03 City Council Min 11-21-05 - Laserfiche WebLink

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Regular City Council Meeting November 21,2005 Page 7 D. ORDINANCE NO. 2005-061: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AUTHORIZING AND ALLOWING, UNDER THE ACT GOVERNING THE TEXAS MUNICIPAL RETIREMENT SYSTEM, "UPDATED SERVICE CREDITS" IN SAID SYSTEM FOR SERVICE PERFORMED BY QUALIFYING MEMBERS OF SUCH SYSTEM WHO PRESENTL Y ARE IN THE EMPLOYMENT OF THE CITY OF PARIS, TEXAS; PROVIDING FOR INCREASED PRIOR AND CURRENT SERVICE ANNUITIES FOR RETIREES AND BENEFICIARIES OF DECEASED RETIREES OF THE CITY; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND ESTABLISHING AN EFFECTIVE DATE FOR SUCH ACTIONS. Tony Williams explained that this item and next item relate to the retirement. He told Council the updated service credit is annually brought before the governing body. If approved by Council, retirees would get a 70% of the CPI increase to help them keep pace with inflation. Eric Davis, deputy executive director for TMRS, explained the update is also inflation protection for the active employee. It updates the benefits based on the most recent three year salary history. The 2006 adoption would be based on the years 2002, 2003 and 2004. There is a cost this coming year of .16% in our contribution. Tony said the other item was set by Legislature in 1947, which did not include an escalator clause. They set a maximum rate instead of an actuarial rate, which was set at 12.5%. Tony said that about 150 cities in Texas had an actuarial rate which was a little above that. They as a system, are proposing to go back to the Legislature this next term to try to change the legislature. Since it has not changed at this time, we have to seek Council's permission to go over the 12.5% legislative cap. Mayor Fendley inquired as to the dollar amount on each one of these items. Mr. Davis said that changing the contribution limit doesn't affect the dollar cost, but is simply allowing the City to pay the calculated rate. Council Member Wilson wanted to know what it was last year. Gene Anderson told Council we were paying 12.78% for 2005. Council Member Wilson wanted to know what it was the year before and Mr. Davis replied 11.84%. Gene said you usually have a rate of three months in a fiscal year October, November, December, and the rate always changes in January. You have nine months of new rate. Gene told Council the dollar cost for updated service credit in annuity change is about $18,300.00 based on the .16% of payroll. Council Member wanted to know the whole dollar value. Gene said the total gross payroll was about 11.4 million. Council Member Wilson said we were paying approximately 1.43 million dollars into this fund. Mr. Davis said if the cap is not removed, the service credits cannot be adopted. Mr. Davis informed Council that the rate does several things, which includes paying in the month to month match as it accrues, paying .. .,.