Economic Vitality Incentive Program (EVIP)
Beginning October 1, 2011, units of local government (local unit) receiving statutory revenue sharing under PA 140 will now have to meet certain requirements to be eligible to receive a percentage of the total revenue sharing appropriated. This is known as the Economic Vitality Incentive Program or EVIP.
The EVIP defines a few broad elements that should be included but recognizes each unit of local government is unique and therefore allows each local unit to identify its own set of financial and operating measures and results.
The EVIP program is comprised of three components: Accountability and Transparency which includes the Citizens Guide and Performance Dashboard, Consolidation of Services, and Employee Compensation.
ACCOUNTABILITY AND TRANSPARENCY
The purpose of the Citizens’ Guide is to provide a more transparent understanding of local unit finances by the citizens. The intent is to provide a simple graphical presentation of the most important financial measures, in a manner that can be easily understood b y the average citizen. While the local unit has flexibility regarding the contents of the Citizens’ Guide, it must include recognition of its unfunded liabilities. The local unit has the latitude to create the guide in a manner best suited for the local unit.
The Performance Dashboard should include those financial and operating measures that are most important to the government and its citizens. Meeting this criterion will require the local unit to report on measures such as fiscal stability, economic strength, public safety, quality of life and other measures the local unit select that are relevant to the local unit’s strategic goals and objectives.
These items are due to the State no later than October 1, 2011.
CONSOLIDATION OF SERVICES. To satisfy the second requirement, no later than January 1, 2012, communities must produce a plan with one or more proposals to increase existing levels of cooperation, collaboration and consolidation within their jurisdiction or with other jurisdictions. The plan must list previous efforts of cooperation, collaboration and consolidation and with any cost savings and estimates of any potential savings of future efforts.
EMPLOYEE COMPENSATION. For the third and final requirement, by May 1, 2012, communities must certify they INTEND to implement the following employee compensation criteria for any new, modified or extended contract or employment agreements for employees not covered under contract or employment contract:
a. New hires eligible for retirement plans will be placed on retirement plans that cap annual employer contributions:
i. 10% of base salary if they are eligible for social security
ii. 16.2% of base salary if they are not eligible for social security.
b. For defined benefit plans:
i. A maximum 1.5% multiplier if employee is eligible for social security. If there is no retiree health care, a maximum 2.25% multiplier.
ii. A maximum 2.25% multiplier if employee is not eligible for social security. If there is no retiree health care, a maximum 3.0% multiplier.
c. Also for defined benefit plans the final average compensation shall be computed using at a minimum 3 years compensation and can’t include more than 240 hours of paid leave. It also cannot include over time.
d. Health care premium costs for new hires shall include a minimum employee share of 20%, OR the employer’s share shall be cost competitive with the new state preferred provider organization health plan on a per-employee basis.