City of Houston v Board of Trustees of the Houston Firefighters' Relief and Retirement Fund
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Transcript of City of Houston v Board of Trustees of the Houston Firefighters' Relief and Retirement Fund
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7/31/2019 City of Houston v Board of Trustees of the Houston Firefighters' Relief and Retirement Fund
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See TEX . CONST. art. XI, 5. In accordance with Section 9.008(b) of the Texas Local1
Government Code, Houston requests the Court to take judicial notice of its published charter and
status thereunder as a home-rule city. See TEX.LOC.GOVT CODE 9.008(b).
See TEX.REV.CIV.STAT.ANN. art. 6243e.2(1).2
CAUSE NO. _______________
THE CITY OF HOUSTON, TEXAS
v.
THE BOARD OF TRUSTEES OF THE
HOUSTON FIREFIGHTERS RELIEF
AND RETIREMENT FUND
IN THE DISTRICT COURT
HARRIS COUNTY, TEXAS
_____ JUDICIAL DISTRICT
ORIGINAL PETITION FOR WRIT OF MANDAMUS
The City of Houston, Texas [Houston] complains of the Board of Trustees of the
Houston Firefighters Relief and Retirement Fund [Board] and shows the Court:
DISCOVERY LEVEL
1. Houston intends that discovery will be conducted under a Level 3 Discovery
Control Plan pursuant to Rule 190 of the Texas Rules of Civil Procedure.
PARTIES
2. Houston is a Texas home-rule city operating under a municipal charter pursuant
to Article XI, Section 5, of the Texas Constitution.1
3. The Board is the governing body of a public retirement system created by
Article 6243e.2(1) of Vernons Annotated Texas Civil Statutes [Article 6243e.2(1)]. The2
Board may be served with process through its Executive Director and Chief Investment
2012-28760 / Court: 215
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The Texas Government Code defines public retirement system to mean a continuing,3
organized program of service retirement, disability retirement, or death benefits for officers or
employees of the state or a political subdivision, or of an agency or instrumentality of the state or a
political subdivision.... See TEX.GOVT CODE 802.001(3).
2
Officer, Christopher E. Gonzales, at the Boards usual place of business located at 4225
Interwood North Parkway, Houston, Texas, 77032, or wherever he may be found.
JURISDICTION AND VENUE
4. This Court has subject-matter jurisdiction pursuant to Chapters 24 and 802 of
the Texas Government Code and Article 5, Section 8 of the Texas Constitution.
5. The Boards immunity from suit is waived by Section 802.003 of the Texas
Government Code.
6. Venue is proper in Harris County, Texas, under Section 802.003 of the Texas
Government Code and/or Section 15.002 of the Texas Civil Practice and Remedies Code.
FACTS
7. Like many other governmental employers, Houston sponsors defined benefit
public retirement pension plans designed to attract and retain quality employees.
8. Houston taxpayers contribute significantly each year to fund the three public
retirement systems for Houston employees: the Houston Municipal Employees Pension
System [HMEPS]; the Houston Police Officers Pension System [HPOPS]; and the Houston
Firefighters Relief and Retirement Fund [Fund].3
9. The Board is the governing body of the public retirement system for Houston
firefighters.
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See TEX.CONST. art. 16, 67(a), (f). An actuary is a business professional who analyzes4
the financial consequences of risk using mathematics, statistics, and financial theory to study
uncertain future events (such as those of concern to a pension plan), evaluate the likelihood of those
events, and develop ways to reduce the likelihood and decrease the impact of adverse events.
Actuarial soundness is a professional term that refers the ability of a provider in a financial security
system (such as a pension plan) to satisfy its obligations given the actuarial risks. The goal is toidentify circumstances where combinations of considerations and assets are not compatible with
satisfying the providers obligations to pay benefits and expenses. A providers practices, such as
risk selection, rate structures, or funding levels, can affect the risk that the provider will not be able
to satisfy its obligations. Practices that increase the likelihood that the provider will satisfy its
obligations increase the degree of actuarial soundness of the provider.
3
10. Houston did not create and does not control the Fund. Rather, the Fund was
created by the Texas Legislature through enactment of Article 6243e.2(1).
11. Houston is the Funds plan sponsor and is required to make contributions for
the benefit of Houston firefighters as their employer. As with most public pension plans,
plan beneficiaries, in this case, Houston firefighters, contribute a portion of their salary
toward their future retirement benef its. Houston taxpayers make the remaining direct
contributions to the Fund in an amount exceeding the contributions of Houston firefighters.
The Board invests monies that exceed current demands on the Fund.
12. Houstons annual contributions to Houston employee pension plans (including
the Fund) currently represent over 9% per cent of Houstons overall yearly budgetan
amount greater than $164,000,000 every year.
13. The Texas Constitution requires that the financing of state and local retirement
systems and benefits be based onsound actuarial principles and assumptions. In assessing4
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the actuarial soundness of a pension plan, one primary factor must necessarily be whether or
not funding its benefit obligations imposes fiscal stress upon the plan sponsor.
14. Under traditional retirement adequacy models, the general goal for post-
retirement income is an amount equal to about 70 to 90% of the retirees pre-retirement
income. Under sound actuarial principles and assumptions, the general standard for pension
plan contribution rates designed to meet and maintain this post-retirement income goal is, for
employees, about 9% of their salary and, for employers, from about 15 to 18% of the
employees salary.
15. It is estimated that by 2015, Houstons contribution rate to the Fund for the
benefit of Houston firefighters will approximate 31%. It is currently 23.9%.
16. Houston has developed significant concerns about the Funds ability to meet
its future retirement benefit obligations to Houston firefighters.
17. The Boards lobbying efforts have resulted in the enactment of special laws
that apply only to the Fund and that grant the Fund preferential treatment and self-
governance. The Board exercises control over administration of the Fund and establishes
firefighter benefit levels with virtually no accountability to Houston taxpayers or their elected
officials. The Board unilaterally establishes the Houston taxpayer contribution rate for
purposes of funding benefitswithout any requirement for approval by Houston taxpayers
or their elected officials, and without regard for Houstons ability to pay the contribution rate,
or the impact of the contribution rate upon Houston and its citizens.
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The Fund was created through enactment of a statute that has been amended over time and5
today governs public retirement systems for firefighters in cities with populations of less than350,000 (subject to other limitations). SeeTEX.REV.CIV.STAT.ANN . art. 6243e (Texas Local Fire
Fighters Retirement Act). As noted above, the Fund is now governed by Article 6243e.2(1). And
there are also several other statutes that govern public retirement systems for firefighters. See TEX.
REV.CIV.STAT.ANN. art. 6243e-2 (Firemens pensions in cities of 350,000 to 400,000); TEX.REV.
CIV.STAT.ANN . art. 6243e.1 (Firefighters relief and retirement fund in cities of 450,000 to 500,000);
TEX.REV.CIV.STAT.ANN . art. 6243e.3 (Firemens death and disability benefits; heart or lung
disease).
See https://www.hfrrf.org/admin_History_1958Changes.asp.6
See https://www.hfrrf.org/admin_History_1975SepLegAuthority.asp.7
See https://www.hfrrf.org/admin_History_1975SepLegAuthority.asp.8
See https://www.hfrrf.org/admin_History_1975SepLegAuthority.asp.9
See https://www.hfrrf.org/admin_History_1988FullControl.asp.10
5
18. The Fund was originally established in 1937 through lobbying efforts that
resulted in creation of Houstons first firefighter retirement pension plan.5
19. In 1958, the Legislature changed the composition of the Board to require a
controlling majority of firefighters.6
20. In 1975, the Legislature granted the Board even greater autonomy and the
power to make specific plan changes. Because the pertinent statute applied only to7
municipalities with populations of no less than 1.2 million, Houston was the only city subject
to the statute. This use of population as a means of obtaining separate privileges for the8
Fund was a common strategy in the Boards legislative battles for control of the Fund.9
21. In 1988, the Board voted unanimously to take full control over administration
of the Fund.10
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22. In 1997, the Legislature enacted Article 6243e.2(1), the statute that currently
governs the Fund, and its baseline contribution rates and benefit levels. Houston is the only
city in the State of Texas subject to Article 6243e.2(1), as the statute applies only to
municipalities with populations of at least 1,600,000. Article 6243e.2(1) also specifies that
the controlling majority of the Board must be composed of firefighters.
23. In addition, and significantly, Article 6243e.2(1) empowers the Board to
increase both firefighter benefit levels and Houstons contribution ratewithout any
requirement for Houstons assent or approval.
24. In 2000, the Board unilaterally made plan changes that increased firefighter
benefit levels and also immediately increased Houstons long-term funding contribution
obligations to the Fund by over 60%. In seeking approval from the State Pension Review
Board and support from Houstons then-Mayor, the Board presented erroneous and
misleading information indicating that the changes could not reasonably be viewed as posing
a material risk of jeopardizing the Funds ability to pay firefighter benefits.
25. In the 12 years since the Board significantly increased Houstons contribution
rate to the Fund, the rate of return on the Funds investments has been almost 30% less than
its projected 8.5% return rate.
26. The Funds actuary projects that Houstons contribution rate beginning in 2015
will approximate 31% of firefighter payroll. This projected contribution rate more than
doubles the rates that fell between 15.0 and 15.4% of payroll from about 1990 to 2000.
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valuation at least once every three years of the assets and liabilities of the
system on the basis of assumptions and methods that are reasonable in the
aggregate, considering the experience of the program and reasonable
expectations, and that, in combination, offer the actuarys best estimate of
anticipated experience under the program.
TEX.GOVT CODE 802.101 (emphases added).
32. Section 802.102 of the Code also requires the Board to have the Funds
accounts audited by a certified public accountant at least every year:
The governing body of a public retirement systemshall have the accounts of
the system audited at least annually by a certified public accountant in
accordance with generally accepted auditing standards.
TEX.GOVT CODE 802.102 (emphasis added).
33. Section 802.1012 of the Code further requires Houston to have the Funds
actuarial valuations, studies, and reports audited by an actuary at least every five years:
(a) In this section, governmental entity means a unit of government that
is the employer of active members of a public retirement system.
* * *
Every five years, the actuarial valuations, studies, and reports of a
public retirement system most recently prepared for the retirement system as
required by Section 802.101 or other law under this title or under Title 109,
Revised Statutes, must be audited by an independent actuary who:
(1) is engaged for the purpose of the audit by the governmental
entity; and
(2) has the credentials required for an actuary under Section
802.101(d).
TEX.GOVT CODE 802.1012 (emphases added).
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SeeExhibit A (letter dated November 1, 2011, from Houston to Fund); Exhibit C (letter dated11
February 6, 2012, from Houston to Fund).
9
34. The Texas Legislature enacted Section 802.1012 on June 15, 2007, with an
effective date of September 1, 2007. See Acts 2007, 80th Leg., ch. 733, 1, 3.
35. The Legislature required Houston to prepare its first audit under Section
802.1012 by no later than September 1, 2008, covering the prior five years:
The first audit required under Section 802.1012, Government Code, as added
by this Act:
(1) shall be conducted not later than September 1, 2008 ; and
(2) must include an audit of each actuarial valuation, study, and
report of the public retirement system that was prepared for that
retirement system in the preceding five years.
See Acts 2007, 80th Leg., ch. 733, 2 (emphases added).
36. Houstons first Section 802.1012 audit was, due to the nature of information
made available by the Fund, necessarily an attempt to replicate the results of the Funds latest
audit based on its publicly disclosed valuations, studies, reports, and audits for the prior five
years. Houstons audit involved reliance on the quality of the disclosures and undisclosed
source materials/data and conclusions drawn by the Funds actuary.
37. In preparation for its next Section 802.1012 audit, Houston has requested the
Board, on at least two separate occasions, to provide the underlying documents, information,
and/or electronic data for the Funds valuations, studies, reports, and audits. Houston is not11
able obtain these underlying materials from any other source.
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SeeExhibit B (letter dated January 5, 2012, from Fund to Houston); Exhibit D (letter dated
12
February 22, 2012, from Fund to Houston); Exhibit E (letter dated March 19, 2012, from Fund to
Houston).
SeeTEX.REV.CIV.STAT.ANN. art. 6243e.2(1), 17(d); TEX.GOVT CODE 552.0038(d)(2).13
See TEX.REV.CIV.STAT.ANN. art. 6243e.2(1), 17(d); TEX.GOVT CODE 552.0038(f).14
10
38. The Board has refused to provide the requested underlying materials, but has
not identified a single principled reason or legal basis for its refusal. Rather, the Board12
relies on several illusory argumentsnone of which supports its refusal.
39. First, the Board expressed concern about preserving the confidentiality of
individual member data. However, both Article 6243e.2(1) and the Texas Public Information
Act [TPIA] specifically authorize release of information or records of a public retirement
system to the municipality or other governmental entity with a legitimate need for the
information to perform, implement, or advance the purposes of the system and provide that13
such a release does not waive any confidentiality protection.14
40. These statutes alleviate any confidentiality concerns and confirm that
disclosure of the underlying materials to Houston, so that it can perform, implement, and
advance the purposes of the system through its Section 802.1012 audit, is both appropriate
and legitimate. Indeed, if the audit requirement is to have meaning, the Fund must provide
access to the source materials relied upon by the Funds actuary and those materials an
actuary would seek to consider. Only through the Funds transparency can Houston monitor
and assess the actuarial and financial soundness of the Fund, the Funds ability to pay future
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See Exhibit C (letter dated February 6, 2012, from Houston to Fund).15
See Exhibit F (minutes of February 16, 2012 Board meeting); Exhibit G (minutes of March16
8, 2012 Board meeting); Exhibit H (minutes of March 8, 2012 Board meeting).
See Exhibit B (letter dated January 5, 2012, from Fund to Houston).17
11
retirement benefits to Houston firefighters, and evaluate the risks to Houston associated with
making its required contributions.
41. Houston has previously attempted to accommodate the Boards confidentiality
concerns by offering to accept group data for review as opposed to individual member
data. However, the Board declined to provide data in this form.15 16
42. The Board has also stated that it does not believe it is an ordinary practice of
Texas municipalities to replicate plan valuations and that [t]here does not appear to be any
plan purpose behind supporting such an effort. Houston stands apart as the only city in17
the State of Texas governed by Article 6243e.2(1)a statute that provides no tools for
monitoring or assessing the actuarial and financial soundness of the Fund. However, Section
802.1012 provides a tool to enable Houston to protect both its taxpayers and firefighters
the independent audit; and by so doing, it imposes upon the Fund a level of transparency .
The materials underlying the Funds valuations, studies, and reports, must be made available
so that Houston can independently monitor and assess the actuarial and financial soundness
of the Fund. Indeed, disclosure of the underlying materials for purposes of Houstons audit
is particularly important because the Boards assumptions, conclusions, and ordinary
practices cannot be thoroughly assessed without review of such materials.
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See Exhibit B (letter dated January 5, 2012, from Fund to Houston).18
12
43. The Board has further stated that it did not find the words at least [every five
years] ... in the language of the statute, that the Board considers it is reasonable to believe
that the legislature deliberately intended the five-year interval specified in the statute, that
[t]he five year period has not yet elapsed, and that Houstons next audit is not due to
commence until five years has elapsed since the initial one. These and other statements18
by the Board suggest that the Boards passion for secrecy will continue and that it will object
not only to providing the requested materials now, but to providing them at all. However,
Houston has a present need for, and is entitled to, the materials. Houstons access to the
materials is vital to the performance of its next statutorily required audit and should not be
encumbered by the very Board managing the subject of the audit.
44. Should the Board object only to providing the underlying materials at the
present time, the Board has failed to articulate a valid reason for requiring Houston to wait
until some unspecified time in the future. Indeed, the purpose of the audit requirement under
Section 802.1012 is better served by requiring disclosure of the underlying materials to
Houston upon requestor concurrent with the Funds completion of its own annual
valuations, studies, reports, and audits. There can be little or no benefit to be derived from
shielding for any length of time the true nature and adequacy of the information contained
within the Funds underlying materials and which may have served as the basis for the
conclusions of the Funds actuary.
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See Exhibit E (letter dated March 19, 2012, from Fund to Houston).19
13
45. Should the Board object to providing the underlying materials at any time, there
is no principled or legal basis for placing such a limitation on Houstons actuary or to restrict
the scope of Houstons audit in such fashion. Indeed, the legislature having specified that
an actuary be used, it only stands to reason that the actuarial professional will be permitted
to perform an actuarial auditan actuarial audit being a professional term of art that means
scrutiny of one actuarys work by another to ensure that actuarial valuations are performed
correctly and that the methods and assumptions used are reasonable. This includes a critique
of the plan actuarys judgment concerning the plans exposure to risk based on independent
analysis and calculations using the same data, assumptions, and actuarial methods used by
the plans actuary. The purpose of such an audit is to verify that the actuarial work is
accurate and the advice is soundand the goal is to replicate the results of actuarial
valuations to ensure the long-term soundness of the plan.
46. The Board has not wavered in its refusal to disclose the requested underlying
materials. By its refusal to disclose these materials, the Board seeks to further cloak its19
dealings in secrecy, argues against transparency and disregards Houstons statutory authority
and ability to monitor the actuarial soundness of the Fund. The Boards attempt to control
when and how Houston prepares the audit required by Section 802.1012 is improper and
without support under the law.
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REQUEST FOR WRIT OF MANDAMUS
47. Section 802.003 of the Code authorizes a district court to issue a writ of
mandamus compelling the governing body of a public retirement system to comply with any
requirement of Chapter 802 where it fails or refuses to do so:
(a) Except as provided by Subsection (b), if the governing body of a public
retirement system fails or refuses to comply with a requirement of this
chapterthat applies to it, a person residing in the political subdivision in which
the members of the governing body are officers may file a motion, petition,
or other appropriate pleadingin a district court having jurisdiction in a county
in which the political subdivision is located in whole or in part,for a writ of
mandamus to compel the governing body to comply with the applicable
requirement.
TEX.GOVT CODE 802.003 (emphases added). Houston is a person within the meaning
of Section 802.003. See TEX.GOVT CODE 311.005(2) (Person includes corporation,
organization, government or governmental subdivision or agency, business trust, estate, trust,
partnership, association, and any other legal entity.).
48. Houston is entitled by law to obtain and evaluate all underlying documents,
information, and electronic data for the Funds valuations, studies, reports, and audits for
each year since at least 2000 to ensure a full and thorough audit of the Fund that includes
evaluation of the effects of the Boards unilateral plan changes in 2000.
49. The Boards failure and refusal to disclose the underlying materials necessary
for Houston to conduct a Section 802.1012 audit frustrates Houstons ability to conduct a full
and thorough audit.
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50. As the Board has a ministerial duty to release the underlying materials for the
Funds valuations, studies, reports, and audits to Houston, it has no discretion to refuse to
comply with Houstons request for these materials.
51. Houston is therefore entitled under Section 802.003 to a writ of mandamus
compelling the Board to disclose the requested underlying materials so that Houston can
comply with Section 802.1012 and conduct a full and thorough audit.
CONCLUSION AND PRAYER
FOR THESE REASONS, Houston respectfully requests that citation be issued and
served upon the Board and that, upon trial hereof, this Court issue a writ of mandamus under
Section 802.003 of the Texas Government Code compelling the Board to provide to Houston
all underlying documents, information, and/or electronic data for all the Funds valuations,
studies, and reports for each year since at least 2000.
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Exhibit A
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Exhibit B
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Exhibit C
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Exhibit D
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Exhibit E
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Exhibit F
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!
!
MINUTES OF THE HOUSTON FIREFIGHTERS RELIEF AND RETIREMENT FUND
A meeting of the Houston Firefighters Relief and Retirement Fund Board of Trustees convened at the Fund
offices at 4225 Interwood North Parkway on Thursday, February 16, 2012, at 10:22 a.m.
Trustees present were Todd E. Clark (Chair), Gary M. Vincent (Vice Chair), Francis Frank X. Maher
(Secretary), Harold W. McDonald, Kevin Brolan, Craig T. Mason, Fred S. Robertson, Albertino Mays and
Carroll G. Robinson. Others present were staff members Christopher Gonzales (Executive Director/Chief
Investment Officer), Jonathan W. Needle (Chief Legal Officer) and Glenna Hicks (Deputy Director of
Member Services).
The Chair called the meeting to order at 10:22 a.m.
The Board recited the Pledge of Allegiance and observed a moment of silence.
Fund Member William Bill Hausinger thanked the Board and acknowledged them for their hard work.
There was a motion by Carroll G. Robinson, seconded by Gary M. Vincent, to approve the minutes of the
Board meeting held on January 19, 2012. The motion carried.
There was a motion by Albertino Mays, seconded by Kevin Brolan, approving the Board resolution to move
the March 2012 regular Board meeting from Thursday, March 15, 2012 to Thursday, March 22, 2012. The
motion carried.
There was a motion by Kevin Brolan, seconded by Albertino Mays, to approve the following: The report of
the Pension Benefits Committee meeting held on January 26, 2012, the minutes of the Investment Committee
meeting held on January 19, 2012; and the minutes of the Legislative Committee meeting held on January 19,
2012. The motion carried.
The report of the Pension Benefits Committee meeting held on January 26, 2012 noted the following: A
determination of the status of an applicant as a spouse through claim of informal marriage as shown on
Exhibit "PB1", was not proven as provided in the Texas Family Code, in support of the application; approval
of five Deferred Retirement Option Plan (DROP) applications, effective February 1, 2012; approval of elevenPost Retirement Option Plan (PROP) applications, effective February 1, 2012; approval of an application for
General On-Duty Disability benefits under Sections 6(c) and 6(d) of Article 6243e.2(1) (the Statute) as
shown on exhibit "PB4" (1), with a re-examination in one year; approval of an application for General On-
Duty Disability benefits under Sections 6(c) and 6(d) of the Statute as shown on exhibit "PB4" (2), with a re-
examination in one year; continuation of a General On-Duty disability benefit under Sections 6(c) and 6(d) asshown on exhibit PB5 (1), with no further re-examinations required; continuation of a General On-Duty
disability benefit under Section 6(c) as shown on exhibit PB5 (2), with no further re-examinations required;
continuation of a General On-Duty disability benefit under Sections 6(c) and 6(d) as shown on exhibit PB5(3), with no further re-examinations required; and approval of exhibit "PB6" regarding an application fortransfer of prior service credit.
The Chair noted the Committee assignments for calendar year 2012.
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Board Minutes
February 16, 2012Page 2 of 3
The Chair announced that the Board was going into closed session pursuant to Government Code Section
551.071 to receive confidential advice of legal counsel regarding the release of confidential information to an
individual Trustee.
The Board went into closed session at 10:28 a.m.
The Board resumed open session at 11:21 a.m.
The Chair noted there would be discussion on release of various types of confidential information to an
individual trustee at a future meeting.
The Chair gave an update on his attendance to the City of Houston Long-Range Financial Planning Task
Force meetings. He then noted the Task Force Majority and Minority reports ofmenu options submitted to
the Mayor and Council on February 8, 2012, an event that he did not attend. Francis Frank X. Maher noted
two-thirds of Board member attendance at the National Conference on Public Employees Retirement Systems
(NCPERS) 2012 Legislative Conference in Washington, DC and associated Capitol Hill visits in dividedgroups on the same date as the City of Houstons council meeting prevented presence at the meeting. Harold
W. McDonald further commented that Union officials were made aware in advance that HFRRF Trustees
would be in Washington, DC when the Task Force report was submitted to the Mayor.
The Board discussed a letter request to the Chair from Mayor Parker dated February 6, 2012, for informationto be created by the Fund and provided to the City to assist the City in its project to replicate the Funds July
1, 2011 actuarial valuation in connection with an actuarial audit. It was noted that the actuarial audit statute
cited by the Mayor provided for a five year collection of reports in order for such audits to be performed on
five-year cycles, and that the last actuarial audit had been performed in 2008. There was a motion by Craig
T. Mason, seconded by Fred S. Robertson, to provide information to the Mayor as requested in hercorrespondence. The motion failed. There was a motion by Carroll G. Robinson, seconded by Gary M.
Vincent, for the Chair and Fund staff to prepare a response, asking the Mayor to disclose to the Fund the
information that is in dispute and whether the City has difficulty in reconciling their own payroll informationas it relates to the Fund. The motion failed. There was a motion by Kevin Brolan, seconded by FrancisFrank X. Maher, for the Chair and Fund staff to prepare a response to the Mayor similar to a discussed
response with discretionary adjustments. The motion failed. There was a motion by Gary M. Vincent,
seconded by Carroll G. Robinson, for the Chair and Fund staff to prepare correspondence to the Mayor
acknowledging receipt of her request and informing her that her request is under consideration by the Board.
The motion carried, with Craig T. Mason opposed.
There was a motion by Harold W. McDonald, seconded by Gary M. Vincent, to accept the invitation
extended to Carroll G. Robinson to attend the Information Management Network (IMN) 17th Annual Public
Funds Summit, to be held on March 26-27, 2012 in North San Diego, California, with complimentary
conference registration. The motion carried.
There was a motion by Harold W. McDonald, seconded by Albertino Mays, to accept the invitation extended
to Gary Vincent, Frank Maher and Carroll G. Robinson to attend the Klausner Kaufman Jensen & Levinson
Client Conference, to be held on March 18 -21, 2012 in Ft. Lauderdale, Florida, with complimentary
conference registration. The motion carried.
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Board Minutes
February 16, 2012Page 3 of 3
The Board reviewed the monthly reports of the Chair, Executive Director, Chief Legal Officer and the
Deputy Director of Member Services.
The following items were noted for a future agenda:
Gary M. Vincent request more discussion on the Boards response to Mayor Parker concerning
her February 6, 2012 request for information in connection with an actuarial audit.
Craig T. Mason requested discussion and Board input on a policy regarding release of
confidential information to an individual trustee.
There being no further business, the meeting adjourned at 12:26 p.m. on a motion by Gary M. Vincent,
seconded by Harold W. McDonald. The motion carried.
Respectfully submitted,
Francis Frank X. Maher
Secretary
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Exhibit G
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MINUTES OF THE HOUSTON FIREFIGHTERS RELIEF AND RETIREMENT FUND!A meeting of the Houston Firefighters Relief and Retirement Fund Board of Trustees convened at the Fund offices
at 4225 Interwood North Parkway on Thursday, March 8, 2012, at 10:00 a.m.
Trustees present were Todd E. Clark (Chair), Gary M. Vincent (Vice Chair), Francis Frank X. Maher (Secretary),Harold W. McDonald, Kevin Brolan, Craig T. Mason, Fred S. Robertson, Albertino Mays and Carroll G. Robinson.
Others present were staff members Christopher Gonzales (Executive Director/Chief Investment Officer), Jonathan
W. Needle (Chief Legal Officer) and Glenna Hicks (Deputy Director of Member Services).
The Chair called the meeting to order at 10:00 a.m.
The Board recited the Pledge of Allegiance and observed a moment of silence.
Fund Member Nick Salem asked if the Fund files a federal tax return.
The Board discussed a letter request to the Chair from Mayor Parker dated February 6, 2012, for information to be
created by the Fund and provided to the City to assist the City in its project to replicate the Funds July 1, 2011actuarial valuation in connection with an actuarial audit. There was a motion by Harold W. McDonald, seconded
by Gary M. Vincent, to decline to provide actuarial audit calculations to the Mayor as she requested, in that the last
actuarial audit had been performed in 2008 and another was not due to be performed until 2013 and for the Chair
and the executive management team to prepare a letter to the Mayor so stating. The motion carried, with Craig T.
Mason and Fred S. Robertson opposed.
The Chair announced that the Board was going into closed session pursuant to Government Code Section 551.071
to receive confidential advice of legal counsel regarding a Fund policy on the release of non-public Fund
information to a Trustee.
The Board went into closed session at 10:04 a.m.
The Board resumed open session at 10:19 a.m.
There was a motion by Harold W. McDonald, seconded by Gary M. Vincent that under its statutory powers to
manage the fund according to Article 6243e.2(1) ("the statute"), including the power to adopt rules, policies and
procedures not inconsistent with the statute, to interpret and construe the statute, to correct any defect, supply any
omission and reconcile any inconsistency in the statute to the extent the Board considers expedient to administer thestatute for the greatest benefit of all members and to determine all questions, whether legal or factual, relating to the
administration of the fund to promote the uniform administration of the Fund for the benefit of all members, (in
accordance with Texas Civil Statutes Article 6243e.2( 1) sections 2(p )( 1 ), 2(p)(2), 2(p)(3) and 2(p)(5)), the Board
determines to adopt a new Section IX of its Code of Ethics as drafted with one amendment and to re-designate the
(pre) existing Section IX as Section X. The motion carried.
There being no further business, the meeting adjourned at 10:22 a.m. on a motion by Harold W. McDonald,
seconded by Albertino Mays. The motion carried.
Respectfully submitted,
Francis Frank X. Maher
Secretary
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Exhibit H
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MINUTES OF THE HOUSTON FIREFIGHTERS RELIEF AND RETIREMENT FUND
A meeting of the Houston Firefighters Relief and Retirement Fund Board of Trustees convened at the Fundoffices at 4225 Interwood North Parkway on Thursday, March 22, 2012, at 10:00 a.m.
Trustees present were Todd E. Clark (Chair), Gary M. Vincent (Vice Chair), Francis Frank X. Maher(Secretary), Harold W. McDonald, Kevin Brolan, Craig T. Mason, Fred S. Robertson and Albertino Mays. Trustee
absent was Carroll G. Robinson. Others present were staff members Christopher Gonzales (Executive
Director/Chief Investment Officer), Jonathan W. Needle (Chief Legal Officer) and Glenna Hicks (Deputy Directorof Member Services).
The Chair called the meeting to order at 10:00 a.m.
The Board recited the Pledge of Allegiance and observed a moment of silence.
Fund Member Steve Williams encouraged the Board with the assistance of the Executive staff to take thenecessary steps to ensure the presence of elected Board members, as well as the citizen members, at the Memorial
Ceremony and other major events held at the Fund and on behalf of the membership.
Fund Member Jerry Stansel thanked the Board for continuing to protect his confidential DROP account
information.
Fred S. Robertson entered the meeting at 10:06 a.m.
There was a motion by Gary M. Vincent, seconded by Albertino Mays, to approve the minutes of the Board
meeting held on February 16, 2012. The motion carried.
There was a motion by Kevin Brolan, seconded by Harold W. McDonald, to approve the minutes of the Special
Board meeting held on March 8, 2012. The motion carried.
There was a motion by Albertino Mays, seconded by Kevin Brolan, to approve the following: The report of the
Pension Benefits Committee meeting held on February 16, 2012, the report of the Pension Benefits Committee
meeting held on March 8, 2012; the minutes of the Investment Committee meeting held on February 16, 2012; and
the minutes of the Investment Committee meeting held on March 1, 2012. The motion carried.
There was a motion by Gary M. Vincent, seconded by Francis Frank X. Maher, to approve the following: The
minutes of the Personnel and Procedures Committee meeting held on February 16, 2012; the report of the Budget
and Audit Committee meeting held on February 16, 2012; the minutes of the Legislative Committee meeting held
on February 16, 2012, and; the minutes of the Legislative Committee meeting held on March 8, 2012. The motion
carried.
The report of the Pension Benefits Committee meeting held on February 16, 2012 noted the following: Approval
of two Deferred Retirement Option Plan (DROP) applications, effective March 1, 2012; Approval of fourteen PostRetirement Option Plan (PROP) applications, effective March 1, 2012; approval of an application for General On-
Duty Disability benefits under Sections 6(c) and 6(d) of Article 6243e.2(1) (the Statute) as shown on exhibit
"PB3" (1), with a re-examination in one year; approval of an application for General On-Duty Disability benefits
under Sections 6(c) and 6(d) of the Statute as shown on exhibit "PB3" (2), with a re-examination in one year;
continuation of a General On-Duty disability benefit under Sections 6(c) and 6(d) of the Statute as shown on
exhibit PB4, with no further re-examinations required; and, approval of exhibit "PB5" regarding an application
for re-entry to the Fund.
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Board MinutesMarch 22, 2012Page 2 of 2
The report of the Pension Benefits Committee meeting held on March 8, 2012 noted the following: Approval ofeight Deferred Retirement Option Plan (DROP) applications, effective April 1, 2012; Approval of ten PostRetirement Option Plan (PROP) applications, effective April 1, 2012; approval of an application for General On-Duty Disability benefits under Sections 6(c) and 6(d) of the Statute as shown on exhibit "PB3" (1); approval of anapplication for General On-Duty Disability benefits under Section 6(c) of the Statute as shown on exhibit "PB3"
(2), with a re-examination in one year; approval of an application for General On-Duty Disability benefits underSection 6(c) of the Statute as shown on exhibit "PB3" (3), with a re-examination in one year; continuation of aGeneral On-Duty disability benefit under Sections 6(c) and 6(d) of the Statute as shown on exhibit PB4, with nofurther re-examinations required; and, approval of exhibit "PB5" regarding an application for re-entry to the Fund.
The Director of Finance and Administration reviewed the Funds consolidated financials and highlights for the 2nd
quarter ending December 31, 2011. She then noted the Funds plan net assets totaled US$3.084 billion.
The Chief Legal Officer discussed with the Board an issue regarding pension contributions and termination payadjustments by the City on members who have elected, for pension purposes, a retirement date prior to their lastday on payroll as a pension effective date. The Chief Legal Officer and Deputy Director of Member Servicesdescribed a meeting between Fund representatives and the City Attorney and assistant city attorneys in which theFund representatives tried to convince the City to reverse certain self-refunds of contributions that the City had
implemented upon past pension contributions.
The Chair noted Trustee Craig T. Masons request for particular member information. Craig T. Mason provided asummary of his original request and as it currently stood. There was a motion by Craig T. Mason, seconded byFred S. Robertson for the Board to develop the rationale for the level of benefits paid by the Fund, and toadditionally determine and provide the average monthly benefit payable for life, and the average lump sum valuepayablefrom the DROP accounts of the 86 retirees noted in a section of the Funds 2011 CAFR. In consideringCraig T. Masons motion, the Trustees reviewed, considered and balanced the various considerations contained inSection IX of its Code of Ethics Requests by Trustees for Confidential information. The motion failed.
The Board discussed possible electronic formats for distribution of the Funds Retiree Directory. After somediscussion, the Board requested that Fund staff make a future presentation to the Board on possible electronicformats for the secure distribution of, or for retiree access to, the Funds Retiree Directory.
The Board reviewed the monthly reports of the Chair, Executive Director, Chief Legal Officer and the DeputyDirector of Member Services.
The following items were noted for a future agenda:
Francis Frank X. Maher requested further discussion on the attendance level of the Funds elected Boardmembers at certain Fund related events such as the Memorial Ceremony.
Gary M. Vincent requested monthly updates regarding the issue of pension contribution and terminationpay adjustments by the City on members who have elected, for pension purposes, a retirement date prior totheir last day on payroll as a pension effective date (through resolution).
There being no further business, the meeting adjourned at 11:24 a.m. on a motion by Francis Frank X. Maher,seconded by Albertino Mays. The motion carried.
Respectfully submitted,
Francis Frank X Maher