Denham Springs finance review flags retirement-rate drops, new hotel-tax fund and planned salary adjustments

Denham Springs — City finance staff on May 3 told the City Council finance committee that employer retirement contributions for some plans have decreased this year, the draft budget does not include a uniform cost-of-living increase, and the city will create a separate fund to account for hotel-tax revenue.

The changes could affect police and fire pay and the timing of new revenue. In its presentation, staff said the employer contribution for one retirement plan dropped from 14% to 13.5% and that the police contribution fell from 35.6% to about 33.475%, which the presenter said "decreases the premium slightly" while some plan modifications remain under review.

City staff said there is no across-the-board cost-of-living adjustment baked into the draft budget. "There is not a cost of living in the budget," a staff member said during the discussion. Instead, the administration is conducting a salary survey for fire and police now and plans to extend a similar survey and pay-scale adjustments citywide; the draft budget includes a 3.5% placeholder for those salary moves.

The presentation also said the city will open a new fund, referred to as Fund 11, to capture hotel-tax receipts. Staff told the committee hotels are collecting the tax now and will remit April collections with their April returns by May 20; the city expects to receive those funds in early June. Staff said revenues collected there will be accounted for in the new fund rather than directly in individual departments.

On timing and cost, committee members asked about the compensation studies and other professional fees. Staff clarified the compensation study for police and fire recently approved is modest (about $11,000 for those departments), while a separate professional-fee item tied to the 2022 HMA grant — described as work on property elevations — is near $1 million. A separate compensation study mentioned later in the discussion was described as roughly $35,000, not $1 million.

Why it matters: changes in retirement rates and how the city allocates new hotel-tax revenue can alter department budgets and the timing of any pay adjustments. Committee members asked staff to return with firm figures and comparisons to neighboring jurisdictions before adopting final pay-scale changes.

Staff said they expect to have answers on outstanding items by the next departmental meetings; the finance committee continued its review of the line-item budget after these presentations.