EMPLOYEE FURLOUGHS FOR BUDGET BALANCING - REDLINE RESCIND.PDF

Policy on Use of Employee Furloughs for Budget Balancing
(Approved by the Board of Supervisors on May 6, 2009)
RESCINDED: MM-DD-YYYY
RESCIND REASON
This policy, while never included in the County’s official Policy Library numbering Formatted: Left
system, was created during the last economic downturn as a means to reduce
budgeted expenditures. Budget Office has reviewed and indicated it is no longer
necessary, given the Board of Supervisors’ ability to enact a new furlough provision
moving forward if the need arises. Official rescission of this policy is requested.
Revision History
Version Revision Date Description of Revision
1 5-6-2009 Initial version
2 MM-DD-YYYY Policy rescind (C-##-##-###-#-##).
Introduction
The purpose of this policy is to establish guidelines for balancing budgets with
employee furlough savings for departments so that they can reduce expenditures
while maintaining a sustainable, structurally-balanced budget.
Background
An employee furlough is mandatory unpaid leave imposed on employees by a
department facing a severe financial crisis. An employee furlough may be imposed
as an alternative to, or in conjunction with, a Reduction in Force. Employee
furloughs are a means of reducing expenditures in response to a shortage of
revenue and/or a lack of work.
The Budgeting for Results Policy Guidelines require the County to maintain a
sustainable, structurally-balanced budget in which recurring expenditures and
other uses are fully supported by recurring revenues and other sources.
The Funded Positions Policy requires that the full annualized cost of positions be
supported by ongoing funding sources. During the budget process, Departments
and the Office of Management and Budget (OMB) must verify that budgets and
funding are adequate to support all authorized positions.
By themselves, employee furloughs are not consistent with a sustainable,
structurally-balanced budget, and therefore do not comply with the Budgeting for
Results Accountability Policy and the Funded Positions Policy. Expenditure
savings from employee furloughs are non-recurring. , and become an unfunded
payroll liability in subsequent fiscal years because the full-time equivalent value
of the affected positions is not reduced. , and use of employee furloughs must
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be approved by the Board of Supervisors.
Policy:
1. Employee furloughs are not encouraged, but may be used under certain
circumstances to reduce a department’s operating expenditures so long
as there is a plan to make sustainable, recurring adjustments that will
restore the budget to structural balance within one to two fiscal years.
2. In order to implement an employee furlough, Departments must prepare
and submit a furlough budget plan that must be approved by the Board of
Supervisors.
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3. Furlough budget plans must be presented in a format to be specified by
the Office of Management and Budget. Furlough budget plans will include
the following information:
a. An explanation of why the employee furlough is necessary, either in
addition to, or instead of reductions in force,
b. A list of all Market Range Titles that will undergo furloughs, as well
as the anticipated frequency and duration of the proposed
furloughs.
c. Estimated furlough savings.
d. A plan for implementing longer-term expenditure or revenue
adjustments that will restore structural balance
e. Estimated impacts on performance and results for the Activities that
will be affected by the proposed furlough.
4. Furlough budget plans will include a hiring freeze that will, over a period of
no longer than two fiscal years, generate vacant positions through
employee attrition that can be permanently eliminated to restore structural
balance. Furlough budget plans will identify any critical positions that will
be exempted from the hiring freeze, and will demonstrate how elimination
of other positions that become vacant will be sufficient to offset the
annualized payroll liability from the employee furlough.
5. Departments with Activities that are supported by fees may reduce or
eliminate the requirement to eliminate vacant positions based on a
conservative forecast of future revenue growth.
6. The Office of Management and Budget will review all proposed department
employee furlough budget plans. OMB will forward its recommendations
to the Board of Supervisors.
7. Upon implementation of an employee furlough, Departments will prepare
and submit quarterly progress reports of savings generated by the
furlough and progress toward achieving the expenditure and/or revenue
goals established in the furlough budget plan. Department reports will be
consolidated and presented to the Board of Supervisors by OMB.
8. As vacant positions are eliminated through the course of the fiscal year,
the number of planned employee furlough days may be reduced if the
ongoing savings will offset the cost, and the department is not forecast to
exceed its appropriated expenditures.
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9.1. Notwithstanding this policy, all employee furloughs must
comply with applicable employee merit rules and personnel policies.
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