25 - Trasfer Fire Employees to TMRSNo. 25
TO: Mayor, Mayor Pro Tern & City Council
FROM: Grayson Path, City Manager
Gene Anderson, Finance Director
Thomas McMonigle, Fire Chief
SUBJECT: TRANSFER FIRE EMPLOYEES TO TMRS
DATE: August 22, 2022
BACKGROUND:
On June 13, 2022, the City Council heard a presentation on freezing the Paris Firefighter Relief
and Retirement Fund ("pension") while simultaneously issuing a pension bond and transferring
the Fire Department Employees to the Texas Municipal Retirement System (T RS).
On August 8, 2022, the City Council approved a Resolution for a Bond Agreement, a Resolution
approving an agreement with the Board of Trustees, and an Ordinance issuing a Pension Bond in
order to initiate this change. That has served as a first of two steps for council action.
STATUS OF ISSUE:
To complete our second step, tonight the City Council has an Ordinance approving TMRS
participation for all Fire Department members. This is a requirement of the State of Texas Statute
for choosing to join TMRS, 'I'MRS participation occurs the first day of the second month TMRS
receives notice of an election to participate. This will allow the employees to join on October 1,
2022 which corresponds to their amendments made to freeze the plan. Given the City has
previously excluded the Fire Department from TMRS, an ordinance will authorize the removal of
this exclusion and therefore their entry in to TMRS.
Adjustments have already been made to the Proposed FY22/23 Budget to account for a switch
from the existing Fire Pension to the new TMRS accounts for each employee. This has resulted
in a savings to the City as we have moved from a 14% contribution rate to a 5.1 % contribution
rate.
OPTIONS:
1. Approve an ordinance to authorize Fire Department participation in TMRS.
2. Request additional information and/or reject this ordinance. However, rejection and even
delay will complicate the approvals made on August 8, 2022.
RECOMMENDATION:
1. Approve an ordinance to authorize Fire Department participation in TMRS.
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF PARIS, TEXAS, ALLOWING EMPLOYEES OF
THE FIRE DEPARTMENT AS DESCRIBED HEREIN TO PARTICIPATE IN THE
TEXAS MUNICIPAL RETIREMENT SYSTEM ("TMRS"); PROVIDING FOR
REPEAL OF ORDINANCES IN CONFLICT; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City of Paris, Texas (the "City") is a municipality that participates in the
Texas Municipal Retirement System ("TMRS" or the "System") pursuant to the provisions of the
Texas Government Code, Title 8, Subtitle G, as amended (the "TMRS Act"); and
WHEREAS, §852.001 of the TMRS Act provides that a municipality may elect to have
one or more of its departments participate in the System; and
WHEREAS, pursuant to City Ordinance No. 1218 dated May 22, 1950, the City elected
to have all employees and future employees of the City departments named in such Ordinance
participate in TMRS, and such Ordinance specifically excepted the City's Fire Department from
participation in TMRS; and
WHEREAS, pursuant to City Ordinance No. 2062 dated December 13, 1971, and
effective as of January 1, 1972, the City elected to have all employees of all City departments
then existing or thereafter established participate in TMRS, but again specifically excepted the
City's Fire Department from participation in TMRS; and
WHEREAS, pursuant to City Ordinance No. 2352 dated September 12, 1977, the City
elected to have employees of the City's newly created Library Department participate in TMRS;
and
WHEREAS, pursuant to City Ordinance No. 83-060 dated September 26, 1983, and
effective as of October 1, 1983, the City elected to have "the employees of the Paris -Lamar
County Health Unit which acts as the Health Department for the City of Paris who are not
employees of the State of Texas and all departments now existing and those hereafter created,
except those employee[s] of the Fire Department who are included in or who are eligible to be
included in membership in Firemen's Relief and Retirement Fund of the City of Paris,
participate in the Texas Municipal Retirement System as provided in the TMRS Act"; and
WHEREAS, the City of Paris has a regularly organized Fire Department for which the
Firemen's Relief and Retirement Fund of the City of Paris referred to above (hereafter the "Fire
Fund") was established under Section 4 of the Texas Local Fire Fighters Retirement Act, Article
6243e, Vernon's Texas Civil Statutes (the "TLFFRA Act"); and
WHEREAS, the City Council of the City of Paris finds that it will be in the best interest of
the City to have existing employees of the Fire Department who are not participating in TMRS
pursuant to City Ordinance No. 83-060 and all future employees of the Fire Department
(collectively, the "Fire Employees") begin participating in TMRS on the same basis upon which
the other employees of the City participate in TMRS now; and
WHEREAS, the Fire Employees are not eligible to begin participating in TMRS until the
Fire Fund plan documents are amended to end the accrual of any new or additional benefits for
service for existing Fire Employees and to prevent future Fire Employees from participating in
the Fire Fund; and
WHEREAS, under Section 7 of the TLFFRA Act, the board of trustees for the Fire Fund
(the "Fire Fund Board") may change the benefits or eligibility requirements for benefits payable
from the Fire Fund and may change other requirements for the payment of benefits from the
Fire Fund if the changes are approved by (i) an eligible actuary selected by the Fire Fund Board,
and (ii) a majority of the participating members of the Fire Fund voting on the change by secret
ballot at an election held for that purpose at which at least 50 percent of all participating
members of the Fire Fund vote; and
WHEREAS, the Fire Fund Board presented an amended and restated Fire Fund plan
document (the "Amended Plan") to the participating members of the Fire Fund and on July 14,
2022 through July 16, 2022, an election concerning the Amended Plan was held by secret ballot
as required by Section 7 of the TLFFRA Act; and
WHEREAS, the Amended Plan provides that no additional benefits or service would
accrue or be credited to existing Fire Employees on or after the effective date of the Amended
Plan (the "Amended Plan Effective Date"), that no firefighters employed on or after the
Amended Plan Effective Date will be eligible to participate in the Fire Fund, and that the
Amended Plan Effective Date is the latest of the following:
(a) the City's adoption of an ordinance authorizing the issuance of the City of Paris,
Texas Pension Bonds, Taxable Series 2022;
(b) the execution of the Agreement Regarding Pension Obligation Bonds by the City
Mayor and the Chairman of the Fire Fund Board;
(c) the deposit by the City of Paris, Texas of a City contribution to the Fire Fund of an
amount equal to the proceeds from the issuance of the City of Paris, Texas Pension
Bonds; or
(d) October 1, 2022; and
WHEREAS, by a Resolution dated August 8, 2022, the Fire Fund Board found that the
Amended Plan had been approved by the actuarial firm selected by the Fire Fund Board and
had been approved by the Fire Fund participating members pursuant to an election held in
compliance with Section 7 of the TLFFRA Act, and the Fire Fund Board adopted the Amended
Plan and authorized the Fire Fund Board Chairman to execute the Amended Plan; and
WHEREAS, the Fire Fund Board Chairman has properly executed and delivered the
Amended Plan and has taken all other steps necessary to ensure that benefits and service will
cease accruing to the Fire Employees under the City Fire Fund on or before the Amended Plan
Effective Date; and
WHEREAS, on August 8, 2022, the City passed and adopted Ordinance No. 2022-048,
authorizing the issuance of the City of Paris, Texas Pension Bonds, Taxable Series 2022; and
WHEREAS, the Mayor of the City and the Chairman of the Fire Fund Board have
executed the Agreement Regarding Pension Obligation Bonds, dated August 8, 2022; and
WHEREAS, the City anticipates that the City of Paris, Texas Pension Bonds, Taxable
Series 2022, will be issued and the proceeds of such Bond issuance will be deposited by the City
as a City contribution to the Fire Fund in mid-September 2022, so that the anticipated Amended
Plan Effective Date will be October 1, 2022; and
WHEREAS, the City desires to have the Fire Employees begin participating in TMRS
effective on October 1, 2022, or as soon as possible thereafter as allowed under the TMRS Act
if the Amended Plan Effective Date is later than October 1, 2022;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
SECTION 1. The City Council of the City of Paris, Texas, on behalf of the City, hereby
exercises its option and elects to have the Fire Department's Fire Employees (defined above)
participate in TMRS as provided in the TMRS Act and on the same basis upon which employees
of the City now and hereafter participate in TMRS. In the following provisions of this Ordinance,
the "effective date" means October 1, 2022, provided, however, that if the Amended Plan
Effective Date is later than October 1, 2022, then the "effective date" will mean the first day of
the month after the Amended Plan Effective Date, unless the Amended Plan Effective Date is the
first day of a month, in which case the Amended Plan Effective Date and the "effective date" of
this Ordinance shall be the same date.
SECTION 2. All existing and future employees of the City's Fire Department who, on
or after the effective date of this Ordinance, receive compensation from the City and are
engaged in an appointive office or position with the City that normally requires services from
the person for not less than 1,000 hours per year shall be and are hereby required to become
members of the System.
SECTION 3. Pursuant to §853.105(d-1) and §853.303(a-2) of the TMRS Act, each
existing Fire Employee who qualifies for such credit shall be allowed "excluded prior service
credit" as defined in Section 851.001(8-a) of the TMRS Act. Excluded prior service credit has no
monetary value, may be used only to satisfy length of service requirements for vesting and
retirement eligibility, and may not be used to determine eligibility for or computation of
updated service credits under the TMRS Act.
SECTION 4. The City Secretary or her designee is hereby authorized and directed to
notify the TMRS Executive Director of adoption of this Ordinance and of the occurrence of the
events necessary to establish the Amended Plan Effective Date. The City Secretary or her
designee is further authorized to provide any additional information requested by TMRS
regarding the adoption of this Ordinance and/or the occurrence of events related to
establishing the Amended Plan Effective Date. The City Manager [and Fire Chief] or their
designees are hereby authorized and directed to take all administrative actions necessary to
give effect to this Ordinance as of its effective date.
SECTION 5. In the event that the Amended Plan Effective Date has not occurred on or
before December 31, 2022, this Ordinance shall expire automatically and be of no further effect.
SECTION 6. In the event that any prior ordinances of the City of Paris, Texas ("Prior
Ordinances") are in conflict with any provision of this Ordinance, then the conflicting provisions
of such Prior Ordinances are hereby repealed only to the extent necessary to allow the actions
authorized by this Ordinance to be given effect.
DULY PASSED by the City Council of the City of Paris, Texas, on the 22nd day of August,
2022, to be effective as described above in Section 1 of this Ordinance.
Paula Portugal, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney