Happy birthday. That right there. Good morning. How are you? Good. How dare he? No. What are we gonna do? We're going to How are you? It was working a minute ago. But I can technically go in there already, right? Yeah, you can. Thank you. All right. How are you? Here we go. Okay, council. I think we're about ready to get started. I've got enough for quorum. Good morning. Good morning. I'm going to call our budget work session to order and turn it over to Jay Chapa. Since we're have a series of meetings today and we're short on time, I'm just going to turn it straight over to staff so we can get the ball rolling with our presentations. So, Christianne is going to lead the show. Good morning. I'm staff Christian Simmons for Worth Lab. All right. So, um thanks for joining us budget work session. We're moving right along to fiscal year 26 already now that it's June. I'm going to do a quick legislative update, but really our primary focus today will be HR. So, I'm just going to get through these few slides. You've heard about most of this, but happy to talk about any anything you like. So, as you know, the 89th legislative session has adjourned and so staff has worked really hard over the last few months to track and comment on and testify on bills and we're really appreciative of Leanne and Teresa and their staff for leading us through that effort. Um we've been tracking bills that have a legislative sorry fiscal impact for fiscal year 26 and beyond. Um and so there's only a few right now that are um you know we still have some that we're tracking and pending as they sit with the governor but um for fiscal year 26 the most tangible um impact that we're seeing is in Senate Bill 1008 108 whatever you want to say. Um we talked about this last time and we'll even hear about it more in our next budget work session when we talk about fees and rates. Um but this is the one that has to do with regulation of food service particularly what we can um charge for health permits. So without any mitigation what we look at for fiscal year 26 with regard to this bill is a $ 1.9 million revenue loss in the general fund because of reduced permit revenue. So that's thing one for fiscal year 26. Um thing two for fiscal year 26 is Senate Bill 122. This one is not as tangible of an impact. This um bill has to do with third-party review of development documents and inspections. Um, we are not sure if this really has like a tangible fiscal impact. More likely what will happen is that we'll have to reconfigure our permitting system or the Excela system that so many of you are familiar with. Um, so that will just be an administrative cost. We're not sure yet like what that cost will be or if it can just be absorbed with development services and NIT or if we'll have to do some sort of small reconfiguration. Um, but really for fiscal year 26, we're looking at a $ 1.9 million impact again with no mitigation. We do have an idea for how to kind of fix this. um or mitigated at least that we'll talk about. Uh in future years though, starting in fiscal year 27, there's there's a little bit more on the horizon. So, House Bill 9, we've talked about this is the bill that increases the business personal property exemption to 125,000. It's currently 2500 um and the original bill was 250,000. So, this is a bit in the middle through an amendment. Um but this has a $6.25 to 5 million revenue loss starting in fiscal year 27 in the general fund and then also in debt service of course for property tax we see another $ 1.75 million loss. So 8 million this is reflected in the long-term forecast that you saw. Um but this is a reality now. So we just want to remind you that this is coming. Uh and then there's a couple of other bills that have to do with impact fees which again are more administrative in nature and we'll just have to and there's some increased constraint with um how we can step up impact fee increased schedules. Um there's an administrative cost now for periodic audits that we'll have to do on impact fee related activities. Um and so we'll continue to watch those. But the real tangible fiscal impact you'll see there at the bottom is um really having to do with uh House Bill 9. Any questions on any of this? This is mostly a reminder, but just wanted to um questions from councils. We're good. Okay, great. So with that, oh sorry, let me tell you this. Um, Senate Bill 108, this is a preview because again, um, in our next work session on the 17th, we'll talk about, um, an idea for fees. But, um, 1008, $1.9 million revenue loss. What Environmental Services is going to recommend in an M andC that you'll see forthcoming is to charge the uh, a flat rate for these health permits. Right now, they're on a sliding scale. You'll see the detail here. um they'd like to increase that fee to $773 flat rate, which is um what the state of Texas fee schedule allows. Um we have to give 60-day notice on this to the state and this is effective September 1. So that's why they'd like to do it sort of in advance of the regular budget schedule. Uh and so uh Cody's here, he can talk about any of this, but really we'll we'll talk a lot about it on the 17th as well. This would change the revenue loss from 1.9 million. it would mitigate it a bit and we'd lose more like 650,000. So that's the reason. Are Cody, are we still required our requirement for our participation in the inspection of these facilities hasn't changed. Correct. Yes, that's correct. So just as a reminder, we still plan to deliver the same service through health inspections and health permits. We just need to review our fee schedule to be in alignment with this particular Senate bill that has now into law and also to maintain all those other state regulations. So, we're not looking at a change in service. As we move forward in the next few weeks, we'll have a better frame and a better plan of how we're going to structure that. Thank you. Okay, now I think I'm done unless there are other questions. Okay, so I'm going to call in Joanne Henson from HR and we'll talk so much. you know, compensation is such a huge part of the budget. So, we thought it'd be helpful to do some previewing for you today about um pay plan, compensation, benefits, all kinds of things. So, turn it over to you. So, I'm here focusing mostly on the benefits as side of the house. Um first of all, of course, we've got our total compensation, the b the base pay, pension, medical program, dental vision, we offer basic life insurance, holidays, sick leave, um and the employee assistance plan. So, the city health insurance is what's called self-funded, and that means that we assume all the financial risks for our benefits. We pay a TPA to monitor the claims and to run the claims for us, but we pay the actual claims. We do have a stop-loss for an amount of a million dollars per claimant. We do, however, have one child on our plan who actually has what's called a lasered stop-loss. For him specifically, because of his claims, we actually pay the first 1.8 million on this child. And to just give you a little perspective on stop-loss, I've been with the city 13 years now. In the first 10 years I was here, we hit stop-loss twice. In the last two and a half year, two years, we've hit stop loss five times. On the activives alone, we hit the stop loss on the retirees once already. And I have an 895,000 claims sitting out there right now, which means he's probably going to hit stop loss as well. I have three claims that are over atund over $350,000 right now. They may or may not get to that stop-loss tier. So, we're we're struggling a little bit on claims right now. For fiscal year 2026, we're proposing a 7% increase in city contributions. The last four years, we've increased 5% on the city side of the house. 2023 was the first employee premium increase since 2020 since 2018. Um, and then in 2021, we actually were able to do a premium holiday because we were so we had so much fund balance built up. At the moment, we have about just under 10 11,000 employees covered. When we add the MedStar 100 employees that are going to be part of the general population, um that will include that number will increase. These numbers do not count the 440s plan is that it's a separate plan and they do not run the same way we do. And here's where you can see our claims costs and here's where our big problem is. You'll notice from 2023 to 2024, we jumped $16 million in claims costs. It's been rough. Um again, five million claims over the million dollar mark in 23 and 24. We've just got a general increase in the complex medical conditions. In 2023, 44, 2022, we had uh 23 claims hit over $250,000. In 2023, it became 28 claims that hit over $250,000. And in 2024, we had uh 31 claims hit over $250,000. So, it's just a general increase in all of those kinds of things. There's no trend to back out of that, right? I mean, it's just a number of claims. It's just the number of claims and it's the number of complicated claims. is the real problem. It's the complicated claims. It's the claims that are requiring more hospitalizations longer hospitalizations. Cancer is a big problem for us right now. Um, and as we are a hop, skip, and a jump away from MD Anderson. We've had at least two members go down to MD Anderson. MD Anderson is 28% more expensive than if they had stayed here in the Metroplex. So, it's things like that. Um, we also do cover GLP1s. So, those are the weight loss medications. We cover them also for diabetes. And we cover it at 100% which is extremely generous. What we're looking at doing for uh going forward is we're bringing in three different weight management companies to kind of help us with that so that people are not just getting the GLP ones, but they're also going to get the uh lifestyle discussions to help them kind of move forward and go forward and get a better lifestyle plan. Um but there is just an overall increase in treatment costs. Sorry, just on the GLP1s, um we're covering those. Is there an expectation that there'll be any um decrease in claims because of the increased rates of chronic illnesses associated with the weight loss? I mean, is that why we're doing it or are we just doing it to do it? What we're hoping to do is that if we have people who work with lifestyle management that that what we will see is that people will be able to get to a place where they'll be able to come off the GLP1s and still continue to move forward either in maintaining a lower weight or continuing their own weight loss. That's the goal. Um and that's the programs that we've we've contracted with. That's what the we're hope is. So we are proposing again the 7% increase on the city side. We at the moment we have a proposal of 3% increase on the employee side. I have run the numbers on a 5% increase on the employee side. It gives us another about $800,000 to our budget if that's the case. Um but you can see $67 million is what we received from the city. that is um not what we need based on the claims on the wellness program. We do have the premium incentive where you can get 4616 off of your paycheck premium differential. We do have the cash payout for $250 that occurs the second pay period in jo in January. What we're proposing is instead we can do the cash payout or an optional two wellness days. And so that benefit would then provide people an incentive to do the get the colonoscopy, get the mammogram, get the preventive visits in. Um the benefit there would be that the days are not carried over from year to year. So this it represents no hard liability to the city and it potentially would save us if 50% of the population that currently does the 250 thou $250, it would save us about $175,000. Joanne, what's the current participation rate for the premium incentive today? 86%. Great. Thank you. A question on that one there, Council Lord. So, um I know we had brought this up before about, you know, this particular option for giving an employee the day off to actually do the diagnostic testing, which I think would one, it's the right thing to do, and then two, from a fiscal perspective, certainly save the city a lot of money down the down the road if catch something early. I think my my only concern with uh offering the option of um you know this or the $250 cash payment especially for those employees who aren't exactly you know making a lot and they're working paycheck to paycheck is they're always going to take that $250 option because it's you know it's an interesting perspective but if you look at it if they were to look at it strictly from the math um nobody at the city earns less than $11 an hour which is what the $250 would represent in two days worth of days off. Okay. Maybe I'm just going back to Marines and think about what, you know, Marines would do and you offer them cash over, you know, doing what would be the the wise thing over time, right? They're always going to take that cash. But um so it was yeah when we offered so we offered it up until year up until 2015 which is when we were requested to stop it we had about a 50% part of the population would take the days off as opposed to the cash because of that um concept of you know I earn more than $1 an hour basically is yeah I'd like to just take a pause here and talk about that $11 an hour figure well 250 if you divided it by 16 actually I guess it's not even 11 it's $9 an hour. Oh, did I misunderstand you that you said that there were employees making $11? Not at all. She's just saying that would be the breakdown of Yes. Not at all. My point being that if I were if you look at it from a directly purely fiscal standpoint as a person, it's better for me financially to take the days than it is to take the cash. You bet. Any other questions? Keep going. Okay. Um so the in order to receive the points we have a three- tier system right now with 2 2500 points 3,000 or 3,500 points and it gives you three tiers. We would give the proposal is that we would give five hours for the reaching tier one, 10 hours for reaching tier two and 16 hours for reaching tier three total. Um in order to receive those points you have to do certain things. You do your three roll through three requirements and then you have to do a preventive screening on top of that. After that in order to receive points you do things like engage with ramp health. We've just finished wrapping up a uh spring into wellness event that was citywide that people could participate in. Track your steps, do your classes, um engage with a health coach, watch some videos, um participate in a mission. And a mission is a multi-day kind of activity that you can do to learn more about things like weight management or sleep or stress. We have city sponsored wellness classes that you can also earn points for. Attending the health, safety, and benefits fair gives you points. attending the heart walk, uh doing the blood drive, and then also within the departments, we allow departments to earn points within their own department. So, for example, code compliance just did a mental health um day. Anybody who participated in that mental health day, they were able to receive points for that. So, we allow people to do that as [Music] well. And then the pay for performance. So, in fiscal year 2026, we're proposing the same 0 to 7% option um with budgeting for the 4%. We have noticed that in the 2025 and in 2024 um 96% of the employees that received more than 4% are still here. And that's great for us. In 2024, 4% are still actively employed. And so that's what we would like to do is to keep our employees. It costs much more to replace them than to hold on to them. Any questions? No questions. Thank you. Okay, I'm speak away now. Good morning. Holly Moyer, interim HR director, and I'm going to talk to you about an update on the citywide classification and compensation study. So, briefly, I'm just going to review what we did in FY25, our pay strategies, and a little bit of the historical pay strategies that we uh also have completed in the past few years. and then I'll go into a little bit more depth about this classification study. So on FY25, we did a salary structure movement of our pay pay scales. It was a 4% across all pay grades and classifications and we entry rate from 1545 to6007. That was in October of 2024. And in February of 2025, we increased the employee entry rate to $18. And in the same budget year, we uh were approved for this comprehensive city-wide classification study. That was to help us evaluate our salary structures as we looked at our pay compression of of the uh pay ranges because we had to compress some of the entry level pay ranges and collapse titles into the same pay grade. We're also looking at our pay ranges. We're going to look at our compression with with uh employees and the competitive pay. And so this is kind of a phased approach of our classification study and I'll give you details a little bit later. So historically the last time a citywide classification study was done where we looked at our our jobs was back in 2015. And the best practice is to look at this every 7 to 10 years. And so we also do a bannual market study and it's something that we look at both public and private sector to make sure that we are competitive in our wages. And as Joanne mentioned, our annual pay for performance up to 7% has been in place since 2021. And so one of the things we look at every year is our hard to fill positions. We know out there there is a uh there's some positions that are difficult to fill. So some of the things that we've looked at doing for example with the engineering group and also with crime lab we did sign on bonuses and that helped us in able to recruit and retain employees. And one of the things we also do is called an autoreclass program. As employees are hired, they want to see where they're going in the future and what their career path is. And so we have this program where basically if you start out as a maintenance worker to a maintenance worker senior and up the up the uh job family, you're able to u be able to promote into the next level with the business need without going through a promotional process. So employees really understand exactly what they need in order to be able to go to the next level of um the position and have more responsibility but also more career path what that looks like. And then some department stra pay strategies included on call uh incentive program or uh that type of thing that we look at in a department by department basis based on what their needs are. And then we also did a shift differential pay increase in the fall of 20 spring of 2023. So when we look at the uh citywide classification study back in January kind of gave you a brief overview of the program and what's happening. So where we are is basically a job description questionnaire was something that employees had completed and their supervisors reviewed and it was submitted to Seagull Consulting which is our um vendor for this project. They anticipate only around 750 to 850 JDQs, but our employees are very, you know, they like to uh go ahead and show us how they're this is important to them. And we had over 1,900 completed JDQs. And a job description questionnaire is a very comprehensive document. It takes between 20 and 30 minutes for them to complete. And so we I wanted to applaud the employees and their supervisors and managers taking the time to complete those JDQs and be able to submit them. Some some of these JDQs were done on an individual basis and others were done by teams. And so that's why you see the different numbers there and this is across all departments. And so this comprehensive review will help seagull give us a job architecture, what our job families should look like and look at what levels that we need because we want to make sure that we have the jobs correct in order for us to be able to get the right market data. And so the recommendations from SEO will be how to look at our pay structure in the future to address the compression that we have. They're going to develop also a compensation philosophy based on our past pay practices and what we should anticipate in the future. but also look at the fiscal impact of recommendations. So currently we have four pay schedules. We have a non-exempt pay schedule, exempt, IT and executive. We have over 400 or 550 job titles that have to be looked at and about 4,500 positions and these are just general employees. Our civil service fire and police are not included in this study. And so the reason that we're looking at this is we have the compression of job levels in the lower skill skilled areas that's compressing up with the higher level jobs. So for example, what we have is employees who may have little or no experience like a senior maintenance worker whose pay is similar to someone who is an equipment operator who has a license and has a higher critical skill set and responsibilities similar in pay. And so that's one of the reasons why we're looking at this whole classification study to mitigate those issues. And one of the things that we're finding is that there is a difficult recruiting if you have similar different skill sets in the same pay ranges. So one of the things while we're doing this study is we're still continuing to do classification activities that includes the auto recclass program which is something that employees really still need as a career path moving forward. We're also had uh in this project included the office of medical director which is going to be on board here in the next month and also emergency medical services. We want to make sure that we have the correct jobs aligned with the employees so that when we look at the market, we would be able to have that readily available. And so we also continue looking at reclassification requests for vacant positions because again we still need uh to continue our business needs ongoing practices. So that's something that our team still is continuing to do. So the citywide classification study uh a project initiation was in December. we had um as you look at this time frame I'll go into the next slide a little bit more details but as you can see there is overlapping types of projects that are going with on at the same time as we move forward. So in March of uh March 7th, they had 20 seagull had 20 uh on-site meetings with stakeholders with department heads and key staff to discuss with them what are their concerns, what are their pain points, what are the things that we need to be able to address as we look at the study. And we also had five on-site and virtual options for employees to be able to understand what the study is and the job description questionnaire, how to fill it out. and over 750 employees have participated in that presentations. And so currently we're in the time frame of the classification analysis that's going to continue ongoing because as we said we've got over 550 titles to be look looked at as we look at the process and they're going to continue with the market analysis at the same time and by January through April of 2026 we should have a compensation philosophy developed in order for us to be present here in May of 2026 the final results and recommendations. Any questions? questions from council. Council member Blot. Thank you, mayor. Uh, so just based on this time frame that we're seeing, this will inform not our current budget cycle, but next year's budget cycle. Correct. 30. Thank you. Other questions? Council member Larsto. Thank you, Mayor. Um, are they going to be providing recommendations as they go through on anything we should start looking at changing now at all or we're just going to wait till 2026 and then make the recommendations and then implement any change? No. as as we go through the near the end of the time frame here where there's the development recommendations in January through April, that's the time frame that we're going to have more of the analysis and understanding of what the city wants to do as far as their structure and pay. So, it will be uh during that time frame that we have a final solidification for the process because we have to get the beginning stuff done which is the classification and market before we can get into that philosophy. So, it'll be at the end of the project. Thanks. Any other questions? Council member Nettles? No, I do. Thank you. That was a good question. Uh Charlie, um I got a couple of questions here about um the the compression and I I see Well, let me go back to the last slide. The stakeholders that you met with, can you kind of give me a list of who these stakeholders are? It was department heads and their executive team and key management positions. Okay. Um because I know this is one of the one of the major concerns that Dr. Williams and I had about the pay structure uh for our city employees and so it would be good to kind of talk to um some of the council as well. I don't see that on here. Uh but when we look at the compression I think one of our biggest concerns was when you talk about compression it should be bottom up and not top bottom. um cuz we have a lot of our top seniors um which is going to cause our compression or cause our uh budget to take a a a significant hit. And so we when this uh when this study is coming out, do you know how they're going to deal with that compression piece? That's something that actually is across city nationwide is what we've heard from our consultant about compression issues and that's why uh you know currently there is money in the budget to be able to address those things at the entry point where we have people that are new you know lower experience that are making the same amount of money with someone who has more experience or similar type of money. So that compression through the range is part of the uh projected uh to be addressed in this uh project. and then looking at the structures itself based on the philosophy where we want to stand with the market and the structure itself. Okay. And final question I think for right now are we uh anticipating cost of living to take uh effect as when new hires come on. So um are you asking about what what we're looking for as an entry rate? Yes. So currently we proposed entry rate of $18. Uh but we do know cost of living changes from year to year. So is that also already embedded into what you guys are doing now? So we have a budget response that we're going to be able to address that for you that discuss discuss those same issues. It'll be at the next budget session June 17th I believe that we'll have that information readily available for you. Okay. And I think one of the last things we may have received I don't know Dr. Williams remember or not but uh some of the major cities where they are as it relates to uh employees um rates of pay as well. Yes. And we have that information. Some of the we've uh asked for this information from our large Texas city employers DFW area and some of them right now are still in the uh cautionary stage. They're not sure what they're going to do in this budget cycle if they're going to increase their entry rate or not. So, there are some cities that haven't given us that information yet, but we will give you what the latest information is. And I know Dion, do I don't know whoever can answer, but did we already do a uh when we worked on $18 uh as an increase for the next budget cycle? Did we already embed one in the uh Oh, you may have it. I'm sorry. I just remember working with you. Yes, we did. We did have that as far as that. We'll we'll share that with you again. The uh it was the MIT calcul. Yes. Yes. Okay. We'll share that with you as well. All right. Thank you. Which to be clear, Holly, you're not sharing that today. You're sharing that in June. Yes. On the 17th. Okay. Council Williams. Thank you. Um and thank you for the presentation. I just have two questions on the study timeline. Um obviously I know this is a lot of work and um especially to complete by next uh May. Um but I do think it's important um to stay on timeline. Um so first question is um um on the study timeline is there any efficiencies that we could find to maybe shorten the timeline by maybe a month or two? I know budget planning is always tight and any delay in the study would mean that we would forgo um having the information you know the city council needs to be able to make informed decisions about the next um um the next fiscal budget um following this one that we're working on. I can't make promises, but we're going to do our best see if we can get this shortened. We'll see if we can find some efficiencies to be able to shorten the time frame. Thank you. I think that's really important that we don't have delays. Um just to be um you know frank our public servants um are are hardworking folks um you know many of which are hardworking um families and uh a delay you know even of a year for um increasing um our entry level wage to ensure that forward public servants are paid a living wage that they can afford to live in the city is really important. And so I I would stress on this council and city management to do everything that we can to um ensure that we're meeting this timeline without delay for for the next budget. Second question is um for this upcoming budget um are we still scheduled to provide merit increases for all employees including those whose entry level wages have been increased to $18? Yes sir. It was in the beginning of the presentation. The four to seven the range average for across the board is still part of that process and that'll be based on Excellent. It'll be based on performance like we do every year. Excellent. That's really good. Um obviously our um I would think that all of our employees work hard and and deserve an increase and so that will certainly help on top of the $18 entry- level wage as we wait for this study. Um, I really appreciate uh working with DA on and you know the council and and uh city management on this um compression study and market analysis study. I think it's really important that we do that and so looking forward to getting the results and thanks for the all the hard work. I don't estim underestimate the amount of work that's going in this and don't undervalue it. So, um, thank you'all for doing this. And, and just to clarify, to make sure, we'll still have the $18 entry wage, but those folks that are currently at that level, they'll be like everybody else will have the opportunity to receive a merit increase uh, as we go forward into next year's budget. Additionally, we'll be coming back on the 17th with an update on the MIT study that shows the current um uh cost of needed in order to have a minimum wage in the area. Council member Flores. Uh thank you, Mayor. Uh just one question. As part of our comprehensive review, will that include any new or additional compensation analysis software? No detail what we use here at the city. That's why I'm asking. No, there's no software that would be part of this process. I think am I answering your question? Yeah, you are. Yeah. Okay. Thank you. Any other questions for Holly? Thank you, Holly. Great updates. We appreciate it. So, I think at this point we can take future agenda items pertaining to the budget. Anybody has anything in particular they want to make sure is addressed at our next meeting. Everybody's good. Great. With that, we will adjourn and give it a few minutes before we move into our next meeting per city secretary's office. Thank you.