Job cuts loom at Personnel

Other state agencies face higher fees

PATRICK CONDON, THE OLYMPIAN

Originally published Wednesday, April 3, 2002

OLYMPIA -- The Washington Department of Personnel could be forced to reduce its staff by more than one-fourth if it can't find a way to bridge a $1 million shortfall in its operating fund.

In real numbers, agency officials say, that would mean eliminating 19 full-time positions out of a total of 71 -- if the deficit isn't erased.

"It's not a great situation," Sharon Whitehead, the department's assistant director for client relations, said Tuesday. "That is a big chunk, and we're concerned."

The Department of Personnel processes paychecks and benefits for all state employees and is funded almost entirely through processing fees paid by state agencies. Those fees haven't gone up since 1991, Whitehead said, and processing costs have been outpacing the amount raised by the fees.

Those costs have been incurred by a number of additions to state employee benefit programs, including a new variation on the Public Employee Retirement System and the addition of benefits for same-sex couples, among others, Whitehead said.

The department's computer system dates back to the 1970s, Whitehead said, making it increasingly difficult to continue adding new benefit programs.

"This thing is like a '77 Volkswagen pulling a trailer and a boat," Whitehead said.

It's getting hard -- and therefore more expensive -- to find programmers who understand the outdated software, much of it written in ancient computer languages like FORTRAN and COBOL, she said.

"They're not even teaching that in the schools anymore," Whitehead said.

Personnel officials shared their situation recently with state budget writers at the Office of Financial Management.

"We know they've got a situation, and we'll work with them to fix it," said Wolfgang Opitz, OFM deputy director.

What's ahead

A likely scenario is a temporary increase in processing fees for state agencies, allowing the department to cover its costs and finish incorporating the new benefit programs into its computer systems, Opitz said.

Agencies pay $2.35 for every paycheck the department processes, and $1.30 every time an employee record is adjusted for any reason -- such as for a promotion.

While the amount of a temporary increase has not been set, Opitz said it would not add up to overly burdensome costs for state agencies. For instance, OFM would probably face a one-time increase of about $3,000, he said.

OFM and the department have until June 30, the end of the 2001 fiscal year, to bridge the $1 million deficit.

Both Whitehead and Opitz say the long-term solution is a new computer system for the department, but they added that's easier said than done. For one thing, Whitehead said, estimates show it would cost anywhere from $40 million to $60 million.

"If legislators are looking at a choice between, say, protecting a few more abused children and buying some new computers for the Department of Personnel -- well, you can see which one is more attractive," Whitehead said.

"Our system is still cutting paychecks. It's not broken; it's just really old."

If the department were to go through the downsizing, Whitehead said it would most likely have to scale back the services it offers to state agencies, shifting mainly to a paycheck operation and leaving calculation of benefits to the agencies themselves.

Specific employees have not yet been told if their jobs are on the chopping block, Whitehead said, although there has been plenty of speculation and worry among the department's rank and file.

"These folks have worked so hard," Whitehead said. "I would say they're pretty strained, they're tired, and now they're concerned about their own future."

Patrick Condon covers state government for The Olympian. He can be reached at 360-753-1688 or pcondon@olympia. gannett.com.

The Olympian Copyright 2002

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