Whereas, John F. Lopez has decided to retire from State Government after over 27 years of service, including two years as a special appointee and over eight years as the State Personnel Director for the Department of Civil Service, and

Whereas, John has demonstrated commitment and dedication throughout his career as a public servant, gaining the respect and admiration of his colleagues, and

Whereas, John has demonstrated extensive knowledge of the Department of Civil Service and state government and conveyed that knowledge with the highest level of commitment and focus on excellence, and

Whereas, John, in his many capacities as Personnel Specialist, Executive Assistant, Executive Officer, Assistant Personnel Director, Chief of the Office of Employee Relations and Training with the Department of Public Health, and as Human Resources Director for the Department of Transportation has gained a reputation for accomplishing difficult missions with professionalism and diligence, and

Whereas, John, in his capacity as State Personnel Director has provided exemplary executive leadership to the Human Resources community, including initiating the development of the Human Resources Management Network, developing and implementing a statewide performance evaluation system, developing critically needed regulations to govern all human resources areas, continuously providing guidance and assistance to department officials in human resources management, and serving as a distinguished cabinet member of both Governor John Engler and Governor Jennifer Granholm, and

Whereas, John can now pursue his "second career", and

Whereas, John will be able to spend more time traveling, watching old movies, and spending time with his friends and family, be it therefore

Resolved, that the Michigan Civil Service Commission does hereby extend to John F. Lopez its heartfelt appreciation for his dedicated efforts and many accomplishments during his years of service and particularly to this Commission.

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

And,

Whereas, Diane K. Hardman has decided to retire from State Government after over 32 years of service, over 30 of which were with the Department of Civil Service, and

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

Whereas, Diane has demonstrated extensive knowledge of the Department of Civil Service and state government and conveyed that knowledge with diligence and creativity, and

Whereas, Diane, in her many capacities as secretary and management assistant to the top officials of the Department of Civil Service always demonstrated professionalism, integrity, excellence, and courtesy, and

Whereas, Diane, in her capacity as Senior Executive Management Assistant to the State Personnel Director and the Civil Service Commission for over ten years has provided invaluable assistance in keeping the Executive Office running efficiently and Commission meetings running smoothly, even under difficult circumstances, and

Whereas, Diane, in her retirement, can pursue her passion for gardening, having fun at the lake at her home in Bancroft, Michigan, listening to music, golfing, and basking in the Florida sun during the brutal Michigan winters, and

Whereas, Diane will be able to spend more time with her children, Cindy and Shawn, be it therefore

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

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

Regulations: Civil Service Commission Rules require that I report to the Commission on the promulgation of regulations, which are issued to implement commission rules. Since the last Commission meeting, the following regulations were promulgated or revised:

Regulation 5.19, Temporary Furlough Hours, Effective: 10-12-03
Summary: This new regulation was promulgated to establish the standards governing paid and unpaid furlough hours for Nonexclusively Represented Employees.

Regulation 2.09, Drug and Alcohol Testing Self-Reporting, Effective: 10-26-03
Summary: The regulation was revised to establish a process for departments to notify the Department of Civil Service when an employee voluntarily discloses a drug or alcohol problem. The regulation also describes the responsibilities of the Department of Civil Service and appointing authorities in the event that an employee has had two or more previous disclosures.

Regulation 3.02, Student Assistants in the Classified Service, Effective: 10-26-03
Summary: The regulation was modified to indicate that the Civil Service Student Program Application form (CS-424) is no longer required.

Regulation 4.06, Agency Organization Charts, Effective: 10-26-03
Summary: The regulation was amended to require that departments include levels, rather than position codes, on organizational charts.

Regulation 5.15, Moving Expenses, Effective: 10-26-03
Summary: The regulation was revised to note that approval of the Department of Management and Budget is necessary for the payment of moving expenses.

Regulation 2.01, Implementing a Reduction in Force for Nonexclusively Represented Employees, Effective: 11-9-03
Summary: The regulation was revised to clarify with regard to rights to apply preference for probationary employees without status. The regulation was also revised in regard to employees in SES, SEMAS, and Group 4 to permit employees to apply preference to positions in a classification level in a former class series for which the employee attained status, in addition to the classification level held immediately prior to appointment to the SES, SEMAS, or Group 4 classification.

Regulation 3.09 Establishment, Maintenance, and Duration of Recall Lists for Nonexclusively Represented Employees, Effective: 11-9-03
Summary: The regulation was modified to reflect a new standard to address the appointing authority's responsibility for maintaining recall list records. The regulation was also modified to address the proper pay rate of an employee displaced from a SES, SEMAS, or Group 4 classification receiving pay protection who declines recall to a higher classification where the pay rate exceeds the current pay rate.

On motion duly made and supported, the Commission approved Resolution G-1a, Certification of Aggregate Payroll by the Michigan Civil Service Commission:

2. Consistent with its constitutional authority, and recognizing the impending revenue shortfall and prior actions of the State Personnel Director, the Civil Service Commission hereby reduces the previously-approved FY 03-04 budget for the Department of Civil Service by $4,678,163.

3. The State Personnel Director is authorized to take any action necessary to implement the provisions of this Resolution so that expenditures of the Department of Civil Service are reduced as specified for FY 03-04.

The Civil Service Commission approves the fiscal year 05 budget proposal for the Department of Civil Service totaling $32,133,837.

• A four percent across-the-board pay increase to be effective October 1, 2004.
  
  
• Renewal of the Professional Development Fund for MSC employees with funding of $150,000, and renewal of the Professional Development Fund for B & A unit employees with funding of $50,000.

• Any future adjustments to the approved pay increase be made subsequent to any collectively negotiated adjustments affecting exclusively represented employees.

On motion duly made and supported, the Commission approved the Coordinated Compensation Panel Report except for the second paragraph on Page 7.

The Commission does not adopt the recommendation that any future adjustments to the Commission's approved plan be made subsequent to, and in light of, any collectively negotiated adjustments affecting exclusively represented employees, as provided in Rule 5-1.3.

• A 4 percent merit increase.
  
  
• Approval by the legislature of line-item funding necessary to support these recommendations.

G-4a: Letter of Understanding --OSE & MSEA

This interim approval provides for banked leave time, furlough day, copay levels, seniority transfers and concession suspension in the event of layoffs ("no layoff guarantee") for Safety and Regulatory and Labor and Trades Units.

G-4b: Letter of Intent - OSE & MSEA

This interim approval provides for furlough hours for Safety & Regulatory and Labor & Trades Units.

G-4c: Letters of Understanding - OSE & MPE

This interim approval provides for banked leave time, furlough days, retirement assurances, limited-term appointments, lunch length, concession suspension in the event of layoffs or hours reductions ("no layoff guarantee"), and Memorandum of Understanding for Scientific & Engineering Unit.

G-4d: Letters of Understanding and Amendments - OSE & UTEA

This interim approval provides for banked leave time, furlough days, retirement assurances, limited-term appointments, assignment and transfer, grievance handling, lunch length, concession suspension in the event of layoffs or hours reductions ("no layoff guarantee"), and Memorandum of Understanding for Technical Unit.

G-4e: Letters of Understanding and CBA Amendments - OSE & MCO

This interim approval provides for medical leave of absence for disability, assignment closing, compensatory time accrual, efficiency advisory committee, sick leave for birth of child, and banked leave time for Security Unit.

G-4f: Letters of Understanding - OSE & UAW

This interim approval provides for furlough ("temporary layoff") days, concession suspension in the event of layoffs or hours reductions ("no layoff guarantee"), limited-term review, caseload review committees, training fund, retirement assurance, private letter ruling, and banked leave time for Administrative Support and Human Services Unit.

G-4g: Letter of Understanding - OSE & UTEA

Request for approval to provide for pro-rating of furlough hours for Technical Unit.

G-4h: Letter of Understanding - OSE & MPE

Request for approval to provide for pro-rating of furlough hours for Scientific & Engineering Unit.

Andre Friedlis and Gary Calkins, Board members of the Association of State Employees in Management (ASEM), addressed the Commission regarding the concessions that the NEREs have been asked to give in helping with the budget crisis and that of the bargaining units. On October 9, 2003, Mr. Friedlis had addressed the Commission and asked to delay the imposition of the State Employer's request to impose furlough days, banked leave time, 3-tiered prescription, etc. for NEREs until after the results of the negotiations through union contracts was completed. Mr. Friedlis' stated concerns were with the inequities that might result if the process went ahead as scheduled. He stated he feels the concessions are inequitable between the NEREs and the bargaining units and reminded the Commission of comments made at the October 9, 2003 meeting. At that meeting it was indicated that there would be a sharing of the burden dealing with the deficit problem and that it should be spread equitably across all the employees. Mr. Friedlis described some of the inequities to the Commission regarding furlough days, banked leave time, pay for performance and unclassifieds not being required to participate in furlough days. ASEM requests that the loss, as the result of the pay for performance being suspended, should be applied to the concessions for the NEREs. ASEM requests that the Commission adjusts the furlough days, prescription co-pays and pay for performance.

When asked, State Personnel Director, John F. Lopez, indicated that the Governor issued a directive to cabinet members in January 2003 and was followed by an official executive directive.

Gary Calkins addressed the Commission regarding the concessions made where training was utilized for concessions for some unions rather than taking pay away for employees. ASEM suggests to take the training costs approved today by the Commission and roll that into the concessions and eliminate the training program for NEREs.

Susan Grimes Munsell addressed ASEM regarding the chart Mr. Fink provided in respect to the target figures used for concessions. She indicated these figures were computed based on the total savings goal and the cost of compensation for the various units. She stated the Commission feels that it is a fair target as it was based on compensation and it is the conclusion by the Commission that the targets were calculated in a proper manner. Susan Grimes Munsell noted an important point that Mr. Calkins shared regarding the training costs.

Brandon Zuk, on behalf of MAGE, addressed the Commission expressing appreciation on their commitment to equity. He indicated MAGE supports the various letters of understanding brought to the Commission for approval, however, MAGE urges the Commission to recognize the commitment to equity that has been expressed has not been achieved when one compares concessions being agreed to with exclusive represented employees vs. NEREs who have not had the benefit of the collective bargaining process. MAGE urges and requests the Commission to remember the NEREs and revisit the concessions that have been imposed. Mr. Zuk further discussed the concern of employee morale for those making bigger sacrifices than others and stated that it appears the overall burden has been placed on those that have not had the opportunity to negotiate. He described the inequities for NEREs as the no guarantee of no further layoffs, no guarantee in further reduction in work hours, larger increase in prescription copays, greater furlough hours, and pay for performance freeze.

Mr. Zuk commented on the chart that was prepared by Mr. Fink regarding the numbers of NERE employees in comparison to overall state employment. He stated that it appears the NEREs have twenty-five percent of total state employment and the total cuts amount to one-third and, if you proportionately reduce everyone's compensation, the difference between managers and supervisors and the rank and file becomes less and less in dollar terms. He indicated that this would pose retention and recruitment issues and a big morale issue. MAGE requests that the Commission revisit the cuts that have been imposed on NEREs.

Susan Grimes Munsell readdressed her statement regarding the chart being proportionate, but indicated the target line was computed by everyone taking the same number of furlough hours and the same banked leave time at their rates of pay. The reason it is higher on a per employee basis is because when you save a furlough hour of pay for a NERE, it is more of a savings than if you furlough an hour of pay for a UAW member.

Michael Lockwood, UAW 6000 member, speaking on his own behalf, spoke in opposition to Agenda Item G-4f, UAW concession agreement, which he believes was violated by Attorney General Michael Cox by laying off two members of the UAW Local 6000. He stated this is a violation of the "no layoff guarantee." The program indicates that if a layoff does occur, then the banked leave time would be suspended for all members of the bargaining unit.

Susan Grimes Munsell inquired as to whether this would be something that may come back to the Commission at a later date in the form of an appeal. General Counsel, D. Daniel McLellan responded that this may be a matter for arbitration under the collective bargaining agreement if there is a violation of the "no layoff guarantee."

Mr. Lockwood commented that he doesn't understand how the Commission can approve something that already is in violation. He requested the Commission to review and investigate whether the "no layoff guarantee" has already been violated prior to approving the Letters of Understanding.

Susan Grimes Munsell stated that on November 26, 2003, temporary approval was granted on the Letters of Understanding. She informed Mr. Lockwood that his issue should be raised by the Union with the Office of the State Employer. General Counsel, D. Daniel McLellan indicated it is conceivable that this could come to the Commission as an unfair labor practice charge. Susan Grimes Munsell indicated she is hesitant to have too much information shared, other than to inform Mr. Lockwood of the method necessary to take regarding his complaint. Mr. Lockwood requested the Civil Service Commission to overrule the approval and asked the Commission not to approve the concessions.

Sharon Rivera, Financial Secretary Treasurer, UAW Local 6000, expressed gratitude to Mr. Fink on his earlier comment regarding the leadership of UAW Local 6000. Ms. Rivera stated it was misdirected and that it is the membership who burdens the concessions and who ratified these concessions. Ms. Rivera also discussed Attorney General Mike Cox's argument that pay for performance was the only method he had to provide additional motivation to those employees who were eligible for pay for performance. She stated Mr. Cox granted $289,000 worth of bonuses in September 2003 and in October, Mr. Cox hired additional staff. She further stated that in November 2003, Mr. Cox issued a layoff notice to two secretaries in the UAW bargaining unit. She indicated this was going on while members of the UAW were voting on the Letters of Understanding. Members voted on concessions with the understanding that no one would be laid off. Ms. Rivera stated that they have not been in favor of a merit pay program and that those NEREs in pay for performance programs who are not at the top of their pay scale, should go back to the old system where you receive step increases.

David Fink addressed the Commission to clarify concessions regarding the unclassifieds. He indicated that the unclassifieds are not taking furlough hours or days, however, those unclassifieds participate in the benefit program in regards to copays and do participate in the banked leave time. The distinction between the unclassifieds and other NEREs is that although the Coordinated Compensation Plan recommended a three percent increase for the unclassifieds, that increase did not occur. As such, he stated in comparison, the unclassifieds took a slightly larger cut than the NEREs. With respect to banked leave time, Mr. Fink clarified that it is not true that any bargaining unit has only 96 hours or less. Some of these commitments go beyond the end of the fiscal year and the total package is consistent with the spreadsheet that was provided. He further noted that some of the concessions will carry into the next fiscal year. In reference to furlough hours with respect to the NEREs taking four hours in a week, Mr. Fink clarified that this only applies to exempt employees. Mr. Fink stated, as far as pay for performance, he wanted to be clear about this and had stated at the previous meeting that we do support, and are interested and intend to work with the Commission to identify a way to bring some equity back to those persons who are disproportionately impacted by the freeze on pay for performance in the near future. Mr. Fink clarified further the basic issue of compression. The concessions exacerbate the issue of compression, and these concessions are intended to have a percentage-equivalent impact on employees. However, when that is done, there would inevitably be a slight reduction in the spread of employees who are supervisory and those that are line employees.

Mr. Fink responded to a comment presented by Ms. Sharon Rivera regarding expressing gratitude to the leadership of the unions. He indicated over 7,000 members of UAW voted to support this difficult package. Thousands of employees in MSEA and MCO voted to sacrifice for the benefit of the State of Michigan. He stated at the same time, they are grateful to the NEREs for the sacrifices they have made, and will work with the Commission wherever possible to ensure things are not inequitable.

Susan Grimes Munsell stated that one bargaining unit turned down an agreement and an outstanding agreement is being considered by AFSCME that will be addressed at the next meeting. What is before the Commission are the agreements presented by Mr. Gnodtke and it is the Commission's intention to look now at this data and then reconsider whether or not there are changes to take up for consideration for the NEREs.

Commissioner Thomas Lewand stated for the record the desire from all Commissioners, collectively, of our strong desire to revisit these equity issues and that the State Employer is very agreeable to that process.

On motion duly made and supported, the Commission unanimously approved each of the Letters of Understanding for Resolutions G-4a through G-4h regarding concessions as presented by John Gnodtke.

Commissioner Sherry McMillan clarified the commitment from the Commission to review the NERE situation at the next Commission meeting.