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  Daily Briefing  
September 3, 2003

Federal employees in Monterey, Calif. could lose locality pay

By Tanya N. Ballard

Changes to the Office of Management and Budget's list of defined metropolitan areas is causing discomfort for federal employees in Monterey, Calif., who may lose locality pay status if the Federal Salary Council adopts the new areas in October.

Federal workers in 31 metropolitan areas, ranging from Atlanta and Washington to Huntsville, Ala., receive special locality pay, based on the cost of labor in each city. In the past, locality pay areas have been based on metropolitan statistical areas and consolidated metropolitan statistical areas (MSAs) that OMB defines according to population, population density and commuting information. Monterey County, Calif., was part of the San Francisco metropolitan statistical area until OMB revised its areas based on new information from the 2000 census. On Wednesday, advocates for federal employees in Monterey County told council members that the loss of locality pay would devastate the federal workforce in that community.

“A change in Monterey County's locality pay status threatens not only the employees' well-being, but threatens the viability of the agencies and their ability to fulfill their mandate,” Rep. Sam Farr, D-Calif., told council members Wednesday. “Frankly, nothing about Monterey County and its federal employees has changed since the council decision three years ago. What has changed is a line on a map, drawn by an agency that has no jurisdiction over locality pay or federal employees.”

Monterey received its locality pay status in 1999 and federal employees in that area began earning the higher salaries in January 2001. In 2003, locality pay for that area was 21.08 percent. The loss of that extra income is likely to send some federal employees looking for other employment, advocates testified Wednesday. The change would affect about 4,000 federal employees.

“Our most recent employees came here making their employment decisions on the availability of locality pay,” testified Gary Dent, president of the Federal Managers Association chapter in Monterey. “They have expressed a deep sense of betrayal with the current discussion about our losing the locality pay. They feel they were recruited with all cards on the table and now the conditions of their employment are being changed arbitrarily and capriciously.”

The Federal Salary Council, an OPM-run group of government officials and federal union leaders, makes an annual recommendation on locality pay areas to the President's Pay Agent, a group that includes OPM Director Kay Coles James, Labor Secretary Elaine Chao and OMB Director Joshua Bolten. The Pay Agent then recommends a course of action to the president. This year, the group decided to hold off on making changes to locality pay areas until OMB released its new list of MSAs in June.

A working group within the council is researching the new areas and is expected to make recommendations to the full council in the next few weeks. The council may adopt the new MSAs, stick with the old MSAs or develop its own locality pay areas.

The Federal Salary Council is expected to meet again in early October.

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