HomeMy WebLinkAboutResolution 4142-11-2012A Resolution
NO. 4142-11-2012
RATIFYING THE LAWSUIT ENTITLED CITY OF FORT WORTH V.
EMPLOYEES' RETIREMENT FUND OF THE CITY OF FORT WORTH.
CAUSE NO. 342-262392-.12, 342N" DISTRICT COURT, TARRANT COUNTY,
TEXAS, AND RATIFYING THE EMPLOYMENT OF
KELLY, HART & HALLMAN, L.L.P., AS OUTSIDE LEGAL COUNSEL
TO REPRESENT THE CITY IN THE ABOVE NAMED LAWSUIT,
AND AUTHORIZING PAYMENT OF COUNSEL FEES
WHEREAS, on July 10, 2012, the City Council adopted Resolutions notifying the Board of
Trustees of the Employees' Retirement Fund of the City of Fort Worth (Board) of its intent to consider
and vote on amendments to the Retirement Ordinance that would reduce benefits for Police Officer and
General Employee Members of the Employees' Retirement Fund of the City of Fort Worth (Fund); and
WHEREAS, Article 16, Section 66, prohibits the City from reducing or impairing a benefit
accrued by a person if the person would have been eligible for the benefit without accumulating
additional years of service; and
WHEREAS, on August 29, 2012, the Board, at the request of the Fort Worth Police Officers
Association, called an election for police officers only to increase their contributions to the Fund; and
WHEREAS, Section 5.07 of Article 62431 of the Texas Revised Civil Statutes, which governs
the Fund, requires the vote of all participating members of the Fund to approve an amendment
increasing contributions to the Fund, and also requires the approval of City Council; and
WHEREAS, on October 2, 2012, the Board notified the City Council that the police officers had
approved an amendment increasing their contributions to the Fund; and
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, in adopting Ordinance No. 20471-10-2012, the City Council voted to maintain the
current contribution rates for the City and for all employees, thereby rejecting the proposed police
contribution rate increase amendment submitted by the Board; and
WHEREAS, on October 23, 2012, the City of Fort Worth filed a declaratory action against the
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 benefit changes made by the
City are constitutional; and
&RTIYD
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Resolution No. 4142-11-2012
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;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS, THAT:
1.
The filing of the lawsuit against the Employees' Retirement Fund of the City of Fort Worth
(Cause No. 342 - 262392 -12), 342 °d District Court, Tarrant County is hereby ratified.
2.
The employment 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 is hereby
ratified.
3.
The City is hereby authorized to compensate Kelly, Hart, and Hallman, L.L.P., in an amount up
to $100,000.00.
Adopted this 6`h day of November, 2012.
ATTEST:
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Mary Kays y it
Mar y" °Secretary
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ORT W0RTH
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City of Texas
Mayor
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COUNCIL ACTION: Approved - Resolution No. 4142-11-2012
DATE: Tueaday, November O5.2D12
LOG NAME: 12PEN8|ONLITIGATION
REFERENCE NO': G-17724
Adopt Resolution Ratifying the City's Lawsuit Against the Employees' Retirement Fund and the Retention
of Kelly, Hart, and H8U[Ugn LLP.` as Outside Counsel to Represent the City in the L@vvSUit. and
Authorizing Payment Of Counsel Fees in the Amount Vf$100.0DO.O0 (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
UiS recommended that the City Council adopt the attached Resolution ratifying the lawsuit fi/edby the City
against the Employees' Retirement Fund Of the City Of Fort VVOrth, the retention of K8||y. Hart, and
Hallman LLP.. as outside legal counsel to represent the City in the lawsuit, and authorizing payment Of
counsel fees in the amount Of$100,00D.OD.
DISCUSSION:
|n1S45the City of Fort Worth established the Employee's Retirement Fund of the City of Fort Worth
(FUDd) which is a tax-qualified government pension plan /P/@O\. The Fund iS administered bythe Board of
Trustees 0f the Fund (BVB[d).Since 20D7. the Plan has been governed by5243iVf 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 can make changes to benefits. The Plan is also subject tO Article 16. Section O60f
the Texas Constitution.
[)O July 1D,2012. the City Council adopted Resolution Nos. 41O2-O7-2U12 and 41O3-07-2U12.notifying
the Board that the City Council intended to consider and vote on amendments to the R8UnerDnnt
Ordinance for police officers and general employees to reduce non-accrued benefits provided by the
retirement system.
On August 29, 2012, the Board approved a request by the Fort Worth Police Officers Association to call
an election for pO|iC8 officers only to increase their contributions to the Retirement Fund. On October 2,
2D12' the Board notified the City Council that the police officers had voted tO approve 8Oamendment
iDCn885iDg their contributions tO the Fund.
On October 23.2O12' the City Council adopted Ordinance No. Z0471-10-2012, which amended the
ReUnann8Di 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 {V increase police officer contribution h} the Fund.
Shortly after the City Council adopted Ordinance No. 2O471-10-2012.@lawsuit for declaratory judgment
was filed bv the City Vf Fort Worth against the Fund h] declare that the benefit reductions adopted byCity
Council were in compliance with Article 18. Section 88Of the Texas Constitution. The lawsuit also
requested the Court tV find that the election for police officers hJincrease their contributions tOthe
Retirement Fund violated Section 6243i because it did not allow general employees and firefighters bD
vote as required by the statute. Due to the important nature of the issues involved in this lawsuit, the City
Logname: 12PENSlON LITIGATION Pagel of2
had to file suit immediately in this matter.
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 |8vv to ensure that
the City's interests are protected. Kelly, Hart, and Hallman LLF».' has experience ing wide range Of
benefit matters, including pension, and has agreed tO represent the City. Chapter V1. Section 3 of the City
Charter requires the City Council to approve the retention of any outside legal counsel for assistance t0
the City Attorney. ACC0RjiDg|y, it is recommended that the City Council adopt the attached R8SO|u\iVn
ratifying the lawsuit and ratifying the retention of Kelly, Hart and H8/|m8n' L.L.Fz., to represent the City in
the lawsuit, and authorizing payment 0f counsel fees iD the amount Of$100.0OO.00.
CERTIFICATION: FISCAL INFORMATION /
The FlD8DCia| Mam3g8nlerd 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
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
FROM Fund/Account/Centers
FE71 534060 0137120
8US@O/U8niS (8180)
SGr8hFuUeDVVid8r (7823)
Gerald Pruitt /7516\