C.A.F.R., FY 2004-05 - Laserfiche WebLink

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MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Paris, we offer readers of the City of Paris, Texas' financial statements this narrative overview and analysis of the financial activities of the City of Paris for the fiscal year ended September 30, 2005. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal as well as the City's financial statements. Management Change In March of 2004 the Paris City Council performed its annual evaluation of the city manager rating him 2.67 on a scale of 5. This rating placed the manager in the "good" range (2.5 to 3.4) of the evaluation scale. Having completed the public evaluation, the Council then voted 5 to 2 to terminate the manager who was in his 17th year of service as city manager in Paris. The council expressed a need for the City to be a leaner and more efficient operation. In the following months, the City pressed forward with necessary business. The Council appointed the public works director to act as interim city manager. This individual carried the City through a difficult summer budget process. Direction was received from the Council to make budget cuts wherever possible with the long-term goals being to reduce outstanding debt and lower the tax rate. Specifically, the interim manager was asked to trim 5% off the 2003- 04 general fund budget. The 2004-05 budget later presented to the Council had reduced the general fund budget by 7.08% compared to 2003-04 budget numbers. From that point the Council reviewed the proposed budget making further reductions but also some increases. The table below outlines the changes from the 2003-04 budget to the adopted 2004-05 budget. Reductions Budget Final 2003-04 to 2003-04 2004-05 Final 2004-05 General Fund $22,508,606 $20,692,745 $ 1,815,861 Water & Sewer Fund 10,963,673 11,111,798 (148,125) Community Development 945,000 521,000 424,000 Think Child Safety 23,025 13,525 9,500 CJD (Drug Task Force) 607,131 912,391 (305,260) Paris Economic Development Corp. 1,857,412 1,812,274 45,138 Special Revenue 38,390 38,390 Health Department 919,526 933,534 (14,008) Total $37,862,763 $36,035,657 $ 1,827,106 The major reductions accounting for the decreases above were: 1. The Texas Municipal Retirement System contribution ratio was changed from 2 to 1 down to 1.5 to 1. 2. City employees began to contribute $50 per month toward the cost of their health insurance, and the City lowed its contribution by $50. 3. Longevity pay for non-civil service employees was eliminated. 4. Sell back of excess vacation and sick leave at discounted rates was eliminated. 5. Thirteen full-time positions were eliminated. 6. Two part-time positions were eliminated. 7. Three full-time positions were reduced to part-time positions. 8. A second pay plan was adopted affecting all new hires and current employees who promote to a higher position. The new plan is 8.9% less than the old plan. The Council next appointed a retired former metroplex area city manger to serve as interim and began to look in earnest for a permanent replacement. Using the services of a professional search firm, the Paris Council interviewed seven candidates recommended to them. In November 2004, the Council selected its new city manager who was to start December 1, 2004. 3