Untitled Texas Attorney General Opinion ( 1988 )

THE ATTORNEY GENERAL
OF TEXAS
June 29, 1988
Ms. Helen L. Campbell Opinion No. JR-926
Commissioner
Firemen's Pension Commission Re: Whether the board of
3910 s. I.H. 35, Suite 235 trustees of the Austin Fire
Austin, Texas 78104 Fighters' Relief and Retire-
ment Fund may expend funds
to hire an administrator
and an attorney, and related
questions (RQ-1398)
Dear Ms. Campbell:
You ask the following questions regarding the authority
of a board of trustees of a fire fighters' relief and
retirement fund established pursuant to article 6243e.1,
V.T.C.S.:
1. Can the board of trustees incur reason-
able expenses to hire an administrator and
establish an office separate from the city of
Austin pursuant to article 6243e.1, and other
applicable laws of the state of Texas?
2. Can the board of trustees incur reason-
able expenses to hire an attorney to represent
the board in matters outside those speci-
fically included in section 17 of the law?
3. Does the board of trustees or the city
treasurer have custody of the records of the
fund, pursuant to their respective roles under
the statute?
Although your questions are couched in terms of the city of
Austin, our answers will refer to "the city" because the act
relates to all cities of a certain population.
Section 2, article 6243e.1, V.T.C.S., creates the fund,
establishes the board of trustees, and generally outlines
the duties of the board. That section establishes the duty
of the board "to receive, handle and control, manage, and
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Ms. Helen L. Campbell - Page 2 (JM-926)
disburse the fund for the respective city or town." The
remainder of the act is devoted to provisions related to the
payment of contributions into the fund, payment of benefits
out of the fund, and investment and accounting requirements.
your first question, regarding the board's authority to
hire personnel and to establish an office separate from the
city, is answered in the affirmative. The statute, by its
express terms, grants the board the authority to use fund
assets "for reasonable expenses of administering the fund."
V.T.C.S. art. 6243e.1, !jla(l). Although that provision is
reasonably clear, there is considerable disagreement as to
its effect. We find the same authority in the cumulative
effect of the statute.
The general rule on the powers of administrative
agencies is stated as follows:
The agency has only such powers as are
expressly conferred on it by statute together
with those necessarily implied from powers
and duties expressly given or imposed.
2 Tex. Jur. 3d Administrative Law .Q11. In regard to powers
that are necessarily implied from those that are expressly
granted, the Texas Supreme Court has written:
The grant of an express power carries with it
by necessary implication every other power
necessary and proper to the execution of
the power expressly granted. When the law
commands anything to be done, it authorizes
the performance of whatever may be necessary
for executing its commands.
Terre11 v. Soarks, 135 S.W. 519, 521 (Tex. 1911).
It is readily apparent from a reading of the statute
that the legislature intended to create an administrative
agency apart from the municipality. The board is charged
with the duty to keep records of all claims, receipts and
disbursements (section 2), make all disbursements (section
2) I make factual determinations in regard to indivi-
dual claimants (sections 3, 4, 5, 6, a, 10, 11, 14), and
generally invest the funds. The city has only the duty to
supply a book or books in which the board must enter its
records (section 2) and to make contributions to the fund
(section 10). The city may pay the costs of professional
investment counselors (section la(a)), professional
investment evaluation services (section law), bank
p. 4647
Ms. Helen L. Campbell - Page 3 (JM-926)
;;;tTes (section .ia(j)), actuarial services (section
and accounting services (section 21). The relation
of a city to a fund very similar to the pension fund at
issue here was described in a judicial opinion thirty years
ago.
It is true that the city pays money into
this trust fund, but once it is paid into the
fund the city loses control over it and it no
longer belongs to the city. . . . The City
Treasurer just happens to be named as ex
officio treasurer of the pension fund, but
this fact, again, does not give the city, as
such, any control over the funds or make them
city property.
Bolen v. Board of Firemen. 'Policemen, and Fire Alarm
Ooerators' Trustees of San Antonio. Texas, 308 S.W.2d 904,
905 (Tex. Civ. App. - San Antonio 1957, writ ref'd).
Some provisions of the act require complex calculations
to determine the amount of retirement or disability benefits
(sections 3, 5), and others require the maintenance of files
relating to individuals' eligibility for benefits (sections
5, 6, 10, 11). We believe that the duties that are imposed
on this board necessarily imply the authority to establish
an office and to hire an administrator and any other
necessary personnel to accomplish the purposes of the
statute.
This conclusion is also supported by chapter 12, Title
llOB, Public Retirement Systems, V.T.C.S.l That chapter
applies to all "continuing, organized program[s] of service
retirement, disability retirement, or death benefits for
officers or employees of the state or a political sub-
division" with some exceptions that are not relevant here.
1. Our determination is also supported by the appli-
cation of the Texas Trust Act, section 111.001 et sec. of
the Property Code. This office has issued Attorney General
*
Opinion M-252 (1968), applying the Texas Trust Act to define
the powers and duties of a board of trustees of a similar
relief and retirement fund, where the enabling statute was
unclear. Section 113.018 of the Property Code authorizes a
trustee, or the board in this case to "employ attorneys,
accountants, agents, and brokers reasonably necessary in the
administration of the trust estate."
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Ms. Helen L. Campbell - Page 4 (JM-926)
V.T.C.S. Title llOB, § 12.001(2). Therefore, chapter 12,
Title 1lOB applies to article 6243e.l. Section 12.203(a)
defines the level of care that a governing body of a public
retirement system is required to exercise:
(a) In making and supervising investments
of the reserve fund of a public retirement
system, an investment manager or the governing
body shall discharge its duties solely in the
interest of the participants and beneficiaries:
(1) for the exclusive purposes of:
(A) providing benefits to par-
ticipants and their beneficiaries: and
(B) defravina reasonable exoenses
of administerina the system. (Emphasis
added.)
your second question, regarding the authority of the
board to incur reasonable legal expenses, is also answered
in the affirmative. There are two provisions in the statute
that refer to legal representation. Section 17 requires the
city attorney to "represent the board of trustees of that
city in all cases of appeal by any claimant from the order
ordecision of the board of trustees.18 The terms of that
provision preclude representation of the board by anyone
other than the city.attorney in those cases.
Section 20 authorizes the board to recover by civil
action any monies obtained from the fund through fraud,
misrepresentation or otherwise illegal activities. Unlike
the earlier section, section 20 does not require the city
attorney to represent the board. Inasmuch as the provision
is silent in regard to legal representation, it is our
opinion that the board is authorized to employ an attorney
in those cases.
Texas law requires that public administrative bodies
have statutory authority in order to sue or be sued. The
Texas Supreme Court, in upholding a decision that disallowed
the Industrial Accident Board from joining in a suit, said:
The right to sue and be sued has not been
conferred upon [the board]. It is the
general rule that a public administrative
body cannot sue or be sued in the absence of
statutory authority.
P. 4649
Ms. Helen L. Campbell - Page 5 (JM-926)
Texas Emolover Insurance Associat ion v. Elder, 282 S.W.Zd
371, 376 (Tex.si955).
Employing that rule, we must find that the board has no
authority to sue or to be sued other than that found in
sections 17 and 20. However, it is foreseeable that the
board may require legal assistance outside of the courtroom.
Such legal advice is outside of the general prohibition on
suing or being sued and is well within the boardIs general
authority to manage and disburse the fund.
your third question relates to custody of the board's
records. The city treasurer is an ex-officio member of the
board and is secretary-treasurer of the board (section 2).
As such, he is subject to the orders and direction of the
board, acting as a body. The duties of the city treasurer as
city treasurer are separate and distinct from his duties as
secretary-treasurer of the board. & Bolen. sunra. While
the statute designates the treasurer to be custodian of the
fund, it is silent as to custody of the records. The board
is required to keep financial records and has authority to
hear all applications for benefits. The board must have
custody of its own records in order to perform its day-to-
day operations. If the board should remove its office from
the city offices, a person seeking access to those records
under the Open Records Act (article 6252-17a, V.T.C.S.)
would reasonably expect to find them at the office of the
board. Furthermore, the Open Records Act designates the
chief administrative officer as custodian of the public
records. Implicit in article 6243e.l is the board's
authority to control custody of the records of the fund.
Should the board hire an administrator, that person, under
the terms of the open records act, would have custody of the
records.
To recapitulate our findings: we find that a board of
trustees of a fire fighters' relief and retirement fund
established under article 6243e.1, V.T.C.S., is authorized
to establish an office and hire necessary personnel apart
from the city. The board may hire an attorney for general
legal advice and for prosecuting suits to recover money that
was illegally obtained from the fund. The board must have
custody of its records.
p. 4650
Ms. Helen L. Campbell - Page 6 (JM-926)
SUMMARY
The board of trustees of a fire fighters
relief and retirement fund established under
article 6243e.1, V.T.C.S., is authorized to
establish an office and hire necessary
personnel apart from the city. The board may
hire an attorney in certain cases, and the
board has custody of its records.
f-l /fLm%
Very truly you
A;,
J I-M MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
Lou nCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEANLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
p. 4651