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City of Eugene, Oregon <br />General operating costs are the largest expense in the requirements budget. <br />Budget Summary <br />The operating budget has three components: Personal Services, Materials and Services, and <br />Capital Outlay. Personal Services expenses (wages and fringe benefits) account for 59% of <br />general operating expenses. Budgeted regular wages are determined by contracts for represented <br />employees and the Executive Management Team for non-represented employees. Represented <br />employees are budgeted to receive wage increases proscribed in their specific bargaining <br />agreements. <br />Employee Budgeted Wage Employee Share of <br />Groun* Adiustment Health Premium <br />AFSCME 4.2% 5.0% of health premium <br />EPEA 3.2% None <br />IAFF Contract expires at the end of FY07 <br />IATSE 3.5% 8.0% of health premium <br />Non-Represented 3.0% 8.0% of health premium <br />*Where AFSCME is the American Federation of State, County, and Municipal Employees, EPEA is the <br />Eugene Police Employees Association, IAFF is the International Association of Fire Fighters, and IATSE <br />is the Intemational Alliance of Theatrical Stage Employees <br />The second largest type~of Personal Services costs are retirement plan expenses, which account <br />for $21 million. The Public Employee Retirement System (PERS) expense continues to be the <br />biggest cost driver. The most significant litigation around PERS reforms was resolved in the <br />prior fiscal year; the end result is a budgeted PERS rate of approximately 26% of payroll in the <br />FY08 budget, a 3% reduction from the FY07 Adopted Budget rate. <br />A new retirement plan called the Oregon Public Service Retirement Plan (OPSRP) was created by <br />the state legislature for public employees hired on or after August 29, 2003. OPSRP is a hybrid <br />retirement plan with two components: a Pension Program (defined benefit) and an Individual <br />Account Program (defined contribution). OPSRP is administered by the PERS Board. <br />Approximately 15% of the City's employees are in the OPSRP system. <br />Health benefits, budgeted at $17.7 million in FY08, are the third largest component of Personal <br />Services expenses. The FY08 health charge is 6% higher than the rate charged in FY07. <br />The FY08 Proposed Budget assumes a 2.2% inflationary increase for Materials and Services. <br />16 <br />