Can a Texas firefighter pension board run its own office, hire its own administrator and attorney, and control its own records?

Texas AG Opinion JM-926: What Can a Firefighter Pension Board Do on Its Own?

Plain-English summary

A city firefighter pension fund is run by a board of trustees, but it sits in an awkward spot: the city pays money into it, the city treasurer is involved, and yet the fund is supposed to belong to the firefighters and retirees, not the city. The commissioner of the state Firemen's Pension Commission asked the Attorney General to sort out how independent one of these boards really is. Can it open its own office and hire its own administrator instead of leaning on city staff? Can it hire its own lawyer? And who actually keeps the fund's records, the board or the city treasurer? The Attorney General's answers all lean the same direction: the board is its own administrative agency, and it has the authority to run itself.

On hiring staff and setting up an office, the answer is yes. The statute plainly lets the board spend fund money on the "reasonable expenses of administering the fund," and running an office and paying an administrator is exactly that. Even without that express language, the answer would be the same, because of a basic principle about government agencies: when the law hands an agency a job to do, it also gives the agency the powers reasonably necessary to do that job. This board has a heavy workload written into the statute, keeping records, cutting benefit checks, deciding individual claims, running complex benefit calculations, and investing the fund. You cannot do all that without an office and staff, so the authority to have them is implied. The Attorney General pointed out that the state's public retirement systems law and the Texas Trust Act both point the same way, with the Trust Act specifically letting a trustee employ attorneys, accountants, agents, and brokers as needed. And there is an older court decision making the key background point clear: once the city pays money into the fund, that money is no longer the city's, and the city treasurer's role as the fund's ex officio treasurer does not hand the city control.

On hiring an attorney, the answer is a qualified yes. The statute has two spots that touch legal representation. One, section 17, says the city attorney represents the board when a claimant appeals a board decision, and for those appeals the city attorney is the only option. The other, section 20, lets the board go to court to recover money that was taken from the fund by fraud or other illegal means, and it says nothing about who provides the lawyer. Because it is silent, the board can hire its own attorney for those recovery suits. There is an important limit, though. A public body cannot sue or be sued unless a statute gives it that power, so the board's ability to be in court is confined to those two situations. But plenty of legal work happens outside a courtroom, and the board can hire a lawyer for that general advice as part of its authority to manage and disburse the fund.

On records, the answer is that the board has custody of its own records. The city treasurer wears two hats: as city treasurer, and, separately, as the board's secretary-treasurer, in which role he answers to the board. The statute names the treasurer as custodian of the fund's money but says nothing about who keeps the records. Since the board has to maintain financial records and eligibility files to function day to day, it must have custody of them. The Attorney General added a practical open-records angle: if the board moves its office out of city hall, someone requesting records would reasonably look for them at the board's office, and under the Open Records Act the chief administrative officer is the records custodian, so if the board hires an administrator, that person would hold the records.

Currency note

This opinion was issued in 1988. Later statutes, court decisions, and AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

The statutes behind this opinion have moved. The public retirement systems provisions once in Title 110B, V.T.C.S., were recodified into the Government Code, and the Open Records Act (former article 6252-17a) has since been recodified into the Government Code as the state's public information law. The specific firefighter pension statute (article 6243e.1) and its section numbers may read differently today, and the governance, investment-standard, and records rules for these funds have been revisited. The general principles here, that an agency has the powers necessarily implied by its duties, that a public body needs statutory authority to sue, and that a public entity keeps custody of the records it must maintain, remain sound, but anyone dealing with a firefighter pension board today should work from the current statutes rather than the 1988 provisions cited here.

Who this opinion affected (as of 1988)

Firefighter pension boards of trustees: The opinion confirmed they could operate as independent administrative agencies, setting up their own offices, hiring administrators and other staff, and hiring attorneys for general advice and for fraud-recovery suits.

Cities and city treasurers: The opinion clarified the limits of the city's role. Money paid into the fund is no longer city property, the city attorney handles only claimant appeals, and the board, not the city treasurer, holds custody of the fund's records.

Fund participants and retirees: The opinion reinforced that the fund is managed for their benefit by a board with real operational authority, subject to a fiduciary standard of care.

Common questions

Can a firefighter pension board set up its own office and hire an administrator?
Yes. The statute lets the board spend fund money on reasonable administrative expenses, and its duties necessarily imply authority to establish an office and hire an administrator and other needed personnel.

Can the board hire its own attorney?
Partly. The city attorney must represent the board in claimant appeals under section 17. But the board may hire its own attorney for suits to recover money taken from the fund by fraud under section 20, and for general legal advice outside of litigation.

Can the board sue or be sued freely?
No. A public administrative body needs statutory authority to sue or be sued, so the board's litigation authority is limited to what sections 17 and 20 provide. Non-litigation legal advice is not subject to that limit.

Who keeps the fund's records, the board or the city treasurer?
The board. The treasurer is custodian of the fund's money, but the statute is silent on records, and the board must keep its own records to operate. If the board hires an administrator, that person would be the records custodian under the Open Records Act.

Background and statutory framework

Section 2 of article 6243e.1, V.T.C.S., creates the fund, establishes the board of trustees, and outlines the board's duty to receive, handle, control, manage, and disburse the fund for the city or town; the remainder of the act addresses contributions, payment of benefits, and investment and accounting requirements. On the first question, the statute expressly authorizes the board to use fund assets "for reasonable expenses of administering the fund" (article 6243e.1, section 1a(1)), and the same authority follows from the cumulative effect of the statute. The general rule is that an administrative agency has only the powers expressly conferred by statute together with those necessarily implied from powers and duties expressly given (2 Tex. Jur. 3d Administrative Law section 11), and the grant of an express power carries by necessary implication every other power necessary and proper to executing it (Terrell v. Sparks, 135 S.W. 519, 521 (Tex. 1911)). The statute plainly creates an administrative agency apart from the municipality: the board keeps records of claims, receipts, and disbursements, makes all disbursements, makes factual determinations on individual claimants, and invests the funds, while the city's role is limited to supplying record books, making contributions, and paying certain professional costs. As a court described a very similar fund, once the city pays money into the trust fund the city loses control over it and it no longer belongs to the city; the city treasurer is merely named as ex officio treasurer of the pension fund, which does not give the city control (Bolen v. Board of Firemen, Policemen, and Fire Alarm Operators' Trustees of San Antonio, 308 S.W.2d 904, 905 (Tex. Civ. App. - San Antonio 1957, writ ref'd)). Given the complex benefit calculations and eligibility files the act requires, the board's duties necessarily imply authority to establish an office and hire an administrator and other necessary personnel. This is supported by chapter 12 of Title 110B (Public Retirement Systems), which applies to continuing organized retirement, disability, or death-benefit programs for officers or employees of the state or a political subdivision (section 12.001(2)), and therefore to article 6243e.1, and which requires the governing body to discharge its duties solely in the interest of participants and beneficiaries for the exclusive purposes of providing benefits and defraying reasonable expenses of administering the system (section 12.203(a)). It is also supported by the Texas Trust Act (Property Code section 111.001 et seq.), under which a trustee may employ attorneys, accountants, agents, and brokers reasonably necessary in administering the trust estate (Property Code section 113.018; Attorney General Opinion M-252 (1968), applying the Texas Trust Act to a similar relief and retirement fund where the enabling statute was unclear).

On the second question, two provisions address legal representation. Section 17 requires the city attorney to represent the board in all cases of appeal by a claimant from an order or decision of the board, and its terms preclude representation by anyone other than the city attorney in those cases. Section 20 authorizes the board to recover by civil action any money obtained from the fund through fraud, misrepresentation, or other illegal activity; because section 20 is silent on representation, the board may employ an attorney in those cases. A public administrative body cannot sue or be sued in the absence of statutory authority (Texas Employers' Insurance Ass'n v. Elder, 282 S.W.2d 371, 376 (Tex. 1955)), so the board has no authority to sue or be sued beyond sections 17 and 20. But legal advice outside the courtroom is beyond the general prohibition on suing or being sued and is within the board's general authority to manage and disburse the fund, so the board may hire an attorney for that advice.

On the third question, the city treasurer is an ex officio member and the secretary-treasurer of the board (section 2), subject to the orders and direction of the board acting as a body, and his duties as city treasurer are separate and distinct from his duties as secretary-treasurer of the board (see Bolen, supra). While the statute designates the treasurer as custodian of the fund, it is silent as to custody of the records. Because the board is required to keep financial records and hears applications for benefits, it must have custody of its own records to perform its day-to-day operations, and a person seeking records under the Open Records Act (article 6252-17a, V.T.C.S.) would reasonably expect to find them at the board's office. The Open Records Act designates the chief administrative officer as custodian of public records, so if the board hires an administrator, that person would have custody of the records. In sum, the board is authorized to establish an office and hire necessary personnel apart from the city, may hire an attorney for general legal advice and for prosecuting suits to recover money illegally obtained from the fund, and must have custody of its records.

Citations

Statutory authority:

• V.T.C.S. article 6243e.1 (fire fighters' relief and retirement fund): section 1a(1) (reasonable expenses of administering the fund); section 2 (creation of the fund and board; duties; city treasurer as secretary-treasurer); section 17 (city attorney represents the board in claimant appeals); section 20 (board's civil action to recover money obtained by fraud); section 21 (accounting services)
• V.T.C.S. Title 110B, chapter 12 (Public Retirement Systems): section 12.001(2) (coverage); section 12.203(a) (fiduciary standard and reasonable administrative expenses)
• Property Code section 111.001 et seq. (Texas Trust Act); section 113.018 (trustee may employ attorneys, accountants, agents, and brokers)
• V.T.C.S. article 6252-17a (Open Records Act; chief administrative officer as custodian of public records)

Cases (all Texas state courts):

• Terrell v. Sparks, 135 S.W. 519, 521 (Tex. 1911) (Texas Supreme Court; express power carries necessarily implied powers)
• Bolen v. Board of Firemen, Policemen, and Fire Alarm Operators' Trustees of San Antonio, 308 S.W.2d 904, 905 (Tex. Civ. App. - San Antonio 1957, writ ref'd) (money paid into the fund is no longer city property; treasurer's ex officio role gives city no control)
• Texas Employers' Insurance Ass'n v. Elder, 282 S.W.2d 371, 376 (Tex. 1955) (Texas Supreme Court; a public administrative body cannot sue or be sued without statutory authority)

Secondary authority: 2 Tex. Jur. 3d Administrative Law section 11.

Prior Attorney General materials referenced: M-252 (1968).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-926
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0926.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. The scan garbled the opinion number in the header as "JR-926"; the correct number, used throughout, is JM-926.

June 29, 1988

Ms. Helen L. Campbell
Commissioner
Firemen's Pension Commission
3910 S. I.H. 35, Suite 235
Austin, Texas 78704

Opinion No. JM-926

Re: Whether the board of trustees of the Austin Fire Fighters' Relief and Retirement 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 reasonable 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 reasonable expenses to hire an attorney to represent the board in matters outside those specifically 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 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, section 1a(1). 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 section 11. 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.

Terrell v. Sparks, 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), make factual determinations in regard to individual claimants (sections 3, 4, 5, 6, 8, 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 1a(a)), professional investment evaluation services (section 1a(i)), bank services (section 1a(j)), actuarial services (section 1a), 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 Operators' 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 110B, Public Retirement Systems, V.T.C.S.[1] 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 subdivision" with some exceptions that are not relevant here.

[1] Our determination is also supported by the application of the Texas Trust Act, section 111.001 et seq. 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."

V.T.C.S. Title 110B, section 12.001(2). Therefore, chapter 12, Title 110B applies to article 6243e.1. 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 participants and their beneficiaries; and

(B) defraying reasonable expenses of administering 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 or decision of the board of trustees." 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.

Texas Employers' Insurance Ass'n v. Elder, 282 S.W.2d 371, 376 (Tex. 1955).

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 board's 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. See Bolen, supra. 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.1 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.

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.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General