12.14.09 open letter to mcps employees

8/14/2019 12.14.09 Open Letter to MCPS Employees

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Douglas E. Rosenfeld11913 Ambleside DrivePotomac MD [email protected] 14. 2009Open Letter to Montgomery County Public School Employees

RE: Lost COLAs, Unfunded Benefits, and Potential Layoffs and FurloughsDear Montgomery County Public School Employees:

I am writing this letter to all MCPS employees who may be concerned about layoffs,furloughs, lost COLAs and step increases, and the funding status of their health, pension and otherbenefits plans. I think that covers you all.

The County's recent violation of the State's Maintenance of Effort (MOE) law has prompted alot of discussion. As often happens in cases like this, the story that people are choosing to tell is notthe one that needs to be told.

While the basic information about the MOE waiver request contained in the joint FAQ sheetpublished online by Montgomery County Education Association (MCEA), SEIU Local 500 andMCAAP appears to me to be accurate, it is not the whole story (mcea.nea.org). In order to fullyunderstand how this issue affects you, I believe you need to know the whole story. Once youunderstand what has occurred. I am confident that you will be better able to take appropriate stepsto protect your interests and. by extension, the interests of the County's schoolchildren.Q: Was this the f irst time Montgomery County applied to the State Board of Education fo r

a waiver of MOE?A: Yes.Q: Was Montgomery County's MOE waiver request the largest one submitted to the State

Board in FY10?A: Yes. It started at $94 million and was reduced to $79.5 million on the day the State Board

considered Montgomery County's request.Q: What was the State Board's deadline fo r submitting public comments on the waiver

request?

A: April 10, 2009.Q: When did Montgomery County first make its written waiver request public?A: April 10,2009.Q: Did the County Council ever hold a public hearing on the waiver request?A: No.1
mailto:[email protected]:///reader/full/mcea.nea.orgmailto:[email protected]:///reader/full/mcea.nea.org


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Q: Did the MCPS Board of Education ever hold a public hearing on the waiver request?A: No.Q: Did MCEA, SEIU Local 500 or MCAAP submit comments on the waiver request to theState Boa rd?A: No.Q: Did unions in the other 7 counties with pending waiver requests file written comments

with the State Board?A: Yes, with the sole exception of Wicomico County, whose waiver request was for only

$577,000, the teachers' union in each County submitted written comments to the StateBoard in connection with every other waiver request.

Q: What was the basis for Montgomery County's waiver request?A: In a word, Montgomery County pled poverty, claiming the "recession" made it impossible for

the County to fully fund its MOE obligations.Q: Can a County's self-inflicted financial problems justify the waiver of MOE?A: No.Q: When the State Board denied Montgomery County's waiver request, was Montgomery

County engaged in any activity that could be considered as creating self-inflictedfinancial hardship?

A: Yes. The County was spendingLeggett's "Smart Growth Initiative."

hundreds of millions of dollars on County Executive

Q: What did that involve?A: The Smart Growth Initiative required the purchase of four properties in Montgomery County

as part of a half-billion-dollar plan to relocate numerous County facilities.Q: What did those properties cost?A: The Finmarc Property cost $32.7 million; the Casey 6 & 7 Property cost $30 million; the

Webb Tract Property cost $48.3 million; and the GE Tech property cost $76.3 million.Q: Were there any other costs associated with the Smart Growth Initiative?A: Yes. In addition to purchasing the properties, there were substantial costs associated withplanning, design and construction of facilities associated with them. For example, the month

before the County submitted its waiver request, at the request of Mr. Leggett, the CountyCouncil approved $36 million in such expenditures for FY09.

Q: Had all ofsubmitted?

the land purchases been completed when the waiver request was

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A: All except one: the GE Tech Property.Q: What was the status of the GE Tech Property when the waiver request was submitted?A: On the same day Mr. Leggett and then-County Council President Phil Andrews sent the

MOE waiver request to the State Board, they also moved forward with funding for the GETech Property. At the request of Mr. Leggett, Mr. Andrews introduced a resolution before theCounty Council calling for funding the GE Tech Property project in the amount of $ 107.4million.

Q: What happened to that resolution?A: It was approved by the Council on May 13, 2009 - two days before the State Board deniedthe County's waiver request.Q: Is there any reason to believe that the County's funding of the Smart Growth Initiative

influenced the State Board's decision to deny the waiver request?A: Yes. In a November 4, 2009 opinion concluding that the County had violated the MOE law,

Maryland Attorney General Doug Gansler used the example of funding "a new county officebuilding" to explain how the purpose of the MOE law could be defeated by allowing Countyeducation funds to be diverted to other purposes.Under state law, the Attorney General advises the State Board on all matters pertaining toMOE waiver requests, including the legal standards to be applied when reviewing them.

Q: What does the Attorney General's reference to "a new county office building" have todo with the Smart Growth Initiative?

A: The GE Tech Property is the site of a large office building that Mr. Leggett intends torenovate for use as a county office building.

Q: How does all of this affect me?A: It already has, in at least two ways.

First, last year you gave back $89 million in COLAs an amount more than sufficient tocover the $76.3 million purchase of the GE Tech Property.Second, last year the MCPS budget was reduced by $31.1 million - the same amount ofmoney requested by Mr. Leggett to renovate the Tech Property. Almost all of the $31.1million removed from the MCPS budget involved reduced payments to MCPS employeehealth, retirement and other benefits plans.

Q: How might all of this affect me in the future?A: It will get even worse:

1. The FY11 MCPS budget submitted by Dr. Weast assumes no COLAs again this year.

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2. In the FY10 MCPS budget. the Council reserved the right to call back $12 million in retireehealth benefits funding to cover any potential budget shortfalls. Given the County's need tofund MOE and the penalty the County faces for violating the MOE law in FY10, a budgetshortfall is almost certain to occur - leading to the forfeiture of that $12 million.

3. On November 17, the Council approved a $30 million FY10 "savings plan" proposed by Mr.Leggett. At that time Mr. Leggett said no additional budget cuts were planned. Two weekslater. Mr. Leggett announced he was preparing a second "savings plan" for FY10 in theamount of $100 million -- three times the size of the first "savings plan".According to recent press reports, those cuts could include furloughs or layoffs for Countyemployees in the current fiscal year (i.e., before June 30, 2010).The County is projecting a $608 million FY11 deficit. At the same time, the Smart GrowthInitiative will require an additional $150 million in funding. Things are going downhill quickly-and steeply. Where will all of this money come from?

Q: What is my union doing to protect me?A: I don't know.

Unlike the State Board and the Maryland Attorney General, your unions appear to besatisfied with the County's explanation that it was, and remains, too "broke" to fund itsobligations under the MOE law.Your unions also appear to be satisfied with the County's explanation that it was, andremains, too "broke" to fund your COLAs.Finally, your unions appear to be satisfied with the County's explanation that it was, andremains, too "broke" to fund your health, retirement and other benefits plans.All while the County continues to find ways to fund Mr. Leggett's $500,000,000 Smart GrowthInitiative.

Q: What are you doing to help?A: On November 16, 2009 I sent a letter to the MCPS Board raising these issues. I have not

yet heard from the MCPS Board.On November 30, 2009 I sent a letter to the State Board raising these issues. I have yet tohear from the State Board.I have told both the MCPS Board and the State Board that it is my position that Mr. Leggettand Mr. Andrews sought the MOE waiver for the unstated purpose of advancing the SmartGrowth Initiative.I have informed the State Board that I stand ready to prove this assertion and that if I can doso, the State Board would be justified in forgiving any MOE-related penalty that it mightotherwise assess against the residents of this County.

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Q: What do you think will happen next?A: I expect to be attacked by people with a political interest in protecting the Smart Growth

Initiative. That is what happened to the State Board when it denied the waiver request. Thatis what happened to the Attorney General when he issued his opinion. And that is what isnow happening to the law itself. By blaming the law and seeking a legislative "fix" Mr.Leggett, Mr. Andrews and all of those associated with them can divert attention from the realquestion: Why did the County submit the MOE waiver request in the first place?

Q: What questions need to be asked?A: There are so many. Here are a few.

,. Will the County pay to MCPS the $79.5 million in MOE funds that it "shorted" MCPS inFY10? Is this what the County intends to do with the money it saves in the next FY10"savings plan"?

,.. If the County does pay that $79.5 million to MCPS in FY10, where will the money go? Willthe County restore to MPCS employees the FY1 0 COLAs that the unions agreed to forego?

,.. If the County now pays to MCPS the $79.5 million in MOE funds that it "shorted" MCPS inFY10, will the MOE penalty disappear because the County will have satisfied its FY10 MOEobligations? After all, FY10 is not over yet.

,.. If the County does incur a penalty, can it legally take back the $12 million it appropriated forretiree health benefits in the FY10 MCPS budget, which the County attempted to reserve theright to do in the event of a "budget shortfall"?

,.. If the County attempts to take back that $12 million for any purpose, will the MCPS Board ofEducation sue to protect that money? Will the unions sue to protect that money?

Q: Who is in the best position to get answers to these questions?A: Your unions. That is what you pay them for.

You have been asked to make extraordinary sacrifices to help bail the County out of whatyou have been told is serious fiscal distress, and will be asked to make more. I suggest to you thatthe County is not dealing with you in good faith. The lack of public review of the novel andsubstantial MOE waiver request speaks for itself. The County's massive expenditures on the SmartGrowth Initiative, made at the same time the County is cutting the MCPS budget, beg the question:What is really going on here? The State Board and the Attorney General didn' t buy the County'sstory of "financial hardship." Why do your unions continue to do so?

S i n ~ ~ e I Y ' _ / / / / ,7,,'.> / / ~ / ( //// ._/, / , . . - F Z ~ ( , ' , , " ' / ( / ) . ~ " , ; ; : : - : . c k k

\ /OOUQlaS E. Rosenfeld [email protected]
mailto:[email protected]:[email protected]

12.14.09 open letter to mcps employees

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