HomeMy WebLinkAbout07-27-1992
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July 2.1, 1992
Memo to B. McKean - 1992/93 Proposed Budget - HR Issues
Page 2
On January 1, 1992, the city also made the transition to a new,
more responsive, and l9ss costly Health Insurance Program through
Philadelphia Life Insurance Company (PALICO). Even though
this program has saved dollars for the city and provided
improved benefits and lower premiums for employee dependent
coverage, it is anticipated that with a medical inflationary
trend of approximately 20%, our rates will increase
approximately 15%. Currently, with only a few months of
claims data, it is difficult to accurately predict the exact
rate increase. However, preliminary information suggests
that this 15% increase is as accurate as can be expected,
A 151 health insurance rate increase overall equates to about
a 1 - 2% equivalent salary decrease for approximately 56$ of
the employees covering family members. This data is shown in
Attachment A.
Given the fiscal constraints of the 1992/93 Budget, we could
not identify enough resources to sufficiently cover both
increases in health insurance and salary increases of 4 - 5%
in the labor market. However, the City council may wish to
consider one of the following alternatives:
1. A general across-the-board pay increase for all
satisfactorily performing employees; OR
2. A reduced level pay plan implementation to the new Salary
and Performance Management Program; OR
3. An increase in the TMRS contribution rate from the current 5%
to 61 or. 7$1 2 to 1 (For every dollar the employee
contributes, the City contributes two dollars.).
These alternatives are intended to represent a reasonable attempt
to assist employees in oft'-setting benefit cost increases and
erosion of salaries to labor market increases, This further
provides an opportunity to recognize them for their
contributions to the City.
(Please see Attachment B for complete cost details on the two
salary inoreaso alternatives outlined below.)
Alternative #1 - a 1%, 2%, or 3% Across-the-Board (ATB)
increase for all satisfactorily performing employees (Civil
Service and non-Civil Service) including seasonal employees
and regular step increases for eligible Police officers and
Fire Fighters.
July 21, 1992
Memo to B. McKean - 1992/93 Proposed Budget - HR Issues
Page 3
Alternative #1 (Attachment B, Page 1) - Cost Estimates:
Alternative #1A - 1% ATBj civil service stepst
General Fund - $ 259,988
r - All Funds - $ 378,058
Alternative #1B - 2$ ATBj Civil service steps:
- General Fund - $ 4530769
- All Funds - $ 689,909
Alternative ,CSC - 3% ATBj Civil Service steps:
- General Fund - $ 647,550
- All Funds - $ 11001,760
Rather than distribute pay increases across the board, which is no
longer in line with the Cityfs compensation philosophy, the Council
r may wish to consider implementing a modified pay-for-performance
structure as follows.
Alternative 02 - Alternatives that generally correspond to the
those listed above (Alternative 1) which would include a modified
implementation of the new Salary and Performance Management Program
including:
o No Market Adjustment to salary ranges for non-civil
service or civil Service employees
o No increases for seasonal employees
o A "pay-for-performance" matrix (PRI) for
non-Civil Service employees per Attar?iment B, page 2
-1B approximately 1% average increase
-2B approximately 2.6% average increase
-3B approximately 3.4$ average increase
o Police and Fire Department employees (Civil service)
- Regular Step Increases for Police Officers and Fire
Fighters
- a 2% Additional step to the Command Ranks for Police
and Fire pay structures:
- Police ranks - Corporal, SGT, LT, and CPT
- Fire ranks - Driver, CPT, Battalion Chief, and
Division commander
July 21, 1992
Memo to B. McKean - 1992/93 Proposed Budget - HR Issues
Page 4
Alternative 2 (Attachment Be Page 2) - Cost Estimates
Alternative #2A
- General Fund - $ 411,162
- All Funds - $
Alternative #28
- General Fund - $ 49811
- All Funds - $ 760,633
Alternative 02C !
- General Fund - $ 6520738
- All Funds - $ 946,741
The advantages of Alternative 2 are as followst
1) Support for the shift in philosophy to a pay-for
performance pay plan.
2) Reduction of long-term compensation costs by beginning to !
move employees out of the first quartile (where increases
are greatest) toward the midpoint.
3) Meet commitments previously made to employees to reward
employees for performance. ranting across the
4) Avoid establishing a precedent (by g
board increases) that is not in alignment with current
philosophy.
(Please refer to Attachment C for complete explanation of
Alternative 3 as outlined below.)
Alternative #3 - This alternative would -,.oc2r a the City's current dollar
TMRB contrib•.ttion rate of,5% to 6% or 74, to I (For every
the employee contributes, the city contributes two dollars.). The
attached memo from Eric W. Davis of the Texas Munic~ipal retirement
rease
system (Attachment C, part 1) identifies h ®o ee ~2retirement
in contribution rate could increase this p Y
benefits by as much as 20% or 40% respectively. Additionally, in
order to determine a more realistic estimate of the itapaot on
current City employees' salaries, we developed a sprseacdsheet using
a sampling of actual employees. Even using
approach, we found the net increase to the average employee's
retirement benefits to be 13% with a 6% contribution rate and 2)0
with a 7% contribution rate. (See attachment CO par 2.
Furthermorej taxed advantage on he additional alternative the employee
would not b
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III
July 21, 1992
Memo to B. McKean - 1992/93 Proposed Budget - HR Issues
Page 5
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TMRB - survey of Member cities
The attached memo from Ike Obi, Personnel Specialist,
provides some detail on the practices of other TMRS cities
concerning their retirement programs through TMRB.
Primarily, we have included those cities we typically use as
a part of our salary survey.
M914TAL HEALTH PROVIDERS - Effect on Health Insurance Program
Ike's memo also addresses information on some of the benefits
we have realized concerning the expanoion of mental health
providers on our health insurance program. while it is
extremely difficult to assess a direct cost impact, there are
a number of positive intangible factors theft have resulted.
Please let me know if you have any questions or a need for
other information concerning these city council requests.
Thomas W. Klinck
bmcc92.tk
7-21-92
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Attachment A
ASSUMPTIONS
1. HEALTH INSURANCE RATE INCREASE OF 16% -
2. CITY CONTRTIBUTES $189.76 PER EMPLOYEE PER MONTH
3. CURRENT ENROLLMENT DISTRIBUTION; 366
r Employee Only -
Employee & Spouse - 83
i Employee b Child(ren) = 176
Employee A Family = 186
TOTAL - 799
4. ENROLLMENT DISTRIBUTION INCLUDES PART-TIME EMPLOYEES i
66% of City employees have dependent coverage.
Based upon enrollment distribution we will need at loast, a 2%
salary increase to off-set the health insurance increase.
y _
2 Attachment A
rtcom93b.wkl
17-Jul-92
02:41 PM 1992/93 BUDGET
PALICO RATE INCREASE TO EQUIVALENT SALARY INCREASE
ASSUMES 16% RATE INCREASE
EHOURLY EQVLNT
COVRG/PROPSD RATE BHCHMK POSITIONS
HOURLY CURRENT* * INSUR AMOUNT
QVLNT SALARY
RATE RATE RATE (per mo.) INCR
(per mo.) (per mo.)
(A) (B) (C) (D) (E) (F) (G) (H)
Employee d Spouse Firefighterv3 yrs $9.21 $107,00 $123.06 $16.05 $0.09 1%
$312,80 Police Officer-3yrs $12,34 1%
Maint. Worker - 3yr $6.88 1%
Lt Equip Oper-3yrs $7.71 2%
Libr Page - 3yrs $6.14 1X
Cashier - 3 yrs $7.71
Lineman App I-3yrs 68,63
Employee d Children Firefighter-3 yrs 69.21 $70.00 $80,60 610.50 60.06 1%
6270.26 Police Off1cer-3yrs $12.34 11;
Maint. Worker - 3yr $6.88
Lt Equip Oper-3yrs $7.71
Libr Page - 3yrs $6.14
Cashier - 3 yrs $7.71
F Lineman App I-3yrs $8.63
f Employee d Family Firefighter-3 yrs $9.21 $176.00 $201.25 $26.25 $0.16 1%
$391.00 Police Officer-3yrs $12.34 2%
Maint. Worker - 3yr $6.88 2k
Lt Equip Oper-3yrs $7.71 2%
fff Libr Page - 3yrs $6.14 2%
Cashier - 3 yrs $7.71 2%
Lineman App I-3yrs $8.63
* Does not includes $4/month for Network management
**Now rate shows employees' cost minus City's contribution
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PAGE 1
1992/93 Compensation Proposal
Alternative 1
V
Across-the-Board Inoreasee-All Employees
Alternative Percentage General Fund All Funds
1A Is 193,781 311p851
113 2% 387,562 623,702
10 3% 681,343 936,633
I
*Step Increases - Civil Service Only
Fire Fighter 5,744
Police Officer 60,463
Total Funding Required - Civil Service/Non Civil Service
Alternative Genera" r-und All Funds
1A (1% + *Steps) 269,988 378,068
18 (2% + *Steps) 4539769 (3890909
10 (3% + *Steps) 847,550 1,001,780
Avauwptions as of 4W09 PaYrolh
lnotedos Msn0ita 1
Inoludo• sabenal/lswparary tworhor Warm)
We Structure AdJustwente for Police/Piro Oowwand Ranks
No PRO laars4sos
H~Islll
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Al1Nl t1141111V1 t3
PACIL+ 2
07121192 1992193 Compensation Proposal
,11MW Alternative 2 (No Market Adjustment)
Mom&*a 2A Alnrna*o 28 AllsrnabW 20
Ave InclEmp (1.0'16) Aw lholEmp (2.916) Aw WE" (3.416)
Q1 O2 Q3 04 Q1 Q2 Q3 Q4 Q1 Q2 03 04
FAR EXCEEDS 2.0 116 1.00 0.60 4.0 316 3.0 2.6 6.6 6.0 4.76 4.6
FREQU XTLV EXCEEDS 1.6 1.3 0.80 0.60 316 3.0 2.6 2.0 4.6 4.0 3.76 3.6
MEETS REQl1111111E+lENTS 1.3 1.0 0.60 0.30 3.0 2.6 2,0 1.6 3.6 S.0 2.76 2.6
UNSATISFACTORY 0 0 0 0 0 0 _0 0 0 0 0 _ 0
P!# MATRIX COST 1490179 344,369 407,759
' 2% COMMAND RANKS -POLICE 24,993 73,833
x% COMMAND RAW$ • *IRE 63,809 83,+909 93,809
483
SAP INCREASES - POLICE, 90,483 6,74 00,483
STEP ~ASEB - FIRE 6,744
! TOTAL - GENERAL FUND 303,166 496,009 962,734
TOTAL - ALL FUNDS 4110162 780,833 946,741
f Aaump*m as of 419192 payroll
Includes beneft
Iroludes structural adjustment to oannwd ranks
Doss nd Include SeaecnallTemporary Employee Inoreases
` Does not rnalude Eaoutlw Employee Inoraaus
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T! 1E let 24 I P: T M P 7 TEL N01512-476-2503 i73J2 For,
ATTACHMENT C PART 1
M I~
1200 NORTH INIEASTATE 15. AC 612 410S77
7n" MUNICIPAL RETIRFMENT SYSTEM T OFFICE lox 2211
AUSTIN, TWS 71761'2216
3uly 21, 1992
1
YfAs FAX 817/%"333
AND U.S. MAID.
Mr. Ike Obi
Personnel Specialist
City of Denton
215 west McKIWI,
Denton, Texas 16 O1
Dear Ike1
In response to your hone call on this date, inquiring as to the passible impact on
I am writing be
future retirement petits, shau a the City adopt a 696 employee deposit rate. As we have
discussed previously, a member's TMRS benefit is based upon the tow cste~ the l~at gel'°~
before retirement. This is to say, the higher the employed deposit
retirement ben itrat rnin~conjpor unctlonpwith 0096 t Updated o Service Credit, an employee'%s
em loyee deposit
retirement benefit could Increase Updated as much pdaatesd 2Se9rvicledC edit~couldeIn rease4ret employee
deposit rate in conjunction with 10046 pd
benefits by as much as 40%. The actual Increase an employee will receive will be based on
etc
and %
The Increase inethes y employee tort deposit length of Iselndlcatttime d underilPropos d Plans 2 and effect of an
the
res anrannuity ctlvolyIncrease retirement Credit
dy$ transmitted to the City on July 21 (sample pages enclosed),
and a
Ike, should the City elect to adopt a 6% employee deposit rate, the ordinance providing 10046
Updated Service Credit including c transfers, and 70% CPI Annuity Increases would have to be
re-adopted
it we may provide any additional information regarding this or any other retirement matter,
please do not hesitate to call on us.
erely,_
Eric W. Davis
Coordinator Member Relations
BwD/dh
enclosures
ATTACHMENT C
trmr&Wo,wk1 PART 2
07f24/92 IMPACT OF 1 OR 2% TMRS 0ONTR IKITION RATE INCREASES ON FUTURE B H RFTTBETIREMENT EFFECTIVE DATE
08:11 AM RETIREMENT ASSUMING AN AVERAGE OF 3% SALARY INCREASES THROl10H R
FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 6% PER YEAR
Val AGE AS OF ASSUMED TOTAL ASSUMED CURRENT AMMED PLN 1 PLN 2 PLN 3 DOFF. RIFF.
DEC. 91 Wl AOE SVC AT AVERAGE MONTHLY SALARY RRENT)
RETIRMNT PSVC SALARY AT RtETIR 616 2:1 6% 2:1 7% 2;1 1% INC#L 2% INCR
ACTUAL
EMPLOYEES SALARY
~,yl ~Iy~ ~iy 0'40 i8,46~ a ` 47,01!3 i^1',gpli 44,141 , ~ 11C~^,..~ 1 I i r': 1 Ik 3 1 ~:1, I 1 1 ~ II 1 ,1 k I~ ' li'.. , aZ3,488''
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p6 e6 47 1,718 i,A30 3,862 5,036 e,416 7,283 a ;I 18
28 46 2,003 1,811 6,316 iF 7,307 80684 0,8x2 16 20
66
48 66 20 1,080 2,020 3,268 1,238 1,442 1,864 14
30 66 40 2,144 1,630 6,272 6,021 8,824 7,666 ; 13 26
30 66 30 4,007 4,833 n,700 0,430 11,00~088 17,763 1b
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2,017 6,360 5,703 all 7,866 i 16
37 86 39 2,601 2,462 6,447 6,628 0,360 7,319 13% 24
86 39 0 10600 4,773 a 4,840 6,704 8,5x0 5
27
00 66 48 2,@06 2,634 6,083 0,077 11,501 10,102 13 26
86 18 1003 1,651 1,0x4 601 ~T7 t ~6
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41 66 ; 24 0 122b 2,418 11161 1,378 111W4
40 65 34 1,71a 10436 21017 2,074 2,962 3,423 1
06 37 2,844 1,930 4,826 I 4,882 6,732 0,600 1b
61 65 22 2,809 2,1120 3,407 1,848 1,760 2,050 16 113 24
26 66 41 2,6,47 2,118 6,138 00079 8,246 0,612 ,
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07124192 IMPACT OF 1 OR 2% TMRS CONTRIBUTION RATE INCREASES ON FUTURE BENEFITS
08;11 AM RETIREMENT AS3UMING AN AVERAGE OF 3% SALARY INCREASE6' THROUGH RETIREMENT EFFECTIVE DATE
FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 6% PER YEM
VariablM AQEA9OF ASSUMED TOTAL ASSUMED CURRENT ASSUMED ^ PLN1 PLN2 PLN3 TDIFF. DIFF.
IENT) DEC. 91 RETIR ARE SWAT AVERAGE MONTHLY SALARY CURS
ACTUAL FETIRMNTJPSVCCRE SALARY ATHEfIR. 6% 2A 8% 2.1 7% 2.1 1%INCR. 2%IWR,
EMPLOYEES SALARY
20
+ lE rl ~l I 'k,k' , II ~ 0 i}006 I ~ 1r87g 889 11 1r01~ =~11~1t18 t~ 18 1'
1'j 1 1'r:E 1 11! M 2,71 0+46e ~r 8,01 1
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I'11,I,11j111 `~131,1111EI 1.~` it it I t
~ 8 a6 42 0 1,410 4,699 6,312 8,290 7,200 16 28 1
30 66 44 21776 2,698 70092 ;E 9,399 10,687 12,282 ' 11 23
43 66 09 2,89 2,634 4,714 6,128 6,803 8,428 6 20
26 86 46 21,102 1,889 6,808 7,984 9,187 10,640 ; 13 24
21
1 1 i274 y(~~ 0 608 1 4+128 + 1 '14
44 86 33 2,274 2107~yy6 3,749 3,274
l „ 11 111.1111 !II RE,'11 .II 1 ,,,i{ I..: # 3 1. 116V1 f{^T~" '.il 1}'SRI. 31 ! , LL
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23 65 42 0 1,248
30M 41,430 6,123 16%
86
32
1
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32 86 43 2,977 2,696 81886 80863 9,898 11,349 113% 24 i
66 46 2,320 8 338 8,671 9,794 ii,238 1 24
` ~0 e~ 111 l 1,688.' : 1 are x1et
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42 86
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28 86 41 0 2,029 8,239 8,781 70691 9,142 16
44 86 27 10812 1,781 3,181 1, 193 2,146 2,472 16 2811
32 66 44 2,479 2,306 6,936 711979 8,960 i0,293 11
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07&4192 IMPACT OF 1 OR 2% TMRS CONTRIBUTION RATE INCREASES ON FUTURE BENEFITS
,RETIREMENT ASSUMING AN AVERAGE OF 3% SALARY INCREASES THROUGH RETIREMENT EFFECTIVE DATE
08:11 1 AM AM FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 6% PER YEAR
VariabW* AGE A8 OF ASSUMED TOTAL ASSUMED CURRENT ASSUMED PLN / PLN 2 PLN 3 DIFF. DIFF.
DEC. 91 RETIR AGE WC AT AVERAGE MONTHLY SALARY (CURRENT)
ACTUAL RETIRMUT PBVC SALARY AT RIETIR 6% 2:1 8% 2:1 7% 2:1 1% INl 2% INCR.
EMPLOYEES NM SALARY
;111 {?1 4.9; 1}7"dg 10742 40M II,6IIi4 6,680 T,696 1b
t~ ~~p 11Q4" 'i,249`13
2~071 , o01f1_ { i P4N : t
26
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~ 66 37 21298 1,608 3,770 3,881 4,601 6,181 14 26
38 66 42 3,632 31166 8,832 8,374 9,647 1111 13 24
29 4 42 2,892 2,366 8,827 7,796 9,121 10,601 1
40 66 28 0 1,282 2,806 1,661 1,799 2,046 t 14 ?A
23 66 44 0 X2{,029 J6,`617 'I 8,/3y46 {0,881y13 11J1,27i8 Y 1+6
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l 25 66 43 0 1,488 4,849 6,417 8,3'38 70264 1b
it
39 66 37 6,702 6,632 11,683 11,102 12,l 14,726 i3 26
36 66 07 10948 1,747 4,117 ' 3,990 4,439 60337 ;r 14 26
68 66 24 11831 1,887 2,838 1,423 1,668 1,912 14
46
1 86 11 0 10339 1,747 0119• 389 44220 ' 114 24
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trmrat93o.wk 1
07124192 IMPACT OF 1 OR 2% TMRS CONTRIBUTION RATE INCREASES ON FUTURE RENEWS
05:11 AM RETIREMENT ASSUMING AN AVERAGE OF 3% SALARY U`ICREABES THROUGH RETIREMENT EFFECTIVE DATE
FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 5% PER YEAR
Variables AGE AS OF ASSUMED TOTAL ASSUMED CURAE14T ASSUMED PLN 1 PLN 2 1'LN 3 DIFF. Will
DEC. 91 RETIR AGE SVC AT AVERA03E MONTHLY SALARY CU
ACTUAL RETIRMNT PSVC SALARY AT RETIR. 6% 2:1 0% 2:1 7% 2:1 1% INCRR 2% 04CR
EMPLOYEES SALARY
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32 86 38 11630 1,673 4,061 31692 4,220 4,878 16
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_ 68 86 17, 1,223 1,3600 _ 1,710 613 696 686 'r 14 26
AVE'RAGE11 131 26~%
1'i
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's
CITY of DENTON, TEXAS MUNICIPAL BUILDING / 215 E. McKINNEY / DENTON, TEXAS 76201
EXECUTIVE BRIEF
T0; Thomas W. K11nck, Director of Human Resources
A FROM: Z. Ike Obi, Human Resources Specialist
Benefits and Insurance
DATE; July 23, 1992
j SUBJECT: 1992/93 HEALTH INSURANCE AND TMRS ISSUES FOR CITY COUNCIL
This memo is to respond to your questions concerning the following issues,
o Effect of Licensed Professional Counselors on the Health Plan.
o TMRS funding mechanism,
fffeo ogre Licensed_ ro essional Qqun"lor Qn the Health Pia
The expansion of our network provider to include Licensed Professional
Counselors (LPC) and mental health professionals has had a positive impact
on our health plan, Under the current plan, we are able to provide quality
services, using local providers, Employees are pleased with the improved
access that the current arrangement has brought to our health plan. The
current arrangement also improved access to the City's Employee Assistance
Program (EAP). We will assess the financial impact of expanded access to
local mental health providers once our Utilization Review Committee is
formed. Mr. Dave Palatiere (Coopers and Lybrand) is in the process of
forming the Utilization Review Committee,
Texas Municipal Retirement System Funding Mechanism
The Texas Municipal Retirement System (TMRS) i a "defined contribution"
plan. Unlike in a "defined benefit" plan, which uses a benefit formula to
pre-determine retirement benefits, in a defined contribution plan, such as
TMRS, the method of funding benefits is based upon fixed contribution rates.
This means that retirement benefits depend upon the retiree's accumulated
funds and the rate of inflation at retirement. However, TMRS uses Updated
Service Credit to hedge retirement benefits against inflation. This is
accomplished by using the last three years of the employees' earnings to
calculate the monthly benefits to be paid at retirement.
81715668200 D/FW METRO 434.2524
Benefits and Insurance Issues for City Council
July 24, 1992'
Page 2
w
The City of Denton is one of three cities in our survey that make the
employees' portion of the TMRS contribution (see Exhibit). This was
approved by the City Council in a year when there was no funds for salary
adjustments, as an enhancement to employee compensation and benefits
packages, Our survey (see Exhibit) also shows that most TMRS-member titles
ti in our Job market have improved their retirement programs by adopting a 6 or
7% employee contribution rate, According the Mr. Eric Davis (of the Texas
Municipal Retirement System in the attached letter, dated July 17, 1992) a 6
or 7% employee contribution rate could increase an employee's retirement
benefits by as much as 20 or 40%, respectively. In our case, using a very
conservative estimate, a 19 TMRS rate increase could produce as much as a
4 16% increase in retirement benefits. Clearly, a 1% increase in contribution
rate would yield a better and a more sustainable compensation for the
employee than a 1% salary increase, while costing the City less.
f The attached exhibit shows how the City of Denton compares with TMRS-member
cities within the metroplex. If you have any questions, please let me know.
Thank you.
~ky
2. Ike Obi
Exhibit
ccbenrgt.prn
J
it
j
' tNriISIT
1992 TMRS CONTRIBUTION RATE
.r
CITY C'ONTR,X CITY'S EMPLEE EMPLEE SEI',
AND CURRENT X PAID FIRE
RATIO CONTR. BY RATE PROD.
C'ITY'
DENTON 5X 2r1 5,803 5% ,
ADDISON 6% 2;1 8,69% 6% N
ARLINGTON 7% 2:1 11,88% 7% N Y- 11%
CARROLLTON 7% 2:1 8,63% 7%
,
N
DESOTO 5% 2,1 6.50% 6%
DUCAN}'ILLE 7% 1 10.52X 7%
FARMERS 7% 2;1 7%
SRANCH
GRAND 6% 2:1 10.24% 86:
PRAIRIE
ORAPEY'INE 5% 2.1 7,326; 5% Y
IRVINO 7% 1 10,35%e 7%
LEVI$VILLE 6% 2:1 6189% 56; s
MESQUITE 7% 2:1 11.82% 7%
N
PLAN'O 6% 2:1 8.14% 6% N N
RIC'HARDSON 7% 2 :1 11.6 AN 76; IN N
tmrsty KKE11 Y•-YES; N'=NO
a
I
1TUE 1E ~J IPoT 11 R S TEi. rO512- 9," ,
47b-2~IJa gWJc F0 _
ATTACHMENT C PART 1
M~
TEXAS MUNICIPAL RETIREMENT 9TUFM 4 N01TH INTERSTATE JS. AC 612/06-1577
ST OFFICE sox 1221
AUSTIN. TEXAS F17J1.2221
July 21, 1992
VI& FAX S17/3"4333
AND U.& MAIL
Mr. Ike Obl
Personnel Speclallst
City of Denton
313 West McKinney
Denton, Texas 76201
Dear Ikea
1 am writing En response to your phone call on this date, Inquiring as to the possible Impact on
future retirement benefits, should the City adopt a 6% employee deposit rate. As we have
discussed previously, a member's TMRS benefit Is based upon the total reserves accumulated
before retirement. This Is to say, the higher the employee deposit rate, the larger the
retirement benefit earned For example, should the City of Denton elect to adopt a 6%
employ" deposit rate in conjunction with 100% Updated Service Credit, an employao's
retirement benefit could Increase by u much as 20%I likewise, an Increase to 7% employee
deposit rate in conjunction with 100% Updated Service Credit could Increase retirement
benefits by as much as 40%. The actual Increase an employee will receive will be based on
the employee's salary history, length of service, time until retirement, etc. The effect of an
Increase In the employee deposit rate Is Indicated under Proposed Plans 2 and J, 6% and 7%
respectlvely, of the retirement estimates provided with the City's Updated Service Credit
and annulty Increase study, transmitted to the City on July 21 (sample pages enclosed),
Ike, should the City elect to adopt a 6% employee deposit rate, the ordinance providing loft
Updated Service Credit Including transfers, and 70% CPI Annuity Increases would have to be
re-adopted to remain affective.
if we may provide my additional information regarding this or any other retirement matter,
please do not hesitate to call on us.
erely,
[~'Llsl
Eric W. Davis
Coordinator Member Relations
ZWD/dh
Enclosures
I
I _kd~S
+5
Umrat90o.wk: ATTACHMENT C
07124J92 IMPACT OF 1 OR 2% TMRS CONTRIBUTION RATE INCREASER ON FUTURE BENEFITS PART 2
08:11 AM RETIREMENT ASSUMING AN AVERAGE OF 3% SALAw INCREASES THROUGH RETIREMENT EFFECTIVE DATE
FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 6% PER YEAR
Va WA" AGE AS OF ASSUMED TOTAL ASSUMED CURRENT A99UMED PLN 1 1" 2 PLN 3 DIFF,~ RIFF.
DEC. 91 FwnR AGE SVC AT AVERAGE MONTHLY SALARY RRENT)
ACTUAL RETIRMNT pSVC SALARY AT RETIR. r 611 2:1 b% 2:1 7% 2:1 1% INCR., 2% INCK
EMPLOYEES SALARY
EmployM " Ilr 49 1 AG' " 48 !9,488 i3,04D ~!8~„8I56 •7~0d9 17,1♦#a1 #IIif,lyMy 11
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37 66 39 21601 2,452 6,447 6,526 6,369 7,318 1 24
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40 66 34 1,716 1,435 2,917 2,874 2,962 3,423 i
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Vmrat93o.wk 1
07124182 IMPACT OF 1 OR 2% TMRS CONTRIBUTION RATE INCREASES ON FUTURE BENEFITS
08:11 AM RETIREMENT ASSUMING AN AVERAGE OF 3% SALARY INCREASES THROUGH RETIREMENT EFFECTIVE DATE
FUTURE INTEREST ALLOCATIONS ASSUMED TO BE 6% PER YEAR
V4wwmN AGE AS OF ASSUMED TOTAL ASSUMED CANT ASSUMED PLN 1 PLN 2 Pl P13 DOFF. DIFF.
DEC. 91 RETIR AGE SVC AT AVERAGE MONTHLY SALARY CURIE
ACTUAL RETIRMNT PSVC SALARY AT Ra= I'IR r., 696 2t 1 6% 2:1 7% 2:1 11% INCR. 2% INCR
EMPLOYEES MIS) SALARY
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32 66 44 2,479 21305 5,936 7,979 8,980 10,293 1f
tr0 rt24W wk1 IMPACT OF 1 OR 2% TMRS 0ONTRIBUTiON RATE INCREASES
08:11 AM ON FUTURE BENEFITS DATE
TENT ASSUMING AN AVERADE OF 3% SMAW INCREASES 7 }IROA" RETIRQ{ENT EFFECTIVE FUTURE INTEREST ALLOCATIONS ASSUG!ED TO BE 6% PER YEAR
, DIFF. ~ DIFF.
AgSUUIEQ PLN 1 PLN 2 F'LN 3
VwlabWe A03E AS OF AssuwlED TOTAL AW MED CURREPfT
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.
SALARY
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A0 00~I 9Sd4 1M 1,1 13
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I„j 11111,1;,111 1~ {11 1 1~ 1 X11'' 1111w1 I:I r a
it yy n 1 1 { ,
k V111k1 l'1 11 1 {I 1 Ij 1 I'.k 11' F I 1 1!, i1 ht1 .iC I'1,,,y , 1
;i1!1qi11!;i 4i
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{II, I. i11i~ 11 1 111'11 11 I.1 111. il!,11 11' 11'111'' ';,I 1 11-*":1~ I~+~,I 11.Ii U1yI k 1~ it ~1-1r,~'wT" '1 1 II
14 '1 :4
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1111,np 111 j'ij 11,1 13
1 11~I~T11 1111'11,1'1 "T*? , 111
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X11 1111 11 ° 1111 1141: 11 1I 4 ~1 ::p6 1'i , IIk '~:V 1 1 ,'11:11 1 ~I,•y I :
,111 11;1'1i311,.'.11'th111' 111 I:i II I3 r 1, 1 1:,k kl 11,1 1.:, 14... 26
1','11I111111 .„k :1 11,1 ,1 I1 1!11111' 9,088 1016a3 12,181
1 1 11;1 1~ 1 1'11.,1, .j r 311 11,1111.1' 11111 1 1, 1 1
I{ II, !11,,~a111~.kmi1 11 ':,Flli II 'i .I:. r1 [ 1 9518 w~~
24 66 47 8 4957 2,766 2148 2,314 2,838 21
47 86 ?A 1,911 8,118 8,764 7,766
43 3,439 3,188 4,662 ? 962 4.432
66 t
61 12 4.048 3,874 4,110 901
62 66 607 1 24
1,W7
65 11 40817 1,663 397 440
66
I
I
trmr&%M.wk1 HATE INCREASES ON FUTURE Bk"NEFIYS
07124192 Impilk o OF 1 OR 2% TWO CONTRIBUTION ENT EFFECTIVE DATE
TOAB~ INCREASES TRH RETIF"
08:11 AM RETIREMENT At9811M A E OF 3%
PER YEAR
FUTURE INTEREST ALLOCATIONS
Pt.N 1 PLN 2 F'l.N 3 DIFF. qFF,
Vukabl" AGE AS OF ASSUMED TOTAL ASSUMED 0 Fwew ASS1iMED
DEC. 01 RETm AGE SVC AT AVE'RABE MONTHLY BALMY
ACTUAL. RETIRMNT PWC SALARY AT RETIR 616 2.1 616 2:1 7!6 71 19611dCR 296 il1CR
EMPLOYEES SALARY
4 94
kI1`I' 11r 1,1, t 844 i9fi61 I 13
' ~ ~ ~I ~ ',kI I 2,871[ 1 ,7'~ 1 8,311' 9
II II'1113E~1'i 1311 I'. ,I 1'i~; 3 kl r.~41 : i ''2113 k,. ~y 1~ : ,
16 W .4,048 1
, T yy{ i I
It 11 10
V74
u
~ , .6918 0,1!84 7,006 14 26
r.,IU,I11 42 3142 ,
42 66 37 3,832 2, 6
4,864 8,728 6,621 ; i6
86 38 10762 1,866 51006 24
30 3,812 3.184 3,630 4,161 1
31 3, 2,606 6,237 ~ 16
6
38 1,30 ~ 1,490 4,J13 3,858 4,632 1.617 1
30 1 86 65
1,404 1
66 1A 3,278 3.188 4.133 1.232.
66
I, a il:k i"T E,14T ''„~1"! 31' f ,16,347 i
pp [ 14
79, t E',
j'1E; rJl IIk' °1 ( '~81 I,i eh ; 4,8!¢1 r ' 111 V,~I '~11n # E 1~
...96 .
LEI ~ipi {V ! 11 , 'IEillr' , 1 1 k , li k , , 1 91T' III
1 " i '4dQ 'I
.1
7,728 1,
40 6 6 43 2,768 8,606
6' 6,066 f 1
72 65 43 0 1,473 5.008 7,190 x8,,338 338
"
46 66 40 3,637 3,040 5+176 6,106 7,002 ~ 6,731 7,712 1 21
36 66 46 1,038 1,661 4,362 6. 21
36 9,966 1,780 43,441 3.167 3,650 4,20:1 1 13 3
41 66
Il 1'II I°I ,a( i~ 1'':~fl ii:lEl `~1 III 1t ; I1.: , i YI°'fS' , ,i III III iX~iFllr ;i II
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14
Illy
till L;11:~I!14 go.
j`li,'Ikt I. If1',I" ,1.`f 1 `Iltil.',i i" 1''1I~1P~T'fl'':' [F II 'll k 1 k
I~~~
II i'ai''N,lll Ili1.,1tE EI :''t' .il Ili ::,!L:y~ f
110 i,
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!II tII
ii III 111 11' h's~E: l k 1 : 980 10
66~ 42 ~ 2,716... 2,731 6,163 9,643 10,660 12, II
~ 1b
1 673 41061 ? 3,892 4,220 4,876s
16
28 86 33 1,830 o 86 33 0 2,020 6881 6,6w 8 885 7,004
"
1,685 3,089 « 1,791 2000 2,414 14
28
41 27 ,
66 1, 1350 _ 10710 693 506 888 IL 14 171. f
66 AVEKAGE 13 26
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CITY of DENTON. TEXAS MUNICIPAL BUILDING / 215 E. McK1NNEY / DENTON, TEXAS 76201
EXECUTIVE BRIEF
T0; Thomas W. klinck, Director of Human Resources
FROM; Z. Ike Obi, Human Resources Specialist
Benefits and Insurance
DATE; July 23, 1992
SUBJECT: 1992/93 HEALTH INSURANCE AND TMRS ISSUES FOR CITY COUNCIL
This memo is to respond to your questions concerning the following issues;
I
o Effect of Licensed Professional Counselors on the Health Plan,
I o TMRS funding mechanism.
Effect of More Licensed Professiowl Counselors On the Health Plan:
I
The expansion of our network provider to include Licensed Professional
Counselors (LPC) and mental health professionals has had a positive impact
on our health plan. Under the current plan, we are able to provide quality i
services, using local providers, Employees are pleased with the improved
access that the current arrangement has brought to our health plan. The '
current arrangement also improved access to the City's Employee Assistance
Program (EAP). We will assess the financial impact of expanded access to
local mental health providers once our Utilization Review Committee is
formed. Mr, Dave Palatiere (Coopers and Lybrand) is in the process of
forming the Utilization Review Committee.
Texas Hugicipal Retirement Sysu ina Nac anism:
The Texas Municipal Retirement System (TMRS) is a "defined contribution"
plan. Unlike in a "defined benefit" plan, which uses a benefit formula to
pre-determine retirement benefits, in a defined contribution plan, such as
TMRS, the method of funding benefits 1s based upon fixed contribution rates.
This means that retirement benefits depend upon the retiree's accumulated
funds and the rate of inflation at retirement. However, TMRS uses Updated
Service Credit to hedge retirement benefits against inflation. This is
accomplished by using the last three years of the employees' earnings to
calculate the monthly benefits to be paid at retirement.
8171566.8200 D/FW METRO 434.2529
Benefits and Insurance Issues for City Council
July 24, 1992 JJ
Page 2 1
The City of Denton is one of three cities in our survey that make the
employees' portion of the TMRS contribution (see Exhibit). This was
approved by the City Council in a year when there was no funds for salary
adjustments, as an enhancement to employee compensation and benefits
packages. Our survey (see Exhibit) also shows that most TMRS-member cities
in our job market have improved their retirement programs by adopting a 6 or
7% employee contribution rate, According the Mr, Eric Davis (of the Texas
Municipal Retirement System in the attached letter, datcd July 17, 1992) a 6
or 7% employee contribution rate could increase an employee's retirement I
benefits by as much as 20 or 40%, respectively, In our case, using a very I
conservative estimate, a 1% TMRS rate increase could produce as much as a
16% increase in retirement benefits, Clearly, a 1% increase in contribution
rate would yield a better and a more sustainable compensation for the
employee than a 1% salary increase, while costing the 01ty less,
The attached exhibit shows how the City of Denton compares with TMRS-member
cities within the metroplex. If you have any questions, please let mo know.
Thank you.
L
2. Ike Obi
Exhibit
cobenrgt.prn
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ENHIBIT
1992 TMRS CONTRIBUTION RATE i
i
CITY CONTR,% CITY'S EMPLEE EMPLEE SEP.
1
AND CURRENT % PAID FIRE
RATIO CONTR. B1' PROG.
RATE C I TY
DENTON 5% 2:1 5.80% 5% Y Y-11%
ADDISON 6Y. 2:1 8.69% 6% N
ARLINGTON i% 2:1 11.88% 7% N 1'-7%
CARROLLTON 7% E:1 8.63% 1%
N
DESOTO 5% 2:1 6.50% 5% N
DUCANVILLE 7% 2:1 10,620/, i%
FARMERS i% 2:1 10.28% 7% N
BRANCH N
GRAND B% 2 : 1 11). 24 % 6%
PRAIRIE N
GRAPEt'INE 5% 2: 1 7 32%, 5% Y
IRVING 7% 2:1 10.35% 7% N
LEWISVILLE 5% 2:1 6.89% 51% N
MESQUITE 7% 2:1 11,82% 7% N N
PLANO 6% 2s1 8.14% B, N N
RIC'HARDSON 7X 2:1 11.67% 7°; N N
tmrsty KEY: Y=YES; N=NO
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HANDOUT TO COUNCIL 7.28-92
APPRAISAL ROLL COMPARISON
Difference
Difference Coepar* to
f1992 Preliminary Roll Certified Roll Preliminary final Roll Ch1toI1
1,965,941,225 1,891,722,188 (0.0.38) N/A
2,043,852,257 1,951,304,490 (0.0453) 1,972,288,683 0.0108
2,035,653,064 21036,603,285 010005 2,092,796,973 0.0276
1969 21257,406,373 20128,213,396 (0.0572) 21138,626,212 0.0049
1988 2,278,350,910 2,13+1,291,272 (0.0632) 2,138,360,945 0.0019
2,146,731,462 2,050,294,577 (0.0449) 2,057,864,825 010037
1987 1
Total de0reaee from 1991 Final Roll to 1992 Certified R011 is 4.14.
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I t`
rrO COUNCIL 7-28-92
HANDOUT T t
Assessment of Solid Waste
Management Alternatives
for the Denton Area
Prepared By
i
Denton Area Solid Waste
Technical Committee
Presentation To Denton City Council
July 28, 1992
Denton Area Solid Waste Technical Committee
Ken Dickson, Chairperson Harry Meeuwsen
Institute of Applied Sciences Dept. of Kinesiology
Univ, of North Texas Texas Women's Univ.
John Cooper Joyce Poole
Denton County Extension Denton
Horticulturist
James Smajstrla Dale Branum
Trinity Composting TLC Landscaping
Tom Waller Bill Angelo
Institute of Applied Sciences Director Community
Univ, of North Texas Services
City of Denton
Martin Slemmons Lanse Fullinwider
Grounds Maintenance Supervisor Flant Operations Mgr.
Texas Women's Univ. Univ, North Texas
Jim Coulter Gary Mokry
Water and Wastewater Treatment Andrews Corporation
City of Denton Denton
t.
3
Denton Area Solid Waste
Technical Committee
■ Ad hoc Committee
Mission: Foster the establishment of a
Denton Area Resource Recovery Cooperative
(DARRC)
■ Goal of DARRC: Use creative talents of area
governments, universities, businesses, and
citizens to address solid waste disposal
sound
problems in an environmentally srecovery
manner while fostering resource
and economic development.
of Denton solid waste management is
■ City
the nucleus of DARRC.
■ First met in December of 1991 and has met
regularly over the last seven months.
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Denton Area Resource Recovery Cooperative
"A Partnership in Environmental Stewardship
City of Denton Viotor
Sanger / TWU
1C Denton County
UNT ----~T SW
DISD I'll Peterbilt Tetra Pao
RRC v o
C TI
Andrews produots
Krum
Argyle ~
Others Lewisville
Produots ` To Landfill
r, RDF Plastic Metals Paper
Compost
RESEARCH
Industry Industry In ustry
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Overview of Solid Wastes 1992
I
USA1 Texas2 Ci fir of Denton
Tons 179.6x108 19.4x106 60,000
Percent
Recycled 13.1 10 ? i
Sources:
1 U.S. Environmental Protection Agency
2 Clean Texas 2000, April 1992
3 City of Denton Solid Waste Division
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Materials Generated in MS W
by Weight
Paper
40% Yard
Wastes
17,6%
Metals
Food 8.5%
Wastes
7.4% Glass
Other 7.0%
11,$% Plastics
8.0%
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Management of Municipal Solid Waste
in the US
Landfill, 72,7%
t Recovery
13.1%
Incineration, 14.2%
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Source of Municipal Solid Waste 'I
Denton, Texas
Residential
26%
Commercial
74%
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Opportunities/Challenges
■ City of Denton landfill will be full by July 1996.
Time is short to develop alternatives.
! Unique opportunity exists in Denton for creatively
addressing solid waste management.
• City of Denton Solid Waste Management
Program
• Universities
• Industries
• Citizens
w Parker Bill (Senate Bill 1349) set goal of reducing
the weight of solid waste going to Texas landfills
by 40% by 1994.
■ Clean Texas 2000 set goal of 50-60% reduction in
weight of solid wastes being landfilled by the year
2000.
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Integrated Approach for Municipal
Solid Waste Management
Commercial Residential Institutional Industrial
Source Reduction
Collection
MR F--* Recyclables
Compost RDF Landfill
MRF = Materials Recovery Facility
RDF = Refuse Derived Fuel
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Source Reduction/Waste Minimization
Definition: Source reduction is the design,
manufacture, and use of products so as to reduce the
quantity and toxicity of wastes produced when the
products reach the end of their useful life.
r Recommendations:
I' ■ Develop financial incentives and disincentives
to encourage reduction by linking economic
benefit to reduction activities.
• Commercial, residential, institutional, and
industrial collection rates should be based
on the volume of MSW generated,
■ Develop an active public education program
stressing product reuse, decreasing
consumption and substituting safer products,
■ Sponsor and support state and federal
legislation which encourages product reuse,
decreased packaging, increases in product
lifetime, and decreases in product toxicity.
■ Develop a program to address household
hazardous wastes. Education, collection and
disposal.
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Collection Systems
■ Three Basic Systems
• drop off centers
• source separation curbside collection
• commingled curbside collection
■ Drop-box Recycling Centers
Pros: Oldest, easiest to implement, inexpensive,
accessible to commercial and residential
generators
Cons: Hard to locate, NIMBY, misuse,
inconvenient, have little impact on reducing MSW
volume
■ Source Separation Curbside Recycling
Pros: Popular, convenient, divert greater
amounts of MSW then drop off centers
Cons: Limited to residential customers, requires
a dual collection system, nets only a 10%
reduction in the residential MSW, generally
expensive to implement and produces relatively
insignificant benefits I
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■ Commingled Curbside Collection
• Uses different colored garbage bags for
recyclables versus refuse
• All bags are placed in the same collection
vehicle
• Requires a sorting facility. Refuse to the
landfill, recyclables baled, and shipped to
markets.
i
j Pros: Convenient, lower capital and operating
costs for collection than source separation
programs, allows processing of recyclables from
commercial, and industrial customers
Cons: Requires construction and operation of a
sorting facility (Materials Recovery Facility, MRF).
Recommendation: City of Denton implement in a
phased manner mandatory source separation of
residential and commercial solid wastes, Solid
wastes should be source separated into paper,
recyclables (glass, aluminum, ferrous metals, plastics)
and non recyclables. A three colored bag or sticker
and unified collection system is recommended.
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Composting
■ Yard waste makes up 19,6% by weight and 10.3%
by volume of MSW
■ At times yard wastes make up 45% of residential
solid waste in Denton
■ These materials can be economically and
effectively used after composting for landscaping,
horticulture, and agriculture.
■ Biosolids from wastewater plant can be
composted.
Recommendation:
• Develop a medium technology composting
facility at the Edwards landfill site,
• Provide a collection system for yard wastes, use
volume based rate structure,
• Ultimately ban yard wastes from the MSW
stream.
• Encourage backyard composting and TAEX
Don't Bag It Program--Environmental Education
Program.
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Materials Recovery Facility (MRF)
Definition: A materials recovery facility (MRF)
receives, bales, stores, and ships resources to end
users.
A I
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■ There are approximately 270 MRFs in f
operation in the USA,
■ A MRF allows for efficient processing of both
residential and commercial solid wastes, and
k for compaction and consolidation maximizing
economic return and minimizing environmental
effects of transportation.
Recommendation:
■ Develop a 300 ton/day MRF which can initially
separate, process, store, and ship paper
(including corrugated), aluminum, ferrous
metals, glass, and plastic,
• MRF should be flexible in design so that it
can be expanded to produce paper fluff
for composting, and refuse derived fuel
(RDF) at some later date.
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IAA
Aluminum Used Beverage Can Prices
National Averages - 1991
80
U.B. Prooessors are dealers, brokers, *to.
60 gino.-u.o#r.o...w.n..to.urAfloo....o.O. tm.o.1.to.rm.......................
C
s 40
n
t
30
! p
' o
n 20
d I
10.1 -P11td°bq"Prous- tdrs..........-,+-,P#td°by-9r*;U*wr5................
01 2 3 4 a 8 7 8 9 10 11 12 13 14 15 16 17 16 11120 212 123 24 211
Time - 1891
Note: Prloes here do not reflect exact prices pald, but are raglonel averages tabulated to show
Movement ewe 11we.
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Old Corrugated Cardboard Prices
National Averages - 1991
60
U.S. Proosasors are dealers, brokers, *to.
End-Users are paper mills, etc.
D -
0
a
r
s
20
/
T
0
n
10 +
Paid by Processors Paid by End-Users
01. 2 3 4 6 6 7 8 9 10 11 12 13 14 15 16 V 18 19 20 2122232425
Time - 1991
Note, Price* here do not reflect exact prloN, but are reelor i averages tabulated to show
movement ever time.
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Landfill
■ A landfill is an essential component of an
integrated solid waste management program.
■ Based on historical data and growth assumptions
the City of Denton will need 48 acres of landfill to
meet its needs to the year 2018 or 80 acres to
meet its needs to 2028. This assumes all MSW is
and can be landfilled.
■ With a municipal composting facility and a
materials recovery facility the amount of landfill
needed can be reduced by a factor of 3X. This
means that the 80 acre landfill will only be one-
tr4 ; d full in the year 2028.
■ The City of Denton's Edwards landfill will be full in
July 1996.
Recommendation:
■ The committee re ^ommends that the City of
Denton immediately proceed to expand the
Edwards landfill and provide space for a
materials recovery facility (MRF), municipal
composting facility, and for a resource j
recovery industrial park.
■ This site has many advantages over locating a
new landfill,
• strategic location
• geotechnicai properties adequate
• waste treatment plant location
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Summary of Recommendations
■ The City of Denton should move immediately to I'
expand its current Edwards landfill. a
■ A municipal composting facility should be
established to process yard wastes and yard
wastes should be banned from the landfill
■ A municipal iaterials recovery facility (MRF)
should br- Jeveloped at the Edwards landfill to
recover recyclable resources.
■ Mandatory source separation of both residential
and commercial solid wastes should be
implemented, A three colored bag or sticker and
unified collection system is recommended.
■ Residential and commercial MSW billing rates
should be based on the volume of waste
generated,
■ An aggressive public education program on waste
reduction/waste minimization should be
implemented.
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Economic Implications of Recommendations
■ Committee conducted a preliminary economic
analysis.
■ Committee examined two alternatives.
• Option 1. Building a landfill to hold all of the
' City's solid wastes.
i
• Option 11. An integrated approach which uses j
` source reduction, a municipal composting 1
facility, a materials recovery facility and a +
{
smaller landfill.
E
S Both options were assessed for implementation in
1996 and examined in for cost (1992 dollars) if
built to meet the City's needs for ten years (2005),
23 years (2018) and 33 years (2028).
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Option
■ Option 1. Continue to landfill all MSW will require
an 80 acre landfill to meet the City's needs to the +
year 2028. Development costs will be
approximately $7,000,000 in 1992 dollars. Annual
operating costs including debt service are
estimated to be $2,890,865.
This option will cause an approximate 35%
increase in the residential and commercial
bills to pay for the development of the new
landfill,
1992 1992 Plus Landfill
Average Residential
Bill $ 9.95 $ 13.43
Average Commercial
Bill $116.79 $157.66
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Option II
■ Option II. Materials recovery facili (MRF),
municipal composfin~ facility (MC and landfill.
Development costs will be approximately
$11,700,000 in 1992 dollars for a facility to handle
wastes generated in 2028 (33 years), Annual
operating costs including debt service are
estimated to be $5,180,074 if no credit is allowed
for income from the sale of recovered recyclables.
If recyclables can be sold for an average of $25.00
per ton then the annual operating costs would be
$2,866,174 which is comparable to the annual
operating costs of Option I (landfilling). ~
■ Other benefits of Option II
e Allows the City to meet the legislative goals of
a 40 to 60% reduction in the weight of MSW
being landfilled in Texas.
o Extends the life of a landfill by 3X to 5X.
Recovers valuable resources from MSW and
returns $ back into the local economy.
• Has the potential to attract local industries
which specialize in processing recovered
resources.
• Provides an opportunity for research and
development in a growth area,
• Will establish Denton as a leader in
environmental stewardship in the region and in
Texas.
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Conclusions
■ City of Denton should implement an integrated
solid waste management program which includes
waste reduction initiatives, municipal composting,
a materials recovery facility, and a landfill.
{
■ The implementation should be phased with the
goal of full implementation in 1996.
■ First steps should be:
• Proceed immediately with permitting an
expansion of the Edwards landfill. Permit as
large a landfill as can be accommodated at
the site.
• Start a detailed engineeringg design for a
municipal composting facility, and materials
recovery facility.
• Develop and implement an environmental
education program on waste minimization and
resource recovery.
s Explore with State, Federal and Industries,
funding sources Demonstration funding.
• Explore with other overnmP
g , ntai agencies (the
county, small cities in the area of serving as
the nucleus for the Denton Area Resource
Recovery Cooperative.
• It is the right thing to do and the time is right!