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Welcome to SEMCOG's Think Regional/Act Local blog! SEMCOG is the only organization in Southeast Michigan that brings together all governments to solve regional challenges and enhance the quality of life for the seven-county regions 4.7 million residents. With this regional perspective in mind, we work with member local governments to sustain our regions reputation as a great place to work, play, and do business.

 

Our panel of SEMCOG staff bloggers will post daily to this blog, discussing SEMCOG's data, federal and state legislative issues, and environmental and fiscal sustainability best practices for local governments all with the goal of creating a successful future for the region.

 

Meet SEMCOG's Blogging team:

Amy Mangus
Member Services
About Amy . . .
Read Amy's past posts

Dave Boerger
Government Efficiency
About Dave . . .
Read Dave's past posts

Bill Anderson
Local Government Revenue
About Bill . . .
Read Bill's past posts

Carmine Palombo
Transportation
About Carmine . . .
Read Carmine's past posts

Xuan Liu
Data & Demographics
About Xuan . . .
Read Xuan's past posts

Grant Brooks
Public Outreach
About Grant . . .
Read Grant's past posts

 

 

Think Regional/Act Local

Addressing rising benefit costs

(Best Practice, Right-sizing) Permanent link


July 17, 2012 – Many local government officials have contacted SEMCOG about reducing the legacy costs associated with pensions. As a result, SEMCOG has partnered with MERS, the Michigan Employees Retirement System, to co-develop the following list of recommended actions that local governments can apply to address ever-rising benefit costs:

 

Review Paid Time-Off Accrual Polices
• Paid vacation, sick, and personal leave time is a benefit offered to employees.
• The most cost-effective policies are designed as “use-it or lose-it.” Policies that allow employees to accrue leave time and carry it over each year increases employer liability due to pay increases in the future, but also can increase Defined Benefit pension liabilities over time. This is sometimes known as FAC padding.
• Review policies that cap the amount of leave that can be rolled over from year to year. Options could be given to employees to cash-out eligible leave, donate their leave to other workers, or roll it into programs like a Health Care Savings Program. Tax savings is achieved for both the employer and employee.

 

Consider Tax-Favored Savings
• Participating in programs like the MERS Health Care Savings Program offers employers and employees the ability to save FICA taxes on contributions.
• With no cost to the employer to participate, these programs are a great way to help employees save money to combat rising costs of health care.

 

Re-evaluate Current Benefit Structures
• Create a lesser Defined Benefit Plan for new hires.
• Create a Hybrid Plan for new hires.

 

Consider Group Buying Solutions
• MERS leverages its buying power to save municipalities’ cost on Group Life and Disability Insurance. The average savings is 30%.
• There are many added benefits that can actually increase the value of the benefit to your employees without increasing the premiums.

 

Consider Pooling Investments
• Use a team of proven investment professionals to manage the portfolio, saving you time with the added benefit of trained expertise.
• Spread your risk. Diversification is designed to reduce exposure to volatility, by combining a variety of investments (such as stocks, bonds, real estate, and commodities), which are unlikely to all move in the same direction.
• Pooling reduces investment administration costs, because the investment professional handles all the administration for you.

 

I encourage SEMCOG members to contact me (boerger@semcog.org) for more information. Additional information is also available on the MERS Web site.

Dave Boerger
Learn how to navigate fiscal uncertainty by improving efficiency, fostering collaboration, and providing information on right-sizing. Through weekly posts, Dave will discuss legislative developments, best practices, and training opportunities.

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MAP-21

(Legislation, Transportation) Permanent link

 

July 16, 2012 — So, how many of you read the MAP-21 legislation I gave you last week? Probably not many of you, right? It took me a while, but I finished reading and summarizing the key points contained in MAP-21, the new federal transportation legislation. MAP-21 stands for Moving Ahead for Progress in the 21st Century and you will be hearing a lot about this bill for months to come. Click here to read my summary. The legislation is long on what it is we have to do, that is pretty clear. The state and the region have to develop a freight plan. Transit operators have to develop asset management plans. We have to measure, measure, measure everything (that is what my dietician told me too!) to see if the condition of pavements, bridges, and safety is getting better (or not) as a result of our investment choices.

 

The good stuff – the how we are suppose to do all of this, is yet to come. What are the requirements of this freight plan? What are the performance measures we have to use? Many of these and other decisions are to be made in a process that includes the regions, the state, and the federal government through the regulatory process; the federal secretary of transportation has up to 18 months to develop the specifics. So, it could be a while until we know all of the “how.”

 

This legislation has lots of good stuff in it. The consolidation of many federal programs makes a lot of sense. I know many of the interest groups would challenge me on this, but there were just too many small federal programs that were underfunded. The increased emphasis on traffic safety is also a good thing, as is development of a national freight program.

 

So, be patient. Get ready for guidance, clarification, regulations, conferences, Webinars, and papers designed to help us develop and understand this legislation. SEMCOG will be sure you are aware of every opportunity to participate and learn. After you have read the summary, drop me a line at palombo@semcog.org if you have questions and I will do my best to answer them.


 

Carmine Palombo
If you want to know what about anything related to transportation in Southeast Michigan, don’t miss Carmine Palombo's blog. Carmine has more than 30 years of experience in various phases of transportation planning at SEMCOG. He is responsible for administering SEMCOG’s transportation planning program, which includes the region’s long-range transportation plan and short-term transportation plan.

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