Budget Process in 4 Simple Steps

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Mark Wolf

From our February 2018 e-newsletter

It’s hard to believe that it’s already February and budget season is ramping up again. If you haven’t already done so, the first step in the budget process is to appoint a budget officer. Typically the budget officer is the chief executive officer (i.e. the fire chief or the city administrator), but your finance officer or even your attorney may function as the budget officer. Step two is to review the composition of your Budget Committee. Your Budget Committee consists of the members of your governing body and an equal number of appointed electors. The appointed members of the Budget Committee may not be officers, agents, volunteers or employees of your entity. If for some reason you cannot find enough electors for the Budget Committee, you may still move forward with the budget process. Just make sure that your minutes reflect the efforts you made to recruit citizen members. Your third step is to make a copy of your proposed budget available for public review immediately after the budget officer releases it to the Budget Committee. Your budget officer must publish notice of the budget committee meeting, as well as a notice of the budget hearing held by your governing body. Both the notice of your first budget committee meeting and the notice of your budget hearing can be published in one of four ways. The most common method of publication is to publish the notice in a newspaper of general circulation, at least 5 and not more than 30 days prior to the budget meeting or hearing. If you chose to publish in the paper, the notice of the budget committee meeting must be published twice. Notice of the budget hearing only needs to be published once. If your entity is located in Washington County, you must also send budget information to the County. The notice of your budget hearing must include a summary of the budget approved by the Budget Committee. The Oregon Department of Revenue provides forms you can use to develop and publish your budget. You can find these forms by clicking on the following link and scrolling down to “Local budget”: http://www.oregon.gov/DOR/forms/Pages/default.aspx The fourth step is to adopt the budget. Remember, your governing body has the ability to make changes to the Budget Committee’s recommended budget. New information introduced at the budget hearing should be carefully considered by the governing body prior to budget adoption. If a proposed change to the budget includes an increase in taxes, or more than a 10% increase in a fund, additional notice is required. Changes to the budget after adoption also generally require action by the governing body and sometimes require additional publications and public hearings. For this reason, all available information should be collected and considered during the budget process. Your budget must be adopted on or before June 30. Finally, in thinking about your budget, consider which projects and purchases are planned for this upcoming year. Not only will this process assist you in projecting your entity’s expenditures and revenues, this level of planning will also allow you to provide the required notice to the Bureau of Labor and Industries (BOLI). State law requires that at least 30 days prior to budget adoption, your entity must submit to BOLI a “WH-118 form,” listing each public improvement your entity plans to fund in the upcoming budget period. For example, if you are planning to budget and use public funds to build a new fire station in the next year, you must file a form WH-118 with BOLI at least 30 days before your budget is adopted. Form WH-118 is available on BOLI’s website at http://www.oregon.gov/boli/WHD/PWR/docs/wh118.pdf As always, if you encounter any legal issues during your budget adoption cycle (or if you learn of information or receive additional revenue requiring a change in your adopted budget) please contact your legal counsel as early as possible. An ounce of prevention is worth a pound of cure. It is much more cost effective and efficient to consult with your legal counsel before a problem develops.

Oregon Equal Pay Act of 2017

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By Rebekah Dohrman

From our February 2018 e-newsletter

During the 2017 legislative session, legislators adopted House Bill 2005, the Oregon Equal Pay Act. The law is now in effect and likely impacts local governments, as employers, in a number of different ways. In a nutshell, the law is intended to end differences in pay between employees of the same employer. In more detail, the new law prohibits discrimination between employees who perform work of comparable character on a basis of a protected class in the payment of wages or other compensation. The new law includes the following definitions: “Protected class” is defined as a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age. “Compensation” is defined to include wages, salary, bonuses, benefits, fringe benefits and equity-based compensation. Further, effective January 1, 2019, the new law makes it an unlawful employment practice under ORS Chapter 659A (Unlawful Discrimination laws) for an employer to:

1.  Discriminate between employees on the basis of an employee’s status as a member of a protected class in the payment of wages or other compensation for work of comparable character;

2.  Pay wages or other compensation to any employee at a rate greater than that at which the employer pays wages or other compensation to employees of a protected class for work of comparable character;

3.  Screen job applicants based on current or past compensation;

4.  Determine compensation for a position based on current or past compensation of a prospective employee; and

5.   Seek the pay history of an applicant or employee from the applicant or employee or a current or former employer of the applicant or employee before the employer makes an offer of employment to the prospective employee that includes an amount of compensation.

6.  While it may be no surprise that the new law applies to existing employees, as you can see in the list above, the new law also applies to job applicants or prospective employees. Employers are no longer allowed to ask job applicants for current or previous salary history. The portion of the new law that applies to job applicants went into effect on October 6, 2017. As of that date, it became illegal for employers to screen candidates based on compensation history or ask prospective employees about compensation history.

To comply with the new law, local governments should take the following steps:

1.  If you haven’t already, immediately review your job application materials to make sure that they do not ask applicants for prior or current compensation history or compensation requirements. Also, review your interview questions and update staff on the new law to prepare for interviews.

 2.  This year, assess how you pay your employees. If you encounter disparities, evaluate those disparities to determine whether they can be justified under the law or whether they violate the new law.

On January 1, 2019, BOLI will begin enforcing all aspects of the law. In the meanwhile, be on the lookout for rules from the Bureau of Labor and Industry to help implement this new law and updated workplace notice posters for posting. If you are concerned about how this law could impact your entity or if you suspect that there are pay inequalities in your entity, please contact your legal counsel to discuss and strategize. If you’d like to read the entire bill, go to:

https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/HB2005

Where do I go for more information? BOLI’s frequently asked questions regarding the new law may be found at:

http://www.oregon.gov/boli/TA/Pages/Equal%20Pay%20Law.aspx

http://www.oregon.gov/boli/TA/Pages/Equal%20Pay%20Best%20Practices.aspx

Have You Checked Your CPI? The Portland CPI index has been discontinued

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Diana Moffat

From our February 2018 e-newsletter

Many local government agencies rely on the Bureau of Labor and Statistics (BLS) Consumer Price Index (CPI) to determine wage increases and other forms of compensation for their employees. The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used as a way to maintain relative buying power as the cost of goods and services escalate, thus keeping wages current relative to the market. The BLS publishes CPIs for two population groups: (1) the CPI for Urban Wage Earners and Clerical Workers (CPI-W) that comprise some 32% of the total population and (2) the CPI for all Urban Consumers (CPI-U) and the Chained CPI for All Urban Consumers (C-CPI-U), which cover 87% of the total population and includes a much broader range of workers. The BLS also publishes parts of the CPI-U and CPI-W based on large cities and/or regions of the country. For example, there is a Western Region statistic, based on the urban areas of the west, including Alaska and Hawaii. An overall western region index is published, as well as two population levels (50,000-1,500,000 population and population over 1,500,000). The Portland-Salem index, one of the regional indexes, was published twice a year, for January and July. This index is found in many Oregon union contracts. In January of 2018, the BLS revised its geographic area samples and eliminated the Portland-Salem index. The new sample consists of only 75 urban areas-large, medium, and small. There previously were 87 urban areas, including the Portland-Salem area. If you have a Collective Bargaining Agreement with your union that provides for future wage increases based on the Portland-Salem CPI index, you should contact your labor attorney to make a plan for how to move forward.