TO: Department Directors and Autonomous Agency Heads
FROM: Governor Jennifer M. Granholm
DATE: February 20, 2003
SUBJECT: Restrictions on the Creation of New Positions, Hiring of State Employees, and Acquisition of Contractual Personal Services

A. State departments and agencies are prohibited from creating any new civil service position above classification level 12, unless a specific written exception is granted by the State Budget Director. This prohibition applies to every new position, even those subsequently filled from within the department or agency, but does not apply to the reallocation of an existing position to a new classification level.

B. The State Budget Director may grant an exception under this section if the Director believes that creation of the new position will produce more efficient and timely performance by the state department or agency, eliminate unnecessary functions, increase the ability of the state to receive and expend federal funds, or that failure to create the new position will result in rendering a state department or agency unable to deliver basic services or result in the loss of revenue to the state. The State Budget Director shall consider the budgetary implications and the impact of any proposed new position upon any previously-established active employee base number for the department or agency. The State Budget Director shall consult with the Office of the State Employer regarding the programmatic implications of any proposed new position.

C. To request a new position, a department director or agency head shall submit to the State Budget Office and the Office of the State Employer, on a form determined by the State Budget Office, all of the following:

1. A brief description of the new position and the rationale for the creation of the new position.
2. The proposed class and level of the new position.
3. The permanent or limited-term status of the position.
4. The assigned duties for the position.
5. Any positions to be abolished if the new position is created.
6. An organization chart including position names and levels; a current chart of each affected area; a chart with proposed changes; and a summary organization chart of the department or agency indicating the location of the affected area.
7. A statement indicating whether the establishment of the position requires any budgetary adjustments and/or adjustment of any active employee base number previously established for the department or agency by the State Budget Director.

A. State departments and agencies are prohibited from filling any new or vacant state civil service position unless a specific written exception is granted by the State Budget Director. This prohibition does not apply to internal transfers, reassignments, or recalls from seasonal layoffs.

B. For positions above classification level 12, the State Budget Director shall grant an exception under this section if the Director believes that failing to fill a position will result in rendering a state department or agency unable to deliver basic services, cause the loss of revenue to the state, result in the inability of the state to receive and expend federal funds, or would necessitate additional expenditures that exceed any savings from maintaining a vacancy.

C. Positions at classification level 12 or below are exempt from restrictions under this section if all of the following apply:

1. The department director or autonomous agency head certifies to the State Budget Director that failing to fill the position will result in rendering a state department or agency unable to deliver basic services, cause the loss of revenue to the state, result in the inability of the state to receive and expend federal funds, or would necessitate additional expenditures that exceed any savings from maintaining a vacancy.

2. The filling of the vacancy will not result in the department or agency exceeding the active employee base number established for the department or agency by the State Budget Director.

D. Departments and agencies shall limit all hiring to critical positions. All decisions should be controlled to maintain an employment level of classified employees at or below the active employee base number established for the department or agency by the State Budget Director.

A. Department directors and agency heads are prohibited from acquiring contractual personal services unless necessary or required by any one of the following:

1. Legal mandate, court order, or for law enforcement purposes.
2. To protect the health or safety of Michigan citizens or visitors.
3. To provide for the basic living requirements of residents of state institutions.
4. To produce budgetary savings or increased state revenue, including the prevention of the loss of federal funds or to secure additional federal funds.

B. The restrictions on the acquisition of contractual personal services under this section apply both to new contracts and the renewal of existing contracts.

C. Exceptions may be granted only if the State Budget Director determines that granting the exception will contribute to the efficient and effective administration of state government.

D. Individual department directors and autonomous agency heads are responsible for ensuring compliance with these restrictions and with policies and procedures of the Departments of Management and Budget and Civil Service relating to the acquisition of contractual personal services.

E. Decisions to proceed with the acquisition of contractual personal services remain subject to review by the State Administrative Board.

A. The restrictions established by this Directive apply regardless of the fund source financing a position or a contract.

B. This Directive shall not be construed to amend or alter the requirements of Section 205 of 2002 PA 514, Section 205 of 2002 PA 516, Section 205 of 2002 PA 517, Section 205 of 2002 PA 519, Section 205 of 2002 PA 520, Section 205 of 2002 PA 522, Section 205 of 2002 PA 523, Section 205 of 2002 PA 524, Section 205 of 2002 PA 525, Section 205 of 2002 PA 526, Section 205 of 2002 PA 527, Section 205 of 2002 PA 528, Section 205 of 2002 PA 529, or Section 205 of 2002 PA 561.

C. This Directive supercedes Executive Directive 1991-14 and the Memorandum to Cabinet Members from the Governor’s Director of State Government Affairs regarding the establishment of new positions dated July 20, 2000.
Your cooperation in complying with this Directive is appreciated.