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A Decision of the Michigan Civil Service Commission Thomas M. Wardrop, Commissioner and Chair James Barrett, Commissioner Charles Blockett, Jr., Commissioner Robert W. Swanson, Commissioner ISSUED APRIL 1, 2013

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ERB 2012-008 TRN 2011-002 Ref. No. 2011-04566 CS-138 511S2200001

As provided in civil service rule 1-15.5, the civil service commission has reviewed the recommended decision of the employment relations board in ERB 2012-008. Because a quorum of the commission does not concur that the application for leave to appeal should be granted in this case, the decision of the technical review officer in TRN 2011002 is affirmed as the final administrative decision in this matter. Commissioners Wardrop and Barrett would deny the application for leave to appeal and accept the majority recommendation of the Board for the following reasons: This appeal challenges staff approvals for the department of military and veterans affairs to make disbursements for nursing care services outside the classified service. The initial staff approval was based on standards in chapter 7 of the civil service rules and regulations that required savings of at least 5% of average annual costs when compared to having services performed by classified employees. Here, the initial staff calculation based on standards established by the state personnel director showed savings of over 45%nine times the minimum required savings. The technical review officer found that savings still exceeded 40% under even more conservative methods. AFSCME has offered no real challenge to the central issue authorized for review in a technical disbursement complaint, whether the approval met the requisite standard. Because this approval so clearly exceeded the cost-

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savings threshold, the TRO committed no error in affirming the approval and there is no basis under the civil service rules or regulations to modify the approval on appeal. Rather than addressing cost savings, AFSCME has presented allegations over the competence and integrity of the company ultimately selected by the department of military and veterans affairs to provide the contractual nursing care services. The commission has never approved individual contracts or monitored performance of contractors, and the civil service rules and regulations do not authorize such review either. 1 The allegations made by AFSCME address contractor performance and policy decisions of the host agency. These policy choices are subject to many forms of oversight, including executive oversight from both the departments leadership team and the governor as head of the executive branch; legislative oversight as to policy and appropriations; judicial oversight from the courts; legal oversight from the attorney general; and administrative oversight from the state administrative board and department of technology, management and budgets procurement office. While the commission retains authority to approve disbursements for personal services under the standards that it has promulgated, the civil service rules and regulations do not authorize the commission to substitute or override departmental policy judgments as to the merits of whether to use contractual services to fulfill departmental mandates.
See SPD 2011-19, fn 9, which cites ten previous cases where the commission has affirmed this understanding of its role.

While the policy concerns raised by AFSCME may be entitled to review in the other forums mentioned earlier, the technical disbursement complaint process is not designed or authorized to make these investigations. Accordingly, the application for leave to appeal must be denied. Commissioner Blockett would grant the application for leave to appeal and remand to the employment relations board to hold oral argument, including allowing all interested parties to present additional evidence for the following reasons: The approval or disapproval of personal service contracts is a core civil service responsibility put in place to protect the merit system from a spoils system or cronyism. In 1988, the civil service commission created a blue ribbon committee to review civil service. This committee consisted of former governors G. Mennen Williams and George W. Romney; Judge Wade H. McCree, Jr., former United States Court of Appeals judge and U. S. solicitor general; Michael M. Glusac, director of governmental affairs for the Chrysler Corporation and former mayor of Highland Park; M. Jane Kay, vice president for Detroit Edison; Douglas A. Fraser, former president of the United Auto Workers; Charlotte Copp, former Michigan president of the League of Women Voters; William A. Ryan, former speaker of the Michigan House of Representatives; Robert F. Magill, retired vice president of labor relations for General Motors; Jane Hale Morgan, retired director of the Detroit Public Library; Otis M. Smith, former Michigan Supreme Court justice and

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retired vice president and general counsel for General Motors; David Lawrence, publisher of the Detroit Free Press. Edward L. Cushman, professor of political science at Wayne State University and consultant to four governors, served as the chair of this committee. The unanimous report of the Citizens Review Committee on Civil Service issued in July 1988 states, The concern that the merit system may be undermined by the expanding use of contractual personal service is a serious one. One of the recommendations of the Citizens Review Committee was that A study should be made of the current system to review and approve requests for contractual personal services in order to determine if system modifications are necessary to uphold the merit system. It may be that the state personnel director or the Commission, or both, should become more involved in certain types of personal service contracts. The contracting out of work previously performed by Resident Care Aides (RCAs) at the Grand Rapids Home for Veterans, which resulted in the layoff of 160 to 170 RCAs was a major game changer and should not have been allowed to occur.

The argument of awarding contracts on the bases of cost saving and efficiency can result in the contracting out of virtually any civil service classification. Yes, we should be concerned with efficiency, but we also have responsibility for merit, fitness, and a quality workforce based on a merit system. Since the 1970s, the state classified workforce has shrunk from 70,000 to less than 49,000 employees. The commission should revise chapter 7 to require that any contracts that will result in the layoff of state classified employees will be held to a higher standard and scrutiny. We should guarantee employee organizations an oral argument and require that contractual employees education, experience, and training should equal that of state employees. We should also allow the administration, office of the state employer, unions, and limited-recognition organizations an opportunity for input on the revisions to chapter 7. Commissioner Swanson would grant the application for leave to appeal and remand to the employment relations board to hold oral argument, including allowing all interested parties to present additional evidence.

Notice: This final decision of the civil service commission is subject to review in the Michigan circuit court. A claim of appeal must be filed within 60 calendar days after the date this decision was issued. A claim of appeal must name the Michigan civil service commission as an appellee and must be served on the Michigan civil service commission at its main office, located at 400 South Pine Street, Lansing, Michigan 48913.
(See Michigan Court Rule 7.117 and Michigan Compiled Laws 24.301-24.306.)