Whereas, Carol demonstrated commitment and dedication throughout her career as a public servant, gaining the respect and admiration of her colleagues, and

Whereas, Carol demonstrated extensive knowledge of the Department of Civil Service and state government and imparted that knowledge with diligence and creativity, and

Whereas, Carol, in her many capacities ranging from Personnel Management Analyst and Specialist, Director of Personal Services Review, Compensation Director, Project Director for the Merit System Redesign, and Coordinator for the proceedings of the Coordinated Compensation Panel and the State Officers' Compensation Commission routinely demonstrated professionalism and excellence, and

Whereas, Carol, in her capacity as Departmental Administrator for Human Resource Services Group B took the lead in the development and successful implementation of the first statewide Human Resources Transformation Plan and in the development of the 2003-2005 Human Resources Strategic Plan, and was instrumental in the success of the HRMN coding project, and

Whereas, Carol, in her retirement, can pursue her "second career" in private industry as a consultant, and

Whereas, Carol will be able to spend more time with her husband, Rich, and can further indulge in her love of the finer things in life--literature, art, travel, and relaxing in the Bruce Peninsula, be it therefore

Resolved, that the Michigan Civil Service Commission does hereby extend to Carol Mowitz its heartfelt appreciation for her dedicated efforts and many accomplishments during her years of service.

Resolved, that the Commission extends to Carol its warmest wishes for much health and happiness throughout her retirement.

Summary: The regulation was amended to make clear that the 14-week working period that may be used as an alternative to the administrative support exam is available only for the 5 level.

Regulation 3.04, Selection of Employees for Position Vacancies from an Agency Created Applicant Pool, Effective 8-3-03.

Summary: The regulation was amended to clarify that credential reviews must be conducted by the Department of Civil Service under specific scenarios. The regulation also specifies that credential reviews must be completed before any further candidate evaluation or offer of employment is made. In addition, the regulation describes the necessary documentation relative to applicant sanctions and the process for accessing the information.

Regulation 4.01, Establishment and Reclassification Actions that Require Civil Service Review, Effective 8-31-03.

Summary: The regulation was revised to specify documentation necessary for establishing new positions as required by the Department of Civil Service and the Governor's Executive Directives 2003-3 and 2003-5. The regulation also states that an employee must currently have a satisfactory probationary, annual, or follow-up performance rating to be eligible for reclassification.

Regulation 4.07, Establishment and Reclassification Actions that Require Civil Service Review, Effective 8-31-03.

Summary: The regulation was revised to specify documentation necessary for organizational changes as required by the Department of Civil Service and the Governor's Executive Directives 2003-3 and 2003-5. The regulation also reinstates the process and procedure necessary for the recoding of positions.

Regulation 5.05, Longevity Compensation, Effective 8-31-03.

Summary: The regulation was revised to define a time period of 28 days in which an employee can enter the classified service after leaving a non-elective excepted or exempted position in a principal department, the legislature, or the Supreme Court for purposes of longevity credit.

Reissued Regulations Based Upon Rule Changes (no change in effective dates.)

As a result of the Civil Service Commission's approval of revisions to the Civil Service Rules, the regulations referenced below have been updated to reflect current rule language.

Regulations 1.01, Issuance of Civil Service Regulations, 1.03, Investigating Reports of Discriminatory Harassment, 1.06, Audit and Correction of Personnel Actions, 3.05, Twelve-Month Trial Appointment Process For Persons With Disabilities, 3.08, Establishment, Use, and Duration of Applicant Pools Maintained by the Department of Civil Service, 3.13, Information Technology Programmer/Analyst Trainee Program, 4.02, Preauthorized Classifications and Transactions, 4.05, Frequency of Review of Positions, 4.09, Employee Generated Position Reviews, and 5.12, Severance Pay.

Gary Calkins, retired state employee and Association of State Employees in Management member, addressed the Commission regarding the travel expense reimbursement rates. Mr. Calkins indicated that reimbursement rates should be adequate to prevent state employees from incurring costs associated with travel required to do their jobs. He suggested the Commission reject the proposal, approve rates as computed using the Federal Government cost, and approve a state vehicle mileage rate of $.34 per mile.

On motion duly made and supported, the Commission approved the Proposed Travel Expense Reimbursement Rates for FY 2003-2004.

On motion duly made and supported, the Commission approved the proposed amendments to the Civil Service Rule 2-7.4, Revision A, dated August 25, 2003, effective immediately.

Mr. Fink expressed gratitude to Matt Fedorchuk, Ruth Mealy, their supervisors, Jan Winters and Mike Moody, and to the Department of Information Technology, for their assistance with developing these programs. He also stated for the record that the Attorney General staff has been very helpful in making sure that what they do is consistent with the law. With respect to furlough hours, the Attorney General staff informed the State Employer of the importance of providing due process, and they have therefore included a grievance process for those individuals who feel aggrieved by the way the furlough rule is administered.

Mr. Fink described the specifics of the proposals for a Banked Leave Time (BLT) Program; a furlough program; a revision in the Prescription Drug Program under the State Health Plan PPO; and suspension of the Pay for Performance Plan for fiscal year 2003-2004.

Mr. Fink indicated that the OSE is working with the legislature to make amendments to the retirement systems so that the hours worked for banked leave time will be treated as though the employee had received his or her wages for final average compensation purposes in the defined benefit and defined contribution plans. This would prevent employees at or near retirement from suffering a decrease in their retirement income.

Mr. Fink stated the savings from the BLT plan, if applied to all state employees, would be approximately $150 million. For NERE's only, the savings is in excess of $53 million in this fiscal year. Mr. Fink asked that the Commission waive certain requirements and unanimously act today to support the request, because banked leave time saves over $1 million a week once put in place.

Mr. Fink continued with a description of the temporary furlough proposal. With this program, OSE is also looking to the Legislature to define final average compensation as though the employee worked and was paid for those hours. He indicated that most of the comments received have related to the long term impact for retirees, and concerns for employees who are not full time. Mr. Fink stated they have changed the request to the Commission, and are so advising the unions, so that furlough hours will be pro-rated based on the number of hours an employee works.

Mr. Fink answered questions from Commissioner Lewand, noting that they have tentative agreements with MSEA and with three SEIU bargaining units. After those agreements are ratified by the employees, they will come before the Commission for approval. Mr. Fink indicated that they did share these proposals for NEREs with the unions; however, changes have been made in the proposals that will also be shared with the unions. He noted that an exemption process will be included for uncommon extenuating circumstances, which will require the consent of the Office of the State Employer and approval by the State Personnel Director. Mr. Fink stated that OSE will be asking the Unions to agree to add that exemption.

Mr. Fink briefed the Commission on the proposal to impose a freeze on Pay for Performance throughout fiscal year 2004. He indicated that in making this request, they are mindful of concerns about equity and the need to make some adjustments in the future, but hope to send the message to state employees that when issues of equity and fairness arise, employees in higher levels of government are not being treated more generously than others. Mr. Fink responded to questions from the Commission stating that it is difficult to identify precise savings from pay for performance since there is discretion involved, and that this proposal would result in a cost avoidance rather than a cost savings. He responded further that employees in the Pay for Performance category will also be subject to the other proposed concessions. After additional discussion regarding equity issues between the step system and the pay for performance system, and issues with some departments giving pay for performance awards and some not giving them, Commissioner Lewand suggested that the Commission request that staff, working with the State Employer, study the inequities that are created and come up with some solutions.

Mr. Fink discussed the proposal regarding the Prescription Drug program under the State Health Plan PPO. OSE proposes creating a third co-pay of $30.00 for non-preferred brand name drugs. The estimated savings from this proposal is approximately $500,000 for NEREs, and $1.5 million if accepted by the unions.

Matt Fedorchuk, Compensation Division Director for the Department of Civil Service, provided background information on the compensation schedules with steps, and the performance pay schedules. There are 50,962 employees currently in step schedules, with 27.3 percent currently paid below the maximum. The estimated fiscal year 2003 annual cost of step increases is $26.7 million. There are 2,974 employees currently in performance pay programs, with 62.1 percent below the maximum base rate. The fiscal year 2002 total cost of performance pay awards was $5,046,110, and the fiscal year 2003 total cost was approximately $525,000 prior to the freeze on performance pay awards. A written copy of Mr. Fedorchuk's presentation is by reference a part of the record of this meeting.

Mike Cox, Attorney General, addressed the Commission regarding the proposal to suspend performance pay. Attorney General Cox discussed the Constitutional duty to provide legal services to the State of Michigan and noted the Commission's responsibility to enable the state departments and directors to have the ability to promote and maintain a workforce which helps them carry out Constitutional duties. He stated that if the funds are not there for performance pay, the performance pay cannot occur, and argued that the suspension of the rule is therefore unnecessary. He noted a concern with Civil Service Rule changes made in response to short term problems, and stated he opposes the proposal because it disparately impacts over half of his workforce. Mr. Cox asked that the Commission leave the rules as they are, and let the budget dictate whether performance pay happens.

Brian DeBano addressed the Commission on behalf of the Secretary of State. Mr. DeBano expressed the Secretary of State's opposition to the proposed change to rule 5-3. He stated the issue is about allowing independently elected officials to effectively service the citizens of the State. The Secretary of State believes that this proposed suspension hinders the ability to effectively and efficiently manage the Department of State's resources and the state funds appropriated by the Legislature in order to provide the best service to the people of the State of Michigan. He indicated that for fiscal year 2003, Secretary Land weighed the department's budget and resources against the cost of services they need to provide, and froze the pay for performance increases for the department for the year. Secretary Land would like the same opportunity for fiscal year 2004. Mr. DeBano stated the Secretary of State believes if step increases are going to be allowed, it is inequitable to not allow increases for pay for performance employees, and asked that the Civil Service Commission oppose the proposed suspension of Pay for Performance.

Mr. David Berquist, employee of the Department of Treasury, addressed the Commission on his own behalf in regard to the wage and benefit concessions for non-exclusively represented employees. Mr. Berquist's written presentation is by reference a part of the record of this meeting.

Andres Friedlis and Gary Calkins, Association of State Employees in Management (ASEM), addressed the Commission regarding ASEM's position regarding the wage and benefit concession proposals. The October 7, 2003 Request to defer action on NERE wage and benefit concessions proposed by the Office of State Employer until after all unions vote on their OSE Proposals, and the ASEM Position Statement on FY 2004 State Budget Issues - Amended September 26, 2003, are by reference, a part of the record of this meeting. Mr. Calkins noted that as a limited recognition organization ASEM does not represent the majority of the NEREs and therefore does not agree to the OSE proposals on behalf of NEREs. Mr. Calkins suggested that the Commission indicate that if the Legislature does not pass legislation discussed, they would revisit these proposals.

Chairperson Susan Grimes Munsell commented that the Commission is concerned that the sharing of the burden of dealing with the deficit problem be spread equitably across employees, and will look closely at the contracts brought before the Commission. The Chairperson noted also that equitable does not necessarily mean equal.

Larry Chadzynski, Second Vice-President and Compensation Committee Chair for the Michigan Association of Governmental Employees (MAGE), and Brandon Zuk, Legal Counsel for MAGE, addressed the Commission regarding the OSE proposals. Mr. Chadzynski explained that MAGE did not agree to these concessions, and stated that state employees feel they have already done their part to cure the deficit. He stated the great majority of their membership believes that the State has not genuinely considered viable, less deleterious alternatives to wage concessions. Mr. Zuk noted that MAGE appreciates Mr. Fink's statements regarding the need for equity, the Chair's comments, and comments heard from the other Commissioners during the course of this meeting, regarding its commitment to equity. MAGE emphasized that what the Commission is being asked to do today makes it impossible to determine whether indeed equity is being done, because the negotiations are ongoing with regard to the exclusively represented bargaining units. Mr. Zuk asked that the Commission wait to see the agreements submitted to the Commission for ratification so that they can determine whether there is equity.

Chairperson Susan Grimes Munsell responded that in regard to the waiting issue, if the Commission adopts the proposals today they have the authority to reverse them, if they find that the OSE has not been able to negotiate what they are hoping to.

David Fink responded to comments made, stating that the Governor's office is knowledgeable of the importance of the Constitutional independence of other statewide elected officials, however, noted also that the Constitution vests plenary authority for terms and conditions of employment for all classified state employees in all agencies and departments. While they understand and agree that there is independence among the different elected officials, there still must be consistency in the way that employees are treated, and the benefits available to one group should not be excluded from another.

D. Daniel McLellan noted that the rules require prior public dissemination of information regarding proposed rule changes, and also permit amendments to the rules without prior disclosure with a unanimous vote of the quorum present. A unanimous vote is required to change the rules for Resolutions G-3a, b and c.

Sec. 2. The State Personnel Director has not given prior written notice of the proposed amendments to Rules 2-10 or 9-1, as required in Rule 1-1.1. However, the Civil Service Commission determines that under the circumstances described by State Employer David Fink, the proposed amendments to Civil Service Rules 2 10 and 9-1 require immediate action by the Commission and the Commission therefore waives the notice requirement of Rule 1 1.1, as authorized in Rule 1-1.3, in order to consider the proposed amendments to Rules 2-10 and 9-1.

Sec. 3. After consideration, the Civil Service Commission approves the attached draft amendments to Rules 2-10 and 9-1, Revision A, dated October 8, 2003, effective immediately.

Sec. 2. The State Personnel Director has not given prior written notice of the proposed amendments, as required in Rule 1 1.1. However, the Civil Service Commission determines that under the circumstances described by State Employer David Fink, the proposed amendments require immediate action by the Commission and the Commission therefore waives the notice requirement of Rule 1 1.1, as authorized in Rule 1-1.3, in order to consider the proposed amendments.

Sec. 3. After consideration, the Civil Service Commission approves the attached draft Rule 5-16, Temporary Furloughs, Revision A, dated October 8, 2003, effective immediately.

Commissioner McMillan discussed concerns regarding the suspension of the pay for performance system, and noted there are morale issues when individuals are receiving different levels of increases in compensation. She further noted that this proposal impacts approximately 3,000 employees out of approximately 53,000. Commissioner McMillan concurred with the Chair's suggestion to ask the State Personnel Director to take a look at the compensation issue as a whole.

Commissioner F. Thomas Lewand noted that without immediately suspending the rule, there is an opportunity for a gross inequity to occur while studying the situation. Commissioner Lewand moved that the proposed resolution be amended to suspend the rule for a six month period, expiring March 30, 2004. The motion was supported by Commissioner Pitz. The Commission approved the motion to amend the resolution to change the date to March 31, 2004.

Sec. 2. The Civil Service Commission amends the Medical Benefit Plan for NEREs and approves the attached modification to the prescription drug co-pay for NEREs, effective January 1, 2004.

John Denniston, Michigan State Employees Association, addressed the Commission to state his disagreement with the decision regarding Pay for Performance.