14-B Benefits Sub (05-04-04) MINUTES OF THE CITY OF PARIS CITY COUNCIL
BENEFIT SUBCOMMITTEE
May 4, 2004
The City of Paris City Council Benefit Subcommittee met in special session,
Tuesday, May 4, 2004, 5:30 P.M. at Paris Junior College, Bobby R. Walters
Applied Technology Building Room 1206, 2400 Clarksville Street, Paris, Texas.
Chairman Jay Guest called the meeting to order with Councilman Joe E.
McCarthy and Councilman Jim Bell being present. Also, present were Interim
City Manager Terry Townsend, City Attorney Larry W. Schenk, Director of
Finance Gene Anderson, and City Clerk Mattie Cunningham.
Chairman Guest advised that the minutes of the December 8, 2003 and
December 9, 2003 had been furnished for review and approval. A motion was
made by Councilman Bell, seconded by Councilman McCarthy, tbr approval of
the minutes. The motion carried unanimously.
Chairman Guest called for discussion of City Policy and possible
recommendation to City Council regarding accrued vacation time and asked Mr.
Anderson what the current policy was regarding accrued vacation.
Mr. Anderson advised that when an employee comes to work they earn one day
tbr each month of employment. He advised that there is currently not a limit of
how much vacation time can be accumulated. After an employee has been with
the City ten years, they accumulate one and one-half days of vacation pet'
month. Mr. Anderson said an employee is allowed to sell back one week of
vacation time per year if they have at least 15 days accumulated. It is sold back
at 75% of their pay raise as of the previous September.
Councilman Bell pointed out from the minutes of the December 8, 2003 meeting
which refers to a consensus, but not a motion, that the committee place a cap
of 45 days on accumulated vacation tbr employees. They should use it, sell it,
or lose it. He said the various things he sees that effect vacation time is how
much can be accumulated, and how much can they allow, and under the
circumstances recently, how much should be accumulated, because there is an
ovcr abundance at some point. Also, the question is whether or not the city is
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May 4, 2004
Page 2
actually gaining, or in the prospect of trying to buy that back, whether or not
they should allow a sell back. tie felt that each of those should be addressed
separately, but it was a consensus by the committee and not a motion and he
made a motion that they cap the vacation time at 45 days as discussed.
Chairman Guest asked Councilman Bell if he would be adverse to discussing
vacation time and sick leave time before making any recommendations because
it might affect his motion.
Chairman Guest asked that Mr. Anderson advise the committee what the city is
currently doing regarding sick leave.
Mr. Anderson advised that city employees are currently accumulating one day
and a quarter for each month of employment. There is a maximum of 135 days
sick leave that can be accumulated. Mr. Anderson said the basis for how that
number was capped was to try to equalize the benefit that allows the civil
service employees are allowed to sell back 90 days of sick leave at 100% at the
current pay rate when they leave the employment of the city. Mr. Anderson
explained that a day for a fireman is considered to be 12 hours and it' you
multiply 12 hours times 90 days, that is 1,080 hours and divide that by 8 you
will get 135 days. That is how that 135 day cap was established, in order to give
some equalization to what could be allowed under civil service.
City Attorney Schenk asked Mr. Anderson if there is a minor differential
between the civil service accumulation of vacation time or how much they get
initially verses the regular employee. Mr. Anderson said, yes, but you cannot
change civil service. City Attorney Schenk said it is 15 days vacation
immediately for civil service employees a year.
(~ouncilman Bell stated that civil service employees can sell sick leave upon
departing from the city. Mr. Anderson said that was correct. Councilman Bell
wanted to know if they could sell back vacation. Mr. Anderson advised that the
city only allows for sell back of vacation one time a year and on civil service
City oF Paris Council Benefits Subcommittee
May 4, 2(1(14
Page 3
sick leave, it does not matter what time a year it is. That is a right they have
under civil service. Mr. Anderson advised that if you are a non civil service
employee and leave, they do not get paid for any sick leave.
Councilman Bell stated that on departure of a standard employee/civil service
employee accumulated vacation time. Mr. Anderson advised that an employee
under 10 years, 20 days and an employee more than 10 years is 30 days. Mr.
Anderson said it would be his suggestion, if you go to a 45 day vacation cap,
that you make the amount an employee can be paid for on departure go with the
45 days. Councilman Bell said they could move the cap from 45 days to 30
days and make it match because, right now, the city does not have a maxinmm
accumulated vacation cap. He said if'the city needed them to match then maybe
the vacation time accumulated should be 30 days.
Chairman Guest said he did not see how they can try to equalize what the
regular employee verses what the civil service does. Mr. Anderson said it would
never be a perfect match.
Councilman Bell wanted to know if civil service employees can sell back
vacation time. Mr. Anderson advised that it is non civil service only that can
sell back vacation in terms of the annual sell back. Mr. Anderson said that the
only thing that civil service requires is if an employee leaves the employment
of the city, on the sick leave, the city has to pay them up to 90 days if they have
it accumulated at the current rate of 100%. Councilman Bell said that on non-
civil service employees if they depart the city they do not get paid for their sick
leave. Mr. Anderson said their only opportunity, ifa regular employee does not
take their sick leave, is to sell it back one time a year. He said they cannot sell
back under 30 days. They have to have at least 30 days left alter the sell back
and depending on what their ending balance is determines what percentage of
pay that their sick leave is paid at. If they take it all the way down to 30 days,
they arc only paid at a 50% rate of the previous year's pay rate.
(:ouncilman Bell wanted to know why Melba Harris was not present. Mr.
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May 4, 2004
Page 4
Anderson said he did not request her to come because the city pays her by the
hour and he felt that he could answer any questions that the committee has.
Councilman Bell said the reason as, he understood, was that she was working
on, and that Mr. Anderson had directed her to be working on a new personnel
manual, which has not been updated since 1982. He said that some of the things
that are problems now were by virtue that the city is not staying up with the
personnel changes. He said that one of the things that has comes to his attention
is that vacation, sick leave, all time off is being converted to a thing called PTO
(Personal Time Oft). Councilman Bell said if the city is going to redo the
personnel manual, they need to be looking at PTO's, whether it is vacation or
sick leave. He felt the city should combine the two, max them out and then
discuss if they allow sell back and how much they will allow. Councilman Bell
said this seems to be a trend across the board, including a lot of government
entities going to PTO's. He said he was thinking that they need to work with
Mr. Anderson and Melba as a committee on a regular basis because rather than
redesign this and put certain limits, why don't they just pull all that together.
Councilman Be[l said that would require the city staff to do research too and
look at the cutting edge of the field today, because there is a lot of time involved
in checking out whether or not an employee was sick.
Councilman Bell said as a committee, he would like for them to sit down and get
the staff to come forward with a PTO recommendation and it needs to be one
where they marry up vacation and sick leave and still comply with the FLMA
Act, because then an employee can take off extended periods of time xvithout
pay, but their job comes back to them when they return to work. Councilman
Bell felt that it would be best to go on to that method of accountability, which
seems to be catching on like wildfire. If the city is not going to do it, they need
to undcrstand why they are not doing it. He said it is a lot less accountability on
the city for the employees to take off time and it goes toward the PTO.
Councilman Bell made a motion for city staffto do a study and come back with
a rccommendation combining vacation and sick leave into a PTO concept with
a limit of 45 days. The motion was seconded by Councilman McCarthy. The
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May 4, 2004
Page 5
motion carried unanimously.
Chairman Guest called for discussion of city policy and possible
recommendation to the City Council regarding retiree benefits and asked Mr.
Anderson what were those benefits.
Mr. Anderson advised that the only benefits that the retirees have is if they are
under the age of 65 they are allowed to continue to have coverage through the
cities' insurance plan until they reach the age of 65. If for some reason they
become Medicare eligible through disability or some other reason, they do not
go otfthe plan on the disability but the plan becomes secondary and Medicare
becomes primary.
Councilman Bell asked how many retirees were covered on this plan. Mr.
Anderson advised that there were 23 retirees. Councilman Bell pointed out that
those 23 people are a cost factor that is causing the current employee's insurance
to go up because that is not free and the city is paying for that insurance and
when you factor in 23 employees with $128,000.00 loss toward the self-insured
plan, which he was promoting... He thought they wanted to save money, but
when you are factoring in $128,000.00 or more in losses, it is costing the current
employees. Councilman Bell asked the employees in the audience if they knew
that they are paying the retirees benefits and cost on insurance and asked them
to please stand up. Most all of the employees stood up.
Mr. Anderson said that if an employee retired and they have dependent coverage
such as a spouse, the spouse is allowed to stay on the plan the same as the age
65 rule. The dependents do contribute to the cost of the plan, and in the most
resent year with the ones that are actually covered at this point, they contributed
SB 1,800.00 toward that. He said you would have to net that contribution against
the $128,000.00 worth of claims to get the net cost.
Councilman Bell said he was surprised to find out that this many people here
tonight were aware of the fact that cost is being added in. He said it is going to
City of Paris Council l-lcncl'~ts %ubcomm~llcc
May 4, 2004
Page 6
be a major effect on what they are going to be paying on down thc road.
Councilman Bell said it was a major effect, what they had proposed here the
other night, this Council did not have it explained and this Council voted on an
insurance plan that they did not have this explained to them. He said this is one
of the things that need to be looked at on actual cost of insurance. Councilman
Bell said they were going to have increasing costs like this, and the retired
people have had higher claim ratios with the figures that have been given to him
than they do in the active employees.
Alter discussion with those in the audience regarding when the retirees were
allowed to stay on the city's insurance after retirement until they reach the age
of 65, the city staff was directed to research the city's records and bring that
infbrmation back to the City Council at the May 10, 2004 meeting.
On a comment from an employee in the audience, Mr. Anderson explained the
cun'ent three tiered drug plan under the current insurance. He said that when
you walk into a pharmacy the co-pay for generic is $10.00, a name brand on the
performance prescription co-pay is $25.00 and the name brand that is not on the
preferred list is $40.00. Mr. Anderson advised that if the prescription is done
by mail order the generic co-pay is $20.00, the performance brand is $50.00 and
the brand name that is not on the preferred list is $80.00.
Councilman Bell asked that city staff look at a list of retirees that will be retiring
in five years out and ten years out and see how many people the city might be
carrying under that program and they could factor what they think insurance
cost is going to be going up.
Councilman Bell made a motion to do an actuarial study for ten years out and
place that on a subsequent meeting for discussion of retirees insurance at the
city's cost at retirement.
Mr. Anderson said that no one at the City of Paris is qualified to conduct an
actuarial study. He could project how many people that would become eligible
City of Paris Council Bcncflls Subcommitlcc
May 4, 2004
Page 7
to retire, but that is no indication when they will retire
Councilman Bell wanted to know the percentages of claims applicable to
retirees based on the prior year.
Alter further discussion, the motion was seconded by Councilman McCarthy.
The motion carried unanimously.
Chairman Guest called for discussion of city policy and possible
recommendation to the City Council regarding car allowances.
Interim City Manager Townsend gave the committee a handout containing a
summary of car allowances by cities in the population range of the City of Paris,
car allowances paid by the City of Paris, a breakdown by city of those
employees receiving car allowances, and a comparison by job and by city.
Interim City Manager Townsend said Councilman Guest had mentioned in a
prior council meeting that the concern was consistency. He said by looking at
some of the other cities, you have a little bit of both. Interim City Manager
Townsend said that in case when he was offered the job, it was part of his
package, and in some other cases, it may have been based how much driving
they were doing. He said he could not justify why anyone specific would have
received a car allowance because he did not give it to them, but in most cases,
that is what they were offered when they came to the city.
Chairman Guest said the city spends $6,900.00 a month for car allowances.
Councilman Bell pointed out that puts the City of Paris as the highest of the
cities surveyed.
Councilman Bell said he did not think that the city should be paying cat'
allowances arbitrarily. By the same token, many if these employees utilize a
vehicle during the course of the day. If they come to and from work, go home
t'rom work and basically that is what they use their car tbr, it is a non tax
deductible situation for anyone else. He said that car allowances should not be
City of Paris Council Bcncl'its Subcommittee
May 4, 2004
Page 8
taken into consideration to and from work. Once they are on the job, each
employee that is on this list that is getting a car allowance, they should be able
to look at and say they do 'x' number of driving and their car allowance would
be justified by them using their own vehicle. Councilman Bell said questions
that have been brought up by him such as the meter readers. Are they not using
city vehicles'? Mr. Anderson advised that they have always used their own
vehicles. Councilman Guest said he saw one today pulling out in a city truck
in his neighborhood. Mr. Anderson said he was not reading meters, lie may
have been changing out meters. Interim City Manager Townsend said it could
have been one of his employees because they have been helping out.
Councilman Bell said there are employees utilizing a personal vehicle during the
course of the day for business and this does not include coming to and fi'om
work and going home from work. He felt staff should look at these. He would
like to compare that against a specific budget payment of who was paid milage
last year because we have a situation where he understands that there is a person
drawing a car allowance and the city is paying them milage over and above that.
Councilman Bell wanted to know what justification does the city have tbr that.
Mr. Anderson explained that car allowance covers any traveling in the city and
probably in the county. If an employee goes outside the county such as
Houston, Austin, Dallas, etc., they would be paid milage. Councilman Bell said
the city is paying employees across the board, and if that is the case, why have
car allowances at any point, why not pay milage and have claim on it in toxvn,
in the county or in the state. Mr. Anderson said it depends where you put the
milage reimbursement rate at, but for someone to own, maintain and insure a
vehicle, what you are paying for a car allowance is going to be less than it would
cost the city to buy a vehicle, fuel it, maintain and do all the necessary things.
That is the justification on why the city is doing car allowances, now, instead of
furnishing vehicles. Mr. Anderson advised that when he came to work tbr the
city, a lot of city officials had vehicles provided for them, and he was one of
them, but it was deemed to be cheaper to pay an allowance and be done with it.
(:ity of I~aris ('ouI~cil t3cncl'ils ~%ubconm~illcc
May 4, 2004
Page 9
Councilman Bell said he felt that they should be looking at not only the car
allowance but also the milage policy and the current status of the vehicles and
the restrictions that were put on them, or not put on them, by thc t'ormcr City
Manager. He Felt this was a vehicle expense situation where they need to be
looking at the whole thing. Councilman Bell said he considered this more
something where the City Council could have facts brought to them as a
budgetary item.
Chairman Guest stated that the city is spending $1,200.00 For the Health
Department for car allowances, and wanted to know if that is a shared cost with
the county. Mr. Anderson advised that was correct, but it is not fimded by state
grants, so it comes out of local funding.
Chairman Guest asked that a list of city vehicles be furnished at the June council
meeting.
There being no further business, a motion was made by Councilman McCarthy,
seconded by Councilman Bell, to adjourn the meeting. The motion carried 3
ayes, 0 nays.
JAY GUEST, CHAIRMAN
A I I EST:
MATTIE CUNNINGHAM, CITY CLERK