08-08-2023 - Laserfiche WebLink

Home Browse Search

contribution rate from 14% to 5.1% (the FY22/23 TMRS rate), and 16% to 7% for the employee — both proving to be significant annual savings to the City and employee. The City took on additional debt payment to fund this pension bond, but the ultimate long term cost benefit to the City of Paris of this bond far outweighs the ever growing unfunded liability the City would be facing were the pension to have continued on its previous trajectory. At the time of implementation, the City of Paris' Fire Pension was known as the least funded fire pension in the State of Texas at 28% funded. We are now fully funded and on course to sun setting this liability. Fifth, during the FY22/23, the City experienced greater than expected rate increases for its TML Health Care Benefit. This cost increase is primarily bom by the employee as the City pays a flat monthly amount that does not change unless approved by the City Council. The City Council agreed to increase the monthly contribution from $565/employee to $595/employee. This $30/month increase helped restore some of the balance that the increase in rates threw our program off for employees. On behalf of the City Staff, I would like to thank the City Council for all their support for our employees with the above much needed changes and improvements. In the Proposed FY23/24 Budget, we have included the following adjustments to further make positive impacts to our employee pay and benefits in order to attract and retain quality personnel in the service of our community. 1) A 2% Cost of Living Adjustment for all full-time positions, except the City Manager position. 2) A transition from biennial step increases / seniority increases for employees to an annual step increase / seniority increase program. 3) A $30/month increase in the City's monthly contribution for Health Insurance from $595/month to $625/month. 4) In lieu of #1, the Police Department sworn officers will see a sliding scale increase in between 2% and 8%. Regarding item #1 — annual COLAs will allow the City to try and maintain its pay program in comparison against our comparable communities and help avoid drastic changes at each pay study. Regarding item #2 — For non -civil service employees, the City incorporates an 8 step pay plan where a new step is reached every two years. In other words, an employee typically begins on Step 1 upon initial hire (unless a negotiated higher step is approved by the City Manager where appropriate) and will not move to Step 2 until their second year anniversary (two years later). This continues every other year until finally reaching Step 8 (in approximately 14 years). For civil service employees, their seniority levels work much the same as steps, therefore they reach the next level of seniority every other year. The result of this is employees, while receiving a cost of living adjustment is meant to account for rising prices in the market, do not receive a pay raise but every two years. The new program will take the existing 8 steps, and divide those out to make 15 steps with Step 1 of both plans matching and Step 8 of the current plan matching Step 15 of the new plan. The revised Step Plan has been included as Exhibit E. Therefore, after the same amount of time, the employee will reach the same pay rate, but they will enjoy pay raises each year instead of every other year, which will provide them a cumulative gain in their income over their tenure of service with the City. In order to effectively accomplish this, employees who received a pay increase in FY22/23 will receive their next pay increase on their anniversary one year later in FY23/24. Those however who were set to receive their biennial pay rate in FY23/24, thus did not receive a pay raise in FY22/23, will be moved to the next pay rate available on the new scale on October 151 (where they would have moved to under an annual increase were it have been available in FY22/23), and then again will move to the next step increase on their anniversary in FY23/24. This will prevent unfair compression among employees simply because of the riming of the implementation of this program and where they happen to be in their biennial pay increase process as compared to others. While there will be a higher than normal cost to the City to implement this in year 1, it should in theory resume our typical annual financial cost increase in year 2 and beyond as every employee will be receiving what we would consider a half increase under the proposed plan vs. a portion of the Page 9 of 23