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****PRELIMINARY AND TENTATIVE FINDINGS****
<br />Salary and benefits for the Chief Executive Officer (CEO) and General Counsel are established by the Board.
<br />The CEO's salary and benefits are delineated by contract, but as indicated in finding No. 6, the General
<br />Counsel's salary and benefits are not set forth m a contract but are established through Board actions.
<br />Neither the CEO nor General Counsel are subject to any annual leave caps, and the CEO's sick leave is to
<br />be paid out at 100 percent of his rate of pay, rather than the 25 to 50 percent caps established for other
<br />FMPA personnel. Additionally, the CEO was awarded a total of 600 additional hours of annual leave to be
<br />added to his leave balance as part of contract amendments dated February 16, 2012, October 1, 2013, and
<br />October 16, 2014.
<br />Based on these leave usage and accumulation policies, total hours of annual and sick leave that will be paid upon
<br />employee resignation or retirement have steadily accumulated over time and may result in significant future payouts as
<br />employees retire. For example, as of September 30, 2014, had the CEO and General Counsel resigned or retired, the
<br />FMPA would have been required to pay approximately $355,000 for accumulated annual and sick leave attributable to
<br />these two individuals.
<br />The compensated absences liability, by annual and sick leave balances by fiscal year for all employees, including the
<br />CEO and General Counsel, are included in Table 11.
<br />Table 11
<br />Fiscal Year
<br />Ended
<br />September
<br />30
<br />Total Accrued
<br />Sick Leave
<br />Hours
<br />Sick Leave
<br />Liability
<br />Total Accrued
<br />Annual Leave
<br />Hours
<br />Total Annual
<br />Leave Liability
<br />Total
<br />Compensated
<br />Absences
<br />Liability
<br />2010
<br />17,961
<br />$252,695
<br />8,991
<br />$470,240
<br />$722,935
<br />2011
<br />19,402
<br />315,904
<br />10,163
<br />535,345
<br />851,249
<br />2012
<br />20,963
<br />407,794
<br />10,886
<br />617,411
<br />1,025,205
<br />2013
<br />22,778
<br />477,271
<br />11,711
<br />675,254
<br />1,152,525
<br />2014
<br />23,545
<br />491,675
<br />12,941
<br />771,757
<br />1,263,432
<br />Source: FMP\ Records
<br />As shown in the table above, from the 2009-10 fiscal year to the 2013-14 fiscal year, the projected compensated
<br />absences liability has increased by $540,497, or 75 percent, from $722,935 to $1,263,432. Insofar as the ongoing
<br />growth in the compensated absences liability will ultimately result in actual cash payouts in the future, current leave
<br />provisions established by policy and contract provisions should be periodically reevaluated for reasonableness and to
<br />determine the long-term impact these benefits will have on member rates.
<br />Recommendation: The FMPA should periodically evaluate the impact of projected increases in benefit
<br />package costs provided to employees.
<br />Finding No. 6: General Counsel Contract
<br />The Manual states, 'The Board shall set the position level, pay range, and specific components of the total
<br />compensation package for the General Counsel and the CEO." In addition to periodic salary increases, the CEO and
<br />According to FMPA personnel. .As discussed in finding No. 6, FMPA records did not evidence the official Board action
<br />establishing the General Counsel's annual leave provisions.
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