02 City Council Min 07-27-04MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL
July 27, 2004
The City Council of the City of Paris met in regular session, Monday, May 10,
2004, 6:00 P.M. at Love Civic Center - North Hall, 2025 South Collegiate
Street, Paris, Texas. Mayor Curtis Fendley called the meeting to order with the
following Council Members present: Jim Bell, Jay Guest, Mary Ann Fisher,
Don Wilson, Karen Wilkerson, and Rick Poston. Also, present were Interim
City Manager Terry Townsend, Finance Director Gene Anderson, City
Attorney Larry W. Schenk and Assistant City Clerk Sherian Dixon.
Mayor Fendley indicated the first item was to discuss City Policy,
recommendations of the Benefits Committee and direction to City Staff on
accrued vacation time.
Mayor Fendley pointed out that the Council was furnished a copy of those
minutes from July 23, 2004 Benefits Sub-Committee meeting and said the term
forty (40) hours midway on the first page should read forty (40) days.
Councilman Guest, chairman ofthe Benefits Sub-Committee, related it was the
recommendation of the Committee that the accrual of vacation time for all City
employees be limited to forty (40) days maximum. He said this would be the
maximum number of days an employee would be entitled to be paid for when
leaving work for the City.
He continued that the Committee recommended that the City Staff investigate
and propose a process to manage down the amount of accrued vacation time for
those employees who currently have vacation days in excess of forty (40), such
as encouraging employees to take the vacation time, paying the employees for
the accrued vacation time, etc. Councilman Guest said the managing down of
vacation time could potentially take as much as five years.
He also said the Committee requested that the Staff review and report the
economic impact of reducing accrued vacation time.
Councilman Wilson asked how the Committee came up with forty (40) days.
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Councilman Bell explained at the last meeting, they started out with forty-five
(45) days, and because of the discussion that it needed to be managed down,
it was later reduced to forty (40). He indicated that he had originally asked for
the forty (40) day accrual cap with only a thirty (30) day severance pay.
Mayor Fendley asked about the sell back. Councilman Guest said that wasn't
addressed by the committee on vacation time, only on sick leave. Finance
Director Anderson explained that under current policy, only one week of
vacation could be sold back at 75%. He continued that when an employee
leaves the City of Paris, they can be paid, if they have been there ten (10) years
or longer, for up to thirty (30) days of accumulated vacation time at 100%.
Councilman Wilson quoted from a Benefits Survey that was given to the
Council last years saying the maximum days of vacation accrual was unlimited.
Finance Director Anderson agreed that the current Policy did not put a cap on
how much could be accrued, but how much an employee could be paid for.
Councilman Wilson asked if he had accrued six (6) months vacation time and
was going to retire, could he take that six (6) months vacation time as paid
vacation time. Finance Director Anderson explained that any vacation time had
to be approved by the department head, so it would have to be authorized by
the Department Head.
Councilman Bell said the purpose of this was so that the accrued vacation
would be managed down so that employees coming up on retirement would not
take off three days a week for six to eight months to use up their vacation. He
reiterated that he thought the recommendation should be forty (40) day accrual
max with a thirty (30) day sell back on retirement. He felt the employees should
either use it, sell it or lose it.
Councilman Wilson felt like it should be uniform for the whole City, because
if a department head like one guy more than another, he would let the one take
off more and not let the next day. Councilman Wilson also said he could be
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making the decision for himself and that wouldn't be fair, either.
Councilwoman Wilkerson wanted to know why the employees were allowed
to accrue vacation time at all. Councilman Bell explained because they can't
take it as they earn it on a monthly basis. Councilman Wilkerson wanted to
know why they didn't take it.
Councilman Guest said, in the past, some employees were allowed to build up
comp time and that comp time was taken in lieu of vacation time. Councilman
Bell indicated that this would not effect many of the employees because a vast
majority of the employees have under the original forty-five days discussed.
Finance Director Anderson said it was only about thirty (30) employees that
have over forty (40) days. He continued that there were various reasons for the
accumulation of vacation leave. He recalled a memo sent out by former City
Manager Malone that said if someone was taking off more than a few days off,
he did not want that charged to comp time.
Councilman Wilson wanted to know of the thirty (30) what percent was exempt
and non-exempt. Finance Director Anderson said that was about three (3) or
four (4) department heads.
Councilwoman Fisher wanted to know if the fire department and ambulance
service worked a year and one-half to other employees one year. Mr. Anderson
explained that forty (40) hour a week employee works 2080 hours in a year and
an employee who works twenty-four (24) hours on forty-eight (48) off, works
2912 hours in a year.
Councilwoman Fisher wanted to know if these were some of the people who
have trouble getting their vacation because of short staff. Mr. Anderson said
there were a number of things that would keep them from taking vacation, like
a police investigation or things of that nature.
Councilman Wilson asked if the amount of vacation time is calculated on the
days or number of hours worked, does this mean Civil Service employees
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accrue more vacation time in a year than other employees. Mr. Anderson
wasn't sure exactly how their accrual worked, but when they take a day, they
are charged twelve hours, if they take a full shift, that is two (2) twelve (12)
days.
Councilman Bell made a motion that the recommendation to staff was a
maximum of forty (40) days for accrual for vacation time, with a sell back of
thirty days on severance or retirement from the City. The motion was
seconded by Councilman Guest and carried 7 ayes, 0 nays. Mayor Fendley said
that resolution would be brought back at the next Council Meeting.
Mayor Fendley indicated the next item was discussion of City Policy,
recommendations of the Benefits Sub-Committee and possible action and
direction to City Staff on accrued sick leave.
Councilman Guest related that the Committee recommended that the
accumulation of 135 days sick leave in the current personnel policy remain
unchanged, but that there would be no sell back. Councilman Guest made a
motion to accept the recommendation which was seconded by Councilman
Poston. The motion carried 7 ayes, 0 nays.
Mayor Fendley indicated the next item was discussion of City Policy,
recommendations of the Benefits Sub-Committee to City Council and possible
action and direction to City Staff regarding retiree benefits.
Councilman Guest addressed the current City Policy as addressed in Resolution
No. 91-089, which says the city will pay the cost of a retired employee's health
insurance coverage, should the employee retire before the employee is eligible
for medicare benefits, the time frame beginning the date the employee retires
until such time the employee becomes eligible for medicare. He said the
Committee's recommendation was in two parts.
First, he continued, in regard to new employees, those employees will be hired
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under a policy whereby they will be entitled to participate in the City's health
insurance program which is in affect at their retirement, if they bear the full
cost of that coverage and should be given notice to that affect when they are
hired.
Councilman Guest said, secondly, said they discussed the Rule of 85 and the
Rule of 80. He said the minimum number of years of service to be covered by
paid health insurance is twenty (20) years. He explained that an employee
qualifies under the Rule of 80 when their age and their years of service equal
eighty (80).
City Attorney Schenk reminded the Council that any recommendation that was
approved would have to be researched because of State Laws concerning rights
of retirees and their benefits.
Councilman Bell said that he wasn't sure these recommendations would
completely turn around the current system, which is in trouble, but it was
certainly a step in the right direction.
Councilman Wilson suggested giving them a package deal of "X" amount of
dollars that could be used to pay part of the benefits and extend the employees
time out until age sixty-five (65).
Councilman Poston said they were doing something similar to that at Kimberly
Clark. He explained that plan had an equation of years of service and age plus
"X" amount of dollars that you could choose how to use for your medical
insurance.
Councilman Wilson felt like the reason the Council was at a crossroads now
was because of when the resolution was put into effect, the insurance was only
$147.00 per month and now it is $500.00. He indicated over a period of time,
this decision will be taking a huge chunk out of the budget. He felt like, in
addition to the Rule of 80, there ought to be a limit put on it. Councilman
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Poston agreed the Rule of 80 is not the end, but just the beginning.
Councilman Wilson referred to the Benefit Survey where the insurance benefits
were all over the page. He quoted the dependent coverage last year at the City
of Paris was $7.65 and in other cities, it is over $100.00. Councilman Wilson
felt like it was unfair to charge $500.00 per employee and the family total was
only $220.00. Finance Director Anderson said those figures did not reflect the
changes made in May, when they adopted their new insurance plan and those
premiums were more equal. Under the new plan, the premium for family is
$278.00, for a dependent, $80.00 and for a spouse $178.00. Mr. Anderson said
the question is how do you transition from where we are now, with the City
bearing the full weight of the premium for the retirees to the point where the
retiree bears the full weight of the premium.
Finance Director Anderson said that they are drafting a new personnel policy
and one of the things they haven't discussed yet is this issue. There is a
segment already drafted that says that employees hired after a certain date will
be responsible for 100% of the premium and current employees will have
sliding percentage scale on what they would contribute depending on when
they were hired and this would eventually ease us into everyone paying 100%.
Mayor Fendley thought the City Council would like to see the draft of the
Personnel Policy, that would help them determine how to handle that.
Mayor Fendley said he felt that if the employees were having to pay for the
insurance, the retirees should have to pay, also. Mr. Anderson said that was in
the draft, that the current retirees would have to pay what the current employees
have to pay.
Mayor Fendley asked the Council if they would like to address just the (A) part
of this recommendation of the (B) part, or both. Councilman Guest said the
Committee recommended that all new hirees would not be offered the program.
Councilman Bell said the Rule of 80 might be effected by the proposed
Personnel Policy so he felt that should be looked into first. Mayor Fendley
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asked that Mr. Anderson get a rough copy of the Personnel Policy to the
Council.
A motion was made by Councilwoman Fisher to accept the Sub-committee's
proposal that new employees will be hired under a policy where they will be
able to participate in the City's health insurance program which is in effect at
their retirement, provided those employees absorb the full cost ofthat coverage.
Which coverage will end at age sixty-five or when they become eligible for
Medicare. The motion was seconded by Councilman Poston and carried 7 ayes,
0 nays.
Mayor Fendley read the next item, which was discussion of City Policy,
recommendations of the Benefits Sub-Committee to the Council and possible
action and direction to the City Staff regarding employee participation in the
cost of health insurance.
Councilman Guest said the Committee made no recommendations as such but
that the City should obtain the services of an insurance consultant for the
purposes of designing a new health insurance program and to bid out such
insurance program. He said it would be a conflict of interest for that consultant
to participate in the participating in offering or providing the insurance
products themselves.
Councilman Wilson said that since the next time they could get bids was in
May, they have plenty of time. Councilman Guest said he felt the employees
should have the opportunity to participate in a cafeteria plan where they could
choose the coverage they wanted. Mr. Anderson said that they talked about
going out for proposals for that. He also talked to Texas Municipal League to
see if there was an option under the current plan to do this, who said they
would bring him back a proposal.
Councilman Guest did say the Committee's recommendation was to hire a
consultant.
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Mayor Fendley said the next item was discussion and consideration of possible
direction to City Staff for the proposed Financial Year 2004-2005 City Budget.
Interim City Manager Terry Townsend said that the Council had received the
draft which has a 7.08% cut which is $1,593,562 taken from the General Fund.
Mr. Townsend suggested that these funds could be used to reduce the debt,
decrease the tax rate, or various other priorities set by the community and the
Council. He did say that although these cuts have been made, his goal was to
maintain city services and programs that the tax payers have come to enj oy. He
indicated that all the budget changes were a reflection of his own beliefs, and
not to any specific directions from the Council to cut any certain services or
departments.
Mr. Townsend said of these items were already discussed in the Sub-
committee. He recommended changing the Employee Pension Fund match 2
to 1 to 1 to l, which would be equivalent to a savings of $280,587.00. He
suggested that the contribution on health insurance for employees and retirees
at $50.00 per month per person would be equivalent to $250,549.00. He
recommended that there be no stability pay for a savings of $76,050.00. He also
recommended there be no sell back of sick leave or vacation which is
equivalent to $81,665.00. He finally recommended that the workforce be
reduced by fourteen (14) positions to include three fire fighters, $132,290.00,
2 police clerks, $61,751.00, 2 library clerks, $62, 243.00, 1 library para-
professional, $38,436.00 and 6 public works mechanics, $263,754.00 including
benefits. He noted that the reduction in the garage would mean closing the
garage completely and that work would be subbed out to local shops, which
would mean an increase in fees for that work.
He did note that the TXU Franchise fees were not included in the budget
numbers.
Finance Director Anderson related that they received the certified tax roll the
day before from Lamar County Appraisal District for a total taxable value of
$1,136,263,007.00, which made the current property tax revenue come in
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$41,940 more than he had estimated.
Councilman Wilson said that makes this budget within $200,000.00 of being
a balanced budget, to the good.
Interim City Manager Townsend reminded the Council of the non-profit
organizations who are not in the budget now but which were asking for
contributions because he has had lots of phone calls.
Mr. Anderson said the average home value in the City, which changes every
year, is $55,598.00 for the 2004-05 year, which is $386.00 for taxes.
Councilman Wilson said that the income from the tax rate has gone up
tremendously, as well as the valuation of their property, and the citizens are
feeling this. He said the problem was we keep raising taxes and people are not
wanting to locate here because of the high tax rate.
Councilman Bell requested copies of Mr. Townsend's executive summary and
copies of Mr. Anderson's summary for the Council.
Councilman Poston asked what the discretionary dollars were for not for
profits.
Mr. Townsend said it was about $60,000.00. Mr. Townsend said the Visitors
and Convention Council had been separated out.
Councilman Wilson asked what the next step was. Mayor Fendley said it was
to set dates for Budget Workshops. He suggested they could look at it 2, 3, 4
or 5 departments a night or however the Council wanted to do that.
Mayor Fendley suggested setting aside sometime during the next two scheduled
City Council meetings, August Sth and August 9th, to discuss the budget.
Councilman Wilson didn't feel like we should be scheduling if we weren't
going to discuss it because it wouldn't be fair to employees to show up and
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wait if it wasn't going to be discussed.
City Attorney Schenk said there needs to be a formal budget hearing done to
formally adopt the budget with a minimum of ten (10) days published notice
in advance of that hearing. He explained that they also had to have a formal
hearing to adopt the amendments to He continued that they can have as many
meetings as they wanted but must give notice of those meetings.
It was agreed to have a budget workshop on Tuesday, August 3rd at 6 p.m. and
to also have budget workshops at the end of the City Council Meetings on
Thursday, August Sth, and Monday, August 9tn
On discussion of future agenda items, Mayor Fendley said he would like to
appoint a committee to look at privatization of various city services, which
could be put on the Agenda for August 9tn
Mayor Fendley opened the floor for any employee would like to address the
Council about the benefits, requesting that they make their comments concise,
to the point and not repetitive. He restricted the time to thirty (30) minutes for
comments.
Mike Alexander, Code Enforcement Officer, for the City of Paris, came forward
saying that he had been a City employee for nearly twenty-one (21) years. He
informed the Council that what they were doing might determine whether or
not he retired. He said when he came to work for the City, he was told that if
he would come and mow some lots, and tear down some house and move some
vehicles, then the City would take care of him after twenty (20) years and he
did all that. He said didn't go to work here because the City of Paris had the
best money, but it had the best benefit package. He continued that he felt now
the City of Paris was saying "April Fool." He also noted that if the City of Paris
was broke, someone hasn't led we1L Mr. Alexander also said that it takes more
than time to take a vacation, it takes money. He explained that the City sent
him to get certification and knowledge but they wanted him to stay with the
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City and now they don't want to pay stability pay. He reminded the Council
that they had been talking about saving money and asked what about the nine
(9) laptop computers they were using anymore.
Councilman Guest asked Mr. Alexander if retiree health benefits were a part
of his package when he went to work. Mr. Alexander replied yes. Councilman
Guest said that benefit did not start until 1990 for that. Mr. Alexander said that
the Council was talking about stopping the sick leave sell back and some
people who work for the City of Paris depend on that sell back to buy
Christmas. He said a deal is a deal is a deal and there was other places the
Council could cut.
Jim Bryan from the Parks Department came forward saying he was a new
employee and had worked for the City for one (1) year. He asked what was the
use of working without benefits and stability pay. He told the Council what
they would have is a bunch employees that don't care and a bunch of things
that don't get done. He continued that the employees need something to work
for.
Chuck McMellon, a paramedic, came forward, saying he's been a paramedic
for twenty years. He explained the cuts proposed by Mr. Townsend took
$5300.00 out of his pocket a year, $2400.00 a year from TMRS, $600.00 a year
for insurance, $720.00 for longevity pay, and his sell back, $1600.00 a year,
which he used for Christmas, which isn't even counting retiree benefits. He
said he has gotten a$5.00 raise for the past twenty (20) years. He said when
someone retires at age sixty (60) or sixty-two (62), the Council was wanting
retirees to pay $600.00 to $700.00 for insurance and the retirees would only be
getting about $1200 a month before taxes.
Brad Allen with the Engineering Department came forward and said he was a
single dad, divorced, and he was required by law to provide insurance for his
four (4) kids and because of that, his net check is $450.00 for two weeks, which
doesn't leave him much to live on. He mentioned that he had high blood
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pressure but has had to cut out his medication. He said he is working here for
the benefits and he is also a citizen and his taxes have gone up. He had planned
to retire at age forty-three (43) but now he will have to work eight (8) or nine
(90 more years. He said we have to feed our families and wanted the Council
to do the right thing.
Mark Shew from Public Works, Water and Sewer Department, came forward
and asked if a person who was thirty-eight (38) years old and had fifteen (15)
years of service with the City, when will they be able to retire with the Rule of
80. He said he knew a lady who worked for the City with just that and under
the current plan she could retire in five more years. He asked if she would have
to work twenty (20) more years before she could retire.
Councilman Bell said the retirement and the Rule of 80 was just about the City
paying medical benefits, so that would mean that she could still retire at twenty
(20) years but wouldn't get her medical benefits paid by the City. Mr. Bell said
that if 10% of the employees retired per year for five (5) years that would be
thirty-five (35) annually, that would add $200,000.00 for the cost of insurance
per year, which would add up to $1 million dollars. He said even if the cost
didn't go through the roof, there would be another $1 million added to that and
that is what the City is facing. He said if the Council does nothing, the system
for the insurance will go bankrupt and that is because of retiring employees. He
felt the Rule of 80 plan needed to be studied. He said this Council is challenged
with coming up with more income or making additional cuts.
Bill Wilhite, who works for Sanitation, came forward and said he had his own
business but sold it to move back here with his family. He said all he hears is
cut, cut, cut. He said when they cut people in the shop, they are going to have
to wait to get things fixed, when they cut people, they are cutting services. He
asked the Council to look at what could be saved in the budget instead of
cutting people. He felt that if they would look at saving money instead of
cutting that would be better.
Councilman Wilson said the Council is faced with a$1,500,000.00 shortfall.
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He said the reality is that the income and the expenses don't meet. He said they
can't continue to raise taxes. He explained that new industries that look at this
town also look at the tax rate. He continued that other states are giving
industries a lot more incentives. He asked what would get more industry in
Paris.
Councilman Guest said the Toyota Plant in San Antonio got a $3 80,000,000.00
incentive package and we can't even raise $3.8 million.
Josey Carrington from the Paris Public Library said it was suggested to cut
three ( 3) people from the library. She said there are only fourteen (14)
employees and the library is open six (6) days a week. She related that over five
hundred (500) people a day visit the library and they are very busy. She asked
the Council how many of them had library cards. Three raised their hands. She
said then the didn't have very much knowledge to make this decision.
Councilman Guest asked what percentage of those patrons were citizens of
Paris. Assistant Library Director Priscilla McAnally said about 40% of the
library cards were from the County. Councilman Guest asked about the
County's participation in the library. Ms. McAnally said none. Councilman
Guest said that was the problem. Ms. Carrington said this had been discussed
before but no one has done anything about it.
Councilman Wilson said he thought there were sixteen (16) employees in the
library. Assistant Library Director Priscilla McAnally replied that there were
just fourteen (14), but there are just thirteen (13) at the moment because the
director retired. She explained that these fourteen (14), in light of their
circulation and number patrons, do the work of thirty-two (32) people. She did
say they had only hired one additional person the library. She indicated that the
number sixteen (16) in the budget was incorrect and she has requested that that
be corrected. She stated the library budget for last year was $814,386.00 and
the proposed budget is $690,525.00. She did instruct the Council that if three
(3) employees were cut from the budget, that would drastically cut services and
some hour the library is open would have to be cut.
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Councilman Wilson said he talked to one town, Denison, and their library
budget was $521,000.00 and they are charging their county patrons $40.00.
Ms. McAnally indicated that they get county participation and don't have as
much circulation. She did mention that outreach to adults and children would
have to be cut, also.
Councilman Bell asked if the City Council would be the ones who made the
decision to have the County participate. Mayor Fendley said that would need
to be addressed. Councilman Bell agreed.
Anna Wims, who works for the Environmental Services of the Utilities
Department, said she had heard that the wages and benefits at the City had
been compared to industry. She indicated that she came from industry, Earth
Grains, and she only paid $30.00 a month for health insurance for herself, her
spouse and her children. She said she made considerably more money then,
also. She reminded them of the survey which they have which said that the
employees were considerably underpaid. She said the reason she and others
work for the City of Paris is the benefits and if they cut the benefits, they
should at least give the employees the pay they deserve. She also stated that if
they continued to take money out of the employees' pockets, the employees
would not be able to afford working for the City of Paris. She continued that the
employees needed to get their fair share and not be expected to take care of the
whole problem.
Mike Ford of the Paris Police Department wanted to clarify that a person could
still retire with twenty (20) years of service but would not be able to get
insurance. Councilman Bell said they were discussing the Rule of 80 but it had
not been decided yet, although it is the recommendation. He also asked about
the 2 to 1 match being changed to a 1 to 1 match. Councilman Bell said that is
in the proposed budget. Mr. Ford asked if that was just to save money.
Mr. Ford said he had been with City for fourteen (14) years and the one thing
that kept him here was the 2 to 1 match. He informed the Council that if they
take that away, they will lose many good police officers. He said the match at
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other cities has been looked at before and most have the 2 to 1 match and some
have a 7% match instead of a 6% match.
Mayor Fendley called for a break at 7:45 p.m before reconvening in Executive
Session.
Mayor Fendley convened the Council into Executive Session at 8:50 p.m.
pursuantto Section 551.071 ofthe Texas Government Code, Consultation with
Attorney, to receive advice of legal counsel pertaining to pending or possible
litigation and to receive advice of legal counsel pursuant to the duty of an
attorney to his client under the Texas Disciplinary Rules of Professional
Conduct of the State Bar of Texas, regarding appropriate legal action for the
collection of delinquent franchise fees from TXU Gas Company.
Mayor Fendley closed the Executive Session at 9:06 p.m. and reconvened the
open session at 9:08 p.m.
Councilman Wilson made a motion to authorize City Attorney Schenk to go
forward to resolve the suit against TXU Gas Company as discussed in
Executive
Session.
Councilwoman Wilson asked Mr. Anderson how many employees work for the
city but live outside of the city limits and don't pay taxes. Mr. Anderson said
he would get that for her.
There being no further business, the meeting adjourned.
CURTIS FENDLEY, MAYOR
ATTEST:
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SHERIAN DIXON, ASST. CITY CLERK