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<br />ø Effective Plan Managen:ent, Inc. <br /> <br />c9Qn <br /> <br />Jim C. Mosley <br />President <br /> <br />October 11, 2004 <br /> <br />Mr. Larry Shaw <br />Interim City Manager <br />City of Paris <br />P.O. Box 9037 <br />Paris, TX 75461-9037 <br /> <br />.. . <br /> <br />Re: Benefits Review and Consulting Services Proposal <br /> <br />Dear Larry: <br /> <br />Thank you for the opportunity to meet with you and Mr. Gene Anderson to discuss the <br />prospect of providing our services to you once again. We enjoyed a lengthy and pleasant <br />relationship with you at the City of Duncanville and we are honored that your confidence <br />in our services prompted you to contact us once more. If we are fortunate enough to earn <br />your business we shall be pleased to work with you, Mr. Anderson and the City of Paris. <br /> <br />As you and Mr. Anderson have agreed, one of the most immediate changes to the benefit <br />plans sponsored by the City should be the implementation of IRC Section 125 Premium <br />Conversion Plan. The adoption of the Plan will allow eligible employees to pay for their <br />medical and dental premiums pre-tax. Participating employees will realize an increase in <br />net take home pay because of the tax-favored treatment that results from participation. <br />The City will recognize an immediate payroll tax decrease because of the reduction of <br />taxable income to employees. We shall provide the City with the Plan Document for a <br />premium conversion plan that is required by the Internal Revenue Code and the necessary <br />election fonn for employees. The City will realize immediate cost reductions as you <br />aware of over $3,000 per month based upon projections provided by the Mr. Anderson. <br /> <br />We will prepare the Plan Document and the necessary forms for an implementation date <br />of November 1, 2004 with the first year being from November 1, 2004 through December <br />31, 2004. The first Plan Year will be a short one. Subsequent Plan Years will operate on <br />a calendar/tax-year basis commencing January 1,2005. Meetings must be held to explain <br />the new approach and election forms must be distributed and collected prior to your last <br />payroll period in October if a November 1 date is to be accomplished. <br /> <br />104 Houston Street, Suite B . Roanoke, Texas 76262 <br />(817) 430-7100. Fax (817) 430-7105 <br />