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02 City Council (9/04/03)MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL September 4, 2003 The City Council of the City of Paris met in regular session, Monday, September 4, 2003, 5:00 P.M., at Paris Junior College, Bobby R. Walters Applied Technology Building Room 1206, 2400 Clarksville Street, Paris, Texas. Mayor Curtis Fendley called the meeting to order with the following Council Members present: Jim Bell, Francine Neeley, Willie Weekly, Sr., and Benny Plata. Also present were City Manager Michael E. Malone, City Attorney Larry W. Schenk, and City Clerk Mattie Cunningham. Mayor Fendley called for input from interested citizens of Paris proposing services or projects to be included in the 2003-2004 City of Paris Budget and if there was anyone in the audience who would like to speak on a particular item to come forward. Michael Louis Alexander, employed by the City of Paris as a Code Encodement Officer for the last 20 years, appeared before the City Council. Mr. Alexander said the issues that he would like to address are the health care issue and employee benefits. He said the people that are here tonight does not show a fair representation of employee concern about their health care benefits. Mr. Alexander said the city has been good to them over the years. Mr. Alexander said his main reason and incentive for working for the City of Paris for the past 20 years is the benefits the city offers. It has helped him raise a family and he did not have to worry about his children receiving good health care. Mr. Alexander said what he is asking, and he knew that the city is going to have to do something and it has to be addressed, is that the City Council see if there could be cuts made somewhere else. He felt that any city employee is willing to compromise. Mr. Alexander said he is down at Public Works every morning and he sees men that are working for a private contractor that have asked him if there are openings in the city, and his comments were that these men are making $3.00 or $4.00 an hour more than what a city employee doing the same thing would, so he asks why would he want to come to work for the city, and the main reason they say is they need some kind of benefits for their family. Regular City Council Meeting September 4,2003 Page 2 Councilman Bell asked Mr. Alexander what was his understanding about the coverage, the benefits, and what is on the table for consideration. Mr. Alexander said the way he understands it is that the employees will possibly be getting fewer benefits and having to pay more money. Mr. Alexander said he felt the City Council could fix something like this if they looked hard enough. Councilman Bell said it is important that the employees understand that the figures that have been given to them say that Paris was paying about $296.00 per employee and it has increased to $500.00. Gene Anderson, Director of Finance, advised that this was changed back in November of last year when he received the results for claims from the previous year. He said based on the figures that he received, he estimated it would cost $500.00 per employee per month. Mr. Anderson said that at this point, the city hasn't contributed more than what the budget allowed. Mr. Anderson explained that the city has employees that have employee only coverage, employee and spouse coverage, and employee and children coverage, and in the past the city has always paid for the employee's cost. He said for a long time the city contributed $250.00 per employee for those who did not have dependent coverage, and $350.00 if they had dependent coverage. He said that averaged out to the number that the Mayor is talking about and it is a blend because you have different amounts of employees in each one of those different levels. Mayor Fendley stated that the City Council has no intentions of taking health care away from the employees, but the plan needs to be changed and they need to look at other options. He said that what he is hearing from his employees that they would like to see is to keep the co-pay relatively inexpensive and their drug card and those are the things that everybody is bumping up. He said that most employees are paying $20.00 to $25.00 co-pay. Mr. Alexander asked the Council what should the people be hearing. Councilman Bell said that what has happened is the cost of insurance for everyone has gone right through the roof. The employees of the City of Paris have one of the finest medical insurance plans in the United States. They have Regular City Council Meeting September 4,2003 Page 3 a plan that is costing so much, if something is not done to hold it down and modify some of the minor benefits, then for example, if you get sick and go to the doctor, instead of you paying $15.00, you pay $30.00. That is costing you more, but the point is, you try to manage this and hold the cost down. He said if they leave this plan as it is, what they will be looking at is the same plan and you will have half as many employees because the employees will not be there because the city cannot cover the medical insurance. Councilman Plata said that he pays $10.00 for doctor visits, but they are on an HMO. The health insurance plan that the city has is called a comprehensive plan and they had an 80/20 split at Kimberly Clark where the city has a 90/10 split. Kimberly Clark did away with it and went to HMO. Mr. Anderson advised that the city's plan is a preferred provider plan. Mr. Anderson said he has requested TML to look at some of the things that Councilman Bell was talking about, like changing individual deductible from $200.00 to $500.00 in network, and out of network would be $500.00/$700.00, that is up to three people in a family deductible plan in network would be $600.00, out of network would be $1,500.00, changing the out of pocket minimum, raising it up to $2,000.00 from $1,000.00. That would change the benefit percentage from 90% to 80% in network and for out of network it would be 80%/50%. Mr. Anderson said he has the deductible applying in some areas where it is not currently applying, office visits going from $15.00 to $25.00. He said that based on the city's claim history, which is very bad for the last few years, it would save the city about $140,000.00 a year, and that is about $30.00 an employee per month. Mayor Pro Tem McCarthy entered the council chambers and assumed his seat at the council table. Councilman Weekly said that it was a tremendous amount to go from $296.00 to $500.00. Mr. Anderson said the problem is there have been catastrophic claims. He said there are about 6 people over the past three years that have had Regular City Council Meeting September 4,2003 Page 4 some chronic catastrophic type claims and they say that is one of the reasons that they are concerned about they might not save more money as long those people remain in the group. Mr. Alexander asked the City Council not to give the employees a paper raise. They have not had a raise, but don't give a raise and then take money and have to spend it out on the other end. That is just a raise on paper and he hoped that the employees will not have to endure that. Councilman Plata asked what does an employee and that family pay per month. Mr. Anderson advised that would be $220.15 a month for family coverage, an employee and spouse is $131.02, and an employee and children that is only $7.65. Steve Methven, Building Official for the City of Paris, said he would like to talk about the insurance also. He noted that the raises have not been that big, and last year there was no raise at all. Mr. Methven said many of the employees have been topped out for many years. He advised that he has been topped out for 10 years. Mr. Methven said gas is going up and he certainly understands that insurance is going up and you see that everywhere. He said he understands that you have to do something, but he did have a concern that he asked the City Council to consider and that is, a lot of the employees at Public Works are not making big money. They have not received a large raise and no raise last year. Everything is going up and his concern is whatever they come up with regarding insurance, his concern is all of those employees might be dropping off the insurance, which he did not know what that would do with the pool, but it could actually affect the other employees part they would have to contribute. Mr. Methven said everything is going up, not just health insurance, taxes, property insurance, gasoline, etc. He asked the City Council to do what they can with the insurance. Mr. Methven said one of the reasons he has stayed with the City for more than 25 years was certainly not the pay. He said he loves his job and working with the public, but the main thing is the benefits offered by the city. The benefits have kept him out of the private industry. Mr. Methven asked the Regular City Council Meeting September 4,2003 Page 5 Council to consider the pay scale as whole for the City of Paris versus the private industry. He thought they will find that the city employees are on the bottom end, and the key in keeping personnel has been the benefits. Jeff Springer came forward stating that he was representing the Police Department on these issues. Mr. Springer said one of the issues they were concerned about, and the rumors that they have heard, is that the city is going to make the employees pay, or take so much extra money out of their pay check to pay for the health insurance. He said he went to the doctor a few months ago and was charged $50.00 for a visit and he did not know if that was an error in paper work. If you are talking about a 3.4% raise and then turn around and take extra money out of the pay checks to pay for insurance, the employees will not get a raise and they will not get the benefits that they currently have. If it needs to be fixed, the city needs to fix it; but the employees cannot afford it. Mayor Fendley asked if there were any others who wished to speak. There being none, he advised that he would open this portion of the agenda up again to give others an opportunity if they would like to speak. Mayor Fendley called for consideration and discussion on the proposed 2003- 2004 budget and accompanying tax rate for the City of Paris. Mr. Anderson said that in an earlier workshop Councilman Bell had asked for a dollar amount to follow in the insurance plan. Then he said that would let him go out and open doors and see what is the best deal and coverage that he could get and come back and let the Council know what that is. If everyone is agreeable to that, they could come up with an earlier implementation date. That would probably be their best option. Mayor Fendley said to give him 60 days and he felt that should be long enough to consider that, but he was not sure how they would implement that. If they say $450.00, for instance, just as a number, and he goes out and can't do any better than $470.00 and we budgeted $450.00, he wanted to know could the budget be amended before the end of the year. Mr. Anderson said they can amend the budget. Mr. Anderson said what he Regular City Council Meeting September 4,2003 Page 6 proposed to do is to bring back a plan that fits that dollar amount and let the City Council make the decision if that coverage level is acceptable to them. Mr. Anderson said what he would hope to do is shoot for somewhere around the first of the year because they are going to have to research it. If they have to change companies, they will have to work out the runoff coverage and some other issues and have new books printed. He said they will need to have meetings with the departments and explain what the new coverage is. Mr. Anderson felt it would be hard to do, to shop for it, get ready for it, and explain it before it went into effect. Councilman Plata asked to address these people. They have all said that they do not want a paper raise, and he said he understands that because, believe it or not, Kimberly-Clark is one of the best places to work in Paris, Texas. He said that for the past three or four years, they have gotten nothing but paper raises. The city employees do not want anything to happen to their insurance, and here they are working for Kimberly-Clark and last year he received a 3.2% raise and his insurance doubled. He asked what do you call that? There is nothing they can do about it, and somebody was even told, ~'if you don't like it, maybe Kimberly -Clark is not for you," that is what they were told. Councilman Plata said that he wanted the employees to understand that it is happening everywhere. He said if we have to take care of the insurance problem to save the taxpayers some money, that is what they are here for and he has gone through it every year. He has not really gotten a raise, but people say that he makes a whole lot of money, but he also pays a lot of money out, and he works rotating shifts to make that kind of money. City Attorney Schenk advised that if the city goes outside TML, the city might have to go out for formal proposals on the insurance because of how the bid laws are structured. Mr. Anderson said he feels that he can get some pricing to generally find out if he needs to go out for proposals. Regular City Council Meeting September 4,2003 Page 7 Mayor Fendley told Mr. Anderson he might request a November 1, 2003, date. That would push it, but if it might get out in the next couple of weeks. Councilman Bell asked if there was a broker in Mt. Pleasant that handles all of this type things. Mayor Fendley said he does municipalities and water districts. He said he would get Mr. Anderson his name. Mayor Fendley said that if you just go get a price, you are going to waste a lot of time coming back because you will have to go back and go out for formal bids. They are not going to underwrite it without loss runs from Mr. Anderson. Councilman Bell asked if they could set a figure. Mayor Fendley said they could put a number in the budget, but what Mr. Anderson is going to do is go out and get bids. Councilwoman Neeley asked if there is a process of offering different options regarding the amount of coverage a person wanted to have. In other words, is there a process of being able to pick and choose coverage. Mayor Fendley said yes, he felt there could be some options because he assumed there are companies that offer those features. Councilman Plata had the current plan for teachers and for Plan One for an employee and family, the cost is $314.67 a month that the teacher would have pay. Plan Two is $519.00, and Plan Three is $738.00. Karl Louis, Police Chief, came forward responding to some of these statements, and stated that it was his understanding that the City Manager presented a budget that would maintain the current insurance where it is, not reduce the employees retirement benefits, and give the employees a 3.43% increase in salary without raising taxes. He pointed out that without raising taxes one cent, they could leave the benefits just like they are, and leave the retirement alone. Chief Louis said last year, the employees had a zero percent increase in salary and part of the talk about was since they were not receiving a raise last year, they said they would give the employees one more percent to the retirement. They increased the retirement from 5% to 6% since the employees were not receiving a raise, and that was fine. Now, it is as if you are coming back and saying or considering taking the 1% away from the employees that the employees received last year, and you are looking at reducing insurance Regular City Council Meeting September 4,2003 Page 8 coverage plus requiring the employees to pay a portion of the premium. Chief Louis said for the lower paid employees, it is going to negate their salary by going backward and they will lose retirement and insurance benefits. Chief Louis said some of those things that they are talking about now, the employees were more or less promised last year in lieu ora raise. Chief Louis said he felt this should be considered, and without raising anything, they could remain intact. Councilman Plata stated that if he had of known last year how much this contribution rate was, he would never have voted for that one percent raise for the retirement. He said that was extreme for what was even offered to anybody. Mr. Anderson advised how he did not know how he could say that without taking an example of what Kimberly-Clark's retirement is. Councilman Plata said they pay them $.50 on a dollar to 5% and that is what they get. Mr. Anderson asked if they didn't look at the last five years' pay and figure to some extent based on that. Councilman Plata said that was so if you invest in a 401K. Mr. Anderson asked if, regardless of the 401K, K-C has a plan in addition to that. Mr. Anderson said he was told that what they did was look at the last five years' earnings and that is what your retirement is based on. You also have a stock option deal, which was up to 15% and they would match up to 6% of that on top of the normal retirement. He did not know if that is true, but that is what he was told. Mr. Anderson said without talking dollars for dollars, he couldn't say one is better than the other one. Councilman Plata said they have also cut their pension to where, now, if he retired and was drawing $2,000.00 a month and when he starts drawing his Social Security, he will not be able to draw over that $2,000.00 because they are going to cut back their pension. The pension together with Social Security will only equal $2,000.00, and that is what they have done for him. Mayor Pro Tem McCarthy said they can expect more changes to their benefit package. Councilman Plata said you sit there and want him to say, don't touch our benefits. Mr. Anderson asked Councilman Plata what was the average wage for a Regular City Council Meeting September 4,2003 Page 9 maintenance worker at Kimberly-Clark. Councilman Plata said they were not talking about wages at this time. Mr. Anderson said to compare benefit plans without comparing wage levels does not make any sense, because someone out here is making $25,000.00 or $35,000.00 a year and he has good retirement and then you have someone making lesser retirement but they are making $75,000.00 or $85,000.00 a year. He said that when you are making that much, you can take part of your salary and do your own retirement plan. Mr. Anderson said the two are linked together; you can't take them separately if you want an honest look at it. Councilman Plata discussed teacher retirement as his wife teaches. Chief Louis said no one has a greater respect for educators than he does and felt they need to be making more and receiving more benefits, but city employees do not get off two or three months during the summer either. He said you have to look at apples to apples. Mr. Anderson again asked what was the average pay for a worker at K-C. Mayor Pro Tem McCarthy advised that they average more than what the city workers make, and it is very good pay. Mr. Anderson said it is a lot more than what a city employee makes and that is the point. After further discussion, Chief Louis said the original request from the Fire, Police, and EMS was a 5% increase in salary and in reference to what they are discussing now, his understanding is, instead of the 5% increase in salary, they would take the 3.43% increase, leave the insurance and retirement intact. The City Attorney mentioned the fact that anything that is put into a raise also leaves that open for taxation by the Federal Government, everything left in your benefits is not taxed. If you are looking at a 3.43% increase in salary and keeping all the benefits verses the 4% or 5%, part of that 4% or 5% is going to be taxed. Mr. Anderson said the 3.43% will be taxed, but the benefits will not be and you have to keep that in the consideration when you are looking at the numbers. Regular City Council Meeting September 4,2003 Page 10 Mayor Fendley advised that the City Council needs to keep focused on coming back with a comparable plan for less money. He said the Council has an obligation to the taxpayers, as they do to the employees, to provide good health coverage and a living wage in return for what they are doing, but they have an obligation to the citizens to keep the taxes down and the corporations that are trying to come into the city to keep the taxes down to attract people. It is kind of an all-encompassing thing; they have a lot of different issues and they have to look at all of them. Mayor Pro Tem McCarthy said in lieu of what has got to be done eventually, if they could take the budget that is in front of them and work with it and what they are proposing to do with benefits, that can't be done in one to three months to get a good plan that will suit the employees. He said it is going to take some studying and it is going to take more than Councilman Bell, Councilman Guest, and himself. Mayor Pro Tem McCarthy said he felt that it is going to take some outside help to form a plan and get something concrete that the employees will be satisfied with and something that the Council could work with. Mr. Anderson said it needs to be studied regardless of what the Council wants to do. Otherwise, it needs to be looked at to get a grip on it. Mayor Pro Tem McCarthy said he would like to see one or two human resource type people involved. Mayor Fendley advised that the Council needs to decide what number to place in the budget for the line item for health care and then go outside and get that person to look and work with Mr. Anderson and get proposals to see if the city can streamline the plan, but still keep it affordable for everyone. Mr. Anderson requested that he be given until the first of the year because the city's fiscal year closes on September 30, 2003, and the auditors will be in and they are also having to report on the GASB34 for the first time. He said he is as busy with the auditors for two months as he has been with the budget. After further discussion, it was the consensus of the City Council to place the Regular City Council Meeting September 4,2003 Page 11 number of $450.00 per employee in the budget for health insurance. Councilman Plata asked Mr. Anderson if he had the figures of what the impact was on the budget for the 2%. Mr. Anderson said that Councilman Plata asked if the city went from 6% for the employee contribution to 5%, what that cost would be. Mr. Anderson advised that number was $154,07400 keeping the 2 for 1 match. Tommy Haynes, Director of Community Development, came forward giving the City Council a handout of what some of the other TML cities are doing regarding the contributions and match of the pension. Mayor Fendley advised that it was 6:00 P.M., and the City Council would go out of the budget workshop and move into the Planning and Zoning portion of the agenda. City Manager Malone presented the minutes of the Planning and Zoning Commission of September 2, 2003, and they are hereto attached to these minutes as Exhibit A. Mayor Fendley declared the public hearing open on the petition ofRonald Kyle for a change in zoning from a General Retail District (GR) With Specific Use Permit (52) Signs and Billboards on Lots lB and lC, City Block 315, being number 3755 Loop 286 N.E. Mayor Fendley called for proponents to appear. Ronald Kyle appeared before the City Council in behalf of his petition, advising that this is the same sign that was before the City Council last month. He said the sign may have to be a little higher since it is going on the other side of the road in order to get over the overpass. Mr. Kyle said he could go up to a 40 feet maximum at this location, but he is not going that high if he doesn't have to. Regular City Council Meeting September 4,2003 Page 12 Councilman Plata asked what is the probability of using that electronic sign for Amber Alerts. Mr. Kyle said he did not have a problem with that, but it might have to require a permit because any kind of an alert would be a flashing motion and the State requires that there is no flashing. He said that would be an emergency and he did not think there would be a problem in getting a permit. Councilwoman Neeley asked Mr. Kyle if a certain part of the sign would be devoted to public service announcement. Mr. Kyle said they were saving ten minutes every hour. Mayor Fendley called for opponents to appear, no one appeared, and the public hearing was declared closed. ORDINANCE NO. 2003-036 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AMENDING ZONING ORDINANCE NO. 1710 OF THE CITY OF PARIS, PARIS, TEXAS, AND CHANGING THE BOUNDARIES ESTABLISHED BY THE ZONING MAP OF SAID CITY; ESTABLISHING A GENERAL RETAIL DISTRICT (GR) WITH SPECIFIC USE PERMIT (52) SIGNS AND BILLBOARDS ON LOTS 1B AND 1 C, CITY BLOCK 315, AS REQUESTED BY RONALD KYLE, AGENT TO LEASE FROM D. WAYNE BROWN, OWNER, SO AS TO INCLUDE THEREIN TERRITORY FORMERLY DESIGNATED AS A GENERAL RETAIL DISTRICT (GR); DESIGNATING THE BOUNDARIES OF THE GENERAL RETAIL DISTRICT (GR) WITH SPECIFIC USE PERMIT (52) SIGNS AND BILLBOARDS SO ESTABLISHED; PROVIDING FORA PENALTY NOT TO EXCEED $2,000.00; REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; AND DECLARING AN EFFECTIVE DATE, WAS PRESENTED. A motion was made by Councilman Bell, seconded by Councilwoman Neeley, Regular City Council Meeting September 4,2003 Page 13 for adoption of the ordinance. The motion carried 6 ayes, 0 nays. Mayor Fendley called for consideration of and action on the Final Plat of Paris Business Park, Phase 2. A motion was made by Councilman Weekly, seconded by Councilwoman Neeley, approving the Final Plat of the Paris Business Park, Phase 2. The motion carried 6 ayes, 0 nays. FRANCHISE ORDINANCE AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PRIS, PARIS, TEXAS, GRANTING TO DENNIS NELMS, DBA CITY CAB COMPANY, A FRANCHISE TO USE THE PUBLIC STREETS, ALLEYS, AND HIGHWAYS OF THE CITY OF PARIS FOR THE PURPOSE OF TRANSPORTING PASSENGERS FOR HIRE IN MOTOR VEHICLES FOR A PERIOD OF ONE (1) YEAR, BEGINNING AUGUST 10, 2003, AND ENDING AUGUST 9, 2004, UPON THE TERMS AND CONDITIONS HEREINAFTER PRESCRIBED; PROVIDING FOR THE REGULATION OF SAID BUSINES S; PROVIDING FOR THE PAYMENT OF A TAX FOR SUCH PRIVILEGE AND USE OF SUCH STREETS, ALLEYS, AND HIGHWAYS; PROVIDING FOR THE TERMINATION OF SUCH GRANT UPON SPECIFIED CONDITIONS; PROVIDING FOR TAXICAB STANDS FOR USE OF SAID GRANTEE; PROVIDING FOR PUBLIC LIABILITY INSURANCE ON THE MOTOR VEHICLES AND EQUIPMENT OF SAID GRANTEE; PROVIDING FOR THE SUPERVISION OF SAID BUSINESS AND INSPECTION OF ITS VEHICULAR EQUIPMENT BY THE OFFICIALS OF THE CITY OF PARIS; AND PROVIDING AN EFFECTIVE DATE, WAS PRESENTED ON SECOND READING. A motion was made by Mayor Pro Tem McCarthy, seconded by Councilman Bell, for approval of the ordinance on second reading. The motion carried 6 ayes, 0 nays. FRANCHISE ORDINANCE Regular City Council Meeting September 4,2003 Page 14 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PRIS, PARIS, TEXAS, GRANTING TO STEVE B. RAINEY AND WENDY L. RANEY, DBA YELLOW CAB COMPANY, A FRANCHISE TO USE THE PUBLIC STREETS, ALLEYS, AND HIGHWAYS OF THE CITY OF PARIS FOR THE PURPOSE OF TRANSPORTING PASSENGERS FOR HIRE IN MOTOR VEHICLES FOR A PERIOD OF ONE (1) YEAR, BEGINNING AUGUST 10, 2003, AND ENDING AUGUST 9, 2004, UPON THE TERMS AND CONDITIONS HEREINAFTER PRESCRIBED; PROVIDING FOR THE REGULATION OF SAID BUSINES S; PROVIDING FOR THE PAYMENT OF A TAX FOR SUCH PRIVILEGE AND USE OF SUCH STREETS, ALLEYS, AND HIGHWAYS; PROVIDING FOR THE TERMINATION OF SUCH GRANT UPON SPECIFIED CONDITIONS; PROVIDING FOR TAXICAB STANDS FOR USE OF SAID GRANTEE; PROVIDING FOR PUBLIC LIABILITY INSURANCE ON THE MOTOR VEHICLES AND EQUIPMENT OF SAID GRANTEE; PROVIDING FOR THE SUPERVISION OF SAID BUSINESS AND INSPECTION OF ITS VEHICULAR EQUIPMENT BY THE OFFICIALS OF THE CITY OF PARIS; AND PROVIDING AN EFFECTIVE DATE, WAS PRESENTED ON SECOND READING. A motion was made by Councilman Bell, seconded by Mayor Pro Tem McCarthy, for approval of the ordinance on second reading. The motion carried 6 ayes, 0 nays. Councilman Weekly asked about the$15,000.00 that was donated for use at the Leon Williams Park. City Manager Malone said advised that the Campbell Soup Company wishes to use a particular contractor who is agreeing to donate $5,000.00 worth of work, and he advised the KPB Board that the city would need to write a check for $15,000.00 for the donation back to the KPB Board so they could get the work done. The City of Paris can't do that, otherwise, it is a $40,000.00 restroom and Campbell Soup has donated $15,000.00 and the contractor wishes to donate in labor, so that is $20,000.00 and that is one-half of the cost for this facility. If it is done through the City of Paris, they will have to take bids and the contractor could do this by donation only if he was the lowest bid. Regular City Council Meeting September 4,2003 Page 15 Mayor Fendley announced that the Council would adjourn out of the Planning and Zoning's portion of the agenda and go back into the budget workshop. Mayor Fendley announced that they would take a 10 minute break at 6:25 P.M. Mayor Fendley reconvened the meeting at 6:36 P.M. Councilman Bell said he would like to go back and request that the electricity in the Water and Sewer Department be cut. Mayor Fendley advised that he asked Mr. Anderson to look at that because that number looks high. They have also gone to a new utility service. Mr. Anderson came forward giving the City Council a handout concerning the detailed account for the Water and Sewer Department where the city has made ten payments. Mr. Anderson said they have had a problem, as discussed before, with the electrical provider not billing for all the accounts every month, and it looks like in February that they caught up. That is the only adjustment that they have seen and they have been pretty consistent since then. He said the number there is $299,069.00, which represents ten payments. Mayor Fendley said that $375,000.00 would be a realistic figure. Councilman Bell made a motion to cut this account by $400,000.00 to $375,000.00. Herb Campbell, Director of Utilities, appeared before the City Council and stated that he wanted to go back and look at the year 1998-99. What he has done is add up the budget for the whole department. He said that in 1998-99, the electrical budget was $800,700.00 with TXU. Mr. Campbell said in 2000-01 the actual expense was $1,030,000.00 and the actual in 2002 was $900,013.00. At that point, they had switched over to First Choice. He advised that the budget for this year was $1,026,000.00, and the budget for last year was Regular City Council Meeting September 4,2003 Page 16 $1,155,000.00, so, he still does not think that First Choice is billing the city properly or they are not getting the accounts in the right department. He thought that it needs more research to find out what is happening. Mr. Campbell said in his departments, they have over billed in the Lift Stations and at the Wastewater Plant, and he felt that some of those accounts really go over into the Water Treatment Plant. Councilman Bell felt they should go ahead and cut this now and the Council will be able to move it at the end of the year. He said they have a number of these accounts that are way out. Mr. Anderson advised that they had already cut it back to $605,000.00 so what they would be doing is cutting it an additional $230,000.00. Mayor Fendley requested Mr. Anderson to take a look at those other accounts. Mr. Anderson said what he would rather do on that is, because he has sent Mr. Campbell copies of First Choice bills, and he knows which pump goes to what he is in better position to say that it is allocated correctly. Mr. Campbell said he would look at those bills and see what is happening. Mayor Fendley wanted to know if they can make a footnote that the recommendation is to go to $375,000.00 and asked Mr. Campbell if he could have that ready by Monday and then the Council will review it at that time to see if that is a valid number. Councilman Bell asked if they needed to look at and discuss the utility franchise fee and the administrative fee that are transferred at the end of the year, and if they place them in the budget now, is that approving them for next year, or the ones that are coming up this year or have they already been approved. Mr. Anderson advised those are approved as part of the budget process. He normally does not pay those until right before the end of the year. Councilman Bell advised that he understands that. He asked if because it was approved in the budget last year, is it automatic now. Mr. Anderson said it has been authorized by a previous Council. Regular City Council Meeting September 4,2003 Page 17 Councilman Bell said the franchise fee is a standard of 3%, which is not unusual. The $750,000.00 that is an administrative fee. He stated that he did not understand or see the justification for this fee. Councilman Bell said that $350,000.00 is closer to a realistic figure. Mr. Anderson explained that figure originally came back from the 80's as a part of one of the things that the city asked the rate consultants to do and what a reasonable amount of a transfer would be and that is how that was developed. Councilman Bell said he did not want to actually cut the budget. He said if they take this from $750,000.00 to $350,000.00, that would leave $400,000.00 to go toward catching up the upside down debt service the city has in the Water Department to try to get that balanced. He felt it was much more important there. Mayor Fendley asked Mr. Anderson if the city could prepay debt without a penalty. Mr. Anderson said they can do an advance refunding. Most of their bond issues, when they are issued for 20 years with a 10 year point, are where you can call and do what is called a prefunding if it is financially feasible. That is what they have been looking at. He said of the last two refundings, one was current and one was a prefunding because they could not call for another year. He said none of them that the city has, other than the ones that they are looking at, are cost effective at this point. Mr. Anderson said on the flip side of that is it is placing pressure on the General Fund because that is a revenue to the that fund. Councilman Bell said that on page 236, line item number 0399 remove $400,000.00 and take that $400,000.00 and put it back against the debt service, which is down a 1.6 million dollars, and try to get it balanced. The citizens do not need any more taxes or water increases and the Council is going to have to figure out how to do that. Mayor Fendley said the upside down on the debt service fund is not in the debt service. It is in the operating fund. Mr. Anderson Regular City Council Meeting September 4,2003 Page 18 said if you just leave it where it is and reduce that expenditure, it leaves it in there. Mayor Fendley asked Mr. Anderson where the Council was regarding the cuts that have been made. Mr. Anderson advised that is about $104,406.00 out of the General Fund. Councilman Plata asked if the answering service had been cut from the budget. Mr. Anderson advised that they did not vote on it. Mayor Fendley asked if the Council would like to cut the $33,550.00 from the budget. It was the consensus of the City Council to cut the answering service from the budget in Account No. 01-1002-21-00 in the amount of $17,500.00 and in Account No. 01-0510-21-00 in the amount of $16,050.00. Councilman Plata asked Mr. Anderson if he had the cost for the electricity at Woodall Field. Mr. Anderson said that cost was $10,666.00. The City Council discussed the pros and cons of this type funding and was advised by the Mayor they would look at it Monday. Mayor Fendley advised the City Council that they had been furnished a copy of the breakdown regarding the Texas Municipal Retirement System. Mr. Haynes came forward telling the City Council that Councilman Bell asked him to expand the survey that he did the last time to include cities with the population of 18,000 to 33,000 as to how many are 5%, 6%, and 7%, 1 for 1, 1 for ½, and 2 for 1, and that is what he tried to do. He said there were 10 cities in Texas that are in this population range that employees contribute 5% and they are matched 1 to 1 and all the way through to 2 for 1. He said there are six cities that are at 6%, 2 for 1, one of which is the City of Paris, and it has been for this year only. He advised that there are 36 cities or nearly 70% that are at 7% employee contribution with the city match of 2 for 1. Mr. Haynes said that the employees appreciate the 6% - 2 for 1 match, but Mt. Pleasant and Sulphur Springs are both 6% 2 to 1 match. Regular City Council Meeting September 4,2003 Page 19 , and the city employees appreciate the 6% 2 to 1 Mayor Fendley said he feels if they leave the retirement at 6%, 2 for 1, they have a discrepancy with the Fire Department as far as he was concerned. He felt that the Fire Department should either be at 12% or 6% and 2 for 1, or everyone be at 5% and 2 for 1. It needs to be on equal footing. City Manager Malone advised that the Fire Department had a retirement system long before the other employees had one. It was started in 1948 and the other one came in the 60's. So, they have had their own retirement system and it is set up differently. They have a board that governs how much they contribute. The City Manager informed the Council that there is one city that is conducting a study to see what it would take to bring their separate Fire Department Retirement System into the TMRS, and that might be something the City of Paris might want to look at. Councilwoman Neeley said the city contributes 11.8 for all employees except the Fire Department and it contributes 10% for them. Mr. Anderson explained that this is the first year for that, but for all the prior years, that would be less than the 10% with TMRS. So, the Fire Department has been receiving more than the other employees for several years. Councilman Plata stated that it was his opinion that they should go back to the 5% - 2 for 1 match. Councilman Plata said he had a problem because last year they were not told everything. Mayor Pro Tem McCarthy said he has a problem with taking the 1% away from the employees because that is all they received last year, and he did not want to be an Indian giver and he does not feel right about taking this away. Councilwoman Neeley said that she has a problem with this, also. Regular City Council Meeting September 4,2003 Page 20 Mayor Fendley advised that they can vote on this on Monday night when the full Council is present. Councilman Plata said that the handout regarding car allowances had been given to the City Council, and just because other cities do this, they are not Paris. He said he really doesn't care what other cities do, but car allowances to him are given to most of the employees to come to work and he has a problem with that. Councilman Bell said there are situations in which a number of department heads are using cars in their jobs. They are out quite a bit. There are others using their cars to go to and from work, and until they study the entire issue all the way through, there are some people that he feels are getting additional compensation that is not reflected in salary that really need a car allowance. This issue needs to be studied. Mayor Fendley said they could look at this handout over the weekend and come back Monday and resolve the car allowances, or he can appoint a committee to come back and report to the Council. Councilwoman Neeley said this appears to be something for the committee that has been appointed to look at the policies and procedures. Mayor Fendley said they could leave it like it is and refer it to the committee and they can make recommendation to the Council. Mayor Fendley advised Mr. Anderson if the Council announces that is what they intend to do, they have to address the actual payments to reflect that. The Council was in agreement to move the car allowance issue to the committee to study and make recommendation. There being no further business, a motion was made by Councilman McCarthy, seconded by Councilwoman Neeley, to adjourn the meeting. The motion carried 6 ayes, 0 nays. Regular City Council Meeting September 4,2003 Page 21 CURTIS FENDLEY, MAYOR ATTEST: MATTIE CUNNINGHAM, CITY CLERK