Decision to Extend City Manager’s Employment Agreement Through Budget Season

Date of release:  December 20, 2017

After a closed executive session at last night’s meeting of the Paducah Board of Commissioners, the Board returned to open session and voted to approve extending City Manager Jeff Pederson’s employment agreement through May 15, 2018.

After discussing options for an interim city manager, the Board determined that extending Jeff Pederson’s agreement through the budget season is a thoughtful decision as the City works through fiscal decisions due to the additional pension burden.

Pederson says, “I am pleased to continue my service with the City of Paducah and am committed to working with the Board and department directors in navigating through the upcoming budget challenges.   Even though we are facing a $2.3 million burden due to the pension crisis, we are dedicated to providing exemplary core services and organizational advancement.” 

Earlier this month the Kentucky Retirement Systems Board of Trustees set the County Employees Retirement System (CERS) employer contribution rates that go into effect July 1, 2018.  These are the rates that Kentucky cities pay to the State as a pension contribution for each hazardous and non-hazardous employee.  The rate is 28.05% for a non-hazardous employee and 47.86% for a hazardous employee.  In other words, for every dollar paid to a police officer (a hazardous employee), 47.86 cents is paid to the State.  These rates are significantly higher than the rates for the current fiscal year (19.18% and 31.55%, respectively).  This change in the rates will increase the City of Paducah’s annual pension cost by approximately $2.3 million per year.

In November, a majority of the Paducah Board of Commissioners asked Pederson to submit his letter of resignation.  Pederson had agreed to continue as City Manager through January 12 to assist the City of Paducah during the transition position.

The Human Resources Department has received proposals from recruiting firms to conduct a national search for the next City Manager.  Mayor Harless says three companies will be making presentations at the January 9 Commission meeting. 

Pederson began his employment as Paducah’s City Manager in December 2010.