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Nebraska Brand Committee approves 10 percent cost of living adjustment

By Spike Jordan for Tri-State Livestock News

ALLIANCE, Neb. – The Nebraska Brand Committee board of directors voted 3-0 to approve a 10 percent cost of living allowance increase for committee employees during a Tuesday, June 14 special telephone meeting. The pay increase will be retroactive to July 1, 2021, the start of the current Nebraska fiscal year.

Shortly after convening the Tuesday morning meeting, Brand Committee Chairman Adam Sawyer, and board members Duane Gangwish and Tanya Storer voted to enter executive session to “consider compensation adjustment to improve recruitment and retention.” Board member Chris Gentry was absent from the call.

In a short discussion after the committee moved to exit closed session, Storer said that committee employees had not received a cost of living increase since 2016, and that the 10 percent increase would still allow the committee to stay within the budget appropriation for salary that was approved by the legislature in 2021.



Gangwish said that the compensation adjustment would be across the board for all employees, and would be based on the time and service for full-time staff, and for the committee’s intermittent brand inspectors will be based on the inspections performed.

Additionally, starting July 1, the IRS mileage reimbursement rate is set to increase to 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The mileage increase, which was announced by the IRS on June 9, will help the committee’s brand inspectors offset inflation-driven fuel costs.



Inflation and high gas prices are just a few of the woes facing the State of Nebraska. Nebraska’s unemployment rate is currently the lowest in the country — a historic 1.9 percent – which means a highly competitive market that makes it hard for state and private employers to retain workers.

TAKING CARE OF PEOPLE

Brand Committee Executive Director John Widdowson said in a telephone interview Wednesday that the committee has tried to increase the pay, benefits, and general quality of life for brand inspectors, but that has been easier said than done.

“I hear from producers that ask why we don’t just pay brand inspectors more, and I wish it were that simple,” Widdowson said.

Unlike other Nebraska agencies, which get an appropriation of tax-payer dollars from the legislature’s general fund, Nebraska Brand Committee is a solely cash-fund agency. Its budget is entirely funded by the fees it collects from Nebraska cattle producers. However, the committee is still required by state law to submit a budget request to the Department of Administrative Service’s (DAS) Budget Division, which is responsible for compiling and issuing the governor’s budget recommendation. From there, the legislature’s Appropriations Committee takes up the governor’s recommendations and senators will adjust the amount that state agencies are allowed to spend on operations and employee salaries. Final appropriations are approved by the full body of the legislature.

A complicated set of rules puts restrictions on how money earmarked for salaries can be used, and places restrictions on carrying unspent salary money over to the next year’s budget. If there are any reductions to the amounts allocated for operations or salaries, the committee has to scramble and make do with less. And while Nebraska Gov. Pete Ricketts has consistently included a cost of living adjustment for state employees in his budget recommendation, the authority for the Brand Committee to spend its own money – on its own employees – has not always been there.

In more simple terms, The Brand Committee has to play “mother-may-I?” with the state and the legislature before it has the authority to use its checkbook. And that is, unfortunately, where politics comes into play.

APPROPRIATIONS BATTLES

Here’s a short history lesson.

During the 2017 Nebraska legislative session, the state faced a roughly $900 million budget shortfall, prompting then-Appropriations Committee Chairman Sen. John Stinner of Gering, to search for pots of unallocated money within in the state’s treasury to fill the holes.

Previous Nebraska Brand Committee boards had opted to stash funds in a “rainy day” cash equity account so that the agency could fund operations and still make payroll in the event something catastrophic happened. By 2017, that fund had swelled to several million dollars, making it a prime target for Stinner to go after.

An initial proposal to sweep $500,000 from the Brand Committee was later reduced to $100,000 when then-Brand Committee Executive Director Bill Bunce told Stinner that a sweep that large would put the committee in a position to where it would be dangerously close to not making payroll. However, the $100,000 sweep still prompted an angry backlash from Nebraska cattle producers, who felt that the Brand Committee’s funds belonged to producers and were not for the legislature to spend. The sweep was defeated on the floor.

Additionally in 2017, a group of large Nebraska Registered Feedlot (RFL) owners calling themselves “The Nebraska Beef Producers Committee” sued Bunce and the brand committee in an attempt to overturn the Nebraska Brand Act and prevent the committee from collecting inspection fees. The feedlots, some of which spanned across the inspected and non-inspected brand areas of Nebraska, were upset at having to pay inspection fees. While that lawsuit was dismissed by a Federal judge in 2018, the efforts to disband the brand committee did not end there.

In late 2019, Stinner held a joint Agriculture and Appropriations committee hearing to address what he perceived to be an “unsustainable” trend in the brand committee’s budget requests. He argued that comp-time paid to brand inspectors and expenses related to technology (which the legislature had asked the committee to implement) were draining the brand committee’s cash fund. Stinner’s analysis, among other things, failed to take into account that the brand committee’s revenue fluctuates with the cattle markets. But in a letter to Nebraska Cattlemen and the Nebraska Farm Bureau following the hearing, Stinner said that he had exhausted his attempts to work out a solution with the committee, and expressed intent to introduce a bill to do away with the brand committee altogether.

True to his word, Stinner introduced LB 1156 in 2020, which would have dissolved the committee, ended brand inspection in Nebraska, and transferred brand recording to the Nebraska Department of Agriculture. That prompted the brand committee to bring forward a hasty response, LB 1200, which was carried by Sen. Tom Brewer of Gordon, whose district is the largest part of Nebraska’s “cow county.” That bill contained sweeping reforms – including a fee reduction in an attempt to appease registered feedlots.

The Ag Committee hearing for both of those bills was a long, grueling affair, stretching well into the evening hours, prompting Brewer – a decorated former U.S. Army Special Forces Colonel – to remark that he would “rather endure a 12-hour firefight in Afghanistan” than fight over another Brand Committee bill.

In the end, neither bill advanced from the Ag Committee. Chairman Sen. Steve Halloran of Hastings sought an interim study in fall of 2020 to find a compromise between the feedlots and the cow/calf sector. During the course of those meetings, the Beef Producers Committee splintered when it was revealed that one of its members – Broken Bow-based Adams Land and Cattle Company – had filed a lawsuit* against the brand committee over a 2009 “sweetheart” agreement it had brokered to exempt brand inspections for cattle arriving at its registered feedlots from affiliated backgrounding yards.

While the other Beef Producers members had long complained, arguing that they were being charged twice for brand inspections, they were stunned to learn that Adams had effectively avoided brand inspections (and paying fees) for hundreds of thousands of cattle. (*The lawsuit over that 2009 agreement went to bench trial in Box Butte County District court in April 2022; however, the judge in that case has not handed down a decision as of press time).

During the 2021 session, Halloran introduced LB 572, which among other things reduced the brand inspection fee to $0.85 cents per head until July 1, 2023. Halloran hoped the fee reduction would address some of the complaints raised by Registered Feedlots. Reducing those fees forced the brand committee to run a budget deficit over the next two years and gradually spend down its cash equity fund, making that money less of a target for Stinner and the appropriations committee to sweep.

At the end of the 2022 session, Stinner reached his two-term limit in the legislature, ending the largest threat the brand committee has faced. Analysts from DAS Budget Division have also attended regular Brand Committee meetings since June 2021, which helps the state budget office better understand the pressures and constraints of the agency’s unique mission. Those two things will hopefully help the brand committee access the funds it needs to continue taking care of the brand inspectors.

And when brand inspectors are taken care of, so are producers.

FINAL PUZZLE PIECE

Widdowson said that the increase to employee compensation was “the final puzzle piece” for the Nebraska Brand Committee.

“We’ve asked our staff to cinch up and ride out these last few years,” Widdowson said. “It was tough, and we asked them to sacrifice a lot. But I feel good about where the committee is at today.”

“Our inspectors have families too, and we have to take care of them,” he said.

The aftermath of a critical 2016 state audit that identified deficiencies with the brand committee’s records and business practices has led the brand committee to change more over the last 6 years than at any other point in time since the legislature created it in 1941. New technologies, such as electronic records and time keeping, were developed and fielded at the recommendation of the legislature and state auditor. As with any technology, there are still bugs that need fixed, often times to the frustration of rank-and-file brand inspectors and producers.

Changes to how brand inspectors kept track of hours and a cap on overtime created further pinch points between producers and the committee, however, the brand committee was backed into a corner by Stinner and the appropriations committee. Since comp time is paid at time and a half, it was an expense that had to be controlled. Further changes, including changes to the law requiring 48-hour notice when requesting a brand inspection, were unpopular with some producers, but were deemed necessary by the committee to help inspectors with their work/life balance and prevent burnout in the ranks. Charging mileage to the point of inspection, instead of a flat service fee, was also a needed change to help the committee manage costs and keep the legislature from breathing down its neck.

Other employee benefits have been offered by the brand committee’s board to help keep brand inspectors with the agency, including a December 2020 beef stipend given to inspectors to pay for beef processing at a locker plant of their choice, and a performance bonus was given in June 2021. The committee has sought creative ways to offer retention and a recruitment incentive, but low unemployment in the state has made it increasingly difficult to compete with the private sector.

There are still challenges ahead with the agency responsible for inspecting and verifying ownership for more the millions of head of cattle that pass through Nebraska annually. But the pay increase should move the needle as far as employee morale is concerned.

 


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