HomeMy WebLinkAboutResolution 4152-12-2012A Resolution
NO. 4152 -12 -2012
AUTHORIZING THE EMPLOYMENT OF
KELLY, HART & HALLMAN, L.L.P., AS OUTSIDE LEGAL
COUNSEL TO REPRESENT THE CITY IN THE LAWSUIT
ENTITLED RICHARD VAN HOUTEN, JR. AND STEPHEN HALL v.
CITY OF FORT WORTH, A TEXAS MUNICIPAL CORPORATION,
CASE 4:12 -CV- 00826, AND ANY OTHER RELATED LITIGATION,
AND AUTHORIZING PAYMENT OF COUNSEL FEES
WHEREAS, on October 23, 2012, the City Council adopted Ordinance No. 20471 -10 -2012,
which amended the Retirement Ordinance to reduce benefits for future police officers and for future
service accruals for existing police officers and general employees; and
WHEREAS, on October 23, 2012, the City of Fort Worth filed a declaratory action against the
Employees' Retirement Fund of the City of Fort Worth (Fund) requesting a Court to declare that the
election called for police officers only to increase their contributions to the Fund was in violation of
Article 62431, and that the pension benefit changes adopted by the City Council are constitutional; and
WHEREAS, on November 6, 2012, the City Council adopted Resolution No. 4142 -11 -2012,
ratifying the filing of the declaratory action against the Fund and the employment of Kelly, Hart, and
Hallman, L.L.P., as outside legal counsel to represent the City in the lawsuit against the Fund, and
authorized compensation in an amount up to $100,000.00; and
WHEREAS, on November 19, 2012, a lawsuit against the City was filed by Richard Van
Houten, Jr. and Stephen Hall related to the pension benefit changes adopted by the City Council on
October 23, 2012; and
WHEREAS, it is possible that there will be additional lawsuits filed against the City related to
the pension benefit changes adopted by the City Council on October 23, 2012; and
WHEREAS, because of the extraordinary complexity of this area of law, the City Manager and
the City Attorney recommend that the City retain outside legal counsel with knowledge and expertise in
matters involving pension law; and
WHEREAS, the law firm of Kelly, Hart, and Hallman, L.L.P., possesses the required
knowledge and expertise in pension law;
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No. 4152 -12 -2012
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS, THAT:
1.
The City is authorized to retain the law firm of Kelly, Hart, and Hallman, L.L.P., as outside legal
counsel pursuant to Chapter VI, Section 3, of the City Charter to represent the City in the above
referenced lawsuit, and any other litigation related to the Retirement Ordinance amendments adopted by
City Council on October 23, 2012.
2.
The City is hereby authorized to compensate Kelly, Hart, and Hallman, L.L.P., for its
representation of the City in all litigation related to the pension benefit changes adopted by City Council
on October 23, 2012 in an amount up to $200,000.00.
Adopted this 4`h day of December, 2012.
ATTEST:
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Mary Kayser, Se etary
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION. Approved on 1214/2012 - Resolution; No. 4152. 12.2012
DATE: Tuesday, December 04, 2012 REFERENCE NO.: G -17752
LOG NAME: 12PENSION BENEFITS LITIGATION
SUBJECT:
Adopt Resolution Authorizing the Employment of Kelly, Hart, and Hallman L.L.P., as Outside Counsel to
Represent the City in the Lawsuit Entitled Richard Van Houten, Jr. and Stephen Hall v. City of Fort Worth,
a Texas Municipal Corporation, Case No. 4:12 -CV- 00826, and any Litigation Related to the Pension
Benefit Changes Adopted by the City Council on October 23, 2012, and Authorizing Payment of Counsel
Fees in a Total Amount Up to $200,000.00 (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council adopt the attached resolution authorizing the employment of Kelly,
Hart, and Hallman L.L.P., as outside counsel to represent the City in the lawsuit entitled Richard Van
Houten, Jr. and Stephen Hall v. City of Fort Worth, a Texas Municipal Corporation, Case No. 4:12 -CV-
00826, and any other litigation related to the pension benefit changes adopted by City Council on October
23, 2012, and authorizing payment of counsel fees in a total amount up to $200,000.00.
DISCUSSION:
In 1945, the City of Fort Worth established the Employees' Retirement Fund of the City of Fort Worth
(Fund) which is a tax - qualified government pension plan (Plan). The Fund is administered by the Board of
Trustees of the Fund (Board). Since 2007, the Plan has been governed by 6243i of the Texas Revised
Civil Statutes. The statute permits both the Board and the City Council to make rules governing the Plan.
However, only the City Council can make changes to benefits. The Plan is also subject to Article 16,
Section 66 of the Texas Constitution.
On October 23, 2012, the City Council adopted Ordinance No. 20471 -10 -2012, which amended the
Retirement Ordinance to reduce benefits for future police officers and to reduce benefits for future service
accrual for existing general employees and police officers. The Motion to adopt the amendment included a
motion to reject the amendment to increase police officer contributions to the Fund.
Shortly after the City Council adopted Ordinance No. 20471 -10 -2012, a petition for declaratory judgment
was filed by the City of Fort Worth against the Fund to declare that the benefit reductions adopted by City
Council were in compliance with Article 16, Section 66 of the Texas Constitution. The petition also
requested the Court to find that the election for police officers to increase their contributions to the Fund
violated Section 6243i because it did not allow general employees and firefighters to vote as required by
the statute. Due to the important nature of the issues involved, the City had to file its petition immediately
in this matter.
On November 6, 2012, the City Council adopted Resolution No. 4142 -11 -2012, ratifying the filing of the
declaratory action against the Fund and the employment of Kelly, Hart, and Hallman, L.L.P., as outside
legal counsel to represent the City in the lawsuit against the Fund. The City Council authorized
compensation in the amount up to $100,000.00.
Logname: 12PENSION BENEFITS LITIGATION Page I of 2
On November 19, 2012, a lawsuit was filed against the City by Richard Van Houten, Jr. and Stephen Hall,
two employees of the City of Fort Worth. The lawsuit challenges the constitutionality of the pension benefit
changes adopted by City Council on October 23, 2012 under both the Texas and U.S. Constitutions. It is
recommended that an additional $100,000.00 be added for the second lawsuit, bringing the total
authorization for all such litigation to the amount up to $200,000.00.
The City Manager and the City Attorney agree that, because of the extraordinary complexity of this area of
law it is necessary to retain outside legal counsel with significant knowledge in pension law to ensure that
the City's interests are protected. Kelly, Hart, and Hallman L.L.P., has experience in a wide range of
benefit matters, including pension, and has agreed to represent the City. Chapter VI, Section 3 of the City
Charter requires the City Council to approve the retention of any outside legal counsel for assistance to
the City Attorney. Accordingly, it is recommended that the City Council adopt the attached Resolution
authorizing the retention of Kelly, Hart, and Hallman, L.L.P., to represent the City in the above referenced
lawsuit, and in any other litigation related to the pension benefit changes adopted by City Council on
October 23, 2012. It is also recommended that the City Council authorize payment of an additional
$100,000.00 in counsel fees for all litigation related to the pension benefit changes, bringing the total
authorization to the amount up to $200,000.00.
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated, of the Risk Management Fund.
FUND CENTERS:
TO Fund /Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by_
Originating Department Head:
Additional Information Contact:
FROM Fund /Account/Centers
FE71 534060 0137120
Susan Alanis (8180)
Sarah Fullenwider (7623)
Gerald Pruitt (7616)
$200.000.00
Logname: 12PENSION BENEFITS LITIGATION Page 2 of 2