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salary costs, but accomplishes the need to recognize more of those costs when earned. This may also benefit the department in its competitive pay standing, as benefits are generally not considered by employees to be dollar for dollar equivalents to current compensation. The key to a successful compensated absence plan is the establishment of accumulation limits and the enforcement though a ''use it or lose it" policy. This enforcement is easier with a PTO system, as sick leave tends to complicate the policy. As described earlier in the background section, the department does have limitations, but we are suggesting lower limits. We also suggest that limits be enforced on a monthly or quarterly basis to stagger the usage for staffing reasons and to place the responsibility to monitor and schedule the use of those benefits upon the employee. Summary We believe there are changes that could be implemented to address the major concerns revealed to us during this project. The changes must be based on both what is good for the department and fair for the employees. Changes can be phased-in or grand fathered- in to protect benefits already earned by employees, allowing them time to either use them or be paid for them. Although we have heard differences of opinion as to whether this liability should be of concern, the fact that tl:1:is study was requested makes it a concern. The payment of these liabilities needs to be incorporated into the budget and annual funding process. We caution against taking the approach of ignoring the liability, and considering it a stable future funding issue that will somehow take care of itself. We hope this report addresses your primary concerns in regards to compensated absences. Please let us know if we can be of further assistance in this matter. 4 ~/ ~ LL-L';04; Malloy, Montague, Karnowski, Radosevich &Co. P.A. August 31,2001