workable budget.
Ending
Staff will return with modeled scenarios that show the budget impacts of using up to $3.5 million from the OPEB trust, plus the effect of specific market adjustments for sworn personnel and the full Board of Education request that will be delivered to the county the following day.
