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August 30`h paycheck would compensate employees for work through August 29, 2013. Therefore, employees would receive pay for one week rather than two weeks for the pay period when the one-week lag is implemented(August 30'"). It is important to note that County employees have not received a pay increase of any kind since fiscal year 2008/09(FY 2009/10 for IAFF bargaining unit)and no COLA since 2007/08. Furthermore, all employees were required to contribute 3%to the Florida Retirement System effective July 1, 2011, effectively reducing take-home pay by a similar amount. In light of these circumstances, the loss of one week of pay at this time would create a hardship for many employees. Staff recommends that the employees receive compensation for this week of lost wages. The staff proposal would result in essentially no change in cashflow from remaining in the status quo payroll system. For example, consider an employee making $26,000 per year. This employee receives $1,000 in gross pay (before deductions) each pay period. Under the proposal, this employee would receive$1,000 on the August 30''paycheck. The additional expense to the County would essentially be a balance sheet item at the end of the fiscal year. The County would simply need to record a larger wages payable liability to reflect the additional one-week lag. The estimated cost of compensating employees for the one-week lag is $781,621 on a countywide basis (please see attached worksheet). The total estimated impact on taxing funds is $599,042. As noted above,this will result in an increased liability recorded on the County's financial statements, but essentially no immediate impact on cashflow. The cashflow impact would be realized over time as workers end their employment with the County,and pay for the last week is received. Recommendation Staff recommends the Board authorize staff to implement a one-week lag in the payroll period in order to (W eliminate the "projected" week. In addition, staff recommends that the Board authorize staff to compensate employees for the week of lost wages by giving employees the equivalent of one week's pay at the time the one-week lag is implemented. Staff recommends implementing the one-week lag in the pay period beginning August 16, 2013. Additionally, staff recommends that the Board authorize the necessary Budget Amendment to fund the financial impact of compensating employees for the lost week estimated at$781,621 on a countywide basis. Attachments Worksheet—Projected Pay Week-Estimated Financial Impact APPROVED FOR AGENDA: A. aO/3 tseph.Tkaird, County Administrator ate Admin. Approval Date Le al P •12-•I Budget 1 l Dept. Risk M t. 25