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2022 Town of Westlake Council Orientation BookMay 2022 Town Council Orientation Table of Contents TAB TM Welcome Message ………………………………………………………………………………………………..1 Organizational Structure……………………………………………………………………………………………..2 Council Manager Form of Government……………………………………………………………..………….3 2022 TML Handbook for Mayors and Councilmembers Duties of the Council Ordinance 327 Canvassing the Election returns adopting Council-Manager Form of Government in May 1999 ICMA Council-Manager Brochure Administrative Processes & Procedures………………………………………………………………………..4 Municipal Meeting Calendar Academic Meeting Calendar FY 23 Municipal Budget Calendar FY 23 Academic Budget Calendar Communications with Staff Responsibilities for Council Members Where Council Activities Occur Town Council Mail Process Council Tablets and Emails Legal………………………………………………………………………………………..………………………………5 Open Government Training – AG’s website Open Government pop quiz 2021 TML PIA Made Easy PowerPoint Presentation by Matthew Butler, Boyle & Lowry, LLP PowerPoint Presentation by Janet Bubert, Underwood Law Firm Governance Westlake Documents………………………………………………………………………..……………………6 Council Governance and Ethics Policy January 2022 Policy on Council Meeting Procedures Citizen Advisory Board/Committee/Affiliate Relations and Communications Policy Academic Charter (provided separately) January 2022 A FIRM FOUNDATION: building an extraordinary charter school board with Policy Governance® THE EFFECTIVE CHARTER SCHOOL BOARD Charter School Board University: An Introduction to Effective Charter School Governance by Brian L. Carpenter – Various Chapters of Interest Chapter 5 – First Things First Chapter 6 – The Starting Line for Your Board Chapter 7 – Governing Versus Managing Chapter 13 – Two Things That Really Matter Chapter 16 – When a Board Member Doesn’t Play by the Rules Chapter 19 – The 12 Characteristics of Effective Charter School Executives Supplemental Documents……………………………………………………………………………………………7 Council Development and Training Allen Program Bastrop Program How Cities Work – TML Council-Manager Form of Government – FAQ Preparing Councils for Their Work Cuff’s Rules of Good Governance Eight Great Things that make Great Leaders Great Your Role on the City Team The 8 Indisputable Behaviors of OnTarget Board Members The Five Dysfunctions of Charter School Boards Ten Lessons Charter School Boards Can Learn at Someone Else’s Expense Charter Schools: Creating Effective Governing Boards Systems and Processes………………………………………………………………………………………….……8 Municipal Fiscal and Budget Policies Academic Fiscal and Budgetary Policies Building Quality Manual Capital Improvement Plan TOWN OF WESTLAKE COUNCIL ORIENTATION MAY 18, 2022 WELCOME TO THE TOWN COUNCIL! For those newly elected, congratulations on your election success and thank you for giving of your time and talents to serve the community. Westlake is truly a wonderful place to live/work and is known for its focus on the quality-of-life amenities for our residents and corporate stakeholders. The information contained in the orientation packet will help you become familiar with the legislative and administrative processes of our organization. The staff teams and I hope you will find this helpful and informative. If you have questions or need clarification, please address topics during the orientation session or contact me directly for assistance. There will be a significant amount of information for you to learn and familiarize yourself with so that you will be prepared to conduct Council meetings and govern the municipality. Please know that I am here to be of assistance to you by providing any background information, policy clarification, or as a general resource in your new role. Serving on Town Council will be both a challenging and rewarding experience. Local government is closest to the people and as such, we have a greater impact on our communities and interact with more people on a day-to-day basis than the other levels of government. As elected officials, you have specific roles in the governance process: • policy making, • approve budgets, • adopt the annual property tax rate, • establish goals for the organization, • adopt ordinances and pass resolutions, and • work with various advisory committees. The Council Member role is one of great responsibility and we hope you will find it to be a rewarding time of public service for you, as well. While your time on the Council will require time and commitment, you will serve as an integral part of shaping our community. Westlake is Distinctive by Design and our current success has been based on the work of previous Council Members, input from residents and stakeholders, and both the municipal and academic staff teams. We have a unique service delivery approach that helps us maintain our low tax rate, high quality of life amenities, and a very high customer satisfaction rating in our residential surveys. We look forward to what the future will bring with you in a new role. Town Council Meetings Meetings are primarily scheduled on the 2nd and 4th Mondays of the month. Executive Session is generally held at 4:00 p.m. and is closed to the public. A limited number of topics may be discussed in Executive Session and the information is to be kept confidential between the Council, legal counsel, and the Town Manager or his/her designee. The Regular Session begins at 5:00 p.m. and is open to the public for general discussion and policy direction. All actions of the Council take place at a Council Meeting. I have included a copy of the Adopted Meeting Calendar in the Orientation Book. Town Council iPads, Email Addresses, Agenda Notices and Packets Town Council Members are provided with a dedicated iPad in order to review agendas/documents and respond to official emails in your governance capacity. The Town Manager will arrange a time for you to receive the iPad and for Staff to provide a quick overview. Staff will also create an official email address for each of you to use for Town business. Please be mindful to keep your personal emails separate from official use. Official agenda notices are posted at least 72 hours prior to a meeting (usually on a Friday afternoon) at our official notice location outside Town Hall. The Town Secretary handles the behind-the-scenes processes to post the agenda and the items are placed on the agenda by the Town Manager according to our normal course of business and the Governance Policies of the Council. Once the agenda packet is built, the Town Secretary will upload the documents to the Town Council (Drop) Box account and will send an email to notify you the packet is ready for review. The Town Council packet is also made available on the Town’s website and through social media. Agenda Item Requests If you would like an item placed on the agenda for discussion or presentation at a Town Council meeting, please contact me directly. Some of the topics may simply require background information, an explanation for a resident, or Staff may be able to remedy the issue prior to a formal agenda listing. Other topics will need to be placed on an agenda for the larger Council to discuss, and I can assist you with this process. Communications When an issue arises in the community that may be seen as controversial, involve a fatality or fire, or concern an issue I believe you may be asked about in your Council role, I (or someone from the Town Manager’s office) will contact you individually by phone. This helps keep you informed and generally avoids you hearing about something from your neighbor or the media. In certain instances, you will receive information directly and I ask that you keep me informed so that we can be responsive to the community. If I need to send a general update, I will email the entire Council; however, you must call me or email me directly if you need any additional information. It may be a violation of the Open Meetings Act for you to use the ‘reply all’ feature in an email. There are numerous stories of both Council and School Board Members violating these requirements and I hope to avoid this issue for all of you. Other communication items to consider: • any email, text or letter you send about either municipal or academic issues are generally considered to be an open record – a good rule of thumb is “do not put anything in an email, text, letter, on a social media site, or printed publication/material that you do not want to see on the front page of the newspaper’. Council Members are held to a different standard that the general public and at times – things may be taken out of context that you did not mean to say or didn’t have time to completely explain. • please do not contact Department Heads directly without speaking with me first about an issue or question. It is important that I know what is happening so I can address any issues and be responsive to you as a Council. I instruct all Department Heads to notify me if contacted by a Town Council Member and please understand this is a best practices policy in the Council-Manager form of Government which has been adopted by the voters. • I will also try to keep every member of the Town Council informed with the same information. For instance, if Council Member “A” asks a question that I believe will benefit or inform the entire Council, I will respond to Council Member “A” and copy the remaining Council so that you have the same information. Police Emergencies During my time in Westlake, we have had an issue with residents being reluctant to dial 9-1-1 if they have a concern or think they see something suspicious. In addition, if their home or vehicle is burglarized, please encourage them to call the police. No emergency or concern is too small given the size of Westlake and our relationship with the Keller Police Department. Also, we pay for animal control services as a part of our police services contract and feel free to help us inform residents of this service. Urgent Issues/Problems I am available to you on an almost 24/7 basis. With that said, and for those of you that I do not know well yet, I also have two small children at home, and we are generally wrapping the day up by 8:30 p.m. If it is after that time, please feel free to text me and I will respond the next day. If it is an emergency though, please call either me or Jarrod Greenwood, Deputy Town Manager, at any time. General Concerns After Hours/Weekends If you or a resident have a general operations issue after 5 p.m. or on the weekend, I have provided you with contact information below. Examples might be a water main break, park sprinklers on, a dead animal in the street or something else that needs to be handled before the next morning or Monday. 1. Call the non-emergency phone number (817) 490-5729. Please identify yourself as a Town Councilmember. This line is answered by Public Works staff 24 hours a day. We have staff from Public Works “on-call” or “on-standby” evenings and weekends. 2. You can reach someone on their cell phones in the Town Managers office as shown below: a. Amanda DeGan (940) 389-4153 b. Jarrod Greenwood (817) 680-1422 c. Troy Meyer at (817) 829-6974 3. On the off chance you are contacted by the media, please let me know and I can provide you with whatever data they need or information that may assist you. Common Concerns Over the years, we have developed routine response to the more common concerns we have heard from residents. These responses have developed over time and may be subject to change by the Town Council at any time. • SPEEDING. If a resident has a concern about a particular street or area, I refer these to the Keller Police Chief and ask police officers to monitor the location and respond directly to the citizen. This helps create a relationship between our residents and our public safety officers. Town staff or KPD may also place a speed recording device near the area of concern. This device records the speed and time of all passing cars and allows us to tailor enforcement to the time when most violations are occurring. Once the results are in, someone from the department will contact the citizen and discuss the results. • SPEED BUMPS. We do not install speed bumps as they are an obstruction not prescribed by the MUTCD (Manual of Uniform Traffic Control Devices). Additionally, studies conducted point to the adverse impact they would have on emergency medical and fire response times. • STOP SIGNS. A request for a stop sign is forwarded to the Public Works Director. He will contract with a traffic engineer to perform a “warrant” study to determine if the location meets standards for sign placement. As a rule of thumb, most locations will unfortunately not meet those standards. The traffic engineer provides a double-check and shows that we have used a reasonable approach to determine the need. • RUNNING STOP SIGNS. I refer these concerns to the Keller Police Chief. Officers Observe the location for several days and report the outcome to the citizen. • CONSTRUCTION PROJECTS. On major construction projects, such as street reconstruction, we first try to channel these complaints to our Public Works Director. He can obtain the quickest results. When we begin a major project, Staff provides a variety of notices and communicates directly with all the adjacent residents. We provide each of our phone numbers for residents to call if there is a problem, particularly for the Town staff that will be on the construction site daily. We also coordinate and communicate with any adjacent HOA’s to help disseminate information and updates related to a construction project. • PARENT COMPLAINTS. In your role, you will hear or may already have heard from parents who are concerned about something at the school. There is an established complaint process in the parent/student handbook that should be followed. Please refer them to the handbook and contact me for any questions. I would like to commend you again for being of service to your fellow residents and your community! I have much to share with you regarding the community and look forward to explaining our unique approach to service delivery which sets us apart from other cities. Westlake, and the team members who work for the community, are frankly - second to none and I look forward to serving with you over the coming years. Sincerely, Amanda DeGan Town Manager/CEO C ITIZENS OF W ESTLAKE Finance DEPUTY TOWN MANAGER Fire Chief Human Resources Public Works .33 Planning & Development Town Secretary Municipal Finance Manager Community Engagement Information Technology TOWN MANAGER & Facilities Maintenance .33 Business Services Mgr Deputy Clerk/ Juv Case Mgr Court Administrator WA Facility Manager Advisory Boards And Committees Town Attorney Court Judge Texas Student Housing Deputy Chief Fire Marshal Superintendent UB Coordinator Building Official Permit Clerk P&D Coordinator This organizational chart is a visual depiction of the way work is distributed within the Town of Westlake. It is also meant to be a tool to help enhance our working relationship with our customers, students and stake-holders, and to clear channels of communications to better accomplish our goals and objectives. M AYOR AND T OWN C OUNCIL PW Inspector/ Project Manager WA SUPERINTENDENT continued on next page Parks and Recreation .33 WA Coordinator WA Technician Network Manager Fac & Event Manager Lead Clerk HR Generalist Marshal/SRO ASSISTANT TOWN MANAGER Academic Finance Manager Systems Administrator Communications Manager WA Communications Specialist PW Technician Part Time Clerk Captains (2) Lieutenant (1) Accountant IIAccountant I PT Firefighter Paramedics (24) FT Firefighter Paramedics (12) Police Services (Contracted with City of Keller) Administrative Assistant Budget Analyst Database Admin M AYOR AND T OWN C OUNCIL continued from previous page Registrar WESTLAKE ACADEMYEXECUTIVE DIRECTOR WAF Executive Director Assistant .50 WESTLAKE ACADEMY ORGANIZATIONAL CHART SUPERINTENDENT College Counselor Nurse SPED Coordinator Primary Years Principal PYP Assistant Principal Coordinator Primary Faculty and Staff Librarian Technology Integration Specialist Middle Years Principal MYP Faculty and Staff Athletic Director Coordinator SPED Faculty and Staff Diploma Programme Principal/Coordinator DP Faculty and Staff MYP Assistant Principal Counselors ADMINISTRATION & ACCOUNTABILITY DIRECTOR Administrative Staff Handbook for Mayors and Councilmembers 1 2022 Handbook for Mayors and Councilmembers Texas Municipal League 1821 Rutherford Lane, Suite 400, Austin, Texas 78754 Copyright ©, Texas Municipal League, 2022 All materials are subject to copyrights owned by the Texas Municipal League (TML). Any reproduction, retransmission, or republication of all or part of this document is expressly prohibited, unless TML has expressly granted its prior written consent to so reproduce, retransmit, or republish the material. All other rights reserved. The names, trademarks, services marks, and logos of TML on this document may not be used in any advertising or publicity, or otherwise to indicate TML’s sponsorship of or affiliation with any product or service, without TML’s prior written permission. 2 2022 Handbook for Mayors and Councilmembers Foreword Serving as a local elected official is one of the most demanding —and often thankless—tasks a citizen can perform. Municipal officials can be called upon day and night. They are subject to constant criticism, and almost everything they do will be wrong in someone’s opinion. Many spend their own money to campaign for election; most receive little, if any, pay for the job. But serving in local office can also be rewarding and produ ctive. For many, it is more important than being in Congress or the state legislature because the city is the real world where municipal officials can make good things happen for their fellow citizens. We hope this handbook will offer a few suggestions th at will make your job easier. Obviously, such a guide cannot possibly touch upon every relevant subject, but it does include what we think are the most important topics. Throughout, however, it should be recognized that this handbook is only a guide and that there is no substitute for competent legal advice regarding interpretations of the law and other questions that might arise in specific situations. If you don’t find the answers to your questions about the part of city government you are covering or the issues facing cities today, we’re ready to assist you in any way we can. Just give us a call at 512 - 231-7400, email us at legalinfo@tml.org, or visit our website at www.tml.org. We wish you great success. Bennett Sandlin TML Executive Director 3 Table of Contents Introduction ....................................................................................................................................................... 6 Chapter One: Local Government in Texas ............................................................................................... 7 Units of Local Government ........................................................................................................................................ 7 Categories of General Law Cities ............................................................................................................................. 8 City Manager Plan ...................................................................................................................................................... 10 The Home Rule Concept .......................................................................................................................................... 11 Inherent Powers of Home Rule Cities ................................................................................................................ 12 Limitations on Home Rule Powers ...................................................................................................................... 14 The Charter Document ............................................................................................................................................ 14 Forms of Home Rule City Government ............................................................................................................... 15 Chapter Two: Roles and Responsibilities of Officers in General Law Cities ............................ 17 Office of the Mayor .................................................................................................................................................... 17 Office of the Mayor Pro Tem .................................................................................................................................. 21 Office of Councilmember ........................................................................................................................................ 22 Qualifications .............................................................................................................................................................. 22 Terms of Office ........................................................................................................................................................... 23 Vacancies ...................................................................................................................................................................... 23 Absences ....................................................................................................................................................................... 23 Removal ........................................................................................................................................................................ 24 Compensation ............................................................................................................................................................. 24 Expense Reimbursement ........................................................................................................................................ 24 Chapter Three: Roles and Responsibilities of Officers in Home Rule Cities ............................ 25 Office of the Mayor .................................................................................................................................................... 25 Office of the Mayor Pro Tem .................................................................................................................................. 27 Office of Councilmember ........................................................................................................................................ 27 Qualifications .............................................................................................................................................................. 28 Terms of Office ........................................................................................................................................................... 29 Vacancies ...................................................................................................................................................................... 29 Compensation ............................................................................................................................................................. 30 Chapter Four: Powers and Duties of Cities ........................................................................................... 31 Administrative Oversight in General Law Cities ............................................................................................ 31 Administrative Oversight in Home Rule Cities ............................................................................................... 33 The Police Power ....................................................................................................................................................... 33 Planning, Subdivision Controls, and Annexation ........................................................................................... 34 Regulation of Streets and Other Public Places ................................................................................................ 35 Construction of Public Facilities .......................................................................................................................... 35 Donations of City Funds .......................................................................................................................................... 35 Payment of Bonuses to City Employees ............................................................................................................. 36 Bids ................................................................................................................................................................................. 36 City Depository ........................................................................................................................................................... 37 Uniform Election Dates ............................................................................................................................................ 37 Official Newspaper .................................................................................................................................................... 37 Federal Voting Rights Act ....................................................................................................................................... 37 Delegation of Legislative Powers ......................................................................................................................... 38 Chapter Five: The City Council at Work: Meetings ............................................................................. 39 4 Legal Requirements .................................................................................................................................................. 39 Texas Open Meetings Act ........................................................................................................................................ 39 Public Information Act ............................................................................................................................................ 42 Formal Meetings of the Council/ The Agenda ................................................................................................. 44 Rules of Order and Procedure .............................................................................................................................. 46 Motions .......................................................................................................................................................................... 46 Streamlining Council Meetings ............................................................................................................................. 49 Council Work Sessions ............................................................................................................................................. 51 Citizen Participation ................................................................................................................................................. 51 Public Hearings .......................................................................................................................................................... 52 Chapter Six: Financial Administration ................................................................................................... 54 Revenue Sources ........................................................................................................................................................ 54 Budgeting ..................................................................................................................................................................... 58 Municipal Borrowing ............................................................................................................................................... 61 General Obligation Debt .......................................................................................................................................... 62 Revenue Bonds ........................................................................................................................................................... 63 Bond Ratings ............................................................................................................................................................... 64 Bond Elections ............................................................................................................................................................ 65 Installment Obligations ........................................................................................................................................... 65 Anticipation Notes ..................................................................................................................................................... 65 Capital Improvements Programming ................................................................................................................ 65 Financial Reporting .................................................................................................................................................. 66 Investments ................................................................................................................................................................. 68 Financial Warning Signals ...................................................................................................................................... 68 Chapter Seven: Ordinances and Resolutions ....................................................................................... 69 Compatibility of Ordinances with State and Federal Laws ......................................................................... 70 Validity of Ordinances ............................................................................................................................................. 70 Form of the Ordinance ............................................................................................................................................. 70 Chapter Eight: Conflicts of Interest ......................................................................................................... 74 Dual Office-Holding ................................................................................................................................................... 74 City Actions that Benefit Mayors and Councilmembers .............................................................................. 75 Nepotism ....................................................................................................................................................................... 77 Purchasing ................................................................................................................................................................... 78 Chapter Nine: Personal Liability of Councilmembers ...................................................................... 79 Liability Under State Law........................................................................................................................................ 79 Liability Under Federal Law .................................................................................................................................. 80 Chapter Ten: Sources of Information ..................................................................................................... 82 Local Sources ............................................................................................................................................................... 82 Texas Municipal League .......................................................................................................................................... 82 National Resources ................................................................................................................................................... 82 5 About the Texas Municipal League In the summer of 1913, Professor Herman G. James, Director of the Bureau of Municipal Research and Reference at the University of Texas at Austin, and A.P. Woolridge, then the Mayor of Austin, formed the League of Texas Municipalities. The two men invited representatives from all Texas cities to come to Austin on November 4, 1913, for an organizational meeting. Fourteen cities sent representatives to Austin. At that first meeting, a modest membership fee was approved along with a constitution to govern the association. Since that time, the League has grown into one of the largest and most respected organizations of its kind in the nation. From the original 14 members, TML’s membership has grown to 1,160 cities. Membership is voluntary and is open to any city in Texas. More than 16,000 mayors, councilmembers, city managers, city attorneys, and department heads are member officials of the League by virtue of their cities’ participation. The Texas Municipal League exists solely to provide services to Texas cities. Since its formation, the League’s mission has remained the same: to serve the needs and advocate the interests of its members. The TML constitution states that the purpose of the League is to “render services which individual cities have neither the time, money, nor strength to do alone.” League services to its member cities include legal advice and information on municipal legal matters, legislative representation on the state and federal levels, information and research, publication of a monthly magazine, conferences and training seminars on municipal issues, and professional development of member city officials. 6 Introduction How to Use This Book In the past, the League has prepared two separate handbooks for city officials: one for those in general law cities, and one for those in home rule cities. In the interest of efficiency, those books have been combined to form this Handbook for Mayors and Councilmembers. Most of the information is relevant to all cities. But a fundamental understanding of the fact that there are two types of cities in Texas will help the reader recognize those areas where a distinction is made. The two types of cities in Texas are general law and home rule. Most smaller cities (those with 5,000 or fewer inhabitants) are general law cities. A general law city operates exactly as its name implies: it can do only what state law expressly authorizes. The most important part of t hat authorization is the form of government of a general law city. State law defines the composition of the governing body and various items that go with that (such as filling vacancies on the governing body). Chapter two describes in detail the roles and responsibilities of officers in general law cities: Type A, Type B, and Type C. The main differences in the powers of the different types of cities are largely of historical interest, but the state law directing the makeup of the governing body is still ve ry important. When a general law city reaches 5,000 inhabitants, it may follow procedures in state law to draft a home rule charter. The draft is then submitted to the voters of the city at an election. If the voters approve the charter at the election, the city becomes a home rule city. A home rule city is governed by its charter (see chapter three for the roles and responsibilities of officers in home rule cities) and looks to state law for limitations on its power. The state legislature has frequently p assed laws that limit the authority of home rule cities, and state law also frequently imposes certain procedures that must be followed by any type of city. This book is meant to be a broad and general overview of cities in Texas. Many of the topics are covered in much more detail in various papers and memos available from the League. City officials with questions about items in this book or anything relating to the governance or authority of their city should visit the TML website at www.tml.org and/or contact the League’s legal services department at legalinfo@tml.org. The information in this book, or other information obtained from the League, should never be substituted for the advice of local legal counsel. 7 Chapter One: Local Government in Texas Understanding city government requires some knowledge of all local governments. This chapter briefly discusses counties, school districts, council of governments, and types of city governments. Units of Local Government According to 2010 Census of Government figures, Texas has 1,209 cities, 254 counties, 1,082 school districts, and 2,291 special districts. During the past 20 years, the number of special districts has steadily increased, due mainly to the rapid creation of water districts in unincorporated areas. Conversely, the number of school districts has steadily declined as smaller systems have consolidated with larger ones. The number of counties has remained constant for 100 years, while the number of cities is increasing at an average of about 10 per year. The United States Census Bureau also recognized that four of the 10 cities with the largest recent population gains were in Texas —San Antonio, Dallas, Fort Worth, and Frisco. Texas also had seven of the most recent 15 fastest-growing cities by percentage — New Braunfels, Frisco, McKinney, Georgetown, Rowlett, Midland, and Round Rock. Counties Counties are known as “general purpose” governments due to the many different functions they perform. Counties serve the dual purposes of providing governmental services for the benefit of their residents and administrative services on behalf of the state. Major governmental services include road construction and maintenance, jails and courts, welfare, health, and law enforcement. Administrative services performed by counties as agents of the state include voter registration and motor vehicle licensing. Special Districts Schools and the many types of special districts are known as “single-purpose” governments, since they usually perform just one function, such as education, water supply, or hospital care. Most special districts serve a limited geo- graphical area and were created because of the inability of general purpose local governments to provide a particular service. Councils of Governments Councils of governments (COGs) are also known as “regional planning commissions.” COGs are defined as “political subdivisions of the state” under Texas law. However, COGs differ considerably from cities, counties, and other conventional local governments because they cannot levy taxes nor incur debt. COGs are voluntary, area-wide associations of local governments. Their function is to foster local cooperation among localities by serving as forums for intergovernmental problem- solving and by planning governmental programs and facilities on a regional basis. Though they do not have broad power to execute projects, many of the state’s COGs provide direct services on a limited basis. 8 Each COG operates under the supervision of a governing body composed of elected officials representing participating local governments. Financing is provided by a combination of dues paid by member governments and federal and state funds. Cities Among all of the different types of local governments, cities perform the greatest number of functions, both governmental and proprietary. State law specifically defines and lists certain activities as either governmental or proprietary functions in the Texas Tort Claims Act. The law lists 36 functions that are govern- mental. Included among them are police and fire protection, health and sanitation services, street construction and design, transportation systems, establishment and maintenance of jails, and enforcement of land use restrictions. Three functions are listed as proprietary: the operation and maintenance of a public utility, amusements owned and operated by a city, and any activity that is abnormally dangerous or ultra-hazardous. Functions that are listed as governmental are not included as proprietary functions. There are two categories of cities in Texas: home rule and general law. Home rule cities are larger cities with more than 5,000 inhabitants in which the citizens have adopted a home rule charter. A charter is a document that establishes the city’s governmental structure and provides for the distribution of powers and duties among the various branches of government. The legal position of home rule cities is the reverse of general law cities. Rather than looking to state law to determine what they may do, as general law cities must, home rule cites look to the state constitution and state statutes to determine what they may not do. Thus, if a proposed home rule city action has not been prohibited, limited, or pre-empted by the state, the city generally can proceed. General law cities are smaller cities, most of which are less than 5,000 in population. All general law cities operate according to specific state statutes prescribing their powers and duties. General law cities are limited to doing what the state authorizes or permits them to do. If state law does not grant general law cities the express or implied power to initiate a particular action, none may be taken. Approximately seventy-five percent of all Texas cities operate under the general laws; the remainder are home rule cities. “General law” is a term used to describe all of the state laws applicable to a particular class of things. A general law city, therefore, is one that is subject to all of the state laws applicable to such cities, many of which are found in the Local Government Code. General law city officials occasionally call the Texas Municipal League office to request a copy of their “city charters.” Unlike home rule cities, general law cities do not have charters. The creation of a general law city is documented in its incorporation papers, filed at the county courthouse, which describe when the city was established and its original boundaries. Categories of General Law Cities There are three categories of general law cities: Type A, Type B, and Type C. Although it is sometimes difficult to distinguish between 9 the types, it is necessary to know the difference in order to determine which state laws apply. Type B General Law Cities Most new cities begin as Type B general law cities under a state law that permits the incorporation of any area containing 201 to 10,000 inhabitants. Later, as the population of a city grows to 600 or more, it can make a transition to Type A. In a Type B general law city with the aldermanic form of government, the governing body is known as the “board of aldermen” and includes six members (a mayor and five aldermen), all of whom are elected at-large. At its discretion, the board of aldermen may provide by ordinance for the appointment or election of such additional officers as are needed to conduct the business of the city. Type A General Law Cities Type A general law cities are usually the larger general law cities. Most were incorporated under Type B status and then switched to Type A status when their population increased to 600 or more, or when they had at least one manufacturing establishment. The governing body of a city operating as a Type A general law city is technically known as the board of aldermen, although many cities refer to it as the “city council.” It varies in size depending on whether the city has been divided into wards. If the city has been divided into wards, the council consists of a mayor and two councilmembers from each ward— whatever the number. If the city has not been divided into wards, the governing body always consists of a mayor and five councilmembers. In addition to the city council, other municipal officers include a marshal, treasurer, tax assessor-collector, city secretary, city attorney, and engineer. Whether these offices are elective or appointive depends on the method selected by the city council for filling them. Moreover, the city council may provide by ordinance for the appointment or election of such other municipal officers as it deems necessary. Type C General Law Cities A Type C city operates with the commission form of government. The governing body is known as the “board of commissioners” and always consists of a mayor and two commissioners. No other elective officers are required; however, the board of commissioners must appoint a city clerk, and may provide by ordinance for the election or appointment of such other officers as are required. In a Type C city of 500 or less population, the board of commissioners must follow the requirements applicable to a Type B general law city—that is, the board of commissioners has the same powers and duties as the board of aldermen in a Type B general law city, except where specifically provided otherwise. In a city of over 500 population, the board of commissioners must follow the requirements of a Type A general law city, except where specifically provided otherwise. Any city operating under the commission form of government can change over to the aldermanic form of government, and vice versa. The commission form of government in a general law city should not be confused with the commission plan adopted by the City of Galveston at the turn of the century. Under the Galveston plan, each member of the 10 municipal governing body—the city commission—simultaneously served as legislators and heads of the city’s administrative departments. Thus, one member of the governing body served as “police commissioner,’’ another served as “fire commissioner,” and so on, with each commissioner exercising day-to-day supervisory authority over a particular department. General law cities operating under the commission form of government are not authorized to adopt the Galveston plan. In a general law city, one commissioner, acting alone, has no individual power; only the commission, acting collectively, exercises power. City Manager Plan The city manager plan can be adopted in any general law city under the provisions of Chapter 25, Local Government Code: 1) Upon presentation of a petition signed by at least 20 percent of the total number of qualified voters voting for mayor in the last preceding city election, the mayor must call an election on the question of adopting the city manager plan within 10 days after the date the petition is filed. 2) If a majority of the votes cast at the election favor adoption of the city manager plan, the council must, within 60 days after the election, appoint a city manager and fix his or her salary by ordinance. 3) The administration of the city is to be placed in the hands of the city manager, who serves at the pleasure of the city council. 4) In any city where the city manager plan has been approved, all officers of the city, except members of the governing body, thereafter shall be appointed as may be provided by ordinance. 5) Procedures for repealing the city manager plan are essentially the same as for adopting it. The basic structure of the city manager plan is similar to that of a private corporation, in which the stockholders elect a board of directors which then hires a president to run the company. Under the city manager plan, the voters elect a city council which, in turn, hires a city manager to administer the city’s day-to-day affairs. Under the city manager plan, the council serves as the legislative body. The council sets policy, it approves the budget and sets the tax rate, and it determines the size of the payroll and the extent and cost of municipal services. In short, the council is the final authority on all of the many policy decisions that determine the scope and functions of the city government. The mayor and councilmembers have no administrative duties under the city manager plan. These are vested in the city manager, who is responsible for directing the workforce and programs of the city in accordance with ordinances, rules, and regulations adopted by the council. The typical city manager in Texas is appointed for an indefinite term and is subject to dismissal by the council at any time except as otherwise prohibited by law. He or she is designated as the chief executive and administrative officer of the city and is accountable to the council for the proper conduct of all municipal operations. The 11 manager has the unilateral authority to hire, discipline, and fire the department heads under the manager’s control. In some cases, however, certain employees, such as the city attorney or municipal judge, are directly hired and/or supervised by the council rather than the manager. Although the manager’s role varies from one city to another, the primary function is to implement the policies established by the council and ensure that the city is operated in an economical and responsible manner. Specific duties of the manager may include the following: 1) Enforcing all city ordinances, rules, and regulations. 2) Supervising all municipal employees and programs. 3) Preparing and executing the city’s annual budget pursuant to the revenue and expenditure plans adopted by the council. 4) Managing the city’s funds and preparing periodic reports that advise the council and the general public of the city’s financial condition. 5) Providing information to the council to facilitate its ability to make informed decisions in the best interests of the city. 6) Preparing council meeting agendas and attending all such meetings to serve as a resource to the council and the public. 7) Drawing the council’s attention to community needs and recommending alternatives by which the council can respond to those needs. Adopting the city manager plan does not change the basic governmental framework of a general law city. Rather, it is an administrative mechanism added to the basic structure. Legislation passed in 2003 clarifies that city councils of cities that have not adopted a city manager plan under chapter 25 of the Local Government Code are free to delegate by ordinance management duties to a city administrator. The Home Rule Concept Although scholars have used a variety of flowery phrases to describe the concept of home rule, the principle is simple: home rule is the right of citizens at the grassroots level to manage their own affairs with minimum interference from the state. Home rule assumes that governmental problems should be solved at the lowest possible level, closest to the people. As mentioned earlier, home rule cities look to the state to tell them what they are prohibited from doing, rather than for specific grants of authority to undertake particular functions. In Forwood v. City of Taylor, the Texas Supreme Court summarized Texas’ home rule doctrine as follows: It was the purpose of the Home-Rule Amendment ... to bestow upon accepting cities and towns of more than 5,000 population full power of self- government, that is, full authority to do anything the legislature could theretofore have authorized them to do. The result is that now it is necessary to look to the acts of the legislature not for grants of power to such cities but only for limitations on their powers. As a result of the Forwood case and other court decisions upholding their broad powers, home rule cities have the inherent authority to do just about anything that qualifies as a 12 “public purpose” and is not contrary to the constitution or laws of the state. Inherent Powers of Home Rule Cities An “inherent power” is one that is possessed by a city without its having been specifically granted by the state. It is the right to perform an act without having received that right from the Texas Constitution or the state legislature. Home rule cities have many inherent powers. A discussion of some of the inherent powers of major significance may explain why so many cities have chosen to adopt home rule charters. Municipal Organization In contrast to counties or general law cities, whose organization is fixed by state law, the governmental structure of a home rule city is left entirely to the discretion of local voters. The citizens of a home rule city are free to decide their form of municipal government (mayor-council, council-manager, and so on); choose between a large or small city council; provide for the election of the city council at- large, by single-member district, or by place; fix the terms of office for councilmembers at two, three, or four years; or establish overlapping terms of office. Moreover, they can decide whether the mayor is to be elected directly by the voters, selected from among members of the council, or chosen by some other method. The citizens of a home rule city also have total discretion over the city’s administrative structure. Subject only to local preferences, the charter can establish a simple administrative framework or a complex one, provide for the appointment or election of major administrative officials, and so on. And finally, the charter can provide for the creation of any boards or commissions that local voters decide are necessary to make the city function effectively. Annexation From 1912-2019, when H.B. 347 passed, the inherent power to unilaterally annex adjoining areas was one of the most important home rule prerogatives. To annex “unilaterally” means that the city can bring an adjacent, unincorporated area into the city without the permission of the persons residing in that area. In 2019, the legislature passed H.B. 347. The bill drastically altered the annexation landscape for all cities. The bill provides that a city: 1) May annex vacant land at request of the owner 2) may annex an area with a population of less than 200 only if the following conditions are met, as applicable: (1) the city obtains consent to annex the area through a petition signed by more than 50 percent of the registered voters of the area; and (2) if the registered voters of the area do not own more than 50 percent of the land in the area, the petition described by (1) is signed by more than 50 percent of the owners of land in the area; and 3) may annex an area with a population of 200 or more only if the following conditions are met, as applicable: (1) the city holds an election in the area proposed to be annexed at which the qualified voters of the area may vote on the question of the annexation and 13 a majority of the votes received at the election approve the annexation; and (2) if the registered voters of the area do not own more than 50 percent of the land in the area, the city obtains consent to annex the area through a petition signed by more than 50 percent of the owners of land in the area. Initiative, Referendum, and Recall Initiative, referendum, and recall are inherent home rule powers that are reserved for exclusive use by local voters in order to provide direct remedies in unusual situations. There is no constitutional or statutory authority for initiative, referendum, or recall. These powers are unique to home rule cities, and they are not available to voters at any other level of government, including the state. Initiative is a procedure under which local voters directly propose (initiate) legislation. Citizen lawmaking through the initiative process allows local voters to circumvent the city council by direct ballot box action on new ordinances that have wide support in the community, but which the council refuses to enact. The initiative process begins with circulation of a petition setting forth the text of the desired ordinance. Then, petitioners must obtain the number of voter signatures needed to force the city council to submit the ordinance to the people at a citywide election. Petition signature requirements vary from charter to charter. Some are based on a percentage of the number of qualified voters in the city, while others are expressed as a ratio of the number of votes cast at the last general city election. After a completed petition is filed, the city secretary checks it to make sure that all of those who signed are qualified voters. If the petition complies with the requirements of the charter, the city council has two options: (1) it can adopt the proposed ordinance; or (2) it must call an election on the ordinance. If, at the election on the proposed ordinance, a majority of those voting favor its adoption, the ordinance is put into effect. Referendum is a procedure under which local voters can repeal unpopular, existing ordinances the council refuses to rescind by its own action. The procedures for forcing the city council to call a referendum election are usually the same as for initiative elections. Petitions calling for an election to repeal “Ordinance X” are circulated. When the required number of signatures is obtained, the petition is submitted to the city council, which can either repeal the ordinance by its own action or call an election at which the people can vote to repeal it. If, at such election, a majority favors retaining the ordinance, it is left on the books. If a majority favors its repeal, it is rescinded when the council canvasses the election returns. Recall is a process by which local voters can oust members of the city council before the expiration of their terms. Under most charters, a recall election begins with the filing of an affidavit stating the name of the councilmember whose removal is sought and the grounds for removal. The city clerk or secretary then furnishes the person filing the affidavit with petition forms that must be completed and returned within a prescribed time. Most city charters impose two further limitations on recall efforts. First, they prohibit more than one recall election per 14 councilmember per term. Secondly, they forbid recall elections for any councilmember during the early stages of his or her term—as, for example, prohibiting an election to recall a councilmember within 60 days of the date he or she was sworn into office, or prohibiting recall elections for councilmembers whose terms will expire within 60 days. The following language is typical of charter recall provisions: The people of the city reserve the power to recall any member of the council and may exercise such power by filing with the city clerk a petition, signed by qualified voters of the city equal in number to at least ten percent of the qualified voters of the city, demanding the removal of a councilman. Charter Amendments In addition to initiative and referendum, direct lawmaking by local voters can be accomplished through amendments to the charter document itself. Under Section 9.004 of the Local Government Code, citizens can force the city council to call an election on a proposed charter amendment by simply filing a petition signed by five percent of the qualified voters or 20,000, whichever is less. Voter-initiated charter amendments, if adopted, can change most aspects of the city government. Limitations on Home Rule Powers Although the powers of a home rule city are extensive, they remain subject to all of the limitations imposed by state and federal law. Some of these are briefly summarized below. Every city must comply with the federal and state constitution and statutory requirements. Examples include state statutes that require every city to pay unemployment taxes, that require cities with 10,000 or more in population to pay longevity compensation to its police officers and firefighters, or prohibit conducting regular city elections on any day except on those days prescribed by the Election Code. Though certain limitations are imposed on home rule cities by the state, some can be further narrowed by local action. For example, the Texas Constitution authorizes any city with more than 5,000 inhabitants to levy property taxes at a maximum rate of $2.50 per $100 assessed valuation. But a home rule charter may set a local ceiling lower than that. If a city’s charter limits the city tax rate to $1.70 per $100 of assessed valuation, this provision has the same effect as state law. The city council is bound by it even though the state constitution permits a higher rate. Additionally, the governing body of a home rule city cannot act on any matter which has been preempted by the state. For example, the Texas Alcoholic Beverage Code fixes the business hours of retail liquor stores. Therefore, an ordinance requiring liquor stores to open or close at times other than those prescribed by state law may not be enacted. Finally, when a charter provision conflicts with a state law, the state law controls, unless expressly stated otherwise. The Charter Document Although all municipal governments are subject to an abundance of federal and state laws, the charter remains the most important document for a home rule city. Members of the council should read the charter 15 immediately upon their election to office; annual reviews also can be useful. Most charters include the following components:  Provisions establishing the city’s form of government (mayor-council, council- manager, and so on) and its legislative and judicial machinery;  Organizational provisions establishing the administrative structure of the city government and the means for financing its operations;  Provisions governing the procedures of the city council and advisory boards and commissions, and procedures for granting franchises, and assessing and collecting taxes; and,  Popular controls over the city government, such as elections, referenda, initiative, and recall. Forms of Home Rule City Government Every home rule city in the state operates under one of two forms of government: mayor-council or council-manager. Among Texas’ approximately 385 home rule cities, the vast majority have the council-manager form. Mayor-Council Government The mayor-council plan has two variants: strong-mayor and weak-mayor. Under the strong-mayor system, most key administrative and appointive powers are concentrated in the hands of a full-time mayor who also presides over meetings of the city council. The mayor usually has: (1) the power to appoint and remove department heads and the members of most major boards and commissions; (2) the prerogative to prepare the city budget and, following its adoption by the council, to execute the budget; (3) a high enough salary to enable the officeholder to devote their full time to being mayor, as well as an office budget sufficient to hire an adequate staff; and (4) the power to veto actions by the city council. In a strong-mayor city, councilmembers have no administrative duties. Their role is to enact ordinances, adopt policies governing the operations of the city, and otherwise function as the legislative branch of the city government. Under the weak-mayor system, the powers of the mayor are limited. First, the mayor may be selected by the council rather than being directly elected by the people, which dilutes his or her political influence. Secondly, the mayor’s pay is usually minimal and few, if any, funds are provided for staff. Third, department heads often are appointed and removed by majority vote of the city council, which diffuses administrative authority. And finally, few weak mayors have either the authority to veto actions of the council or the exclusive power to develop and execute the budget, since these powers are collectively exercised by the council. Very few home rule cities in Texas use the weak-mayor form of government. Council-Manager Plan The basic structure of the council-manager form of government is similar to that of a private corporation where the stockholders elect a board of directors which then hires a president to run the company. Under the council-manager plan, the voters elect a city council which, in turn, hires a city manager to administer the city’s day-to-day affairs. 16 In a council-manager city, as in any other form of city government, the council serves as the legislative body. The council sets policy, approves the budget and sets the tax rate, and determines the size of the payroll and the extent and cost of municipal services. In short, the council is the final authority on all of the many policy decisions that determine the scope and functions of the city government. Under the council-manager plan, the mayor and councilmembers have no administrative duties. These are vested in the city manager, who is responsible for directing the workforce and programs of the city in accordance with ordinances, rules, and regulations adopted by the council. The typical city manager in Texas is appointed for an indefinite term and is subject to dismissal by the council at any time except as otherwise prohibited by law. He or she is designated, either by charter or ordinance, as the chief executive and administrative officer of the city and is accountable to the council for the proper conduct of all municipal operations. The manager has the unilateral authority to hire, discipline, and fire the department heads. Although the manager’s role varies from one city to another, the manager’s primary function is to implement the policies established by the council and ensure that the city is operated in an economical and responsible manner. Specific duties of the manager may include the following: 1) Enforcing all city ordinances, rules, and regulations. 2) Supervising all municipal employees and programs. 3) Preparing and executing the city’s annual budget pursuant to the revenue and expenditure plans adopted by the council. 4) Managing the city’s funds and preparing periodic reports that advise the council and the general public of the city’s financial condition. 5) Providing information to the council to facilitate its ability to make informed decisions in the best interests of the community. 6) Preparing council meeting agendas and attending all such meetings to serve as a resource to the council and the public. 7) Drawing the council’s attention to community needs and recommending alternatives by which the council can respond to those needs. In larger cities, city managers spend comparatively little time on citizen contacts, personnel problems, and other routine matters. Managers in these cities usually have a sizable staff capable of handling day-to-day problems, thus allowing the manager to concentrate on communicating with the council, policy issues, planning activities, and work sessions with department heads. On the other hand, the managers of medium- sized and smaller cities frequently operate with limited resources and small staffs. The manager must, by necessity, be personally involved in the details of providing police, fire, solid waste, and other services. 17 Chapter Two: Roles and Responsibilities of Officers in General Law Cities All members of the city council play unique roles in making the city government operate effectively in a general law city. Many of their functions are set by law, while others are established as a matter of local custom or policy. Office of the Mayor The mayor occupies the highest elective office in the municipal government. As political head of the city, the mayor is expected to provide the leadership necessary to keep it moving in the proper direction. Except under the city manager plan of government, the mayor is the city’s chief executive officer. The mayor presides over council meetings and is generally recognized as the ceremonial and governmental head of the city for most purposes. Most of the powers exercised by the mayor are created through ordinances and resolutions adopted by the city council. Very few mayoral powers are prescribed by state law. Legislative Responsibilities The mayor’s most important duty is to carry out the legislative responsibilities he or she shares with other members of the council— identifying the needs of the city, developing programs to satisfy those needs, and evaluating the extent to which municipal services satisfactorily reflect the policy goals of the council. Under the law, the mayor is the presiding officer of the city council. In this capacity as presiding officer, the mayor’s actual powers in legislative matters can be greater than those of other councilmembers. For example, the mayor can influence the flow of debate through the power to recognize councilmembers for motions or statements. Also, the mayor rules on questions of procedure at council meetings, and those rulings are binding unless successfully challenged by a majority of the governing body. Finally, the mayor of a Type A general law city can formally object to ordinances and other resolutions passed by the council. If the mayor objects to an ordinance or resolution before the fourth day after it is placed in the city secretary’s office, it must be reconsidered by the governing body. If approved, it becomes effective (Local Government Code Section 52.003). Appointive Powers Appointive powers represent another area in which the mayor’s powers often outrank those of councilmembers, especially when the mayor is authorized by ordinance to appoint department heads and advisory board members. In Chapter 25 council-manager cities, the mayor’s appointive powers are more limited, because the city manager may appoint all or most administrative employees. Although most of the mayor’s appointive 18 powers are established by ordinances enacted by the city council, some are established by state law, such as the power to appoint commissioners of a housing authority (Local Government Code Section 392.031). Law Enforcement and Related Duties of the Mayor The office of the mayor involves a variety of law enforcement responsibilities. The mayor is specifically obligated by law to “actively ensure that the laws and ordinances of the city are properly carried out,” and “in the event of a riot or unlawful assembly or to preserve the peace,” the mayor may order the closing of certain public places. Under extreme circumstances, as in the case of a riot, the mayor of a Type A general law city can summon a special police force into service (Local Government Code Section 341.011) or call for assistance from the Texas National Guard. Also, if the city has used the provisions of Sections 362.001 et seq., Local Government Code, to enter into a mutual law enforcement pact with other nearby cities or the county, the mayor can call on those localities for help in dealing with civil disorders and other emergencies. Additionally, most local emergency management plans authorize the mayor to exercise supreme powers in case of a public calamity, after the mayor has declared a local disaster or asked the governor to declare a state of emergency. State law also permits a mayor to require a mandatory evacuation order and control who can access an area during a phased reentry (Government Code Chapters 418 and 433). Judge of the Municipal Court In every general law city where no separate office of judge of the municipal court exists by ordinance, the mayor is ex officio judge of the court (Government Code Section 29.004). A mayor serving as the ex officio municipal judge must still receive the annual training required of all municipal judges. Signatory Duties As signatory for the city, the mayor maybe required to sign a variety of documents to give them official legal effect. The mayor’s signature is required on all bonds, certificates of obligation, warrants, and other evidence of debt, as well as may be required on ordinances, resolutions, advertisements for bids on public works projects, contracts, and similar legal paperwork. The mayor is also responsible for signing proclamations recognizing special events and personal achievements. Ceremonial Duties The mayor’s participation in local ceremonial events is a never-ending responsibility. The mayor is expected on a daily basis to cut ribbons at ceremonies opening new businesses; break the ground to begin the construction of new city facilities; and regularly appear at fairs, parades, beauty pageants, and other community celebrations. The mayor also issues proclamations for a variety of purposes, whether to honor visiting dignitaries or declare “Support Your Local School Week.” And as a featured speaker before professional clubs, school assemblies, and neighborhood groups, the mayor can expect to be interviewed, photographed, and otherwise placed on extensive public display by the media. 19 Administrative Duties Except in Chapter 25 council-manager cities, the mayor serves in the dual roles of administrator and political head of the city, going to city hall on a regular basis, working with department heads on matters that need attention each day, and performing the ceremonial duties that go with the office. In some cases, ordinances approved by the council give the mayor wide latitude to deal with the many problems that arise each day. Also, an administrative staff is sometimes available to help the mayor, but the office still involves considerably more effort—and power—than its counterpart in cities operating under the city manager plan. Limitations on the Mayor’s Powers The broad powers of the mayor can be offset by several methods, including ordinance requirements that the council ratify mayoral appointments and other key actions. Limiting the mayor’s power at the council table is another way of imposing restraints. In Type A general law cities, for instance, the mayor is allowed to vote only in the event of a tie (Local Government Code Section 22.037). As state law is unclear on the mayor’s ability to vote in Type B general law cities, those cities should consult with their local legal counsel with questions. The mayor’s prerogatives can also be restricted by the structure of the city government. Under the Chapter 25 council- manager plan, for example, the mayor has no administrative powers and will probably be in city hall on a less frequent basis. The ordinances of most council-manager cities also make it clear that decision-making is to be shared by the full council, and that the mayor is to be considered the same as any other member of the governing body for policy purposes. This is accomplished by concentrating administrative powers in the hands of a city manager, who acts under the direction of the full council. Qualifications of Office In Type A general law cities, every candidate for the office of mayor must meet the following qualifications: 1) Be a United States citizen; 2) Have been a resident of Texas for at least 12 months, as of the deadline for filing for the office; 3) Have resided in the city for at least 12 months preceding election day; 4) Be a registered voter; 5) Be 18 years of age or older upon the commencement of the term to be filled at the election; 6) Not have been convicted of a felony for which he or she has not been pardoned or otherwise released from the resulting disabilities; and 7) Not have been deemed mentally incompetent by a final judgment of a court. (Election Code Section 141.001; Local Government Code Section 22.032). In Type B and Type C general law cities, every candidate for mayor must meet the qualifications listed above, except that he or she must have resided in the city for six months, rather than twelve, preceding election day (Election Code Section 141.001; Local Government Code Section 23.024). 20 Terms of Office In a Type B general law city operating under the aldermanic form of government, the mayor’s term of office is one year, unless the board of aldermen has enacted an ordinance providing a two-year term for the mayor and two-year overlapping terms for aldermen (Local Government Code Section 23.026). In a Type A general law city, the term of the mayor and members of the city council or board of aldermen is two years (Local Government Code Section 22.035). In a Type C general law city, the mayor’s term of office is two years (Local Government Code Section 24.023). In any city, the term of office for members of the governing body can be extended to three years or four years upon approval of a majority of the voters voting at an election on the question (Texas Constitution, Article XI, Section 11). Vacancies When the mayor is temporarily unable to perform his or her duties because of illness, out-of-town travel, or similar reasons, the mayor pro tem assumes the responsibilities of the office on an interim basis (please see discussion of mayor pro tem on the next page). But if a permanent vacancy occurs in the office of mayor as a result of death, disability, resignation, or some other reason, the vacancy should be filled according to prescribed procedures. In a Type B general law city operating under the aldermanic form of government, a mayoral vacancy must be filled by appointment by the board of aldermen. The term of the person appointed expires at the same time that the term of the person who vacated the office would have expired if he or she had remained in office (Local Government Code Section 23.002). In a Type A general law city operating under the aldermanic form of government, the vacancy can be filled either by appointment of the city council or by a special election if the mayor’s office is the only one vacant. However, if another vacancy exists on the board of aldermen when the mayor’s office is vacant, both vacancies must be filled at a special election. When a vacancy is filled by appointment, the term of the person appointed expires at the next general municipal election. When a vacancy is filled by special election, the person elected serves out the remainder of the unexpired term of the vacancy being filled (Local Government Code Section 22.010). In a Type C city operating under the commission form of government, a vacancy in the office of mayor must be filled by appointment by the two remaining members of the board of commissioners. But if there are two vacancies on the board of commissioners, they must be filled at a special election called by the county judge, and the persons elected serve out the remainder of the unexpired terms of the vacancies being filled (Local Government Code Section 24.026). If the terms of office in a city have been changed to three or four years, appointment to fill a vacancy is no longer an option. Any vacancy must be filled by special election (Texas Constitution, Article XI, Section 11). Absences Under Section 22.041 of the Local Government Code, “if a member of the governing body is absent for three regular consecutive meetings, the member’s office is considered vacant 21 unless the member is sick or has first obtained a leave of absence at a regular meeting.” Removal Procedures for removing the mayor or a councilmember from office are set forth in Section 21.002 of the Local Government Code. Under the law, a member of the governing body is subject to removal for incompetence, official misconduct, or intoxication. A petition for removal must be filed with a district court, may be filed by any resident of the city, and must state the alleged grounds for removal. The judge may decide to issue a citation to the member in question or may decline to do so. If the judge declines to issue a citation, the petition is dismissed at the cost of the petitioner. If the judge issues a citation to the member, the member must appear before the judge to answer the petition and may request a trial by jury. The petitioner must execute a bond in an amount fixed by the judge. The bond shall be used to pay damages and costs to the member if the alleged grounds for removal are found to be insufficient or untrue. The final judgment on the issue may be appealed by either party. Conviction of the member for any felony or official misconduct will result in immediate removal, and the removed member is ineligible for reelection for two years. There is no such thing in a general law city as “recall,” which is a procedure citizens can use to vote an incumbent mayor or councilmember out of office before the expiration of his or her term. The power of recall is limited to voters in home rule cities in which the charter provides for the procedure. Compensation In Type C cities, the board of commissioners may, by ordinance, fix the mayor’s compensation at a maximum of $5 for each regular commission meeting and $3 for each special meeting. Alternatively, the board of commissioners in a city of less than 2,000 can pay the mayor a salary of up to $600 per year, while the board of commissioners in a city of 2,000 or greater population can pay the mayor up to $1,200 per year (Local Government Code Section 141.003). In Type A and B general law cities, no maximum salary amount is fixed for the mayor. The governing body can set the mayor’s compensation at any level it chooses (Local Government Code Sections 141.001 and 141.002). Only one limitation exists: an elected officer cannot receive a pay increase that was approved during the term for which he or she is elected. Such increase will become effective only after the next general municipal election at which the office is filled (Local Government Code Section 141.001). Expense Reimbursement It is commonplace for the city to reimburse the mayor for travel and other expenses incurred on official city business trips, such as meetings of the Texas Municipal League and similar organizations. Most city travel policies are established by ordinance or resolution. Office of the Mayor Pro Tem The mayor pro tempore is a member of the council who performs the mayor’s duties during the mayor’s incapacity or absence. The mayor pro tem is selected by majority vote of the council from among its own membership. 22 The mayor pro tem’s term is one year. The mayor pro tem retains the right to vote on all matters before the council while performing the duties of the mayor (Local Government Code Sections 22.037 and 23.027). Office of Councilmember Councilmembers are the city’s legislators. Their primary duty is policymaking, which includes identifying the needs of local residents, formulating programs to meet the changing requirements of the community, and measuring the effectiveness of ongoing municipal services. Unless restricted by state law, each councilmember is entitled to vote or abstain on every question decided at a council meeting, and has full parliamentary privileges in council meetings—including the right to speak and make motions when recognized by the chair and the right to introduce new ordinances and amendments to existing ones. Though foremost in importance, lawmaking is just one of many functions councilmembers perform. They also wear several other hats, which one writer describes as follows:  Regulator—The council exercises regulatory powers over the conduct and property of its citizens. It has the power to declare certain conduct to be criminal, to require that certain businesses and activities be licensed, and to tell property owners how and for what purposes they may use their property.  Financier—The council may levy taxes, assess fees and charges, and sell bonds in order to finance the many functions of the city government. The council also has to budget the expenditure of the city’s funds, and then explain to the people why municipal government is a bargain compared to the price of rampant crime, fires, disease, and all of the other problems that would flourish without proper city services.  Employer—The council is responsible for all of the city’s employees, and must see that they are adequately paid and provided with decent working conditions and fringe benefits.  Buyer—The council is one of the biggest purchasers in the community, and must see to it that the city gets the best value possible for dollars spent. Even this is not a complete description of all the challenges that confront councilmembers. The real task is in providing leadership and direction for the city, in deciding what needs to be done, and in helping plan what the city will be for future generations. Qualifications In general law cities, the qualifications for the office of councilmember are: 1) Be a United States citizen; 2) Have been a resident of Texas for at least 12 months as of the deadline for filing for the office; 3) Have resided in the city for at least six months preceding election day; 4) Be a registered voter; 5) Be 18 years of age or older upon the commencement of the term to be filled at the election; 6) Not have been convicted of a felony for which he or she has not been pardoned or otherwise released from the resulting disabilities; and 23 7) Not have been deemed mentally incompetent by a final judgment of a court. (Election Code Section 141.001; Local Government Code Sections 22.032 and 23.024). One additional requirement: if a Type A general law city has been divided into wards, every council candidate must, at the time of his or her election, be a resident of the ward he or she proposes to represent if elected (Local Government Code Section 22.032). Terms of Office In a Type B general law city, the term of office for aldermen is one year, unless the board of aldermen has enacted an ordinance providing a two-year term for the mayor and two-year overlapping terms for aldermen (Local Government Code Section 23.026). In a Type A general law city, the term of office for members of the city council is two years (overlapping terms) (Local Government Code Section 22.035). In any city, the term of office of members of the governing body can be extended to three years or four years upon approval of a majority of the voters voting at an election called on the question (Texas Constitution, Article XI, Section 11). Vacancies In a Type B general law city operating under the aldermanic form of government, vacancies on the board of aldermen— whatever the number of vacancies—must be filled by appointment by the remaining members of the board (Local Government Code Section 23.002). In a Type A general law city operating under the aldermanic form of government, when there is only one vacancy on the governing body, the vacancy can be filled either by appointment of the city council or by means of a special election. However, if there are two or more vacancies on the governing body, such vacancies must be filled at a special election (Local Government Code Section 22.010). In a Type C general law city, a single vacancy must be filled by appointment by the two remaining members of the board of commissioners. But if there are two vacancies on the board, they must be filled at a special election called by the county judge (Local Government Code Section 24.026). Absences Under Section 22.038 of the Local Government Code, an illness of an alderman or someone in his or her family is the only reason for absence from council meetings in a Type A general law city without a fine. Unexcused absences are punishable by a fine of $3 for each council meeting missed. If an alderman is absent for three consecutive regular meetings—unless because of sickness or the alderman has obtained a leave of absence at a regular meeting—his or her office shall be vacant. (Local Government Code Section 22.041). There is no law applicable to absences by aldermen in Type B general law cities or members of the board of commissioners in cities operating under the commission form of government (Type C general law cities). However, in cities over 500 population, which operate under the commission form of 24 government, Sections 51.035 and 51.051 (the “borrowing provisions”) of the Local Government Code (relating to the application of laws to cities with the commission form) would probably make Sections 22.038 and 22.041 of the Local Government Code (relating to absences) applicable to such cities. Type B general law cities should contact their local legal counsel to discuss this issue, as state law is unclear. Removal Procedures for removing a councilmember from office in a general law city are the same as for the mayor and are governed by Chapter 21 of the Local Government Code. Compensation In Type C cities, the board of commissioners may, by ordinance, fix commissioners’ compensation at a maximum of $5 for each regular commission meeting and $3 for each special meeting. Alternatively, the board of commissioners in a city of 2,000 or greater population can provide for paying commissioners up to $600 per year (Local Government Code Section 141.003). In Type A and B general law cities, no maximum salary amount is fixed for aldermen. Therefore, the governing body can set councilmembers’ compensation at any level it decides. Only one limitation exists: an alderman cannot receive the benefit of a pay increase adopted during the term for which he or she is elected. Such increase will become effective only after the next general municipal election at which the office of the alderman serving at the time of the pay increase is filled (Local Government Code Chapter 141). Expense Reimbursement It is commonplace for cities to reimburse councilmembers for travel and other expenses incurred on official city business trips to meetings of the Texas Municipal League, a council of governments, and similar organizations. Most travel policies are established by ordinance or resolution. 25 Chapter Three: Roles and Responsibilities of Officers in Home Rule Cities All members of the city council play unique roles in making the city government operate effectively in a home rule city. Many of their functions are set by law, while others are established as a matter of local custom or policy. Office of the Mayor The mayor occupies the highest elective office in the municipal government. As political head of the city, the mayor is expected to provide the leadership necessary to keep it moving in the proper direction. Except under the city manager plan of government, the mayor is the city’s chief executive officer, just as the governor serves as chief executive of the state. The mayor pre- sides over council meetings, is the signatory for the city, and is generally recognized as the ceremonial and governmental head of the city for most purposes. Most of the powers exercised by the mayor are created either by provisions in the charter or through ordinances and resolutions adopted by the city council. Very few mayoral powers are prescribed by state law. Legislative Responsibilities The mayor’s most important duty is to carry out the legislative responsibilities he or she shares with other members of the council— identifying the needs of the city, developing programs to satisfy those needs, and evaluating the extent to which municipal services satisfactorily reflect the policy goals of the council. All charters designate the mayor as presiding officer of the city council and as such, his or her actual powers in legislative matters can be greater than those of other councilmembers. For example, as presiding officer of the council, the mayor can influence the flow of debate through the power to recognize councilmembers for motions or statements. Also, the mayor rules on questions of procedure at council meetings, and those rulings are binding unless successfully challenged by a majority of the governing body. Finally, the charters of some cities authorize the mayor to veto ordinances and other enactments approved by the city council. Appointive Powers Appointive powers represent another area in which the mayor’s powers often outrank those of councilmembers, especially in mayor- council cities where the mayor is authorized to appoint department heads and advisory board members. In council-manager cities, however, the mayor’s appointive powers are more limited, since the city manager appoints all or most administrative employees, and the full council appoints the members of advisory boards and commissions. 26 Signatory Duties As signatory for the city, the mayor is required to sign a variety of documents to give them official legal effect. The mayor’s signature is required on all bonds, certificates of obligation, warrants, and other evidence of debt, as well as ordinances, resolutions, advertisements for bids on public works projects, contracts, and similar legal paperwork. The mayor is also responsible for signing proclamations recognizing special events and personal achievements. Ceremonial Duties The mayor’s participation in local ceremonial events is a never-ending responsibility. The mayor is expected on a daily basis to cut ribbons at ceremonies opening new businesses; break the ground to begin the construction of new city facilities; and regularly appear at fairs, parades, beauty pageants, and other community celebrations. The mayor also issues proclamations for a variety of purposes, whether to honor visiting dignitaries or declare “Support Your Local School Week.” And as a featured speaker before professional clubs, school assemblies, and neighborhood groups, the mayor can expect to be interviewed, photographed, and otherwise placed on extensive public display by the media. Powers of the Mayor in Mayor-Council Home Rule Cities In mayor-council home rule cities, the mayor serves in the dual roles of administrator and political head of the city. He or she is in city hall on a continuing basis, working with department heads on routine items that need to be addressed each day, handling emergencies, and performing all of the ceremonial duties that go with the office. Depending on the city, the charter may give the mayor broad authority to deal with the many problems that arise each day. A skilled administrative staff usually is available to help the mayor carry the day-to-day load. Also, in some cities, the charter gives the mayor the power to veto actions of the council. The broad powers of the mayor in mayor- council cities usually are offset by charter provisions that require the council to ratify mayoral appointments and other key actions. Also, the requirement for council approval of the budget provides councilmembers with an effective method of slowing down a zealous mayor by reducing or abolishing expenditures. Further checks can be created by distributing governmental powers in a certain way. Under the Houston charter, for example, provision is made for an elected city controller responsible for supervising the expenditure of municipal funds independent of both the mayor and council. Powers of the Mayor in Council-Manager Home Rule Cities Under the council-manager form of government in a home rule city, the mayor’s administrative responsibilities differ sharply from those of a mayor in a mayor-council city. Under the council-manager plan, the mayor has no day-to-day administrative duties; these are vested in a city manager who is responsible for implementing policies established by the council. In most council-manager cities, the mayor is in city hall on an irregular basis and is involved very little in routine operational matters. 27 The charters of most council-manager cities make it clear that decision-making is to be exercised by the full council, and that the mayor is to be considered the same as any other member of the council for policy purposes. This is accomplished by concentrating administrative powers in the hands of the city manager and by requiring action by the whole council, and not just the mayor, to appoint key board and commission members. And finally, a number of state laws further ensure that the full council share appointive powers. An example is Local Government Code Section 211.008, which requires that the city’s governing body appoint the zoning board of adjustment. Limitations on the Mayor’s Powers As noted above, the powers of the mayor in both mayor-council and council-manager home rule cities can be limited by requiring full council approval of the budget and board and commission appointments, and by distributing governmental powers among a variety of city officials rather than concentrating them in the office of mayor. Another way to impose restraints on the mayor is to limit his or her power at the council table. For example, some charters in home rule cities do not allow the mayor to initiate motions at council meetings. Some charters forbid the mayor from voting except to break a tie. Office of the Mayor Pro Tem The mayor pro tempore is a member of the council who performs the mayor’s duties during the mayor’s incapacity or absence. The mayor pro tem is usually selected by majority vote of the council, and his or her term is often the same as that of a councilmember. In some cities, the term of mayor pro tem is shorter; in one city, for example, each councilmember serves a three-month term as mayor pro tem on a rotating basis. Office of Councilmember Councilmembers are the city’s legislators. Their primary duty is policymaking, which includes identifying the needs of local residents, formulating programs to meet the changing requirements of the community, and measuring the effectiveness of ongoing municipal services. Unless restricted by state law, each councilmember is entitled to vote or abstain on every question decided at a council meeting, and has full parliamentary privileges in council meetings—including the right to speak and make motions when recognized by the chair and the right to introduce new ordinances and amendments to existing ones. Though foremost in importance, lawmaking is just one of many functions councilmembers perform. They also wear several other hats, which one writer describes as follows:  Regulator—The council exercises regulatory powers over the conduct and property of its citizens. It has the power to declare certain conduct to be criminal, to require that certain businesses and activities be licensed, and to tell property owners how and for what purposes they may use their property.  Financier—The council must levy taxes, assess fees and charges, and sell bonds in order to finance the many functions of the city government. The council 28 also has to budget the expenditure of the city’s funds, and then explain to the people why city government is a bargain compared to the price of rampant crime, fires, disease, and all of the other problems that would flourish without proper city services.  Employer—The council is responsible for all the city’s employees, and must see that they are adequately paid and provided with decent working conditions and fringe benefits.  Buyer—The council is one of the biggest purchasers in the community, and must see to it that the city gets the best value possible for dollars spent. In addition to these everyday duties, councilmembers spend considerable time representing the city in a wide circle of external relationships. Examples include:  Serving on committees of the Texas Municipal League and other statewide local government organizations.  Working with state legislators on city- related bills.  Working with the National League of Cities, the U.S. Conference of Mayors, and other national public interest groups on municipal issues pending before Congress or federal regulatory agencies.  Supporting efforts of the chamber of commerce, industrial foundations, and other organizations to foster the city’s economic development. Size of the Council There is no state law requiring the city council of a home rule city to be any particular size. As is true in so many other areas of home rule, the size of the governing body is determined by the city’s charter. Method of Electing the Council There are four basic methods of electing home rule city councils in Texas. The first is the at- large system, under which candidates are elected citywide without regard to where they live. The second is the place system of electing the council, under which candidates run citywide, but each must file for a designated seat (place) on the council. Under an at-large/from-districts system, candidates are elected citywide, but councilmembers must reside in designated geographical areas of the city. Under a pure single-member district electoral system, all candidates for the council (not including the mayor) must live in designated districts of the city and are voted upon only by the voters residing in those districts. Additionally, a number of cities use hybrid electoral systems that combine various features of the plans described above. Mixed systems include those in which some members of the council are elected at-large and the remaining councilmembers are elected from single-member districts, or where some members of the council are elected at-large and the balance are elected from districts at- large. Qualifications Every candidate for the office of mayor or councilmember must meet the qualifications 29 prescribed by the Texas Election Code, which requires that a candidate: 1) Be a United States citizen; 2) Be 18 years of age or older upon the commencement of the term to be filled at the election; 3) Has been a resident of Texas for at least 12 months as of the deadline for filing for the office; 4) Has resided in the city for at least 6 months as of the deadline for filing for the office; 5) Has not been convicted of a felony for which he or she has not been pardoned or otherwise released from the resulting disabilities; 6) Has not been found mentally incompetent by a final judgment of a court; and 7) Be a registered voter. (Election Code Section 141.001). The Election Code authorizes home rule cities to establish two exceptions to these six criteria. First, the charter can require council candidates to be up to 21 years old, rather than 18, upon the commencement of the term to be filled at the election. Second, the charter can require candidates to be residents of the city for 12 months, rather than 6 months, as of the deadline for filing for office (Election Code Section 141.003). Terms of Office The terms of office for mayors and councilmembers range from two to four years and are set by the city’s charter. More than ninety percent of all home rule charters provide continuity on the governing body by staggering councilmembers’ terms, thus preventing wholesale changeovers on the council at any one election. Under staggered term procedures, the terms of approximately half of the members of the council expire at one municipal election, and the other half expire at the next election. In the case of a seven-member city council with two-year terms, the terms of three members might expire during each odd-numbered year, while the other four terms would expire during each even-numbered year. Some home rule charters limit the number of terms a councilmember may serve. Vacancies Vacancies on the council can result from resignation, death, disability, recall, or failure of a councilmember to meet the requirements of the charter. In some instances, a vacancy can occur if a member of the council announces for another elective office. For example, under Article XI, Section 11, of the Texas Constitution, in cities where the term of office for councilmembers is three or four years, any councilmember who announces for another elective office is automatically removed from the council if more than one year and 30 days remains in his or her term at the time of such announcement. Also, some city charters provide that any councilmember who runs for another office automatically vacates his or her seat on the council. A city charter may provide that: If any officer of the city shall file as a candidate for nomination or election to any public office, except to some office under this charter, he shall immediately forfeit his office. 30 Procedures for filling vacancies vary from charter to charter. In some instances, charters require that vacancies on the governing body be filled by appointment of the council in every case, regardless of whether a regular municipal election is imminent. The charters of others require the council to fill a single vacancy by appointment, but if two or more vacancies exist, they must be filled at a special election. Under Article XI, Section 11, of the Texas Constitution, cities with three- or four- year terms must fill all vacancies by election unless: (a) there is 12 months or less left in the councilmember’s term; and (b) the charter provides for appointment. Finally, some charters require that all council vacancies must be filled by special election. Among these cities, the common practice is not to require special elections in cases where a regular municipal election is imminent (for example, within sixty to ninety days of the time the vacancy occurred). Compensation As with so many other aspects of home rule government, state law is silent regarding the compensation of mayors and councilmembers. As such, the salary can be governed by the charter or set by local policy if the charter is silent. Salaries In most of the cities operating under the mayor-council form of government, the mayor may receive a substantial salary for his or her full-time administrative services. In council- manager cities, the charter generally treats councilmembers as part-time legislators for whom minimum compensation is provided. Most charters fix the dollar amount of the salary or fees to be paid to members of the governing body. A few permit the council to set its own compensation. Expense Reimbursement It is commonplace for cities to reimburse councilmembers for travel, hotel, and other expenses incurred on official city business trips to meetings of the Texas Municipal League, National League of Cities, and similar organizations. Only a small number of charters make any mention whatsoever of councilmembers’ expense reimbursement. Most travel policies are established by ordinance or resolution. Other Benefits A final category of benefits for councilmembers includes staff and office facilities. Again, there is no consistency among cities: benefits range from providing part-time clerical help to full-time secretaries and administrative assistants. As with so many other issues, the question of what—if any—staff and facilities should be provided to councilmembers must be decided locally. 31 Chapter Four: Powers and Duties of Cities Both home rule and general law cities have the authority to deal with many issues. General law cities must look to state law for the authority to act, while home rule cities may have more latitude in certain areas (although the state legislature has seen fit to limit home rule authority in many ways). Below is a discussion of some of the basic powers given to cities. Administrative Oversight in General Law Cities The Mayor as Chief Executive Officer In a general law city, a mayor’s duties and authority come first from the Local Government Code and other state law and then may be expanded by the city council. See Local Government Code Sections 22.037, 22.042, and 23.027. The city council in a smaller city may give the mayor the responsibility of supervising the city’s employees, procuring supplies, ensuring that the streets are cleaned and repaired, and overseeing the multitude of other items that need attention each day. Department heads report directly to the mayor, who meets with them from time to time to check on their problems. Most of the mayors who assume these extensive responsibilities usually do so in addition to their regular jobs. The degree of flexibility the council permits the mayor to exercise in administrative matters varies from one city to another. In some cities, the council expects the mayor to make routine decisions only as specifically authorized by ordinances enacted by the governing body. In others, the mayor is given free rein over the city’s administration. Placing the lead responsibility for administration in the hands of the mayor enables citizens and the city council to go to one central point for solutions to particular problems. Also, this arrangement can help focus accountability and keep the city’s business moving ahead smoothly and efficiently. At the same time, this system can easily go awry if the mayor does not get along with the council or when council meetings deteriorate into haggling sessions over whether the mayor has the legal authority to do something. The City Council as “Administrative Board” In addition to their legislative duties, some city councils supervise local operations on a continuing basis. Under this approach, the full council approves all purchases and other administrative details, and department heads report directly to the council at every regular meeting. This arrangement has the advantage of providing the council with maximum control over the city’s operations. If a department is not functioning properly, the council can go directly to the source of the problem and take corrective action. The downside is that the council meets just once or twice a month, and may not be able to 32 deal in a timely manner with problems as they arise. Delays can occur if a department is unable to proceed with a project because of snags that only the council can overcome. Also, this arrangement tends to be inefficient unless some method is established for coordinating the operations of various departments on a regular basis between council meetings, while not violating open meetings laws. City Manager or Administrator Many city councils have found it advantageous to delegate administrative powers and responsibilities to a single appointive officer or employee. In some cases, this official is the city manager or city administrator, whose position has been established by ordinance. In others, the lead administrative role is assumed by the city clerk or secretary, the utility manager, or another department head who serves as “first among equals.” Whatever the title, the official the city has delegated administrative functions to is responsible for overseeing all the city’s operations on a continuing basis and for reporting to the council on behalf of the various departments. All administrative actions by the council are taken through the official, and any questions the council may have concerning the enforcement of ordinances or performance of city programs are directed to that individual. Centralizing authority and accountability in one appointed officer or employee can simplify the council’s job. The council will be relieved of attending to minor details and will have more time for the important task of setting policy. With proper guidance from the council, a skillful administrator can create an efficient management team capable of running itself. Conversely, concentrating too much authority in the hands of an appointed officer or employee may put a barrier between citizens and their elected representatives. Also, allowing one person to control information concerning the city’s internal administrative operations can lead to a situation in which councilmembers are isolated from the real- world problems the community is experiencing with the city government. Another form of administrative oversight of a city is accomplished by an election under chapter 25 of the Local Government Code. Under this chapter, the city manager position is created pursuant to an election, and his duties are established by state law. This form of government is rare and has different characteristics from other forms where a manager or administrator position is created solely by ordinance at the city council’s discretion. Council Committees Most smaller cities are faced with the problem of limited resources, and there simply are not enough staff members to handle the many demands imposed on the city organization. One method of dealing with this problem is to subdivide the council into administrative committees, each responsible for a different area of the city government. Council committees usually are organized by service or function: police, fire, health, budget, and so on. “Standing committees” are permanent panels that meet regularly and have assigned areas in which there is always work to be done. On the other hand, “ad hoc” or “special” committees serve on a temporary basis and deal with short-term items that cannot be handled by a standing committee. At the option of the city council, either the full 33 council can designate the councilmembers who chair or serve as members of the various committees or the council can delegate this authority to the mayor. Most council committees serve as the liaison between the governing body and individual city departments. They communicate with department heads, ensure that the full council is kept apprised of departmental problems, and, as necessary, conduct departmental evaluations and report their findings to the council. The most common temptation for members of council committees is to overstep the bounds of their authority. Although they can be vested with substantial authority—such as the authority to conduct investigations or take employment action—council committees do not possess legislative powers and should never attempt to act as if they are the city council. One cautionary note: care should be taken to avoid violations of the Texas Open Meeting Act, which requires that meetings of all governmental bodies be posted in advance and open to the public. If there is some question as to whether meetings of a council committee are subject to the open meeting statute, the best practice usually is to assume that they are (see Texas attorney general opinions H-3, and JM-1072; and JC-60) and consult with the city attorney for guidance. Administrative Oversight in Home Rule Cities While the same general policy-making functions are shared by city councils everywhere, administrative responsibilities differ according to the particular local government organization. For example, if the city operates under a city manager or administrator plan, or if the mayor serves as an administrative head of the city, the council exercises control in a more indirect way by setting broad policies that are left to the mayor or manager for execution. Regardless of the administrative structure used, every city council should operate on the basis of written policies that set out the specific powers and duties of all the city’s departments and officials, and some method should be established for ensuring that those policies are carried out. Policy decisions are not implemented automatically, and no matter how much careful thought may go into their preparation, there is always a management job to be done. Someone must assume the responsibility for organizing and controlling the city’s administrative machinery. The city’s charter, along with local ordinances and policies, outline the administrative procedures in a home rule city. The Police Power Cities have the power to regulate a wide range of activities in order to promote the general welfare of the city’s residents. This is known as the city’s “police power,” and it encompasses all governmental powers exercised for the public good. More particularly, the police power is defined as the city’s authority to preserve and promote the health, safety, morals, and welfare of local citizens. It is based on the supremacy of the rights of the general public over individual rights. Some of the more common methods by which city police powers are exercised are 34 described below. In order to preserve the peace, the city council has the power to create a police department to maintain order, enact ordinances controlling noise and other disturbances, and require animals to be leashed. The council also can declare certain activities to be public nuisances and penalize persons who create them. With regard to public health and safety, the council has the power to take all actions and make all regulations that may be necessary or expedient for the promotion of health or the suppression of disease. A city’s authority to protect the health of the public is generally broader than other city police powers. The regulation of dogs and other animals, the regulation of unwholesome business practices, and the regulation of slaughterhouses are just a few of the powers the city council may exercise to protect the health of its citizens. The council also has the power to enact quarantine regulations, regulate cemeteries, and regulate weeds and stagnant water. The authority for these regulations can be found in the Local Government Code, the Health and Safety Code, and other statutes. Additionally, a city can enact a zoning ordinance to regulate the height and size of buildings, the size of lots and density of population, the location and use of buildings, and other aspects of land and improvements thereon, and the uses to which they are put (Local Government Code Chapter 211). The city council also has the authority to prescribe some standards for the construction of buildings within the city, regulate the condition of buildings, and condemn unsafe buildings. Planning, Subdivision Controls, and Annexation The city council has the power to spend city funds to compile statistics, conduct studies, and make plans for the orderly growth of the city and the welfare of its residents. The council can create a planning commission to develop and maintain a city plan, and can establish a planning department to implement the plan. The council can establish rules and regulations governing the subdivision and development of land within the city. The city also can extend its subdivision controls to land located within the city’s area of extraterritorial jurisdiction in order to ensure the orderly development of outlying areas (Local Government Code Chapters 212 and 213). Prior to 2017, a home rule city could annex most areas without consent. However, in 2017, the legislature began to drastically alter the annexation landscape by passing S.B. 6, which provided that certain home rule cities: (1) may annex an area with a population of less than 200 only if the following conditions are met, as applicable: (1) the city obtains consent to annex the area through a petition signed by more than 50 percent of the registered voters of the area; and (2) if the registered voters of the area do not own more than 50 percent of the land in the area, the petition described by (1) is signed by more than 50 percent of the owners of land in the area; and (2) may annex an area with a population of 200 or more only if the following conditions are met, as applicable: (1) 35 the city holds an election in the area proposed to be annexed at which the qualified voters of the area may vote on the question of the annexation and a majority of the votes received at the election approve the annexation; and (2) if the registered voters of the area do not own more than 50 percent of the land in the area, the city obtains consent to annex the area through a petition signed by more than 50 percent of the owners of land in the area. In 2019, the legislature finished restricting cities ability to annex without consent. H.B. 347, which became effective on May 24, 2019, now applies these restrictions on annexation to all cities. Cities can either follow the procedure above or annex on request of landowners. Regulation of Streets and Other Public Places The city council has supervisory powers over all streets, alleys, sidewalks, bridges, parks, and other public ways and places within the city. The council has the power to: (1) regulate the use of streets and other public ways, provide for cleaning and lighting, prevent and remove encroachments, and direct and regulate the planting of trees; (2) regulate openings for laying out gas, water, and other mains and pipes; (3) regulate the use of sidewalks and require the owners or occupants of abutting premises to keep their sidewalks free from obstructions; (4) prevent activities that would result in damage to streets, alleys, or other public grounds; (5) regulate crosswalks, curbs, and gutters; (6) regulate and prevent the posting of signposts, handbills, and similar items on streets or sidewalks; (7) regulate traffic and sales on streets, sidewalks, and other public spaces; (8) control weedy lots and junked vehicles; (9) regulate the location of manufactured housing; and (10) regulate the location of sexually oriented businesses and establishments that sell alcoholic beverages. Construction of Public Facilities In addition to its regulatory powers, the council has the authority to erect, construct, and maintain a wide variety of facilities for public use, including water and sewage systems, airports, hospitals, parks, libraries, transit systems, electric and gas systems, streets, bridges, culverts, sidewalks, street lights, and many other kinds of facilities. A city may construct or maintain certain public facilities using either traditional competitive bidding or an alternative procurement and delivery method (such as design-build, construction management, a job order contract, or competitive sealed proposals) that provides the “best value” to the city (Local Government Code Chapter 252 and Government Code Chapter 2267). Donations of City Funds The Texas Constitution prohibits the donation of city funds to private individuals, corporations, or associations (such as garden clubs or boy or girl scouts), no matter how worthy the cause. The purpose of this prohibition is to prevent a city council from appropriating public money for private purposes (Texas Constitution, art. III, §52, and art. XI, §3). 36 Expenditures that serve a “public purpose” (for example, contributions to a local volunteer fire department) may fall outside of the constitutional prohibition against donations. If the city council wishes to make such an expenditure, it must determine whether the expenditure accomplishes a public purpose, and the determination is subject to review by the courts. Written contracts with formal control over use of a city expenditure or payment are usually necessary in order for the council to ensure that the city receives some sort of payment or value for its expenditure— the accomplishment of the public purpose. The constitutional prohibition does not apply to expenditures made in connection with contracts for services provided by engineers, architects, and other professionals, nor to the payment of dues to the Texas Municipal League, councils of governments, or similar organizations. A city may establish and implement programs to promote state or local economic development and to stimulate business and commercial activity within the city. A program such as this may include provisions for making loans and grants of public money and for utilizing the city’s personnel and services for the purpose of economic development (Local Government Code Chapter 380). Payment of Bonuses to City Employees The State Constitution (Article III, Sections 52 and 53) prohibits the payment of bonuses to city employees. If, for example, when December arrives, it is found that the city has some extra funds and it is decided that it would be nice to reward the city’s employees with a Christmas bonus, such a distribution of public funds would be illegal. However, if the bonus is part of the employee’s overall compensation, and is included in the budget as such, it is a legitimate expenditure. Bids Chapter 252 of the Local Government Code requires that any city purchase requiring the payment of more than $50,000 be awarded pursuant to certain competitive bidding or sealed proposal procedures. The statute mandates that the city either accept the lowest responsible bid under the traditional competitive bidding process, accept the bid or proposal that provides goods or services at the best value for the city, use an Internet-based reverse auction procedure, or participate in a cooperative purchasing program. Certain cities that choose to use traditional competitive bidding when purchasing real or personal property may give preference to a local bidder if certain procedures are followed and the local bid is within a certain percentage of the lowest bid from a non-local bidder. In some cases, local preference is allowed only if the purchase is for less than $100,000. Cities making an expenditure of more than $3,000 but less than $50,000 must contact at least two historically underutilized businesses (HUBs) from a list provided by the Texas Facilities Commission through the state comptroller’s office. If the list does not identify a HUB in the county in which the city is situated, the city is exempt from this requirement. 37 The above procedures do not apply to some purchases, including: (1) the purchase of land or rights-of-way; (2) personal or professional services, such as engineering, architectural, or planning services; (3) property bought at an auction; (4) property bought at a going-out-of- business sale; (5) property bought from another political subdivision or the state or federal government; and (6) advertising, other than legal notices. Also, the city can waive the requirement for bids in—for example—the following instances: (1) in the case of public calamity, where it becomes necessary to act at once to provide relief for local citizens or to preserve or protect the public health; or (2) in the case of unforeseen damage to public property, machinery, or equipment, where immediate repair is necessary. A city may use a competitive sealed proposal procedure for the purchase of goods, services, and high technology items. If a city makes a contract without compliance with competitive procurement laws, it is void, and the performance of the contract, including the payment of any money under the contract, may be enjoined by: (1) any property tax- paying resident of the city; or (2) a person who submitted a bid for a contract to which the competitive sealed bidding requirement applies, regardless of residency, if the contract is for the construction of public works. City Depository Under chapter 105 of the Local Government Code, the city council is authorized to designate a bank as the official depository of the city’s funds. The city attorney should be consulted as to the manner of designating the depository, as well as procedures the city must follow after designation has been made. Uniform Election Dates The Texas Election Code prescribes certain days for holding municipal elections for officers. Any municipal election for officers held on a day other than one of those prescribed is void, with a few exceptions. Currently, the uniform election dates for city elections are the first Saturday in May and the first Tuesday after the first Monday in November. Official Newspaper At the beginning of each fiscal year, the council is required to designate, by ordinance or resolution, the official newspaper of the city, and to publish therein the captions of penal ordinances, notifications of public hearings, and other required public notices (Local Government Code Sections 52.004 and 52.011). Type B general law cities must, be- fore enforcing an ordinance, publish the ordinance (or simply the caption and penalty for violations of the ordinance) enacted by the governing body by either posting it in three public places or by publication in the newspaper (Local Government Code chapter 52). Many home rule charters may have similar provisions. Federal Voting Rights Act On June 25, 2013, the U.S. Supreme Court issued its opinion in Shelby County v. Holder. In the case, Shelby County, Alabama, alleged that the basis for applying the federal Voting Rights Act to certain states is unconstitutional. The Court agreed. It concluded that Section 4 38 of the Act is unconstitutional, but the holding also affects other portions of the law, including the requirement that any voting change made by a city be “precleared” by submitting it to the U.S. Department of Justice or a federal court for a determination that it is not discriminatory. In response to the opinion, the United States Department of Justice is providing a written response to jurisdictions that submit proposed changes to the Attorney General that advises that no determination will be made under Section 5 of the Voting Rights Act on the specified change. Based on the United States Department of Justice’s response, the Texas Municipal League advises that Section 5 preclearance submissions to the Department of Justice are no longer required. However, each city should heed the advice of its attorney to make the determination on whether or not preclearance is required, as pending litigation may impact other sections of the Voting Rights Act. Delegation of Legislative Powers The city council is prohibited from delegating its legislative powers. As a practical matter, this means that the council may not authorize any person, committee, board, or com- mission to make policy decisions on its behalf. The job of ensuring that the council’s policies are carried out can be assigned to the mayor, city manager, or some other city official, but the ultimate responsibility for establishing policy rests with the council. 39 Chapter Five: The City Council at Work: Meetings It is imperative that every meeting of the city council be conducted in an orderly and legal manner. If the council’s procedures are improper, the legality of its actions may be successfully challenged in court. If its meetings are slovenly and disorganized, the council cannot expect to command public respect. Legal Requirements State law prescribes several specific requirements for council meetings, including: (1) that meetings be scheduled at a fixed time and place; (2) that a quorum of the council be present (either in person or, in certain cases, by video conference) for the transaction of business; (3) that any question before the council be decided by majority vote of the members present and voting, except where the law requires more than a simple majority; and (4) that the mayor always presides, if present. Texas Open Meetings Act Every meeting of the city council must be conducted in accordance with chapter 551 of the Government Code, the Texas Open Meetings Act. Among all the state laws affecting city officials, this is the one most likely to be unintentionally violated because of lack of knowledge. To help educate government officials on the Act’s requirements, each elected or appointed member of a governmental body must take at least one hour of training in the Open Meetings Act. The training must be completed not later than ninety days after the member takes the oath of office or assumes the responsibilities of the office. The attorney general’s office allows the training requirement to be met in at least two ways: (1) viewing a video that is available to borrow or online; and (2) receiving training from certified entities, such as TML. Please visit the attorney general’s website or call TML for more information on the training. The Open Meetings Act requires that written notice of the date, hour, location, and subject of every council meeting, be posted 72 hours in advance of such meeting on a bulletin board in city hall accessible to the public day and night. Cities that maintain a website must also post the city council agenda on the website and the minutes of the city council’s meetings must be posted when approved. If the governmental body makes a good-faith attempt to continuously post the notice on the Internet during the prescribed period, the notice physically posted at city hall must be readily accessible to the general public only during normal business hours. There are some special requirements, including additional notice requirements, if a meeting is to be held by videoconference call. There are three exceptions to the 72-hour posting requirement: 1) At least one hour advance notice is required for a special meeting called in 40 the case of “emergency or urgent public necessity,” the nature of which must be stated in the notice. 2) Items of an emergency or urgent public necessity nature may be added to the agenda of a meeting for which 72 hours notice has already been posted if a supplemental notice listing such items is posted at least one hour prior to the meeting stating the emergency that requires action on the additional items. 3) Pursuant to a general posting of items of “community interest,” the following need not specifically appear 4) on the posted notice: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; honorary recognitions of city officials, employees, or other citizens; reminders about upcoming events sponsored by the city or other entity that is scheduled to be attended by a city official or employee; and announcements involving imminent threats to the public health and safety of the city. The Act also requires that all council meetings, with narrow exceptions, be open to the public. Closed meetings (“executive sessions”) are permitted for the discussion of items that legitimately fall within the exceptions stated in the law. Exceptions from the open meeting requirement are provided for the following: 1) Private consultations between the city council and its lawyers to discuss pending or contemplated litigation, settlement offers, and other legal matters that implicate the attorney- client privilege. The city’s attorney must be present (either in person if the attorney is a city employee, or in person or by telephone, video conference call, or Internet communications if the attorney is an in- dependent contractor) at any closed meeting held under this exception. 2) Discussions regarding the purchase, exchange, lease, or value of real property, or negotiated contracts for prospective gifts or donations to the city, when a discussion of these items in public would have a detrimental effect on the city’s negotiating position. 3) Deliberations involving the appointment, employment, evaluation, reassignment, duties, discipline, or dis- missal of a city officer or employee, or to hear complaints or charges against such officer or employee, unless such officer or employee requests a public hearing. 4) Discussions regarding the deployment or implementation of security personnel or devices, or a security audit. Also, security assessments or deployment relating to information research technology. 5) Discussions regarding commercial information received from a business prospect and/or the nature of any incentives being considered by the city for economic development purposes. 6) Deliberations regarding a test item or information relating to a test that the city administers to individuals who seek to obtain or renew a license or certificate necessary to engage in an activity. 7) Electric or gas service discussions in very limited circumstances. 8) Discussions regarding various critical infrastructure and homeland security information, including: (a) staffing requirements of an emergency response provider; (b) tactical plans; (c) infrastructure vulnerability 41 assessments and other reports prepared for the federal government; (d) the location of dangerous materials that may be used for weapons; (e) computer passwords; and (f) information regarding security systems that protect property from terrorism or related criminal activity. Before an executive session can take place, the council must first convene in open session, the presiding officer must announce that a closed meeting will take place, and he or she then must identify the section of the Open Meetings Act that authorizes the closed session. The law requires that a certified agenda or a recording must be made of all meetings that are closed to the public, except executive sessions held for the purpose of consulting with an attorney under the provisions of the law. For an executive session to discuss critical infrastructure or homeland security matters, a recording is mandatory. The law does not define “certified agenda,” but it does provide that the agenda shall state the subject matter of each deliberation and include a record of any further action taken. It also must include a record of the date and time of the beginning and end of the meeting. The presiding officer must certify that the agenda is a true and correct record of the proceedings. In lieu of the certified agenda, the governmental body may make a recording of the closed meeting, including an announcement made by the presiding officer at the beginning and end of the meeting indicating the date and time. The certified agenda or the recording must be maintained for a period of two years after the date of the meeting. However, if a lawsuit is filed during this two-year period, the certified agenda or recording must be preserved pending the outcome of the action. The certified agenda or recording is not a public record, and it is unlawful to make either avail- able to the public without lawful authority, but either may be reviewed by a current member of the governmental body that conducted the closed meeting. It is advisable that the certified agenda or the recording be placed in a sealed envelope identifying the contents and then placed in secured storage. They are available for inspection by a judge if litigation has been initiated involving an alleged violation of the open meetings law. The judge may order that the recording or certified agenda be made available to the public if the closed meeting was not authorized. Although a certification of the posted notice may have been the intent of the legislature, the fact that a certified agenda or recording is to be made available only upon court order may indicate that the contents of the certified agenda consist of a more descriptive agenda item than might be placed on the posted notice. For example, while the posted notice may state that an executive session is being held for the purpose of discussing “Land Acquisition for an Electric Substation,” the certified agenda may read “Land Acquisition— Discuss acquisition of land for a new electric substation to serve The Oaks subdivision.” Although the statute requires the certified agenda to include a record of any further action taken, the open meetings law expressly provides that no final action, decision, or vote can be made except in a meeting that is open to the public. The “further action” which must be noted on the certified agenda may be, for instance, no action, a directive to place the item on an open meeting agenda for final action, or a request that additional information be gathered for discussion on another date. 42 One of the most difficult aspects of the Open Meetings Act results from the fact that communications between a quorum of a city council about public business, no matter the forum or the time, constitute a “meeting” to which the Open Meetings Act applies. As a result, city councilmembers have generally been advised to avoid commenting, for instance, on social media sites related to city business if the discussion will ultimately involve a quorum. However, Texas Government Code Section 551.006, provides that communication between councilmembers about public business or public policy over which the council has supervision or control does not constitute a meeting if certain conditions are met. The communication must be: (1) in writing, (2) posted to an online message board that is viewable and searchable by the public, and (3) displayed in real time and displayed on the message board for no less than 30 days after the communication is first posted. A city is prohibited from having more than one online message board used for these purposes. Additionally, the online message board must be prominently displayed on the city’s primary website and no more than one click away from the city’s website. The message board may only be used by city councilmembers or city employees that have received authorization from the council. If a city employee posts on the message board, the employee must include his or her name and title with the communication. The council may not vote or take action by posting on the city’s online message board, and if the city removes a posted message, the city must retain the posting for six years as it is considered public information. Stiff penalties are provided for violations of the Open Meetings Act. A councilmember or any other person who participates in an illegal closed meeting can be punished by a fine of $100 to $500, confinement in the county jail for one to six months, or both. The same penalty can be applied to a councilmember who has a prohibited series of communica- tions. For instance, using the telephone or email to poll other councilmembers or meeting with them individually to deliberate over some matter of city business that will be deliberated among a quorum of councilmembers could violate the Act. The actions taken by a city council in an illegal meeting are voidable, and a court may assess costs of litigation and reasonable attorney’s fees incurred by a party who substantially prevails in an action brought under the open meetings law. Public Information Act Chapter 552 of the Government Code requires that most city records, including those in the possession of councilmembers, be open to public inspection. As with the Open Meetings Act, each elected or appointed member of a governmental body must take at least one hour of training in the Public Information Act, or designate a public information coordinator to take the training on his or her behalf. The training or designation must be completed not later than ninety days after the member takes the oath of office or assumes the responsibilities of the office. Again, note that a public official (for example, a member of a city council) may designate a public information 43 coordinator to satisfy the open records training requirement. “Public information” is defined as information that is written, produced, collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business: (1) by a governmental body; (2) for a governmental body and the governmental body: (A) owns the information; (B) has a right of access to the information; or (C) spends or contributes public money for the purpose of writing, producing, collecting, assembling, or maintaining the information; or (3) by an individual officer or employee of a governmental body in the officer’s or employee’s official capacity and the information pertains to official business of the governmental body. Information is in connection with the transaction of official business if the information is created by, transmitted to, received by, or maintained by an officer or employee of the governmental body in the officer’s or employee’s official capacity, or a person or entity performing official business or a governmental function on behalf of a governmental body, and pertains to official business of the governmental body. “Public information” includes any electronic communication created, transmitted, received, or maintained on any device if the communication is in connection with the transaction of official business. “Official business” is defined as any matter over which a governmental body has any authority, administrative duties, or advisory duties. This means, for instance, that the Act now expressly provides that a councilmember’s private computer or cell phone communications, if made in connection with the transaction of official business, are public information. Councilmembers are considered “temporary custodians” of the public information on their privately-owned devices. “Temporary custodian” means an officer or employee of a governmental body, including a former officer or employee, who, in transaction of official business, creates or receives public information that the officer or employee has not provided to the officer for public information of the governmental body or the officer’s agent. As a temporary custodian, the councilmember must preserve the public information in its original form in a backup and on their privately-owned device for the required record retention period, or transfer the public information to the governmental body or the governmental body server. Also, as the temporary custodian, a councilmember is required to surrender public information that has been requested to the public information coordinator not later than the tenth day after receiving a request for the information from the public information coordinator. Failure to surrender the information could be grounds for disciplinary action by the governmental body, as well as, other penalties being brought against the temporary custodian. The media on which public information is recorded includes paper; film; a magnetic, optical, or solid state or other device that can store an electronic signal; tape; mylar; and any physical material on which information may be recorded, including linen, silk, and vellum. The general forms in which the media containing public information exist include a book, paper, letter, document, email, Internet posting, text message, instant message, other electronic communication, printout, photograph, film, tape, microfiche, microfilm, photostat, sound recording, map, and drawing and a voice, data, or video representation held in computer memory. 44 Certain information is specifically excluded from the requirements of the law. While the list of exempt materials is too long to recite here, it includes such information as working papers being used to draft ordinances or resolutions; certain personnel records; information that would, if released, give an advantage to bidders; documents protected because of attorney-client relationships; documents relating to pending litigation; and various types of critical infrastructure and homeland security information, including information that relates to: (a) staffing requirements of an emergency response provider; (b) tactical plans; (c) infrastructure vulnerability assessments and other reports prepared for the federal government; (d) the location of dangerous materials that may be used for weapons; (e) computer passwords; and (f) information regarding security systems that protect property from terrorism or related criminal activity. Despite the narrow exemptions established in the law, its net effect is to require that most information must be made available, upon request, to the news media and other members of the public. A governmental body that receives a written request for information that it wishes to withhold from public disclosure and that it considers to be within one of the exceptions, must, with some exceptions, ask for a decision from the Texas attorney general. If an attorney general decision is required, the city must request the decision and state the exceptions that apply not later than the 10th business day after receiving the written request. Not later than the 15th business day after receiving the request, the city must submit to the attorney general the reasons that the exceptions apply, a copy of the request for information, and a copy of the information requested or representative samples labeled to indicate which exceptions apply to which parts of the information. Formal Meetings of the Council/ The Agenda A well-organized agenda is an indispensable part of every orderly council meeting. The agenda establishes a calendar of activities for the council to follow in the course of its meeting. It lists all the items of business that will be considered. By putting councilmembers on notice as to what will be discussed, each of them is enabled to arrive at the meeting prepared and ready to conduct business. The following illustrates a typical agenda format: 1) Call to Order—The presiding officer calls the meeting to order and determines whether a quorum is present. 2) Invocation—Optional. 3) Roll Call—Although most city councils are small enough to readily determine who is present by simply looking around the council table, a formal roll call lends an air of dignity to the proceedings. 4) Approve Minutes of the Previous Meeting—Unless a majority of the council desires that the minutes of the previous council meeting be read, the minutes can be approved as submitted or corrected. 5) Consent Items—“Consent” items are noncontroversial items that can be considered and voted upon as a block. 6) Presentations by Citizens—Scheduling this agenda item early in the meeting permits citizens to complete their 45 business with the council in a timely manner and then leave, if they wish. 7) Public Hearings. 8) Old Business—Final passage of ordinances, and other business pending from previous council meetings. 9) New Business—New ordinances or resolutions (or amendments to existing ones) or policies that councilmembers or city staff wish to have the council consider. Under the Open Meetings Act, each item to be considered must be specifically described in the agenda. It is not sufficient just to put the words “New Business” or “Old Business” on the agenda, and then allow the consideration at the council meeting of any or all items that might be brought up. 10) Reports of Advisory Boards and Commissions—Each board or commission must be listed, together with a description of each report that will be presented at the council meeting. 11) Items from Council—This part of the agenda is provided for councilmembers to present matters other than ordinances, resolutions, and other matters requiring formal action. The attorney general has opined that matters raised by councilmembers or members of the city staff must be specifically described on the agenda (other than items of “community interest,” as previously explained in this chapter). Examples would include a councilmember’s request that the staff take action on a particular problem, as described in the agenda. 12) Staff Reports—This agenda item includes reports from the mayor and/or city administrator on the status of various projects, problems that are developing in particular neighborhoods, and so on. Under the open meetings law, each of these reports must be listed and specifically described in the agenda. 13) Announcements. 14) Adjournment—If there is no further business, the mayor can adjourn the meeting. If all of the items listed in the agenda have not been considered and disposed of, a majority vote usually is required to adjourn. The amount of detail included in the agenda is a matter for the council to decide. Oftentimes, the agenda is used as the notice of the meeting. In that case, the legal rule applicable to the format of an agenda is found in the open meetings law, which requires that every agenda item be specifically described in the meeting notice. In practice, this means that broad categories, such as “Old Business” or “New Business,” cannot be included in the agenda without listing each of the specific items that will be discussed. The governmental body is specifically required to have minutes or a recording of each of its open meetings. The minutes shall state the subject matter of each deliberation and shall indicate each vote, other decision, or other action taken by the governmental body. The minutes or recording are public records and may be examined or copied by members of the public. This requirement must be met for all open meetings of governmental bodies, including meetings when formal actions or votes do not occur. City councils or boards that meet to discuss formulation or development of a policy or ordinance that will be voted on at a later date must keep a formal record of the proceedings, even though no final vote or action is taken. 46 Rules of Order and Procedure Recognizing that every legislative body needs a systematic way of conducting its business, many city councils operate according to formal rules of order and procedure. Rules of order and procedure prevent confusion by establishing an organized process for conducting council meetings. Properly followed, they save time for all participants, while protecting the individual’s right to participate fully. The following provisions usually are included in rules of order and procedure:  Designation of the time and location of regular meetings of the council, together with a description of procedures for calling special meetings;  Procedures for placing items on a meeting agenda;  Methods for compelling councilmembers to attend meetings;  A description of the duties of the presiding officer at council meetings;  A description of the parliamentary rules under which the council will operate;  Procedures for introducing and voting on ordinances, resolutions, and other items;  The order of business the council will follow at each meeting; and  A ranking of motions by order or precedence, which motions may or may not be debated, and so on. Although most city councils use Robert’s Rules of Order to conduct their meetings, some have adopted their own local rules. Robert’s Rules of Order may be appropriate for some cities, but is often too cumbersome for others. State law is silent with regard to this matter; so, unless your city charter provides otherwise, any standard rules that are reasonable and consistently followed are acceptable. The following two sections briefly describe motions and debate rules that are fairly common. Motions A motion is simply a vehicle for initiating action on a proposal. Some types of motions can be brought up and voted on at any time, while others are out of order at certain times. Certain motions outrank others. Some motions require a second; others do not. Knowing the difference between the various types of motions and when to use them is a first step in taking an active part in passing or defeating measures before the council. A main motion is used to initiate the consideration of a new item of business. After being seconded, a main motion is subject to being debated, amended, tabled, or withdrawn before a final vote is taken. Any councilmember making a main motion may, prior to receiving a second, withdraw or change it. If the motion has been seconded, approval of the person who seconded it is required in order for the maker of the motion to change or withdraw it, unless another councilmember objects, in which case the change or withdrawal must be voted upon. A new main motion cannot be brought up for consideration while another main motion is being debated. Each main motion must be disposed of before another is made. A secondary motion is used to propose an action on a main motion being debated by the 47 council. Examples of secondary motions include the following: 1) Motion to table the main motion; that is, lay it aside and go on to the next item on the agenda. 2) Motion to request that discussion cease and that the main motion be voted upon; that is, moving the previous question. 3) Motion to limit discussion to a fixed amount of time. 4) Motion to postpone action on the proposal until some definite time in the future. 5) Motion to refer the proposal to a committee. 6) Motion to amend the main motion. 7) Motion to postpone action on the proposal to an indefinite future time. These examples of secondary motions are listed in the order of their rank. Therefore, if the council is debating Councilmember X’s motion that the item under consideration be referred to a committee, and Councilmember Y moves to table the main motion, debate would cease until Councilmember Y’s higher- ranking motion is voted upon. A privileged motion is used to bring procedural questions before the council, such as whether the council should recess or adjourn. Unlike other motions, privileged motions do not require a second in order to be considered. A privileged motion can be offered at any time, without regard to any other motion pending before the council, and must be decided before the council returns to the other business under discussion. Therefore, a motion to adjourn, if made while a main motion is before the council, must be decided before the main motion is considered any further. Some privileged motions are more privileged than others. This is the usual order of their importance: 1) Motion to set the time and place of the next meeting. 2) Motion to fix the time of adjournment. 3) Motion to adjourn. 4) Motion to recess. 5) Motions on questions of privilege. 6) Motion to keep the meeting to the agreed order of business. Thus, during consideration of a main motion, a privileged motion might be made to adjourn. But before the question is called on the motion to adjourn, another higher-ranking privileged motion might be made to set the time and place of the next meeting. Debate Motions are usually classified three ways: (l) undebatable motions; (2) privileged motions upon which limited debate is permitted; and (3) fully-debatable motions. Undebatable motions involve procedural questions that can be resolved without discussion, such as tabling a main motion, moving the previous question, restricting further discussion of a main motion to a fixed number of minutes, postponing action, or referring an item under discussion to a committee. [See items (1) through (7) under “secondary motions.”] After an undebatable motion is offered, the presiding officer must immediately take a vote, without discussion. Privileged motions upon which limited debate is permitted include setting the time of the next meeting and others listed among items (1) through (6) under “privileged motions.” 48 Any discussion of a privileged motion must be addressed to the motion itself. A motion to fix the time for adjourning the council meeting, for example, might require limited debate as to the advisability of such a decision, but other points of discussion would be out of order. Fully-debatable motions are subject to unlimited discussion prior to a decision. One of the most important principles of debate is that councilmembers’ statements be directly relevant to the item under consideration. Councilmembers recognized by the mayor are given the floor only for the purpose of discussing the item then pending, and they are out of order if they depart from that item. “Debate” can easily evolve into statements of personal philosophy. Interesting though they may seem to the speaker, such departures do not belong in a council meeting. Meandering can be controlled by limiting councilmembers to one speech per agenda item or by restricting the length of their speeches. (Robert’s Rules of Order sets an arbitrary limit of 10 minutes for each such speech.) A more difficult alternative is to impose limits on the number of minutes that will be allotted for a given agenda item. Role of the Mayor as Presiding Officer The mayor, as presiding officer, has the primary responsibility for ensuring that the council’s rules of procedure are followed and for maintaining the dignity of council meetings. The mayor calls the meeting to order and confines the discussion to the agreed order of business. He or she recognizes councilmembers for motions and statements and allows audience participation at appropriate times. The mayor sees to it that speakers limit their remarks to the item being considered and, as necessary, calls down people who are out of order. Proper performance of these functions requires that the mayor know parliamentary procedure and how to apply it. The mayor must recognize that parliamentary procedure is a tool, not a bludgeon—that is used to ensure that the will of the majority prevails while the right of the minority to be heard is protected. In addition to fulfilling the duties of the presiding officer, the mayor should be familiar with legal requirements imposed by state law. This involves knowing which actions are required on ordinances, when extraordinary council votes are required, and when a time element—such as the deadline for giving notice of a city election—is important. The city attorney can help with these matters, but if the mayor knows the basics, time can be saved and illegal or incomplete actions prevented. Presiding effectively at a council meeting is an art that no book can fully teach. The tactful presiding officer knows how to courteously discourage councilmembers who talk too much or too often, and how to encourage shy councilmembers who are hesitant to speak at all. Councilmembers’ remarks should always be directed to the chair. Even when responding to questions asked by another councilmember, he or she should begin by saying, “Mayor, if you will permit me. . .” and wait for recognition from the chair before proceeding. This helps avoid the spectacle of two councilmembers haggling over an issue that is of little interest to their council colleagues. 49 In addition to maintaining order and decorum at council meetings, the mayor must see to it that all motions are properly dealt with as they arise. The mayor must recognize the councilmember offering the motion, restate the motion, present it to the council for consideration, call for the vote, announce the vote, give the results of the effect of the vote, and then announce the next order of business. In some cases, the mayor might refuse to allow a councilmember to offer a motion, even though it is in order, either because of unfamiliarity with parliamentary procedure or because of personal opposition to the proposed action. The mayor’s refusal to allow a motion to be considered is subject to appeal, as are all of the mayor’s decisions regarding procedures. A simple majority vote is all that is required to overrule the mayor’s decision on procedural issues. If the decision of the chair is sustained, no further action is taken; but if the decision of the chair is overruled by the council, the council goes forward with the discussion of the motion or other matters before it. On rare occasions, the mayor, in the heat of the moment, may rule that an appeal is out of order, or even declare the meeting adjourned. Both rulings are improper. A meeting cannot be summarily adjourned by the mayor. If an appeal from the decision of the chair is made immediately following the ruling, it is not out of order. If the mayor refuses to honor the appeal, the person making the appeal could then state the question, suggest limited debate, and then put the question to a vote. Streamlining Council Meetings Even the best planned council meetings can deteriorate into endurance contests. These are not necessarily the exceptional meetings, with long public hearings or battles over controversial ordinances. As often as not, these are regularly-scheduled meetings which drone on until the entire council is thoroughly exhausted. Regulating Talk Too much talking is the most common cause of lengthy meetings. Talking can assume a variety of forms—bickering or tiresome exchanges of personal opinions among councilmembers, endless speeches by citizens appearing before the council, or unnecessarily long and detailed reports by staff. Nearly all these problems can be overcome by tactful action on the part of the presiding officer. If citizens addressing the council ramble on and on, the mayor may have no choice but to tell them to confine their remarks to the subject at hand and conclude as quickly as possible. If the problem is created by a talkative councilmember, a simple statement to the effect that “it’s getting late and we must move along” usually will suffice, though private visits by the mayor may be needed to handle chronic talkers. Shortening the Agenda Having too many items on the agenda is another frequent cause of lengthy council meetings. This is not an easy problem to solve, and several evaluation sessions may be needed to correct the situation. Perhaps the agenda is loaded down with detailed items that are included for reasons of custom, rather than necessity, and many of these could be handled by staff without council action. If too much meeting time is needed to explain the various items on the 50 agenda, perhaps a requirement that the more complex ones be explained in writing in advance of the meeting would help. In some cases, it may be discovered that lengthy council meetings are the result of complexities that simply cannot be overcome. In these instances, the only answer may be more frequent meetings. Handling “Consent” Agenda Items Agendas tend to be cluttered with uncontroversial, recurring items that are of little interest to most councilmembers, but must be included because they require formal council approval. Examples include council approval of the minutes of previous meetings, routine purchases, and minor fund transfers between accounts. Most of these items generate no discussion, but each uses up time by requiring a separate motion to approve, a second, and a vote. This problem can be overcome by establishing a “consent” agenda category that encompasses routine items that are approved by a single motion and a vote, without debate. (“Councilmember Smith moves the approval of items 3a, b, c, d, e, f, and g.”) If a councilmember objects to a consent item, it is removed from the list and added to the regular agenda at the appropriate spot. If a councilmember questions a consent item, but not so strongly as to require that it be removed from the list, his or her “no” vote or abstention can be entered in the minutes when the consent vote is taken. The number of consent items can range from a handful to 25 or 30 or more, depending on the council’s workload and preferences. Whatever the size, the consent agenda can be a real time-saver. One city reported that using a consent agenda had slashed the length of the average council meeting by 50 percent. Administrative Improvements Some council meetings are unnecessarily long because of deficiencies in the city’s administrative procedures. For example, citizens who can’t get their problems solved at city hall during normal business hours are likely to show up at council meetings to demand assistance. The fact that most of these complaints should have been handled through administrative action does not relieve the council of the duty to spend time listening to them. Councilmembers who sense that too much formal meeting time is being devoted to hearing gripes from citizens about administrative inaction usually come to the conclusion that the way to get frustrated citizens off the agenda and into proper channels is to establish a system for receiving and processing complaints. The system can be simple, such as assigning one or two employees to process complaints on a part- time basis, or it can be a more sophisticated office operated by a full-time staff. In any event, it is usually advisable to have at least one of the staff members responsible for this function attend council meetings to be available to head off complaints. Mechanical Aids The time needed to explain an agenda item can be reduced by using photographs, flipcharts, and other graphic arts to supplement or replace written reports. Graphics and visual presentations needn’t be expensive. In most cases, using a simple map to show the location of a project, flow charts 51 to illustrate a particular procedure or process, photographs to point out the physical characteristics of the matter being discussed, or a PowerPoint presentation can provide the extra perspective that written words or oral discussions sometimes fail to convey. Council Work Sessions Informal work sessions (sometimes called “workshops”) of the council may be needed from time to time to study certain matters in detail. These are most often held in con- junction with budget review, since regular council meetings do not provide enough time to consider the budget in detail. Work sessions also are useful when major policy questions must be decided or when a complicated ordinance, such as a building code, comes before the council. The Texas Open Meetings Act applies to all council meetings, whether formal or informal. Notices of workshop meetings therefore should be posted in the same manner as notices of regular council meetings. Also, minutes or a recording must be made of the meetings. Citizen Participation Many citizens form their opinions of the city government on the basis of having attended just one council meeting. For some, it will be the only one they attend in their lifetime. This is the time to impress citizens favorably, and to show them that the council is capable of doing its job. The “citizen participation” period, also known as “public comment,” is a time slot set aside on the agenda for citizens to address the council on any subject. Prior to 2019, councils determined when and if there would be citizen participation on an agenda because the Open Meetings Act only gave the public the right to observe an open meeting. Through reasonable rules, councils governed when citizen participation was placed on the agenda, how long a citizen could speak on a topic, and the decorum of the speaker towards the council. House Bill 2840, effective on September 1, 2019, now requires a council to give the public the right to speak on items on the agenda for consideration at an open meeting. The council is required to allow the public to speak on items on the agenda either at the beginning of an open meeting or during the meeting when that item is being discussed by the council. The council can still adopt reasonable rules regarding the right of the public to address the council. This includes limiting the amount of time that the public may address the council on a given item. If the citizen addressing the council on an item on the agenda speaks a foreign language and needs an interpreter, then the council must allow at least double the time allowed for this non-English speaker to address the council. Just as before, the presiding officer should inform visitors of the place on the agenda at which time they will be recognized to speak. And if an exceptionally controversial item has drawn a large crowd, it is generally wise to state the approximate time the item is likely to come up for discussion. To guard against citizen filibusters, some councils limit the length of time any one citizen may speak to three or four minutes, and permit this to be extended only by a two-thirds vote of the council. This kind of limitation often is necessary to keep talkative speakers from infringing on the rights of others who may wish to speak. 52 Although limited verbal interchanges between citizens and council members are appropriate, discussions should not be permitted to drag on. When a member of the public makes an inquiry about a subject for which notice has not been given, a councilmember may respond with a statement of factual information or recite existing policy. Though councilmembers are expected to be polite to citizens appearing before them, H.B. 2840 prohibits councils from forbidding public criticism in public comment. The city council cannot take action unless it has been posted on the agenda in accordance with the Open Meetings Act. If a citizen brings an item before the council that needs to be acted upon, the city council should request that it be placed on the agenda for the next meeting. The attorney general has also stated that a city that knows or reasonably should know the subject matter of a citizen’s presentation should place the matter on the agenda. Public Hearings The purpose of a public hearing is to present evidence on both sides of an issue. Some public hearings are required by state law, as in the case of the Uniform Budget Law (Sections 102.001 et seq., Local Government Code), which requires a public hearing on the city budget prior to its adoption. Others are voluntarily conducted by the council to obtain a full range of citizen opinion on important matters, such as a proposed bond issue. The difference between a public hearing and public comments is that a public hearing is required by law for particular topics with specific notice requirements by the Open Meetings Act. The proper conduct of a public hearing is no less important than for a regular council meeting. Each should begin promptly and be conducted in an orderly manner in conformance with established rules of procedure. At the start of the hearing, the presiding officer should clearly state the subject to be discussed. If, for instance, it is a rezoning hearing, the proposed ordinance should be read and its purpose explained. If the subject is controversial, the following order can be adhered to: proponents’ presentation, opponents’ presentation, proponents’ rebuttal, opponents’ rebuttal, questions from council. One cardinal rule to remember is that numbers don’t always count. There are some topics that naturally draw large, highly biased crowds. Vocal minorities often swamp public hearings to show that their side has widespread support. Such items as little league ballparks, school crosswalks, water rates, and taxes can attract crowds, but the size of the turnout does not necessarily indicate that their cause is just. The council is elected to serve all the citizens, and a councilmember must look at the overall picture—not just the view presented by one partisan group. The council is responsible for weighing the evidence presented at the hearing and, after due consideration, reaching a decision. Obviously, this cannot always be done at the same meeting as the public hearing. In fairness to those who have taken the time to attend, the presiding officer should indicate when a decision can be made immediately after the hearing and the result announced. Otherwise, the chair should describe the reason that no decision will be made at that time, then state the probable time at which a final determination will be reached. 53 When a decision is announced on an issue that involves a public hearing, the presiding officer may, with the assistance of legal counsel, give the reasons why the decision was reached. Even a brief explanation will help prevent observers from feeling that the outcome of the hearing was decided in advance, and that they wasted their time by attending. 54 Chapter Six: Financial Administration Financial administration, simply stated, is matching dollars with needs. Financial administration is the small town mayor who notices that city hall has a leaky roof, and makes a mental note to have it replaced when the money is available. Financial administration is a million-dollar capital improvements program, a bond election preceded by a barrage of information disseminated through the news media, a bond sale, and a report to the taxpayers through the newspaper—all of this is part of financial administration. Financial administration involves an understanding of the extent and limits of the economic resources of the city and the methods of tapping them to meet citizens’ demands for city services. It begins with a thorough knowledge of revenue sources and ends with a proper accounting of all of the funds expended by the city. Much lies in between; it is all financial administration. Revenue Sources City revenues come from many sources, including utility systems, property taxes, sales taxes, user fees, federal grants, and street rentals. (The Texas Municipal League publishes a comprehensive Revenue Manual for Texas Cities.) Utility Revenues Most Texas cities own water and sewer systems, while comparatively few operate electric or gas systems. Among those that own water or sewer systems, the revenue produced by utility billings accounts for a substantial portion of all money taken in at city hall. This percentage is considerably higher among cities that own electric or gas systems. Property Taxes Municipal property tax revenue is growing each year, both in total dollars and on a per- capita basis. In many cases, however, the demands on city budgets have increased at a much greater rate than have property tax collections. Maximum Property Tax Rates The Texas Constitution establishes the maximum permissible property tax rate for cities at the following levels: (1) for Type B and small Type C general law cities—25¢ per $100 assessed valuation; (2) for other general law cities with a population of 5,000 or less—$1.50 per $100 assessed valuation; and (3) for cities with 5,001 or greater population—$2.50 per $100 assessed valuation. Administrative Procedures Over the years, the Texas system of property tax administration has undergone significant change. 55 Prior to 1980, the appraisal of property for tax purposes was fragmented among more than 3,000 cities and other local jurisdictions, and there were no uniform statewide standards governing the administration of local taxes. In 1979, however, the Texas Legislature changed this situation radically when it enacted a new State Property Tax Code that established uniform appraisal policies and procedures. Under the code, county-wide appraisal districts are now responsible for preparing a unitary tax roll that encompasses all property within the county. Although cities and other jurisdictions retain the authority to set their own tax rates and collect their own taxes, they must use the tax roll prepared by the central appraisal district for all tax-related purposes. The basic procedures for administering property taxes include the following: 1) Appraisal: The taxable value of all property in the county is determined by the central appraisal district. 2) Protest: Any property owner dissatisfied by the value fixed by the central appraisal district can appeal to the appraisal review board. Upon a convincing demonstration that the appraisal district’s determination was erroneous, the review board has the authority to correct the error, including but not limited to ordering a reduction of the taxable value of the appellant’s property. 3) Assessment of Taxes: The tax roll prepared by the central appraisal district is furnished to cities and other taxing entities within the county; those entities use it as the basis for levying taxes for the coming fiscal year. Legislation passed in 2019 overhauls the process by which cities adopt their tax rates. Generally speaking, if taxes that fund maintenance and operations expenses increase more than 3.5 percent, the city must hold an election on the November uniform election date for voters to approve the rate. (Note: There are exceptions to this general process for cities under 30,000 population, under certain circumstances.) A city may not adopt a tax rate exceeding the lower of the voter-approved tax rate or the no-new- revenue tax rate until it publishes notice and holds a public hearing. Cities must take various other actions to promote transparency in the tax-rate- setting process, including posting certain information on their websites, and incorporating tax rate information into a database maintained by their appraisal districts. 4) Collection: After the council has set the property tax rate for the coming fiscal year, the tax assessor-collector mails tax notices to all property owners in the city and initiates the collection of taxes. The procedures for assessing and collecting property taxes are prescribed by the Tax Code and Local Government Code. Complete details regarding state requirements are available from the Property Tax Division of the Texas State Comptroller of Public Accounts. Delinquent Property Taxes For obvious reasons, it is to the city’s advantage to collect as much as possible of the amount of property taxes owed. In this regard, financial analysts are inclined to criticize cities that fail to consistently collect at least 95 56 percent of the taxes levied. In many Texas cities, a 98-percent collection rate is the norm. The more successful city tax offices are assisted by an attorney who is skilled in collecting delinquent taxes. In some cases, this may be the city attorney, but the more common practice is for the city to hire a lawyer who specializes in the delinquent tax field. Most outside lawyers charge a fee that is paid by the delinquent taxpayers on the basis of a percentage of the delinquent taxes they owed. City Sales Tax As a result of legislation initiated by the Texas Municipal League, the general city sales tax became available to Texas cities in 1968 and has become almost universal, with virtually all cities in the state having adopted it. Most cities in which the combined local sales tax (city, county, special district) has not reached two percent can consider the imposition of certain additional sales taxes for purposes that include economic development, crime control, property tax relief, and street maintenance. Additional information regarding the sales tax for economic development is available from the Texas Municipal League and the League’s Economic Development Handbook. User Fees Charges for the use of city services are an increasingly popular method of generating revenues. In addition to charging for solid waste collection and water and sewer services, cities impose fees for the use of a variety of facilities, including swimming pools, golf courses, and airports. Federal Grants Despite cutbacks in recent years, federal aid is still an important part of the municipal revenue picture. For individual cities, federal aid as a proportion of all revenues fluctuates widely, with “distressed” cities receiving large amounts of federal money, and the more prosperous cities receiving comparatively little. Street Rentals A portion of an average city’s revenue is produced by rental charges collected from private firms—such as cable TV companies, telecommunications providers, and gas and electric utilities—in return for allowing them to use streets and other public rights-of-way. Municipal street rental charges for electric, gas, and water utilities are authorized under the state Tax Code, which allows cities to impose such charges on utility and transportation enterprises in return for the privilege of using the city’s streets and alleys to string lines, bury pipes, and otherwise use public property to conduct business. The provisions for collecting compensation from telecommunications providers are contained in Local Government Code Chapter 283, and those relating to cable and video providers are in Chapter 66 of the Utilities Code. Chapter 284 of the Local Government Code contains right-of-way compensation provisions for small cellular network nodes. Fines Under state law, a city may assess a fine of up to $2,000 per day for violations of ordinances dealing with fire safety, zoning, or public health-related matters. A city may assess a fine of up to $4,000 per day for violation of an ordinance governing the dumping of refuse. For ordinances dealing with other violations, the maximum fine is $500 per day. 57 The amount of revenue from fines as a proportion of city revenues usually varies in direct proportion to city size. In larger cities, fines generate a comparatively small proportion of total revenues; in most small cities, fine revenues play a much more important role in the city budget. State law limits the amount of revenue that a city under 5,000 population may derive from fines for violations of traffic laws. License and Permit Fees Under their police powers, cities regulate a wide variety of activities in order to promote the health, safety, and welfare of local citizens. Permit and license fees provide the revenues necessary to finance the cost of these regulatory programs. Examples of permit fees include those charged for examining subdivision plats and plumbing installations. Examples of license fees include those for registering dogs. The amount of a permit or license fee must bear a reasonable relationship to the cost of the particular regulatory pro- gram. Under the law, excessive fees may not be imposed in order to create “profits.” Also, the city may not assess a fee or require a permit for which no bona fide regulatory function is performed. Hotel-Motel Tax Chapter 351 of the Tax Code authorizes most cities to levy an occupancy tax of up to seven percent on the price of a hotel or motel room. Other cities, depending on population, may levy an even higher tax. Under the law, proceeds from this tax must be earmarked for certain specified purposes, including the advertising and promotion of the city and its vicinity to attract tourism, arts and cultural activities, historical restoration and preservation activities, registration of convention delegates, operation of visitor information centers, the construction of civic centers and auditoriums, certain sporting events, signage, and tourist buses. Cities must maintain a written list of all projects funded by the hotel-motel tax. Cities must also annually report to the comptroller their hotel occupancy tax rates, the amount of revenue collected from hotel occupancy taxes during the year, and the amounts and percentages allocated to specific uses during the year. Taxes on Alcoholic Beverages Under the Texas Alcoholic Beverage Code, the state levies both a gross receipts tax and a separate tax on the sale of all mixed drinks served in clubs, saloons, and restaurants. Some of the state’s total collections are remitted back to the cities on a pro rata basis. Additionally, cities are authorized by Section 11.38 of the Texas Alcoholic Beverages Code to levy fees not to exceed one-half of the state fee for a variety of alcoholic beverage-related permits, including permits for package stores, distributors, brewers, and others issued within the city. Occupation Taxes Cities are authorized under Section 302.101 of the Texas Tax Code and Article VIII, Section 1, of the Texas Constitution to levy an occupation tax on certain businesses and professions, such as operators of pinball machines and other coin-operated devices. The rate of the city tax may not exceed an amount set by statute and may not exceed 50 percent of the rate of the occupation tax levied by the state on the same businesses, if no statutory amount is set. A city may not levy a tax on a business or profession not subject to state occupation taxation. 58 Special Assessments A “special assessment” is a charge imposed by the city on a limited group of properties to finance public improvements that specifically benefit those properties and enhance their value. Special assessments are most frequently used to finance the construction of sidewalks or reconstruction of streets. The cost of improvements is apportioned among all the owners of property abutting the improvement according to relative benefit. Costs are divided between property owners and the city according to the state law applicable to the particular type of improvement. Miscellaneous Revenues Miscellaneous income is derived from many different sources, such as rental charges for the use of the city’s property, the sale of city property, the sale of water and other utility services to other jurisdictions, and interest in- come on idle city funds. Budgeting For many councilmembers, budgeting represents the most wretched and tiresome aspect of city government. Budgeting begins amid cries from some citizens for “tax relief” and demands from others that their “essential” programs be funded. Upon its adoption, the budget is dismissed with a sigh: “Now that that dreadful chore is behind us, we can get on with the ‘fun’ part of the city’s business.” Financial management is indeed unglamorous, and budgets are poor leisure reading. However, it is also true that among all the functions performed by the city council, budgeting is the most important. In its simplest definition, budgeting is a plan for utilizing the city’s available funds during a fiscal year to accomplish established goals and objectives. Within a broader context, the budget also serves to: 1) Provide the public with an understandable financial plan that plainly describes activities that will be undertaken during the next fiscal year and the extent and specific types of services that will be performed. 2) Establish priorities among city programs, particularly new or expanded programs. 3) Define the financial framework that will be used to periodically check the status of city operations. 4) Determine the level of taxation necessary to finance city programs. Budgeting is the forum for making the most of the council’s key decisions about the future of the city. It is a process for determining the community’s standard of living—what local residents need and want, what they are willing and able to pay for, and what services they can expect to receive for their tax dollars. The council can use the budget to restore an ailing municipal government to financial health, or misuse it to drive a healthy government to insolvency. It can be used to nurture community development or freeze growth. The budget is everything. It is, in the words of one mayor, “the World Series of municipal government.” Statutory Requirements The budgeting process in every Texas city, regardless of size, must comply with the 59 requirements in Chapter 102 of the Local Government Code. Under the statute: 1) The city council must adopt an annual budget and conduct the financial affairs of the city in strict conformance with the budget. 2) The budget for each fiscal year must be adopted prior to the first day of such fiscal year. In most Texas cities, the fiscal year begins on October 1; therefore, the budget must be adopted by September 29 or earlier. 3) The city’s budget officer must prepare a proposed budget for the consideration of the city council. In most cities, the law requires that the mayor serve as budget officer; in cities that have adopted the city manager form of government, the city manager is the budget officer. 4) Copies of the proposed budget compiled by the budget officer must be filed with the city clerk/secretary and made available for public inspection. The initially proposed budget must be filed no later than thirty days prior to the date upon which the city council sets the property tax rate for the next fiscal year. 5) If the budget will raise more total property taxes than in the prior year, it must contain a cover page giving notice of that fact. A budget calling for such a property tax increase must be posted on the city’s website, if it operates one. 6) The city council must hold a public hearing on the budget after the 15th day that the budget has been filed with the city clerk or secretary. Notice of the public hearing must be given in a newspaper of general circulation in the county not less than ten nor more than thirty days prior to the hearing. The notice must identify a proposed property tax increase. 7) Upon adoption of the final budget by majority vote of the council, copies must be filed with the county clerk and city clerk/secretary and made available for public inspection. A budget that raises total property taxes requires a separate ratification vote. The adopted budget must contain a cover page that includes property tax information as well as the record vote of each councilmember on the budget. The adopted budget and cover page must be posted on the city’s website, if it operates one. 8) After the new fiscal year has begun and the budget has been put into effect, no expenditure “shall thereafter be made except in strict compliance with such adopted budget,” nor may the council amend the budget except for reasons of “grave public necessity” requiring “emergency expenditures to meet unusual and unforeseen conditions, which could not, by reasonable diligent thought and attention, have been included in the original budget...” 9) The budget and any amendments to it must be filed with the county clerk. 10) The governing body of the city may levy taxes only in accordance with the budget. For obvious reasons, Chapter 102 of the Local Government Code is generally interpreted to prohibit deficit financing— that is, budgeting expenditures for which no offsetting revenues are provided. Charter Requirements in a Home Rule City All city charters establish a framework for budget preparation, adoption, and 60 implementation. While the details of these provisions vary from city to city, charter requirements generally prescribe a timetable for preparing the budget, require a public hearing(s), and require the council to adopt the budget by a certain time. Many charters also prescribe the format of the budget, including requirements that it contain a message describing the budget officer’s proposed fiscal plan for the city and significant features of the budget for the forthcoming fiscal year; a general summary, with supporting data, which shows proposed expenditures and anticipated revenues for the next fiscal year and their relationships to corresponding data for the current budget year; and details of proposed expenditures and anticipated revenues. Basic Budget Information Adoption of a plan of city services for the next fiscal year begins with a budget document containing certain basic information. The budget document should identify all services currently provided and proposed to be provided (or terminated) during the coming fiscal year. For each service, the following information should be furnished:  An itemization of expenditures for each service during the previous fiscal year, a projection of actual expenditures for the current year, and proposed expenditures for the next fiscal year.  A statement of objectives for each service to be funded during the next fiscal year. “Objectives” do not mean organizational objectives—such as “to add new police officers” or “to purchase a new street sweeper.” Rather, these statements should describe the benefits the community will derive from a particular service, such as “to reduce average police response time to emergency calls by three minutes,” or “to clean x number of miles of streets.”  The proposed level of each service for the next fiscal year, together with a description of performance standards for each. In the case of the solid waste budget, for example, service levels and performance can be expressed in terms of the numbers of customers served and the volume of refuse collected. Street maintenance can be expressed in terms of lane miles resurfaced, maintenance requests, and number of complaints concerning street quality, and so on. This approach will help the council focus on community benefits that will be produced by a given expenditure, rather than on such details as whether a particular department is requesting too much money for supplies or travel.  A brief description of the methods by which the services will be delivered.  An itemization of the cost components of proposed services.  Sources of funding for the proposed services.  A description of factors that could affect the cost of proposed services. The budget also should contain a summary of the city’s financial condition for the prior year and current year, and a projection of its anticipated condition for the coming fiscal year and beyond. This summary should indicate:  Outstanding obligations of the city.  Beginning balance of all cash funds. 61  Actual revenues, broken down by source, collected in the preceding year and anticipated for the ensuing year.  Estimated revenue available to cover the proposed budget.  Estimated tax rate required to cover the proposed budget. Properly organized, this information will enable councilmembers to gain a comprehensive understanding of the city’s financial condition and give them the tools they need to establish the scope and direction of municipal services for the coming year. For a more in-depth discussion of budgets, the Texas Comptroller, with the help of the Texas Municipal League, has published the Budget Manual for Texas Cities. Copies are available on the Comptroller’s website. Implementation After the budget has been approved, regular monitoring by the city council can help ensure that municipal services are carried out in accordance with budget objectives and within expenditure ceilings. In most cities, the budget officer is required to furnish the council with periodic reports that show the prior month’s expenditures and total expenditures to date for each budgeted activity. Using these reports, the council can identify deviations from budget plans, anticipate financial trouble spots, and determine whether the various departments are functioning properly. On a periodic basis, perhaps quarterly, the council should be furnished with a written description of significant budgetary developments during the current fiscal year. For each activity, this statement should describe progress to date in comparison with objectives, and should provide reports on expenditures by budget category and revenue collections. Revised estimates of revenue also should be presented, together with revised surplus or deficit projections. These reports will give the council the basis for determining how well the city is meeting its service targets with the funds available. Also, it can help the council determine whether budget modifications are needed during the year. Municipal Borrowing It is a rare case when a city is able to carry out a capital improvements program of any consequence without using its credit. More often, the city borrows money, and in doing so, offers future tax collections or utility revenues as security for the loan. Loans fall into two categories: short-term and long-term—or, stated differently, loans to be repaid within the current fiscal year versus those to be repaid in future years. This section briefly reviews the two types of loans. Short-Term Borrowing Most short-term loans are made with local banks. Their purpose is to provide funds of a temporary nature, and they are made with the expectation of repayment within the current fiscal year. A bank loan made in August to avoid an overdraft in the general fund pending receipt of tax collections in September is a good example of a short-term loan. A short-term loan differs from a long-term loan in two respects: (1) it will mature within the current fiscal year; and (2) it can be approved by the city council without the necessity for voter approval at a referendum election. 62 Short-term loans should be used sparingly. An excessive amount of short-term debt can adversely affect the city’s bond rating and impair its ability to accomplish long-term borrowing for major capital improvement programs. Frequent use of short-term borrowing reflects deficiencies in the quality of the city’s management of its financial resources. Long-Term Borrowing Unlike short-term loans, which can be repaid with general fund dollars derived from a variety of revenue sources, long- term loans require that the specific source of revenue that will be used to repay the debt be identified and, in certain cases, pledged. Long-term loans secured by a pledge of property taxes are called “general obligations” and include ad valorem tax bonds, time warrants, and certificates of obligation. Long- term loans secured by a pledge of revenue from an income-producing facility are called “revenue bonds.” General Obligation Debt General obligation debts are payable from, and are secured by, a pledge of future property tax collections. Under standards promulgated by the attorney general of Texas, a city with a maximum permissible tax rate of $1.50 per $100 assessed valuation may not incur general obligation debt that will require the levy of a tax at a rate higher than $1.00, after allowing ten percent for delinquencies in collection and for the payment of maturing principal and interest. General obligation debt is commonly expressed as a percentage of the city’s total assessed valuations. For example, a city that has a total assessed valuation of $10 million and outstanding general obligation debt in the principal amount of $500,000 is said to have a debt ratio of five percent. Three common forms of general obligation debt are ad valorem tax bonds, time warrants, and certificates of obligation. Ad Valorem Tax Bonds Ad valorem tax bonds are commonly referred to as general obligation, or G.O. bonds. They are issued pursuant to an ordinance adopted by the city council, typically following approval of the bonds at a referendum election. The bonds are examined as to legality by the attorney general of Texas, and then delivered by the city to the successful purchaser or bidder for payment in cash. This cash is then used by the city to pay for libraries, police buildings, city halls, and other public facilities with a long, useful life. G.O. bonds usually are issued in $5,000 denominations, and the bond issue usually provides serial maturities, with a certain amount of principal maturing each year over a period not to exceed forty years. General obligation bonds have the highest degree of investor acceptance of any type of municipal indebtedness, and they command the lowest interest rates. Therefore, unless exceptional circumstances dictate otherwise, G.O. bonds are the preferred means of borrowing against a pledge of tax revenues. Time Warrants Time warrants are also general obligation debts and are payable from ad valorem taxes. Unlike G.O. bonds, which are sold for cash, time warrants are issued directly to vendors to 63 pay for construction, equipment, and services. Also unlike G.O. bonds, time warrants do not require voter approval, although the law does require that the city council publish notice of its intent to issue them and that the council call a referendum election upon presentation of a petition signed by ten percent of the taxpaying voters. The procedures for issuing time warrants are cumbersome and expensive and will result in the city paying a higher rate of interest than if the borrowing were accomplished with bonds. Nevertheless, time warrants can occasionally be advantageous—for example, to complete the construction of a public works project where there has been a cost overrun and bond funds have been exhausted. Certificates of Obligation The third form of general obligation debt payable from ad valorem taxes is certificates of obligation (COs). Like time warrants, COs can be issued without voter approval—except that upon notice of the city’s intent to issue certificates, five percent of the qualified voters can force an election on the issue by submission of a petition. With certain exceptions, a city may not issue a CO to pay a contracted obligation if a bond proposition to authorize the issuance of bonds for the same purpose was submitted to the voters during the preceding three years and failed to be approved. Certificates of obligation can be issued directly to vendors to pay for construction work, equipment, machinery, materials, supplies, land, or professional services furnished to the city. Also, under certain circumstances COs can be sold, like bonds, for cash, in which case they must he approved by the attorney general in the same manner as bonds. Revenue Bonds There is only one type of bond secured by a pledge of revenues from an income-producing facility such as a utility system. These obligations are revenue bonds and usually are designated with the name of the system that pledges the revenues (for example, Waterworks System Revenue Bonds, Waterworks and Sewer System Revenue Bonds, and so on). When utility revenues are pledged to support revenue bonds, the pledge is made of the system’s net revenues—that is, gross revenues minus operating and maintenance costs. Such bonds are payable solely from these revenues and include a statement on their face that the holder shall never be entitled to demand payment from property taxes. In determining whether the amount of pledged revenues is sufficient to repay the outstanding revenue bonds of a utility system, analysts will look at the ratio between the system’s net earnings and the requirements of principal and interest maturities over a period of years. As a rule, net revenues should be at least 1.25 times larger than the average annual debt service requirements of the system. This ratio is called “coverage,” and revenue bonds are said to have 1.25X coverage, or 2.23X coverage, and so on. The higher the coverage, the better the security for the bonds and, all other things being equal, the lower the rate of interest at which the bonds can be issued. In pledging the revenues of a utility system, it is common to make a “cross pledge,” or “combined pledge.” This is a pledge of the revenues of one system to repay bonds issued for improvements to a different system; for 64 example, pledging the net revenues of the water system to the payment of bonds issued to improve the sewer system. On the other hand, the revenues of a utility system may not be cross pledged to the payment of bonds issued on behalf of a non-revenue-producing facility. For instance, water system revenues cannot be pledged to the payment of bonds issued to build a city hall. Bond Ratings As the annual volume of long-term debt incurred by state and local governments has grown over the years, competition between cities and other borrowers for the investor’s dollar has increased correspondingly. A municipal bond rating is one of the methods used to help alleviate the problems arising from this competitive situation. A bond rating gives a quick indication of the quality of a new issue being offered, so that prospective bidders may know if they want to develop a bid. But a bond rating has greater value than a mere screening device: it also influences the rate of interest payable on bonds. Therefore, it is desirable that the city maintain a good rating for its bonds, because it can mean the difference between a good bid and a poor one, and a difference in interest charges to the city running into many tens of thousands of dollars. Most Texas cities have more than one bond rating. Each bond issue is rated separately, based on the source of revenue that has been pledged to secure payment. General obligation bonds, therefore, are rated separately from water or sewer revenue bonds. In determining the rating of a bond issue, analysts focus on the nature of the particular security. In the case of general obligation bonds, prime importance is attached to relationships among the city’s debt, wealth, population, and tax collection experience. The economic base of the city, the stage of its development, and the quality of its government also are important factors. Finally, analysts examine the exact nature and strength of the legal obligation that the bonds represent. The bond ratings of two particular firms are universally accepted in investor circles. These are Moody’s Investors Service and Standard & Poor’s Corporation, both of which are based in New York City. The four investment grade ratings granted by these services are as follows: Moody’s Investors Service Aaa: Best quality, carrying the smallest degree of investment risk Aa: High quality (together with Aaa comprise “high-grade bonds”) A: Higher medium-grade (many favorable investment attributes) Baa: Lower medium-grade (neither high- quality nor high-risk) Standard & Poor’s Corporation AAA: Highest rating, with extremely strong capacity to repay loan AA: Only a small degree below AAA in the capacity to repay the loan A: Strong capacity to repay loan, although more susceptible to adverse effects in economic conditions BBB: Adequate capacity to repay loan In offering newly issued bonds for bids, the city should apply to one or both of the rating agencies to obtain a rating on the issue being offered. The nominal cost of obtaining 65 a rating can be recovered many times over by minimizing interest costs on the basis of a favorable bond rating, as opposed to the sale of non-rated bonds. Bond Elections If it has been determined by the city council that a bond election is required, the first step—and the key step—in a successful campaign is citizen participation. The tried-and true elements of a successful bond election include the following:  Let private citizen volunteers, rather than the city council, conduct the campaign to persuade local voters to vote for the bonds.  Enlist the support of community and civic organizations. Installment Obligations An ever increasing number of Texas cities are financing municipal purchases through installment sales or lease-purchase agreements. Generally speaking, cities must competitively procure the personal property at issue when a lease-purchase agreement or installment sale involves an expenditure of more than $50,000 in city funds. Anticipation Notes Certain cities may have authority to borrow against anticipated revenue (typically federal grant money) by issuing anticipation notes. Anticipation notes may be appropriate for borrowing relatively small amounts of money when the issuance of bonds would be cost prohibitive. State agencies may be authorized to purchase anticipation notes from cities, thus speeding the grant process to fund city projects. The law relating to anticipation notes may be found in chapter 1431 of the Texas Government Code. Capital Improvements Programming It is a financial fact of life in every city that the demand for new streets, water lines, and other public works will always exceed the supply of current funds. Capital improvements programming is the primary method used by most cities to cope with the perpetual imbalance between capital demands and limited financial resources. A capital improvements program (CIP) is a long-term plan, usually spanning five to six years, for financing major cost items that have a long useful life, such as buildings, land, streets, utility lines, and expensive equipment. The CIP document lists all the capital items scheduled for construction or acquisition during the next five or six years, the time when construction or acquisition is to occur, the amount expected to be spent during each year of the CIP, and the source of funding for each expenditure. Preparation of a CIP involves five major steps. First, a list of proposed capital improvements is prepared on the basis of recommendations from the city council, staff, and citizen groups. The city’s comprehensive plan will be the source of many CIP items, but whatever the source, each item included in the list should be supportive of the community goals expressed in the plan. 66 Second, cost estimates are developed for all proposed CIP items. In addition to stating the up-front cost of each item, these calculations usually include a description of savings that will result from its acquisition or construction, as well as the impact the item would have on future revenues or operating costs. Third, a determination is made of the city’s ability to pay for the items included in the draft CIP, together with a description of the method by which each will be financed. Ability to pay will be determined by a financial analysis of past, current, and future revenue, expenditure, and debt patterns. Options for financing particular items include special assessments, state or federal grants, additional fees or taxes, current revenues (pay-as-you- go), reserve or surplus funds, general obligation or revenue bonds, and certificates of obligation. The objective of this step is to determine, for each year, the minimum costs the city will incur before any new capital expenditures can be financed. Fourth, all proposed CIP items are organized by the staff for orderly presentation to the city council. Each is ranked in recommended priority order. Items that overlap or duplicate previously approved projects or that are inconsistent with the city’s comprehensive plan are identified and perhaps downgraded. Finally, the tentative CIP is discussed at public hearings, thoroughly reviewed by the council, and then finally approved by formal council action. Based on information contained in the CIP, a capital budget is prepared to show all capital expenditures in priority order, together with summaries of the financial activities planned for each year, including the amounts of bonds to be issued, amounts of operating funds required, and so forth. The capital budgeting process normally takes place on a cyclical basis. Under a six-year CIP, year one is the current capital budget adopted by the city council at the same time it approves the operating budget. Many times, the capital budget is included as a component of the operating budget. Years two through six, having been approved by the council when it adopted the CIP, remain in the record as expressing the council’s intent to carry forward with the balance of the CIP. At the conclusion of year one, the council approves another one-year capital budget and extends the CIP, with revisions, for another year. Thus, year two of the previous CIP be- comes year one of the new six-year program, and the cycle begins anew. Capital improvement programming offers several advantages. By scheduling ample time for construction or acquisitions, costly mistakes can be avoided, as is the case when streets have to be dug up repeatedly because they are not planned in relation to other facilities. Also, by working with a list of planned projects, sites can be purchased at lower cost, and by spacing out projects over several years, the city’s tax and debt load can be stabilized, and balance can be maintained between debt service and current expenditures. Financial Reporting Financial reports prepared periodically throughout the fiscal year are an essential part of the control system necessary to permit the city council to determine whether funds are being expended in accordance with the budget and to identify discrepancies between anticipated and actual revenues. Financial 67 reports fall into four general categories— internal budgetary reports, annual financial reports, annual audits, and local debt reports—each of which is briefly discussed next. Internal Budgetary Reports Internal budgetary reports are prepared on a monthly basis and are distributed to the city council and department heads. These reports illustrate the financial condition of the city as it unfolds from month to month and answer such questions as: Are city services being provided as planned? Are expenditures exceeding budgeted levels? Is the cash inflow at the expected level? By determining the answers to these and related questions on a regular basis, the council can identify problem areas and initiate corrective actions accordingly. Annual Financial Report The annual financial report is compiled at the conclusion of the fiscal year and shows, item by item, budgeted versus actual revenues and expenditures, together with other information that describes the city’s year-end financial condition. The financial report should be prepared by an independent certified public accountant appointed by the city council and made available to the department heads, the news media, and other interested parties. Annual Audit Sections 103.001-103.004 of the Local Government Code require each city to have an annual audit of its financial records and accounts. The audit can be performed either by a certified public accountant or a qualified city employee, and must be made available for public inspection no later than 180 days after the close of the city’s fiscal year. The audit involves examination of three aspects of the city’s financial operations: (1) internal controls; (2) statements, records, and accounting transactions; and (3) compliance with statutory and budgetary requirements. Properly conducted, the audit provides a double check on the city’s financial status, a method for communicating with the citizenry, and a bona fide statement of the city’s financial condition, which will improve its ability to issue bonds. Local Debt Report Section 140.008 of the Local Government Code requires cities to annually compile and report various types of debt obligation information, including the amounts of principal and interest to pay outstanding debt obligations, the current credit rating given by any nationally recognized credit rating organization to debt obligations of the city, and any other information that the city considers relevant or necessary to explain the outstanding debt values. Subject to certain exceptions discussed below, the local debt report must be posted continuously on the city’s website until the city posts the next year’s report. The report must be made available to any person for inspection. As an alternative to posting the report on the city’s website, a city may provide all required debt information to the comptroller and have the comptroller post the information on the comptroller’s official website. Further, a city with a population of less than 15,000 may provide the comptroller with its local debt report for inclusion on the comptroller’s website. A city that already includes the required debt information in other reports 68 that are posted to the city’s website may provide a link to that information rather than replicating the data in the local debt report. Investments In 1995, the Texas Legislature enacted the Public Funds Investment Act, which requires the governing body to adopt a written investment policy. A city may contract with an independent investment advisor to provide investment and management services. Typically the city investment officer must attend one investment training session within twelve months of taking office and must attend eight hours of training once every two years thereafter. The treasurer and the chief financial officer (if the treasurer is not the chief financial officer) must also attend ten hours of training every two years. The Texas Municipal League offers comprehensive public funds investment training. Financial Warning Signals In recent years, increasing attention has been given to monitoring the financial health of cities. Although most of the chronic financial problems of cities tend to slowly snowball over an extended period of time, they usually result from a standard set of problems, including: (1) a decline in revenues or tax base; (2) an eroding capital plant; (3) a faltering local or regional economy; (4) growing debt burden; (5) accumulation of unfunded pension liabilities; (6) a sudden loss of substantial federal funds; (7) an increase in spending pressures; and/or (8) ineffective financial management practices. 69 Chapter Seven: Ordinances and Resolutions The city council takes official action by two primary means: resolutions and ordinances. Both of these play important roles in their own respective ways, and they share certain similarities. But there are distinctions between the two, and it is good to know the differences. The distinction between an ordinance and a resolution is in subject matter, not terminology. An ordinance cannot be changed into a resolution merely by calling it a resolution, nor may the requirements for enacting an ordinance be bypassed by simply passing a resolution. A resolution generally states a position or policy of a city. An ordinance is more formal and authoritative than a resolution. An ordinance is a local law that usually regulates persons or property and usually relates to a matter of a general and permanent nature. Passage of an ordinance generally involves three steps, the first of which is the introduction of the proposed ordinance at a council meeting. Next, the city clerk or city attorney either reads the entire ordinance or reads just the caption of the ordinance and allows the person proposing it to provide an explanation. There is no state law requiring that ordinances be read aloud in their entirety. In addition, there is no generally applicable state law that requires multiple readings of an ordinance. (Some home rule charters, however, do provide for more than one reading.) If the ordinance is short, the council may wish to have it read in full for the benefit of any citizens present. If the ordinance is long and technical, the usual practice is to settle for a brief summary and general explanation of the purpose of the ordinance. Third, the ordinance is debated by the council and either defeated, postponed, referred to a committee for further study, or approved. If the ordinance is approved, it is then signed by the mayor and attested to (certified) by the city secretary or city attorney. Also, depending on city type and the subject matter of an ordinance, it may have to be published in a newspaper before becoming effective. Because of the relatively cumbersome procedures involved in enacting an ordinance, it is important to know when an ordinance is required and when less formal kinds of council action will suffice. Though there are no absolute standards that apply, these three rules of law may help: 1) Any council enactment that regulates persons or property and imposes a fine for violations must be in the form of an ordinance. This requirement is based on the principle that there must be a printed law and citizens must have some notice that it is in effect before they can be subjected to a fine. 2) An enactment must always be in the form of an ordinance if the state law authorizing the particular action requires an ordinance. Examples include the creation of a planning and 70 zoning commission or setting the tax levy for the next fiscal year. 3) An ordinance is required to amend or repeal an existing ordinance. Compatibility of Ordinances with State and Federal Laws An ordinance, or portion thereof, is void if it conflicts with the U.S. Constitution, the Texas Constitution, or a federal or state law. Also, even though an ordinance might be valid at the time it was passed, if a law subsequently enacted by the state or federal legislature conflicts with the ordinance, the ordinance is void. Conversely, if an ordinance supplements and is in harmony with the law, the ordinance will be sustained. An ordinance is invalid if a court determines that the state legislature intended to preempt the field with regard to the subject addressed in the ordinance. If the legislature has preempted the field, no ordinance except those specifically authorized by statute may be enacted in such field. Examples of conflicts that have caused ordinances to be ruled invalid include:  an ordinance prescribing a different penalty from that imposed by state law where the ordinance and the law dealt with the same type of offense;  An ordinance restricting the hours of operation of liquor stores to fewer than those authorized under the state Alcoholic Beverage Code;  an ordinance legalizing an activity or business that was prohibited by state law; and  an ordinance in conflict with the Interstate Commerce Clause of the United States Constitution. Validity of Ordinances An ordinance that is arbitrary, oppressive, capricious, or fraudulent will be invalidated by the courts. The courts can inquire into the validity of ordinances by looking at whether the ordinance has a substantial relationship to the protection of the general health, safety, or welfare of the public. The courts usually will not substitute their judgment for that of the city council; but if an ordinance is not in compliance with lawful requirements, the courts may overturn it. An ordinance is considered valid if no lawsuit has been filed to invalidate the ordinance on or before the third anniversary of the effective date of the ordinance, unless the ordinance was invalid on the day it was enacted or it was preempted. Form of the Ordinance State law does not prescribe the form of an ordinance, other than to require that it contain an ordaining clause (Section 52.002 of the Local Government Code) and to require the publication, or sometimes posting of either the complete text or caption of every ordinance that establishes penalties for violations (Sections 52.011-52.013 of the Local Government Code). But a form for ordinances has evolved by custom and is now used by most cities. Although the actual drafting of an ordinance is best left to the city attorney, councilmembers should be familiar with the basic form. This 71 includes: 1) The number of the ordinance. This information is good to have for indexing and ready reference. 2) The caption, which briefly describes the subject of the ordinance and the penalties provided for its violation. Although an ordinance is valid without a caption, this is a useful feature because it provides a simple way of determining what is included in the ordinance without reading the entire document. Also, if the ordinance does not have a caption, Section 52.011 of the Local Government Code requires that the ordinance be published in its entirety if it provides a penalty for violations. Conversely, a penal ordinance may be published by caption only if the caption states the penalty for violations. 3) A preamble, which is optional, may be included in cases in which the council wants the courts to understand the reasons the ordinance was passed, factual findings made by the council, or the legislative authority for the ordinance. 4) The ordaining clause, which is required by law, in most instances. 5) The body of the ordinance, which usually is broken down into sections according to subjects. This contains the command of law as ordained by the council. 6) The effective date of the ordinance which may, in some circumstances, be governed by state law or city charter (if adopted by a home rule city). 7) A severability clause which clarifies that the invalidity of some portions of the ordinance should not render the entire ordinance invalid. 8) The penalty clause, which fixes the penalty for violating the ordinance. Under state law, the maximum penalty the council may establish for violating an ordinance dealing with fire safety, zoning, or public health (except for dumping refuse) is a fine of $2,000 per day for each day the ordinance is violated. The maximum penalty the council may establish for violating an ordinance governing the dumping of refuse is $4,000 per day. For ordin- ances dealing with other violations, the maximum fine is $500 per day. Cities do not have the power to punish violators by sending them to jail. 9) The final part of the ordinance is the statement that it was passed and approved, giving the date of passage, the signature of the mayor, and a space for the city clerk or secretary to sign and attest to the fact that the ordinance was actually adopted. Some cities also require the city attorney to approve the form of the ordinance. If required by state law or city charter, signatures must be present on the ordinance or the ordinance may be declared void. 72 The following ordinance illustrates these eight components: Ordinance No. 125 CAPTION AN ORDINANCE OF THE CITY OF ANYWHERE, TEXAS, ESTABLISHING WATER CONSERVATION REQUIREMENTS AND PROVIDING A PENALTY FOR VIOLATIONS. PREAMBLE WHEREAS, because of the conditions prevailing in the City of Anywhere, the general welfare requires that the water resources available to the City be put to the maximum beneficial use and that the waste or unreasonable use be prevented; and WHEREAS, lack of rain has resulted in a severe reduction in the available water supply to the City, and it is therefore deemed essential to the public welfare that the City Council adopt the water conservation plan hereafter set forth. ORDAINING CLAUSE NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANYWHERE, TEXAS: BODY SECTION 1. AUTHORIZATION. The City Manager or his designee is hereby authorized and directed to implement the applicable provisions of this Ordinance upon his determination that such implementation is necessary to protect the public welfare and safety. SECTION 2. APPLICATION. The provisions of this Ordinance shall apply to all persons, customers, and property served with City of Anywhere water wherever situated. No customer of the City of Anywhere water system shall knowingly make, cause, use, or permit the use of water received from the City for residential, commercial, industrial, agricultural, governmental, or any other purpose in a manner contrary to any provision of this ordinance, or in an amount in excess of that use permitted by the conservation stage in effect pursuant to action taken by the City Manager or his designee in accordance with the provisions of this Ordinance. SECTION 3. CONSERVATION REQUIREMENTS. From May 1 to September 30 of each year and upon implementation by the City Manager and publication of notice, the following restrictions shall apply to all persons: (a) Irrigation utilizing individual sprinklers or sprinkler systems of lawns, gardens, landscaped areas, trees, shrubs, and other plants is prohibited except on a designated day which shall be once every five days, and only then during the hours of 8:00 p.m. and 12:00 noon. Provided, however, irrigation of lawns, gardens, landscaped areas, trees, shrubs or other plants is permitted at any time if: (i) a hand-held hose is used: (ii) a hand-held, faucet filled bucket of five (5) gallons or less is used; or (iii) a drip irrigation system is used. (b) The washing of automobiles, trucks, trailers, boats, airplanes and other types of mobile equipment, the refilling or adding of water to swimming and/or wading pools and the use of water for irrigation of golf greens and tees is prohibited except on designated irrigation days between the hours of 8:00 p.m. and 12:00 noon. (c ) The washing or sprinkling of foundations is prohibited except on designated irrigation days between the hours of 8:00 p.m. and 12:00 midnight. (d) The following uses of water are defined as “waste of water” and are absolutely 73 prohibited: (i) allowing water to run off into a gutter, ditch, or drain; (ii) failure to repair a controllable leak; and (iii) washing sidewalks, driveways, parking areas, tennis courts, patios, or other paved areas except to alleviate immediate fire hazards. SECTION 4. EFFECTIVE DATE This Ordinance shall become effective immediately upon its passage and publication as required by law. SECTION 5. SEVERABILITY This Ordinance shall be considered severable, and the invalidity or unconstitutionality of any section, clause, provision or portion of the Ordinance shall not affect the validity or constitutionality of any other section, clause, provision or portion of this Ordinance. SECTION 6. PENALTY Any person, corporation or association violating any provision of this Ordinance shall be deemed guilty of an offense, and upon conviction shall be punished by a fine not to exceed Five Hundred Dollars ($500.00). The violation thereof shall be deemed a separate offense, and shall be punished accordingly. Provided, however, compliance may be further sought through injunctive relief in the District Court. CONCLUSION PASSED AND APPROVED this____ day of _________, 20___ /s/_______________ Mayor ATTEST: /s/_______________ City Secretary/ Clerk APPROVED AS TO FORM: /s/_______________ City Attorney 74 Chapter Eight: Conflicts of Interest Mayors and councilmembers are expected to avoid involvements that put their own personal interests at cross purposes with those of the public. In most cases, good judgment is enough to keep city officials within the bounds of propriety. There are, however, state laws governing the behavior of city officials. At least three situations can impair the ability of mayors or councilmembers to properly perform their duties. All three involve conflicts of interest in which a member of the city council is placed in the position of owing loyalty to the interests of the city on one hand, and to some other interest on the other. The first situation occurs when a councilmember occupies two or more public offices at the same time. The second exists when the city council votes to take an action that will have a beneficial effect on a business or property in which a councilmember has a major interest. And the third exists in cases of nepotism, where hiring decisions are made on the basis of relationship. Each of these situations is described below. Dual Office-Holding Two or More Civil Offices Mayors and councilmembers are prohibited from holding more than one public office at the same time if both are “offices of emolument.” An emolument is a benefit that is received as compensation for services and includes salaries, fees of office, or other compensation—not including the re- imbursement of actual expenses. Therefore, a mayor or councilmember who receives a salary, fees for attending council meetings, or any other emoluments from the city, may not simultaneously serve as a district judge, state senator or representative, county clerk, or in any other local or state office of emolument. The only exceptions to this prohibition are found in Article XVI of the Texas Constitution, which allows certain state officers and employees to hold municipal offices of emolument and which permits a person holding an office of emolument to also serve as a justice of the peace, county commissioner, notary public, as an officer of a soil and water conservation district, or in other specific offices. Incompatibility Secondly, with respect to dual civil offices, mayors and councilmembers are prohibited from holding a second public office having duties and loyalties incompatible with those that must be performed as an officer of the city. This rule—which applies to all public offices, whether paid or unpaid—heeds the mandate that no person can serve two masters; full allegiance is required to one or the other. The general rule regarding incompatible offices was reviewed in Thomas v. Abernathy County Line I.S.D., in which the Texas Supreme Court held that the offices of city councilmember and school board member were incompatible 75 because if the same person could be a school trustee and a member of the city council or board of aldermen at the same time, school policies, in many important respects, would be subject to direction of the council or aldermen instead of the trustees. The incompatibility doctrine also prohibits the council from appointing one of its own members to a public office or employing the member as a public employee. A mayor, for example, could not simultaneously serve as a police officer for the city. Though it may be difficult at times to determine whether two offices or positions are incompatible, a misjudgment could be costly. The courts have held that when an individual who holds an office accepts and is sworn into a second office that conflicts with the first, the individual is deemed to have automatically resigned from the first office. City Actions that Benefit Mayors and Councilmembers City councils everywhere routinely make decisions on purchases, rezoning, utility extensions, road construction projects, and other matters that benefit various private interests. Because of the broad scope of the council’s powers, it is reasonable to expect that some of its decisions will directly or indirectly impact the individual members of the council making such decisions. Anticipating that potential conflicts of interest will inevitably arise at the local level, while acknowledging the practical impossibility of flatly prohibiting such conflicts, the Texas Legislature has enacted at least three statutory schemes that require the public disclosure of conflicts between the public interest and a councilmember’s private interests (Section 171.001 et seq., Section 176.001 et seq., Local Government Code; and Section 553.002 et seq., Government Code). The purpose of chapter 171, the conflicts of interest statute, is to prevent councilmembers and other local officials from using their positions for hidden personal gain. The law requires the filing of an affidavit by any councilmember whose private financial interests—or those of relatives— would be affected by an action of the council. Whenever any contract, zoning decision, or other matter is pending before the council, each councilmember must take the following steps: (a) Examine the pending matter and determine whether the councilmember or a related person has a substantial interest in the business or property that would be beneficially affected by a decision of the city council on the matter. A person has a substantial interest in a business entity if: 1) the person owns 10 percent or more of the voting stock or shares or of the fair market value of the business entity or owns $15,000 or more of the fair market value of the business entity; or 2) funds received by the person from the business entity exceed 10 percent of the person’s gross income for the previous year. A person has a substantial interest in real property if the interest is an 76 equitable or legal ownership with a fair market value of $2,500 or more. Additionally, a substantial interest of a person related in the first degree by either affinity or consanguinity to the local public official is a “substantial interest” that the official must disclose. (b) If the answer to (a) is “yes,” the councilmember must file an affidavit disclosing the nature of the interest in the matter and/or the nature of the substantial interest of a related person in such matter, if: 1) in the case of a substantial interest in a business entity, the action on the matter will have a special economic effect on the business entity that is distinguishable from the effect on the public; or 2) in the case of a substantial interest in real property, it is reasonably foreseeable that an action on the matter will have a special economic effect on the value of the property, distinguishable from its effect on the public. The affidavit must be filed with the official record keeper of the governmental entity. (c) After the councilmember files a disclosure affidavit, he or she must abstain from participating in the discussion of the matter and abstain from voting on it. However, if a local public official is required to file the affidavit and does file the affidavit, that official is not required to abstain in the matter if a majority of the governing body are also required to file and do file affidavits on the same official action. Pursuant to this statute, the city can purchase goods or services from a business in which a councilmember has a substantial interest if the councilmember files a disclosure affidavit and then abstains from discussing and voting on the decision regarding the purchase. The city council must take a separate vote on any budget item specifically dedicated to a contract with an entity in which a member of the governing body has a substantial interest, and the affected member must abstain from that separate vote. The member who has complied in abstaining in such vote may vote on a final budget only after the matter in which there was an interest has been resolved. An officer who knowingly violates the affidavit or abstention requirement commits a Class A misdemeanor which is punishable by confinement in jail for up to one year and a fine up to $4,000. Local Government Code Chapter 176, a second conflicts disclosure statute, requires that mayors, councilmembers, and certain other executive city officers or agents file a “conflicts disclosure statement” with a city’s records administrator within seven days of becoming aware of any of the following situations:  A city officer or the officer’s family member has an employment or business relationship that results in taxable income of more than $2,500 with a person who has contracted with the city or with whom the city is considering doing business. 77  A city officer or the officer’s family member receives and accepts one or more gifts with an aggregate value of $100 in the preceding 12 months from a person who conducts business or is being considered for business with the officer’s city.  A city officer has a family relationship with a person who conducts business or is being considered for business with the officer’s city. The chapter also requires a vendor who wishes to conduct business or be considered for business with a city to file a “conflict of interest questionnaire” if the vendor has a business relationship with the city and an employment or other relationship with an officer or officer’s family member, gives a gift to either, or has a family relationship with a city officer. An officer who knowingly fails to file the statement commits either a Class A, B, or C misdemeanor, depending on the amount of the contract. A third conflicts disclosure statute, Chapter 553 of the Government Code, prevents councilmembers and other local officials from using their positions for hidden personal gain related to the city’s purchase or condemnation of property in which the city official has a legal or equitable interest. Whenever a city is deciding whether to purchase or condemn a piece of property, the individual officer should determine whether they have a legal or equitable interest in property that is to be purchased or condemned. If the individual does have a legal or equitable interest in property in such a situation, then the individual needs to file an affidavit within 10 days before the date on which the property is to be acquired by purchase or condemnation. The affidavit is filed with the county clerk of the county in which the official resides as well as the county clerk of each county in which the property is located. The affidavit must include: (1) the name of the public servant; (2) the public servant’s office, public title, or job designation; (3) a full description of the property; (4) a full description of the nature, type, and amount of interest in the property, including the percentage of ownership interest; (5) the date the public servant acquired an interest in the property; (6) the following verification: “I swear that the information in this affidavit is personally known by me to be correct and contains the information required by Section 553.002, Government Code;” and (7) an acknowledgement of the same type required for recording a deed in the deed records of the county. A public official who violates the affidavit requirement after having notice of the purchase or condemnation commits a Class A misdemeanor, which is punishable by up to one year in jail and a fine up to $4,000. Nepotism “Nepotism” is the award of employment or appointment on the basis of kinship. The practice is contrary to sound public policy, which is why prohibitions against nepotism are common in all states, including Texas. The Texas nepotism statute, chapter 573 of the Government Code, forbids the city council from hiring any person who is related to a councilmember within the second degree by affinity or within the third degree by 78 consanguinity. This prohibition does not apply to a city with a population of 200 or less, or to relatives who were continuously employed by the city for: (1) at least 30 days, if the councilmember is appointed; or (2) at least six months, if the councilmember is elected. When a person is allowed to continue employment with the city because the person has been continuously employed for the requisite period of time, the city council member who is related shall not participate in the deliberation or voting on matters concerning employment if such action applies only to the particular person and is not taken with respect to a bona fide class or category of employees. The nepotism statute does not apply to unpaid positions. Since “affinity” and “consanguinity” are the controlling factors in determining nepotism, both terms need to be clearly understood. Affinity is kinship by marriage, as between a husband and wife, or between the husband and the blood relatives of the wife (or vice versa). Consanguinity is kinship by blood, as between a mother and child or sister and brother. Two persons are related to each other by affinity if they are married to each other or the spouse of one of the persons is related by consanguinity to the other person. The following relatives of a public official would fall within the prohibited first or second degree o f affinity. Relatives related within the first degree of affinity include a public official’s husband, wife, father-in-law, mother-in-law, sons-in-law, daughters-in-law, stepsons, and stepdaughters. Relatives related within the second degree of affinity include a public official’s sisters-in-law (brother’s spouse or spouse’s sister), brothers- in-law (sister’s spouse or spouse’s brother), spouse’s grandmothers, spouse’s grandfathers, spouse’s granddaughters, and spouse’s grandsons. Termination of a marriage by divorce or the death of a spouse terminates relationships by affinity created by that marriage unless a child of that marriage is living, in which case the marriage is treated as continuing to exist as long as a child of the marriage is living. Two persons are related to each other by consanguinity if one is a descendant of the other or if they share a common ancestor. Purchasing Government Code Section 2252.908 provides that, with certain exceptions: (1) a city is prohibited from entering into a contract with a business entity unless the business entity submits a disclosure of interested parties (i.e., discloses a person who has a controlling interest in the business or who actively participates in facilitating the contract for the business) if the contract: (a) requires an action or vote by the city council before the contract may be signed; or (b) the contract has a value of at least $1 million or (c) is for services that would require a person to register as a lobbyist; (2) the disclosure must be on a form prescribed by the Texas Ethics Commission; and (3) a city must, not later than 30 days after receiving a disclosure, acknowledge receipt of the disclosure with the Texas Ethics Commission. 79 Chapter Nine: Personal Liability of Councilmembers A legal concept known as “governmental immunity” protects cities from being sued or held liable for various torts (a tort is a wrongful act resulting in injury to a person or property) and causes of action. But there are some exceptions to this general rule. For example, Chapter 101 of the Texas Civil Practice and Remedies Code (also known as the Texas Tort Claims Act) provides that a city may be liable for damages arising from the use of publicly- owned vehicles, premises defects, and injuries arising from conditions or use of property. Thus, a city (as an entity) is sometimes liable for limited damages resulting from the actions of city officials and employees. But what about mayors and councilmembers? Mayors and councilmembers across the state daily make decisions that impact the lives and property of thousands of people. Can these city officials be held personally responsible for damages resulting from decisions they make (or refuse to make) in their official capacity as members of the city’s governing body? In most instances, mayors and councilmembers will not face personal liability. Like the city itself, mayors and councilmembers are often protected by different types of immunity, the purpose of which is to allow them to make decisions in the public interest with confidence and without fear. However, immunity is not available in all instances. For that reason, it is important for mayors and councilmembers to have a basic understanding of the areas in which they face potential liability. Liability Under State Law We start by examining a civil tort suit, a common instance in which the issue of the personal liability of a mayor or councilmember may arise. Generally speaking, Texas courts have held that mayors and councilmembers are not personally liable when the suit arises from the performance of (1) discretionary acts (2) taken in good faith (3) within the scope of their authority. When a mayor or councilmember is protected in this way, it is commonly referred to as official immunity. A “discretionary act” involves personal judgment. The decision about where to place a traffic sign is one example of a discretionary act. An action taken in good faith is one that is taken without intent to do harm. Thus, councilmembers should ensure that discretionary actions are taken in good faith and pursuant to their authority as authorized by relevant state law, ordinances, or policies. Again, generally speaking, mayors and councilmembers may be held personally liable for torts that arise from ministerial acts. A “ministerial act” is one performed as a matter of duty; an act which a mayor or councilmember must perform. Ministerial acts also include those performed in obedience to state law or federal laws which are so plain and explicit that nothing is left to discretion or judgment. For example, canvassing the results of a city election is a ministerial and non- discretionary duty. An improper ministerial act imperils a councilmember regardless of whether it is performed in good faith. A 80 ministerial act required by law, but that is not performed at all, could also lead to liability. In sum, a mayor or councilmember could potentially be individually liable for damages to individuals injured because of the failure to properly perform a ministerial duty or negligently failing to perform the duty at all. Personal liability of most city officials is capped at $100,000 for actions brought in state court under the Texas Tort Claims Act. Additionally, until recently, a mayor or councilmember could not be held personally liable for sexual harassment. In 2021, the Texas Legislature adopted Senate Bill 45, which expanded the definition of “employer” to include “any person who acts directly in the interests of an employer in relation to an employee.” Under this new definition, it is possible that elected officials may be subject to individual liability for sexual harassment if they: (1) know or should have known that the conduct constituting sexual harassment was occurring; and (2) fail to take immediate and appropriate corrective action. In addition to personal civil liability, a mayor of councilmember fulfilling his or her duties for the city may be subject to criminal liability as the result of a violation of certain state laws. Some of the most common state laws under which a councilmember may face criminal liability include the Open Meetings Act, the Public Information Act, conflicts of interest and financial disclosure laws, purchasing laws, and nepotism laws. In addition, prohibitions found in the Texas Penal Code may be implicated as a result of serving as a mayor or councilmember, including laws dealing with bribery, gifts, honorariums, falsification of government documents, the misuse of information, abuse of official capacity, official oppression, forgery, and theft. Finally, as an elected official, mayors and councilmembers may face both civil and criminal liability for failure to comply with certain state laws, such as those governing political contributions, political advertising, and campaign contributions. Liability Under Federal Law A mayor or councilmember may also face personal liability for violations of a person’s rights under federal law. This usually occurs: (1) as the result of claims alleging violations of constitutional rights; or (2) in an employment context (e.g., a claim brought under the Fair Labor Standards Act or the Family Medical Leave Act). The law customarily used to take action against city officials for violations of constitutional rights or violations of federal law is Section 1983, Title 42, of the United States Code. It provides: Every person who, under color any statute, ordinance, regulation, custom, or usage, of any State . . . .subjects, or causes to be subjected, any citizen of the United states or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured . . . . Various types of policy decisions related to both city employees and citizens could render a mayor or councilmember liable under Section 1983. However, city officials are usually protected by qualified immunity. 81 Similar to the official immunity defense under state law (described above), a mayor or councilmember may be protected by qualified immunity when sued under federal law. To be covered by qualified immunity, the official must show that the action taken: (1) was discretionary; (2) was within the official’s authority to take; and (3) did not violate any clearly established statutory or constitutional right of which a reasonable person would have known. It is rare that a mayor or councilmember is held personally liable under federal law for the decisions he or she makes as a member of the governing body. Even so, city officials should make sure that they have a reasonable basis for decisions made, and that applicable state and federal law is reviewed before those decisions are made, especially when those decisions impact specific individuals. In sum, liability questions are notoriously fact- sensitive. The advice of the city attorney should always be sought in regard to any specific liability question. 82 Chapter Ten: Sources of Information There is no comprehensive guide to everything there is to know about Texas cities, but there are many sources of information that can be helpful. Several are listed below. Local Sources Depending on the amount of time available, information on the finances, services, and other aspects of the city can be obtained by:  Reading the city’s code of ordinances;  Reviewing the minutes of council meetings held during the past several months;  Studying the current budget, the previous year’s financial report, and other key financial documents;  Visiting the various city departments to learn how the city conducts its day-to- day operations; and  Conferring with past and present members of the council, the local newspaper editor, civic leaders, and others who have followed the city’s affairs over the years. Texas Municipal League The Texas Municipal League is an association of cities that exists for one reason: to serve city officials. TML offers councilmembers and other city officials a broad range of services – including training seminars and conferences, technical assistance, legal advice, and many other services. The League office welcomes all inquiries from its member officials, no matter how ordinary or unusual. The League is also willing to assist members of the press in understanding cities. National Resources American Planning Association, 1030 15th Street N.W., Suite 750 West, Washington, D.C. 20005, 202-872-0611. Major publications: Planning, Journal of the APA, and Zoning Practice. APA also publishes a number of guides to zoning, subdivision development, and other aspects of municipal planning. www.planning.org American Public Works Association, 1200 Main Street, Suite 1400, Kansas City, Missouri 64105-2100, 816-472-6100. Monthly publication: APWA Reporter. APWA also publishes several public works-related manuals. www.apwa.net American Society for Public Administration, 1730 Rhode Island Ave. NW, Suite 500, Washington, D.C. 20036, 202-393-7878. Bi- Monthly publication: Public Administration Review features articles for councilmembers interested in municipal administrative and organizational processes and theory. Public Integrity, published bimonthly, addresses ethical issues affecting government and society. ASPA’s quarterly newspaper, PA TIMES, covers developments in the academic and professional field of public administration. www.aspanet.org Government Finance Officers Association, 203 N. LaSalle St., Suite 2700, Chicago, Illinois 60601-1210, 312-977-9700. Major publications 83 include the weekly GFOA Newsletter and bimonthly Government Finance Review. GFOA also publishes a wealth of excellent operating manuals on the topics of budgeting, debt management, financial forecasting, and related items. www.gfoa.org International Association of Chiefs of Police, 44 Canal Center Plaza, Suite 200, Alexandria, Virginia 22314, 703-836-6767. Major Publication: monthly Police Chiefs Magazine. www.theiacp.org International Association of Fire Chiefs, 4795 Meadow Wood Lane, Suite 100, Chantilly, Virginia 20151, 703-273-0911. Major publication: On Scene newsletter. www.iafc.org International City/County Management Association (ICMA), 777 North Capitol St. N.E., Suite 500, Washington, D.C. 20002-4201, 202- 962-3680. Major publication: Public Management. Other publications: LGR: Local Government Review (biannual); SmartBrief (daily newsletter); and Leadership Matters (weekly newsletter). ICMA also publishes a series of manuals on different aspects of city government. www.icma.org International Institute of Municipal Clerks, 8331 Utica Ave., Suite 200, Rancho Cucamonga, California 91730, 909-944-4162. Major Publications: IIMC News Digest, Consent Agendas, IIMC Meeting Administration Handbook, and Language of Local Government. IIMC provides training and information to city clerks and city secretaries. www. iimc.com International Municipal Lawyers Association, 51 Monroe Street, Suite 404, Rockville, MD 20850 202-466-5424. Bimonthly publication: Municipal Lawyer. IMLA also publishes a variety of documents of special interest to city attorneys. www.imla.org International Public Management Association for Human Resources, 1617 Duke St., Alexandria, Virginia 22314, 703-549-7100. Major publications: Public Personnel Management, HR News, and HR Bulletin. IPMA-HR is a source of excellent information on productivity, employee performance appraisal, and other aspects of municipal personnel administration. www.ipma-hr.org National Association of Towns and Townships, 1901 Pennsylvania Avenue, NW, Suite 700, Washington, D.C., 20006, 202-331-8500. Major Publication: Weekly Updates. NATaT offers technical assistance, educational services, and public policy support to local government officials from small communities. www.natat.org National Civic League, 190 E. 9th Ave, Suite 200, Denver, Colorado 80203, 303-571-4343. Major Publication: National Civic Review. NCL serves as a resource for information on citizen participation in state and local government and provides guides, model charters, and laws on specific subjects. NCL also sponsors the All- America City Award. www.ncl.org National League of Cities, 660 North Capitol St. NW, Washington, D.C. 20001, 1-877-827-2385. Major Publication: Cities Speak Blog. Additionally, the organization conducts two national conventions of city officials, the first of which focuses on city-related federal programs, while the second emphasizes methods of improving municipal operations. www.nlc.org U.S. Conference of Mayors, 1620 I Street N.W., Washington, D.C. 20006, 202-293-7330. USCM provides current information on federal policy 84 developments of interest to cities over the population of 30,000. www.usmayors.org Duties of Council The Town Council is the governing body for the Town of Westlake and must bear responsibility for the integrity of governance. The Town Council will govern the Town in a manner associated with a commitment to the preservation of the values and integrity of representative local government and democracy, and a dedication to the promotion of efficient and effective governing. The following statements will serve as a guide and acknowledge the commitment being made in this service to the community: 1. The Council has as high priorities, the continual improvement of the member’s professional ability and the promotion of an atmosphere conducive to the fair exchange of ideas and policies among members. 2. In its governance role, the Council will continue to be dedicated to friendly and courteous relationships with staff, other Councilmembers, and the public, and seek to improve the quality and image of public service. 3. The Council will also strive to recognize its responsibility to future generations by addressing the interrelatedness of the social, cultural, and physical characteristics of the community when making policies. 4. Each Councilmember will make a commitment to improve the quality of life for the individual and the community, and to be dedicated to the faithful stewardship of the public trust. Town Manager Sec. 26-57. - Governing body. (a) The board of aldermen, as the governing body of the town, shall have such authority as is consistent with state law, and the ordinances of the town, to initiate, undertake, and decide all legislative matters pertaining to the regulation of the use and development of land, which is the subject of the Unified Development Code, including but not limited to enactment or amendment of UDC provisions; approval, disapproval or modification of amendments to the zoning map; and authorization of planned developments and specific use permits. (b) If authorized in the UDC, the board of aldermen shall also have the authority to review and decide appeals from decisions of the commissions, boards, and administrative officers, or exceptions to the UDC otherwise authorized by these regulations in accordance with the procedures established in the UDC. (c) The board of aldermen shall appoint the Town Manager, who in turn, shall be held responsible to the board of aldermen for the execution of the laws and the administration of the government of the town. (UDC 1994, art. II, § 1; Ord. No. 512, § 9, 4-23-2007) Sec. 26-57.1. - Town manager. (a) Appointment and qualifications. The board of aldermen shall appoint a town manager who shall be the chief administrative officer of the town, and shall be responsible to the board of aldermen for the administration of all the affairs of the town. The town manager shall be chosen by the board of aldermen solely on the basis of his or her executive and administrative training, experience and ability; and need not, when appointed, be a resident of the Town of Westlake. No member of the board of aldermen shall, during the time for which he or she is elected, and for one year thereafter, be appointed town manager. (b) Term and salary. The town manager shall receive compensation as may be fixed by the board of aldermen. The board of aldermen may enter into agreement establishing a term of service. The town manager may be removed at the will and pleasure of the board of aldermen by a vote of the majority of the entire board. The action of the board of aldermen in suspending or removing the town manager shall be final, it being the intention of this section to vest all authority and fix all responsibility of such suspension or removal, in the board of aldermen. (c) Duties of the town manager. (1) Appoint and remove any employee of the town, except as otherwise provided by this section. (2) Prepare the budget annually and submit it to the board of aldermen, and be responsible for its administration after adoption. (3) Prepare and submit to the board of aldermen in the annual proposed budget, a complete report on the finances and administrative activities of the town for the preceding year. (4) Keep the board of aldermen advised of the financial condition and future needs of the town and make such recommendations as may seem desirable to the board. (5) Perform such duties as may be prescribed or may be required of him or her by the board of aldermen, not inconsistent with this section. (6) Attend all meetings of the board of aldermen, except at the request of the board during executive sessions when the town manager is under discussion. He or she shall be notified of all special meetings of the board. (Ord. No. 512, § 9, 4-23-2007) State law reference— Appointment of City Manager, V.T.C.A., Local Government Code §§ 25.026, 25.027, 25.028, 25.029, 25.051. Sec. 26-57.2. - Board of aldermen not to interfere in appointments. Neither the board of aldermen, nor any of its members, shall direct the appointment of any person to office by the town manager, or by any of his subordinates. Except for the purpose of inquiry, the board of aldermen and its members shall deal with the administrative services through the town manager, and neither the board of aldermen, nor any member thereof, shall give orders to any subordinate of the town manager, either publicly or privately. (Ord. No. 512, § 9, 4-23-2007) What it is, how it works, and the benefits to your community Council-Manager Form of Government INTERNATIONAL CITY/COUNTY MANAGEMENT ASSOCIATION 777 N. Capitol St NE, Ste. 500, Washington, DC 20002 202.962.3680 | 202.962.3500 (f) | icma.org THE ROLE OF THE MAYOR OR CHIEF ELECTED OFFICIAL Typically, the mayor or board chairperson in a council- manager community is a voting member of the governing body who may be either directly elected, as in 69 percent of council-manager communities, or who is selected by and from among their colleagues on the governing body. The mayor or chairperson is the public face of the community who presides at meetings, assigns agenda items to committees, facilitates communication and understanding between elected and appointed officials, and assists the governing body in setting goals and advocating policy decisions. THE ROLE OF ELECTED OFFICIALS Under the council-manager form, the elected officials (e.g. the council or board) are the legislative body and the community’s policy makers. Power is centralized in this body, which approves the budget and adopts local laws and regulations, for example. The elected officials also focus on the community’s big-picture goals, such as community growth and sustainability. The elected officials hire a professional city, town, or county manager based on that person’s education, experience, skills, and abilities and NOT on their political allegiances. The elected officials supervise the manager’s performance, and if that person is not responsive and effective in their role, the elected officials have the authority to remove her or him at any time. THE MANAGER’S ROLE The manager is an at-will employee who can be fired by a majority of the elected officials, consistent with local laws or any employment agreements. This person • • Prepares a budget for the governing body’s consideration. • • Recruits, hires, supervises, and terminates government staff. • • Serves as the governing body’s chief advisor by providing complete and objective information about local operations, discussing options, offering an assessment of the long-term consequences of decisions, and making policy recommendations. • • Carries out the policies established by the governing body. WHAT ROLE DO RESIDENTS PLAY? Under council-manager government, local governments often actively engage and involve their residents in community decision making. Residents can guide their community by serving on boards and commissions, participating in visioning and strategic planning sessions, and designing community- oriented local government services. Key Roles in Council-Manager Government For more information, contact icma.org/contactus @ICMA ICMAorg To lean more about professional local government management, visit icma.org/professional-local-government-management City of Tampa, Florida City of Cedar Park, Texas What is the council-manager form of government? The council-manager form is the most popular structure of government in the United States among municipalities with populations of 2,500 or more. It is one of several ways in which U.S. municipalities and counties can organize. Under this form, residents elect a governing body— including a chief elected official, such as a mayor or board chairperson—to adopt legislation and set policy. The governing body then hires a manager or administrator with broad executive authority to carry out those policies and oversee the local government’s day-to-day operations. What’s so special about the council-manager form of government? Born out of the U.S. progressive reform movement at the turn of the 20th century, the council-manager form was created to combat corruption and unethical activity within local government by promoting nonpolitical management that is effective, transparent, responsive, and accountable. The council-manager form of government recognizes the critical role of elected officials as policy makers, who focus on mapping out a collective vision for the community and establishing the policies that govern it. The form also recognizes the need for a highly-qualified individual who is devoted exclusively to the delivery of services to residents. Think about the structure used by many corporations, in which the board of directors hires an experienced CEO, who is granted broad, executive authority to run the organization. While these boards establish the company’s overall policy direction, the CEO oversees implementation of that policy. What types of communities use the council-manager form of government? Today more than 120 million people in the U.S. live in municipalities that operate under the council-manager form. Fifty-four percent of the more than 4,300 U.S. municipalities with populations of 10,000 or more use the form, as do 59 percent of the 347 municipalities with populations greater than 100,000. More than 800 counties also employ a similar system. How can council-manager government benefit my community? • • Flexibility—The council-manager form can adapt to local needs and demands. While governing bodies in some council-manager communities are elected at large, for example, others are elected by district or by a combination of an at-large-and-by-district system to respond to local needs. • • Clearly Defined Roles—Under the council-manager form, there is a clear distinction between the administrative role of the manager and the political and policy roles of the governing body, lead by the mayor. The day-to-day operations of the local government organization reside with the appointed manager, allowing elected officials to devote their time and energy to policy development and the assessment of the effectiveness of those policies within the community. • • A Roadmap for Success—The council-manager form is the system of local government under which professional management is most likely to succeed. Under this system, professional managers can focus on service delivery, policy implementation, and performance management and can align the local government’s services with the values, mission, and policy goals defined by the community and elected officials. How do we know that council-manager government works? • • The Equipt to Innovate Initiative—a framework of seven essential elements that define high-performance government and empower innovation—found in 2017 that top-performing cities in all but one element employed the council-manager form of government. In 2018, the study’s overall top performer was also council-manager. VOTERS GOVERNING BODY MANAGER DEPARTMENT HEADS The Council-Manager Form • • Two-thirds of Moody’s Aaa-bond-rated communities are run by professional local government managers, and many operate under the council-manager form of government. • • An IBM Global Business Services report titled “Smarter, Faster, Cheaper” found that cities that operate under the council-manager form of government are nearly 10 percent more efficient than those that operate under the mayor-council form. • • The National Civic League, America's oldest advocate for community democracy, has endorsed council-manager government through its Model City Charter since 1915. • • The majority of communities recognized since 2013 with the National Civic League’s coveted All-America City Award have been council-manager. Does it cost more for a community to adopt the council-manager form and hire a professional manager? Many local governments have reduced their overall costs after hiring a professional manager. Savings can come from decreased operating costs, increased efficiency and productivity, improved revenue collection, and effective use of technology. The economic health of the community may also benefit from the implementation of improved business development and retention strategies. How can my community adopt the council-manager form of government? Methods vary from state to state, but most communities can adopt council-manager government through a charter, local ordinance, state enabling law, or by voter referendum. For information on how your community can adopt council- manager government, contact your state municipal league, state and local government association, or association of counties. You can find contact information for these organizations at icma.org/state-localgovassns or ncl.org/ state-municipal-leagues. Once my community adopts council-manager government, how do we hire a professional manager? The vacancy is often announced in Leadership Matters, ICMA’s weekly e-newsletter; through the ICMA Job Center at icma.org/job-center; and through state league publications, and qualified candidates are invited to apply. Elected officials may also hire an executive recruitment firm to assist them with the selection process. Interested parties may apply directly to the governing body or to the recruitment firm, which reviews the applications and interviews qualified candidates. ICMA makes no recommendations regarding candidates. Additional information on hiring a professional local government manager is available in ICMA’s Recruitment Guidelines Handbook. Visit icma.org/documents/recruitment- guidelines to download a copy. What kind of educational and on-the-job experience do professional local government managers generally have? Sixty-five percent of managers surveyed by ICMA indicated that they had earned a master’s (usually in public administration, business, or public policy), or other advanced degree. Survey respondents also said that they had spent an average of more than 20 years working in the local government management profession. What is ICMA and why is membership in that organization important? ICMA, the International City/County Management Association, is the professional and educational “home” for more than 12,000 appointed managers and administrators serving cities, towns, counties, other local governments, and regional entities in 40 countries throughout the world. In addition to gaining access to valuable resources and lifelong professional development opportunities, appointed local government managers who are members of ICMA are bound by its Code of Ethics, which commits members to a set of ethical standards of honesty and integrity that go beyond those required by the law. This stringently enforced code specifies 12 ethical principles of personal and professional conduct, including dedication to good government. For more information, visit icma.org/ethics. Finally, through its Voluntary Credentialing Program, ICMA recognizes individual members who are qualified by a combination of education and experience, adherence to high standards of integrity, and an assessed commitment to lifelong learning and professional development. ICMA members who meet these requirements may earn designation as an ICMA Credentialed Manager. For more information on ICMA’s Voluntary Credentialing Program, visit icma.org/ voluntary-credentialing-program-overview. Communication with Staff Interference in administrative matters. Neither the Council nor any of its members shall direct or request the Town Manager or any of his/her subordinates to appoint or to remove from office or employment any person except a person whose office is filled by appointment of the Council. Except for the purpose of inquiry and investigation, the Council and its members shall deal with the administrative services of the Town solely through the Town Manager; and neither the Council nor any member thereof shall give orders to any subordinate of the Town Manager, either publicly or privately. Responsibilities of Councilmembers Mayoral Responsibilities The Mayor occupies the highest elected office in the municipal government. As a political head of the Town, the Mayor is expected to provide the leadership necessary to keep it moving in the proper direction.  The Mayor is the presiding officer at all meetings. The Mayor Pro-Tem will preside in his/her absence.  The Mayor only votes in the event of a tie.  The Mayor will preserve order and decorum and will require Councilmembers engaged in debate to limit discussion to the question under consideration.  The Mayor is the spokesperson for the Council on all matters unless, absent, at which time his/her designee will assume the role.  The Mayor will encourage all Councilmembers to participate in Council discussion and give each member an opportunity to speak before any member can speak again on the same subject.  The Mayor is responsible for keeping the meetings orderly by recognizing each member for discussion, limiting speaking time, encouraging debate among members and keeping discussion on the agenda item being considered.  The Mayor, when authorized by the Council, will sign all official documents such as ordinances, resolutions, conveyances, grant agreements, official plats, contracts, and bonds.  The Mayor will perform other duties consistent with State law, Town Ordinances, or as may be imposed on him/her by Council. Mayor Pro-Tem Responsibilities The Mayor Pro-Tem is a Councilmember appointed by the Mayor at the first regular Town Council meeting following each Town election or runoff election, if needed. The Mayor Pro-Tem will act as Mayor during the disability or absence of the Mayor or if the office is vacated and in this capacity, and will have the rights conferred upon the Mayor. Councilmember Responsibilities Councilmembers are the Town’s legislators. Their primary duty is policymaking, which includes identifying the needs of local residents, formulating programs to meet the changing requirements of the community, and measuring the effectiveness of ongoing municipal services. Every Councilmember is entitled to vote or abstain, in the case of a conflict of interest, on every question decided at the Council meeting, and has full parliamentary privileges in Council meetings, including the right to speak and make motions when recognized by the Mayor. Where Council Activities Occur Majority of Council A majority of Council is 3 Councilmembers, the Mayor is not included in the count of members for quorum. A quorum of Council must be present at any meeting in order for any posted meeting to begin and/or take action. A majority of Council is also required to pass all Town Ordinances. The Mayor does not vote, only in the case of a tie. Regular Council Meetings The Mayor and Town Council have regular Town Council meetings on the first and fourth Monday of each month (or as identified on the Adopted Town and Academic Calendars) at 5:00 p.m. in the Town Hall Council Chambers, located at 1500 Solana Boulevard, Westlake, Texas; unless otherwise adopted by a majority of Town Council. All meetings are open to the public unless specified as an Executive Session. A quorum is required A written agenda notice of Council meetings is required by law, to be posted 72 hours in advance of the Council meeting including the date, hour, location, and subject of meeting. Special Meetings and Emergency Meeting Special Meetings and Emergency Meetings may be necessitated from time to time. At least two (2) hours notice is required for a special meeting in the case of an “emergency or urgent public necessity,” the nature of which must be stated in the notice. Executive Sessions The Council may recess to an executive session for any purpose permitted by State law. The general subject matter for consideration will be expressed in the agenda or the motion calling for the session. Final action will not be taken by Council until the matter is placed on the agenda and a vote taken in an open meeting. Executive sessions are typically held on the 2nd Floor Conference Room. A governing body may generally hold a closed meeting for one or more of the following nine reasons:  Consideration of specific personnel matters – Texas Government Code (TGC) 551.074  Certain consultations with its attorney – TGC 551.071  Discussions about the value or transfer of real property – TGC 551.072  Discussions about security personnel, security devices, or a security audit – TGC 551.076  Discussions about a prospective gift or donation to a governmental body  Discussions by a governing body of potential items on tests that the governing body conducts for purposes of licensing individuals to engage in an activity – TGC 551.088  Discussions of certain economic development matters – TGC 551.087  Discussions of certain competitive matters relating to a Town owned electric or gas utility for which the Town Council is the governing body – TGC 551.086  Certain information relating to the subject of emergencies and disasters – TGC 418.183(f) Town Council Mail Process The Town Secretary’s Office receives and processes the Town Council’s incoming mail. All mail will be stamped with the received date and distributed in corresponding boxes located in the Town Secretary’s Office. Town Council mail is not opened and reviewed unless the Councilmember so requests. Councilmembers are welcome to pick up mail at Town Hall. Mail will be distributed to members of Council at each regular Council Meeting. Council Tablets and Email All Town Councilmembers are supplied tablets by the Town to use during Council meetings for their term duration. Councilmembers are also issued a Town email address to use while in office to communicate with the public and staff. Please keep in mind that all information on assigned computers and within the Town’s network are subject to the Public Information Act. Town Email Address: If you have any problems accessing your email please contact the Town Manager’s Office for assistance. 123 SMTWThFSa SMTWThFSa SMTWThFSa 1 12345 12345 2345678 67 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 456 SMTWThFSa SMTWThFSa SMTWThFSa 12 1234567 1234 3 4 56789 89 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 789 SMTWThFSa SMTWThFSa SMTWThFSa 12 123456 123 3 4 56789 78 9 10111213 4 5 678910 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19 20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 10 11 12 SMTWThFSa SMTWThFSa SMTWThFSa 1 12345 123 2 3 45678 67 8 9 10 11 12 4 5 678910 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 * 10/10 School Holiday Town Council Municipal Holiday Budget/Meeting Retreats New Council Orientation Academic Holiday Planning & Zoning Election Day/Special Municipal & Academic Holiday First/Last Day of School Meeting to Canvass 1/03: Academic Holiday 6/16: TC Governance/Budget Retreat - All Day 1/10: TC to call the election (2/18 too late)8/08: Adopt Academic Budget 3/14-18: Spring Break 8/17: First Day of School 5/07: Election Day 8/29: TC Meeting to approve max tax rate 5/16: Canvass if Election is held (5/19 too late)and set Public Hearing date 5/18: TC Orientation (if necessary)9/12: Public Hearing, adopt Muncipal Budget, and 5/26: Last Day of School vote on Tax Rate 5/28: Academy Commencement 10/10: Academic Holiday 2022 Meeting Schedule Town of Westlake July 2022 April 2022 May 2022 June 2022 August 2022 November 2022 September 2022 March 2022February 2022January 2022 October 2022 December 2022 Resolution WA 22-01 Page 3 of 3 TOWN’S MUNICIPAL BUDGET CALENDAR FOR FISCAL YEAR 2022-2023 *Calendar dates subject to change based on hiring of new Finance Mgr. APRIL MAY JUNE JULY AUGUST SEPTEMBER S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 April –  04/11/22 – Finance to send Dept Head YTD data and other forms  04/12/22 – DH Budget Kickoff (CY Amendments, Budget Calendar, Employee 5 YR Forecast, SLA form and Instructions ; No payroll entries in STW by DH , please & thank you)  04/13/22 to 04/27/22– Fin. Mgr. and DH individual meetings to discuss one -time expenses/revenues and SLAs.  04/18/22 – Deadline for 5 YR Personnel Forecast to Finance May –  05/02/22 – Deadline for a ll department s’ one-time & SLAs in STW  05/13/22 – DH Roundtable with the 5 YR Forecast (All Funds)  05/20/22 – REV02 OPEN for Dept Head editing (any changes noted from Roundtable) June –  06/16/22 – TC/BOT Budget Retreat; Location TBD (possibly hold for 2 days through June 17) June –  06/24/22 – REV03 OPEN for D H editing (Any changes from retreat) July –  07/01/2022 – Deadline for Dept Goals and Objectives to Finance  07/08/2022 – CY (FY22) Budget Amendment s finalized by DH  07/25/22 TO 08/22/22 – Receipt of Property Tax certified rolls, completion of TNT calculations, & preparation of tax rate recommendations and notifications August – **WA Budget Adoption on August 8, 2022  08/29/22 - TC Budget Workshop (to include Water Rate Study)  08/30/22 – REV04 Open (Any changes noted from Workshop September –  09/12/22 – Town Council to Adopt the Budget & Tax Rate; Public Hearing (Agenda Packet out 9/9/22) BUDGET PHASES PLANNING PREPARATION LEGISLATIVE APPROVAL TOWN’S ACADEMIC BUDGET CALENDAR FOR FISCAL YEAR 2022-2023 MARCH APRIL MAY JUNE JULY AUGUST S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 9 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 March –  03/11/22 – Finance to send campus leadership budget recap, YTD data, budget forms & budget calendar  03/14-18/22 – WA Spring Break  03/22/22 - Campus Leadership Budget Kickoff w/ 1st Roundtable (CY budget review & amendments, budget process /forms review, account coding structure, revenue projections )  03/29/22 – Program meetings w/ Principals , Exec Dir & Finance April –  04/08/22 – SLAs due to Finance  04/11/22 – Principals Mtg w/ Exec Dir & Finance (Review of Current budget, SLAs, FTEs)  04/26/22 – Campus Leadership 2nd Roundtable (CY budget review and amendments, SLAs, 5-yr forecast, data assignments) May –  05/16/22– Finance to send draft of budget to Campus L eadership, Exec Dir, Supt  05/27/22 – Deadline for any changes in FTEs  05/27/22 – Deadline to receive final student count June –  06/16/22 – TC/BOT Budget Retreat; Location TBD (possibly for 2 days through June 17) July –  07/18/22 – Final review of CY budget amendments and proposed budget by Supt/Exec Dir/Finance/HR August –  08/08/22 – WA Budget Adoption and Public Hearing (Agenda packet out by 8/5/22) September – *Municipal Budget Adoption on 09/12/22 BUDGET PHASES PLANNING PREPARATION LEGISLATIVE APPROVAL A board of trustees of a school district may not convene in executive session for a termination hearing of a teacher when the teacher specifically requests that the hearing be open to the public pursuant to the Open Meetings Act. 4. Correct answers: b & c. While the Open Meetings Act protects the certified agenda or tape reco rd- ing of an executive session, it does not prohibit discussions outside of the meeting. Of course, other problems may arise if a councilmember does so. Opinion No. JM-1071 (July 11, 1989) Re: Whether the "certified agenda" provision of the Open Meetings Act, article 6252-17, V.T. C.S., unduly restricts speech rights of members of governmental bodies The Texas Open Meetings Act applies to the certified agenda or tape recording kept as a record of an executive ses- sion. It does not prohibit members of a governmental body or other persons in attendance at an executive session from mak- ing public statements about the subject matter of that session. 5. Correct answer: b. This question is based on an actual request that was received by the City of Arlington. In response to the request and in view of the terrorist attacks of September 11 , the Texas Legislature in 2003 passe d House Bill 9, a comprehensive Texas homeland security bill. Among many other things, the bill provides for the confidentiality under the Texas Public Information Act of various critical infrastructure and homeland security infor- mation, including information collected, assembled, or maintained by or for a governmental entity for the purpose of preventing, detecting, responding to, or investigating an act of terrorism or related criminal activity and that: a . relates to the staffing requirements of an emergency response provider, including a law enforcement agency, a fire-fighting agency, or an emergency ser- vtces agency. b. relates to a tactical plan. c. consists of a list or compilation of pager or tele- phone numbers, including mobile and cellular tele- phone numbers of certain emergency personnel. d . relates to an assessment by or for a governmental entity of the risk or vulnerability of persons or property, including critical infrastructure, to an act of terrorism or related criminal activity. e. is more than likely to assist in the construction or assembly of an explosive weapon or a chemical, biological, radiological, or nuclear weapon of mass destructi9n. WE CAN HElP YOU SUCCEED. You've got empty chairs. You've got budget constraints. You've tried conducting executive recruitments in-house, but without results . JANUARY 2010 • T EX A S T 0 W N & C I T Y 15 L-1 TEXAS PUBLIC INFORMATION ACT LAWS MADE EASY 2021 Editor Will Trevino Legal Counsel Texas Municipal League www.tml.org Updated January 2022 I. Application of the Public Information Act ........................ 1 1. What types of information are subject to the Public Information Act? ............. 1 2. What types of entities are subject to the Public Information Act? .................... 2 3. Are there certain entities that are excluded from the definition of “governmental body” under the Act? ....................................................................................... 3 4. Are the records of an entity that receives public funds subject to the Public Information Act? .............................................................................................. 4 5. Are records that are kept or owned by a consultant on behalf of a city subject to the Public Information Act? ......................................................................... 4 6. Are court records subject to the Public Information Act? ................................. 4 7. Do members of city council have a special right of access to the city’s records? ........................................................................................................................ 5 II. What Constitutes a Public Information Request .............. 6 8. How may a person make a written request for public information? ................. 6 9. May a city designate a mailing address or an e-mail address that a request for public information must be sent to in order for the request to be considered received by the city? ....................................................................................... 7 10. How does a city approve other appropriate methods for receiving a request for public information? .......................................................................................... 7 11. Is the office of the attorney general required to create a PIA request form? ... 7 12. Is a city required to allow requestors to use the OAG’s PIA request form? ..... 8 13. Is a city required to respond to verbal requests for copies of records? ........... 8 III. Administration of Public Information Requests .............. 8 A. Timing Issues under the Public Information Act ........................... 8 14. How much time does a city generally have to release requested information?8 15. What happens if after informing the requestor that the PIA request has been completed, and the requestor fails to inspect, pick up, or pay postage and other fees? ............................................................................................................... 9 16. What are the deadlines to take a particular action when handling a public information request? ....................................................................................... 9 17. What can a city do if it is unclear about what information is being requested or that the scope of the information is unduly broad? ........................................ 11 18. When is a city required to ask for an open records letter ruling from the attorney general? ........................................................................................................ 12 19. Can a city request an attorney general ruling when the city has determined the requested information is not subject to one of the Act’s exceptions? ............ 13 20. Can a city withhold information that is the subject of a previous determination? ...................................................................................................................... 13 21. Can a city withhold information without asking for an open record letter ruling? ...................................................................................................................... 14 22. What must a city do if it wants to request an open records letter ruling? ...... 14 23. How does a city calculate business days? .................................................... 16 24. How long does the attorney general have to respond to a request for an open records letter ruling? ..................................................................................... 17 25. Can a city take longer than 15 business days to determine whether the requested information is confidential if the request is for an excessive amount of information? .............................................................................................. 17 26. May a city seek a reconsideration of an open records letter ruling that is issued by the attorney general? ............................................................................... 17 B. Public Information Requests During a Catastrophe ................... 18 27. May a city temporarily suspend the requirements of the Act during a disaster? ...................................................................................................................... 18 28. What is the city required to do if it elects to suspend the Act because it has been impacted by a catastrophe? ................................................................. 18 29. For how long can the requirements of the Act be suspended? ..................... 19 30. What happens to requests for public information that are received before or during a suspension period(s)? ..................................................................... 20 31. What is the city required to do if the city decides to extend the initial suspension period? .......................................................................................................... 20 32. How does the city submit the catastrophe notice forms to the attorney general’s office? ........................................................................................................... 20 33. Is the attorney general’s office required to post these catastrophe forms on its website? ........................................................................................................ 21 34. If the offices are closed, working with a skeleton crew, or working remotely, does the city have to fill out a catastrophe notice form and submit it to the attorney general’s office? .............................................................................. 21 C. Rights and Duties of the Governmental Body and of the Public Information Requestor .................................................................. 21 35. Is a city required to post information regarding the Public Information Act? .. 21 36. What inquiries can a city make of a public information requestor? ................ 21 37. Does the name and address of an individual who requests public information become public information? .......................................................................... 22 38. Can a requestor choose the format (paper, computer disc, etc.) in which the city must provide requested information? ...................................................... 22 39. Is a city required to create a record if none exists? ....................................... 22 40. Does a city have to comply with standing requests for information? ............. 23 41. Is a city required to compile statistics, perform research, or provide answers to questions in response to a PIA request? ....................................................... 23 42. Is a city required to locate information that is not organized or retrievable by the type of information that is requested? ..................................................... 23 43. Must a city buy new software or equipment to accommodate a request for information in a certain format? ..................................................................... 24 44. Can requestors insist on the right to personally use the governmental body’s equipment to access public information? ...................................................... 24 45. Do requestors have a right to bring in their own copier to make copies of public records? ........................................................................................................ 24 46. Can requestors require a city copy information onto supplies provided by the requestor? ..................................................................................................... 25 47. Does a city have to provide information that is also available commercially? 25 48. Does a city have to provide information that is copyrighted in response to a PIA request? ........................................................................................................ 25 49. Is a city required to respond to repeated requests for the same information? ...................................................................................................................... 25 D. Temporary Custodian .................................................................... 26 50. Who is a “temporary custodian”? .................................................................. 26 51. Does a temporary custodian have a personal or property right to public information that was created or received while acting in their official capacity? ...................................................................................................................... 26 52. Is a temporary custodian required to retain public information on his/her privately owned device? ................................................................................ 27 53. What is a temporary custodian required to do if the city receives a request for public information that includes public information in the custodian’s possession, custody, or control? ................................................................... 27 54. When is a request for public information considered received by the city if a request to surrender or return public information is requested from a temporary custodian? ..................................................................................................... 27 55. What is the public information officer’s duty concerning retrieving public information from a temporary custodian? ...................................................... 27 E. Contracting Entities Required to Provide Contracting Information ........................................................................................................ 28 56. What entities are required to provide contracting information to a city when the city receives a PIA request concerning information in the custody or possession of the entity? .................................................................................................. 28 57. What is required of a contracting entity that has custody or possession of contracting information(PIA contracting entity requirements)? ...................... 28 58. What are the deadlines to request an open records letter ruling when a city receives a PIA request that includes contracting information that must be obtained from a contracting entity? ............................................................... 29 59. If the city does not receive the requested contracting information from the contracting entity in time to request an open records letter ruling, does the information become public? .......................................................................... 30 60. May a city accept bids or contract with a contracting entity that does not comply with the PIA contracting entity requirements? ............................................... 30 61. What is a city required to do if a contracting entity is not in compliance with the PIA contracting entity requirements? ............................................................ 30 62. May a city terminate its contract with a contracting entity? ........................... 31 63. What is considered “adequate steps to ensure future compliance” for the purpose of not terminating a contract with a contracting entity?.................... 31 64. Are there certain contracts that a city may not terminate for not complying with the PIA contracting entity requirements? ...................................................... 31 65. May a city include and enforce more stringent requirements than the PIA contracting entity requirements in its contracts with contracting entities? ..... 32 66. Do the PIA contracting entity requirements create a cause of action? .......... 32 67. May a requestor file a suit for a writ of mandamus to force a city or contracting entity to comply with the PIA contracting entity requirements? ..................... 32 IV. Statutory Exceptions That Allow Information to Be Withheld ............................................................................. 32 A. Information that Is Presumed Public ............................................ 32 68. Is there a list of items that are presumed to be public information? .............. 32 69. What “contracting information” is presumed to be public information? .......... 32 70. Is a discretionary exception considered “other law” for the purpose of withholding public information? ..................................................................... 33 71. Is there “other law” which may be relied upon to withhold information presumed to be public under section 552.022 of the Government Code? ..................... 33 B. General Issues Regarding Confidential Records ........................ 34 72. Is there a laundry list of items that are confidential under the Act and other state laws? ............................................................................................................. 34 73. Can staff promise confidentiality for certain records that are provided to the city? ............................................................................................................... 34 74. Can a city substitute a new document or produce a redacted copy of a record in response to a public information request? ................................................. 34 C. Information about Public Officials/Employees ............................ 34 75. Can a governmental body disclose a public official or public employee’s home address, home phone number, emergency contact information, social security number, or family information? ...................................................................... 34 76. Can a city withhold a public official or public employee’s home address, home phone number, emergency contact information, social security number, or family information without requesting an attorney general ruling? ................. 35 77. Are personal notes kept by an official subject to the Act? ............................. 36 D. Personnel Information ................................................................... 36 78. What information within a public employee’s personnel file is considered public information? .................................................................................................. 36 79. Can a city disclose the dates of birth of public employees? .......................... 37 80. Do employees have a special right of access to information contained in their own personnel file? ....................................................................................... 37 81. Are the personnel files of police officers and/or firefighters in a city that has adopted civil service treated differently under the Act? ................................. 38 82. Are there certain work schedules or time sheets considered confidential under the Act? ......................................................................................................... 38 E. General Exception to Withholding Information ........................... 38 83. Can a city withhold social security numbers without requesting an attorney general’s ruling? ............................................................................................ 38 84. Can a city withhold the dates of birth of members of the public? .................. 39 85. Are e-mail addresses protected from disclosure under the Act? ................... 39 86. What information is protected from disclosure under the exception for intra- agency and inter-agency memoranda or letters? .......................................... 39 87. Can a city release copies of certified agendas or recording of closed meetings (executive sessions)? .................................................................................... 40 F. Law Enforcement Information ...................................................... 41 88. What information within the records of a law enforcement entity may be withheld? ....................................................................................................... 41 89. Can a city request a previous determination for records under the “law enforcement exception”? ............................................................................... 43 90. Can motor vehicle accident report information be disclosed under the Act? . 44 91. Can a city release a body worn camera recording? ...................................... 46 92. Is certain crime victim information confidential? ............................................ 48 G. Lawsuit or Other Legal Information.............................................. 48 93. What type of information is excepted from disclosure under the attorney/client privilege? ....................................................................................................... 48 94. When is information that relates to pending or anticipated litigation protected from disclosure? ............................................................................................ 50 95. When can a city withhold attorney work product? ......................................... 50 H. Government-Operated Utility Information ................................... 51 96. Can a city-operated utility disclose customers’ personal information? .......... 51 97. What information about a public power utility is confidential? ....................... 52 I. Purchasing/Procurement Information .......................................... 54 98. What information must be disclosed if there is a public information request regarding a competitive bid? ......................................................................... 54 99. What information is protected under the exception for trade secrets or the exception for commercial or financial information that would give an advantage to competitors? .............................................................................................. 54 100. What information is protected under the exception for proprietary information submitted to a city? ....................................................................................... 55 101. Which type of contracting information may not be withheld as a trade secret and certain commercial or financial information (section 552.110 of the Government Code) or proprietary information (section 552.1101 of the Government Code)? ...................................................................................... 56 102. What information regarding the acquisition of real estate or personal property by a city may be withheld? ............................................................................ 58 J. Economic Development Information ............................................ 58 103. Is information related to economic development negotiations is public? ...... 58 104. May an economic development entity withhold information related to economic development negotiations under section 552.131 of the Government Code?59 K. Health Information ......................................................................... 59 105. What is “protected health information”? ........................................................ 59 106. Is protected health information considered public information under the PIA? ...................................................................................................................... 60 107. Is information provided by an out-of-state health care provider protected from disclosure under the PIA? ............................................................................. 60 108. Is information regarding communicable diseases protected from disclosure under the PIA? .............................................................................................. 60 L. Transit Authority or Department Held Information ...................... 60 109. Is information held by a transit authority or department protected from disclosure under the PIA? ............................................................................. 60 V. Ability to Recover Costs for Providing Copies of Public Information ........................................................................ 61 110. What is the general ability of a city to charge for documents? ...................... 61 111. When can a city recover labor charges for a public information request? ..... 61 112. Can a city charge for the labor cost to retrieve materials from a remote location? ...................................................................................................................... 62 113. When and how much may a city charge for overhead when handling a public information request? ..................................................................................... 63 114. Can a city recover costs for any modifications to its computer program that are necessary to respond to a public information request? ................................. 63 115. Can a city require a requestor pay the costs for producing the records prior to the city mailing out the requested information? ............................................. 63 116. Can a city refer a requestor to the city’s website if the public information being requested is available on the city’s website?................................................. 63 117. What duty does a city have to inform a requestor of the estimated charges for copies of or access to public information?..................................................... 64 118. Can a city require a monetary deposit or bond in order to comply with a public information request? ..................................................................................... 65 119. Can a city reduce or waive the cost for making copies of public information? ...................................................................................................................... 65 120. Can a city count multiple public information requests from the same requestor as a single request for the purpose of calculating cost? ................................ 65 VI. Redundant Requests and Vexatious Requestors .......... 66 121. What can a city do to deal with redundant or repetitive PIA requests? ......... 66 122. What is a vexatious requestor? ..................................................................... 66 123. How can a city deal with vexatious requestors who ask for voluminous amounts of information? .............................................................................................. 66 124. Are any requestors exempted from Section 552.275? .................................. 67 VII. Enforcement of the Public Information Act .................... 68 125. May a requestor sue a city for failure to comply with the Act? ....................... 68 126. What civil remedies can be brought against a city for failure to comply with the Act? ............................................................................................................... 69 127. What are the criminal penalties for noncompliance within the Act? ............... 70 VIII. Additional Information on the Public Information Act... 71 128. How long must a city retain various types of records? .................................. 71 129. Are all elected or appointed governmental officials required to take PIA training? ........................................................................................................ 72 130. Where can a city get more information about the Public Information Act? .... 72 Acknowledgments …………………………………………………………………………….73 Texas Public Information Act Made Easy This “made easy” publication provides answers in easy-to-understand language to the most frequently asked questions regarding the Public Information Act (“PIA” or “Act”). In a question-and-answer format, this article provides guidance to public officials and members of the public on the most frequently asked questions on the Act. For example, this article addresses: the types of records and entities that fall under the Act; the time deadlines and mandatory notices that apply when a governmental body handles a PIA request; and when a governmental body is required to ask for an attorney general open records letter ruling. The stakes are high for public officials who handle PIA requests. There are strict time lines for making determinations on what records to release, and public officials must make such decisions knowing that there are potential criminal penalties if the governmental body releases information that is considered confidential under state law. Similarly, public officers face criminal penalties if they refuse to release information that is considered open to the public. TML is available to answer questions regarding the Act from city officials, who should nonetheless consult with their local legal counsel regarding the application of the law to the facts of each particular situation. Additionally, government entities, and their elected officials and employees, and members of the public, can seek advice on the PIA from the Attorney General’s Open Government Hotline at (877) 673-6839 or (512) 478-6736, or by visiting its website. 1 I. Application of the Public Information Act 1. What types of information are subject to the Public Information Act? Public information includes: Any information that is written, produced, collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business: 1) by a governmental body; 2) for a governmental body and the governmental body: a. Owns the information; b. Has a right of access to the information; or c. Spends or contributes public money for the purpose of writing, producing, collecting, assembling, or maintaining the information; or 3) by an individual officer or employee of a governmental body in the officer’s or employee’s official capacity and the information pertains to official business of the governmental body.1 Also, information is considered to be “in connection with the transaction of official business” if: (1) the information is created by, transmitted to, received by, or maintained by an officer or employee of the governmental body in the officer’s or employee’s official capacity, or a person or entity performing official business or a governmental function on behalf of a governmental body; and (2) the information pertains to official business of the governmental body.2 Additionally, any electronic communication created, transmitted, received, or maintained on any device if the communication is in connection with the transaction of official business is public information.3 The Act applies to records regardless of their format. It includes information that is maintained in: paper; film; a magnetic, optical, solid state, or other device that can store an electronic signal; tape; Mylar; any physical material on which information may be recorded, including linen, silk, and vellum, as well as other mediums specified under law.4 The general forms in which the media containing public information exist include a book, paper, letter, document, e-mail, Internet posting, text message, instant message, other electronic communication, printout, photograph, film, tape, microfiche, microfilm, 1 Tex. Gov’t Code § 552.002(a). 2 Id. § 552.002(a-1). 3 Id. § 552.002(a-2). 4 Id. § 552.002(b). 2 photostat, sound recording, map, and drawing and a voice, data, or video representation held in computer memory.5 2. What types of entities are subject to the Public Information Act? The Act applies to a “governmental body.”6 The term “governmental body” has a broad definition that includes in applicable part: 1) Boards, commissions, departments, committees, institutions, agencies, or offices that are within or are created by the executive or legislative branch of state government and that are directed by one or more elected or appointed members; 2) A city governing body; 3) A deliberative body that has rulemaking or quasi-judicial power and that is classified as a department, agency, or political subdivision of a city or county; 4) A county commissioners court; 5) A school district board of trustees; 6) A local workforce development board; 7) The governing board of a special district; 8) Nonprofit corporations that are eligible to receive funds under the federal community services block grant program and that are authorized by the state to serve a geographic area of the state; 9) A confinement facility operated under a contract with any division of the Texas Department of Criminal Justice; 10) A civil commitment housing facility owned, leased, or operated by a vendor under contract with the Texas Civil Commitment Office; 11) Entities that receive public funds in the current or preceding state fiscal year to manage the daily operations or restoration of the Alamo, or an entity that oversees such an entity; 12) The part, section or portion of a public or private entity that spends or that is supported in whole or in part by public funds; and 5 Id. § 552.002(c). 6 Id. § 552.003(1)(A). Although the term “governmental body” is defined by the Act, for purposes of this handbook the phrase “governmental body” is used interchangeably with the words “city”, “town” or “village”. 3 13) Certain property owners’ associations.7 In other words, all governmental entities and certain non-governmental entities are subject to the Act. Additionally, entities that are considered departments, agencies, or political subdivisions of a city or county are also subject to the Act if the involved entity has rule-making or quasi-judicial powers.8 For example, zoning boards of adjustment have rule-making or quasi-judicial powers and are considered agencies or departments of a city. Therefore, the records of such entities would be subject to the Act. 3. Are there certain entities that are excluded from the definition of “governmental body” under the Act? There are two entities that are excluded from the definition of governmental body under the Act. The first entity is the judiciary.9 (See Question 6 for more detail.) The second is an economic development entity whose mission or purpose is to develop and promote the economic growth of a state agency or political subdivision with which the entity contracts if: • the entity does not receive $1 million or more in public funds from a single state agency or political subdivision in the current of preceding state fiscal year; or • the entity does not have the authority to make decisions or recommendations on behalf of a state agency or political subdivision regarding tax abatements or tax incentives; or • the entity: o does not require an officer of the state agency or political subdivision to hold office as a member of the board of directors of the entity; o does not use staff or office space of the state agency or political subdivision for no or nominal consideration, unless the space is available to the public; o track the entity’s receipt and expenditure of public funds separately from the entity’s receipt and expenditure of private funds to a responsible degree; and o provides, at least quarterly, public reports to the state agency or political subdivision regarding work performed on behalf of the state agency or political subdivision.10 7 Id. §§ 552.003(1)(A); .0036. 8 Id. § 552.003(1)(A)(iv). 9 Id. § 552.003(1)(B)(i). 10 Id. § 552.003(1)(B)(ii). 4 4. Are the records of an entity that receives public funds subject to the Public Information Act? An entity that is supported in whole or in part by public funds or that spends public funds is a governmental body under the Act.11 Public funds are defined as “funds of the state or of a governmental subdivision of the state.”12 The Texas Supreme Court has determined that entities that are “‘supported in whole or part by public funds’ […] include only those private entities or their sub-parts sustained, at least in part, by public funds, meaning they could not perform the same or similar services without the public funds.”13 Thus, only those private entities that are the functional equivalent of the government and that are dependent on public funds to operate as a going concern are subject to the Act. Finally, it should be noted that certain entities are specifically made subject to the Act under the state law that governs that entity. For example, economic development corporations are specifically made subject to the provisions of the PIA under the Development Corporation Act found in Chapters 501 through 507 of the Local Government Code.14 5. Are records that are kept or owned by a consultant on behalf of a city subject to the Public Information Act? The fact that a private entity may own or retain a record does not mean the record is not subject to release under the Act. For example, if a consultant maintains or holds records for a city, the documents are still considered public information, provided that the city owns the information or has a right of access to it.15 It is important to note that a city usually cannot contract the right to access documents that are held by a consultant if the information would otherwise be considered public. For example, the attorney general held that a city manager could not contract away the public’s right to inspect a list of applicants for a city job even though the list was developed by a private consultant for the city and the contract provided that the ownership and control of the list remained with the consultant.16 6. Are court records subject to the Public Information Act? Judicial records, including municipal court records, are not subject to the Act.17 Courts must look to the rules adopted by the Texas Supreme Court to determine the court’s duty 11 Id. § 552.003(1)(A)(xv) 12 Id. § 552.003(5). 13 Greater Houston P’ship v. Paxton, 468 S.W.3d 51, 63 (Tex. 2015). 14 Tex. Loc. Gov’t Code § 501.072. 15 Tex. Gov’t Code § 552.002(a)(2)(A)-(B). See also Tex. Att’y Gen. ORD-363 (1983). 16 Tex. Att’y Gen. ORD-585 (1991). 17 Tex. Gov’t Code § 552.003(1)(B)(i). 5 to provide access to court records.18 Additionally, courts must consider court rulings, attorney general opinions and certain state statutes that give the public a right to obtain copies of court records. For example, higher courts have held that there is an “open courts” concept that must guide judges in giving public access to court documents. This legal concept provides that the public has a right to inspect and copy judicial records subject to the court’s inherent power to control access to such records in order to preserve justice. In other words, the public’s right of access to court documents is not an absolute right.19 It should be noted that the public’s right to access court records is in addition to the right of parties to a lawsuit to obtain information through discovery or through other court procedures. Legislation has clarified that subpoenas and motions for discovery are not considered a request for information under the Act.20 Such requests should be handled as required by the applicable civil or criminal procedural statutes. Additionally, state law has been amended to indicate that probable cause affidavits for a search warrant are considered public records once the warrant has been executed.21 The magistrate who issued the warrant must make the affidavits available for public inspection in the court clerk’s office. 7. Do members of city council have a special right of access to the city’s records? A current member of city council who requests information from the city in his/her official capacity has a special right of access to the requested information. The Act is not implicated when such request is made as the release of the documents is not viewed as a release to the general public.22 The exceptions to disclosure that might otherwise apply to an open records request from a member of the public would generally not apply to such request.23 In other words, information that would typically be considered confidential under the Act would be releasable. However, the ability to release said information to elected officials may be limited by the state or federal law that pertains to such documents. Furthermore, charges for expenses associated with fulfilling the request that are usually assessed to members of the public under the Act would not be imposed upon a member of council. 18 Id. § 552.0035. See Tex. R. Jud. Admin. 12 reprinted in Tex. Gov’t Code, tit. 2, subtit. F app. 19 Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978); Ashpole v. Millard, 778 S.W.2d 169 (Tex. App. — Houston [1st Dist.] 1989, no writ); Tex. Att’y Gen. Op. No. DM-166 (1992), Tex. Att’y Gen. ORD-25 (1974). 20 Tex. Gov’t Code § 552.0055. 21 Tex. Code Crim. Proc. Art 18.01(b). See also Houston Chronicle Publishing Co. v. Woods, 949 S.W.2d 492, 499 (Tex. App. — Beaumont 1997, no writ). 22 Tex. Att’y Gen. Op. No. JM-119 (1983); Tex. Att’y Gen. LO-93-69. 23 Tex. Att’y Gen. Op. No. JM-119 (1983). 6 Because a release of information to a mayor or councilmember requesting such information in their official capacity is not a release to the public, the recipient must be cautious in maintaining the documents in the same way they are maintained by the governmental body as a whole. The Act imposes criminal provisions for the release of confidential information.24 As a result, a member of the governing body who receives confidential information must ensure that it remains confidential. Disclosing confidential information would constitute official misconduct, and would be considered a misdemeanor punishable by either a fine of up to $1,000, confinement in county jail for up to six months, or both.25 If, however, a member of the governing body requests city records in his/her individual capacity for personal use, then the request would be treated like any other open records request from a member of the public. The exceptions to disclosure under the Act would apply, and the custodian of records is prohibited from releasing otherwise protected information to the individual member of council. Additionally, PIA charges could be assessed against the mayor or councilmember if the information is requested in an individual capacity. II. What Constitutes a Public Information Request 8. How may a person make a written request for public information? A person can make a written request for public information under the Act only by delivering the request by one of the following methods to the public information officer: • United States mail; • e-mail; • hand delivery; or • any other appropriate method approved by the governmental body, including fax and electronic submission through the governmental body’s website.26 24 Tex. Gov’t Code § 552.352. 25 Id. § 552.352. 26 Id. § 552.234(a). 7 9. May a city designate a mailing address or an e-mail address that a request for public information must be sent to in order for the request to be considered received by the city? A city may designate one mailing address and one e-mail address for receiving requests for public information.27 The city shall post the designated mailing address and e-mail address on the city’s website and on its required PIA informational sign, and provide the addresses to any person on request.28 Once the city has posted the designated mailing address and e-mail address on its website and PIA sign, the governmental body is not required to respond to a request for public information unless the request is received at the designated mailing address, designated email address, and/or hand delivered. In addition, the governmental body may create additional methods to submit, but those methods may not eliminate any of the methods in the previous sentence. 29 (See next question.) 10. How does a city approve other appropriate methods for receiving a request for public information? A city is considered to have approved other appropriate methods for receiving a request for public information only if the city includes a statement that a request for public information may be made by these other appropriate methods on the required PIA sign or on the city’s website.30 11. Is the office of the attorney general required to create a PIA request form? The office of the attorney general (OAG) is required to create a PIA request form that will provides a requestor with the option of excluding from a request, information that the governmental body determines is confidential or subject to an exception to disclosure that the governmental body would assert if the information were subject to the request.31 The PIA request form can be obtained from the OAG’s website. 27 Id. § 552.234(c). 28 Id. § 552.234(c); (d). 29 Id. § 552.234(d). 30 Id. § 552.234(b). 31 Id. § 552.235(a). 8 12. Is a city required to allow requestors to use the OAG’s PIA request form? A city is not required to allow requestors to use the OAG’s PIA request form. However, if the city does allow a requestor to use the OAG’s PIA request form, the city is required to post the OAG’s PIA request form on its website, if it maintains a website.32 13. Is a city required to respond to verbal requests for copies of records? A governmental body may respond to a verbal request for information, but the Act is only triggered when the requestor requests for information in writing.33 If a city provides copies of records upon a verbal request, the city must be consistent in its treatment of all requestors.34 In other words, if a city does not require a written request from certain individuals, it should not insist on a written request from others. III. Administration of Public Information Requests A. Timing Issues under the Public Information Act 14. How much time does a city generally have to release requested information? There is often a misconception that the Act requires that public information be produced within ten business days of a written request for information . The standard under the Act is actually that the city must “promptly produce” the public information.35 Further, the Act defines “promptly” as “as soon as possible under the circumstances, that is within a reasonable time, without delay”.36 What is considered reasonable and prompt will vary depending on the number of documents sought by the requestor. In certain circumstances, the records can be produced in less than ten business days. However, requests for a substantial number of documents may take several weeks to produce. If it will take the city more than ten business days to provide the records, the city must certify that fact in writing to the requestor.37 In its notice to the requestor, the city must indicate a set date and hour within a reasonable time that the information will be available for inspection or duplication.38 32 Id. § 552.235(b). 33 Id. §§ 552.234, .301(a). See also Tex. Att’y Gen. ORD-304 (1982). 34 Tex. Gov’t Code § 552.223. 35 Id. § 552.221(a). See also Tex. Att’y Gen. ORD-664 (2000). 36 Tex. Gov’t Code § 552.221(a), Tex. Att’y Gen. ORD-467 (1987), ORD-664 (2000). 37 Tex. Gov’t Code § 552.221(d). 38 Id. 9 15. What happens if after informing the requestor that the PIA request has been completed, and the requestor fails to inspect, pick up, or pay postage and other fees? If the requestor fails to inspect or duplicate public information in the governmental body’s office on or before the 60th day after the date the information is made available, or fails to pay postage and any other Act charges on or before the 60th day after the date the requestor is informed of the charges, then the request is considered withdrawn.39 16. What are the deadlines to take a particular action when handling a public information request? The amount of time that a city has to produce copies of governmental records will vary depending on the amount of information that is requested. However, there are six situations that present a timing deadline for cities to take a particular action when handling a public information request. 1) Notice to Requestor that the Governmental Body Needs Additional Time to Produce Records.40 If the city is unable to produce a requested record within ten business days for inspection or for duplication, the city must certify that fact in writing to the requestor and set a date and hour within a reasonable time that the information will be available for inspection or for duplication. 2) Notice to Requestor that the Governmental Body Needs Additional Time to Produce Records That Are in Active Use or in Storage.41 If the city needs additional time to produce a record because it is in active use or because it is in storage, the city must notify the requestor of this fact in writing. This notice must be given within ten business days of the city’s receipt of the request for the documents.42 The notice must set a date and hour within a reasonable time that the information will be available for inspection or duplication. It should be noted that the fact that a document has not been formally approved by the city usually would not justify a delay of the document’s release under the “active use” provision.43 39 Id. § 552.221(e). 40 Id. § 552.221(d) 41 Id. § 552.221(c). 42 Id. § 552.221(d). 43 Tex. Att’y Gen. ORD-148 (1976) (faculty member’s file not in active use the entire time the promotion is under consideration). But see Tex. Att’y Gen. ORD-225 (1979) (secretary’s handwritten notes are in active use while the secretary is typing minutes of the meeting from them). 10 3) Notice to Requestor of Programming or Manipulation Costs.44 If production of the requested information in a particular format would require additional computer programming or manipulation of data, the city must provide a written notice of this fact to the requestor. The notice must indicate: a. that the information is not available in the requested form; b. a description of the forms in which the information is available; c. a description of any contract or services that would be required to provide the information in the requested form; d. as estimated cost providing the information in the requested form; and e. the time that it would take to provide the information in that form.45 Generally, this notice must be provided to the requestor within 20 days of the city’s receipt of the request.46 4) Request by the Governmental Body for an Open Records Letter Ruling from the Attorney General.47 If a city plans to withhold certain documents or information, it usually must request a ruling from the attorney general on the ability to withhold such information. The written request for an attorney general ruling must be made within ten business days after the date the city receives the written request for information. Also, certain notices must be sent: a. Notice to Requestor that the Governmental Body Sought an Attorney General’s Open Records Letter Ruling.48 A city must give written notice to a requestor if the city seeks an attorney general ruling on the request. A copy of the city’s communication to the attorney general must be provided to the requestor, though it may be redacted if the copy itself discloses the requested information. Both must be given within ten business days of the city’s receipt of the request for the documents. b. Notice to Person or Entity with Proprietary Interest in Information of Attorney General’s Open Records Letter Ruling Request.49 If a PIA 44 Tex. Gov’t Code § 552.231(a). 45 Id. § 522.231(b). 46 Id. § 552.231(c). 47 Id. § 552.301(a). 48 Id. § 552.301(d). 49 Id. § 552.305(d)(1). 11 request may result in the release of proprietary information, the city must make a good faith attempt to notify the person or entity that has such an interest in the open records letter ruling request. The written notice must be sent by the city within ten business days of the date the city received the original request for the information. This notice must include: i. a copy of the written request for the information; and ii. a statement, in a form prescribed by the attorney general, that the person is entitled to submit a letter, brief, or memorandum to the attorney general in support of withholding the information.50 The notice must inform the person that any briefing must include each reason why the person believes the information should be withheld. The person with a proprietary interest must submit his/her brief within ten business days of the date the person receives the written notice from the city. Also, the person who submits a brief to withhold the information must provide a copy of his/her brief to the requestor.51 17. What can a city do if it is unclear about what information is being requested or that the scope of the information is unduly broad? If a city in good faith has determined that the PIA request is unclear or that the scope of the information being asked for is unduly broad, the governmental body may ask the requestor to clarify or narrow the scope of the request.52 If the city asks the requestor to clarify or narrow a request, the ten business day deadline to request an attorney general’s open records letter ruling is measured from the date the request is clarified or narrowed as long as the governmental body is acting in good faith.53 In other words, the city has ten business days from the day that the requestor clarifies or narrows his/her request to ask for a ruling from the attorney general’s office. The written request for clarification, discussion or additional information to the requestor must contain a statement as to the consequence of failing to timely respond to the request for clarification, discussion or additional information.54 If the city sends such written request to the requestor and the requestor does not send a written response by the 61st 50 Id. § 552.305(d)(2). 51 Id. § 552.305(e). 52 Id. § 552.222(b) 53 City of Dallas v. Abbott, 304 S.W.3d 390, 384 (Tex. 2010). 54 Tex. Gov’t Code § 552.222(e). 12 day, the requestor’s PIA request is considered withdrawn.55 For the request to be considered withdrawn, the governmental body must send the request for clarification, discussion or additional information to the requestor by certified mail if the city has the requestor’s physical or mailing address.56 If the PIA request is received by e-mail, the city can send the written request for clarification, discussion or additional information by e- mail.57 Also, if the requestor does not send an e-mail written response by the 61st day to the e-mail requesting clarification or narrowing, the request is considered withdrawn.58 18. When is a city required to ask for an open records letter ruling from the attorney general? In almost all cases, a city is required to ask the attorney general for a ruling if the city wants to withhold requested information.59 The fact that a particular responsive document may arguably fall within one of the statutory exceptions to disclosure does not in itself eliminate the need to ask for an open records letter ruling. Unless the city can point to a previous determination that addresses the exact information that the city now wants to withhold 60 or to a section of the Act that allows a city to withhold information without asking for a ruling,61 the city must request a ruling to withhold the information. In addition, if determining whether a particular record may be withheld under a statutory exception requires a review and consideration of applicable facts, the city should request an attorney general ruling before it withholds the record. A request for an attorney general ruling must be made, in most cases, within ten business days from the date the city receives the PIA request.62 Such a request, in most cases, can only be made by the city.63 If the city does not make such a request within the deadline, the information is presumed to be open to the public as a matter of law and the information must be released.64 The presumption of openness and the duty to release the information can only be overcome by a compelling reason that the information should not be released. A compelling reason may in certain cases involve a showing that the information is deemed confidential by some other source of law or that third-party 55 Id. § 552.222(d). 56 Id. § 552.222(f). 57 Id. § 552.222(g)(1). 58 Id. § 552.222(g)(2). 59 Id. § 552.301(a). 60 See Tex. Att’y Gen. ORD-673 (2001) (what constitutes a “previous determination”); Tex. Att’y Gen. ORD-435 (1986) (school district cannot unilaterally decide that material fits within exception unless the school district has previously requested a determination involving the exact same material); Houston Chronicle Publishing Co., v. Mattox, 767 S.W.2d 695, 698 (Tex. 1989) (specifying that Attorney General is authorized to determine what constitutes “previous determination.”). 61 See, e.g., Tex. Gov’t Code §§ 552.130(c); .136(c), .147(b). 62 Tex. Gov’t Code § 552.301(b). See id. §§ 552.371(d), .371(e)(3); Tex. Occup. Code § 1701.662. 63 Tex. Att’y Gen. ORD-542 (1990). See Tex. Gov’t Code §§ 552.1101(c), .131(b-1). 64 Tex. Gov’t Code § 552.302. See id § 552.371(e)(1)-(2). See Tex. Att’y Gen. ORD-319 (1982). 13 interests are at stake.65 It should be noted that if the city is going to release all of the requested information, there is no need to ask for a ruling. 19. Can a city request an attorney general ruling when the city has determined the requested information is not subject to one of the Act’s exceptions? The attorney general has concluded that a city may not request an open records letter ruling from the attorney general if the city reasonably believes the requested information is not excepted from required disclosure. Instead, the city must promptly produce the requested public information to the requestor.66 20. Can a city withhold information that is the subject of a previous determination? The Act provides that a city must request an attorney general open records letter ruling if the governmental body wishes to withhold requested information unless there has been a previous determination about that particular information.67 The Act does not define previous determination. However, the attorney general has concluded there are two types of “previous determinations.”68 The first type of previous determination exists so long as: (1) the law, facts, and circumstances on which the ruling was based have not changed and where the requested information is precisely the same information which was addressed in a prior attorney general ruling; (2) the ruling is addressed to the same governmental body; and (3) the ruling concludes that the information is or is not excepted from disclosure. The second type of previous determination is an attorney general decision which may be relied upon so long as: (1) the elements of law, facts, and circumstances are met to support the previous decision’s conclusion; (2) the decision concludes that a specific, clearly delineated category of information is or is not excepted from disclosure; and (3) the decision explicitly provides that the governmental body or type of governmental body from which the information is requested, in response to future requests, is not required to seek a decision from the attorney general in order to withhold the information. For example, all cities may withhold direct deposit authorizations; Form I-9s and attachments; W-2 and W -4 forms; certified agendas and tapes (recordings) of closed meetings; and fingerprints without the necessity of requesting an attorney general ruling as to whether the applicable exception applies.69 65 Tex. Att’y Gen. ORD-150 (1977). 66 Tex. Att’y Gen. ORD-665 (2000). 67 Tex. Gov’t Code § 552.301(a). 68 Tex. Att’y Gen. ORD-673 (2001). 69 Tex. Att’y Gen. ORD-684 (2009). 14 21. Can a city withhold information without asking for an open record letter ruling? Certain provisions of the Act allow a city to withhold information without asking for an open records letter ruling from the attorney general’s office. These sections include: 1) Information related to driver’s license, motor vehicle title or registration, or personal identification documents;70 2) Credit cards, debit cards and access device numbers;71 3) Certain information maintained by a family violence shelter center, victim of trafficking shelter center, and sexual assault program;72 4) Personal information of current or former public employees and officials;73 and 5) Social security numbers of any living individual.74 All of these sections, except for social security numbers, require the city to send a specific letter to the requestor that explains that certain information has been redacted without asking for a ruling, but that the requestor has the right to appeal to the attorney general’s office for a ruling on the withheld information.75 The attorney general’s office has form letters for those sections that require these letters that can be found on its website. If the requestor chooses to appeal to the attorney general’s office, then the city will receive a notice from the attorney general’s office and will have to submit the required information for a review of the redacted information.76 22. What must a city do if it wants to request an open records letter ruling? If a city wants to withhold information, it has ten business days from the date it receives the request to ask for an open records letter ruling from the attorney general. By the tenth business day, the city must do the following: 1. Write the attorney general requesting an open records letter ruling and state which exceptions apply to the requested information.77 The original request for a ruling must indicate the specific exception(s) that the city is relying on to withhold the information. If the city fails to cite the 70 Tex. Gov’t Code § 552.130. 71 Id. § 552.136(c). 72 Id. § 552.138(c). 73 Id. §§ 552.024(c); .117(a)(17); .1175(a)(17); .1175(f). 74 Id. § 552.147. 75 Id. §§ 552.024(c-1)-(c-2); .1175(g) - (h); .130(d)-(e); .136(d)-(e); .138(d)-(e). 76 1 Tex. Admin. Code §§ 63.11-63.16. 77 Tex. Gov’t Code § 552.301(b). 15 applicable exceptions in this request, the city generally will be barred from raising the exceptions in any additional briefing that it may provide. 2. Provide the requestor with a written statement that the city wishes to withhold the information and that it has asked the attorney general for a ruling.78 3. Provide the requestor with a copy of the city’s correspondence to the attorney general.79 4. Make a good faith attempt to notify any affected third parties of the request.80 If in its original request for a ruling the city does not provide comments explaining how the specific exceptions apply to the requested information, the city has an additional five business days (a total of 15 business days from the date the city body received the PIA request f) to provide the attorney general with additional written documentation that supports withholding the requested information.81 By the 15th business day, the city must submit to the attorney general: 1. Written comments explaining how the claimed exceptions apply.82 2. A copy of the written request for information.83 3. A signed statement or evidence sufficient to establish the date the request for information was received.84 It is important to note that if the city requests the requestor clarify or narrow an unclear or unduly broad request, the ten business day deadline for requesting an open records letter ruling is measured from the date the request is clarified or narrowed as long as the city is acting in good faith in requesting a clarification or narrowing of the request.85 If the city contends that the ten business day deadline started the date the request was clarified or narrowed, the city must explain this fact in its request for an open records ruling. Also, the city must explain if there were holidays, natural disasters, and any other days the city was officially closed. In its explanation, the city should include all dates relevant to the calculation of the ten-business day deadline. 78 Id. § 552.301(d)(1). 79 Id. § 552.301(d)(2). 80 Id. § 552.305(d). 81 Id. § 552.301(e). 82 Id. § 552.301(e)(1)(A). 83 Id. § 552.301(e)(1)(B). 84 Id. § 552.301(e)(1)(C). 85 City of Dallas v. Abbott, 304 S.W.3d 380, 384 (Tex. 2010). 16 4. Submit copies of documents requested or a representative sample of the documents.86 The documents must be labeled to show which exceptions apply to which parts of the documents.87 Representative samples are not appropriate when each document sought to be withheld contains substantially different information or when third-party proprietary information is at issue. 5. Provide the requestor with a copy of the written comments submitted to the attorney general.88 The city must provide a copy of its comments to the requestor not later than the 15th business day after the date the request for information was received. This does not mean that the governmental body has to send the requestor a copy of the information that they are trying to withhold. If the written comments disclose or contain the substance of the information requested, the copy provided to the requestor should be redacted. However, cities are cautioned against redacting more than that which would reveal the requested information to the requestor. The attorney general may ask the city for additional information.89 The governmental body must respond to the attorney general’s request of additional information within seven calendar days.90 If the governmental body fails to respond, the information is presumed to be open and must be released unless there is a compelling reason to withhold the information.91 23. How does a city calculate business days? Generally, business days are those days that a city is open for business and to the public. If the city is closed, with no employees working remotely, then those days do not count as business days. Specifically, the following are not considered business days: • Weekends; • Holidays observed by the governmental body; • Skeleton crew days; and • A day on which a city’s administrative offices are closed with no employees working, including remotely.92 86 Tex. Gov’t Code § 552.301(e)(1)(D). 87 Id. § 552.301(e)(2). 88 Id. § 552.301(e-1). 89 Id. § 552.303(c). 90 Id. § 552.303(d). 91 Id. § 552.303(e). 92 Id. § 552.2211(a). 17 However, if a city closes its physical offices, but requires staff to work, including remotely, then the city shall make a good faith effort to continue responding to applications for public information, to the extent staff have access to public information responsive to an application, while its administrative offices are closed.93 Failure to respond to requests under this provision may constitute a refusal to request an attorney general's decision as provided by the Act or a refusal to supply public information or information that the attorney general has determined is public information that is not excepted from disclosure 94 24. How long does the attorney general have to respond to a request for an open records letter ruling? The attorney general has 45 business days from the date the request for ruling is received from the city.95 However, if the attorney general is unable to issue the decision within the 45 business-day period, the attorney general may extend the time to respond for an additional ten business days. Such an extension may be taken if the attorney general notifies the city and the requestor of the reason for the delay. This notification must take place within the original 45 business-day time period. 25. Can a city take longer than 15 business days to determine whether the requested information is confidential if the request is for an excessive amount of information? There is no statutory provision that provides a city with an extension of time to seek an open records letter ruling from the attorney general’s office. Even if the request is for an excessive amount of information, the city must still meet the fifteen-business day deadline for requesting a ruling from the attorney general. However, if applicable, a city may provide the attorney general with a marked-up representative sample of the requested information (marked to show which exceptions apply to what portion of the sample documents).96 26. May a city seek a reconsideration of an open records letter ruling that is issued by the attorney general? If the attorney general or a court has already ruled that the exact information that is at issue in a particular request is open to the public, a city must release the information and is prohibited from seeking a reconsideration of that issue from the attorney general.97 If 93 Id. 94 Id. § 552.2211(b) 95 Id. § 552.306(a). 96 Id. § 552.301(e). 97 Id. § 552.301(f). 18 the city wants to challenge the ruling, the city must file, within 30 calendar days of receiving the ruling, suit in Travis County district court.98 B. Public Information Requests During a Catastrophe 27. May a city temporarily suspend the requirements of the Act during a disaster? A city that is currently significantly impacted by a catastrophe such that the catastrophe directly causes the inability of the city to comply with the requirements of the Act may suspend the applicability of the requirements of the Act.99 For purposes of the suspension of the Act, a “catastrophe” is defined as a condition or occurrence that directly interferes with the ability of a governmental body to comply with the requirements of the Act, including: (1) a fire, flood, earthquake, hurricane, tornado, or wind, rain or snow storm; (2) power failure, transportation failure, or interruption of communication facilities; (3) epidemic; or (4) riot, civil disturbance, enemy attack, or other actual or threatened act of lawlessness or violence.100 However, “catastrophe” does not mean a period when staff is required to work remotely and can access information responsive to an application for information electronically, although the physical office of the governmental body is closed.101 A governmental body that elects to suspend the requirements of the Act must provide notice to the office of the attorney general that the governmental body is currently impacted by a catastrophe and has elected to suspend the applicability of the Act during the initial suspension period and the extension period.102 Notice must be provided in a form promulgated by the attorney general.103 28. What is the city required to do if it elects to suspend the Act because it has been impacted by a catastrophe? The city is required to: 98 Id. § 552.324(b). 99 Id. § 552.2325(b). 100 Id. § 552.2325(a)(1)(A) - (D). 101 Id. § 552.2325(a)(2). 102 Id. § 552.2325(e). 103 Id. § 552.2325(c), (h). 19 1) Submit a catastrophe notice to the attorney general’s office. The notice has to be on the form created by the attorney general’s office. The form (first page) requires the following information: a. Name of the city; b. Identification and description of the catastrophe; c. The dates for the beginning and end of the suspension period (only a seven-calendar day period); and d. Name, title, phone number, and signature of the city’s contact person. 2) Post notice of the PIA suspension in the same places the city would post notice of an open meeting. This would be at the bulletin board or electronic bulletin board at city hall and on the city’s website, if the city has a website.104 29. For how long can the requirements of the Act be suspended? A city may suspend the applicability of the Act only once for each catastrophe.105 The initial suspension period may not exceed seven consecutive days.106 The initial suspension period must occur during the period that: (a) begins not earlier than the second day before the date the city submits the notice to the office of the attorney general; and (b) ends not later than the seventh day after the city submits the notice.107 A city may extend an initial suspension period, one time, if the governing body determines that the city is still impacted by the catastrophe on which the initial suspension period was based.108 The initial suspension period may be extended for not more than seven consecutive days that begin on the day following the day the initial suspension period ends.109 Accordingly, the combined suspension period may not exceed a total of 14 consecutive calendar days with respect to any single catastrophe.110 104 Id. §§ 552.2325(c), (h), (l); see id. §§ 551.050, .056. 105 Id. § 552.2325(d). 106 Id. § 552.2325(d). 107 Id. 108 Id. §552.2325(e). 109 Id. 110 Id. §552.2325(g). 20 30. What happens to requests for public information that are received before or during a suspension period(s)? The requirements of the Act related to a request for public information that is received before the initial suspension period begins are tolled until the first business day after the date the suspension period ends.111 A request that is received during a suspension period is considered to have been received by the city on the first business day after the date the suspension period ends.112 31. What is the city required to do if the city decides to extend the initial suspension period? The attorney general’s office has promulgated an extension catastrophe notice form (second page) for the extension of the initial suspension of the Act for a period not to exceed seven calendar days.. The following information is required for the extension form: 1. Name of the city; 2. The dates of the initial suspension; 3. Identification of the catastrophe; 4. Dates of the extension suspension period (only seven calendar days); and 5. Name, title, phone number, and signature of the city’s contact person.113 As with the initial catastrophe notice, the extension has to be submitted to the attorney general’s office and posted where open meetings notice are required to be posted.114 32. How does the city submit the catastrophe notice forms to the attorney general’s office? A city can submit its catastrophe notice form to the attorney general’s office either electronically or via US mail to: Attn: Public Information Act Catastrophe Notice Office of the Attorney General Open Records Division P.O. Box 12548 Austin, Texas 78711-2548 111 Id. § 552.2325(j). 112 Id. § 552.2325(i). 113 Id. §§ 552.2325(e), (l). 114 Id. § 552.2325(h); see id. §§ 551.050, 551.056. 21 33. Is the attorney general’s office required to post these catastrophe forms on its website? The attorney general’s office is required to post submitted catastrophe notice forms to its website.115 These notices will be continuously posted until the first anniversary of the date the attorney general’s office received the form. Submitted notice can be seen here. 34. If the offices are closed, working with a skeleton crew, or working remotely, does the city have to fill out a catastrophe notice form and submit it to the attorney general’s office? If the city is closed, working with a skeleton crew, or its employees are working remotely, the city does not have to fill out a catastrophe notice form. ). C. Rights and Duties of the Governmental Body and of the Public Information Requestor 35. Is a city required to post information regarding the Public Information Act? A city’s public information officer is responsible for posting a sign which informs the public about its right to access public information.116 The sign must be displayed in the governmental body’s administrative offices. The attorney general’s office is responsible for determining what specific information must be displayed on the sign. 36. What inquiries can a city make of a public information requestor? Generally, there are only two permissible lines of inquiry that can be made of a requestor. First, a city can ask a requestor for proper identification.117 This inquiry for proper identification should be done only if necessary, but if the information can be given without any identification, then the inquiry is not necessary. State law does not indicate how such identification could be accomplished if the request is completely handled through the mail, e-mail, or by fax. This identification requirement is generally imposed when a state statute limits who may gain access to certain information. For example, certain statutes regulate who can gain access to information within motor vehicle records, such as copies of drivers’ licenses.118 These statutes contain specific rules on what inquiries can be made to determine if the requestor is eligible to receive the information. If an open records request involves such information, a city should visit with its legal counsel regarding the applicable law. 115 Id. § 552.2325(k). 116 Id. § 552.205. 117 Id. § 552.222(a). 118 Id. § 552.222(c). 22 Second, as discussed earlier in this handbook, a city may ask the requestor for a clarification if the request is unclear or ask the requestor to narrow the scope of the request if the request is unduly broad.119 It should be noted that a city cannot ask the requestor the purpose for which the information will be used.120 37. Does the name and address of an individual who requests public information become public information? In certain cases, a requestor may be required to provide identification, which may include his or her name or address.121 If the city receives this information and it becomes part of a city record, there is no statutory provision that would except such information from disclosure. 38. Can a requestor choose the format (paper, computer disc, etc.) in which the city must provide requested information? If the city has the technological ability to produce the information in the requested format, it is usually required to do so.122 For example, if a requestor wants a copy of information on a computer disk, he can ask that it be provided in that format. The city cannot insist on providing the information in only a paper format if the city has the ability to provide it in the requested format. However, a city is not required to buy additional hardware or software to accommodate a PIA request. A city can provide requested information on another medium that is acceptable to the requestor if the city is unable to provide the requested information in the requested medium because: (1) it does not have the technological ability to do so; (2) the city would be required to buy additional software or hardware; or (3) doing so would violate copyright agreements between the city and a third party. 39. Is a city required to create a record if none exists? A PIA request generally does not require a city to produce information which is not in existence.123 The Act does not require a city to prepare new information in response to a request. 119 Id. § 552.222(b). 120 Id. § 552.222(a). 121 Id. § 552.222(a). 122 Id. § 552.228. 123 Id. § 552.002(a). See also Tex. Att’y Gen. ORD-87 (1975), ORD-342 (1982), ORD-452 (1986); Economic Opportunities Dev. Corp. v. Bustamante, 562 S.W.2d 266 (Tex. Civ. App. – San Antonio 1978, writ dism'd). 23 40. Does a city have to comply with standing requests for information? A city has no duty to comply with standing requests for records.124 If a requestor seeks documents that are not in existence at the time of the request, the city may notify the requestor of this fact and ask the requestor to resubmit the request at a later time when such a record may be available. Also, the city has no duty to notify the requestor in the future that the information has come into existence.125 However, some cities have chosen to accommodate standing requests for certain records. Whether to enter into such agreements is at the city’s discretion. Nonetheless, if such an arrangement is made, it should be available to any requestor on an equal basis.126 41. Is a city required to compile statistics, perform research, or provide answers to questions in response to a PIA request? A city is only required to provide copies of documents that relate to the information sought by a requestor. The Act does not require a governmental body to calculate statistics, perform legal research, or prepare answers to questions.127 42. Is a city required to locate information that is not organized or retrievable by the type of information that is requested? Sometimes a PIA request will ask for certain documents or information that is not organized or retrievable by the type of information that is requested. If a city can provide this information by making a simple computer search or by some other basic task, it should make such an effort.128 The city may notify the requestor of the format in which the information is currently available.129 However, if providing the information would require extensive research, the city has no duty to take such action.130 If providing the requested information would require programming or manipulation of data, the city shall send the requestor a written notice explaining that the requested information is not in the format requested and to provide the information would require programming and manipulation of data at a cost to the requestor. 131 The notice must include a cost estimate for providing the information in the format that meets the requestor’s 124 Tex. Att’y Gen. ORD-465 (1987), ORD-476 (1987). 125 Tex. Att’y Gen. Op. No. JM-48 (1983). 126 See Tex. Gov’t Code § 552.223. 127 Tex. Att’y Gen. ORD-342 (1982), ORD-555 at 1 (1990), ORD-563 at 8 (1990). 128 Tex. Gov’t Code § 552.002(a). See also Tex. Att’y Gen. ORD-87 (1975), ORD-342 (1982), ORD-452 (1986); Economic Opportunities Dev. Corp. v. Bustamante, 562 S.W.2d 266 (Tex. Civ. App. – San Antonio 1978, writ dism'd). 129 Tex. Gov’t Code § 552.228(c). 130 Tex. Gov’t Code § 552.002(a). See also Tex. Att’y Gen. ORD-87 (1975), ORD-342 (1982), ORD-452 (1986); Economic Opportunities Dev. Corp. v. Bustamante, 562 S.W.2d 266 (Tex. Civ. App. – San Antonio 1978, writ dism'd). 131 Tex. Gov’t Code § 552.231. 24 preferences. Also, the notice must be sent to the requestor within 20 days after the date the city receives the PIA request.132 If the requestor does not respond to the written notice within 30 days, the request is considered withdrawn.133 43. Must a city buy new software or equipment to accommodate a request for information in a certain format? A city has no duty to purchase new software or hardware to accommodate a public information request.134 If the city is unable with existing resources to provide the information in the requested format, the record should be provided in a paper format or in another medium that is acceptable to the requestor.135 In certain cases, a city can provide the information in the requested format by manipulating the data within a computer system or by making a programming change that allows access to the information. If a PIA request would require such manipulation of data or programming, the city can notify the requestor of the applicable cost of putting the information together in that format and require the requestor to agree to pay the cost of production of the material.136 44. Can requestors insist on the right to personally use the governmental body’s equipment to access public information? The attorney general has concluded that a member of the public does not have the right to personally use a government computer terminal to search for public information.137 Instead, the city may require that searches of public information be conducted by city personnel who then provide the requestor with access to or copies of the requested items. Of course, a city may adopt a policy to allow the public to use its computer terminals to access information, but the public cannot demand that such a policy be implemented. 45. Do requestors have a right to bring in their own copier to make copies of public records? A requestor is allowed to bring his or her own copier to make copies of public records. However, a city may refuse to allow the use of a requestor’s portable copier if such activity would: (1) be unreasonably disruptive, (2) cause a safety hazard, (3) interfere with others’ right to inspect and copy records, or (4) if the requested records contain confidential information that needs to be redacted.138 132 Id. § 552.231(c). 133 Id. § 552.231(d-1). 134 Id. § 552.228(b)(2). 135 Id. § 552.228(c). 136 Id. § 552.231. 137 Tex. Att’y Gen. ORD-571 (1990). 138 Tex. Att’y Gen. Op. No. JM-757 (1987). See also Tex. Att’y Gen. Op. No. GA-400 (2006). 25 46. Can requestors require a city copy information onto supplies provided by the requestor? The Act specifically provides that a city is not required to copy information onto material provided by a requestor.139 For example, a city does not have to copy information onto paper or onto a computer disk that is provided by the requestor. Instead, the city may choose to use its own materials.140 47. Does a city have to provide information that is also available commercially? Generally, a city is not required to allow access to or to provide a copy of information in a commercial book or publication purchased or acquired by the city for research purposes if the book or publication is commercially available to the public.141 However, the city is under a duty to allow inspection of the commercial book or publication if portions of the book or publication are specifically made a part of, incorporated into, or referred to in a city rule or policy.142 48. Does a city have to provide information that is copyrighted in response to a PIA request? If a request is made for documents that are copyrighted, a city will have to provide access to those records, unless there is an applicable exception that would allow those records to be withheld. However, the city is not required to make copies of copyrighted material for a requestor.143 Instead, the city should provide the requestor access to the information. The requestor bears the duty of compliance with federal copyright law. 49. Is a city required to respond to repeated requests for the same information? If a city has previously provided copies of certain information to a requestor, the city has no duty to provide the same information to the requestor again.144 Similarly, if a city has previously made the information available and the requestor has not paid the costs associated with the prior request, the city may respond to a second request for such documents by providing a special notice to the requestor.145 The city’s public information officer or his or her agent must provide the requestor a letter which certifies that all or part 139 Tex. Gov’t Code §552.228(c). 140 Id. See also id. § 552.230 (governmental body may promulgate rules for efficient, safe, and speedy inspection and copying if not inconsistent with Public Information Act). 141 Id. §552.027(a). 142 Id. § 552.027(c). 143 Tex. Att’y Gen. Op. No. JM-672 (1987), Tex. Att’y Gen. ORD-550 (1990). 144 Tex. Gov’t Code § 552.232(a). 145 Id. 26 of the requested information was previously furnished to the requestor or was made available upon payment of costs.146 The certification must include: 1. a description of the information that was previously furnished or made available; 2. the date the city received the previous request; 3. the date the city previously furnished or made available the information to the requestor; 4. a statement that no further additions, deletions, or corrections have been made to that information; and 5. the name, title, and signature of the public information officer or his or her agent who is making the certification.147 A city may not charge the requestor for the preparation of the certification.148 Of course, a city may choose to provide the requested information.149 It is important to note that a city must furnish or make available upon payment of applicable charges any information that has not been previously supplied or made available to the requestor.150 D. Temporary Custodian 50. Who is a “temporary custodian”? A temporary custodian is a current or former officer or employee of a city who, in the transaction of official business, creates or receives public information that the officer or employee has not provided to the public information officer of the city or the public information officer’s agent.151 51. Does a temporary custodian have a personal or property right to public information that was created or received while acting in their official capacity? A temporary custodian does not have a personal or property right to public information that was created or received while acting in their official capacity.152 146 Id. § 552.232(b). 147 Id. 148 Id. § 552.232(c). 149 Id. § 552.232(a)(1)-(2). 150 Id. § 552.232(d). 151 Id. § 552.003(7). 152 Id. § 552.233(a). 27 52. Is a temporary custodian required to retain public information on his/her privately owned device? A temporary custodian who has public information on a privately owned device is required to either: (1) forward or transfer the public information to the city or a city server to be preserved for the required record retention schedule; or (2) preserve the public information in its original form on the privately owned device and in a backup or archive for the required record retention schedule.153 53. What is a temporary custodian required to do if the city receives a request for public information that includes public information in the custodian’s possession, custody, or control? A temporary custodian is required to surrender or return public information that is in his/her possession, custody, or control not later than the 10th day after the date the public information officer requests that the temporary custodian surrender or return the public information.154 If the temporary custodian fails to surrender or return the public information requested by the public information officer, the city may discipline an employee who is a temporary custodian.155 Also, the temporary custodian may be subject to any penalties provided by the PIA or other laws. For example, a temporary custodian can be subject to a writ of mandamus under section 552.321 of the Government Code or criminally charged with failure to provide access to public information under section 552.353 of the Government Code. 54. When is a request for public information considered received by the city if a request to surrender or return public information is requested from a temporary custodian? The city is considered to have received the request for public information on the date the information is surrendered or returned to the city by the temporary custodian.156 55. What is the public information officer’s duty concerning retrieving public information from a temporary custodian? The public information officer is required to make a reasonable effort to obtain public information from a temporary custodian if: 153 Id. § 552.004(b) - (c). 154 Id. § 552.233(b). 155 Id. § 552.233(c). 156 Id. § 552.233(d). 28 1. The information has been requested from the city; 2. The public information officer is aware of facts sufficient to warrant a reasonable belief that the temporary custodian has possession, custody, or control of the requested information; 3. The public information officer is unable to comply with their duties without obtaining the information from the temporary custodian; and 4. The temporary custodian has not provided the information to the public information officer.157 E. Contracting Entities Required to Provide Contracting Information 56. What entities are required to provide contracting information to a city when the city receives a PIA request concerning information in the custody or possession of the entity? When a city receives a PIA request concerning information not maintained by the city but in the custody or possession of a non-governmental entity, such entity is required to provide contracting information to the city if the entity has executed a contract with the city that: 1. Has a stated expenditure of at least $1 million in public funds for the purchase of goods or services by the city; or 2. Results in the expenditure of at least $1 million in public funds for the purchase of goods or services by the city in a fiscal year of the city.158 When a city receives a written PIA request for such contracting information, the city shall send, to the contracting entity, a written request for the contracting entity to provide the requested contracting information to the city not later than the third business day after the date the city receives the written PIA request.159 The contracting entity is required to promptly provide to the city any contracting information related to the contract that is in its custody or possession.160 57. What is required of a contracting entity that has custody or possession of contracting information(PIA contracting entity requirements)? The contract between the city and the contracting entity requires the contracting entity to: 157 Id. § 552.203(4). 158 Id. § 552.371(a). [Note: for the rest of this section, these entities will be referred to as “contracting entities”.] 159 Id. § 552.371(c). 160 Id. § 552.372(a)(2). 29 1. Preserve all contracting information related to the contract as provided by the record retention requirements applicable to the city for the duration of the contract; 2. Promptly provide to the city any contracting information related to the contract that is in its custody or possession on the city’s request; and 3. On completion of the contract, either: a. Provide, at no cost to the city, all contracting information related to the contract that is in its custody or possession; or b. Preserve the contracting information related to the contract as provided by the record retention requirements applicable to the city.161 Also, the contract must include the following statement: The requirements of Subchapter J, Chapter 552, Government Code, may apply to this (include “bid” or “contract” as applicable) and the contractor or vendor agrees that the contract can be terminated if the contractor or vendor knowingly or intentionally fails to comply with a requirement of that subchapter.162 58. What are the deadlines to request an open records letter ruling when a city receives a PIA request that includes contracting information that must be obtained from a contracting entity? A city must request an open records letter ruling from the attorney general’s office concerning contracting information that is in the custody or possession of a contracting entity within 13 business days of the date the city receives a request for the contracting information, as well as provide a copy of the request for the open records letter ruling to the requestor.163 A city must submit its brief and a copy of the information requested (or representative samples of such information) to the attorney general’s office within 18 business days of the date the city receives a request for the contracting information in the custody or possession of the contracting entity, as well as provide a copy of the brief to the requestor.164 Note that these deadlines do not apply to contracting information that is maintained by the city.165 161 Id. § 552.372(a). 162 Id. § 553.372(b). 163 Id. § 552.371(d)(1) - (2). 164 Id. § 552.371(d)(3) - (4). 165 Id. § 552.371(f). 30 59. If the city does not receive the requested contracting information from the contracting entity in time to request an open records letter ruling, does the information become public? If the governmental body does not receive the requested contracting information from the contracting entity in time to request an open records letter ruling, the requested contracting information does not become public if the governmental body: 1. complies with the requirements to send a written request to the contracting entity in a good faith effort to obtain the contracting information from the contracting entity; 2. is unable to meet the deadline to request an open records letter ruling because the contracting entity failed to provide the contracting information to the city before the 13th business day after the date the city receives the request for the contracting information; and 3. complies with the requirements of requesting an open records letter ruling from the attorney general not later than the eighth business day after the date the city receives the information from the contracting entity.166 60. May a city accept bids or contract with a contracting entity that does not comply with the PIA contracting entity requirements? A city may not accept a bid for a contract or award a contract to a contracting entity that the governmental body has determined has knowingly or intentionally failed, in a previous bid or contract, to comply with preserving contracting information and providing it to the city upon request, unless the city determines and documents that the contracting entity has taken adequate steps to ensure future compliance with these requirements.167 61. What is a city required to do if a contracting entity is not in compliance with the PIA contracting entity requirements? If a contracting entity fails to comply with the PIA contracting entity requirements, the city shall provide, to the contracting entity, written notice that describes the PIA contracting entity requirement that was violated, and advises the contracting entity that the contract may be terminated without further obligation to the contracting entity if the entity does not cure the violation on or before the 10th business day after the date the city provides the notice.168 166 Id. § 552.371(e). 167 Id. § 552.372(c). 168 Id. § 552.373. 31 62. May a city terminate its contract with a contracting entity? Yes. A city may terminate a contract with a contracting entity if: • the city provides the above-described noncompliance notice to the contracting entity; • the contracting entity does not cure the violation on or before the 10th business day after it has received the noncompliance notice; • the city determines that the contracting entity has intentionally or knowingly failed to comply with the PIA contracting entity requirements; and • the city determines that the contracting entity has not taken adequate steps to ensure future compliance with the requirements.169 63. What is considered “adequate steps to ensure future compliance” for the purpose of not terminating a contract with a contracting entity? A contracting entity is considered to be taking adequate steps to ensure future compliance with the PIA contracting entity requirements if the contracting entity: (1) produces contracting information requested by the city not later than the 10th business day after the date the city makes the request; and (2) establishes a records management program to enable the entity to comply with the PIA contracting entity requirements.170 64. Are there certain contracts that a city may not terminate for not complying with the PIA contracting entity requirements? Yes. A city may not terminate the following contracts for noncompliance of the PIA contracting entity requirements: • contracts that relate to the purchase of a public security; • contracts that are or may be used as collateral on a loan; or • contracts whose proceeds are used to pay debt service of a public security or loan.171 169 Id. § 552.374(a). 170 Id. § 552.374(b). 171 Id. § 552.374(c). 32 65. May a city include and enforce more stringent requirements than the PIA contracting entity requirements in its contracts with contracting entities? A city may include and enforce more stringent requirements in its contracts with contracting entities in order to increase accountability or transparency.172 66. Do the PIA contracting entity requirements create a cause of action? The PIA contracting entity requirements do not create a cause of action to contest a bid for or the award of a contract with a city.173 67. May a requestor file a suit for a writ of mandamus to force a city or contracting entity to comply with the PIA contracting entity requirements? A requestor may file a suit for a writ of mandamus to compel a city or a contracting entity to comply with the PIA contracting entity requirements.174 IV. Statutory Exceptions That Allow Information to Be Withheld A. Information that Is Presumed Public 68. Is there a list of items that are presumed to be public information? Yes. The Act lists items that are presumed to be public information. Section 552.022(a) of the Government Code states “(w)ithout limiting the amount or kind of information that is public information under this chapter, the following categories of information are public information and not excepted from required disclosure unless made confidential under this chapter or other law.”175 For example, completed reports,176 public court record information,177 and settlement agreements to which a city is a party178 are just a few of the items that are considered public information. 69. What “contracting information” is presumed to be public information? “Contracting information” means the following information maintained by a city or sent between a city and a vendor, contractor, potential vendor, or potential contractor: 172 Id. § 553.375. 173 Id. § 552.376. 174 Id. § 552.321(c). 175 Id. § 552.022(a). 176 Id. § 552.022(a)(1). 177 Id. § 552.022(a)(17). 178 Id. § 552.022(a)(18). 33 • Information in a voucher or contract relating to the receipt or expenditure of public funds by a city; • Solicitation or bid documents relating to a contract with a city; • Communications sent between a city and a vendor, contractor, potential vendor or potential contractor during the solicitation, evaluation, or negotiation of a contract; • Documents, including bid tabulations, showing the criteria by which a governmental body evaluates each vendor, contractor, potential vendor, or potential contractor responding to a solicitation and, if applicable, an explanation of why the vendor or contractor was selected; and • Communications and other information sent between a city and a vendor or contractor related to the performance of a final contract with the city or work performed on behalf of the city.179 70. Is a discretionary exception considered “other law” for the purpose of withholding public information? Discretionary exceptions are designed to protect the interests of the city and are not considered “other law” for purposes of section 552.022 of the Government Code. Public information can only be withheld if it is “made confidential under [the Act] or other law.”180 However, sections 552.104 (Information Related to Competition or Bidding) and 552.133 (Public Power Utility Competitive Matters) are two exceptions to this general rule.181 71. Is there “other law” which may be relied upon to withhold information presumed to be public under section 552.022 of the Government Code? The Texas Supreme Court has concluded the term “other law” as it is used in section 552.022 of the Government Code includes the Texas Rules of Civil Procedure and Texas Rules of Evidence.182 Accordingly, the attorney-client privilege and work-product doctrine could be considered “other law” for the purpose of withholding public information.183 179 Id. § 552.003(1-a). 180 Id. § 552.022(a). 181 Id. §§ 552.104(b); .133(c). 182 In re City of Georgetown, 53 S.W.3d 328, 332 (Tex. 2001); Tex. Att’y Gen. ORD-676 (2002). 183 Id.; See also Paxton v. City of Dallas, 509 S.W.3d 247, 262, 271 (Tex. 2017). 34 B. General Issues Regarding Confidential Records 72. Is there a laundry list of items that are confidential under the Act and other state laws? At this time, there does not appear to be an entity that publishes a single, comprehensive list of all the types of information that are confidential under state law. A governmental body should consult closely with its attorney and/or public information coordinator regarding records that state or federal law specifically require or allow to be withheld from the public. 73. Can staff promise confidentiality for certain records that are provided to the city? A promise of confidentiality from staff or a related promise within a governmental contract generally does not give the city the right to withhold certain information from public disclosure. Such promises are only enforceable if a state statute specifically allows the city to guarantee the confidentiality of the information.184 74. Can a city substitute a new document or produce a redacted copy of a record in response to a public information request? The city is required to make copies of the actual records that exist. If authorized by law, the city can cross through or otherwise redact the confidential information. However, a city may not substitute a new document in which only the non-confidential information is presented, unless the requestor consents to the substitution.185 C. Information about Public Officials/Employees 75. Can a governmental body disclose a public official or public employee’s home address, home phone number, emergency contact information, social security number, or family information? A public official or public employee may request in writing that the city not reveal his/her home address, home phone number, emergency contact information, social security number, or information about family members. In fact, a city is required to ask each employee or official whether they want such information to be treated as confidential. This inquiry must be made within 14 days of the employee being hired, appointed, elected or ending service with the city.186 If the employee indicates in writing a preference for such confidentiality, the city cannot release the personal information.187 184 Tex. Att’y Gen. Op. Nos. H-258 (1974), JM-672 (1987); Tex. Att’y Gen. ORD-455 (1987). 185 Tex. Att’y Gen. ORD-633 (1995), ORD-606 (1992). 186 Tex. Gov’t Code § 552.024(a)-(b). 187 Id. §§ 552.024(c), .117. 35 Although the city is required to make this inquiry at the start or end of the employee’s employment with the city, the ultimate duty to make a written request for confidentiality rests with the employee. If the city receives a request for the employee’s information and no confidentiality request has been filed by the employee, it is too late for the city to ask the employee whether such confidentiality is preferred. In such a case, the city would have to release the personal information to the requestor.188 It is important to note that an elected public officer’s personal information is excepted from disclosure whether or not the officer affirmatively elects to have his or her information kept confidential.189 Moreover, a peace officer, including a current or honorably retired peace officer, is not required to file a written request to keep his/her personal information confidential.190 As such, an elected public officer’s and a peace officer’s home address, home phone number, emergency contact information, social security number, and any information about family members are automatically confidential.191 Additionally, the home address, home phone number, emergency contact information, social security number, and any information about family members relating to a peace officer killed in the line of duty will remain confidential after his death. The section also covers certain other state employees whose duties involve law enforcement.192 76. Can a city withhold a public official or public employee’s home address, home phone number, emergency contact information, social security number, or family information without requesting an attorney general ruling? A city may withhold a public official or public employee’s home address, home phone number, emergency contact information, social security number, or family information without requesting an attorney general’s ruling.193 If a city withholds the public employee’s information, the city must provide the requestor, on a form prescribed by the attorney general, with: 1) a description of the information redacted or withheld; 2) the citation to section 552.024 of the Government Code; and 3) instructions regarding how the requestor may seek an attorney general ruling regarding whether the withheld information is excepted from disclosure.194 188 Id. § 552.024(d). 189 Id. § 552.117(a)(17). 190 Id. § 552.117(a)(2), (4). 191 Id. §§ 552.117(a), .1175. See id. § 552.1175(b) (also protects date of birth). 192 Id. § 552.117(a)(4). 193 Id. § 552.024(c)(2). 194 Id. § 552.024(c-2). 36 The requestor has the ability to ask for an attorney general’s ruling regarding whether the withheld information is excepted from disclosure.195 The attorney general’s office has established procedures and deadlines for receiving information necessary to decide the ruling and briefs from the requestor, the city, and any other interested party.196 Like any other request for an attorney general ruling, the attorney general has 45 business days to render a ruling. 77. Are personal notes kept by an official subject to the Act? Personal notes pertaining to official business that are made by an official are generally subject to the Act. A city should consider the following factors if it receives a request for such information: (1) who prepared the notes; (2) who possesses or controls the document; (3) who has access to it; (4) the nature of its contents; (4) whether the document is used in conducting the business of the city; and (5) whether public funds were expended in creating or maintaining the document.197 D. Personnel Information 78. What information within a public employee’s personnel file is considered public information? The vast majority of information within a public employee’s personnel file is considered public information and accessible to the public. For example, information about a public employee’s job performance, dismissal, demotion, promotion, resignation, and salary information is generally considered open.198 Similarly, job-related test scores of public employees or applicants for public employment are generally treated as public information,199 as are letters of recommendation, and opinions and recommendations concerning other routine personnel matters.200 However, attorney general rulings have required information about an employee’s withholding on a federal tax form be withheld, as well as information about an employee’s beneficiary under a city life insurance program.201 A city may refuse to reveal certain information under common law privacy through Section 552.101 of the Government Code. To make such a determination, the city should consider: 195 Id. § 552.024(c-1). 196 See 1 Tex. Admin. Code §§ 63.11 – 63.16. 197 See, e.g., Tex. Att’y Gen. ORD-626 (1994) (handwritten notes taken during D.P.S. promotion board oral interviews are subject to Act), ORD-635 (1995) (public official’s or employee’s appointment calendar may be subject to Act). 198 Tex. Gov’t Code § 552.022(a)(2). See also Tex. Att’y Gen. ORD-405 (1983), ORD-444 (1986). 199 Tex. Att’y Gen. ORD-441 (1986). 200 Tex. Att’y Gen. ORD-615 (1993). 201 Tex. Att’y Gen. ORD-600 (1992). 37 1) whether the information contains highly intimate or embarrassing facts about the person; and 2) whether there is any legitimate public interest in the release of or access to this information.202 Under the above two part-test, a court has held that a governmental body did not have to release the names and statements of victims and witnesses alleging sexual harassment.203 The court found that the information at issue was intimate or embarrassing and that the public had no legitimate interest in the release of that information. 79. Can a city disclose the dates of birth of public employees? The dates of birth of public employees are excepted from disclosure under section 552.102(a).204 However, only those public employee’s birth dates that are contained in records maintained by the city in a personnel context are protected. Also, this exception applies to former, as well as, current public employees.205 However, it does not apply to applicants for employment,206 nor to private employees or private individuals. 80. Do employees have a special right of access to information contained in their own personnel file? Most information within an employee’s personnel file can be accessed by the involved employee or the employee’s designated representative.207 However, it is possible for a city to withhold the employee’s personnel information from the employee under some other exception. For example, a city may deny an employee information in the employee’s personnel file if the information relates to issues that are currently under civil or criminal litigation.208 202 See Industrial Foundation of the South v. Texas Industrial Accident Board, 540 S.W.2d 668 (Tex. 1976), cert denied, 430 U.S. 931 (1977); Hubert v. Harte-Hanks Texas Newspapers, Inc., 652 S.W.2d 546, 550 (Tex. App.—Austin 1983, writ ref’d n.r.e.). 203 See Morales v. Ellen, 840 S.W.2d 519 (Tex. App.-El Paso 1992, no writ). 204 See Tex. Comptroller of Pub. Accounts v. Attorney Gen. of Tex., 354 S.W.3d 336 (Tex. 2010). 205 Tex. Att’y Gen. Op. No. JM-229 at 2 (1984). 206 Tex. Att’y Gen. ORD-455 at 8 (1987). 207 Tex. Gov’t Code § 552.023(a). See Tex. Att’y Gen. ORD-288 (1981). 208 Tex. Att’y Gen. ORD-288 (1981). (The Attorney General generally does not allow a governmental body to withhold information pursuant to the litigation exception if the opposing party has had previous access to the information. Thus, if a governmental body is engaged in litigation with its own employee, the litigation exception generally would not protect any information in the employee’s personnel file to which the employee had previously had access.) 38 81. Are the personnel files of police officers and/or firefighters in a city that has adopted civil service treated differently under the Act? Section 143.089 of the Local Government Code prohibits a city’s civil service fire or police department from releasing information from the department’s personnel file (the “g” file). Instead, the department is required to refer someone who requests information from the “g” file to the city’s director of civil service, who maintains the civil service file.209 The civil service file does not contain information about complaints against civil service police officers or firefighters if no departmental disciplinary action was taken or if the disciplinary action was determined to have been taken without just cause.210 However, if there is disciplinary action taken against a police officer or firefighter, then all investigatory records relating to the investigation and disciplinary action, including background documents such as complaints, witness statements, and documents of like nature from individuals who were not in a supervisory capacity are required to be placed in the civil service file.211 Note that a law enforcement agency hiring a police officer is entitled to view the contents of the officer's “g” file.212 82. Are there certain work schedules or time sheets considered confidential under the Act? The work schedules or time sheets of a firefighter, volunteer firefighter, or certain emergency medical services personnel 213 are confidential and excepted from public disclosure.214 E. General Exception to Withholding Information 83. Can a city withhold social security numbers without requesting an attorney general’s ruling? A city can withhold the social security number of a living person without requesting an attorney general ruling.215 A city must release the requestor’s social security number to the requestor or an authorized representative of the requestor.216 209 Tex. Loc. Gov’t Code § 143.089(g). 210 Id. § 143.089(c). See also City of San Antonio v. San Antonio Express-News, 47 S.W.3d 556 (Tex. App.— San Antonio 2000, pet. denied); City of San Antonio v. Tex. Attorney General, 851 S.W.2d 946, 949 (Tex. App.—Austin 1993, writ denied); Tex. Att’y Gen. ORD-642 (1996). 211 Tex. Loc. Gov’t Code § 143.089(a)(2). See also Abbott v. City of Corpus Christi, 109 S.W.3d 113, 122 (Tex. App.—Austin 2003, no pet.). 212 Tex. Loc. Gov’t Code § 143.089(h);Tex. Occ. Code § 1701.454 (providing requirements for law enforcement agency to hire persons licensed under chapter 1701). 213 See Tex. Health & Safety Code § 773.003. (Definition of “emergency medical services personnel”.) 214 Tex. Gov’t Code § 552.159. 215 Tex. Gov’t Code § 552.147(b). 216 See id. § 552.023. 39 84. Can a city withhold the dates of birth of members of the public? A city can withhold the dates of birth of members of the public.217 Dates of birth of members of the public are protected by common-law privacy pursuant to section 552.101 of the Government Code. 85. Are e-mail addresses protected from disclosure under the Act? A city cannot release the e-mail address of a member of the public that is provided for the purpose of communicating electronically with the city.218 The member of the public can allow his/her e-mail address to be disclosed if the member of the public affirmatively consents to its release. Under certain circumstances, an e-mail address is public if the city is provided with the e-mail address: 1) by a person who has a contractual relationship with the city; 2) by a vendor who seeks a contract with the city; 3) during the bidding process; 4) on a letterhead, coversheet, printed document or other document made available to the public; or 5) for the purpose of providing public comment on or receiving notices related to an application for a license as defined by section 2001.003(2) of the Government Code or receiving orders or decisions from a city.219 86. What information is protected from disclosure under the exception for intra-agency and inter-agency memoranda or letters? The Act allows a city, in limited circumstances, to withhold certain information that is contained in an inter-agency or intra-agency memoranda or letter.220 This exception has been held to only apply to internal staff communications consisting of advice, recommendations, or opinions that reflect the policymaking process.221 This exception does not apply to purely factual information that could be severed from the opinion portions of the document. Additionally, this exception does not protect routine memoranda or letters on administrative and personnel matters, unless those matters involve policy 217 Paxton v. City of Dallas, No. 03-13-00546-CV, 2015 WL 3394061, at *3 (Tex. App.—Austin, May 22, 2015, pet. denied) (memo op.). 218 Tex. Gov’t Code § 552.137. 219 Id. § 552.137(c). 220 Id. § 552.111. 221 City of Garland V. Dallas Morning News, 22 S.W.3d 351, 360 (Tex. 2000); Lett v. Klein Indep. Sch. Dist., 917 S.W.2d 455, 456 (Tex. App.—Houston [14th Dist.] 1996, writ denied); Tex. Dep’t of Pub. Safety v. Gilbreath, 842 S.W.2d 408, 412-13 (Tex. App.—Austin 1992, no writ); Tex. Att’y Gen. ORD- 615 (1993). See also Tex. Att’y Gen. ORD-631 (1995) (report addressing systematic discrimination against minorities and the educational mission of the university in question was not open to public). 40 issues of a broad scope.222 For example, the evaluation of an individual employee would probably not be protected from disclosure under this exception.223 On the other hand, a university report addressing systematic discrimination against minorities has been found to be protected by this exception.224 It should be noted that information created by outside consultants acting on the city’s behalf may in certain cases be covered by this exception.225 87. Can a city release copies of certified agendas or recording of closed meetings (executive sessions)? A certified agenda is a written document that summarizes each of the issues that were discussed at a closed meeting or the minutes of the closed meeting. The Open Meeting Act requires a governmental body have a certified agenda or recording of its closed meetings.226 The certified agenda or recording of the closed meeting is considered confidential227 and may not be released except under order of a court.228 Therefore, a certified agenda or recording of a closed meeting cannot be obtained through a PIA request. Actually, the unlawful release of a certified agenda or recording of a closed meeting is a class B misdemeanor.229 Moreover, person who releases a certified agenda or recording of a closed meeting may be liable to a person injured or damaged by the disclosure for: (1) actual damages, including damages for personal injury or damage, lost wages, defamation, or mental or other emotional distress; (2) reasonable attorney fees and court costs; and (3) at the discretion of the jury or judge, as the case may be, exemplary damages.230 Governmental bodies can withhold the certified agenda or recording of a closed meeting without asking for an attorney general’s ruling.231 However, the certified agenda or recording of a closed meeting can be reviewed by members of the governmental body who attended the closed meeting.232 Also, elected members that were absent from the 222 Tex. Att’y Gen. ORD-631 at 3 (1995); City of Garland V. Dallas Morning News, 22 S.W.3d 351, 360 (Tex. 2000). 223 Tex. Att’y Gen. ORD-615 (1993). 224 Tex. Att’y Gen ORD-631 (1995). 225 Id. 226 Tex. Gov’t Code § 551.103. 227 Tex. Att’y Gen. ORD-495 (1988). 228 Tex. Gov’t Code § 551.104. 229 Id. § 551.146(a)(1). 230 Id. § 551.146(a)(2). 231 Tex. Att’y Gen. ORD-684 (2009). 232 Tex. Att’y Gen. Op. No. JC-120 (1999), DM-227 (1993). 41 closed meeting can review the certified agenda or recording.233 But, a member of governmental body cannot have a copy or make a copy of the certified agenda or recording whether they were present for or absent from the closed meeting.234 Additionally, a governmental body may not allow a member to review the certified agenda or recording of a closed meeting once the member has left the office.235 The governmental body may adopt procedures for reviewing the certified agenda or recording, but it cannot absolutely prohibit the review by a member of the governmental body. F. Law Enforcement Information 88. What information within the records of a law enforcement entity may be withheld? Section 552.108 of the Government Code contains what is generally referred to as the “law enforcement exception”. This exception allows the governmental body to withhold four types of information: 1) Information that, if released, would affect investigations or prosecutions: Information that is held by a law enforcement agency or prosecutor that, if disclosed, would interfere with the law enforcement agency or prosecutor’s ability to detect, investigate or prosecute a crime; 2) Information about certain prosecutions: Information that deals with the prosecution of crimes that did not result in a conviction or a deferred adjudication; 3) Threats against peace officers: Information that deals with threats against peace officers collected or disseminated under section 411.048 of the Government Code; or 4) Attorney w ork-product: Information that the attorney of the governmental body prepared for use in criminal litigation or information reflecting the mental impressions or legal reasoning of the attorney regarding such litigation.236 It is important to note that the law enforcement exception does not except from disclosure basic information about an arrested person or basic information within a criminal citation or police offense report.237 Information that has been held to be open includes: 233 Tex. Att’y Gen. Op. No. JC-120 (1999). 234 Id.; Tex. Att’y Gen. LO-98-033 (1998). 235 Tex. Att’y Gen. Op. No. JC-120 (1999). 236 Tex. Gov’t Code § 552.108(a). 237 Id. § 552.108(c); See also Tex. Att’y Gen. ORD-127 (1976); Houston Chronicle Publ’g Co. v. City of Houston, 531 S.W.2d 177 (Tex. Civ. App.—Houston [14th Dist.] 1975), writ ref’d n.r.e. per curiam, 536 S.W.2d 559 (Tex. 1976). 42 1) The name, age, address, race, sex, occupation, alias, Social Security number, police department identification number, and physical condition of an arrested person; 2) The date and time of the arrest; 3) The place of the arrest; 4) The offense charged and the court in which it is filed; 5) The details of the arrest; 6) Booking information; 7) The notation of any release or transfer; 8) The location of the crime; 9) The identification and description of the complainant; 10) The premises involved; 11) The time of occurrence of the crime; 12) The property involved, if any; 13) The vehicle involved, if any; 14) A description of the weather; 15) A detailed description of the offense; and 16) The names of the arresting and investigating officers.238 Section 552.108 only applies to criminal investigations and prosecutions. Section 552.108 is inapplicable when no criminal investigation or prosecution results from an administrative investigation of a police officer’s alleged misconduct.239 It is also important to note that the law enforcement exception may apply to departments other than the police department if those departments are, by law, charged with the detection, investigation, or prosecution of crime. For example, the attorney general has determined that the arson investigation unit of a fire department may cite the law enforcement exception to protect some of its records.240 238 Tex. Att’y Gen. ORD-127 at 3-5 (1976). 239 Morales v. Ellen, 840 S.W.2d 519 (Tex. Civ. App. – El Paso 1992, writ denied) (Gov't Code § 552.108 not applicable where no criminal investigation or prosecution of police officer resulted from investigation of allegation of sexual harassment); Tex. Att’y Gen. ORD-350 (1982) (predecessor provision of Gov't Code § 552.108 not applicable to IAD investigation file when no criminal charge against officer results from investigation of complaint against police officer). 240 Tex. Att’y Gen. ORD-127 (1976). 43 89. Can a city request a previous determination for records under the “law enforcement exception”? Yes. The attorney general announced at the 2015 Open Government Conference a new previous determination program whereby the attorney general’s office would issue a section 552.108(a)(1) Previous Determination (“108 PD”), which once granted, would allow a governmental body to withhold some law enforcement records related to pending criminal cases without needing to request a ruling from the attorney general, so long as the governmental body complied with the specific requirements of the 108 PD program, including the requirement that at least basic information be released within five business days of receiving the request. Pursuant to the 108 PD program, records may be withheld under section 552.108(a)(1) in the following circumstances: 1. The city makes a good faith determination that the information at issue relates to the detection, investigation, or prosecution of crime; 2. The release of such information would interfere with the detection, investigation or prosecution of crime; 3. The city will release at least the basic information from the information at issue (it may release more); 4. The city will release such information within five business days of receiving the request; 5. The city will provide the requestor with the required notice form promulgated by the attorney general, which describes the requestor’s rights and the types of information withheld; and 6. The city has not previously received a request for the same information from the same requestor after the governmental body has provided the requestor with the information described above. A city may request the 108 PD by seeking a ruling from the attorney general’s office in response to an open records request. The city should request the 108 PD in conjunction with the kind of file to which the city will apply the 108 PD. For example, the city should request the 108 PD in relation to a file that 1. pertains to law enforcement records related to an open criminal case; 2. the release of the information would interfere with the detection, investigation, or prosecution of crime; 3. portions of the basic information are not confidential (e.g., the name of a sexual assault victim who is also a complainant); and 44 4. the information is not otherwise confidential in its entirety pursuant to other statutes (e.g., juvenile records subject to section 58.008 of the Family Code, or child abuse records subject to section 261.201 of the Family Code.) Even if a city has been granted a previous determination of this type, the city may still request an open records decision on any records. When in doubt, the city should consult with the city attorney or seek a ruling from the attorney general’s office. Misapplication of the 108 PD may result in the presumption that the information at issue is public. Additionally, misuse of the 108 PD may result in the attorney general’s office revoking the 108 PD from the city. Additional information regarding the 108 PD program can be obtained from the attorney general’s office or here. 90. Can motor vehicle accident report information be disclosed under the Act? The disclosure of motor vehicle accident reports, also known as ST-3, CRB-3 or CR-3 forms, is governed by the Transportation Code.241 In general, motor vehicle accident reports are privileged and for the confidential use of the Department of Public Safety (DPS), an agency of the United States, the state of Texas, or a Texas local government that uses the information for accident prevention purposes.242 However, certain people and entities can obtain an unredacted copy of a motor vehicle accident report. With a written request and payment of any required fee, the following requestors can obtain the unredacted report: 1) DPS; 2) An agency of the United States, state of Texas, or a local government of Texas that uses the information for accident prevention purposes; 3) Law enforcement agency that employs the peace officer who investigated the accident and sent to DPS, including an agent of the law enforcement agency authorized by contract to obtain the information; 4) The court in which a case involving a person involved in the accident is pending if the report is subpoenaed; or 5) any person directly concerned in the accident or having a proper interest therein, including: a) any person involved in the accident; b) the authorized representative of any person involved in the accident; 241 Tex. Transp. Code § 550.065. 242 Id. § 550.065(b). 45 c) a driver involved in the accident; d) an employer, parent, or legal guardian of a driver involved in the accident; e) the owner of a vehicle or property damaged in the accident; f) a person who has established financial responsibility for a vehicle involved in the accident in a manner described by section 601.051 of the Transportation Code; including a policyholder of a motor vehicle liability insurance policy covering the vehicle; g) an insurance company that issued an insurance policy covering a vehicle involved in the accident; h) an insurance company that issued a policy covering any person involved in the accident; i) a person under contract to provide claims or underwriting information to a person described above in f, g, or h; j) a radio or television station that holds a license issued by the Federal Communication Commission; k) a newspaper that is: i) a free newspaper of general circulation or qualified under section 2051.044 of the Government Code to publish legal notices; ii) published at least once a week; and iii) available and of interest to the general public in connection with the dissemination of news; or l) any person who may sue because of death resulting from the accident.243 Any person, with a written request and payment of the required fee, can receive a redacted version of the motor vehicle accident report.244 The following information must be withheld in the redacted version of the accident report: 1) personal information as defined by section 730.003 of the Transportation Code245; 243 Id. §§ 550.065(b), (c). 244 Id. § 550.065(c-1). 245 Id. § 730.003(6) ("Personal information" means information that identifies a person, including an individual's photograph or computerized image, social security number, driver identification number, name, address, but not the zip code, telephone number, and medical or disability information. The term does not include: 46 2) the first, middle, and last name of any person listed in an accident report, including a vehicle driver, occupant, owner, or lessee, a bicyclist, a pedestrian, or a property owner; 3) the number of any driver's license, commercial driver's license, or personal identification certificate issued to any person listed in an accident report; 4) the date of birth, other than the year, of any person listed in an accident report; 5) the address, other than zip code, and telephone number of any person listed in an accident report; 6) the license plate number of any vehicle listed in an accident report; 7) the name of any insurance company listed as a provider of financial responsibility for a vehicle listed in an accident report; 8) the number of any insurance policy issued by an insurance company listed as a provider of financial responsibility; 9) the date the peace officer who investigated the accident was notified of the accident; 10) the date the investigating peace officer arrived at the accident site; 11) the badge number or identification number of the investigating officer; 12) the date on which any person who died as a result of the accident died; 13) the date of any commercial motor vehicle report; and 14) the place where any person injured or killed in an accident was taken and the person or entity that provided the transportation.246 91. Can a city release a body worn camera recording? Chapter 1701 of the Occupations Code provides the procedures a requestor must follow when seeking a body worn camera recording. A member of the public is required to (A) information on vehicle accidents, driving or equipment-related violations, or driver's license or registration status; or (B) information contained in an accident report prepared under: (i) Chapter 550; or (ii) former Section 601.004 before September 1, 2017.) 246 Id. § 550.065(f). 47 provide the following information when submitting a written request to a law enforcement agency for information recorded by a body worn camera: 1) The date and approximate time of the recording; 2) The specific location where the recording occurred; and 3) The name of one or more persons known to be a subject of the recording.247 Failure to provide this information does not preclude a requestor from requesting the same information again.248 However, even if the requestor provides the proper information to obtain the body worn camera recording, chapter 1701 provides for the confidentiality of the recordings under certain circumstances. A body worn camera recording is confidential if it was not required to be made under a law or policy adopted by the appropriate law enforcement agency and does not relate to a law enforcement purpose.249 Also, any recording that documents the use of deadly force or related to an administrative or criminal investigation of an officer is considered confidential and remains confidential until all criminal matters are finally adjudicated and all administrative investigations are complete.250 However, a law enforcement agency may choose to release such information if doing so furthers a law enforcement purpose.251 Before releasing a body worn camera recording that was made in a private place or in connection with a fine-only misdemeanor, the law enforcement agency must receive authorization from the person who is the subject of the recording, or if the person is deceased, from the person’s authorized representative.252 A city may continue to raise section 552.108 (law enforcement exception) or other applicable exception to disclosure or law for body-worn camera recordings.253 Also, for body worn cameras, the ten and 15 business day deadlines associated with requesting a ruling from the attorney general are extended to 20 and t25 business days, respectively.254 Additionally, a city that receives a “voluminous request” for body worn camera recording is considered to have complied with the request if it provides the information not later than the 21st business day after it receives the request.255 A "voluminous request" is one that includes: 247 Tex. Occup. Code § 1701.661(a). 248 Id. § 1701.661(b). 249 Id. § 1701.661(h). 250 Id. § 1701.660(a). 251 Id. § 1701.660(b) 252 Id. § 1701.661(f). 253 Id. § 1701.661(e). 254 Id. § 1701.662. 255 Id. § 1701.663. 48 (1) a request for body worn camera recordings from more than five separate incidents; (2) more than five separate requests for body worn camera recordings from the same person in a 24-hour period, regardless of the number of incidents included in each request; or (3) a request or multiple requests from the same person in a 24-hour period for body worn camera recordings that, taken together, constitute more than five total hours of video footage. 92. Is certain crime victim information confidential? Certain crime victim information is confidential and excepted from disclosure if the information identifies an individual as a victim of: (1) human trafficking, sexual abuse of a young child or disabled individual, indecency with a child, including sexual performance by a child, sexual assault, including aggravated sexual assault, compelling prostitution; (2) an offense that is part of the same criminal episode; or (3) a victim of any criminal offense, if the victim was younger than 18 years of age when any element of the offense was committed.256 Information may be disclosed: (1) to any victim identified by the information, or to the parent or guardian of a victim identified by the information who was younger than 18 years of age when the offense was committed; (2) to a law enforcement agency for investigative purposes; or (3) in accordance with a court order requiring the disclosure.257 G. Lawsuit or Other Legal Information 93. What type of information is excepted from disclosure under the attorney/client privilege? Section 552.107(1) of the Government Code protects information coming within the attorney-client privilege. When asserting the attorney-client privilege, a city has the burden of providing the necessary facts to demonstrate the elements of the privilege in order to withhold the information at issue.258 The elements are as follows: 1) A city must demonstrate that the information constitutes or documents a communication.259 2) The communication must have been made "for the purpose of facilitating the rendition of professional legal services" to the client governmental 256 Tex. Gov’t Code § 552.1315(a). 257 Id. § 552.1315(b). 258 Tex. Att’y Gen. ORD-676 at 6-11 (2002). 259 Id. at 7. 49 body.260 The privilege does not apply when an attorney or representative is involved in some capacity other than that of providing or facilitating professional legal services to the client city.261 Governmental attorneys often act in capacities other than that of professional legal counsel, such as administrators, investigators or managers. Thus, the mere fact that a communication involves an attorney for the government does not demonstrate this element. 3) The privilege applies only to communications between or among clients, client representatives, lawyers and lawyer representatives.262 Thus, a city must inform this office of the identities and capacities of the individuals to whom each communication at issue has been made. 4) The attorney client privilege applies only to a confidential communication,263 meaning it was "not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication."264 Whether a communication meets this definition depends on the intent of the parties involved at the time the information was communicated.265 Moreover, because the client may elect to waive the privilege at any time, a city must explain that the confidentiality of a communication has been maintained. Section 552.107(1) generally excepts an entire communication that is demonstrated to be protected by the attorney client privilege unless otherwise waived by the governmental body.266 Also, if a city fails to timely seek an open records letter ruling to withhold information subject to the attorney-client privilege, the privilege is not waived and constitutes a compelling reason to withhold information under section 552.302 of the Government Code.267 260 Id.; See Tex. R. Evid. 503(b)(1). 261 Tex. Att’y Gen. ORD-676 at 7 (2002). See In re Texas Farmers Ins. Exch., 990 S.W.2d 337, 340 (Tex. App. – Texarkana 1999, orig. proceeding) (attorney client privilege does not apply if attorney acting in a capacity other than that of attorney). 262 Tex. Att’y Gen. ORD-676 at 8 (2002). See Tex. R. Evid. 503(b)(1)(A), (B), (C), (D), (E). 263 Tex. Att’y Gen. ORD-676 at 10 (2002). See Tex. R. Evid. 503(b)(1). 264 Tex. Att’y Gen. ORD-676 at 10 (2002). See Tex. R. Evid. 503(a)(5). 265 Tex. Att’y Gen. ORD-676 at 10 (2002). See Osborne v. Johnson, 954 S.W.2d 180, 184 (Tex. App.— Waco 1997, no writ). 266 See Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex. 1996) (privilege extends to entire communication, including facts contained therein). 267 Paxton v. City of Dallas, 509 S.W.3d 247, 262, 271 (Tex. 2017). 50 94. When is information that relates to pending or anticipated litigation protected from disclosure? Under Section 552.103 of the Government Code, a city may withhold information about pending or reasonably anticipated civil or criminal litigation. The litigation must be pending or reasonably anticipated as of the date the PIA request is received by the city.268 The city, its officials, or its staff must be a party to such litigation.269 Whether litigation is reasonably anticipated is a question that involves both factual and legal issues.270 There must be concrete evidence that litigation is likely. It must be more than mere conjecture. The city must identify the issues that are involved in the litigation and explain how the information to be withheld relates to those issues. The governmental body should provide a copy of the relevant pleadings if the case has been filed. Information that falls under the litigation exception generally can be withheld until the litigation has concluded or is no longer anticipated.271 Criminal litigation is considered concluded once the statute of limitations has expired or when the defendant has exhausted all appellate and post-conviction remedies in state and federal court.272 State law does not specifically define when civil litigation is considered to be concluded. Generally, civil litigation is considered to be concluded when all right of appeal has been exhausted and/or a final judgment has been entered. However, generally if the parties to civil litigation have inspected the records under discovery or through other means, the litigation exception would no longer apply. 95. When can a city withhold attorney work product? Section 552.111 encompasses the attorney work product privilege found in rule 192.5 of the Texas Rules of Civil Procedure.273 Rule 192.5 defines work product as: 1) material prepared or mental impressions developed in anticipation of litigation or for trial by or for a party or a party's representatives, including the party's attorneys, consultants, sureties, indemnitors, insurers, employees, or agents; or 2) a communication made in anticipation of litigation or for trial between a party and the party's representatives or among a party's representatives, 268 Tex. Gov’t Code § 552.103(c). 269 Id. § 552.103(a). 270 See University of Texas Law School v. Texas Legal Foundation, 958 S.W.2d 479 (Tex. App.— Austin 1997, no pet.). 271 Tex. Att’y Gen. ORD-647 (1996). 272 Tex. Gov’t Code § 552.103(b). 273 City of Garland v. Dallas Morning News, 22 S.W.3d 351, 360 (Tex. 2000); Tex. Att’y Gen. ORD-677 at 4-8 (2002). 51 including the party's attorneys, consultants, sureties, indemnitors, insurers, employees or agents.274 For a city to use this exception, the city body bears the burden of demonstrating that the information was created or developed for trial or in anticipation of litigation by or for a party or a party’s representative.275 To show that the information was made or developed in anticipation of litigation, the city has to prove that: a) a reasonable person would have concluded from the totality of the circumstances surrounding the investigation that there was a substantial chance that litigation would ensue; and b) the party resisting discovery believed in good faith that there was a substantial chance that litigation would ensue and [created or obtained the information] for the purpose of preparing for such litigation.276 A “substantial chance” of litigation does not mean a statistical probability, but rather “that litigation is more than merely an abstract possibility or unwarranted fear.”277 Also, the city has to prove that the materials or mental impressions must have been prepared or developed by or for a party or party’s representatives, as well as, the communication was between a party and the party’s representatives.278 Therefore, the city must identify the parties and potential parties to the litigation, the person that prepared the information, and any individual with whom the information was shared in order to claim the work product privilege.279 H. Government-Operated Utility Information 96. Can a city-operated utility disclose customers’ personal information? Personal information in a customer’s account record, or any information relating to the volume or units of utility usage or the amounts billed to or collected from the individual for utility usage, may not be disclosed by a city-operated utility unless the customer elects to make the information public or certain exceptions to this prohibition of disclosure apply.280 Also excluded from public disclosure is information: (1) that reveals whether an account is delinquent or eligible for disconnection; and (2) collected as part of an advanced 274 Tex. R. Civ. P. 192.5(a). 275 Id.; Tex. Att’y Gen. ORD-677 at 6-8 (2002). 276 Nat’l Tank Co. v. Brotherton, 851 S.W.2d 193, 207 (Tex. 1993). 277 Id. at 204; Tex. Att’y Gen. ORD-677 at 7 (2002). 278 Tex. R. Civ. P. 192.5(a); Tex. Att’y Gen. ORD-677 at 7-8 (2002). 279 Tex. Att’y Gen. ORD-677 at 8 (2002). 280 Tex. Util. Code § 182.052(a). (The 87th Texas Legislature passed H.B. 872. essentially reversing the prior law’s requirements. Before H.B. 872, utility customers had to fill out a form to request their information remain confidential. Failure to do so made the customer’s information public. Now, a customer’s information is protected unless the customer opts to make it public). 52 metering system.281 A city-operated utility would include a city-entity that, for compensation, provides water, wastewater, sewer, gas, garbage, electricity, or drainage service.282 Personal information is defined to include a customer’s address, telephone number, and social security number.283 The city-operated utility must include, with a bill sent to each customer, or post on the utility’s Internet website, a notice of a customer’s right to request disclosure of his or her personal information and a form 284 by which the customer may request disclosure by marking an appropriate box on the form and returning it to the utility.285 A customer may rescind a request for disclosure by providing the city-operated utility a written request to withhold the customer’s personal information beginning on the date the utility receives the request.286 This prohibition of disclosure does not affect the ability of the utility to release such information to other governmental agencies for official purposes, to consumer reporting agencies, or to another entity providing utility service.287 Although the utility has a duty to notify customers of their right to disclose such information, the ultimate duty to request disclosure remains with the customer. If the utility customer does not make such a written request, the utility may not disclose the personal information within the utility records. If a member of the public requests access to this personal information, and the customer has not given the utility permission to disclose his or her information, the utility will be able to withhold the customer’s personal information without asking for an open records ruling.288 When in doubt, the city may submit a request for a ruling to the attorney general’s office. 97. What information about a public power utility289 is confidential? Section 552.133 of the Government Code excepts from disclosure a public power utility’s information related to a competitive matter. The exception defines “competitive matters” as a utility-related matter that is related to the public power utility’s competitive activity.290 In order to be “utility-related,”, the matter must relate to the following six enumerated categories of information: 281 Tex. Gov’t Code § 552.1331(b). 282 Tex. Util. Code § 182.051(3). 283 Id. § 182.051(4). 284 The League’s legal department prepared an example form for customers to request disclosure of their records. This is just an example, and each city should have its city attorney review the form prior to its use. 285 Tex. Util. Code § 182.052(c). 286 Id. § 182.052(d). 287 Id. § 182.054. 288 Id. § 182.052(e). 289 Tex. Gov’t Code § 552.133(a). 290 Id. § 552.133(a-1). 53 1) generation unit specific and portfolio fixed and variable costs, including forecasts of those costs, capital improvement plans for generation units, and generation unit operating characteristics and outage scheduling; 2) bidding and pricing information for purchased power, generation and fuel, and Electric Reliability Council of Texas bids, prices, offers, and related services and strategies; 3) effective fuel and purchased power agreements and fuel transportation arrangements and contracts; 4) risk management information, contracts, and strategies, including fuel hedging and storage; 5) plans, studies, proposals, and analyses for system improvements, additions, or sales, other than transmission and distribution system improvements inside the service area for which the public power utility is the sole certificated retail provider; and 6) customer billing, contract, and usage information, electric power pricing information, system load characteristics, and electric power marketing analyses and strategies.291 Also, there is a list of sixteen categories of information that may not be deemed competitive matters and therefore cannot be withheld under this exception.292 Information or records of a city-operated utility that operates a chilled water program are subject to disclosure under the Act if the information or records are reasonably related to: (1) a city-operated utility's rate review process; (2) the method a city-operated utility uses to set rates for retail electric service; or (3) the method a city-operated utility uses to set rates for a chilled water program defined as: (A) a program to produce chilled water at a central plant and pipe that water to buildings for air conditioning, including a district cooling system or chilled water service; or (B) any other program designed to used chilled water to provide air conditioning, reduce peak electric demand, or shift electric load.293 Additionally, a city may disclose information pertaining to a city-owned power utility to a city-appointed citizen advisory board without waiving its right thereafter to assert an 291 Id. § 552.133(a-1)(1). 292 Id. § 552.133(a-1)(2). 293 Id. § 552.133(b-1); Tex. Util. Code § 11.03(3-a). 54 exception under the Act in response to a future public information request for this information.294 I. Purchasing/Procurement Information 98. What information must be disclosed if there is a public information request regarding a competitive bid? Section 552.104 of the Government Code allows a city to withhold information that is submitted in response to a competitive bid if disclosure of the information would give advantage to a competitor or bidder.295 This exception can only be asserted by the city. This exception applies when the city demonstrates that release of the information would harm its interests by providing an advantage to a competitor or bidder in a particular ongoing competitive situation or in a particular competitive situation where the city establishes the situation at issue is set to reoccur or there is a specific and demonstrable intent to enter into the competitive situation again in the future. Even if the information falls within one of the categories of information listed in section 552.022(a) of the Government Code, this exception allows the city to withhold that information under this exception.296 However, any expenditure for a parade, concert, or other types of entertainment events paid for in whole or in part with public funds is prohibited from being withheld under this exception.297 A city or other entity cannot include a provision in a contract that would prohibit disclosure of these expenditures. Any contract provision that does prevent disclosure of these expenditures is void.298 99. What information is protected under the exception for trade secrets or the exception for commercial or financial information that would give an advantage to competitors? Section 552.110 of the Government Code provides that certain information within bids and other documents may be protected under the exception for trade secrets or the exception for commercial or financial information that would give an advantage to competitors. First, information may be withheld if it is demonstrated based on specific factual evidence that the information is a trade secret.299 The term “trade secret” includes all forms and types of information, including business, scientific, technical, economic, or engineering information, and any formula, design, prototype, pattern, plan, compilation, program device, program, code, device, method, technique, process, procedure, financial 294 Tex. Att’y Gen. ORD-666 (2000). 295 Tex. Gov’t Code § 552.104(a). 296 Id. § 552.104(b). 297 Id. § 552.104(c). 298 Id. 299 Id. § 552.110(b). 55 data, or list of actual or potential customers or suppliers, whether tangible or intangible and whether or however stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if: • the owner of the trade secret has taken reasonable measures under the circumstances to keep the information secret; and • the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information.300 Second, commercial or financial information may be withheld if it is demonstrated, based on specific factual evidence, that disclosure would cause substantial competitive harm to the person from whom that information was obtained.301 Note that certain contracting information may not be withheld under this section 302 (See Question 100 for information on contracting information). Also, the Act requires a city to inform third parties when their proprietary information may be subject to this exception.303 The city must make a good faith attempt to notify the third party of the request for an open records letter ruling by sending a notice statement on a form promulgated by the attorney general’s office and a copy of the PIA request to the third party within a reasonable time not later than the 10th day after the date the city received the PIA request.304 Also, the city may decline to release the requested information for the purpose of requesting an open records letter ruling from the attorney general’s office.305 100. What information is protected under the exception for proprietary information submitted to a city? Information submitted to a city by a vendor, contractor, potential vendor, or potential contractor in response to a request for bids, proposals, or qualifications is excepted from disclosure under the Act if the vendor, contractor, potential vendor, potential contractor that the information related to demonstrates based on specific factual evidence that disclosure of the information would: 1. reveal an individual approach to: a. work; 300 Id. § 552.110(a). 301 Id. § 552.110(c). 302 See id. § 552.0222. 303 Id. § 552.305(d). 304 Id. § 552.305(d)(2). 305 Id. § 552.305(a). 56 b. organizational structure; c. staffing; d. internal operations; e. processes; or f. discounts, pricing methodology, pricing per kilowatt hour, cost data, or other pricing information that will be used in future solicitation or bid documents; and 2. give advantage to a competitor.306 However, this exception does not apply to: (1) information in a voucher or contract relating to the receipt or expenditure of public funds by a city; or (2) communications and other information sent between a city and a vendor or contractor related to the performance of a final contract with the city or work performed in behalf of the city.307 Also, this exception does not apply to certain contracting information.308 [See Question 100 for information on contracting information.] This exception can only be asserted by a vendor, contractor, potential vendor, or potential contractor.309 The PIA requires a city to inform third parties when their proprietary information may be subject to this exception.310 The city must make a good faith attempt to notify the third party of the request for an open records letter ruling by sending a notice statement on a form promulgated by the attorney general’s office and a copy of the PIA request to the third party within a reasonable time not later than the 10th day after the date the city received the PIA request. The city must decline to release information to the extent necessary to allow a vendor, contractor, potential vendor, or potential contractor to assert the exception to disclosure.311 101. Which type of contracting information may not be withheld as a trade secret and certain commercial or financial information (section 552.110 of the Government Code) or proprietary information (section 552.1101 of the Government Code)? Sections 552.110 and 552.1101 do not apply to the following types of contracting information: 306 Id. § 552.1101(a). 307 Id. § 552.1101(b). 308 Id. 552.1101(a); see id. § 552.0222. 309 Id. § 552.1101(c). 310 See id. § 552.305(d). 311 Id. § 552.1101(c); see id. § 552.305(a). 57 1. A state agency’s contract for goods and services from a private vendor excluding any information that is confidential under law; excepted by an attorney general’s open record decision; and an individual’s social security number; 2. A major contract of a state agency posted on the Legislative Budget Board’s website excluding information that is not subject to disclosure under the Act; 3. The following contract or offer terms or their functional equivalent: a. Any term describing the overall or total price a city will or could potentially pay, including overall or total value, maximum liability, and final price; b. A description of the items or services to be delivered with the total price for each if a total price is identified for the item or service in the contract; c. The delivery and service deadlines; d. The remedies for breach of contract; e. The identity of all the parties to the contract; f. The identity of all subcontractors in a contract; g. The affiliate overall or total pricing for a vendor, contractor, potential vendor, or potential contractor; h. The execution dates; i. Effective dates; and j. The contract duration terms, including any extension options; or 4. Information indicating whether a vendor, contractor, potential vendor, or potential contractor performed its duties under a contract, including information regarding: a. A breach of contract; b. A contract variance or exception; c. A remedial action; d. An amendment to a contract; e. Any assessed or paid liquidated damages; f. A key measures report; g. A progress report; and 58 h. A final payment checklist.312 102. What information regarding the acquisition of real estate or personal property by a city may be withheld? Section 552.105 of the Government Code provides a city with limited authority to withhold information that relates to the city’s acquisition of real estate or personal property.313 Specifically, this exception is designed to protect a city’s planning and negotiating position with respect to particular transactions.314 The authority to withhold this information generally ends once the city acquires the involved property.315 However, this exception is not limited solely to transactions not yet finalized. The attorney general’s office has concluded that information about specific parcels of land obtained in advance of other parcels to be acquired for the same project could be withheld where release of the information would harm the city’s negotiating position with respect to the remaining parcels.316 As long as the city makes a good faith determination that the release of information would damage its negotiating position with respect to the acquisition of property, the attorney general will generally accept the determination, unless the records or other information show the contrary as a matter of law.317 Also, this exception has equal application to information pertaining to a lease of real or personal property.318 Similarly, the information about the lease is considered public once the city enters into the lease agreement. It should be noted that if the information is considered public under section 552.022, the governmental body cannot withhold it under this exception. J. Economic Development Information 103. Is information related to economic development negotiations is public? Section 552.131 of the Government Code allows a city to withhold certain information related to economic development negotiations between a city and a business that the city is seeking to have locate, stay or expand within or near the territory of the city. Under this provision, the city may withhold trade secrets of the business prospect that are related to economic development negotiations.319 Similarly, a city may withhold certain commercial and financial information about the business prospect that was acquired during economic 312 Id. § 552.0222(b). See id. §§ 322.020(c) – (d); 2261.253(a), (e). 313 Id. § 552.105. See Tex. Att’y Gen. ORD-222 (1979) 314 Tex. Att’y Gen. ORD-564 (1982); ORD-310 (1982). 315 Tex. Att’y Gen. ORD-348 (1982). 316 Tex. Att’y Gen. ORD-564 at 2 (1982). 317 Id. 318 Tex. Att’y Gen. ORD-348 (1982). 319 Tex. Gov’t Code. § 552.131(a)(1). 59 development negotiations if release of the information would result in substantial competitive harm to the business prospect.320 The test for which information may be withheld under this section is the same as the test for trade secrets under section 552.110 of the Government Code. Additionally, until an agreement is entered into with the business prospect, the city may withhold financial or other incentive information being offered to the business prospect by the city or another person.321 Such financial or other incentive information that is withheld under this provision is releasable after an agreement is executed with the business prospect.322 104. May an economic development entity withhold information related to economic development negotiations under section 552.131 of the Government Code? An economic development entity whose mission or purpose is to develop and promote the economic growth of a state agency or political subdivision, including a city, with which the entity contracts may assert Section 552.131 with respect to information that is in the entity’s custody or control.323 Like a city, the economic development entity must make a good faith attempt to notify any third party of the request for an open records letter ruling by sending a notice statement on a form promulgated by the attorney general’s office and a copy of the PIA request to the third party within a reasonable time, but not later than the 10th day after the date the economic development entity receives the PIA request.324 K. Health Information 105. What is “protected health information”? Protected health information is any information that reflects that an individual received health care from a covered entity as defined by Section 181.001(b)(2) of the Health & Safety Code.325 Examples of covered entities include hospitals and medical centers. A more specific definition of “protected health information” is individually identifiable health information that is transmitted or maintained in electronic media or any other form or medium.326 320 Id. § 552.131(a)(2). 321 Id. § 552.131(b). 322 Id. § 552.131(c). 323 Id. § 552.131(b-1). 324 See id. § 552.305(d). 325 Id. § 552.002(d); Tex. Health & Safety Code § 181.006(1). 326 Id. § 181.001(a). See 45 C.F.R §160.103. (Chapter 181 of the Health and Safety Code borrows definitions from the Health Insurance Portability and Accountability Act and Privacy Standards (HIPAA) 60 106. Is protected health information considered public information under the PIA? Protected health information is not considered public information and is not subject to disclosure under the PIA.327 107. Is information provided by an out-of-state health care provider protected from disclosure under the PIA? Information provided to a city by an out-of-state health care provider in connection with a quality management, peer review, or best practice program that the out-of-state health care provider pays for is considered confidential and excepted from disclosure under the PIA.328 108. Is information regarding communicable diseases protected from disclosure under the PIA? Protected health information does not include information that: (1) identifies the name or location of a facility in which residents have been diagnosed with a communicable disease; or (2) the number of residents who have been diagnosed with a communicable disease in a facility.329 Facility is defined as a licensed nursing facility, continuing care facility, and an assisted living facility.330 Unless made confidential under other law, certain information regarding communicable diseases in specific facilities is not confidential and is subject to disclosure under the Act.331 L. Transit Authority or Department Held Information 109. Is information held by a transit authority or department protected from disclosure under the PIA? Personal identifying information collected by a transit authority or department is confidential and not subject to disclosure under the Act, including a person's: (1) name, address, e-mail address, and phone number; (2) account number, password, payment transaction activity, toll or charge record, or credit, debit, or other payment card number; for terms not defined by this chapter. This Chapter borrows the HIPAA definitions of “protected health information” and “individually identifiable health information”.) 327 Tex. Gov’t Code § 552.002(d). See also Tex. Health & Safety Code § 181.006(2). 328 Tex. Gov’t Code § 552.162. 329 Tex. Health & Safety Code § 181.060(b). 330 Id. § 181.060(a)(2). 331 Id. § 181.060(c). 61 (3) trip data, including the time, date, origin, and destination of a trip, and demographic information collected when the person purchases a ticket or schedules a trip; and (4) other personal information, including financial information.332 Notwithstanding the foregoing, information identified in (3) above may be disclosed to a governmental agency or institution of higher education by a transit authority if the requestor confirms in writing that the use of the information will be strictly limited to use in research or in producing statistical reports, but only if the information is not published, redisclosed, sold, or used to contact any individual.333 V. Ability to Recover Costs for Providing Copies of Public Information 110. What is the general ability of a city to charge for documents? The Act allows a city to set a charge for providing copies of public information.334 However, a city may not charge more than 25 percent above the charges set by the attorney general’s office.335 The attorney general’s office has set a charge of 10 cents per page for making simple photocopies or printouts. If a city’s actual cost for producing copies of public information exceeds the attorney general’s office charges by more than 25 percent, the city may apply to the attorney general’s office for permission to charge more.336 In no case may the charge exceed the actual cost of producing the requested copies.337 111. When can a city recover labor charges for a public information request? Labor to Produce Paper Copies: A city may recover labor charges in response to a public information request for paper copies in three circumstances: 1) if the responsive records will result in over 50 pages of paper copies; 2) if the records to be copied are located in more than two separate buildings or in a remote storage facility;338 or 332 Tex. Transp. Code §§ 451.061(f); 452.061(e); 453.104(b); 460.109(e). 333 Id. §§ 451.061(g); 452.061(f); 453.104(c); 460.109(f). 334 Tex. Gov’t Code § 552.262. See generally id. §§ 552.261 - .275. 335 See generally 1 Tex. Admin. Code §§ 70.1-.13. (cost rules promulgated by the attorney general’s office). 336 Tex. Gov’t Code § 552.262(c). 337 Id. § 552.262(a). 338 Id. § 552.261(a). 62 3) if the city provides access to paper documents that meet certain specifications.339 Presently, the attorney general’s office allows a maximum labor charge of $15 per hour.340 If the city assesses a charge for labor, the requestor may require the city to provide a statement of the amount of time that was needed to prepare the requested copies. This statement must be signed by the officer for public information or the agent of that officer with the signer’s name clearly typed below the signature. The city is not permitted to charge for providing this statement.341 Labor to Produce Copies from Electronic Records: Charges for copies of records that are stored electronically may include reasonable costs of materials, labor, and overhead if the records result in more than 50 pages.342 If the city assesses a charge for labor, the requestor may require the governmental body provide a statement of the amount of time that was needed to prepare the requested copies. This statement must be signed by the officer for public information or the agent of that officer with the signer’s name clearly typed below the signature. The city is not permitted to charge for providing this statement.343 A city can recover labor charges for providing access to electronic records if providing such access requires programming or manipulation of data.344 In such a case, the city must provide a special written notice to the requestor as provided under the Act.345 Additionally, the city must obey the rules of the attorney general’s office in determining how much to charge for the labor.346 112. Can a city charge for the labor cost to retrieve materials from a remote location? A city may charge for the labor cost of retrieving records that are located in two or more separate buildings that are not connected to each other or that are located in a remote storage facility.347 Buildings are considered to be “separate” if they are not connected by a covered or open sidewalk, or by an elevated or underground walkway.348 The charge 339 Id. § 552.271(c) - (d). 340 1 Tex. Admin. Code § 70.3(d)(1). 341 Tex. Gov’t Code § 552.261(b). 342 Id. § 552.261(a). 343 Id. § 552.261(b). 344 Id. § 552.231. 345 Id. 346 Id. § 552.262(b). See generally 1 Tex. Admin. Code §§ 70.1-.13 (cost rules promulgated by the attorney general’s office). 347 Tex. Gov’t Code § 552.261(a)(1)-(2). 348 Id. § 552.261(c). 63 for labor can be recovered in such a situation even if the requestor seeks fewer than 50 pages of copies.349 113. When and how much may a city charge for overhead when handling a public information request? A city may impose a charge for overhead whenever a personnel (labor) charge is applicable to a PIA request. Any overhead charge cannot exceed 20 percent of the personnel charge.350 114. Can a city recover costs for any modifications to its computer program that are necessary to respond to a public information request? A city may charge a requestor for the cost of any programming or manipulation of data that is necessary to respond to a PIA request.351 Presently, the attorney general’s office allows a maximum programming charge of $28.50 per hour.352 Unlike most other charges for public information, this charge may be imposed even if the requestor only wants access to the requested information and does not request any copies.353 However, before a city may impose such a charge, it must provide the requestor with certain written information in advance, including a statement of the estimated charges.354 115. Can a city require a requestor pay the costs for producing the records prior to the city mailing out the requested information? If a requestor asks the city to mail the information, the city can send the information by first class mail and can require that the requestor pay in advance for postage, along with other permitted charges related to producing the information.355 A city is not required to provide public information by mail until the requestor pays all applicable charges. 116. Can a city refer a requestor to the city’s website if the public information being requested is available on the city’s website? A city complies with the Act when it refers a requestor to the city’s website if the information being requested is available on the city’s website.356 The city will have to refer the requestor to the exact Internet location or uniform resource locator (URL) address on its website. The information has to be accessible to the public and the requested information must be identifiable and readily accessible. However, if the requestor prefers 349 Id. § 552.261(a). 350 1 Tex. Admin. Code § 70.3(e)(3). 351 Tex. Gov’t Code § 552.231. 352 1 Tex. Admin. Code § 70.3(c)(1). 353 Tex. Gov’t Code § 552.272(a). 354 Id. See also id. § 552.231. 355 Id. § 552.221(b)(2). 356 Id. § 552.221(b-1). 64 to receive the requested information in a manner other than access through the URL, the city must supply the information in the manner requested. Also, if the city provides by e- mail an Internet location or URL address for requested information, the e-mail must contain a statement in a conspicuous font clearly indicating that the requestor may nonetheless access the requested information by inspection or duplication or by receipt through U.S. mail.357 117. What duty does a city have to inform a requestor of the estimated charges for copies of or access to public information? A city is required to provide detailed information to the requestor if the charges for a public information request are likely to exceed $40.358 If the charges will likely exceed $40, the city must provide the requestor with a written statement that contains: 1) an itemized estimate of the expected cost;359 2) inform the requestor about contacting the city about an alternative method for supplying the requested records if an alternative method exists and it would be less costly;360 3) inform the requestor that he or she has ten business days to provide the city with a written response stating whether: a. the charges are accepted, b. the request is modified, or c. a complaint has been lodged with the Attorney General’s office alleging overcharges for providing the copies;361 and 4) notify the requestor that failure to respond to the statement within ten business days results in the automatic withdrawal of the public information request.362 If the city finds that the costs will exceed more than 20 percent of the original estimate, the city must provide the requestor with an updated itemized statement.363 The requestor again has ten business days to provide the city with a written response to the updated statement, or the request will be considered to be withdrawn. 357 Id. § 552.221(b-2). 358 Id. § 552.2615. 359 Id. § 552.2615(a). 360 Id. 361 Id. § 552.2615(a) - (b). 362 Id. § 552.2615(a)(2), (b). 363 Id. § 552.2615(c). 65 If the actual charges are more than $40, a city may only charge the amount estimated in the latest itemized statement that was provided to the requestor.364 However, if the city did not provide the requestor with an updated itemized statement, the city is limited to charging no more than 20 percent more than the amount of the original itemized statement.365 118. Can a city require a monetary deposit or bond in order to comply with a public information request? A city can require a deposit or bond to comply with a public information request if the city provides the requestor with an appropriate estimated itemized statement.366 If such a statement is provided, a city that has 16 or more full-time employees may require a deposit or bond if the estimated charge for producing copies of the requested records exceeds $100.367 A city with fewer than 16 full-time employees may require a deposit if the estimated charges for producing copies of information are more than $50.368 If the requestor modifies the request, then the modified request is considered a separate request.369 This separate modified request is considered received on the date the city receives the written modified request. If the requestor does not make a deposit by the 10th business day after the date the deposit is required, then the public information request is considered withdrawn.370 119. Can a city reduce or waive the cost for making copies of public information? A city shall reduce or waive the normal charge for copies of public information if providing the copies would benefit the public.371 The city may waive a charge for such copies if the cost of collecting the fee would exceed the amount of the charge.372 120. Can a city count multiple public information requests from the same requestor as a single request for the purpose of calculating cost? Section 552.261 of the Act allows a city that receives multiple requests from the same requestor in one calendar day to treat those requests as a single request for the purposes of calculating cost.373 However, if a city receives the same request from different 364 Id. § 552.2615(d)(1). 365 Id. § 552.2615(d)(2). 366 Id. § 552.263(a)(1). 367 Id. § 552.263(a)(2)(A). 368 Id. § 552.263(a)(2)(B). 369 Id. § 552.263(e-1). 370 Id. § 552.263(f). 371 Id. § 552.267(a). 372 Id. § 552.267(b). 373 Id. § 552.261(e). 66 individuals on behalf of an organization, it will not be able to combine those requests for the purpose of calculating cost. VI. Redundant Requests and Vexatious Requestors 121. What can a city do to deal with redundant or repetitive PIA requests? If a city receives a redundant or repetitive PIA request from the same requestor for information that has already been provided, Section 552.232 allows the city to send a letter to the requestor explaining: (1) that the information was already provided, (2) when that information was provided, and (3) that no new information has been generated by the city since the last request.374 122. What is a vexatious requestor? A vexatious requestor is a person who abuses the Act by sending frequent and/or voluminous public information requests to a city, especially small governmental bodies, to disrupt the operations of the city’s business. 123. How can a city deal with vexatious requestors who ask for voluminous amounts of information? Section 552.275 allows a city to establish a reasonable monthly or annual time limit on the amount of personnel time spent to produce a PIA request for inspection or to prepare copies for a requestor.375 For cities, this would be done by ordinance. Here are the specifics: 1) If the city establishes an annual time limit, the limit may not be less than 36 hours for a requestor during a 12-month period starting at the beginning of the city’s fiscal year.376 2) If the city establishes a monthly time limit, the limit may not be less than 15 hours per requestor per month.377 3) Every time a requestor submits a public information request, the city must keep track of the amount of time spent to compile the information for the request. (This means for every requestor, not just the alleged vexatious requestor.) 4) When responsive information is sent, the city is required to send a letter to the requestor informing him of the amount of personnel time spent on 374 Id. § 552.232. 375 Id. § 552.275(a). 376 Id. § 552.275(b). 377 Id. 67 the request and how much personnel time has cumulatively been spent on his requests.378 5) Once the requestor has surpassed the established time limit, the city can impose certain costs on the requestor and provide a written cost estimate for any public information request received thereafter.379 6) The written cost estimate must be sent to the requestor on or before the 10th day after the date on which the public information was requested. 7) If the city needs more time to prepare the written cost estimate, the city must provide a letter to the requestor explaining it needs additional time to provide the written cost estimate.380 8) After sending the additional time letter, the city must send the written cost estimate as soon as possible, but either on or before the 10th day after the city provided the additional time letter. 9) A requestor must pay the amount in the city’s written cost estimate before the city will process the request if the city has sent a written cost estimate and the requestor has exceed the monthly or annual time limit.381 10) If the requestor fails or refuses to pay the amount in the cost estimate, the request is considered withdrawn.382 Also, if the requestor has made previous PIA requests in which the city: (1) has located and compiled documents in response to those requests; (2) sent written cost estimates that remain unpaid; and (3) the requests have not be withdrawn on the date the requestor submits a new request, the city is not required to locate, compile, produce or provide copies of documents or prepare a written cost estimate until the date the requestor pays each unpaid cost estimate in connection with any previous requests or the previous requests are withdrawn.383 124. Are any requestors exempted from Section 552.275? Yes. The law does not apply if a requestor is an individual who, for a substantial portion of the individual’s livelihood or for substantial financial gain, gathers, compiles, prepares, collects, photographs, records, writes, edits, reports, investigates, processes, or publishes news or information for and is seeking the information for: 378 Id. § 552.275(d). 379 Id. § 552.275(e). 380 Id. § 552.275(f). 381 Id. § 552.275(g). 382 Id. § 552.275(h). 383 Id. § 552.275(e-1). 68 1) dissemination by a news medium384 or communication service provider 385, including: a. an individual who supervises or assists in gathering, preparing, and disseminating the news or information; or b. an individual who is or was a journalist, scholar, or researcher employed by an institution of higher education at the time the person made the request for information; or 2) creation or maintenance of an abstract plant (i.e., title records).386 Also, elected officials of the United States, Texas, or a political subdivision of Texas, and representatives of a publicly-funded legal service organization that is a 501(c)(3) exempt organization are exempted from section 552.275.387 VII. Enforcement of the Public Information Act 125. May a requestor sue a city for failure to comply with the Act? A requestor may bring a declaratory judgment or injunctive relief action against a city for violations of the Act. The requestor may file a complaint against a city with the local county or district attorney.388 The complaint must meet the following requirements: 1) be in writing and signed by the complainant; 2) state the name of the city that allegedly committed the violation, as accurately as can be done by the complainant; 3) state the time and place of the alleged commission of the violation, as definitely as can be done by the complainant; and 4) describe the violation, in general terms.389 Before the 31st day after receiving the complaint, the local prosecuting attorney must determine if a violation has been committed, decide whether to take action against the city, and notify the person who filed the complaint of that decision.390 If the local prosecutor declines to proceed with an action against a city, the complainant can file a complaint with the attorney general before the 31st day after the date the 384 Id. § 552.275(m)(2) (definition of “news medium”). 385 Id. § 552.275(m)(1) (definition of “communication service provider”). 386 Id. § 552.275(j). 387 Id. § 552.275(k) - (l). 388 Id. § 552.3215(e). 389 Id. 390 Id. § 552.3215(g). 69 complaint is returned to the complainant by the local prosecuting attorney.391 Also, if the local prosecutor does not bring any action on or after the 90th day after the date the complaint is filed, the complainant can file a complaint with the attorney general. The attorney general must determine if a violation has been committed, decide whether to take action against the city, and notify the person who filed the complaint of that decision. The attorney general’s office must notify the complainant of its determination before the 31st day after receiving the complaint.392 If either the local prosecuting attorney or the attorney general decides to bring a lawsuit against a city, the city must be notified prior to the filing of the lawsuit.393 The city has three days to remedy the problem. 126. What civil remedies can be brought against a city for failure to comply with the Act? If a city refuses to release public information or refuses to request an attorney general ruling, either the requestor or the attorney general may bring a lawsuit to force the release of the records in question.394 Even if the attorney general has determined that the city may withhold the requested information, the requestor may still file a lawsuit against the city to seek disclosure of the requested information.395 Under certain circumstances, a third party may file litigation to prevent the release of records that implicate that person’s privacy or proprietary interests.396 In a writ of mandamus397, declaratory judgment or injunctive relief398 lawsuit, a plaintiff that substantially prevails in their suit is entitled to an award of attorney fees and costs399 However, a court may not assess cost and attorney fees against a city if the court finds that the city acted in reasonable reliance on: 1) a judgment or an order of a court applicable to the city; 2) the published opinion of an appellate court; or 3) a written decision or opinion of the attorney general.400 391 Id. § 552.3215(i). 392 Id. 393 Id. § 552.3215(j). 394 Id. § 552.321. 395 Texas Department of Public Safety v. Gilbreath, 842 S.W.2d 408 (Tex. App. — Austin 1992, no writ). 396 See, e.g., Morales v. Ellen, 840 S.W. 2d 519 (Tex. App. — El Paso 1992, writ denied). See also Tex. Gov’t Code. § 552.325. 397 See Tex. Gov’t Code § 552.321. 398 See id. § 552.3215. 399 Id. § 552.323(a). 400 Id. 70 In a lawsuit by a city seeking relief from compliance with an attorney general ruling, a court may not order the losing side to pay litigation costs and attorneys’ fees, unless the court finds the action or defense of the action was groundless in fact or law.401 Additionally, a requestor who feels he or she has been overcharged for copies of public information may file a complaint with the attorney general’s office.402 The attorney general’s office may require the city pay the requestor the amount of any overcharge. If the attorney general’s office finds that the overcharge was due to bad faith on the part of the city, the requestor who is overcharged may recover up to three times the amount of the overcharge from the city.403 127. What are the criminal penalties for noncompliance within the Act? There are three provisions of the Act that have criminal penalties if violated: Failure to Give Access to Public Information.404 A person responsible for releasing public information commits a crime if he or she fails to give access to or fails to permit copying of public information as required by the Act. This violation is a misdemeanor punishable by a fine of up to $1,000, a six-month jail term, or both. Also, the Act states that this violation constitutes official misconduct. Thus, a public official may be subject to removal from office for such an offense. However, there are affirmative defenses to this violation.405 The affirmative defenses are: 1) Reasonable belief that public access to information not required and relied on a court order, court opinion, or ruling by the attorney general’s office;406 2) A ruling from the attorney general’s office has been sought and no decision has been issued;407 3) A suit filed in Travis County district court challenging ruling by the attorney general’s office and suit is pending;408 or 4) Officer’s agent reasonably relied upon written instruction from the officer of public information.409 Release of Confidential Information.410 A person commits a crime if he or she distributes information considered confidential under the Act. This violation is a 401 Id. § 552.323(b). See id. § 552.324. (Suit by governmental body). 402 Id. § 552.269. 403 Id. § 552.269(b). 404 Id. § 552.353. 405 Id. § 552.353(b)-(d). 406 Id. § 552.353(b)(1). 407 Id. § 552.353(b)(2). 408 Id. § 552.353(b)(3); (c). 409 Id. § 552.353(d) 410 Id. § 552.352. 71 misdemeanor punishable by a fine of up to $1,000, a six-month jail term, or both. This violation also constitutes official misconduct. Illegal Destruction or Alteration of Public Information.411 A person commits a crime if that person willfully destroys, mutilates, or alters public information or removes such information without permission. This offense is a misdemeanor and is punishable by a fine between $25 and $4,000, three days to three months of jail time, or both. It is important to note that there are provisions of Texas law outside of the Act that criminalize tampering with a governmental record which may constitute a felony.412 VIII. Additional Information on the Public Information Act 128. How long must a city retain various types of records? All governmental bodies must follow a record retention schedule that requires preservation of records for a certain amount of time.413 The Local Government Records Act (LGRA) is codified in Chapters 201 through 205 of the Local Government Code. The LGRA provides that, on or before June 1, 1990, the governing body of each local government should have designated a records management officer.414 The LGRA further provides that, by January 1, 1991, the governing body should have established a records management program.415 On or before January 4, 1999, all cities were required to prepare a records control schedule and file with the Director of the Texas State Library and Archives Commission (TSLAC) a written certification of compliance that the local government has adopted records control schedules that comply with the minimum requirements established on records retention schedule issued by TSLAC.416 A governmental body may not destroy records prior to the time set for the destruction of those records in the governmental body’s retention schedule.417 TSLAC has promulgated model records retention schedules, which are available on the TSLAC’s website. For more information concerning record retention, including the Local Government Record Act, and how to comply, contact the State and Local Records Management Division of the Texas State Library and Archives Commission either at its website: https://www.tsl.texas.gov/slrm, by phone at (512) 463-7610, or by email at slrminfo@tsl.texas.gov. 411 Id. § 552.351. 412 See, e.g., Tex. Pen. Code. § 37.10. 413 See Tex. Loc. Gov’t Code, subtitle C (Chap. 201 et seq.) (Local Government Record Act); Tex. Gov’t Code §§ 441.180 - .205 (state agency record retention). 414 Tex. Loc. Gov’t Code § 203.025(a). 415 Id. § 203.026(a). 416 Id. § 203.041(a). 417 Id. § 202.001. 72 129. Are all elected or appointed governmental officials required to take PIA training? Elected and appointed officials must have a minimum of one hour but no more than two hours of training.418 Newly elected or appointed officials have 90 days from the date they take the oath of office or otherwise assume their duties, if not required to take an oath, to complete the required training. If the city has designated a public information coordinator, then the officials can opt out of taking the training provided that they designate their public information coordinator to receive the training in their place. The public information coordinator must be the person who is primarily responsible for the processing of open records requests for the governmental body. The official or public information coordinator who completes the required PIA training should receive a certificate of completion. The city shall maintain the certificates and make them available for public inspection upon request. 130. Where can a city get more information about the Public Information Act? The Office of the Attorney General produces a Public Information Act Handbook, an in- depth publication about the Act and its interpretation through attorney general rulings and court cases. That publication can be found on the attorney general’s website. Also, the Open Records Division of the Office of the Attorney General sponsors an Open Record Hotline where public officials and concerned citizens can get answers to basic questions about the Act and an Open Records Cost Hotline where staff can answer questions about charges relating to the Act. The phone number for the Open Government Hotline is (512) 478-OPEN (6736) or (877) OPEN-TEX (673-6839) and for the Open Government Cost Hotline is (512) 475-2497 or (888) OR-COSTS (672-6787). 418 Tex. Gov’t Code § 552.012. 73 Acknowledgments This handbook has come about through the efforts of many attorneys over the years, Zindia Thomas originally prepared much of the material in this handbook. The more recent updates have been provided by Will Trevino. Town of Westlake – May 18, 2022Written By: L. Stanton LowryPresented By: Matthew L. ButlerBoyle & Lowry, L.L.P.4201 Wingren, Suite 108Irving, Texas 75062972.650.7100www.boyle-lowry.comStan: slowry@boyle-lowry.comMatt: mbutler@boyle-lowry.comHOW TO BE AN EFFECTIVE, AND LEGAL, PUBLIC OFFICIAL1 Welcome!Many common practices of the “private sector” do not apply to the “public sector.”There are laws – not merely policies or suggestions – that govern how local governments operate.Violations = indictment and criminal convictions!2 ObjectiveAwareness of legalities.Tips on how to be an effective, and legal, public official.3 The “really important” exceptionto the lawJudge – “So, why did you violate the law?”Public Official – “Because the issue was really important.”Judge – “That’s all you’ve got?”Public Official – “Yes, but it was REALLY important.”Judge – “Guilty.”4 Open Meetings Act andPublic Information Act5 Open Meetings ActGov’t Code Chapter 551“Every regular, special or called meeting of a governmental body shall be open to the public, except as provided by this chapter.”Meeting Agenda must be posted 72 hours in advance – except for emergency meetings6 What is a Meeting?Quorum of members + deliberationsQuorum = Majority of the CouncilDeliberations = a verbal or writtenexchange concerning an issue within the jurisdiction of the governmental body.7 Beware the “Walking Quorum”Recently struck down by the Court of Criminal Appeals.Legislature then amended § 551.143 in 2019…8 a) A member of a governmental body commits an offense if the member:(1) knowingly engages in at least one communication among a series of communications that each occur outside of a meeting authorized by this chapter and that concern an issue within the jurisdiction of the governmental body in which the members engaging in the individual communications constitute fewer than a quorum of members but the members engaging in the series of communications constitute a quorum of members; and(2) knew at the time the member engaged in the communication that the series of communications:(A) involved or would involve a quorum; and(B) would constitute a deliberation once a quorum of members engaged in the series of communications.9 Notice“A governmental body must give the public advance notice of the subject it will consider in an open meeting or a closed executive session.” The notice must be sufficient to apprise the general public of the subjects to be considered during the meeting.“But, I really want to talk about it.” 10 Open SessionsConvening the Meeting - Need a quorum to begin a meeting Location of the Meeting - Must be accessible to the publicRights of the PublicEntitled to attend and they may record the meeting. Public comment on any items on the agenda. If a public comment is permitted on items not on the agenda, the governing body may not discuss topics not posted, except to either provide facts or the existing policy or direct that the matter be placed on a future agenda.11 Closed Session(also called Executive Session)Must fit within one of the exceptions.Must first meet in open session and then adjourn back into open session.Notice Requirements Apply!12 Common Closed SessionsSection 551.071 - Consultations with AttorneySection 551.072 - Deliberations about Real propertySection 551.073 - Deliberations Regarding Gifts and DonationsSection 551.074 - Personnel MattersSection 551.087 - Deliberations Regarding Economic DevelopmentSection 551.076 - Deliberations Regarding Security Devices13 Violations of theOpen Meetings ActCriminal Provisions – Class B Misdemeanor -punishable by fine of $100 to $500, confinement in the county jail for one month to six months; or both.Violations: Disclosing certified agenda or tape Meeting in less than a quorum to circumvent the ActMeeting in closed session when not allowed“But, my attorney said I could!”14 Open Meetings ActLitigationAny interested person may bring an action to stop a violation of the Act, which could include attorney’s fees and costs of litigationActions taken are voidable15 La Estancia Investments v.Flower Mound16 Public Information Act17 Public Information ActGov’t Code Ch. 552General Rules:“Public information is available to the public at a minimum during the normal business hours of the governmental body.”Upon request, the Town “shall promptly produce public information for inspection, duplication, or both[.]”The Town must either provide a response to the request or request a ruling from the AG’s office within 10 business days18 “Public Information”Information that is written, produced, collected, assembled, ormaintained under a law or ordinance or in connection with thetransaction of official business:(1)by a governmental body;(2)for a governmental body and the governmental body:a.owns the information;b.has a right of access to the information; orc.spends or contributes public money for the purpose ofwriting, producing, collecting, assembling, or maintainingthe information;or(3)by an individual officer or employee of a governmental body inthe officer's or employee's official capacity and the informationpertains to official business of the governmental body. Practical WarningAvoid sending emails, forwarding emails, or texting each otherThese records may be considered public information that must be released – even if they are sent to or from personal device.Carroll ISD20 PRACTICAL TIPS FORINTERNAL E-MAIL AND TEXTS1.Before sending, take a Moment to reflect2.Limit the Distribution (but remember, a message can always be forwarded)3.Avoid Exaggeration, Negativity and Self-Criticism4.Avoid Sarcasm21 Practical Tips, con’t.5.Do not appear sneaky6.Refrain from swearing7.Watch the Attachments8.Clearly Label Privileged Communications9.Consider Public Perception22 Duties of the Town Secretary(1)Make public information available for publicinspection and copying;(2)carefully protect public information fromdeterioration, alteration, mutilation, loss, orunlawful removal;(3)repair, renovate, or rebind publicinformation as necessary to maintain itproperly; and(4)make reasonable efforts to obtain publicinformation from a temporary custodian. The “Temporary Custodian”“Temporary custodian” means an officeror employee of a governmental body who,in the transaction of official business,creates or receives public information thattheofficeroremployeehasnotprovidedto the officer for public information of thegovernmental body or the officer's agent.E.g., emails and text messages onpersonal device Duties of the Temporary CustodianProvide the information to the town secretary’s office nolater than the 10th day after it was requested from you.Failure to comply: grounds for disciplinary action by theTown Council or any other applicable penalties providedby the PIAGov’t Code Sec. 552.233(b),(c). Practical TipOnly Use Town-issued devices to conduct Town business. Violations of the PIADestruction of public information: Class Bmisdemeanor – up to $4,000 fine and/or 3months jailDistribution of confidential information:Class B misdemeanor – up to $1,000 fineand/or 6 months jailRefusal to give access: Class Bmisdemeanor – up to $1,000 fine and/or 6months jail CONFLICTS OF INTEREST AND ETHICS28 Conflicts Disclosure StatementRequires that mayors, council members, city managers, and certain other city officials must file a “conflicts disclosure statement” within seven (7) days of becoming aware of either of the following situations:29 1.A city official or family member has an employment or business relationship that results in taxable income with a person who has contracted with the city or with whom the city is considering doing business.2.A city official or family member receives and accepts one or more gifts with an aggregate value of $100 in the preceding 12 months from a person who conducts business or is being considered for business with the city.30 Conflict of InterestOfficials shall not use their position to solicit or accept employment with a person or business entity that is seeking official action from the Official.Officials shall not accept or solicit a grant or gift or thing of value from a person or business entity seeking official action from the official.31 Statutory Conflict of InterestTEX. LOCAL GOVT. CODE, §171.003prohibits a local public official fromknowingly participating in a vote ordecision on a matter involving a businessentity in which the official has a substantialinterest if it is reasonably foreseeable thatan action on the matter would confer aneconomic benefit on the business entity. Statutory Conflict of InterestChapter 171 Local Government Code1) Substantial interestBusiness entityReal Property2) Special economic effect, e.g., own property withinthe notice areaPenaltyClass A misdemeanor. Punishable by:a fine not to exceed $4,000.00;confinement in jail for a term not to exceed oneyear; orboth a fine and confinement. Chapter 36 - Penal CodeOffer, confer, or agree to confer any special benefitSolicit, accept, or agree to accept any benefitClass A Misdemeanor. Punishable by: a maximum fine of $4,000.00;confinement in jail for a term not to exceed one year;or both a fine plus incarceration. §36.08(h). DON’T TAKE BRIBES OR PROMISE FAVORS!!!34 FAQ’s35 FAQ’sQ: Are my private e-mails and texts subject to the Public Information Act?A: Yes, if the emails and texts relate to public business. It makes no difference if the e-mails and texts come from a private or business account. The only factor is whether the e-mail and texts pertains to public business.36 FAQ’sQ: Would communicating with another Councilmember about a public matter via e-mail, text or telephone be a violation of the Open Meetings Act?A: Possibly! Having read virtually every case and attorney general opinion that interprets the Open Meetings Act, this is the answer that I must give being a conservative lawyer who does not want his clients going to jail.37 FAQ’sQ: After a noticed meeting is concluded, can coucil members mingle and talk afterwards?A: Not recommended. It is inevitable that public information will be discussed. This, in turn, can lead to a violation of the Open Meetings Act. 38 FAQ’sQ: What is the most appropriate way to address a Councilmember that brings up a topic for discussion at a meeting when the topic was not posted on the agenda?A: First, this should not happen based on this training and the law. If it does, the chairperson should simply state that the matter is not on the agenda and no further discussion will take place.39 FAQ’sQ: Do you have to keep the door open for it to be a public meeting?A: No. The public merely has to be allowed in the meeting.40 FAQ’sQ: Can meetings be cancelled if it is known a quorum won’t be present?A: Yes, post a notice of cancellation; however, different requirements may apply for advertised public hearings. 41 Immunity42 Official ImmunityGovernment officials are entitled to official immunity from suit arising from the performance of their (1) discretionary duties in (2) good faith as long as they are (3) acting within the scope of their authority.Public officials are “liable personally only when, in the exercise of the powers conferred upon them, they have acted willfully, maliciously or when activated by malice.”43 FINAL TIPS ANDCONCLUSIONS44 How to Drive Your Town Attorney CRAZY1.If you are holding regular conferences with your town attorney, stop doing so at once. This will keep him from finding out what you have in mind until it’s too late to do anything about it.2.Do not tell your town attorney what you’re going to do; always tell him after it has been done. This is a particularly good tactic when you know there are potential problems.45 How to Drive Your Town Attorney Crazy con’t.3.Tell the newspaper and TV what you have done, and why, before you tell the town attorney. For example, you could tell a TV reporter that, “I fired the chief of police because everyone knows a woman can’t do the job.”4.Never discuss future agenda items with your town attorney. Rather, send him the agenda right before the meeting. It is always interesting to observe what happens when the attorney learns for the first time at the meeting about some legally doubtful course of action.46 How to Drive Your Town Attorney Crazy, con’t.5.Demand the town attorney’s opinion at public meetings. If he suggests a particular course of action is illegal, do it anyway. Then, he can see his opinion quoted against him in court.6.Slant the facts. Since the answer to almost every legal question depends entirely upon its factual basis, conceal or change the facts to compel the town attorney to give you the answer you want.47 How to Drive Your Town Attorney Crazy, con’t.7. Answer legal questions yourself. This always makes for an interesting situation, particularly at public meetings. The town attorney must either publicly point out to you – the boss - your error and make it appear you do not know what you are talking about, or he must keep quiet and allow a decision to be made on the basis of an incorrect legal conclusion.48 Tips for Being An Effective Public Official1.Service– always participate with servitude to those people you deal with day in and day out. Provide service humbly. Approach each day at work like it’s the last day before you go on vacation; think how much you’ll get done every day. Always strive to make a difference in everything you do.2.Integrity– have integrity in all that you do. Personally and professionally. Be self aware and open to feedback.49 Tips, con’t.3.Optimism– be an optimist. Have a Positive Mental Attitude; Dispositions are contagious. Which attitude would you rather everyone around you have? What you think is what you will become in a very short period of time.4.Preparation/planning– be a relentless preparer. Fail to plan, and you plan to fail. Set goals and then meet them.50 Tips, con’t.5.Listen - you learn from listening. No one learns from talking.6.Balance– have balance in your life. If you’re out of kilter at home, you’re going to be out of kilter at work and vice versa. Strive to find the balance and you’ll be a happier (and more productive) person. With balance, you will be successful in all that you do.51 Tips, con’t.7.Humor– keep your sense of humor and your ability to laugh at not only the world around you, but yourself. Life can be a dreadful undertaking without laughter.8.Courage– have courage as a leader. Have the courage to make the hard (but right) decision. Have the courage to do what you think is right, even if the naysayers are howling at the doors.52 9.Perseverance– NEVER quit. Motivation applies to all aspects of life.10.Teamwork– you do not accomplish great things alone. You accomplish great things due to the help of the people around you. Know your own weaknesses and do not be intimidated to bring in people around you that are wrong where you are weak.53Tips, con’t. Tips, con’t.11.Responsibility – the buck stops with you. Take responsibility when things don’t work out and pass out the responsibility when the things go well.54 FinallyAnd Remember ……▪There is no “really important exception” to the law.55 Charter School Training for Governing Board Members Page 1 Underwood Law Firm May 18, 2022 Presented by: Janet Bubert janet.bubert@uwlaw.com Underwood Law Firm 1008 Macon Street, Suite 101 Fort Worth, Texas 76102 CHARTER SCHOOL TRAINING FOR GOVERNING BOARD MEMBERS I. OVERVIEW A. Open-enrollment charter schools are part of the public school system of Texas. Tex. Educ. Code § 12.105. B. Purposes 1. Improve student learning; 2. Increase the choice of learning opportunities within the public school system; 3. Create professional opportunities to attract new teachers to the public school system; 4. Establish a new form of accountability for public schools; and 5. Encourage different and innovative learning methods. Tex. Educ. Code§ 12.001. C. Classes of charters available 1. Home-rule school district charter 2. Campus or campus program charter 3. Open-enrollment charter Charter School Training for Governing Board Members Page 2 Underwood Law Firm May 18, 2022 4. College or university charter Tex. Educ. Code §12.002. D. Laws Applicable to Charter Schools 1. Charter schools are subject to the federal and state laws and rules governing public schools; however, they are subject to the provisions of the Texas Education Code and the corresponding rules in the Texas Administrative Code only to the extent that the statutes and rules specifically provide. 2. Laws which state that they apply to a "school district" or "political subdivision" do not apply to a charter school unless expressly applied to charter schools. 3. Texas Education Code a. Laws are to ensure that charter holders are fiscally and academically accountable. b. Laws should not be applied in such a way to unduly regulate the instructional methods or pedagogical innovations of charter schools. c. Texas Education Code provisions that apply to charter schools include: Tex. Educ. Code §§ 12.104, 12.156(a). (1) Education statutes that establish a criminal offense, which includes: (a) Education Code Chapter 22 provisions relating to unlawful inquiries into religious affiliation; (b) Education Code Chapter 31 provisions relating to textbook rebates; (c) Education Code Chapter 44 provisions relating to offenses for attempting to defraud the State on any forms submitted under Chapter 42; a board member's vote to approve any expenditure in excess of items appropriated or adopted under the budget; offenses for attempting to circumvent purchasing requirements, if applicable; Charter School Training for Governing Board Members Page 3 Underwood Law Firm May 18, 2022 (2) The Public Education Information Management System (PEIMS) reporting requirements; (3) Background checks for criminal history records; (4) Reading instruments, accelerated instruction programs, intensive programs of instruction and assessments required under Education Code Chapter 28; (5) High school graduation requirements; (6) Special education, bilingual, and pre-kindergarten programs under Education Code Chapter 29; (7) Extracurricular requirements; (8) Prohibition of restraints and seclusion as discipline management techniques under Education Code Chapter 37; (9) Health and safety requirements such as immunizations, dyslexia screening, reporting of child abuse, tobacco and alcohol prohibitions, and implementation of coordinated health programs under Education Code Chapter 38; (10) Public school accountability provisions under Education Code Chapter 39; (11) Education Code Chapter 42 funding formulas; (12) Education Code Chapter 45 regarding restrictions on use of public funds and requirements for depository contracts; (13) Education Code § 37.007(e) regarding expulsion of a student who brings a firearm to school; (14) Requirement under Education Code § 21.006 to report an educator’s misconduct; (15) Right of a school employee to report a crime, as provided by Education Code § 37.148; (16) Bullying prevention policies and procedures under Education Code § 37.0832; (17) Right of a school under Education Code § 37.0052 to place Charter School Training for Governing Board Members Page 4 Underwood Law Firm May 18, 2022 a student who has engaged in certain bullying behavior in a disciplinary alternative education program or to expel the student; (18) Right under Education Code § 37.0151 to report to local law enforcement certain conduct constituting assault or harassment; (19) A parent’s right to information regarding the provision of assistance for learning difficulties to the parent’s child as provided by Education Code §§ 26.004(b)(11) and 26.0081(c) and (d); (20) Establishment of residency under Education Code § 25.001; (21) School safety requirements under certain provisions of Education Code Chapter 37; (22) Early childhood literacy and mathematics proficiency plans under Education Code § 11.185; (23) College, career, and military readiness plans under Education Code § 11.186; (24) Parental options to retain a student under Education Code § 28.02124; and (25) Fee assessments in accordance with Education Code § 11.158. 4. Texas Administrative Code (TAC) - Texas Education Agency's Commissioner's rules implementing the charter school statutes are included in Title 19, Chapter 100. 5. Texas Government Code a. Governing bodies are considered to be governmental bodies for purposes of Government Code Chapters 551 (Texas Open Meetings Act) and 552 (Texas Public Information Act). b. Any requirement in Government Code Chapter 551 or 552 that applies to a school district, the board of trustees of a school district, or public school students applies to an open-enrollment charter school, the governing body of a charter holder, the governing body of an open-enrollment charter school, or students attending an open-enrollment charter school. Tex. Educ. Code § Charter School Training for Governing Board Members Page 5 Underwood Law Firm May 18, 2022 12.1051. 6. Texas Local Government Code Charter schools are subject to the certain provisions of Chapter 271, the Public Property Finance Act. 7. Constitutional provisions applicable to charter schools a. Programs must be non-sectarian (1) State dollars or State property cannot be used to benefit any religious organization (Texas Constitution). (2) Charter schools cannot violate the First Amendment Establishment Clause (Federal Constitution). b. Public funds (Texas Constitution) (1) Public funds cannot be given as extra compensation to public officers or employees after service has been rendered. (2) Charter schools cannot make a gift of public funds or lend credit with public funds (with certain exceptions). II. CHARTER SCHOOL GOVERNANCE A. Definitions 1. Charter holder -- the entity to which a charter is granted. 2. Governing body of a charter holder -- the board of directors, board of trustees, or other governing body of a charter holder. 3. Governing body of an open-enrollment charter school -- the board of directors, board of trustees, or other governing body of an open- enrollment charter school, including the governing body of a charter holder if that body also acts as the governing body of the open- enrollment charter school. 4. Officer of an open-enrollment charter school -- the principal, director, or other chief operating officer of an open-enrollment charter school; an assistant principal or assistant director of an open-enrollment charter school; or a person charged with managing the finances of an open- enrollment charter school. Charter School Training for Governing Board Members Page 6 Underwood Law Firm May 18, 2022 Tex. Educ. Code § 12.1012. B. Responsibilities of the governing body 1. Management, operation, and accountability of the school regardless of any delegation. Tex. Educ. Code § 12.121. 2. Primary responsibility for implementing the public school program authorized by the school's charter. 19 TAC § 100.1101. 3. Primary responsibility for ensuring the performance of the students enrolled in accordance with the Texas Education Code. 19 TAC § 100.1101. 4. Oversee the management of the school by acting as a body corporate at meetings posted and conducted in accordance with the Texas Open Meetings Act. a. Individual board member acting without authority from the board could be personally responsible. b. Board must act as a body corporate. 19 TAC § 100.l l0l. c. Adopt policies for the school including, but not limited to, those relating to financial matters, employment practices, property use, academic guidelines, selection of instructional materials, student discipline, child abuse, and other required reporting obligations. C. Restrictions on serving as a member of the governing body 1. Criminal background check is required. 19 TAC § 100.1151. 2. A person may not serve as a board member if he or she has been: a. Convicted of a felony; b. Convicted of a misdemeanor involving moral turpitude (e.g., theft, fraud); c. Convicted of an offense for which a student must be expelled (e.g., sexual assault; indecency with a child; certain offenses on or off campus at a school-related activity such as drugs, possession of firearm or other prohibited weapon) under Tex. Educ. Code § 37.007(a); Charter School Training for Governing Board Members Page 7 Underwood Law Firm May 18, 2022 d. Convicted of an offense listed in the Code of Criminal Procedure § 62.01(5), which is a reportable offense under the sex offenders registration program. Tex. Educ. Code § 12.120. D. Conflicts of Interest 1. Board members and charter school officers must comply with Texas Local Government Code Chapter 171 regarding impermissible conflicts of interest. Tex. Educ. Code § 12.1054; 19 TAC § 100.1131. 2. General Provisions a. A board member of the charter holder or governing body of the charter school is considered to be a "local public official" for purposes of Tex. Loc. Gov't Code Chapter 171. Tex. Educ. Code § 12.1054; 19 TAC § 100.1132. b. Board members or charter officers are considered to have a conflict if a relative within the third degree of consanguinity or affinity has such a conflict. Tex. Educ. Code 12.1054; 19 TAC § 100.1132(d). 3. A conflict of interest exists if: a. The board member or charter officer has a substantial interest in a business entity or in real property in which the charter school has some involvement or interest. b. The board member receives compensation or remuneration from the charter holder or school (e.g., may not be a board member and employee) unless an exception applies. 4. If a conflict exists: a. Board member or officer must file an affidavit and refrain from voting on matters affecting personal interest. b. Board must take a separate vote on any budget item specifically dedicated to a contract with a business entity in which a board member has a substantial interest. Charter School Training for Governing Board Members Page 8 Underwood Law Firm May 18, 2022 5. Abstention from voting is excused if both of the following requirements are met: a. Board member files an affidavit as required. b. A majority of the members of the board have a similar interest on the same official action and all file the required affidavits. E. Nepotism 1. Charter schools are subject to the nepotism laws in Texas Government Code Chapter 573. Tex. Educ. Code § 12.1055. 2. General Provisions a. A public official is prohibited from hiring, selecting, appointing, confirming the appointment, or voting for the hiring, selection, appointment or confirmation of the appointment of an individual to a charter position that is either directly or indirectly compensated by public funds who is within the third degree of consanguinity (blood relation) or second degree of affinity (marriage) to the public official. Tex. Gov't Code § 573.002; 19 TAC §§ 100.1112(b), 100.1113(e) and 100.1114. b. Two individuals are related by consanguinity if one is a descendent of the other or they share a common ancestor. An adopted child is to be considered the child of the adoptive parent for purposes of the nepotism statute. c. A public official is defined as a member of the governing body of the charter holder, a member of the governing body of the school, or an officer of the school. 19 TAC § 100.1112. d. An officer of the school is defined as the chief executive officer, central administration officer, campus administration officer, business manager, principal, director, other chief operation officer, an assistant principal, assistant director, or person charged with managing the finances of the school. Tex. Educ. Code § 12.101; 19 TAC § 100.1011(16). 3. The charter school officer responsible for hiring charter school personnel is a public official for purposes of the nepotism prohibition with respect to a decision made under that authority; and each member of the governing board of the charter school remains subject to the nepotism prohibition with respect to all charter employees. Tex. Educ. Code § 12.1055. 4. Exceptions to nepotism prohibitions: Charter School Training for Governing Board Members Page 9 Underwood Law Firm May 18, 2022 a. Prohibitions do not apply to situations involving continuous employment under the following circumstances: The related person was continuously employed for at least 30 days to one year (depending on the position of the public official) before the public official took office: (1) 30 days if the individual is a charter school officer; (2) 6 months if the individual is a member of the governing body of the charter school; (3) 1 year if the individual is a member of the governing board of the charter holder. b. Government Code prohibitions do not apply to bus drivers in sparsely populated counties or to substitute teachers. 5. Consequences of Non-Compliance a. An individual who violates the nepotism prohibitions must be removed from his or her position. b. The removal must comply with the charter holder's organizational documents, board policy, and applicable law. c. The Attorney General may bring suit for removal or the Commissioner of Education may remove the individual. d. The individual who violates the nepotism prohibitions may be subject to criminal sanctions. e. The charter holder's failure to remove the individual is a material charter violation. F. Delegation of Duties 1. The governing body is responsible for the management, operation, and accountability of the school and retains the ultimate authority and responsibility for the school even if it delegates certain tasks. Tex. Educ. Code § 12.121; 19 TAC § 100.1101. 2. Method for Delegating Charter School Training for Governing Board Members Page 10 Underwood Law Firm May 18, 2022 a. Charter application - a charter applicant may specify in its charter application the powers or duties that the governing body will delegate or may delegate to an officer. Tex. Educ. Code § 12.111; 19 TAC §§ 100.1033 and 100.1101. b. Delegation amendment - a governing body may delegate powers and duties through an amendment adopted in accordance with applicable law. 19 TAC §§ 100.1101, 100.1033. 3. Non-delegable Duties. A charter holder governing body may not delegate the following duties absent a specific written exception setting forth good cause why the function cannot be carried out by the charter holder governing body and approved by the Commissioner of Education: a. Final authority to hear or decide employee grievances, citizen complaints, or parental concerns; b. Final authority to adopt or amend the budget of the charter holder or school, or to authorize expenditures or obligations of state funds or the use of public property; c. Final authority to approve audit reports under Texas Education Code § 44.008(d); d. Final authority to direct the disposition or safekeeping of public records, except the board may delegate this function to someone subject to the board's right of immediate access to, control over, and possession of such records; e. Final authority to adopt policies governing school operations; f. Initial or final authority to select, employ, direct, evaluate, renew, non-renew, terminate, or set compensation for the superintendent/chief executive officer. 19 TAC § 100.1033. G. Training 1. Each member of the governing body of a charter holder or the governing body of a charter school must complete a training course consisting of 12 instructional hours unless an exemption applies. 2. The training must include modules on the following: school law, school finance, health and safety issues, state accountability requirements, open meeting requirements under state law, and public records. Charter School Training for Governing Board Members Page 11 Underwood Law Firm May 18, 2022 3. Following completion of the required training, additional annual training is required as described in the TEA charter regulations. 19 TAC § 100.1102. H. Liability 1. Charter schools, members of the governing bodies of charter holders and charter schools, and charter school employees and volunteers are immune from liability to the same extent that a school district and its board members, employees and volunteers are immune in matters relating to the operation of the charter school. 2. An open-enrollment charter school is a governmental unit as defined by Texas Civil Practice and Remedies Code Section 101.001 and is subject to liability only as provided by Civil Practice and Remedies Code Chapter 101, and only in the manner that liability is provided by that chapter for a school district. Tex. Educ. Code § 12.1056. I. Chief Executive Officer (CEO) 1. Relationship with the Board a. CEO is the person directly responsible to the governing body of the charter holder for supervising one or more central administration officers, campus administration officers, and/or business managers. 19 TAC § 100.1001(17). b. Regardless of title, the person is considered the CEO if he or she functions as the chief administrative officer of the charter holder and serves as the chief administrative officer of the school. c. The charter holder governing body must adopt a job description for the CEO. 2. Responsibilities the CEO may not delegate, absent a delegation amendment approved by the Commissioner include: a. Organization of charter school's central administration; b. Approval of reports or data submissions required by law; c. Selection of school's employees or officers. Charter School Training for Governing Board Members Page 12 Underwood Law Firm May 18, 2022 19 TAC § 100.1033. III. SCHOOL STRUCTURE A. Admissions Policy 1. Total enrollment may not exceed the maximum number of students identified in the school's charter. 19 TAC § 100.1207(d). 2. Schools must require students to complete and submit an application for enrollment. Tex. Educ. Code § 12.117. 3. School must establish a reasonable deadline for application submission. 4. Non-discrimination Policy a. A charter school must have an admission policy that prohibits discrimination on the basis of sex; national origin; ethnicity; religion; disability; academic, artistic, or athletic ability; or the district a child would otherwise attend. b. A charter school may have a policy that permits exclusion of a student who has a documented history of a criminal offense, a juvenile court adjudication, or discipline problems under Texas Education Code Chapter 37, Subchapter A. 5. Admissions a. If a charter school receives more acceptable applications than it has available positions, the charter school must fill the available positions by lottery. Tex. Educ. Code § 12.117; 20 U.S.C. § 7225d. b. A charter school may adopt an admissions policy that exempts certain categories of students from the lottery as allowed by federal law. c. An open-enrollment charter school that specializes in one or more performing arts may require an applicant to audition for admission to the school. Tex. Educ. Code § 12.1171. 6. Notice of Expulsion When a student is expelled from a charter school, the charter holder must notify the school district in which the student resides within three (3) business days of any such action. 19 TAC § 100.1211 Charter School Training for Governing Board Members Page 13 Underwood Law Firm May 18, 2022 B. Geographic Boundaries 1. A charter school may establish a primary and secondary boundary. 2. Students residing outside the primary geographic boundary stated in the charter shall not be admitted until all eligible applicants within the geographic boundaries who have submitted a timely application have been given the opportunity for admission. 19 TAC § 100.1207(f). 3. The school may admit students who reside in the secondary boundary in accordance with the terms of its charter. 19 TAC § 100.1207(f). 4. A charter school must file an application for amendment with TEA to change its geographic boundaries. C. School Personnel 1. Qualifications of Teachers a. A person employed as a principal or a teacher by an open- enrollment charter school must hold a baccalaureate degree. Tex. Educ. Code § 12.129. b. Bilingual and Special Education Teachers must be appropriately certified in their respective areas according to state standards. c. The charter school is required to give written notice of the qualifications of each teacher it employs to the parent or guardian of each student enrolled in the school. Tex. Educ. Code § 12.130. 2. Criminal History Background Checks a. A person may not be employed by or serve as a teacher, librarian, educational aide, administrator, or counselor for an open- enrollment charter school unless: (1) the person has been approved by TEA following a review of the person's national criminal history record information as provided by Education Code 22.0832; and (2) the school has confirmed that the person is not included in the registry under Education Code Section 22.092. Charter School Training for Governing Board Members Page 14 Underwood Law Firm May 18, 2022 Tex. Educ. Code § 12.1059. b. An entity contracting with an open-enrollment charter school must obtain the national criminal history record information for any employee, offered employment after January 1, 2008, that has or will have continuing duties related to the contracted services and has or will have direct contact with students. c. An open-enrollment charter school must obtain criminal history record information for employees not subject to a national criminal history record information review. (1) This requirement applies to an employee of the charter school or an employee of a shared services arrangement if the employee's duties are performed on school property or at another location where students are regularly present. (2) The charter school may obtain the criminal history information from DPS, a law enforcement agency, or a private entity that is a consumer reporting agency governed by the Fair Credit Reporting Act. Tex. Educ. Code § 22.083. d. An open-enrollment charter school must also obtain criminal history record information for any person serving as a student teacher or a school volunteer. The charter school may obtain the criminal history information from DPS, a law enforcement agency, or a private entity that is a consumer reporting agency governed by the Fair Credit Reporting Act. (1) Although the school is authorized to obtain criminal history record information on all volunteers, the following categories of individuals may be exempted from this requirement by board policy: (a) parent, guardian or grandparent of an enrolled student; (b) volunteers accompanied by a school employee while on campus; (c) volunteers for a single event. (2) The school may require the student teacher or volunteer to pay any costs related to obtaining criminal history Charter School Training for Governing Board Members Page 15 Underwood Law Firm May 18, 2022 information. Tex. Educ. Code § 22.0835. e. A charter school may not employ a person who: (1) has been convicted of a felony offense under Title 5, Texas Penal Code; or an offense requiring registration as a sex offender; and (2) at the time the offense occurred, the victim was under age 18 or enrolled in public school. (3) The employment prohibition does not apply if the employee or applicant committed a Title 5 offense and the date of the offense is more than 30 years before the effective date of this requirement or the date employment will begin, and the person satisfied all requirements of the conviction order. Tex. Educ. Code § 22.085. f. A charter school employee who is discharged for failure to disclose a conviction of a felony or misdemeanor involving moral turpitude to either TEA or the charter school is considered to have been discharged for misconduct under the Texas Labor Code. Tex. Educ. Code § 22.085. 3. Teacher Retirement System (TRS) A charter school employee who qualifies for membership in TRS must be covered under the TRS to the same extent as a school district employee. Tex. Educ. Code § 12.1057; Tex. Gov't Code Chs. 821-24. D. Financial Operations 1. Funding a. Charter schools are entitled to funding from the State Foundation School Program. 19 TAC § 100.1041. b. A charter may not charge tuition or fees except in accordance with statutory authority which includes, but is not limited to, fees for the following: (1) Membership dues for student organizations/clubs (if Charter School Training for Governing Board Members Page 16 Underwood Law Firm May 18, 2022 membership is voluntary); (2) Authorized voluntary student health and accident insurance; (3) Personal athletic equipment for physical education; (4) Parking fees. Tex. Educ. Code § 11.158; 19 TAC § 100.1041(c). c. Charter school funds received from the State are considered public funds for all purposes under State law. 2. Budget and Expenditures a. The board has the final authority for adopting or amending the budget. (1) TEA recommends a cooperative approach between the chief administrative officer and the board in formulating the budget. (2) The budget must be prepared in accordance with GAAP 19 TAC § 100.1047(b) b. The board has the final authority for authorizing an expenditure or obligation of State funds or the use of public property. 19 TAC § 100.1133(c)(6). (1) The school cannot expend funds except in accordance with the adopted budget (Fin. Acc't Sys Resource Guide). (2) A board member commits a criminal offense if he or she votes to approve any expenditure in excess of items appropriated or adopted under the budget. Tex. Educ. Code §§ 12.104, 44.052(c). (3) The board may amend the budget or adopt a supplementary emergency budget to cover unforeseen expenditures (Fin. Acc't Sys Resource Guide 2.6.1). c. The board may adopt other policies relating to the budgetary process and expenditures that are not inconsistent with the law or Texas Education Agency procedures. E. Ownership of Property Charter School Training for Governing Board Members Page 17 Underwood Law Firm May 18, 2022 1. Public property includes any interest in real estate or personal property acquired, improved, or maintained with State funds. 19 TAC §§ 100.1063(a), 100.1065(b). 2. Public property is held in trust by the charter holder for the benefit of the students. 3. The school may only use its public property for a purpose for which a school district may use its property and only to implement a program described in its charter and consistent with the Texas Education Code. § 12.102. 19 TAC § 100.1063(c). IV. CHARTER CONTRACTS A. Charter contract incorporates all information provided in the charter application B. Amendments 1. All amendments must be in writing and must be approved by the Commissioner in writing. 19 TAC § 100.1033(a). 2. An amendment includes any change to the terms of an open-enrollment charter, including the following: maximum enrollment, grade levels, geographic boundaries, approved campus(es), approved sites, relocation of campus, charter holder name, charter school name, charter campus name, charter holder governance, articles of incorporation, corporate bylaws, management company, admission policy, or the educational program of the school. 3. The amendment must be approved by the Commissioner before implementation. TOWN OF WESTLAKE RESOLUTION NO. 22-03 A RESOLUTION OF THE TOWN COUNCIL AMENDING AND ADOPTING THE COUNCIL'S GOVERNANCE AND ETHICS POLICY DOCUMENT. WHEREAS, the Town Council finds that ethical, transparent, and effective governance are a foundation of the daily operations of our organization; and, WHEREAS, the Town Council has reviewed, discussed, and approved the proposed update to the current Ethics policy (being renamed the Governance & Ethics Policy; and WHEREAS, the Town Council finds that it is important to publish said policies and procedures to help guide the work and interaction of the Council; and WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 22- 03 Page 1 of 15 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 19th DAY OF JANUARY 2022. ATTEST: VI-L Todd Wood, Town Secretary APPROVED AS TO FORM: c4jlx— F; r L. Stanton Lowry, Town Attorney zz&ey-1 Laura Wheat, Mayor Amanda DeGan, Town Manager X NC:) Resolution 22-03 Page 2 of 15 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN Town Council Member Board of Trustee) Governance & Ethics Policy Adopted 07/28/2008 Revised 12/13/2021 Resolution 22-03 Page 3 of 15 We Will Never bring disgrace to this, our Town, by any act of dishonesty or cowardice; we will fight for our ideals and sacred things of the Town, both alone and with many; We will never bring disgrace to this, our Town, by any act of dishonesty or cowardice; we will fight for our ideals and sacred things of the Town, both alone and with many; we will revere and obey the Town's laws and do our best to incite a like respect and reverence in those about us; we will strive unceasingly to quicken the public's sense of civic duty; and thus in all the ways we will strive to transmit this Town not only not less but greater, better and more beautiful than it was transmitted to us. The Ephebic Oath was that taken by the young men of the ancient Athens when they became of age to assume the responsibility of citizenship We all have the responsibility to protect the integrity of our governing process and therefore, have read and agreed to these guidelines. Resolution 22-03 Page 4 of 15 Table of Contents Section I: Governance Relations & Ethics Policy .............................4 A. Mayor/President's Responsibilities ...................................... 6 B. Council/Board of Trustee Member's Responsibilities ......... 6 C. Mayor/President & Council/Board Member Codeof Conduct..................................................................7 D. Board and Staff Relations .................................................... 7 Section II: Council -Manager Form of Government ...........................8 Section III: Agenda Procedures........................................................9 Section IV: Council Media Relations................................................12 Resolution 22-03 Page 5 of 15 Section I - Governance Relations Policy The Westlake Town Council is the governing body for the Town of Westlake and also serves as the Board of Trustees for Westlake Academy; therefore, they must bear the initial responsibility for the integrity of governance. As the Town of Westlake owns, operates, and holds the charter for the school, the title of Council Member will also apply to their role as a governing board for our academic services department (Westlake Academy). Thus, Town Council Member is synonymous with Board of Trustee Member and Mayor is synonymous with President of Westlake Academy. Serving the community is a great honor and should help build the public trust in our local government. The Council is responsible for its own professional development and education (both as a body and as individuals), its own discipline, and its own performance. The development and adherence to this policy is designed to ensure effective and efficient governance as it is the foundation of our success. This policy will address Mayor/President and Council/Board relations, Council/Board and Staff relations, the Council -Manager Form of Government and Council/Board and media relations. By adopting these guidelines, we acknowledge our responsibility to each other, to our professional staff, and to the public that we all serve. The Council will govern both municipal and academic services in a manner associated with a commitment to the preservation of the values and integrity of representative local government and democracy, and a dedication to the promotion of efficient and effective governing. The following statements will serve as a guide and acknowledge the commitment being made in this service to the community: 1. The Council has as high priorities the continual improvement of the member's professional ability and the promotion of an atmosphere conducive to the fair exchange of ideas and policies among members. 2. The Council will endeavor to keep the community informed on municipal/academy affairs; encourage communication between the residents and the Council; strive for strong working relationships among neighboring municipalities and elected officials. 3. In its governance role, the Council will continue to be dedicated to friendly and courteous relationships with Staff, other Council members, and the public, and seek to improve the quality and image of public service. 4. The Council will also strive to recognize its responsibility to future generations by addressing the interrelatedness of the social, cultural, and physical characteristics of the ties of the community when making policies. 5. And finally, each Council member will make a commitment to improve the quality of life for the individual and the community, and to be dedicated to the faithful stewardship of the public trust. Statement of Purpose In order to ensure the proper discharge of duties for the improvement of democratic municipal and school governance, Westlake Council/Board Members should display behavior that demonstrates independent, impartial review of all matters addressed by them and be duly responsible to the residents of Westlake and to each other in their relationships. Resolution 22-03 Page 6 of 15 Code of Ethics The office of elected officials is one of trust and service to the residents of the Town of Westlake and Westlake Academy. This position creates a special responsibility for the Westlake Council/Board Member. In response to this, the Westlake Council/Board is expected to govern this Town in a manner associated with a commitment to the preservation of the values and integrity of representative local government and local democracy and a dedication to the promotion of efficient and effective governing. To further these objectives, certain ethical principles shall govern the conduct of every Council/Board Member, who shall: 1. Be dedicated to the highest ideals of honor and integrity in all public and personal relationships in order that the member may merit the respect and confidence of the residents of Westlake; and, 2. Recognize that the chief function of local government at all times is to serve the best interests of all of the people; and, 3. Be dedicated to public service by being cooperative and constructive, and by making the best and most efficient use of available resources; and, 4. Refrain from any activity or action that may hinder one's ability to be objective and impartial on any matter coming before the board. Do not seek nor accept gifts or special favors; believe that personal gain by use of confidential information or misuse of public funds or time is dishonest; and, 5. Recognize that public and political policy decisions, based on established values, are ultimately the responsibility of the board; and, 6. Conduct business in open, well publicized meetings in order to be directly accountable to the residents of Westlake. It is recognized that certain exceptions are made by the State for executive sessions; however, any action as a result of that type of meeting will be handled later in open session. A. MAYOR/PRESIDENT'S RESPONSIBILITIES The Mayor/President has the important responsibility of presiding at meetings, issuing proclamations, and generally serves as the governmental head of Town Council/Board of Trustees. One of the major duties of the position, is to work with the other Council/Board Members to identify, prioritize, and allocate funding for the needs of both municipal and academic service areas and work with staff to set the strategic outcomes of the organization. The Mayor also represents the Town in ceremonial events, makes presentations on behalf of the municipality and should expect to give interviews to the media (when necessary), preside at graduation each year, help produce videos for the organization and participate in business discussions with all stakeholders. Additional information is listed below: Resolution 22-03 Page 7 of 15 1. The Mayor/President shall be the presiding officer at all meetings. The Mayor Pro-tem shall preside in his/her absence. 2. Except as provided for by State law pertaining to voting on Council/Board matters, the Mayor/President shall have a voice in all matters before the Council/Board. 3. The Mayor/President shall preserve order and decorum and shall require Council/Board members engaged in debate to limit discussion to the question under consideration. 4. The Mayor /President is the spokesperson for the Council/Board on all matters unless absent, at which time his/her designee will assume the role. 5. The Mayor/President will encourage all Council/Board members to participate in Council/Board discussions and give each member an opportunity to speak before any member can speak again on the same subject. 6. The Mayor /President may limit each speaker to three to five (5) minutes to ensure an efficient use of time. The Mayor/President is responsible for keeping the meetings orderly by recognizing each member for discussion, limiting speaking time, encouraging debate among members and keeping discussion limited to the agenda item being considered. 7. Should a conflict arise among Council/ Board members, the Mayor/President will serve as the mediator. B. COUNCILBOARD OF TRUSTEES MEMBER RESPONSIBILITIES Council/Board of Trustee members serve in a legislative role for the organization. They have the important role of approving policy direction, setting the strategic direction for both municipal and academic services through the establishment of the vision/mission/values and collaborating with staff to develop outcome objectives, and measuring the effectiveness of the service delivery methods for the municipality. Unless restricted by state law, each Council/Board member may vote (or abstain) on agenda items that require approval at meetings. Members also serve as the authorizing body that may levy taxes, assess and charge fees, sell bonds to finance projects and functions of the municipality, and approves the budget for both municipal and academic services. C. MAYOR/PRESIDENT AND COUNCILBOARD MEMBER CODE OF CONDUCT During the Council/Board meetings, members shall preserve order and decorum, shall not interrupt or delay proceedings, and shall not refuse to obey the orders of the Mayor/President or the rules of the Council/Board. Council/Board members shall demonstrate respect and courtesy to each other, to professional Staff, and to members of the public appearing before the Council/Board. Council/Board members shall refrain from rude and derogatory comments and shall not belittle Resolution 22-03 Page 8 of 15 Staff members, other Board members, or members of the public. They should not use their position to secure special privileges and should avoid situations that could cause any person to believe that they may have brought bias or partiality to a question or issue before the Council/Board. Members of the Council/Board will not condone any unethical or illegal activity. All members of the Council/Board agree to uphold the intent of this policy and to govern their actions accordingly. D. BOARD AND STAFF RELATIONS No single relationship is as important as that of the Council/Board and their Town Manager Superintendent in effectively governing the Town of Westlake/Westlake Academy. It is for this reason that the Council/Board and Town Manager /Superintendent must understand their respective roles in that process. The Town Manager/Superintendent is the primary link between the Council/Board and the professional Staff. The Council'sBoard's relationship with the Staff shall be through the Town Manager/Superintendent. 1. In order to ensure proper presentation of agenda items by Staff, questions arising from Council/Board members after receiving their information packet should be, whenever possible, presented to the Town Manager /Superintendent for Staff consideration prior to the meeting. This allows the Staff time to address the member's concern and provide all members with the additional information. 2. The Town Manager /Superintendent shall designate the appropriate Staff member to address each agenda item and shall see that each presentation is prepared and presented in order to inform and educate the Council/Board on the issues which require action. The presentation should be professional, timely, and allow for discussion of options for resolving the issue. The Staff member making the presentation shall either make it clear that no action is required or present the specific options for Council/Board consideration. 3. The Town Manager /Superintendent is directly responsible for providing information to all the Council/Board concerning any inquiries by a specific Board member. If the Town Manager or his/her Staffs time is being dominated or misdirected by a Council/Board member, it is his/her responsibility to inform the Mayor/President. 4. The Town Manager/Superintendent will be held responsible for the professional and ethical behavior of himself/herself and the discipline of his/her Staff. The Town Manager/Superintendent is also responsible for seeing that his/her Staff receives the education necessary to address the issues facing municipal government. 5. Any conflicts arising between the Town Staff and the Council/Board will be addressed by the Mayor/President and the Town Manager /Superintendent. 6. All Staff members shall show each other, each Council/Board member, and the public respect and courtesy at all times. They are also responsible for making objective, professional presentations to ensure public confidence in the process. Resolution 22-03 Page 9 of 15 7. The Town Manager /Superintendent, after an election, will make sure that the Staff has prepared information needed for the orientation of new Council/Board members and inform them of any Texas Municipal League/Texas Charter School conferences and seminars available. 8. The Town Manager /Superintendent will also be responsible for meeting personally with new members and informing them about Town/Academy facilities and procedures. 9. The Town Manager/ Superintendent is responsible for the orientation of all new Council/Board members after an election. The orientation shall include meeting procedures, Staff and media relations, current agenda items and leadership training programs. SECTION II — COUNCIL-MANAGER FORM OF GOVERNMENT The Council -Manager Form of government (or town manager plan) is similar, in many respects, to that of a private corporation, in which the stockholders elect a board of directors which then hires a president to run the company. Under the city manager plan, the voters elect a city council which, in turn, hires a town manager to administer the town's day-to-day operations. Under this configuration, the council serves as the legislative body: sets policy, approves the budget, sets the tax rate, and the extent and cost of municipal and academic services. In short, the council is the final authority on the policy decisions that determine the scope and functions of the town government. The mayor and councilmembers have no administrative duties under the Council -Manager form of government. These responsibilities are vested in the town manager, who is responsible for hiring staff, directing and managing the programs of the town in accordance with ordinances, rules, and regulations adopted by the council. The typical town manager in Texas is appointed for an indefinite term and is subject to dismissal by the council at any time except as otherwise prohibited by law. He or she is designated as the chief executive and administrative officer of the town and is accountable to the council for the proper conduct of all municipal operations. The manager has the unilateral authority to hire, discipline, and fire the department heads under the town manager's direction. In our organization, the town attorney and municipal judge, are directly hired and/or supervised by the council rather than the town manager. Although the manager's role varies from one city to another, the primary function is to implement the policies established by the council and ensure the city is operated in an economical and responsible manner. Specific duties of the manager may include the following: 1. Enforcing all town ordinances, rules, and regulations. 2. Supervising all municipal and academic employees and programs. 3. Preparing and executing the town's annual budgets for municipal and academic services Resolution 22-03 Page 10 of 15 4. Managing the town's funds and preparing periodic reports that advise the council and the public of the town's financial position. 5. Providing information to the council to facilitate its ability to make informed decisions in the best interests of the town. 6. Preparing council and board meeting agendas and attending all such meetings to serve as a resource to the council and the public. 7. Identifying needs of the community and recommending methodology by which the council may respond to those needs. SECTION III — AGENDA GUIDELINES AND PROCEDURES The Open Meetings Act (the "Act") was adopted to help facilitate the publics access to governmental meetings and decision -making processes. "It requires meetings of governmental bodies to be open to the public, liberally construed in favor of open government." (excerpted from the ww,v.texasattorney eneral.gov website) The Act prohibits the Town Council/Board of Trustees, boards, and commissions from taking action on or engaging in any discussion regarding an item not listed on the agenda. There will be a section for open citizen comments during each agenda; however, the Council/Board Members are not allowed to engage or interact on the topic with the person speaking during this portion of the meeting. Quorum of Elected Officials: The Act defines "quorum" as a majority of the governing body for both the Town Council and the Board of Trustees. For example, three members of the five -member Council/Board constitutes a quorum for hearing both municipal and academic matters. Except in certain circumstances, the presence of the Mayor/President is not included in the `count' for a quorum. A resident who has been elected to serve as a member of a governing body but whose election has not been certified (or the oath of office administered) is not yet a member of the governing body. Thus, a meeting between two newly elected persons who have not yet taken the oath of office and two serving CouncilBOT members is not subject to the Act because no quorum is present. It is also important to note, that a board member may not delegate his or her authority to deliberate or vote to another person, absent express statutory authority to do so. Regular meetings of the Town Council/Board of Trustees are held on the second and fourth Monday of each month (pending any conflicts with holiday scheduling). The meetings will begin at the time posted on each respective agenda and may change based on the number of items placed on the agenda for discussions during each session. The location will also be posted for each meeting in order to allow the public to attend and participate in the local government process. Consent Agenda Items The consent agenda includes items of a routine nature and will generally be approved with one motion. Council/Board Members may ask a question regarding a consent agenda item, speak in opposition to the recommended action, request that their vote show opposition to an item, or may remove an item from the consent agenda and have it considered as a separate item. Any item so removed from the consent agenda shall be considered after other items on the consent portion of the agenda have been heard and voted on. Resolution 22-03 Page I 1 of 15 Executive Session Executive Sessions are closed meetings and are permitted for the discussion of the following items that legitimately fall within the exceptions as stated in the Texas Open Meetings Act: Consultation with the Town Attorney to seek advice about pending or contemplated litigation, settlement offer, or other matter as permitted; Deliberations regarding the purchase, lease, exchange or value of real property; Deliberations regarding personnel matters; or Deliberations regarding economic development negotiations. Future Agenda Item Requests. Any Council/Board member may request an agenda item be considered for discussion at a future meeting. a. The Council/Board member making the request will contact the Town Manager/Superintendent, in writing, with a description of the requested item and he or she will list it on an agenda as a "Future Agenda Item" for consideration by the entire Council. The item will then be placed on future agenda within 30 days of the initial request. b. At the agenda meeting where the item will be considered for a future discussion, the requesting Council/Board member shall provide the following information to the Council: i. an explanation of the item being considered; ii. the items relationship to the strategic priorities/objectives of the organization; iii. the question(s) the Council member would like to have answered by Staff. c. If the requesting Council Member receives a second after the broader discussion, the Town Manager/Superintendent will place the item on a future agenda workshop for preliminary discussions by Council. The Council should consider the following in providing direction to Staff on the item: i. the necessary Staff time it will take to research and prepare the item for the initial discussion (the Town Manager/Superintendent will provide an estimate to Council); ii. the priority of the item in relation to other projects currently in process, and; iii. the Council shall then provide Staff with an estimated month for completion. Requests for Administrative Inquiry. A Council/Board member may request that the Town Manager/Superintendent investigate a specific topic or subject and report staff s response and/or findings back to the entire Council by brief email. Administrative inquiries are strictly intended for items that are of interest to the Council/Board as a whole, will require only brief staff time (less than 30 min of research) to investigate and respond, and in the Council's view does not merit time or discussion at a Council meeting. If the request will take more than a brief amount of time to research and respond, the Town Manager/Superintendent will inform the Council by email and the requesting Council Member will then have the option to submit the request as a Future Agenda Item for consideration by the Resolution 22-03 Page 12 of 15 larger governing board. a. At the agenda meeting where the item will be considered for a future discussion, the requesting Council Member shall provide the following information to the Council: iv. an explanation of the item being considered; v. the items relationship to the strategic priorities/objectives of the organization; vi. the question(s) the Council member would like to have answered by Staff. Agenda Reports. Reports are prepared by staff and placed on the appropriate Council agenda for informational purposes and will be accepted as presented. There will be no presentation for these items or separate discussion unless a Council Member requests that a report be removed and discussed separately. Agenda Preparation by Council. Each Council Member is responsible for being prepared to attend the meetings and discuss the agenda and is encouraged to attend at least one Texas Municipal League or Texas Charter School sponsored conference each year in order to stay informed on issues facing municipalities and charter schools. It is the responsibility of Council/Board members to be informed about action taken by the Council/Board in their absence. Each individual Council/Board member is responsible for scheduling a discussion with the Town Manager/Superintendent, or his/her representative, to receive an update on information that was discussed at any missed meeting. Whenever possible, this update should occur prior to the next regularly scheduled Council meeting in order to ensure each Council Member is receiving timely information and engaged in the process of governance for the community. General Rules of Order 1. When addressing an agenda item, the Council/Board member shall first be recognized by the Mayor/President, confine himself/herself to the question under debate, avoid reference to personalities, and refrain from impugning the integrity or motives of any other Council/Board member or Staff member in his/her argument or vote. 2. In the absence of a ruling by the Mayor/President on any procedural matter, a Council/Board member may move to change the order of business or make any other procedural decision deemed appropriate. The affirmative vote of a majority of the Council/Board members present and voting shall be necessary to approve the motion. 3. Any Council/Board member may appeal to the Council/Board as a whole from a ruling by the Mayor/President. If the appeal is seconded, the person making the appeal may make a brief statement and the Mayor/President may explain his/her position, but no other member may speak on the motion. The Mayor/President will then put the ruling to a vote. 4. Any Council/Board member may ask the Mayor/President to enforce the rules established by the Board. Should the Mayor/President fail to do so, a majority vote of the Council/Board members present shall require him/her to do so. Resolution 22-03 Page 13 of 15 5. When a Council/Board member is appointed to serve as liaison to an affiliate board, the Council/Board member is responsible for keeping all Council/Board members informed of significant activities. 6. As much as practicable, Council/Board agendas, particularly workshop meetings, should be centered on the Council'sBoard's strategic plans and related policy matters. To achieve that end, the Town Manager/Superintendent and his/her Staff will work to facilitate that focus. Section IV - Council/Board and Media Relations Since the democratic form of government is only successful when the citizens are kept informed and educated about the issues facing their municipality, it is imperative the media play an important role in the council -manager -media relations. It is through an informed public that progress is insured and good government remains sensitive to its constituents. These guidelines are designed to help ensure fair relationships with print, radio, and television reporters. The Council and the Town Manager/ Superintendent recognize that the news media provides an important link between the Council/Board and the public. It is desire to establish a professional working relationship to help maintain a well informed and educated citizenry. 1. During the conduct of official business, the news media shall occupy places designated for them or the general public. 2. All reporters will have access to an agenda and will be furnished support material needed for clarification if requested. 3. In order to preserve the decorum and professionalism of Council/Board meetings, the media are requested to refrain from conversing privately with other people in the audience and to conduct any interview with the public outside the meeting room while the Council/Board is in session. 4. Since each government body conducts business differently, it is requested that all reporters new to Board meetings meet with the Town Manager/Superintendent, Mayor/President, or the designated media relations representative prior to covering their first meeting to be informed of the policies and procedures to help foster a professional working relationship between the media reporter and the Town. 5. On administrative matters, the Town Manager/Superintendent is the spokesperson, unless he/she has appointed a media relations person to present staff information on the agenda. 6. The Mayor/President, or his/her designee, is the primary spokesperson for the Town/Academy on matters regarding policy decisions or any Council information pertaining to issues on the agenda. In order to ensure fair treatment of an issue, any clarifications requested by the media on the issue should be addressed after the meeting. When opposing positions have been debated, regardless of the outcome, the public is better informed when all sides have adequate coverage by the media. This lets the public know that the item was seriously debated and Resolution 22-03 Page 14 of 15 options discussed before a vote was taken and helps build confidence in the democratic process. 7. The Town of Westlake Council/Board is made up of five (5) Council Members and a Mayor/President, each elected by the residents of Westlake. In respect to each Council Member and his/her constituents, his/her views as presented on an issue before the Council should provide equitable representation from all members. Even though Council Members may express differing ideas, equitable representation helps promote unity of purpose by allowing the public to be informed of each member's position during his/her term of office and not only during an election campaign. Resolution 22-03 Page 15 of 15 TOWN OF WESTLAKE RESOLUTION NO. 15-27 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, AMENDING THE POLICY REGARDING BOARD MEETING PROCEDURES. WHEREAS, the Town Council adopted a policy regarding Board Meeting Procedures on July 28, 2008; and, WHEREAS, the Town Council desires amend the policy changing the name from Board of Alderman to Town Council; and, WHEREAS, the Town Council desires to add language to the policy by adding a section to meeting agendas named "Items of Community Interested"; and, WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town of Westlake Town Council does hereby approves the policy regarding Board Meeting Procedures, attached as Exhibit "A". SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 15-27 Page I of 2 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 21s' DAY OF SEPTEMBER, 2015. ATTEST: Kelly tdward)Town Secretary AS TO --FORM: Town Attorney Laura L. Wheat, Mayor Thomas E. rym r, T wn Manager Resolution 15-27 Page 2 of 2 POLICY ON COUNCIL MEETING PROCEDURES Approved by the Town Council Resolution 15-27 on 09/21/15 Upon adoption of this policy by the Town Council, the following rules and order of business will be adhered to. MEETINGS Regular Meetings will be held on the second and fourth Monday of each month. Special meetings shall be called, upon request of the Mayor or a majority of the members of the Town Council as prescribed by the Texas Local Government Code Sec. 22.038. Should the Town Manager identify a need for a special meeting, he or she shall consult with the Mayor to schedule said meeting. All meetings shall be subject to the provisions of the Texas Open Meetings Act, V.T.C.A., Government Code, Ch. 551, Open Meetings, as amended. Work Sessions may be scheduled prior to the regular meetings on the second and fourth Monday of the month, as necessary. The time is subject to change at the discretion of the Town Council or the Town Manager. Periodic Work sessions will also be scheduled to provide the Town Council with time to discuss short term and long term goals. The general public can, of course, attend such meetings, but may not participate in the proceedings unless invited to do so by the Mayor. Executive Sessions are an exception to the general rule that all meetings are open to the public. Executive Session may be held on the second and fourth Monday of each month. A special meeting can be called by the Mayor and the Town Manager. The Open Meetings Act allows closed meetings in a few specific instances where privacy serves the public interest — i.e. to discuss real estate, economic development, personnel matters. The Council must keep a record of the meeting and it shall be certified by the Mayor to assure that all matters discussed in executive session were properly recorded. AGENDA Agendas are prepared and posted for every meeting of the governmental body. The Mayor, working in conjunction with the Town Manager, will exercise their professional judgment in determining what items of business should come before the Council. Any member of the Town staff wishing to have an item placed on the agenda shall consult with the Town Manager's office and then submit the item to the Town Secretary. Staff will post agenda packets on the internet for all Regular Meetings and Work Sessions no later than the Friday afternoon preceding the week of scheduled meetings. This should afford ample time for all Council members to inquire into the nature of each matter to be discussed or to personally investigate the matter so as to be better informed before a Council meeting. Policy on Council Meeting Procedures Page 1 The Town Secretary's office, in conjunction with the Town Attorney, assumes the responsibility for compliance with the Open Meetings Act. Pledge of Allegiance First item on the regular Council agenda shall be to recite the Pledge of Allegiances. Consent Agenda All items listed on the consent agenda are considered routine by the Town Council and, in the instance a Council workshop is held prior to a Council meeting, the Council will have an opportunity review and ask questions related to the consent agenda items listed. Consent agenda items will be enacted with one motion. There will be no separate discussion of items unless a Council Member or citizen so requests, in which event the item will be removed from the general order of business and considered in its normal sequence. Items of Community Interest Expressions of thanks, congratulations or condolences; information regarding holiday schedules; honorary recognition of town officials, employees or other citizens; reminders about upcoming events sponsored by the Town or other entity that are scheduled to be attended by a town official or town employee. These procedures shall apply to all meetings of the Town Council. The Mayor shall be the presiding officer at all meetings of the Town Council. In the event of the absence of the Mayor and Mayor Pro Tem, the Mayor shall designate the presiding officer. In the event the Mayor has failed to designate the presiding officer, the Council member with the most seniority shall serve as presiding officer. In regular and special meetings, the Town Council will utilize reasonable rules of parliamentary procedure in the conduct of its business. Below are examples (not mandatory) of reasonable parliamentary procedure in certain types of actions of the Town Council: 1. MAIN MOTION: A formal proposal to take certain action. Step 1. Addressing the Chair. (Begin the discussion by having a member make the motion. Motion should be made and seconded. After this, debate can be conducted. (Ex: "Mayor, I move the following..."). SECOND REQUIRED Yes DEBATABLE Yes AMENDABLE Yes VOTE REQUIRED Majority Policy on Council Meeting Procedures Page 2 Step 2. Assigning the floor (Mayor recognizes the member) Step 3. Making a motion. Step 4. Seconding a motion. Step 5. Stating the motion (Mayor states the motion) Step 6. Debating the question. (Mayor allows debate, with maker of motion speaking first in debate). Step 7. Putting the question. (Mayor takes the vote after debate is complete). Step 8. Announcing the result of vote. (Mayor announces the vote, members for and against). 2. TO TAKE FROM THE TABLE: To enable an assembly to take up and consider a motion that was postponed temporarily during the same meeting. Maybe used at a future meeting if the item that was tabled was posted. SECOND REQUIRED Yes DEBATABLE No AMENDABLE No VOTE REQUIRED Majority 3. AMENDING A MOTION Any motion may be amended as follows: "Mayor, I move that we amend the motion by (adding, striking our, etc. the words...)." The amendment must be seconded and then it can be discussed. When discussion ends, the amendment is voted on first. If the amendment passes, the original motion is then put to a vote as amended. If the amendment fails, the original motion is put to a vote. SECOND REQUIRED Yes DEBATABLE Yes AMENDABLE Yes VOTE REQUIRED Majority 4. TO OFFER A SUBSTITUTE AMENDMENT: Another way to change an original motion is by use of the Substitute Motion. A substitute motion is an amendment that changes an entire sentence or paragraph. It must be seconded and then discussed. It may be amended and differs only from an amendment in that if the substitute motion passes it does away with the original motion. SECOND REQUIRED Yes DEBATABLE Yes AMENDABLE Yes VOTE REQUIRED Majority Policy on Council Meeting Procedures Page 3 LAY A MOTION ON THE TABLE: Sometimes the Council may wish to defer action on a motion. One way to accomplish this is to lay a motion on the table. It is in order to move that a main motion be laid on the table when discussion on the main motion has or is about to end. A tabled motion can be brought from the table during the same meeting but is usually done so at a later meeting when unfinished business is being considered. SECOND REQUIRED Yes DEBATABLE No AMENDABLE No VOTE REQUIRED Majority MOTION TO CLOSE DEBATE (call for question): To prevent or stop discussion on the pending question, and to bring the pending question or questions to an immediate vote. SECOND REQUIRED DEBATABLE AMENDABLE VOTE REQUIRED Yes No No 2/3 of members present 6. POINT OF ORDER: Anytime a member feels an incorrect procedure is being used, he or she can interrupt with a point of order request that requires the Mayor to determine the correct procedure. The point of order can have no additional motions applied to the request other than a motion to withdraw. SECOND REQUIRED No DEBATABLE No AMENDABLE No VOTE REQUIRED Mayor must concede or deny. RIGHTS IN DEBATE Robert's Rules of Order says that debate is the discussion regarding a motion that occurs after the presiding officer has restated the motion and before putting it to a vote. When a pending question is presented for consideration to the Council, the presiding officer shall recognize the member who made the motion to speak first and the member who seconded the motion to speak second. When two or more members wish to speak, the presiding officer shall name the member who is to speak first. No member of the Council shall interrupt another while speaking except to make a point of order or to make a point of personal privilege. No member shall speak more than five minutes on any amendment to the question except as further provided in this rule. Policy on Council Meeting Procedures Page 4 No member shall speak more than the time limits provided herein on any subject or amendment, and such member may use his or her time in any combination, in separate speech or comments totaling the number of minutes permitted. The Mayor shall not be obligated to recolmize any Council member for a second comment on the subject or amendment until every Council member wishing to speak has been allowed a first comment. Council members shall also have the right to yield a portion of time to another member. Any member deciding to speak more than five minutes on any question or more than five minutes on any amendment to the question shall be accorded the privilege without objection upon motion supported by two-thirds of the Council. No member shall be permitted to interrupt while another member is speaking. No Council member shall be permitted to indulge in a discussion of personalities, use language personally offensive, arraign motives of members, charge deliberate misrepresentation, or use language tending to hold a member of the Town Council up to contempt. If a member is speaking or otherwise transgressing the rules of the Council, the presiding officer shall or any Council member may call him or her to order in which case he or she shall immediately be quiet unless permitted to explain. The Council shall, if appealed to, decide the case without debate. If the decision is in favor of the member called to order, he or she shall be at liberty to proceed, but not otherwise. CONFLICT OF INTEREST Each Council member should be aware of the conflict of interest regulations, including State provisions and statutes. When a Council member has a conflict of interest with an agenda item, he or she should submit the required affidavit (if required) prior to the beginning of the meeting at which the agenda item is scheduled. Upon introduction of the agenda item, the Council member with the conflict of interest should announce that he or she has a conflict of interest and will not participate in discussion or consideration of the agenda item. It is not necessary that the Council member leave the meeting room. Policy on Council Meeting Procedures Page 5 CITIZEN PARTICIPATION Individuals who wish to address the Town Council on an item posted as a public hearing shall register with the Town Secretary prior to the Mayor's announcement to open the public hearing. Registration forms are available in the lobby. The Mayor will open the public hearing and recognize individuals who wish to come forward to speak for or against the item. The speaker will state their name and address for the record and shall be allowed three minutes. After a public hearing is closed, there shall be no additional public comments. If the Council needs additional information from the general public, some limited comments may be allowed at the discretion of the Mayor. When a large number of participants have indicated an interest in addressing the Council on a zoning case or another regular agenda item, the Mayor or Mayor Pro Tem may set a maximum time limit for the proponents and opponents and a time limit for rebuttal, if necessary. Individuals who wish to address the Town Council on a consent or regular agenda item not posted as a public hearing shall register with the Town Secretary prior to the Mayor's reading of the agenda item. Registration forms are available in the lobby. The Mayor will recognize individuals who wish to come forward to speak for or against the item. The speaker will state their name and address for the record and shall be allowed three minutes. Policy on Council Meeting Procedures Page 6           2008 Town of Westlake /  Westlake Academy  Town Council / Board of Trustees   CITIZEN ADVISORY  BOARD/COMMITTEE/AFFILIATE RELATIONS  AND COMMUNICATIONS POLICY      1  (adopted December 8, 2008)  CITIZEN ADVISORY BOARD/COMMITTEE/AFFILIATE  RELATIONS AND COMMUNICATIONS POLICY    Contents    I.   POLICY PURPOSE. ................................................................................................................................... 2  II.   POLICY GOALS. ........................................................................................................................................ 2  III.   POLICY PARAMETERS ............................................................................................................................. 2  A. Annual Meeting with Board. ............................................................................................................ 2  B.   IRS Tax‐Exempt Status Requests. ..................................................................................................... 3  C.   Use of Town and Academy Name, Resources, and Logos. .............................................................. 3  D.   Fiduciary/Stewardship Responsibilities and Requirements. ........................................................... 3    2  (adopted December 8, 2008)  I.   POLICY PURPOSE. To establish a clear framework and process for enhanced collaborative interaction, communication, and mutual understanding of roles and responsibilities between the Town Council (TC) and the Board of Trustees (BOT) and their various citizen advisory boards, commissions, committees, and organizations affiliated with the Town of Westlake and/or Westlake Academy. II.   POLICY GOALS. The goals of this policy are: A. Enhanced two-way communication between the TC/BOT and its various advisory boards, commissions, committees and affiliate organizations (and vice versa). B. Reaching mutual agreement regarding annual programs of work for these various citizen advisory boards, commissions, committees, and affiliate organizations to enhance and assist in the pursuit of the TC’s/BOT’s strategic priorities. C. Achieving a common paradigm that all advisory boards, commissions, committees, and affiliates of the Town of Westlake and Westlake Academy exist to further the TC/BOT strategic agenda and are under the direct control of BOT/TC or, if they are a Westlake Academy affiliate, are under the day-to-day direction of the Head of School. D. Creating a clear understanding, coordination, and agreement by the TC/BOT and its citizen advisory boards, commissions, committees, and affiliate organizations as to each group’s role, function, and scope of responsibility in terms of their relationship to the Town of Westlake and/or Westlake Academy. E. Establishing a direct link between Westlake Academy, its Head of School, and the Academy’s Senior Management Team as being the first point of contact for coordinating the activities of Westlake Academy affiliates. III.   POLICY PARAMETERS. To achieve this policy’s purpose and goals, the following parameters are put in place: A. Annual Meeting with Board. All TC/BOT advisory boards, committees, commissions, and affiliate organizations shall meet at least annually with the TC/BOT to: 1.) Report on progress to date in implementing that group’s program of work for the current fiscal year 2.) Review a proposed program of work for the coming fiscal year as well as submit any budget requests and requested staff resources for this proposed program of work. Said program of work will be discussed within the context of the organization’s program of work carrying out the TC’s/BOA’s strategic plan for both the Town and Westlake Academy. All funding requests should be submitted not later than the July 1st prior to the upcoming fiscal year. Requests received after that time will not be considered until the following fiscal year. 3.) Review fund raising activities underway or planned to support the current or proposed plan of work. 3  (adopted December 8, 2008)  4.) The chair of each advisory board, committee, and/or affiliate organization shall schedule this annual meeting (or more frequent if needed) through the Town Secretary’s office. The TC/BOT may choose to hold these meetings one or two times per year. 5.) All affiliates of Westlake Academy, prior to meeting with the TC/BOT, will meet with the Head of School to make sure they their proposed efforts are coordinated through the Head of School and his/her designates. B.   IRS Tax­Exempt Status Requests.  All advisory committees, commissions, boards, and affiliates seeking tax-exempt status from the Internal Revenue Service 501(c)3 must receive prior approval from the TC/BOT. When submitting a request to the TC/BOT to apply for this IRS 501(c)3 status, the organization wishing to apply must be able to demonstrate and illustrate to the TC/BOT the benefits of this status for achieving TC/BOT strategic priorities as well as the advantages of this designation not currently afforded by the Town’s existing tax- exempt status. Further, the organization requesting to apply for this 501(c)3 status must be able to demonstrate to the TC/BOT their organizational capacity to administer and comply with all IRS regulations related to this status on an on-going basis. C.   Use of Town and Academy Name, Resources, and Logos.  Any advisory board, commission, or committee, as well as affiliate organizations of the Town or Westlake Academy, that wish to begin using the Town or Academy’s name or logo in their operational efforts must receive prior approval from the TC/BOT. Said approval can be withdrawn at any time by the TC/BOT. Additionally, any on-going use of Town facilities, resources, and staff by an advisory committee, commission, board, or affiliate must be requested through the Town Manager’s office and is subject to his/her approval prior to on-going utilization of those resources. Requests to add organizations covered by this policy to the Town’s insurance policy shall be submitted to the Town Manager for his prior approval before any insurance coverage is extended. If approved, the annual cost of this insurance shall be borne by the requesting organization. Requests to add staff to support any advisory board, commission, committee, or affiliate shall be made through the Town Manger’s office as a part of the annual budget preparation process and must be approved in advance by the TC/BOT. This request will include the identification of funding resources to pay for this position, the operational reporting arrangement for this position, and which payroll/insurance program this position will fall under. D.   Fiduciary/Stewardship Responsibilities and Requirements. All advisory boards, commissions, committees, and affiliates that expend funds through their own bank accounts must first have TC/BOA approval to have separate bank accounts. All such groups will also submit their financial control procedures to the Town Manager or his/her designate for review and approval as to providing acceptable internal control on collection and expenditure of funds from these bank accounts. 4  (adopted December 8, 2008)  Additionally, if this approval for separate bank accounts is authorized by the TC/BOT, a timely annual audit of this account(s) shall be submitted to the Town Manager or his/her designate for presentation to the TC/BOT. Said audit may be conducted by an external CPA auditing firm or may be conducted by the Town’s Director of Finance with that decision being made by the Town Manager depending on staff workload requirements at the time. Since the Westlake Academy Foundation has IRS 501(c)3 status at the time of the adoption of this policy, that organization shall, at its cost, utilize the same external auditor concurrently used to audit Westlake Academy finances. This Westlake Academy Foundation audit shall be prepared on a timely basis for presentation to the TC/BOT at the same time that the Academy’s audit is presented. For those advisory boards, commissions, and committees funded by the TC/BOT through the Town or Academy approved budget, use of approved budgetary allocations shall be made on transaction by transaction basis. That is, the chair or president of that organization will identify the vendor they wish to utilize, contact the Town’s Director of Finance, and submit necessary invoices so that the vendor can be paid by the Town for goods/services rendered to that advisory committee, commission, or board from their TC/BOT approved budget. Use of approved Town budgeted funds by these organizations shall be in accordance with State purchasing statutes and Town purchasing policies. All by-laws for proposed for citizen advisory boards, commissions, committees, and organizations affiliated with the Town of Westlake and/or Westlake Academy shall first be reviewed and approved by the TC/BOT. 
 A FIRM FOUNDATION: building an extraordinary charter school board with Policy Governance® Brian L Carpenter, PhD, CFE 2 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 I still remember sitting at my desk one afternoon in late 1998, reading Dr. John Carver’s book, “Boards That Make a Difference,” then just out in its second edition. (A hardcover third edition followed in 2006.) I had never heard of Policy Governance® (a registered service mark owned by Carver) before one of my mentors recommended the book, but I told my wife that evening that if I could work for a board that followed Carver’s model, I would be willing to continue running schools for a living. As it was, though, I was actively thinking about leaving the profession as I approached the end of my first decade of experience as a school leader. In 2002, I left it. Why? When I started reading Boards That Make a Difference, I was leading a modestly-sized Christian school with an enrollment of about 800 pre-K-12 students spread across three campuses. In some respects, school leadership was easier in those days because the school did not have a website, email, or social media accounts. I did have a personal cell phone (the old “brick” style), but most of my staff did not. Still, school leadership was a difficult and complex task for which, like many school leaders, I had very little in the way of formal training. Most of what I knew about school leadership at the time had come almost entirely from on- the-job learning. Then as now, this included learning how to operate with constant budgetary limitations, regulatory compliance, facilities, instructional design, recruiting, developing and retaining the most competent faculty and staff you can attract, student well-being, sports programs, fundraising, stakeholder relations, risk management, and so on. To round out this list, the thing I found to be the most difficult of all to master was working for, and with, a board. Regardless of whether a board is composed of five, seven, nine, or eleven members, over time, I learned that boards tend to speak as individuals rather than as a collective, co-manage rather than govern, focus on administrivia rather than vital issues, and have few, if any, rules it is willing to enforce upon itself and its members individually when it comes their conduct. Over the past 15 years, I’ve also observed that few charter school boards take their own development in the art of governance seriously, so they rarely engage in ongoing learning aimed at improving their performance—a posture they would never accept from the people employed by the school. (If you doubt the accuracy of this observation, my guess is you’re not familiar with the research on charter school quality generally, and school closures particularly.) Fortunately, there are solutions to these problems, one of which is Policy Governance. One of the reasons I have such confidence in the model is that in October 2006, I was privileged to become one of about 300 consultants worldwide who are able to say that they were personally trained in the theory and implementation of Policy Governance by John and his wife Miriam Carver in their weeklong consultant’s academy before they retired. To this day, I regard it as one of the most profound professional development experiences I have ever had. Even when I train boards that don’t follow Policy Governance, much of John’s thinking on boards underlies the model I created (see the I HOPE model on p. 10). Neither the workbook I use to teach that model or this workbook would have been possible without Dr. Carver. To him and Miriam, I owe a debt of gratitude that I cannot repay. The most I can give back is to pass their model along to you with the most fidelity of which I am capable. This workbook is intended to help me do just that. acknowledgements 3 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 about the author For most of the past thirty years, I’ve been in the education profession in one role or another. I’ve led schools, taught college, researched charter school boards, written books, evaluated schools, and advanced my conceptions of good governance. The seven paragraphs below summarize my credentials & experience. 1.I have been working with charter boards and leaders since 2005. This means I’ve been writing, speaking, researching and consulting in the charter sector for roughly half of its 30-year existence, during which time, I have watched it—and I hope—helped it, evolve. 2.I’ve actually been a school leader and a national non-profit CEO. Prior to being CEO of the National Charter Schools Institute at Central Michigan University (2005-2009), I had more than a decade of experience running private schools. In 2015-16, I served as the interim head of school for York Preparatory Academy, an SC charter school serving 1,500 students in grades K-12. Since then, the school has been repeatedly recognized for its performance. 3.My books and videos are used widely across the US. The body of my work includes three books (with a fourth on YPA’s turnaround having been commissioned by the school and now in progress), white papers, magazine articles, podcasts, training videos. I also published the very first scientific research on charter school boards and closures (2008). 4.My unique combination of graduate credentials (i.e., education and forensic accounting) enable me to help boards and school leaders develop competence in school performance, including risk management. Insofar as I know, I am the only consultant working with charters that holds a PhD in Education and is a Certified Fraud Examiner. I am also one of about 300 consultants worldwide to have been personally trained by John & Miriam Carver in the theory and implementation of Policy Governance. 5.Other charter professionals, i.e., authorizers, attorneys, and association leaders, engage me when they need demonstrated expertise. You can fake expertise with people who know less than you do but you can’t fake it with people who know as much or more than you do (at least not for very long). See my list of other professionally staffed clients on p. 4. 6.I truly nerd out on topics such as good governance, school performance and risk management. And it comes through in my presentations, whether remote or in person—at least that’s what people tell me. What can I say? I really do love this stuff and for good reason: I know that only competent boards and leaders can create great schools for kids. My passion and sense of humor also help make my seminars enjoyable. 7.I was taught the virtue of committing to something larger than oneself by my first employer: The United States Marine Corps. During seven years of active duty as a young man, I learned many important life-lessons about character, leadership, and commitment, including the virtue of committing to something larger than oneself. Although I left the Corps almost thirty- five years ago (I can’t believe it’s been that long ago!), I’m still a Marine at heart and I view my work with charter school boards and leaders as a purpose larger than myself—preserving our Constitutionally guaranteed freedoms by training and educating future generations. The Effective Charter School Board 4 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 As in: 1.WHY thousands of charter school boards have been ineffective since 1992 2.WHY shouldn’t our charter school board just do what other boards I serve on do? 3.WHY the conventional model of governance is wrong 4.WHY your board actually exists 5.WHY the “I HOPE” model is better than the conventional model of governance PART 1 A Firm Foundation 5 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Having personally worked with and/or formally evaluated the boards of several hundred individual charter schools across the US, as well as having published the first scientific research on the role of the board in charter school closures, I have observed that TYPICALLY, charter school board members: 1.received no orientation when they join the board 2.receive little, if any, ongoing training about how to fulfill their responsibilities 3.have not read their school’s articles of incorporation, bylaws, or charter 4.are generally unaware of the potential personal liability involved in serving on a board 5.have a weak understanding of board oversight of financial management 6.have not read the board’s policy manual (in schools where such a manual even exists) 7.have not read the contract between the board and the EMO or CMO and often think that they work for the management company instead of the other way around 8.do not know how much money the school is paying management company 9.do not understand the difference between management and governance 10.rarely focus on how well academic outcomes are being produced 11.have only a vague awareness of the vast number of statutory and regulatory obligations with which their school must comply to stay in operation 12.serve on boards that churn through a new school leader every 12 to 36 months 13.do not know who the school’s authorizer is or when the charter expires 14.believe that the purpose of a financial audit is to detect fraud 15.believe that their primary accountability is to the school’s parents and teachers rather than to the state’s citizens WHY Thousands of Charter School Boards Have Been Ineffective Since 1992 My stationery tagline reveals why I focus most of my efforts on developing board competence: According to recent research, half of all charter school’s cease to exist by their fifteenth year of operations. This amounts to thousands of schools in the past three decades. Having been working with charter school boards over half that time, this data does not surprise me, but it does concern me. A Firm Foundation 6 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHY Shouldn’t Our Charter School Board Just Do What Other Boards I Serve on Do? Governing Charters With Five Differences In Mind FIVE Differences: FOUR Similarities: •boards with fiduciary responsibilities which should not be delegated to management •laws and regulations with which they must comply •need to make money to stay in business (not for profit vs non-profit) •are under IRS scrutiny due to decades of board negligence and malfeasance 1.Charter schools have an ____________ lifespan. Like a parking meter which automatically expires, charters in most states are time-bounded by design. I know of no other non-profit that operates under an inorganic drop-dead date like this. This often requires charter boards within only two to four years of opening to make sure everything gets done right (i.e., a year before renewal evaluations are typically conducted on a three or five year charter). 2.Charter agreements create contractually ____________ student outcomes and they usually limit or prohibit some actions that a private school could change anytime it wants. (Examples: modification of bylaws, changes to curriculum, changes to the instructional calendar, maximum permitted enrollment, number of sites the school can operate, etc.). Charter school boards need to focus like a laser on how well the student outcomes that were agreed to in the charter are being produced. (Reading the charter is a good start.) 3.Charter schools are accountable to an _______________. While some non-profits have parent organizations to whom they are accountable (e.g., Girl Scouts), charter schools operate under the oversight of a regulatory agency called an authorizer (or sponsor). A charter school board should strive to maintain a professional, responsive relationship with their authorizer. (One implication: Do not delegate the authorizer relationship completely to management.) 4.Charter schools are mostly publicly ____________, but may receive a smattering of philanthropy. When an ordinary not-for-profit receives any tax dollars, this pattern is usually inverted. This requires heightened fiscal oversight by charter school boards. Charter school boards should practice robust oversight of financial management. (More on this later in this seminar.) 5.Charter schools are still widely _____________ in many venues. While ordinary non- profits enjoy a presumption of goodwill, charter schools, though having existed since 1992, are still controversial for various reasons (e.g., they may cause a decline in nearby district funding, etc.). Your board would be wise to practice sound governance with the utmost transparency so that it can weather extreme scrutiny and unfounded criticisms. A Firm Foundation 7 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHY the Conventional Model of Governance is WRONG Some variation of the model shown below is commonly used to explain the relationship between board management. Although conventionally accepted and widely practiced by charter school boards, in particular, IT IS WRONG. Following the model (intentionally or unintentionally) actually results in a board co-managing the school rather than governing it. Even more problematic, when boards follow the model, they believe they are governing but in reality, they are not. This means that governance responsibilities—sometimes crucial ones—go undone by the board.“Shared decision-making” Board Management Cost Daily Operations vs Strategic or “Big Picture” The Doozy of All Flawed Assumptions: Governance and management are on the _________________ ________ of the ____________ ________________________ ! They are NOT! And if your board governs as though they are, it will be ineffective. A Firm Foundation 8 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHY Your Board Actually Exists In other words, your board’s true purpose is actually distinct from management PARAMETERS 1. 2. 3. 4. 5. 6. TWO-Part Definition of Charter School Performance Accomplishing the student ______________ which the school was chartered to produce, within ALL of the required parameters. Student outcomes: Something students know, understand, can do or appreciate as a result of the school and its programs. Outcomes should never be confused with the programs themselves. Outcome examples: College-ready, responsible citizen, self-aware, literate. A The Purpose of a Charter School’s Manager To make the school ___________. (See block A) Attribution: In the words of Dr. Peter F. Drucker: “The manager is a servant. His master is the institution he manages and his first responsibility must therefore be to it. His first task is to make the institution, whether business, hospital, school, or university, perform the function and make the contribution for the sake of which it exists.” Source: Management: Tasks, Responsibilities, Practices (p. 343) by Peter F. Drucker Related Verbs B The Purpose of a Charter School’s Board To __________ the school performs. (See block A) Attribution: In the words of Dr. John Carver: “Reduced to its minimum, the purpose of governance is to ensure, usually on behalf of others, that an organization achieves what it should while avoiding those behaviors and situations that should be avoided.” Source: Boards That Make a Difference (p. 1) by John Carver Related Verbs C In other words, the role of the board is to provide _____________ of management, NOT to be a ____________________ in it. A Firm Foundation 9 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Prudential? What Do You Think? Copyright: The Albuquerque Journal, Mountain View Telegraph. Reprinted with permission. Permission does not imply endorsement. Editorial: Executive pay at charter school catches auditor’s attention By Albuquerque Journal Editorial Board Tuesday, March 28th, 2017 at 12:02am It’s doubtful state Auditor Tim Keller is the only person whose jaw dropped after learning the husband- wife team who head the GREAT Academy charter school here draw salaries totaling $305,652 a year – an amount stratospherically higher than the $87,000 average other charter school executives in similar positions receive. (Meanwhile, the sixth- through 12th-grade school pays its instructors an average of $38,000 per year – 143rd-lowest among 148 school districts statewide.) In a letter to the president of the school’s board of directors last week, Keller said that the compensation paid to executive director Jasper Matthews and his wife, principal Keisha Matthews, commands about 30 percent of the academy’s annual budget and that they are, by far, the highest-paid charter school executives in the state. (Their closest cohort is the principal at Albuquerque’s Mission Achievement and Success charter school, who makes $118,112 per year, according to state officials. That school has nearly double the enrollment of the academy’s roughly 200 students.) Jasper Matthews’ annual salary is $163,952, which includes an $11,852 car allowance. He also has a $24,750 special education consulting contract with the academy – forms of compensation Keller characterized as “very irregular” but perfectly legal. While the state Public Education Department gives charters wide latitude over employee pay, the compensation being lavished on the Matthews family (their daughter also works there) can reasonably be called exorbitant. No one from the school responded to a Journal reporter’s request for comment. To their credit, the school does well academically, receiving an overall grade of B in the latest round by PED. But given that only a few charter leaders earn more than $100K a year, the Matthewses’ compensation is troubling – to Keller and taxpayers. Perhaps the school’s board of directors – according to the school’s website Dr. Penny Edwards, Michael Pitts, Jade Rogers, Ron Shorter and Ronnie Wallace – could explain publicly why the Matthews family receives such remuneration. In lieu of that, a realignment of their compensation to more closely reflect that of their peers should be in order. This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers. A Firm Foundation 10 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Why the “I HOPE” Model is Better than the Conventional Model of Governance Dimensions BOARD’s “Lane”MANAGEMENT’s “Lane” 5 Exercise of Authority (HOW)I I 4 Primary Focus (WHAT)H W H W 3 Accountability as (WHOM)O O 2 Success Indicator (WHEN)P O P O 1 Purpose (WHY)E E it clearly identifies the so-called “lanes” consultants are always recommending boards operate within but rarely defining For a board using the I HOPE Model to be effective, three prerequisites are necessary: 1.Single point of delegation: The board utilizes a single point of delegation & accountability for operations. (More on the importance of this in the next section.) 2.Board independence: All board members are independent of management AND not related to each other or excessively linked to one another (e.g., board members aren’t dependent on the board president for their livelihood). 3.Accountability. Adherence to board policies is mandatory by all board members, especially those policies that delineate the boundaries between board and management. (More on this in the next section.) Six lead indicators I look at when assessing board effectiveness: 1.The board is actually providing oversight of school management, not ___- ______________ or abrogating its non-delegable responsibilities to management. 2.The board understands that IT is the “owner” of the charter, not the founder or management company that operates the school. Both are accountable to the board, not the other way around. 3.The board prohibits ALL of its ___________ from exercising board authority individually. 4.The board’s meetings are predominantly focused on assessing how well the school is performing, not on how will decisions, especially matters concerning ____________ design. (Curriculum, supplements, faculty, PD, & assessments, etc.) 5.The board is vitally engaged in oversight of school financial _________________. 6.As part of its fiduciary duty to the true owners of the school (the state’s citizens), the board sets a proper ______ at the _____ by acting with integrity in HOW it does its work. Lead indicators (inputs) Lag indicators (outcomes) A Firm Foundation 11 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 PART 1: Actionable Recommendations 1.Adopt a board mission statement and read it as part of your opening ceremonies. “The mission of the ABC Charter School Board is to provide oversight of school management, not to be a participant in it. We will focus our work on ensuring that (1) the school accomplishes the student outcomes we were chartered to produce, and ensuring that (2) the school operates at all times within all required parameters.” 2. Ensure the accuracy of the board’s bylaws. Make sure your bylaws accurately define your board’s purpose (as being to provide oversight of school management rather than “to manage the school”). Moreover, most charter school bylaws I’ve read use what I call 1850s language, a time when board presidents and treasurers actually did have management responsibilities. While this may have been necessary two centuries ago, the nature of organizations and professions have evolved, which means that boards and their bylaws should evolve too. In particular: The proper role of the board president can be stated in two sentences: “Subject to board policy and board direction, the board president shall lead the board in its oversight of management. The president shall not have the authority to give directives to the school leader or any other employee of the school.” The proper role of the board treasurer can be stated in two sentences: “Subject to board policy and board direction, the board treasurer shall assist the board in the oversight of the school’s financial management. The treasurer shall not have the authority to give directives to the school leader or any other employee of the school.” 1 Statutory or authorizer requirements may prevent you from changing wording, so be sure to check with your attorney. 1 The description of the board president: 1.Should NOT say they are the CEO of the corporation. 2.Should NOT say they have responsibility for oversight of operations. (You’ll thank me for removing this language when you get sued.) 3.Should NOT say they are responsible for overseeing or supervising the school leader “in between board meetings.” Similarly, the description of the board treasurer: 1.Should NOT say they are the custodian of the school’s money and assets. 2.Should NOT say they are responsible for presenting financial reports to the board. 3.Should NOT say they provide supervision of the business manager, etc. A Firm Foundation 12 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Board Doctor’s Director & Officer Code of Conduct (to be signed annually) 1.I will NOT attempt to influence management OR board decisions pertaining to the employment or contracts of family members or personal friends (including hiring, termination, compensation, discipline, assignment, etc.). 2.I will recuse myself from all board votes AND discussions, whether in open or closed sessions, that individually (i.e., not categorically such as all teachers) involve my family members or personal friends or businesses which I may have an interest in (whether or not I am an owner). 3.I will refrain from giving directives to faculty, staff and management and I recognize that any suggestions to faculty, staff or management I may make from time to time carry no board authority with them. 4.When participating in board meetings or committee meetings, I will conduct myself in a professional, courteous manner. I will specifically refrain from excessive profanity, unlawful discrimination, and rude behavior that the board would deem unacceptable were such to occur on the part of management or staff. 5.I will not speak for the board when I have not been authorized to do so. I remain free to express my personal opinions, but I will be careful to state that they do not necessarily represent the board as a whole. 6.Other than issues of student safety or things covered by the board’s whistleblower policy, I will not take any action on any complaint or concern until the school leader has first had the opportunity to address it, other than to refer the person to the board’s policy on such matters. 7.I will prepare in advance for board meetings and fulfill all committee assignments or other tasks that the board may delegate to me. 8.I will preserve confidences and confidential/sensitive information that I may become privy to as part of my responsibility as a board member. 9.I understand that the board’s role is to govern the school (i.e., ensure that the student outcomes are being achieved within all required parameters) and NOT to co-manage it. As such, I will refrain from entangling myself in matters that properly belong to management. 10.I will not informally evaluate any staff member’s performance or make any evaluative statement of management’s performance in an open session of the board unless the board is specifically evaluating management as an agenda item. 11.I will not use my position as a board member to secure special privileges for my children or the children of my friends. I agree to adhere to the above conduct standards as a condition of serving on the board of directors of _____________________________________. I also understand that if I violate any of the above standards, the board may remove me for cause as stated in the bylaws. __________________________ __________ __________________________ __________ Board member Date Witness (Board president) Date A Firm Foundation 13 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 PART 2 As in: 1.WHAT does “single point of delegation” mean? (and why it matters) 2.WHAT Policy Governance is and is not! (Source Document and ten principles) 3.WHAT are main benefits of using Policy Governance? 4.WHAT is the board’s purpose in Policy Governance? (as the owner’s representative) 5.WHAT are the two types of policies in Policy Governance? (ends & means) 6.WHAT are Policy Governance’s only four policy quadrants 7.At WHAT level does the board stop writing any particular executive limitation? 8.WHAT is the chief executive’s sole performance criteria in Policy Governance? A Firm Foundation 14 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHAT does “single point of delegation” mean? School Operations The dashed line constitutes the 6 parameters within which the school and the board must operate. See p. 9 School chief exec or CMO Governance takes place above the line. Management takes place below the line. The Board X X X X X X X Using a single point of delegation (SPD) means that the board gives one entity (a person or a management company) appropriate authority (it’s never unbounded) over operations and then holds that entity accountable for school performance (as reflected by the bi-directional blue arrow). Using the words in the I HOPE Model, this means the board holds its SPD accountable for “how well” the school performs (i.e., how well the SPD is producing the outcomes while staying within the parameters). In other words, authority and accountability for operations aren’t watered down or camouflaged across multiple employees, board committees, board officers, and/or vendors. This matters because having multiple points of delegation actually weakens the board because it cannot really know who is accountable for what. Example: Decisions by a board personnel committee to hire a teacher against the leader’s will. Board Doctor Rx: See p.10 to review lane line composition A Firm Foundation 15 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 As Policy Governance has increasingly come into use by boards around the world, a lot of misunderstanding about what it is and is not has also arisen. I personally have encountered many charter school boards that tell me they’re using Policy Governance (usually because they’ve adopted the policy templates Carver created), but they aren’t—meaning that board is not observing the principles and structure of Policy Governance. As Dr. Carver has pointed out, this can result in a dangerous lapse in oversight. Before your board can successfully implement Policy Governance, it must first correctly understand the model. To do so, pages 16-18 are a reprint of a document published by the International Policy Governance Association, now known as Govern for Impact. (I’ve annotated the document with a couple of green boxes for teaching purposes.) You can find this document and other authoritative information about Policy Governance on their website at www.GovernForImpact.org. WHAT Policy Governance is and is not! A Firm Foundation 16 POLICY GOVERNANCE® SOURCE DOCUMENT Why a Source Document? A “source” is a point of origin. A source document is a “fundamental document or record on which subsequent writings, compositions, opinions, beliefs, or practices are based.” (Websters) Without a simply expressed clear point of source, interpretations, opinions, writings and implementations may intentionally or unintentionally diverge from the originating intent and ultimately be undifferentiated. The point of source (“authoritative source”) is John Carver, the creator of Policy Governance, with Miriam Carver his fellow master teacher. Without a simply expressed clear source document, Policy Governance is not reliably grounded and not transferable as a paradigm of governance. It is left vulnerable to interpretation, adaptation and impotence. This document has been produced by the International Policy Governance Association and approved by John and Miriam Carver as being true to source. What Policy Governance is NOT! 1. Policy Governance is not a specific board structure. It does not dictate board size, specific officers, or require a CEO. While it gives rise to principles for committees, it does not prohibit committees nor require specific committees. 2. Policy Governance is not a set of individual “best practices” or tips for piecemeal improvement. 3. Policy Governance does not dictate what a board should do or say about group dynamics, methods of needs assessment, basic problem solving, fund raising, managing change. 4. Policy Governance does not limit human interaction or stifle collective or individual thinking. What Policy Governance IS! Policy Governance is a comprehensive set of integrated principles that, when consistently applied, allows governing boards to realize owner-accountable organizations. Starting with recognition of the fundamental reasons that boards exist and the nature of board authority, Policy Governance integrates a number of unique principles designed to enable accountable board leadership. Principles of Policy Governance 1. Ownership: The board connects its authority and accountability to those who morally if not legally own the organization—if such a class exists beyond the board itself—seeing its task as servant-leader to and for that group. “Owners,” as used in the Policy Governance model, are not all stakeholders, but only those who stand in a position corresponding to shareholders in an equity corporation. Therefore, staff and clients are not owners unless they independently qualify as such. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A Firm Foundation 17 2. Governance Position: With the ownership above it and operational matters below it, a governing board forms a distinct link in the chain of command or moral authority. Its role is commander, not advisor. It exists to exercise that authority and properly empower others rather than to be management’s consultant, ornament, or adversary. The board—not the staff —bears full and direct responsibility for the process and products of governance, just as it bears accountability for any authority and performance expectations delegated to others. 3. Board Holism: The board makes authoritative decisions directed toward management and toward itself, its individual members, and committees only as a total group. That is, the board’s authority is a group authority rather than a summation of individual authorities. 4. Ends Policies: The board defines in writing the (a) the results, changes, or benefits that should come about for (b) specified recipients, beneficiaries, or other targeted groups, and (c) at what cost or relative priority for the various benefits or various beneficiaries. These are not all the possible benefits that may occur, but are those that form the purpose of the organization, the achievement of which constitutes organizational success. Policy documents containing solely these decisions are categorized as Ends in the terminology of the Policy Governance model but can be called by whatever name a board chooses, as long as the concept is strictly preserved. 5. Board Means Policies: The board defines in writing those behaviors, values, practices, disciplines, and conduct of the board itself and of the board’s delegation and accountability relationship with its own subcomponents and with the executive part of the organization. Because these are non-ends decisions, they are called board means to distinguish them from ends and staff means. All board behaviours, decisions and documents must be consistent with these pronouncements. In the terminology of the Policy Governance model, documents containing solely these decisions are categorized as Governance Process and Board- Management Delegation but can be called by whatever name a board chooses, as long as the concept is strictly preserved. 6. Executive Limitations Policies: The board makes decisions with respect to its staff’s means decisions and actions only in a proscriptive way in order simultaneously (a) to avoid prescribing means and (b) to put off limits those means that would be unacceptable even if they work. Policy documents containing solely these decisions are categorized as Executive Limitations in the Policy Governance terminology, but can be called by whatever name a board chooses, as long as the concept is strictly preserved. 7. Policy “Sizes”: The board’s decisions in Ends, Governance Process, Board-Management Delegation, and Executive Limitations are made beginning at the broadest, most inclusive level and, if necessary, continuing into more detailed levels that narrow the interpretative range of higher levels, proceeding one articulated level at a time. These documents are exhaustive, replacing or obviating board expressions of mission, vision, philosophy, values, strategy, and budget. They are called policies in the terminology of the Policy Governance model but can be called by whatever name a board chooses, as long as the concept is strictly preserved. 8. Delegation to Management: If the board chooses to delegate to management through a chief executive officer, it honors the exclusive authority and accountability of that role as the sole connector between governance and management. In any event, the board never delegates the same authority or responsibility to more than one point. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Board Doctor Rx: See p. 22 A Firm Foundation 18 9. Any Reasonable Interpretation: In delegating decisions beyond the ones recorded in board policies, the board grants the delegatee the right to use any reasonable interpretation of those policies. In the case of Ends and Executive Limitations when a CEO exists, that delegate is the CEO. In the case of Governance Process and Board-Management Delegation, that delegatee is the CGO (chief governance officer) except when the board has explicitly designated another board member or board committee. 10. Monitoring: The board monitors organizational performance solely through fair but systematic assessment of whether a reasonable interpretation of its Ends policies is being achieved within the boundaries set by a reasonable interpretation of its Executive Limitations policies. If there is a CEO, this constitutes the CEO's evaluation. All other practices, documents, and disciplines must be consistent with the above principles. For example, if an outside authority demands board actions inconsistent with Policy Governance, the board should use a 'required approvals agenda' or other device to be lawful without compromising governance. Policy Governance is a precision system that promises excellence in governance only if used with precision. These governance principles form a seamless paradigm or model. As with a clock, removing one wheel may not spoil its looks but will seriously damage its ability to tell time. So in Policy Governance, all the above pieces must be in place for Policy Governance to be effective. When all brought into play, they allow for a governing board to realize owner accountability. When they are not used completely, true owner accountability is not available. Policy Governance boards live these principles in everything they are, do and say. Produced by International Policy Governance Association in consultation with John and Miriam Carver, 2005-2007-2011. Policy Governance® is a registered service mark of John Carver. Used with permission. Copying permitted if attributed to source. If referenced as source document, must reference entire document and, if copied, be copied in its entirety. August 2011 *** end of reprint *** © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A Firm Foundation 19 Quoted from the book, “Getting Started With Policy Governance” by Caroline Oliver 1.Become a real leadership team 2.Get where you want to go 3.Get there faster 4.Have the control and the freedom you need 5.Be clear about who does what 6.Know how well you are all doing 7.Be seen to be great © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHAT are main benefits of using Policy Governance? A Firm Foundation 20 Excerpted from the book, “Boards That Make A Difference” by John Carver Remember these three words for school performance: “OUTCOMES WITHIN PARAMETERS” (see p. 8) The school leader’s job is to make the school perform. The board’s job is to to make sure the school performs. That one word difference distinguishes governance from management. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 How I phrase this for charter school boards: A charter school board’s purpose is to make sure that the student outcomes the school was chartered to produce are being accomplished, while also making sure that the school operates within all required parameters (see pp. 8-10). The board is accountable to the state from where it derives its authority and it governs the school on behalf of the state’s people. WHAT is the board’s purpose in Policy Governance? “Reduced to its minimum, the purpose of governance is to ensure, usually on behalf of others, that an organization achieves what it should while avoiding those behaviors and situations that should be avoided.” A Firm Foundation 21 Policy Governance has only TWO types of policies; ENDS and MEANS (see principles 4 and 5 on p. 17 for expanded definitions): In Policy Governance, there are ALWAYS one set of ends policies and three set of means policies. One set of means pertains to policies that limit the chief executive’s authority. As such, these are often called “executive limitations,” but your board can name them anything it wants, so long as the policies are structured according to Policy Governance principles (see principle #7 on p, 17 regarding policy sizes). © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 An END is: A specific ___________ the organization was created to produce, for a _____________ the organization was created to serve, at a ___________ cost or priority Applied to charter schools, an end is an outcome the school was chartered to produce for its students at a cost (generally) not to exceed state, local and federal funds. (As we will see shortly, ends can also be prioritized in Policy Governance. For example, a board might place a higher priority on literacy and numeracy than on technological proficiency or fine arts.) A MEAN is: Any policy that is not an _______. IMPORTANT: In Policy Governance, a “goal” is not necessarily an END. If the goal doesn’t meet the three criteria, it is not an END, however valuable it might be as a goal. Example: Your school can have a goal to pay the highest teacher salaries in your area. This is a worthwhile goal, but it is not an end because schools aren’t created to serve teachers and they do not exist for their benefit. WHAT are the two types of policies in Policy Governance? A Firm Foundation 22 The other two sets of means describe the board’s processes. These are traditionally called “Board-Management Delegation Policies” and “Governance Process Policies,” but your board can name them anything it wants, so long as the policies are structured according to Policy Governance principles (see principle #7 on p. 17 regarding policy sizes). Because Policy Governance polices are nested similar to a set of nested bowls, it is possible for the board to exercise far greater control through far fewer policies. For example, most of charter school clients that are Policy Governance boards have only about three-dozen policies. That’s it! Yes, it is entirely possible to govern a school with only three-dozen policies. Take a a whole, one set of ends and three sets of means constitute four “quadrants of policies which we will see illustrated momentarily. First, let’s compare four sets to a conventional policy manual. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 IMPORTANT: In Policy Governance, every executive limitation is proscriptive rather than prescriptive. This means that, instead prescribing how something will occur, the board’s policies prohibit those methods or circumstances that it would find unacceptable were they to occur. In other words, ELs reflect values that the board doesn’t want violated rather than specific methods it wants followed. A Firm Foundation 23 In contrast to Policy Governance, a conventional school policy manual has countless types of policies, to include but not limited to, financial policies, personnel policies, facilities policies, and safety. While it is necessary to address all of these topics, the weaknesses of such an approach include the following problems: 1.Over time, too many policies exist to even read. 2.Because there are so many policies, contradiction and repetition become problematic. 3.Big policy manuals give the appearance of board control, but this is not really the case because no one really knows what the policies say in their totality. 4.The policies are often prescriptive in nature, meaning that they tell management exactly how to do a particular thing, leaving little room for professional judgment, creativity, ingenuity, or professional discretion. 5.Although voluminous, such policies can contain gaps—things that should be addressed but aren’t because there is no logic to how the policies are constructed other than by topic. 6.With a traditional policy manual, the board can never know when enough is enough. (Policies are part of the cost of doing business—they are not value-adds! Thus, a trade-off usually exists between effectiveness and efficiency. Example: You can require two board signatures on every school check, but this is pretty inefficient and comparatively unnecessary if you have better control points.) © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A Firm Foundation 24 One of the most phenomenal advantages to having only four quadrants of policies is that a board ALWAYS knows where to find existing policies on any given issue. First, it asks itself, “Is this an ENDS or a MEANS issue?” (Most issues are MEANS.) Then it asks, “Is this a board MEANS or a management MEANS issue?” (Most means issues are management MEANS.) Boom! By asking and answering two simple questions, the board now knows where to look for the pertinent policies (Executive Limitations). In Policy Governance, a management MEANS issue literally cannot properly exist in any other quadrant. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHAT are Policy Governance’s only four policy quadrants? Quadrant 1 ______ Statements Quadrant 2 Executive ___________ Quadrant 3 Board-Management _____________ Policies Quadrant 4 ______________ Process Policies CEO’s AccountabilityCGO’s Accountability A Firm Foundation 25 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Quadrant 1 Ends Statements Quadrant 2 Executive Limitations Quadrant 3 Board-Management Delegation Policies Quadrant 4 Governance Process Policies CEO’s AccountabilityCGO’s Accountability Within each quadrant, ALL of the board’s policies for that quadrant exist. These are organized by “size,” (see p. 16) and illustrated by concentric rings or levels. Every policy within a given ring or level is the same size as the other policies at that level. For example, all policies within the second ring of a quadrant are the same size as one another within that quadrant. The further in a ring is, the longer the policies are. When the policies are complete, if illustrated using the quadrant, they’d resemble a jack-o-lantern’s smile. The “empty space” toward the center of the quadrant represents ends and means that the board doesn’t feel that it needs to define. As such, decisions within the blank space are at the discretion of the CGO (left side of the circle) or the CEO (right side of the circle). Typically, a charter school board will need to write some executive limitations at the third level (i.e., more specific than the two bigger levels). It is possible to write policies at the 4th and 5th level, however, it becomes difficult to do so without prescribing the means. Remember: Executive Limitations are proscriptive! A Firm Foundation 26 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The real completed quadrant below is that of one of my clients. Over the past five years, their board has completely reinvented itself using Policy Governance. One result of this has been that the school leader has now been there five years and has taken the school to top of the charts. This is because Policy Governance makes good leadership possible. As I often say, “School leaders can only be as effective their boards allow them to be.” Because of Policy Governance’s ten design principles (see pp. 16-18), it “allows” for maximal school leader effectiveness, while at the same time, ensures for maximal board control. I know of no other model of governance that does this—not even my own I HOPE model. Notice the “nested bowls” (or sizes) of policies. This is a non-alterable feature of Policy Governance. For example, A1-7 fit inside A which fits within the global executive limitations policy. The actual policies are shown on the next page. A Firm Foundation 27 Policy EL #1: Global Executive Limitations Policy The CMO shall not cause or allow any organizational practice, activity, decision, or circumstance that is unlawful, imprudent, unethical, a material deviation from the school’s charter or authorizer policies and directives. Policy EL #2a: Treatment of Families, Students & Prospective Families & Students With respect to interactions with families and students (including prospective, exiting, and former families and students), the CMO shall not cause or allow operational conditions, procedures, communications or decisions that are unsafe, untimely, undigniBied, or unnecessarily intrusive. Policy EL #3a: Treatment of Families, Students & Prospective Families & Students The CMO shall not: 1.Use methods of collecting, reviewing, transmitting, or storing student information that fail to protect against improper access to the data. 2.Fail to operate facilities with appropriate accessibility. 3.Fail to establish with families and prospective families a clear understanding of what may be expected and what may not be expected from the school’s programs and student conduct requirements. 4.Fail to inform families and prospective families of this policy or to provide a way to be heard for persons who believe they have not been accorded a reasonable interpretation of their rights under this policy. 5.Cause or allow any staff member to “counsel out” prospective students as a means of circumventing statutory prohibitions pertaining to nonselective enrollment. 6.Fail to conduct an annual lottery in those grades which are oversubscribed. 7.Fail to ensure appropriate services are provided on a timely basis for special needs students, including screening and evaluations, for any student with, or in need of, an IEP, 504, or EL services. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 My signature as board secretary hereby certiBies that this policy was adopted by the board on the date shown below: _________________________________________________ Date Board Secretary Policy Governance is a registered trademark of John & Miriam Carver. This policy was adapted from John Carver’s book “Reinventing Your Board.” A sample executive limitations policy for treatment of families, students, and prospective families and students. (See principle #6 on p.17 for more info on executive limitations) A Firm Foundation 28 In Policy Governance, as with traditional policies, the board can create as many policies as it feels are necessary to ensure that the school performs properly. A BIG difference, however, is that in Policy Governance, the board allows its CEO to make any reasonable interpretation of what the board said through its policies. (See principle #9 on p. 18) When writing policies, especially limitations, it stops at the point at which it is willing to accept any reasonable interpretation from its CEO. The board also has the prerogative of adding to its policies anytime it feels it’s necessary to do so. For example, the CEO might present a reasonable interpretation on some particular policy, but one that the board doesn’t wish to permit in the future. It would then add to its policies to further limit the range of interpretation open to the CEO, although the CEO’s performance may only be evaluated against a policy that is in force at the time the performance occurred. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 At WHAT level does the board stop writing any particular executive limitation? A Firm Foundation 29 8. In Policy Governance, the CEO’s sole performance criteria are accomplishing the ENDS while not violating the MEANS. That’s it. To determine how well the CEO is doing both, the board continuously monitor’s CEO compliance with ALL ends and executive limitations. HOW the board does begins the next (and final) section of this workbook. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 WHAT is the chief executive’s sole performance criteria in Policy Governance? A Firm Foundation 30 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 As in: 1.HOW is CEO compliance determined by a Policy Governance board? (three-part process: assertion of compliance, any reasonable interpretation, and data to support the interpretation) 2.HOW many ways are there for the board to determine compliance? (only three) 3.HOW does the board ensure that every policy is being followed? (monitoring schedule) 4.HOW does our board implement Policy Governance if we choose to do so? PART 3 A Firm Foundation 31 In Policy Governance, determining CEO compliance with policy is ALWAYS a three-part process: 1.The CEO states (in writing) whether his is or is not in compliance. This is a straight yes or no. There is no such thing in PG as “mostly in compliance,” “almost in compliance,” “approaching compliance,” or “relatively in compliance.” 2.The CEO submits his interpretation of the policy in writing. The board then votes whether it agrees. Remember: In Policy Governance, the standard is and reasonable interpretation. Examples of interpretations that do NOT supplant any reasonable interpretation: •a better interpretation •the best possible interpretation •an interpretation the board would have preferred •an interpretation that should have been avoided because it resulted in difficulties •an interpretation the board’s attorney would have preferred Any reasonable interpretation means just that. Any reasonable interpretation. That said, the board is the final arbiter (John Carver’s word choice) of whether any interpretation is reasonable. 3.The CEO provides written qualitative evidence or data that demonstrates his assertion. Separately, the board votes whether it agrees that the evidence or data do demonstrate the CEO’s assertion. (Note: Although the board can vote that it does not, it should not prescribe to the CEO which evidence or data do. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 HOW is CEO compliance determined by a Policy Governance board? A Firm Foundation 32 There are only three ways for a board to determine compliance. (This is also true of conventional policies). In Policy Governance, the board ALWAYS chooses the way or ways by which assesses CEO compliance (and at intervals of its choosing, as we will see on the next page). 1.Direct inspection. The board can appoint itself, a board committee, or one of more of its members to directly inspect the evidence or data. This method is particularly useful if the board members doing the inspecting have a related expertise or in situations where the board is concerned that the CEO is distorting situations or out and out misrepresenting the situation (in which case, the board should be taking action to remove the CEO). Disadvantage. It may require time that board members do not have. 2.Outside expert. In some situations, the board may hire an outside expert to inspect the evidence of data and the report the findings back to the board. Disadvantage. Outside experts usually aren’t cheap. 3.Self report. In this method, the CEO reports on compliance himself/ herself as described on the previous page. Disadvantage. Distorting or misrepresenting information. Of the three, boards most commonly tend to rely on self report because it is the cheapest, fastest, and easiest of the three methods. Provided that there are no known integrity issues with the CEO, this is perfectly acceptable. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 HOW many ways are there for the board to determine compliance? A Firm Foundation 33 As stated in principle #10 on p. 18, Policy Governance involves fair but systematic monitoring of CEO compliance. From a risk management standpoint, systematically verifying compliance with policies is a very important function but it is one that most non Policy Governance boards simply don’t do. Obviously, this can lead to big problems (to include the collapse of the school) because everyone on the board is assuming that the policies are being followed. Systematic monitoring is easy to do using a schedule, such as the real example shown on the next page. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 HOW does the board ensure that every policy is being followed? A Firm Foundation 34 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Policy EL #2c: Financial Planning/BudgetingThe CEO shall not cause or allow financial planning for any fiscal year or the remaining part of any fiscal year to deviate materially from the board’s Ends priorities (even those that are provisional), risk financial jeopardy, or fail to be derived from a multiyear plan.II=Monthly E=AnnuallyOct. E is done via annual auditPolicy EL #2d: Financial Condition and ActivitiesWith respect to the actual, ongoing financial conditions and activities, the CEO shall not cause or allow the development of financial jeopardy or material deviation of actual expenditures from board priorities established in its Ends policies (even those that are provisional).I, EI=Monthly E=AnnuallyOct. E is done via annual auditPolicy EL #2e: Emergency CEO SuccessionTo protect the board from sudden loss of CEO services, the CEO shall not permit a situation in which there are not at least two other school executives who are sufficiently familiar with board and CEO issues and processes to enable either of them to take over with reasonable proficiency as an acting or interim successor.IAnnuallySept.Policy EL #2f: Asset ProtectionThe CEO shall not cause or allow corporate assets to be unprotected, inadequately maintained, or unnecessarily risked.I, EI=Monthly E=AnnuallyOct. E is done via annual auditPolicy EL #2g: Compensation and BenefitsWith respect to employment, compensation and benefits to employees, consultants, contract workers, and volunteers, the CEO shall not cause or allow jeopardy to financial integrity or to public image.DIAnnuallyFebruaryPolicy EL #2h: Communication and Support to The BoardThe CEO shall not cause or allow the board to be uninformed or unsupported in its work.DIAnnuallyAprilPolicy EL #2i: Ends Focus on Grants or ContractsThe CEO may not enter into any grant or contract arrangements that fail to emphasize primarily the production of the board’s stated Ends.IAnnuallyAprilPolicy EL #3a: Treatment of Families & Prospective FamiliesThe CEO shall not:1. Elicit information for which there is no clear necessity.IAnnuallyMarch2. Use methods of collecting, reviewing, transmitting, or storing student information that fail to protect against improper access to the data.IAnnuallyMarch A Firm Foundation 35 As any trained Policy Governance consultant will tell you, the decision to implement the model is a weighty one, and thus, not be taken lightly. Still, the Policy Governance model is, in my opinion, the most effective, efficient way a board can govern. I have even known a couple of highly-skilled school leaders that incorporated the board’s commitment to Policy Governance in their decision to accept job offers. First, having completed this seminar has introduced you to the model, the principles behind it and some key terminology. But there’s only so much time in a brief seminar, especially considering that the model is highly unusual in the world of governing boards. Therefore, if after this seminar your board wishes to move forward with implementing Policy Governance, I recommend that its next step be to spend a few months reading and discussing Caroline Oliver’s book, “Getting Started With Policy Governance” (cited on p. 19 of this workbook). By the time your board has read through her book and worked through the various discussions in it, your board will be reasonably well-informed about the model and how it works. At that point, your board simply puts the question to a vote. If the board votes to approve implementing Policy Governance, I recommend retaining a trained Policy Governance consultant to assist you during the first year. Govern for Impact (www.GovernForImpact.org) can assist you in locating a qualified person. IMPORTANT: Dr. Carver cautions against using consultants that have not been explicitly trained in the theory and implementation of Policy Governance. As you have seen in this seminar, the model is sufficiently complex that training is essential. Note: Just because someone has read Carver’s books or served on Policy Governance board does not qualify them to consult. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 HOW does our board implement Policy Governance if we choose to do so? A Firm Foundation 36 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Would You Like a Certificate of Participation? If you were present for the entire seminar and would like a certificate of participation, I will email you a PDF certificate free of charge. Just enter your details on this page of my website: https://www.charterschoolboarddevelopment.com/p/certificate Thank You! aka, the Board Doctor Brian L Carpenter, PhD, FAFE, CFE Thank you for engaging me! I hope you enjoyed our time together and that the content of this seminar will be beneficial. While I can really get my nerd on about such topics as sound governance, school risk management, and robust financial oversight, I know that normal people aren’t usually drawn to such topics, so thanks for putting up with me. P.S. I do have a lighter side. I plan on becoming a beach bum if I ever actually retire. Keep in mind that your school can access these digital training resources FREE: •BoardWiser (for monthly board development) •My Strategic Oversight Calendar Kit (for developing your SOC) •Charter School Board Financial Oversight: The BRIARS Method •The Board Secretary Kit If you encounter any difficulty accessing these, drop me an email. As they are proprietary, I ask that you refrain from sharing passwords, etc., with anyone outside your school. A guy’s gotta make a living. In closing, if your school needs additional expert guidance, please contact me. My services include operational assessments, fraud examinations, risk-management assessments and board/executive evaluations. I may also be able to work with your attorney in the event that your board has to defend itself against a lawsuit. Warmest regards, The Effective Charter School Board 1 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 1.I have been providing governance and operations effectiveness training and conducting performance audits of charter schools since 2005. I’ve consulted in most states with chartering laws, including Hawaii and Alaska. I am a certified provider of board training (approved by the Department of Education) in Texas, Georgia, and New Mexico. 2.Having been a school leader & national non-profit CEO, I understand the challenges of executive leadership and working for a board. Prior to serving as CEO of the National Charter Schools Institute at Central Michigan University (2005-2009), I had a dozen years of experience running private schools. Although I decided to start my own practice in 2009, I still partner with the Institute on special projects and publications. I also served as interim Head of School for a 1,500-student client charter school in SC in the 2015-16 school year which was subsequently recognized by its authorizer for its outstanding performance. 3.I’m a resource leader in the charter school sector. While I have learned an incalculable amount from other experts, I have authored more publications than any other consultant in the charter school sector. The body of my work includes three books (with a fourth having been commissioned), a 12,000-word monograph (Governing for Greatness), podcasts, webinars & training videos, and original research on charter school closures. 4.My views on governance are often considered authoritative. My books are used across the country by university professors, state associations, authorizers and other consultants. Attorneys defending charter school board members against lawsuits have also engaged me as a consultant on occasion. 5.Other charter professionals, i.e., authorizers and association leaders, engage me when they need demonstrated expertise. You can fake expertise with people who know less than you do but you can’t fake it with people who know as much or more than you do (at least not for very long). My client list of other professionally staffed entities was included in the proposal that prompted this seminar. 6.Teaching and learning are in my DNA. Like all educators, I’m passionate about teaching and learning which is one of the reasons I have pursued academic credentials over the course of my career. In addition to an earned PhD in Education, I possess a graduate certificate in forensic accounting and fraud examination (FAFE) and I am a certified fraud examiner (CFE). I use what I’ve learned to provide the best possible guidance to my clients. 7.Conference organizers across the country repeatedly engage me. When associations and other organizations host conferences, they seek speakers that add value for their participants. It’s been my privilege to be invited to speak at more than 70 private, regional, state, and national charter school conferences since 2005. Some of these were paid presentations, others were pro bono. The Recommendations in this Workbook are Based on More Than 30 Years in Education During Which I’ve Had Many Roles, Including: School Leader, Board Member, Consultant, Non-Profit CEO, Researcher, Author, College Instructor, Certified Fraud Examiner, and Performance Auditor. The Effective Charter School Board 2 1.The first charter school law was passed in 1991 in Minnesota, and the first chartered school opened there the following year. 2.As public education reform policy, it is one of the longest lasting and most successful ever, though not without its problems and detractors. 3.Charter school laws are state-level initiatives (not federal). As a result, how chartering is carried out varies widely from state to state. 4.Historically, chartering has had bi-partisan support. 5.Currently, 45 states, plus DC have charter school laws. 1 6.Across the US, there are about 7,500 chartered schools, serving about 3.3 million children (about 6.5% of all public school students nationally). 2 7.Almost two-thirds of all charter schools are in urban locations serving impoverished children of color. 3 8.Academic performance varies widely, but in general, urban charter schools significantly outperform traditional public schools. 4 9.More than 3,700 charter schools, that is, about half of all charter schools that opened between 1999-2017, closed within 15 years. 25% of these did so within their first five years. 5 Education Commission of the States website https://www.ecs.org/charter-school-policies/ 1 National Alliance for Public Charter Schools website https://data.publiccharters.org/digest/charter-school-2 data-digest/how-many-charter-schools-and-students-are-there/ National Alliance for Public Charter Schools website https://data.publiccharters.org/digest/charter-school-3 data-digest/who-are-charter-schools-serving/ http://urbancharters.stanford.edu/news.php4 Broken Promises: An Analysis of Charter School Closures from 1999-2017 by the Network for Public 5 Education https://networkforpubliceducation.org/brokenpromises/ © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A bit of charter context & why board training matters The Effective Charter School Board 3 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 15 things my research and fieldwork tell me about the reasons for charter school board ineffectiveness 1.receive no orientation when they joined their board 2.receive little, if any, ongoing training about how to fulfill their responsibilities 3.have not read their school’s articles of incorporation, bylaws, or charter 4.are unaware of the potential personal liability involved in serving on a board (and/or have been told that they have immunity from lawsuits) 5.don’t know whether key financial controls are in place and/or being followed 6.have never seen the board’s policy manual and/or don’t know where it is 7.have not read the contract between the board and the EMO and don’t know how much money taxpayers are paying it 8.mistakenly think they work for, and serve at the pleasure of, the EMO or founder 9.do not understand the difference between management and governance, i.e., they don’t know where the “lane lines” are 10.don’t look at trend data over three or more years when reviewing academic performance 11.think that their schools are deregulated 12.serve on boards which churn through a new top management official1 every 12 to 36 months 13.do not know who the school’s authorizer is or when the charter expires 14.mistakenly believe that primary responsibility for fraud prevention/detection primarily falls to the auditor 15.serve on boards that don’t systematically organize their work on an annual basis Where board performance is concerned, I have worked with and/or formally evaluated the boards of more than 250 individual charter schools across the US, as well as published the first scientific research on the role of the board in charter school closures (2008). In this 16 years+, I have observed the following fifteen characteristics of charter school boards which I believe go a long way in explaining why so many thousands of schools have closed in the past two decades. It appears to me that MOST charter school board members: 1 Throughout this workbook, I predominantly use the term Top Management Official to refer to a school’s chief executive regardless of title (such as school leader, director, executive director, head of school, etc.). The Effective Charter School Board 4 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Have you served on lots of other not-for-profit boards? Charter schools are different from “ordinary” NFPs in five essential ways that the board must bear in mind. Four Commonalities •all NFP boards have fiduciary responsibilities which should not be delegated to management •all NFP boards have laws and regulations with which they must comply •all NFPs need to make money to stay in business (not-for-profit vs non-profit) •all NFPs are under IRS scrutiny due to decades of board negligence and malfeasance Five Differences 1.Charter schools have an ____________ lifespan. Like a parking meter which automatically expires, charters in most states are time-bounded by design. I know of no other non-profit that operates under an inorganic drop- dead date like this. This often results in charter school boards having a tiny window of a couple of years to make sure their schools perform. This means, among other things, new boards have a steep learning curve to climb. 2.Charter agreements create contractually ____________ student outcomes and they usually limit or prohibit some actions that an ordinary not-for-profit could change anytime it wants. (Examples: modification of bylaws, changes to curriculum, changes to the instructional calendar, maximum enrollment, number of sites the school can operate, etc.). Charter school boards need to focus like a laser on how well the student outcomes that were agreed to in the charter are being produced. (Reading the charter is a good start.) 3.Charter schools are accountable to an _______________. While some non-profits have parent organizations to whom they are accountable (e.g., Girl Scouts), charter schools operate under the oversight of a regulatory entity called an authorizer (or sponsor). A charter school board should strive to maintain a professional, responsive relationship with its authorizer. (One implication: Do not delegate the authorizer relationship completely to management.) 4.Charter schools are mostly publicly ____________, but may receive a smattering of philanthropy. When an ordinary not-for-profit receives any tax dollars, this pattern is usually inverted. This requires heightened fiscal oversight by charter school boards. Charter school boards should practice robust oversight of financial management. (More on this later in this seminar.) 5.Charter schools are still widely _____________ in many venues. While ordinary non- profits usually enjoy a presumption of goodwill, charter schools, though having existed since 1992, are still controversial for various reasons (e.g., they may cause a decline in nearby district funding, etc.). Your board would be wise to practice sound governance with the utmost transparency so that it can weather extreme scrutiny and unfounded criticisms. The Effective Charter School Board 5 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Governance consultants love to say, “The board should stay in its own lane.” This would be great advice if anyone actually explained where the lane lines are. part I: Lane Lines the I-HOPE Model for Charter School Board & Management Roles and Responsibilities The Effective Charter School Board 6 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Three Essential Definitions charter school performance, the purpose of a charter school’s chief executive, and the purpose of a charter school board PARAMETERS 1. c_________________ 2. s_________________ 3. r_________________ 4. c_________________ 5. f_________________ 6. e_______/p________ TWO-Part Definition of Charter School Performance Accomplishing the student ______________ which the school was chartered to produce, within ALL of the required parameters. Student outcomes: Something students know, understand, can do or appreciate as a result of the school and its programs. Outcomes should never be confused with the programs themselves. Outcome examples: College-ready, responsible citizen, self-aware, literate. A The Purpose of a Charter School’s Top Management Official To make the school ___________. (See block A) Attribution: In the words of Dr. Peter F. Drucker: “The manager is a servant. His master is the institution he manages and his first responsibility must therefore be to it. His first task is to make the institution, whether business, hospital, school, or university, perform the function and make the contribution for the sake of which it exists.” Source: Management: Tasks, Responsibilities, Practices (p. 343) by Peter F. Drucker Related Verbs B The Purpose of a Charter School’s Board To __________ the school performs. (See block A) Attribution: In the words of Dr. John Carver: “Reduced to its minimum, the purpose of governance is to ensure, usually on behalf of others, that an organization achieves what it should while avoiding those behaviors and situations that should be avoided.” Source: Boards That Make a Difference (p. 1) by John Carver Related Verbs C In other words, the role of the board is to provide _____________ of management, NOT to be a ____________________ in it. The Effective Charter School Board 7 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Imprudent? What Do You Think? Copyright: The Albuquerque Journal, Mountain View Telegraph. Reprinted with permission. Permission does not imply endorsement. Editorial: Executive pay at charter school catches auditor’s attention By Albuquerque Journal Editorial Board Tuesday, March 28th, 2017 at 12:02am It’s doubtful state Auditor Tim Keller is the only person whose jaw dropped after learning the husband- wife team who head the GREAT Academy charter school here draw salaries totaling $305,652 a year – an amount stratospherically higher than the $87,000 average other charter school executives in similar positions receive. (Meanwhile, the sixth- through 12th-grade school pays its instructors an average of $38,000 per year – 143rd-lowest among 148 school districts statewide.) In a letter to the president of the school’s board of directors last week, Keller said that the compensation paid to executive director Jasper Matthews and his wife, principal Keisha Matthews, commands about 30 percent of the academy’s annual budget and that they are, by far, the highest-paid charter school executives in the state. (Their closest cohort is the principal at Albuquerque’s Mission Achievement and Success charter school, who makes $118,112 per year, according to state officials. That school has nearly double the enrollment of the academy’s roughly 200 students.) Jasper Matthews’ annual salary is $163,952, which includes an $11,852 car allowance. He also has a $24,750 special education consulting contract with the academy – forms of compensation Keller characterized as “very irregular” but perfectly legal. While the state Public Education Department gives charters wide latitude over employee pay, the compensation being lavished on the Matthews family (their daughter also works there) can reasonably be called exorbitant. No one from the school responded to a Journal reporter’s request for comment. To their credit, the school does well academically, receiving an overall grade of B in the latest round by PED. But given that only a few charter leaders earn more than $100K a year, the Matthewses’ compensation is troubling – to Keller and taxpayers. Perhaps the school’s board of directors – according to the school’s website Dr. Penny Edwards, Michael Pitts, Jade Rogers, Ron Shorter and Ronnie Wallace – could explain publicly why the Matthews family receives such remuneration. In lieu of that, a realignment of their compensation to more closely reflect that of their peers should be in order. This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers. The Effective Charter School Board 8 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 identifying the “lane lines” Dimensions BOARD’s “Lane”MANAGEMENT’s “Lane” 5 Exercise of Authority (HOW)I I 4 Primary Focus (WHAT)H W ? H W ? 3 Accountability as (WHOM)O O 2 Success Indicator (WHEN)P O P O 1 Purpose (WHY)E E the Board Doctor’s “I HOPE” Model Five lead indicators I look at when assessing board performance: 1.The board’s bylaws, committee purposes, AND actions (i.e., decisions contained in board & committee minutes) reflect that it understands its role is governance, not management. 2.The board embraces responsibility for maintaining proper minutes and other supporting documents such as a motions log and board calendar which reflect that it provides timely, informed, thorough oversight. 3.The board’s composition and actions demonstrate that it understands that it is the legal owner of the school and it makes all its decisions accordingly. For example, the board is 100% independent from management in: •composition (i.e., does not have relatives, buddies, school employees, or business associates of management on it); •board decision-making that benefits the EMO and/or founder operator; and •not deferring board responsibilities to management (e.g., auditor selection, who its attorney is, agenda control). 4.The board’s meetings and board committees and ongoing focus reflect that it is primarily focused on “how well” questions v. “how will” questions, especially with respect to instructional design. 5.The board has an enforced code of conduct which mandates ethical conduct by all officers and directors and prohibits individual members and committees from interfering with management. Lead indicators (inputs) Lag indicators (outcomes) The Effective Charter School Board 9 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 part 2: how to avoid board-TMO Collisions The FIVE most common sources of collisions between the board and the top management official and eight “collision avoidance” practices. The Effective Charter School Board 10 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Proper Lanes of the Between the Board & Top Management Official Management’s lane is on this side. The board’s lane is on this side.The Board X X X X X X X Three important observations: 1.The lane lines are defined in the I HOPE Model on p. 8. 2.Both ends of the blue bi-directional arrow providing ___________ over ___________ and___________ for controlling operations must be kept in tact for both the board and TMO to be effective. 3.The board is most effective when it uses the TMO as the ___________ point of delegation for operations. The purple dashed line constitutes the 6 parameters within which the school and the board must operate. School Operations TMO The Effective Charter School Board 11 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Board Allows Someone Other than the TMO to Grab the Operations Steering Wheel Common Collision Cause #1 The Board X X X X X X X School Operations The SIX most common operations steering wheel grabbers: 1.The board’s ________________ and ___________________, usually because the bylaws are worded wrongly. (see p. 12) 2.The board “_______________” Committee. (see page 13) 3.Flawed board c________________ structure. For example, academic, finance, personnel, etc. (see page 14) 4. Anyone the board hires, evaluates, and supervises other than the ____. 5.The _____ and/or __________ club. 6.Board members that have _______________________________ ______________________________ . TMO The Effective Charter School Board 12 1. ADOPT a board mission statement such as this: ________________________________________________________________________ ABC Charter School Board Mission Statement “The mission of the ABC Charter School Board is to provide oversight of school management, not to be a participant in it. We will focus our work on ensuring that (1) the school accomplishes the student outcomes we were chartered to produce, and ensuring that (2) the school operates at all times within all required parameters.” ________________________________________________________________________ 2.REVISE your bylaws to make it clear that the role of the board, its officers and directors, and its committees is to provide oversight OF school management, not to be participants IN it. Common problematic wording includes misguided notions such as: •The board shall manage the affairs of the corporation (or school) •The board chair or president is the CEO •The board chair or president shall implement the board’s policies •The board chair or president shall supervise, manage, or direct the school leader or the school “in between board meetings” •The board treasurer shall have custody of the school’s funds •The board treasurer shall manage the school’s finances •The board treasurer shall provide financial reports to the board •The board treasurer shall supervise the business manager ________________________________________________________________________ Proper Language for Board Officer Roles 1.The purpose of the board is to provide oversight of management. 2.The purpose of the chair is to lead the board in the oversight of the school. 3.The purpose of the treasurer is to assist the board in the oversight of school financial management. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 1 Authorizer approval is sometimes required, so be sure to check with your attorney. Collision Avoidance Practice #1 Make Sure Your Bylaws Are Right 1 The Effective Charter School Board 13 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 EC TMO Collision Avoidance Practice #2 Don’t Have an Executive Committee The Board X X X X X X X Five Problems Typically Arising from the Existence of an Executive Committee: 1.An EC creates two de facto governing boards thus making the TMO accountable to both. 2.While most charter school bylaws that include an executive committee stipulate that the EC will report its activities to the full board at its next regular meeting, they usually don’t. (Most EC’s don’t even keep minutes of their actions.) 3.An EC increases the chances of a few board members (i.e., the officers on the committee) usurping the board’s authority—something that weakens the board and increases the legal exposure of the officers (e.g., acting outside the scope of their authority). 4.An EC virtually assures that the committee will become entangled in co-managing. Even the committee’s name contains management’s purpose: to EXECUTE 5.An EC is rarely accountable to the full board for those management matters in which it chooses to entangle itself. School Operations The Effective Charter School Board 14 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Collision Avoidance Practice #3 Don’t Assign Management Responsibilities to Board Committees The Board X X X X X X X Four Principles for Board Committees: 1.The purpose of ANY committee established by the board should be only to assist the board in ITS oversight work (i.e., ascertaining HOW WELL the work is being done)—NOT in doing the work of management or prescribing to management HOW WILL the work be done. 2.Adding the name “oversight” to a committee, e.g., financial oversight, doesn’t automatically change what the committee does—ALL committees MUST have a job description and be held accountable by the full board for staying within it. 3.Consider the time required of the TMO in supporting board committees. Every hour they are expected to prepare for, attend, and follow-up on committee meetings is an hour they lose in managing the school. 4.The TMO may assist board committees in accomplishing their work (e.g., answer questions, provide information and documents, provide school clerical support for agendas and minutes), but should not “serve” on board committees. School Operations A TMO F P Legend A = Academic Committee F = Finance Committee P = Personnel Committee The Effective Charter School Board 15 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Here’s a fundamental rule of safeguarding the board-TMO relationship: the board must not allow stakeholders to the TMO with their complaints and concerns. When boards do so, the school environment becomes toxic. Backstabbing, gossiping, factions undermining, and conniving become the norm. If the board allows this, its credibility will be diminished in the eyes of the TMO, just as the TMO’s would if he or she allowed parents to bypass faculty and staff with their complaints. Of course, there are rare instances where the chain of command should be bypassed, such as good faith allegations of ethical misconduct, etc. Thankfully, such instances tend to be outliers. The reality is, MOST stakeholder concerns and complaints can be efficiently and effectively addressed by requiring stakeholders to take them to the TMO before the board will take up any such matter for consideration. The absence of such a policy—or its enforcement by the board—results in a factious work environment, excessive TMO turnover, distrust in the board, and increasing chaos in operations as employees and volunteers realize that the TMO is not actually in charge. School closure is not generally far behind. One of the most powerful things a board can do to safeguard its relationship with the TMO is to adopt and ___________ a “No ___________ Until” policy (see the next page). Such a policy doesn’t stop people from saying whatever they want in public comment, but listening to public comments is not the same as taking them up for board deliberation. The Board Allows Stakeholders to Bypass the TMO with Their Concerns and Complaints Common Collision Cause #2 The Effective Charter School Board 16 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Collision Avoidance Practice #5 Enforce a “No Action Until” Policy 1.ADOPT a “No Action Until” policy. (Your board can use this one as is, edit it, or write its own.) ______________________________________________________________________ No Action Until Policy of ABC Charter School Board “With the exception of concerns pertaining to imminent danger, ethical misconduct, or matters covered under the board’s whistleblower protections policy, neither the board, its officers or members, or its committees, will take any action on any stakeholder concern or complaint until the school’s TMO has first had the opportunity to address it, except to inform the person(s) stating the complaint or concern of the existence of this policy. If, in the TMO’s opinion, the board, or any of its officers or members, or committees violates this policy to the detriment of a good working relationship with the board, the TMO is required to report the violation to the whole board.” ______________________________________________________________________ 2.INCLUDE the requirements of the NAU Policy in the Board’s Officer & Director Code of Conduct (see item 6 on p. 23). This should be signed annually by all officers and directors, including the TMO and CFO (by whatever title your school’s chief business officer goes by. (Note: The IRS treats both positions as officers for compensation reporting purposes.) 3.PUBLISH the NAU in these four places: (1) on the school’s website, (2) in parent/student handbooks, (3) staff handbooks, (4) in the board’s policy manual. 4.ENFORCE the policy as needed, i.e., remove officers and directors that violate it. The Effective Charter School Board 17 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Board Directs the TMO Through 5, 7, 9, or 11 Voices Common Collision Cause #3 students should be able to wear shorts to school Our uniform policy is too strictly enforced. My kids are not in the military. unifor m s a r e s o much e a s i e r i n the mo r n i n g s Can 2nd graders g e t a longer lun c h ? Why should I pay $60 for a uniform polo when they are half that at Target?Are the blouses 100% cotton or a blend? I count e d 4 2 untuck e d s h i r t s on ca m p u s l a s t week! Speaking with one voice does not mean that all board members agree with each other. It means that the board makes its will known to the TMO only through majority votes (which can take the form of policy, directives, job descriptions, performance evaluations, etc.). Everything else is simply an individual opinion— something to which board members are entitled, but that no school leader can reasonably follow. In order for a charter school board to speak with one-voice, it has to vote. To do so, four conditions are generally necessary under the law. Votes can only occur in (1) a properly ___________ open meeting (2) at which a ___________ is present, (3) under the direction of a chair, (4) as an item on the ___________ agenda. An excellent policy makes it clear that only majority votes of the board constitute binding instructions on the TMO. (This policy is excerpted from Policy Governance which is a system invented by world renowned governance authority Dr. John Carver.) See the next page. Regardless of whether you adopt this policy as your own, the fact is, if your board hasn’t ___________, your board hasn’t spoken. The Effective Charter School Board 18 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Collision Avoidance Practice #6 Enforce a “One-Voice” Policy 1.ADOPT a “One-Voice” policy. Your board can use this one as is, edit it, or write its own: ______________________________________________________________________ ABC Charter School Board One-Voice Policy “Only majority votes of the board constitute binding instructions on the school’s TMO.” ______________________________________________________________________ 2.INCLUDE the requirements of your NAU Policy in the Board’s Officer & Director Code of Conduct (see item 3 on p. 23). This should be signed annually by all officers and directors, including the TMO and CFO (by whatever title your school’s chief business officer goes by. (Note: The IRS treats both positions as officers for compensation reporting purposes.) 3.PUBLISH the NAU in these three places: (1) on the school’s website, (2) in parent/student and staff handbooks, (3) in the board’s policy manual. 4.ENFORCE the policy as needed, i.e., remove officers and directors that violate it. The Effective Charter School Board 19 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Individual Board Members Who Have a Misguided Idea of What it Means to a Board Member Common Collision Cause #4 Because charter school boards often fail to conduct a proper orientation when new members join their boards, new members are left to figure out for themselves what it means to be a board member. As a result, some individual board members ending up causing problems in the school because they have a misguided view of what it means to be a board member. For whatever reasons (i.e., service on other boards, popular culture, or just a lack of knowledge about the collective nature of board authority under law), they may view themselves as •“conduits” for faculty and staff concerns •HR representatives •supervisors •the TMO’s boss •on-campus deputies None of these roles is appropriate to service on a charter school board and should be strictly prohibited for their own protection as well as that of the school. If an insurance company determines that a board member ______ ________ the ______ of his or her ________, it may refuse to cover that person in the event of a lawsuit. The best practice for avoiding this kind of collision is to begin with a mandatory orientation that makes the board’s roles and responsibilities clear. All charter school boards should also adopt an ENFORCEABLE code of conduct that prohibits such behavior. See the example on p. 22. If a board member violates the code of conduct, they should be removed by a majority vote of the board. The Effective Charter School Board 20 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Collision Avoidance Practice #7 Provide a Thorough Orientation to New Members 1.MANDATE attendance at a board-orientation as a PREREQUISITE to being eligible to serve on the board. ______________________________________________________________________ 10 Things to Review and Discuss in Your Board Orientation 1.The board’s No Action Until Policy 2.Code of Conduct Requirements 3.One-Voice Policy 4.The purpose of your board 5.The purpose of your board’s committees 6.Your bylaws & charter 7.Board member collision avoidance guidelines (see p. 22) 8.Most recent audit report 9.Pertinent publications (such as my books and webinars) 10. Your board’s strategic oversight calendar ______________________________________________________________________ 2.Who should conduct the orientation? The board governance committee (with the option of the executive director introducing him or herself and talking for a few minutes about the mission of the school). 3.What about candidates who don’t have time to attend? Anyone who doesn’t have time to attend the orientation doesn’t have time to serve on the board. The Effective Charter School Board 21 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Collision Avoidance Practice #8 Don’t Permit the TMO to Control the Board When I see this dynamic, the TMO is usually—but not always, an EMO and/or the founder. Control of the board commonly takes the following forms: 1.The EMO and/or founder exerts undue influence over the selection of new board members, often seeking to place family members, business associates, and their buddies on the board. 2.The EMO and/or founder decides whether or not a given matter, usually one with negative implications for the school, will appear on the board’s agenda. 3.The EMO and/or founder’s compensation isn’t properly vetted by the board (i.e., deliberated by the full board, compared to other data, gauged as to reasonableness, and voted on). 4.The EMO and/or founder dissuades the board from formally evaluating its/his/her performance and retention against actual student performance. 5.The EMO and/or founder takes the lead in recommending the school’s external auditor and attorney. 6.The EMO and/or founder persuades the board to revise the bylaws to suit their own personal interests (usually financial ones). 7.The EMO and/or founder is the actual charter holder, making the “board” not an actual oversight body. TMO The Board X X X X X X X School Operations The TMO Controls the Board Common Collision Cause #5 Notice that lane lines are absent in this diagram. The Effective Charter School Board 22 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 1.Do not communicate with faculty and staff that you are a __________ for them to the board. If they have concerns about the school, they can bring them to the board through the appropriate chain of command and process (which should appear in writing in the employee handbook). 2.Do not give __________ to any faculty and staff (and avoid making __________ because they are prone to be misinterpreted by faculty and staff as carrying board authority with them, though they do not). 3.Do not wander around campus on _____-__________ inspections. 4.Do not allow stakeholders to use you to __________ the proper chain of __________. 5.Do not promise any stakeholder that you will “_____” anything—only the board as a collective has the authority to fix problems or direct the school leader to do so. 6.Do not be drawn into conversations (in person or on social media) that criticize, gossip, or undermine the school leader or board. 7.Do not think of yourself as the TMO’s __________ or as one of the leader’s bosses. Only the board as a __________ is the TMO’s boss. 8.If you have a question best answered by the TMO, ask, but don’t __________ the leader with frequent emails, phone calls, text messages, and office visits. 9.Do not ______ your position as a board member to get what you want for your own children or the children of friends. 10. Do not __________ to __________ faculty and staff meetings as an observer. You are a board member, not a member of senior management. Your presence will likely confuse people and lead to unhealthy speculation about the board lacking confidence in the TMO. Ms. School Leader Emphasize these Guidelines with New Members The Effective Charter School Board 23 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Director & Officer Code of Conduct (to be signed annually) 1.I will NOT attempt to influence management OR board decisions pertaining to the employment or contracts of family members or personal friends (including hiring, termination, compensation, discipline, assignment, etc.). 2.I will recuse myself from all board votes AND discussions, whether in open or closed sessions, that individually (i.e., not categorically such as all teachers) involve my family members or personal friends or businesses which I may have an interest in (whether or not I am an owner). 3.I will refrain from giving directives to faculty, staff and management and I recognize that any suggestions to faculty, staff or management I may make from time to time carry no board authority with them. 4.When participating in board meetings or committee meetings, I will conduct myself in a professional, courteous manner. I will specifically refrain from excessive profanity, unlawful discrimination, and rude behavior that the board would deem unacceptable were such to occur on the part of management or staff. 5.I will not speak for the board when I have not been authorized to do so. I remain free to express my personal opinions, but I will be careful to state that they do not necessarily represent the board as a whole. 6.Other than issues of imminent danger, ethical misconduct, or things covered by the board’s whistleblower protections policy, I will not take any action on any complaint or concern until the school leader has first had the opportunity to address it, other than to refer the person to the board’s policy on such matters. 7.I will prepare in advance for board meetings and fulfill all committee assignments or other tasks that the board may delegate to me. 8.I will preserve confidences and confidential/sensitive information that I may become privy to as part of my responsibility as a board member. 9.I understand that the board’s role is to govern the school (i.e., ensure that the student outcomes are being achieved within all required parameters) and NOT to co-manage it. As such, I will refrain from entangling myself in matters that properly belong to management. 10.I will not informally evaluate any staff member’s performance or make any evaluative statement of management’s performance in an open session of the board unless the board is specifically evaluating management as an agenda item. 11.I will not use my position as a board member to secure special privileges for my children or the children of my friends. I, the undersigned, do hereby agree to adhere to the above conduct standards as a condition of serving on the board of directors of [your charter school’s name]. I also understand that if I violate any of the above standards, the board may remove me with or without cause as stated in the bylaws __________________________ __________ __________________________ __________ Board member Date Witness (Board president) Date The Effective Charter School Board 24 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 part 3: organizing the board’s work The amount of work required by a typical charter school board is considerable, but you can do it more easily using six “tricks of the trade.” The Effective Charter School Board 25 Just like the movie "_________ Day,” about 40 to 60 operational tasks are not only ____________, they are ___________ in nature, meaning that they happen at roughly the ______ ______ every year. This enables your board to ___________ their occurrence a full year out. If you put these items into a ____________, you can simply copy and paste them into the appropriate place on the agenda all year long (generally, under new business). I call this spreadsheet a S____________ O___________ C____________. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A Young School Leader Has an AHA Moment The Effective Charter School Board 26 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 NINE benefits of maintaining an SOC 1.creates institutional ______________ 2.helps ensure that nothing _________ _________ ____ _________ (like annual audits and IRS filings!) 3.extremely useful in _____________ new board members 4.organizes 90% of the board’s work a full ___________ in advance 5.enables the board to ____________ key deadlines & respond accordingly 6.enables management to know what the board intends to discuss at any meeting (and to prepare in advance instead of playing ______ ___ ______) 7.provides a full-year snapshot of both board & leader _______________ 8.helps focus meetings away from the ________ _________ to the ________ ______ 9.helps the board spot problematic trends (e.g., deficiencies in consecutive years) In what would be an amusing story were it not for its unfortunate impact in the lives of children, a charter school in Pennsylvania lost its charter, in part because the school failed to submit annual audits for three consecutive years. A newspaper quoted a board member as saying, “It wasn’t us that was the holdup. It was the people that we employed to provide us with certain things . . .” I guess those certain things must have also included the school’s tax returns because the IRS revoked the school’s 501(c)(3) status after it also failed to file its Form 990 for three consecutive years. In my opinion, while the school’s management clearly failed big time, there is no excuse for a board to have dropped the ball by not ensuring that these were submitted. Like the vast majority of school operations, audits and tax filings occur at the same time every year. This fact makes organizing the board’s oversight work a cinch. All you have to do is figure out which recurring items require some action by the board, build an Excel spreadsheet, sort them by due date and then crosswalk any given month’s items onto the agenda. Tricks of the Trade #1 Create a Strategic Oversight Calendar The Effective Charter School Board 27 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 1.☐ Review a preliminary budget for the new fiscal year 2.☐ Approve a final budget for the new fiscal year 3.☐ Approve faculty and staff contracts (if required by your state or charter) 4.☐ Confirm compliance with key policies (such as separation of duties) 5.☐ Approve student and staff handbooks (if required by your state or charter) 6.☐ Evaluate end of grade/end of course achievement results 7.☐ Evaluate growth testing results (two, or three times each year, e.g., MAP data) 8.☐ Confirm payroll tax filings and retirement contributions were deposited (using source documents) 9.☐ Send out RFPs to external auditors 10.☐ Select an external auditor 11.☐ Approve the audit results 12.☐ Review IRS Form 990 prior to submission (for 501(c)(3) tax-exempt schools only) 13.☐ Confirm submission of an annual report (required by some authorizers) 14.☐ Review the school’s annual improvement plan 15.☐ Conduct a summative evaluation of the board’s performance 16.☐ Conduct a summative evaluation of the TMO’s performance 17.☐ Review the limits of, and ensure renewal of, the school’s liability insurance 18.☐ Hold board elections 19.☐ Orient new board members 20.☐ Conduct officer elections 21.☐ Sign conflict of interest disclosures & conduct agreements (all officers and directors) 22.☐ Ensure a year-end asset inventory was conducted 23.☐ Review the school’s crisis management plan 24.☐ Approve the instructional calendar 25.☐ Review the school’s annual risk assessment and risk management plan 26.☐ Review your bylaws 27.☐ Review your state’s Open Meetings & Freedom of Information laws 28.☐ Confirm that the school is in compliance with special ed laws & regs 29.☐ Confirm compliance with laws & regs for categorical funds (e.g., e-rate monies) 30.☐ Review/approve employee compensation schedules & TMO compensation 31.☐ Confirm submission of headcount reports for state funding (at various intervals) 32.☐ Confirm that all school accounts AND financial institutions are board approved 33.☐ Verify PTO/PTA proper use and management of funds/official recognition MOUs 34.☐ Touch base with your authorizer as the charter holder 35.☐ Confirm that re-enrollment intent forms were sent out 36.☐ Confirm that faculty employment offers were sent out 37.☐ Confirm the completion of required background or fingerprint checks for staff/volunteers/board 38.☐ Confirm compliance with local zoning/occupancy/fire and safety regs/emergency drills 39.☐ Confirm that signatures for the current employee handbook are on file 40.☐ Review/evaluate progress toward ALL major goals contained in the school’s charter Dr. Carpenter’s CHECKLIST of 40 Examples of COMMONLY Recurring Charter School Board Tasks (in no particular order) The Effective Charter School Board 28 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Effective Charter School Board 29 Call to order* 1.Approval of minutes from previous meeting(s) (Approval of minutes should ALWAYS occur at the next regular meeting after which the meeting be approved occurred.) (See the example on pp. 35-38) 2.Public comment 3.Guest discourse (official guests of the board—not staff or public) 4.Review of authorizer unique correspondence (mainly correspondence that is corrective or cautionary in nature but can also include awards or recognition) 5.TMO’s (i.e., your school leader’s title) report (see pp. 31-32) 6.CFO’s report (aka, financial report, presented by the school’s business manager, not the board treasurer) 7.Board committee reports (standing first, then ad hoc) 8.Unfinished business (NOT called “old business”) 9.New business 10.Ongoing Board Development & Self-Assessment Adjournment* *Ordinarily, the call to order and adjournment are not considered part of a standard order of business, but some states require charter school boards to post them as numbered agenda items. Also, if your board conducts opening ceremonies (such as the pledge), they occur immediately after the meeting is called to order. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Tricks of the Trade #2 Follow the Board Doctor’s Standard Order of Business in All REGULAR Meetings The Effective Charter School Board 30 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Tricks of the Trade #3 The One-Page (front & back) School Leader’s Monthly Report Most charter school boards meet on a monthly basis (except during summer and winter breaks). If you structure the TMO’s reporting as follows, your board will never be more than about two weeks away from official reporting by the TMO. Here’s how. Require the TMO to submit a one-page monthly report (front and back) similar to the one shown on the next two pages (which is adapted from one of my actual reports at a previous school I led) about ten business days prior to the board’s next regular meeting. On the front side of the report are eight recurring reporting categories, i.e., categories that will ALWAYS appear in the report, even if the TMO only writes “no changes since the previous board meeting.” Like a standard order of business, this helps prevent reporting gaps. On the reverse side, the TMO can share any “one-off” type of information they think is relevant. When the time for the TMO’s report arrives on the agenda, the school leader does NOT need to read or review what they’ve already written and submitted. Instead, the board chair says two things: (1)Mr./Ms./Dr. TMO, do you have any updates to your report of xx/xx/xx date? The school leader then updates the board on anything that changed since the report BUT DOES NOT GO OVER THE REPORT AGAIN. Any changes (including new information) can be bulleted in the minutes. (2)Does any board member have any questions for Mr./Ms./Dr. TMO? (If there are items that need to be voted on, these will be handled under new business. If there are items the school leader needs to discuss in closed session, these are listed under item #8 on the front and occur when the board convenes in closed session.) Important: Attach the TMO’s report (along with any other written reports) to the approved board minutes. That way, if you ever need to go back through the minutes to see what the TMO did or did not report on, you will have complete documentation. What to write in the minutes: The board received a written report dated xx/xx/xx from the school leader on xx/xx/xx (see attached). The only update to the report was that enrollment decreased by two students. A brief Q&A between the TMO and various board members followed with respect to items 3, 4, and 7 on the reverse side of the report. (Note: As with financial reports, the board does not “approve” the school leader’s report. The Effective Charter School Board 31 [Put the report info in the header so it appears on the front and back]: Board report dated 3/19/2020 by Dr. Brian L. Carpenter, Head of School This report summarizes matters that have occurred since the previous regular board meeting on 2/6/20. Note: As a general rule, my reports omit discussion of items covered in reports submitted by the CFO, High School Principal, K-8 Principal, HR Director, and the Director of Special Ed. Eight Recurring Reporting Categories (categories that appear in every regular monthly report): 1.Enrollment: As of this date, current enrollment is 1,510. As always, an up-to-date count by grade level will be provided to the board on the day of its regular meeting (scheduled for 4/2/20) along with categories regarding disenrolling students where the reason was stated. 2.Changes to Personnel: Mrs. Dillon resigned (high school teacher). A long-term substitute is currently filling the position while we search for a permanent candidate. 3.Head of school correspondence and/or meetings with authorizer personnel: two emails, three phone conversations, and one onsite meeting at their office on 3/12/20. None of the correspondence pertained to matters unique to our school. 4.Litigation/Potential Litigation: Two existing legal complaints are still being negotiated by the school’s general counsel. No new potential litigation. 5.Campus safety: No students or adults were injured or harmed on campus. One shelter in place drill was held on 3/11/20. 6.SOC Items pertaining to management: •Board evaluate dual enrollment metrics: See the report by the High School Principal •Board evaluate EOC report cards: (See reports by both principals) •Work on annual school improvement plan begins: I will be tackling this with the team in the next six weeks. 7.Academic results/progress: (i.e., OUTCOMES) •I provided the board with an overview of EVAAS growth data on 2/19/20 and will be doing a subsequent post of what EVAAS calls “teacher effectiveness.” Keep in mind, however, this data extends through the 2019-20 school year, so there will be additional reporting on student growth using this data before the end of the school year. •The leadership team will be prepared to present a brief overview of winter MAP data at the board meeting. (For purposes of time, I recommend only an overview at this meeting and that we schedule a longer special meeting in the near future.) •I will be send out some Achieve3000 data via email a few days prior to our meeting. 8.Management items for closed session: One confidential personnel matter to be discussed in closed as as permitted by state statute §30-4-70(a)(1). © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Effective Charter School Board 32 Non-recurring matters (in no particular order): 1.As the board is aware, our CFO successfully terminated the contract with Yummy Student Lunches. Although we had finally obtained the necessary approval from the Office of School Facilities to make the modifications to the building to install the necessary equipment, we were concerned about un-budgeted contracting costs, etc. 2.I have scheduled the first of what will be several planning meetings by phone with our consultant. We are working on the budget (as well as the early stages of the next year’s school improvement plan). 3.Regarding the placement of the “Annual Pubic Hearing to review our Internet Safety Policy” item which placed on the agenda at my request, the board adopted such a policy on 3/27/2019 (see attached). I recommend that the board ratify this policy for the current school year (and place the item on the SOC for each subsequent year, perhaps around the October timeframe). To learn more about CIPA, see the footnote and the URL below. 6 4.I was authorized on 1/20/20 by the board to purchase a software known as Acorn which should enable the school to function without handling cash next year. This will streamline receipt of payments for everything from school lunches to fund raisers, etc. 5.I maintained contact with our attorney over the holidays to ensure that open and pending litigation matters are being handled. These can be, but need not necessarily be at this time, discussed in closed session if the board chooses to do so. 6.I’m continuing to work with on the board’s ad hoc committee on revising the charter. I anticipate that we will have a draft version to present to the board no later than 4/21/20. 7.The spring musical was a big hit and well-attended all three evenings. 8.Yearbook photos will take place next week. My main goals before the March regular board meeting: 1.Review Kindergarten through second grade F&P data to see how well we’re doing with respect to reading and make changes to instruction if necessary (i.e., adding a more robust phonics component). 2.Get teacher contract renewal offers prepared to send out the first week of April. 3.Hold the quarterly meeting with my risk management team to evaluate first quarter changes to the risk environment, etc. The team will report out to the board’s risk management oversight committee afterwards. “The Children's Internet Protection Act (CIPA) was enacted by Congress in 2000 to address concerns about 6 children's access to obscene or harmful content over the Internet. CIPA imposes certain requirements on schools or libraries that receive discounts for Internet access or internal connections through the E-rate program – a program that makes certain communications services and products more affordable for eligible schools and libraries. In early 2001, the FCC issued rules implementing CIPA and provided updates to those rules in 2011.” (retrieved from https://www.fcc.gov/consumers/guides/childrens-internet-protection-act on 1/19/21 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Effective Charter School Board 33 
 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Tricks of the Trade #4 Create a Motions Log From time to time, a question may arise as to whether the board as previously addressed given matter, and if so, when. Instead of looking through potentially years of prior minutes, an easy way to find the answer to any thing the board voted on is to create a motions log. By adding a column for tags, you can search on related words in case the motion didn’t happen to contain the words in your search term. For example, in the sample below, notice that I used the tag “kudos” alongside the motion to commend the school leader in case you don’t remember that the motion contained the word commend. (Additional tags could include thanked, praised, appreciated, and so on.) By tagging the entry with kudos, you don’t have to remember that the word “commend” was used—and similarly tagged entries will bring up all the instances the board voted to thank or praise someone. The Effective Charter School Board 34 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 1.Require ALL officer, director and committee ____________ to be submitted to the board seven to ten days in advance of regular meetings. This saves time by not having to walk through every detail in the meeting and it creates an excellent paper trail in the event the board ever needs to demonstrate that it did its duty of care. 2.Recognize that the law of ________________ _______________ applies to board meetings. In general, any meeting longer than about 90 minutes or past 8:00 pm will decline sharply in effectiveness the longer it runs. 3.Be intentional about overriding the ___________ Principle. Unless you intentionally do otherwise, this principle predicts that in a 90-minute meeting, roughly four-fifths of the real value accomplished by your board will take place in only 18 minutes. (This sounds absurd, but I’ve observed many, many two-hour or longer meetings where nothing of real value was accomplished.) 4.Apply the basic 20% of Robert’s Rules of Order Newly Revised (12th Edition) which are explained in the official “In Brief” Third Edition guide shown on the right. For example, a board should limit the number of times any member may speak to a motion as well as how long each member is permitted to speak. (This may require some self-discipline, but isn’t that one of the things your school is teaching its students?) 5.Write out complex ___________ in advance of the meeting and give them to the board ______________ before the meeting begins. 6.Follow the Board Doctor’s recommended standard _____________ of ______________ for charter schools (shown on p. 29). 7.Stay on task! Do NOT deviate from the published agenda unless you have at least a two- thirds vote to do so (and only then if it is permitted by your state’s OMA). 8.Be vigilant as a board not to be drawn into discussions on administrivia. There are thousands of details within school operations, but most of them constitute the “trivial many.” This is both inefficient and ineffective because the “vital few” things the board should discuss usually take a backseat to the trivial matter du jour. 9.Do not allow public comment to turn into public ________________. 10.Create and use a Strategic Oversight Calendar like the one presented in this workbook. Use the calendar to prepare monthly agendas. Tricks of the Trade #5 Master Parliamentary Procedure Basics The Effective Charter School Board 35 Pleasant Ridge Classical Academy Minutes of a REGULAR Board Meeting Held in the school library located at 1041 Yorkshire Way, Rock Hill, SC Thursday, April 2, 2020, agenda posted start time: 6:00 p.m. Others in attendance: School staff: Official guests of the board: Dr. Janet Kane, CEO Mr. Ted Johnson, CFO, District Office of Charter Schools Mr. Jim Thomas, CFO Ms. Susan Davis, Premiere Insurance Company Mrs. Stacy Jackson, Principal Ms. Leslie Stills, Attorney for PRCA CALL TO ORDER: Upon determining the presence of a quorum, Board President Conner called the meeting to order at 6:12 p.m. OPENING CEREMONIES (Optional) Director Rev. Durham offered an invocation. Dr. Kane led those present in reciting the Pledge of Allegiance; Director Johnson read aloud the board’s mission statement; and Board Treasurer Rev. Durham led the invocation. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Minutes prepared by Jon Godfrey, Front Office Receptionist page 1 of 4 Tricks of the Trade #6 Learn to Take Razor Sharp Minutes put this info in the header so it appears on every page VOTING BOARD MEMBERS Name Office Present Absent Arrived late Departed early 1 Delores Conner Board President ✓ 2 Sam Bateman Vice President ✓ 3 Rev. Susan Durham Board Treasurer 7:12 pm 4 Gabi Herrera Board Secretary ✓ 5 Dr. Dan Proski Director at Large 6:49 pm 6 Alison Johnson Director at Large ✓ 7 Ted Smith Director at Large ✓ put this info in the footer so it appears on every page number pages x of y use a matrix to track board member attendance record the exact time the meeting was called to order The Effective Charter School Board 36 Pleasant Ridge Classical Academy Minutes of a REGULAR Board Meeting Held in the school library located at 1041 Yorkshire Way, Rock Hill, SC Thursday, April 2, 2020, agenda posted start time: 6:00 p.m. AGENDA ITEMS: 1.Approval of minutes from previous meeting(s) After calling for corrections to the minutes of the regular meeting on Thursday, March 5, 2020, and hearing none, Board President Conner declared the minutes approved as submitted. or, if corrections are agreed to … After calling for corrections to the minutes of the regular meeting on Thursday, March 5, 2020, Board President Conner declared the minutes approved as corrected. 2.Public comment Three individuals offered comments. 3.Guest discourse Mr. Ted Johnson, CFO, District Office of Charter Schools, addressed the board on the topic of the importance of a properly functioning financial oversight committee. He announced his district will be holding free training on the topic on May 8th. Additional details from his office will follow. Ms. Susan Davis, Premiere Insurance Company, presented information to the board on increasing its director and officer liability insurance coverage from $3 million to $5 million. Ms. Davis responded to several questions by board members. Ms. Leslie Stills, Attorney for PRCA, advised the board of her conversation with the school’s bond counsel (Sumner & Sheftt) in which the latter informed her that the $3.2 million bond issue for a new campus is progressing as planned. 4.Review of authorizer unique correspondence Dr. Kane informed the board that no authorizer unique correspondence has been received since the previous meeting. or … Dr. Kane informed the board that the school received a notice of concern from its authorizer dated 3/19/2020. The notice alleged that the school failed to submit its budget for the new fiscal year by the deadline of 2/28/2020. The board will discuss the matter for possible action under new business. See attached. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Minutes prepared by Jon Godfrey, Front Office Receptionist page 2 of 4 it is generally improper to list who spoke or to summarize their remarks in any way, though state statute varies on this, as well as other requirements pertaining to public comment vital for charter schools! The Effective Charter School Board 37 Pleasant Ridge Classical Academy Minutes of a REGULAR Board Meeting Held in the school library located at 1041 Yorkshire Way, Rock Hill, SC Thursday, April 2, 2020, agenda posted start time: 6:00 p.m. 5.TMO’s report The board received a written report dated 3/19/2020 from Dr. Kane (see attached). The enrollment increased by two students since that time for a current total of 1,512. 6.CFO’s report (aka, financial report) The board received a financial report from CFO Thomas consisting of an income statement and a balance sheet as of 2/29/2020 (see attached). 7.Board committee reports a.Financial oversight committee chair Johnson reported that the financial oversight committee met on Wednesday, March 25, 2020. The committee reviewed the third quarter payroll report produced by Paychex, bank and credit card statements through 2/29/2020, and the school’s third quarter tax filing. The committee did not detect any irregularities. b.Governance committee chair Bateman reported that the governance committee has not met since the board’s previous regular meeting. c.Risk management oversight committee chair Dr. Proski reported that the risk management oversight committee met on Thursday March 26, 2020, to review liability insurance coverage levels with the school’s insurance carrier, Ms. Susan Davis of Premiere Insurance Company with whom the board interacted earlier this meeting. d.The board has no ad hoc committees at the time of this meeting. 8.Unfinished business a.Director Johnson moved that “the board approve the CEO’s request to spend no more than $18,000 from the school’s reserve funds to purchase a one-year license to acquire an individualized, cloud- based reading software to augment the school’s language arts instruction.” The motion was seconded by Director Herrera. After substantial discussion of the benefits to students anticipated by Dr. Kane, the motion carried. (This item had been postponed in a regular meeting on Tuesday, March 17, 2020 until the board’s next regular meeting.) b.Director Rev. Durham moved that the board “engage the services of Stecklehauser and Dorn, CPA, for the 2019-2020 audit.” Seconded by Board President Conner. After considerable discussion about the merits of the various proposals, the motion carried. (This item had been postponed in the special meeting on March 5, 2020, in order to give board members time to review the proposals received by the school.) © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Minutes prepared by Jon Godfrey, Front Office Receptionist page 3 of 4 “unfinished,” NOT “old” business! specify what the financial report consisted of The Effective Charter School Board 38 Pleasant Ridge Classical Academy Minutes of a REGULAR Board Meeting Held in the school library located at 1041 Yorkshire Way, Rock Hill, SC Thursday, April 2, 2020, agenda posted start time: 6:00 p.m. 9.New business There was no new business brought before the board. or … a.Director Proski moved that, “he chair an ad hoc committee to explore available real estate for a future campus and report back to the board as soon as the committee identifies viable properties.” Seconded by Vice President Bateman. After some discussion about prospective committee members, the motion carried. b.Vice President Bateman moved to “postpone taking action on increasing the board’s director and officer liability insurance coverage from $3 million to $5 million until after Dr. Kane has had the opportunity to compare rates with at least three other carriers that have an AM Best rating of A+. Dr. Kane is to bring this information back to the board at its next regular meeting.” Seconded by Director Proski. Motion carried. 10.Ongoing Board Development & Self-Assessment As part of the PRCA Board’s commitment to its own ongoing development and self-assessment, it listened to a six-minute podcast by Dr. Brian L. Carpenter on the topic of board unity of control. At the conclusion of the podcast, the board discussed the two self-assessment questions in the handout that accompanied the podcast. Based on this, the board determined that no action is needed at this time (or the board determined that it will take the following action: adopt a conflict resolution policy). The board asked Dr. Kane to bring a draft policy to the next regular meeting for consideration. Adjournment Having completed the agenda, Board President Conner declared the meeting adjourned at 7:42 p.m. © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Minutes prepared by Jon Godfrey, Front Office Receptionist page 4 of 4 once a set of minutes has been approved by the board, the secretary should write the word “approved,” the date they were approved, and sign them record the exact time the meeting was adjourned do not write “respectfully submitted” unless you think you’re living in1910 The Effective Charter School Board 39 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The purpose of board financial oversight is: (1)to ensure appropriate budgeting, spending, & accounting (2)deter & detect fraud, waste, & abuse on the part of senior management part 4: the secrets to effective board financial oversight The Effective Charter School Board 40 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Latin Academy Charter School was located in the inner city of Atlanta where good public schools are in short supply. Its founder, Chris Clemons, caused the school’s financial collapse in 2016, displacing nearly 200 children. •Chris pleaded guilty to stealing around $1 million; sentenced to 10 years •He is a UPenn grad and has an MBA from MIT. •Academically, LACS was in the top quartile of all similar area schools. •According to the Atlanta Journal Constitution, Chris’s fraud included: -$12,000 at Goldrush Showbar on a single date, plus thousands more on other occasions -$2,848 at Mercedes-Benz of Buckhead -$2,224 at BQE Restaurant and Lounge, plus thousands more on other occasions -$2,109 for Carnival Cruise tickets -$1,000 in ATM withdrawals in a single day, plus thousands more on other occasions 1.Just a few BASIC financial controls were all that would have been necessary to deter this kind of fraud (or at least detect it before it caused the school to collapse). This section contains 21 suggested basic charter school financial controls. 2.Chris’s story appears to me to fit perfectly with what we in the fraud prevention/investigation profession refer to as an “accidental fraudster.” This term refers to people that don’t come into their job with the intention of committing fraud. Rather, people succumb to the temptation to commit occupational fraud as a result of three things (known as the fraud triangle): (1) perceived pressure—(often financial) pressure one doesn’t feel one can share (2) rationalization—excusing oneself as to why stealing doesn’t mean one is bad (3) perceived opportunity—realizing that one can steal. It is this leg of the fraud triangle only that a school can work to deter and/or detect. 3.According to the AJC, Chris’s board was a “blue-ribbon board,” meaning that it was composed of highly educated, successful, committed individuals. Such a board composition is great, but it illustrates that all charter school board members need training on how to fulfill their oversight duties, especially training on developing financial controls and monitoring compliance with them. Charter school leaders also need this kind of training. 4.TRUST IS NOT A CONTROL. The board’s job is to verify. 5.Apart from harming children, examples of charter school fraud like that Chris was convicted of gives opponents of chartering the opportunity to argue for the elimination of ALL charter schools. Your school can minimize (but never entirely eliminate) the chance of it becoming another example of easily preventable (or detectable) fraud. FIVE takeaways for charter schools from this story when a board doesn’t know how to practice financial oversight The Effective Charter School Board 41 Former president of charter school parent group charged with stealing $58,000 https://www.nwitimes.com/news/local/crime-and-courts/former-president- of-charter-school-parent-group-charged-with-stealing-58-000/ article_34308ef3-77b9-5bc9-bb06-509ae4b99c52.html Newpoint charter schools owner Marcus May found guilty of racketeering, fraud https://www.pnj.com/story/news/2018/10/04/jury-out-fraud-trial-newpoint- charter-schools-owner-marcus-may/1524926002/ Allentown charter school sues over embezzled payroll taxes https://www.wfmz.com/news/insideyourtown/allentown-charter-school- sues-over-embezzled-payroll-taxes/article_fb1bacab-45ec-5967- ba17-97a42b323a60.html Former Fort Mill, current charter school coach on leave after arrest in money probe https://www.charlotteobserver.com/news/state/south-carolina/article235239212.html Charter school founder and CEO sentenced to 2½ years in federal prison for misappropriating $3.2 million in public education fund https://www.justice.gov/usao-cdca/pr/charter-school-founder-and-ceo-sentenced-2-years-federal-prison- misappropriating-32#:~:text=LOS%20ANGELES%20%E2%80%93%20The%20founder%20and,allocated%20to%20s ome%20of%20her She did prison time for arson, then became president of a Manatee charter school board. Now she is headed back to jail https://www.bradenton.com/news/local/education/article160181454.html Financial officer admits to stealing $628,000 from Big Island school destroyed by lava https://www.hawaiinewsnow.com/2020/02/05/former-hawaii-island-charter-school-official-pleads-guilty-wire-fraud/ Former White House adviser arrested for stealing $218,000 from charter schools he founded https://www.justice.gov/usao-sdny/pr/former-white-house-adviser-arrested-stealing-218000-charter-schools-he-founded © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Note the variety of people who commit (or allegedly commit) fraud in charter schools, i.e., it’s not always by school leaders. A.parent volunteers B.management company owners/operators C.back office providers (e.g., payroll companies) D.coaches E.charter school founders F.board members G.business managers H.former White House advisers A. B. C. D. E. F. G. H. it’s not just school leaders who steal money The Effective Charter School Board 42 Scenario #1: The business manager of a charter school pleaded guilty to stealing $600,000 over a period of about six years (which is quite long compared to the average duration of an embezzlement of about 18 months). The way she did this was to rack up lots of purchases on her personal credit card, then she simply paid the card via EFT through the school’s bank account along with the rest of the school’s monthly payables. Scenario #2 (item A on the previous page): A PTO president was recently convicted of stealing $58,000 over a period of a coupe of years. She only got caught when a new person was finally elected PTO president and requested the books but was stonewalled. Scenario #3 (item F on the previous page): The board president of a charter school obtained several blank checks from the school which she then wrote to herself for a total of more than $27,000. Her fraud only lasted about two months. She was sentenced to eight months in jail plus probation and she has to pay back the money. Four discussion questions: 1.How easy or difficult do you think it would it be for someone in your school to pull off a similar fraud to any of the above? Why or why not? 2.Internal controls are policies and procedures that are designed to deter and/or detect financial fraud. In scenario #1, the school had written internal controls in place. Why do you think they didn’t work? 3.At Latin Academy Charter School, the board members were all successful in their respective professions. The authorizer even referred to them as a “blue ribbon board.” How is it possible for someone to steal that kind of money right out from under such a well-composed board? 4.In scenario #3, the school’s external auditor caught the fraud. Why do you think the auditor didn’t catch the fraud in the first scenario? (One might think that six audits should have caught it.) © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 three actual charter school frauds The Effective Charter School Board 43 Just as there are key differences between governing a charter school and managing one, there are key differences between financial management—what the school’s administrators do, and the oversight OF financial management —what the school’s board does. (On the next page, we’ll take a look at 25 key differences.) To put this another way, the board’s purpose is NOT to participate IN the financial management of the school. It’s to ensure that the school’s finances (and other assets) are being properly managed and safeguarded from fraud, waste, and abuse. As part of performing this purpose, I recommend that EVERY charter school board operate an independent financial oversight committee (which I often refer to as an audit committee or financial oversight committee in my publications). In this context, independent means that the committee’s work is DIRECTED and CONTROLLED by individuals who are not check signers, or individuals with authority to authorize school purchases. Thus, while your state and/or authorizer might require that the committee include the school’s CEO and/or CFO, the committee should NOT allow these individuals (whatever their titles happen to be in your school) to direct or control the committee’s work, including establishing agendas for items that the committee will review. This FOC is a board owned & controlled committee. This is because the primary function of the financial oversight committee is to serve as a check and balance to senior management’s financial activities. Specifically, this committee exists to prevent and/or detect senior management override of internal controls and/or collusion. To do this, the committee reviews various source documents on a routine basis and reports its activities and findings back to the board. Reporting is essential but easily accomplished when the board follows a standard order of business that includes an agenda item for committee reports in every regular meeting. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 the purpose of a charter school board financial oversight committee The Effective Charter School Board 44 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 25 key differences between financial management and the oversight OF financial management Aspect Management Board 1 Budget Prepare Approve 2 Budget revisions Determine/recommend Approve/Decline 3 Ordinary expenditures Approve Monitor for appropriateness 4 Extraordinary expenditures Recommend Approve 5 Transactions Approve/Execute Monitor for appropriateness 6 General ledger Maintain Monitor for appropriateness 7 Fraud risk management Deter and detect in operations Deter and detect in senior mgmt 8 Annual fraud risk assessment Conduct Ensure/review 9 Financial controls Create and follow Ensure they exist and are being followed 10 Criminal background checks Conduct on faculty and staff Conduct on senior mgmt & board 11 Check stock Safeguard/control Ensure 12 Financial oversight committee Supply documents & information Evaluate documents & information 13 Assets Tag and inventory Ensure 14 New vendors Approve per policy Review 15 External auditor Cooperate with Select and consult with 16 Source documents Maintain and secure Evaluate 17 Reimbursements Approve for faculty and staff Approve for senior management 18 School indebtedness Recommend Approve 19 Financial reports Prepare, submit and explain Monitor for appropriateness/benchmarks 20 School credit cards Control and monitor faculty & staff use Monitor senior mgmt use 21 Spend from reserves Request/recommend Approve/decline 22 Benchmarks (e.g, margin)Manage to accomplish Establish, monitor, confirm 23 Investigate fraud allegations Made against subordinates Made against senior management 24 Employee Dishonesty Insurance Procure/renew on time Confirm & ensure adequacy 25 Monthly reconciliation report Prepare Review The Effective Charter School Board 45 Why review source documents as opposed to just reviewing financial reports? Simple. Source documents, if obtained directly from the entity that produced them (e.g., banks, credit card companies, payroll companies) are less prone to falsification than management-generated reports. Moreover, research on fraud suggests that when employees and volunteers know or believe that someone routinely reviews transactions, the probability fraud decreases. The reason for this is basic to human nature: the fear of getting caught. For your school, this means that an active financial oversight committee serves as BOTH a detection mechanism as well as a deterrence mechanism. Here is a list of 10 source documents the financial oversight committee should routinely review, along with suggested intervals: 1.Bank statements; monthly 2.Credit card statements of senior management; monthly 3.Payroll reports; periodically (I strongly recommend outsourcing payroll to a nationally reputable company such as Paychex or ADP, in part because they produce reports that can be considered source documents.) 4.New vendor verification forms; as needed 5.Payroll tax payments; quarterly (https://www.eftps.gov/eftps/) 6.Invoices, receipts, purchase orders; as needed/periodically 7.PTO/PTA/Booster club financial activities; periodically 8.Canceled checks (that is checks that have been cashed); periodically 9.Vendor invoices, especially the high dollar ones; periodically 10.Travel reimbursement vouchers; periodically Any other supporting documentation for a financial activity that seems odd or unusual. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 10 source documents the financial oversight committee should routinely review The Effective Charter School Board 46 One of the things fraud examiners are commonly told while doing investigations is, “Well, we actually have an internal control to prevent this particular fraud, but it just wasn’t followed.” It goes without saying that simply “having some policies” is insufficient. While management’s job is to figure out which controls are necessary and to put them in place and make sure they’re being followed subordinates, one of the board’s responsibilities is to make sure they’re being followed by senior management—the people in the best position to override them. When senior school administrators override controls, however, it is highly likely that lower level employees, especially those involved in the purchasing or bookkeeping functions know about it. Unfortunately, for fear of losing their job or some other form of reprisal, they keep it to themselves. It is precisely at this point that the board’s financial oversight committee can play a vital role through two strategies. First, by periodically (two to four times a year) going into the school to talk one- on-one with everyone involved in the purchasing and financial record keeping process, someone from the financial oversight committee can ask very simple questions such as: “Since the committee’s last visit to the school, have you been asked to do anything regarding school finances that made you feel uncomfortable?” and “Since the committee’s last visit to the school, have you been asked to process any transactions that seemed peculiar to you?” Second, by giving your contact information directly to lower level employees with instructions to call you should a concern on their part ever arise, you open the door for them to initiate contact. Assure them of confidentiality (to the extent possible) and that part of the board’s responsibilities include ensuring that no one who makes a good faith allegation of fraud, waste, or abuse is subjected to reprisals from the school. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 one incredibly valuable practice that I’ve never seen a board do (until it was trained by me) The Effective Charter School Board 47 It’s important the financial oversight committee document its activities (e.g., committee minutes or notes) AND that the committee report out its activities to the full board at every regular meeting (which is monthly for most charter schools). Reporting does not need to be complicated but it should accurately summarize what the committee did during the previous month. By entering either a written report or a summary of a verbal report into the minutes, the committee’s activities become part of the record of the board’s official actions. In the event that your school is ever sued or the subject of an investigation, being able to demonstrate that the board reasonably performed its fiduciary duty known as its duty of care can be essential to the outcome. To give a report to the board, the committee chair can simply say something similar to this: The committee met on [date] and reviewed the following documents: [name documents] through [date that source document was produced]. The committee did not detect any irregularities. OR The committee detected the following irregularities which we now refer to the board for possible action. Sample entry in the board’s minutes: Financial oversight committee Chair M. Moreno reported that the financial oversight committee met on Wednesday, 6/17/21 and reviewed the school’s bank statements and credit card statements of the CEO and CFO for the period ending 5/31/21. The committee reported that it did not detect any irregularities. Just as importantly from a documentation standpoint, if the committee did not meet in a given period, the minutes should indicate no report was received from the financial oversight committee. © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 documenting and reporting out the committee’s work The Effective Charter School Board 48 1.Separation of duties—especially bookkeeping steps! 2.Credit card usage (no debit cards!) 3.Travel reimbursement (no first class airfare, posh hotels, and white tablecloth dinners on the public’s tab) (see this example: http://www.dailynews.com/social-affairs/ 20160522/special-report-la-charter-school-under-review-after-principal-charges-100k) 4.Purchasing procedures (bidding requirement thresholds, approvals, ordering, etc.) 5.Asset protection, control, and inventory 6.Vendor selection process (to deter undisclosed related party transactions) 7.Positive pay (for both checks and ACH/EFT disbursements)! 8.Contract review policy (by the school’s general counsel) for contracts over $X 9.Single-item purchase authority limit & inter-line item transfer authority 10.Employee dishonesty insurance/bonds (aka, “crime coverage”) 11.Whistleblower protections (vital!) & an anonymous tip hotline 12.Board financial oversight committee functions 13.Criminal history checks (vital for anyone with access to school funds) 14.Cash receipting, deposits, & disbursements (outsource these!) 15.Financial reporting (i.e., specific reports, their interval, and specific metrics) from the school AND its auxiliary groups such as PTO, booster club, etc. 16.Annual banking institution verification (something the board should do) 17.Quarterly tax-deposit verification (US Treasury’s website at https:// www.eftps.gov/eftps/) 18.Budget development/budget approval/spending within approved budget (no purchasing should occur from reserves without board authorization) 19.Payroll processing procedures, including procedures for adding employees 20.Reviewing original bank and credit card statements against monthly, detailed reconciliation reports 21.Accounting software password controls, back-ups, cloud or device storage © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Board Doctor’s list of 21 BASIC financial controls commonly necessary in charter schools The Effective Charter School Board 49 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Adapted from my newest book, Save Your Ship! How to Protect Your Charter School Through Systematic Risk Management part 5: risk management oversight The Effective Charter School Board 50 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 photo credit: Caryn Christensen Promise Charter School: A textbook example of failed risk management In 2011, this academically well-performing charter school in San Diego had its charter revoked. According to various media sources, Promise Charter School: •violated California’s open meeting laws •failed to prevent inappropriate relationships between a male teacher and his female students •maintained faulty financial statements •violated legal requirements pertaining to student suspensions •violated its own rules about who should sit on its charter board •violated state laws pertaining to conflicts of interest •failed to report child abuse to CPS I consider this case a textbook example of a charter school board that failed to ensure sound risk management, an error of such magnitude that it resulted in the loss of its charter, thereby forcing hundreds of students into other nearby schools, some of them lower performing. In my view, the school could have easily avoided revocation through sound risk management. The Effective Charter School Board 51 ‘Deceived’: Indianapolis charter school pitch left out lawsuits, touted questionable college degrees https://in.chalkbeat.org/2021/4/23/22398328/stemnasium-indianapolis-charter-school-application ‘Simply inexcusable:’ Mom ran over son in school parking lot as he clung to car door https://www.mlive.com/news/grand-rapids/2019/04/simply-inexcusable-mom-ran-over-son-in-school-parking-lot-as-he- clung-to-car-door.html 'Beloved' Elementary School Principal Dies Protecting Students From Bus Crash https://abcnews.go.com/US/beloved-elementary-school-principal-dies-protecting-students-bus/story? id=36556133#:~:text=Susan%20Jordan%20died%20after%20a,curb%20at%20an%20Indiana%20school.&text=Susan%20Jo rdan%2C%20the%20longtime%20principal,of%20the%20school%2C%20authorities%20said. Landslide kills two on elementary school field trip in Minnesota https://www.theoaklandpress.com/news/landslide-kills-two-on-elementary-school-field-trip-in-minnesota/ article_b3c3922f-0979-5702-a1c8-8f43c8df53d5.html Judge, senator and closed charter school sued by terminated employees https://nondoc.com/2020/05/07/closed-charter-school-sued-by-terminated-employees/ Lake Forest charter school board member resigned after $120,000 deal with school https://thelensnola.org/2017/02/23/company-owned-by-former-charter-school-board-member-collected-120000-in-deal-with- school/ She did prison time for arson, then became president of a Manatee charter school board. Now she is headed back to jail https://www.bradenton.com/news/local/education/article160181454.html? fb_comment_id=1648965531782276_1651416761537153 State commission revokes Ka'u Learning Academy's charter amid criminal investigations https://www.hawaiinewsnow.com/story/38606336/state-commission-revokes-embattled-kau-learning-academys-charter/ #:~:text=State%20commission%20revokes%20Ka'u%20Learning%20Academy's%20charter%20amid%20criminal%20investigations,- Close&text=HONOLULU%20(HawaiiNewsNow)%20%2D%20The%20Hawaii,investigations%20into%20the%20school's%20founder. Federal agents raid Los Angeles charter school network https://www.latimes.com/local/education/la-me-edu-celerity-charter-schools-20170125-story.html © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Risk Management Disasters in the News (not the kind of media coverage your school wants) The Effective Charter School Board 52 As a former SCHOOL LEADER, I have navigated these risk management situations: •a teacher candidate that misrepresented his credentials on his résumé (no MA as claimed); convicted of stealing pornography •a cheerleader broke her spleen while rehearsing tosses with inadequate mats •allegations of male teachers acting improperly toward students and staff •bullying/hazing incident on a bus returning from an away game in which a student sustained abdominal bruising while the coach intentionally turned a blind eye •a teacher who made inappropriate comments to special needs students •a COO that allowed federal bus inspection stickers to be out of date •coaches having kids doing cross country when the heat index was too high and practicing soccer on a rock strewn field which had resulted in a student needing stitches the previous year •kids driving other students to away games •deficient HR procedures, EEOC negotiation, lawsuit negotiations As a BOARD MEMBER, I have navigated these risk management situations: •CEO embezzlement (subsequently convicted and sent to prison) •board approval to acquire millions in debt without performing any due diligence As a CONSULTANT, I have assisted boards, leaders and authorizers in navigating these risk management debacles: •PTO president used debit cards to for thousands of dollars worth of personal stuff •school employees that have stolen money (occasional LARGE sums), used school credit cards for personal purchases, skimmed petty cash •board that inadvertently allowed its D&O liability coverage to lapse •implementing a sex-offender registry database ID scanner over objections of board president only to have the platform identify two convicted child molesters in the first three months •a wrongful termination suit against the board •schools on corrective action plans •board officers making high-stakes decisions unilaterally •board that failed to conduct an annual audit almost a year after it was due •school that went financially defunct mid-year © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A few firsthand experiences with risk management as a school leader, board member, and consultant . . . The Effective Charter School Board 53 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Charter school risk systematic management does NOT result from simply having some policies and carrying liability insurance. Rather, it is best accomplished through what is known as an Enterprise Risk Management (ERM) framework. Here’s one I’ve created to address the unique needs of charter schools. The Effective Charter School Board 54 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 25 Risks and Their Causes Common to Charter Schools organized by the 3P’s of Charter School RiskTM internal & external (denoted by E/I) risks to your school’s People, Property & Programs 1.sexual predators (campus access, background checks on volunteers) 2.injury/death during daily drop-off and pick-up 3.campus emergencies (e.g., medical, health issue, weather, active shooter) 4.bullying/hazing/sexual harassment/racial discrimination (students and staff) 5.facility hazards (e.g., playgrounds, rocks, holes, wet floors) 6.field trips (e.g., transportation, chaperones, destination itself) 7.pandemics (illustrating that some risks simply aren’t reasonably foreseeable) 8.theft or misuse of protected information (e.g., employee PII, student records) 9.deficient HR practices (wrongful termination, EEOC violations) 1.internal fraud (e.g., skimming, pass-through schemes, undisclosed related parties transactions, embezzlement, compensation schemes, etc.) 2.external fraud (e.g., ACH/EFT transfers, theft of payroll tax deposits, and theft of PII) 3.vandalism 4.theft of school property (made easy through failure to maintain inventory records) 5.technological vulnerabilities (spear-phishing/denial of service attacks/ransomware) 6.natural and manmade disasters (e.g., fire, tornado, volcano (really!), nearby explosions (also really!) 7.gaps in insurance coverage (e.g., inadequate employee dishonesty insurance) Examples of risks to a charter school’s PEOPLE 1.inadequate student achievement and growth 2.diminishing reputation within the community 3.undesirable media coverage 4.problems arising out of actions by inadequately trained employees & volunteers (e.g., untrained board members, inadequate teacher development, chaperones) 5.hiring and/or keeping incompetent people around 6.program non-compliance (e.g. SPED, EL, Title I, Title IX, e-rate, etc.) 7.fraudulent enrollment reporting 8.non-compliance with provisions in your charter (e.g., exceeding enrollment caps) 9.theft of PTO/Booster Club funds Examples of risks to a charter school’s PROPERTY Examples of risks to a charter school’s PROGRAMS E/I E E/I I I E/I E E/I I I E E/I I E/I E I I E/I E/I I I I I I E The Effective Charter School Board 55 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 SIX hypothetical examples to illustrate the concept of a “heat map” A.facility hazards (e.g., playgrounds, rocks, holes, wet floors) B.injury/death during daily drop-off and pick-up C.internal fraud (e.g., skimming, pass-through schemes, undisclosed related parties transactions, embezzlement, compensation schemes, etc.) D.SPED program non-compliance E.non-compliance with provisions in your charter (e.g., exceeding enrollment caps) F.sexual predators (campus access, background checks on volunteers)MAGNITUDE OF IMPACTHIGHMEDIUMLOWHIGHMEDIUMLOW SUSCEPTIBILITY (LIKELIHOOD) B A E C D F The Effective Charter School Board 56 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Once a potential risk has been identified, you can address it by implementing one of FOUR (or more) strategies: (1) Avoid, (2) Transfer, (3) Mitigate, and/or (4) Assume. (1)Examples of AVOIDING charter school risks: •not allowing students to drive other students to away games •using a sex-offender registry to screen out child molesters •prohibiting outdoor sports activities when the heat index is too high •prohibiting certain activities (e.g. soccer practice in a rock-strewn field) •deny field trip requests to dangerous areas •routine maintenance of school playground and gym equipment (2)Examples of TRANSFERRING charter school risks: •liability insurance/D&O insurance •warranty programs (e.g., AC maintenance) •positive pay (for checks and ACH transactions) •subcontracting some services (e.g., transportation companies, payroll companies, food service, building maintenance, etc.) •permission slips/waiver of liability (3)Examples of MITIGATING charter school risks: •financial controls that are routinely monitored for compliance •training employees to report risk indicators (starting with their orientation •policies and procedures •campus security/fences/sex-offender registry database •seeking attorney review (e.g., contracts, HR practices and personnel actions) •conducting external audits (e.g., financial & HR) •parent/guardian permission slips/waivers •staff and volunteer training (such as field trip chaperoning) (4)Examples of ASSUMING charter school risks: •inherent risk in contact sports •in-school food preparation and service •before and after-school programs •allowing nepotism (if lawful in your state) •field trips The Effective Charter School Board 57 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Board Doctor’s 40 favorite “low-hanging fruit” (i.e., do these today—don’t wait to implement the 6-I Model) risk management strategies for charter schools. 1.Write a statement of core values and instill them in everyone. 2.CONFIRM that a criminal background check on all officers and directors has been completed before they are hired or appointed. 3.All directors and officers should annually sign a disclosure statement, code of conduct, and a pledge to act ethically. 4.Carry sufficient levels of director and officer liability insurance coverage. 5.Have an attorney review ALL vendor contracts prior to execution. 6.Make sure the school has employee dishonesty coverage and that the amount of coverage is related to the school’s total assets. (Example: I had client school with millions of dollars in its fund balance but only $50,000 in employee dishonesty coverage.) Also make sure that said insurance covers bad acts by board members with access to school funds. Some insurance companies exclude them as volunteers. 7.Use a computer database to prevent convicted sex offenders from gaining access to your campus (and screen ALL volunteers!). 8.Use a commercial software to manage all student cash transactions. 9.Use positive pay for ALL checks and ACH transactions. 10.Make sure you have a robust separation of duties policy, especially with respect to financial record keeping AND routinely assess compliance with it. 11.Prohibit the existence of debit cards linked to the school’s account. 12.Establish a board audit committee to routinely review financial source documents such as bank statements, credit card statements, payroll reports, and tax filings. 13.Conduct a WELL-ORGANIZED and CLOSELY SUPERVISED student drop-off and pick-up! 14.Conduct an annual risk management assessment, to include an annual fraud risk assessment. 15.Utilize a standard order of business for regular board meetings. 16.Utilize a board calendar to track recurring items annually and plan agendas accordingly. 17.Outsource payroll functions to a reputable company, but confirm its tax deposits on the school’s behalf EVERY quarter. 18.Develop a well thought-out emergency action plan and rehearse scenarios. 19.Adopt a whistleblower non-retaliation policy and fraud reporting hotline or email and widely communicate the existence of both. 20.Prohibit nepotism—especially among senior managers and/or board members. The Effective Charter School Board 58 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 21.Train the board to understand basic parliamentary procedure, open meetings requirements, interpreting financial reports and meaningful, fair school leader evaluation. 22.As a full board, meet with your auditor upon conclusion of the annual audit. 23.Be diligent in composing proper board minutes. 24.Develop an organizational hierarchy with CLEAR lines of authority. 25.Use resources that makes it easier for teachers to provide differentiated instruction (e.g., MAP Accelerator). 26.Adhere to personnel management best practices (job descriptions, new employee orientation, a well-written faculty and staff handbook, proper documentation of disciplinary actions and so on). 27.All school leaders, especially the chief executive, should routinely practice management by walking around (MBWA). 28.Hire a competent business manager/CFO. 29.Practice radical transparency (e.g., post budgets, agendas & minutes, and various other school documents to the school website). 30.Hire competent people and compensate them as well as possible. 31.Tightly control building access. Key fobs are great if you can afford them. 32.Frequently inspect playgrounds and equipment for hazards. 33.Routinely review of PTO/Booster Club financial records and bank statements. 34.Conduct an HR audit (to minimize a myriad of risks arising out of improper personnel management) 35.Maintain a collegial relationship between the school and the authorizer (when possible). 36.Engage in board training that teaches that a board exists to ensure that the school accomplishes the student outcomes it was chartered to produce while operating within all required parameters—not to co-manage it. A co-managing board is often one of the greatest risks to charter schools, especially when its members act as individuals rather than acting only as a collective. 37.Revise your bylaws so they properly that distinguish governance from management (especially the board president and treasurer descriptions). 38.Review the monthly bank reconciliation report against the actual bank statements with an eye for detecting fraud, waste, and abuse. 39.Properly track and manage assets (to include bar code tagging and tracking of computers, tablets, etc.). 40.Train and incentivize ALL employees and volunteers to recognize and quickly report red flags that may indicate risk (e.g., safety mishaps). The Effective Charter School Board 59 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 A Few Helpful Management Resources (not specific to charter schools, but still valuable) 1.Save Your Ship! How to Protect Your Charter School Through Systematic Risk Management by Brian L. Carpenter (available on Amazon.com). 2.Many liability insurance companies (especially companies that insure a lot of charter schools) provide FREE risk management resources. Contact your school’s insurance provider to find out what might be available. 3.GAO Publication: Standards for Internal Control in the Federal Government (https://www.gao.gov/products/GAO-14-704G). This publication is often referred to as “the green book” (because of its use of the color green within the book’s illustrations). Although this is a governmental publication and its contents are mandatory for federal agencies, it is practical and broadly applicable to charter schools (which, it might be noted, receive federal funds and thus potentially fall under its guidelines). Notably, the green book fully incorporates COSO’s standards. 4.Risk Management in Student Affairs: Foundations for Safety and Success by Thomas E. Miller and Roger W. Sorochty (Available on amazon.com) 5.Fraud Risk Management Guide (https://www.aicpastore.com/AST/Main/ CPA2BIZ_Primary/FraudDetectionandPrevention/PRDOVR~PC-ACOSOFRM/PC- ACOSOFRM.jsp). 6.COSO Enterprise Risk Management - Integrating with Strategy and Performance. (https://www.aicpastore.com/ManagementAccounting/GovernanceandRisk/ enterprise-risk-management---integrating-with-stra/PRDOVR~PC-ACOSOERM/ PC-ACOSOERM.jsp) 7.The Principal′s Quick-Reference Guide to School Law: Reducing Liability, Litigation, and Other Potential Legal Tangles by Robert F. Hachiya, Robert J. Shoop and Dennis R. Dunklee (Available on Amazon) 8.FEMA Publication: “Guide for Developing High-Quality School Emergency Operations Plans” https://www.fema.gov/emergency-managers/national- preparedness/plan#emergency-operations The Effective Charter School Board 60 
 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 The Four-Sided Model of Academic Performance adapted from my book, The Seven Outs: Strategic Planning Made Easy for Charter Schools part 6: oversight of the school’s academic performance The Effective Charter School Board 61 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 3 4 2 1 The Four-Sided Model of School Academic Performance The school’s absolute performance is the percentage of students that meet or exceed _____________ standards on end of year, end of grade, and similar state exams. These tests are typically administered in spring in grades 3rd through 8th, although some states have high school absolute performance metrics such as EOC tests for high schools. School data reflecting absolute performance is typically released in the fall. The school’s student gains (or growth) is a measure of how much a student grew during an interval such a from one grade level to the next. Some states measure growth using metrics known as EVAAS and some schools measure it internally using a test called Measures of Academic Progress (MAP) which is commercially available. The school’s relative performance is how well your students performed on numbers 1 and/or 2 compared to other charter schools in your state, nearby districts, all public schools in your state, and/or a _____________ normed groups (such as PSAT, MAP). Relative performance is often reported as a letter grade at the state level. The school’s mission-specific outcomes are determined by each particular school. Examples included, but are not limited to: college readiness, dual- language, preparing kids for careers in STEM/STEAM, citizenship, mastery of classical values, military leadership, performing arts, self-directed learners, etc. One of the advantages of charter schools is that each school can choose its own mission-specific outcomes. 2 3 4 1 The Effective Charter School Board 62 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 CASE in Point: One Year Before This School Lost Its Charter Four Observations About the Data 1. In its first four years of operations, the combined percentage of students passing Math & ELA never exceeded _____%. 2. Over the four years the school had operated, the school’s ____________ was essentially STATIC. 3. The dip between Fall 2008 and Spring 2009 testing cycle suggests that students lost ____________. 4. The board was never aware of the three preceding points because it was never shown TREND DATA. It closed one year after I compiled this snapshot. WHAT Your Board Might Miss Unless It Requires Management to Provide Trend Data 1.In which overall direction the school’s academic performance is trending 2.How the most recent data compares to previous years 3.Whether trend performance is indicative of a need to change management 4.Whether changes to the charter need to be requested 5.What impact, if any, previous major changes made to curriculum or instruction had on performance (e.g., implementing a supplemental reading program) 6.Whether the school is on a trajectory to get its charter renewed 7.Whether management understands the performance of the school enough to diagnose problem areas (You can’t fix a problem you can’t diagnose.) Without Trend Data, Here Are Seven Things Your Board Might Miss: data from a real revoked charter school The Effective Charter School Board 63 © 2009-2022 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Examples of Questions a Board Can Ask About Academic Performance 1.What percentage of our students do not speak English as their native language at the time they enroll? 2.Does our school test students for proficiency using a normed test other than the one we’re required to administer by the state? If yes, which one(s) and how frequently? How do its results compare? 3.Does our school test students to determine grade level proficiency during the enrollment process? 4.On average, what percentage of our students are below/at/above grade level when they enroll? 5.On average, what percentage of our students are performing below/at/above grade level after one full year at our school? Two full years? Three full years? 6.What percentage of our students achieve at least a year of academic growth during a full school year? 7.On average, how long does our school take to bring a student up to grade level in reading? Math? 8.Does the school use test data to inform instruction? How? 9.What percentage of our 3rd through 8th grade students are meeting or exceeding state standards in math and English Language Arts (ELA), Math, & Science? 10.In what quartile does our school perform on the state test relative to: •our students’ home district(s)? •all other public schools in our state (including other charter schools)? •schools with a similar socio-economic composition (e.g., 90% economically disadvantaged)? •other charter schools in our authorizer’s portfolio? 11.Over the past three to five years, is our overall school performance on state tests best described as: •static? •trending upward? •trending downward? 12.What percentage of our students have IEPs or have special needs? How well do they perform? 13.If performance deficiencies exist, why? (Precise causes may not be able to be determined, however, management should be able to identify major contributing factors to trends such as: faculty turnover, changes in curriculum, turnover in students, changes to the state test, changes to the school’s teacher professional development plan, structural program changes [e.g., number of instructional hours allocated to reading] and so on. 12.If the school is performing unsatisfactorily, by what date does management intend to make it perform properly? (Do the bolded words look familiar?) Additional Questions for High Schools 13.What percentage of our students are enrolled in AP courses? 14.What percentage score a 3 or higher? 15.What percentage of our students earned dual credits (college and high school)? 16.What percentage of our students graduate? (Excluding GED and similar equivalencies) 17.What percentage of our students are admitted to college or trade schools? 18.What percentage of our students are required to take remedial classes upon entering college? 19.What percentage of our students take the ACT and/or SAT? 20.How well do they perform on those tests compared to their peers? If you want to learn more about charter school governance, strategic planning, and risk management, why not learn from the guy who literally, wrote the books about them? Page of 64 66 BRAND NEW in December 2021! Save Your Ship! How to Protect Your Charter School Through Systematic Risk Management (1st Edition 2021) (available on Amazon in hardcover, $29.95, or Kindle, $19.95). Discounts available when purchasing six or more hardcover copies directly from the National Charter Schools Institute. Over 10,000 copies in print! Charter School Board University: An Introduction to Effective Charter School Governance (2nd Edition, 2008) (soon to be available on Amazon in Kindle format only, price not yet known) Back by popular demand! The Seven Outs: Strategic Planning Made Easy for Charter Schools (1st Edition, 2008) (soon to be available on Amazon in Kindle format only, price not yet known) Quick-to-read monograph! Governing for Greatness:Ten Fundamentals Every Charter School Board Member Needs To Know (1st Edition 2019) (available from the National Charter Schools Institute in softcover, $14.95) Discounts available when purchasing six or more hardcover copies directly from the National Charter Schools Institute. Books by Brian L. Carpenter The Effective Charter School Board 66 © 2009-2021 Brian L. Carpenter • Brian@BrianLCarpenter.com • (602) 432-1274 Praise for Dr. Brian L. Carpenter, CFE “Although we typically work half a continent apart, when Minney, Young & Corr LLP need expert board governance services, Dr. Carpenter has been our go to guy for years.” Paul Minney, Attorney, Young, Minney & Corr, LLP "Over a period of about two years, we used Dr. Carpenter's expert assistance to completely makeover governance and operations. To say that he saved our school would be putting it mildly. YPA is flourishing today because we crossed paths with Dr. Carpenter at a critical time in our school's existence.” Craig Craze, Founding Board Chair, York Preparatory Academy “Dr. Carpenter is the trailblazer in the art and business of charter public school governance and strategic planning.  His “Charter School Board University” and “The Seven Outs” are widely acknowledged as the groundbreaking texts for board development, orientation and board retreats. He takes a seemingly dry topic, mixes it with a sharp sense of humor and years of ground-level charter public school experience to help boards and school leaders create the kinds of public schools to which we would send our own children.” Lisa S. Grover, National Alliance for Public Charter Schools “After completing Brian’s full day session on Board Governance and how to Create an Effective Charter School, I can say without reservation I’m very well prepared to step into the role of Board Member.  Brian did an amazing job of pointing out the pitfalls and joys of being on a Board, and gave very practical and easy to remember tools to help navigate the water.  As a CEO and President I’ve been dealing with Boards for 15 years, and I can say this is by far the best ‘Board Training’ I’ve received in my career.  While the intent is to focus on Charter School Governance, the applicability of how a Board works with a Leader (CEO, Principal, etc.) was truly spot on.  Thanks for pouring you heart into helping us succeed Brian.” Sean Barry, CEO Bridgevine, Inc. R-1 R-1 R-1 R-1 R-1 R-1 R-1 R-2 R-2 R-2 R-2 R-2 R-2 R-3 R-3 R-3 R-3 R-3 R-3 R-4 R-4 R-4 R-4 R-4 R-4 R-5 R-5 R-5 R-5 R-5 R-6 R-6 R-6 R-6 R-6 R-6 R-6 COUNCIL DEVELOPMENT AND TRAINING OPPORTUNITIES Any Registration for Council Development and Training Opportunities will be coordinated by the Town Manager’s Office and/or Town Secretary. • THURSDAY, JUNE 9, 10:00 – 11:00 A.M. o BUILD EFFECTIVE CITY COUNCIL RELATIONSHIPS WEBINAR • July 21-22 or August 11-12 o TML Newly Elected Officials Training • Certification for elected officials (TMLI) o HTTPS://WWW.TML.ORG/278/CERTIFICATION-FOR-ELECTED-OFFICIALS-TMLI • ICMA 2022 Council Orientation Webinar Series: staff will provide links to each of the sessions through your Town email o Session 1 - Intro to Form of Government o Session 2 - Roles and Responsibilities of the Elected Official o Session 3 - Understanding the Budget and Strategic Plan o Session 4 - Public Relations o Session 5 - Effective Leadership o Session 6 - Ethics HOW CITIES WORK • 1 • 2017 HOW CITIES WORK HOW CITIES WORK • 2 • 2017 HOW CITIES WORK • 3 • 2017 HOW CITIES WORK TABLE OF CONTENTS 4 Texas Cities Lead the Way 6 City Property Taxes: Tremendous Bang for the Buck 8 Where Do Texas Cities Get Their Money? 11 City Property Tax Cap 13 Reverse Intergovernmental Aid 17 Cracking the Code: Citizen Safety and Protection of Property Values 19 City Economic Development 20 Cities Keep the Garbage from Piling Up 22 Putting the “Works” in Public Works 24 The Growing Need for Water and Wastewater Services 26 Water Conservation 28 Funding the State Water Plan 30 The Connection Between Infrastructure and Revenue Caps 32 The High Cost of Providing Public Safety 34 Annexation: It Isn’t a Four-Letter Word 37 Zoning: A Primary Means to Protect Property Values and the Welfare of City Residents 38 Keeping the Power On: Cities and Electricity 40 Cities Refuse to Accept Utility Rate Hikes Without a Fight 41 The Texas Municipal Retirement System: Proven Success 42 Thriving Libraries Reflect Thriving Cities 44 Texans Keep Healthy in City Parks 46 Investing in Tomorrow’s Leaders: City Governments Involve Youth 47 Advocacy Is Vital 48 About the Texas Municipal League HOW CITIES WORK • 4 • 2017 As you read this publication of How Cities Work, the 85th Texas Legislature has convened and is hard at work. The 2017 regular session will not end until Monday, May 29, 2017. Between now and then, lawmakers will consider thousands of bills. Unfortunately, many of those bills would, if enacted, erode municipal authority or otherwise limit the ability of Texas cities to carry out the important functions and provide the vital services expected by municipal residents. Cities, the government closest to the people, embody the idea that “We the people” should be in control. Cities provide the services that we cannot do without. Those services reflect the will of the local taxpayers. They are not the kind of services people think of when they say they want less government. City services are the nuts and bolts of our society. Starting with Texas’ independence in 1845, the legislature began creating cities to do its local work. The Texas TEXAS CITIES LEAD THE WAY By Bennett Sandlin, TML Executive Director HOW CITIES WORK • 5 • 2017 Municipal League now represents more than 1,150 cities of every size, shape, and service level. The locally-elected city councils in those cities decide how to provide appropriate services based on the wants of their citizens. Texas cities provide police and fire protection, the roads we drive on, local business development, the utilities we need to survive and prosper, the protection of property values through thoughtful rules that benefit everyone, and much more. It costs money to provide these services, but keeping taxes low while meeting citizens’ demand for services is a core value of city officials. Cities don’t typically seek funding from the state, and they receive virtually nothing from the state. What cities need in lieu of state funding is to be treated as partners in keeping Texas great. City officials want to continue providing local services in the way they were elected to do. How Cities Work is a tool to help city officials explain how Texas cities are powerful engines of economic growth, as well as safe and pleasant places for people to grow up, raise families, and retire. In this publication, we highlight: • The sources of municipal revenue and the ways in which the legislature can damage that revenue. • The value of building codes. • Municipal economic development efforts and the ways in which property tax caps threaten those efforts. • The status of municipal solid waste programs. • Municipal transportation and public works and the importance of maintaining right-of-way authority, compensation for use of rights-of-way, and funding sources for drainage utilities. • Municipal participation in utility rate cases. • The provision of municipal water and wastewater services, including funding for the State Water Plan. • The connection between infrastructure and revenue caps. • The high cost of providing public safety services. • The importance of annexation authority to the future of Texas cities and to the state’s economy. • The ways in which zoning authority protects citizens and their property values. • The importance of libraries and library funding. • The value of municipal parks and recreation programs. While some state leaders will try to reduce municipal revenue or chip away at municipal authority, the vast majority of Texans knows that their city leaders are trustworthy stew- ards and should be allowed to exercise local control. To a very great extent, economic growth in Texas is the result of municipal efforts to ensure the availability of infrastruc- ture, public safety, and the quality of life necessary for job creation. State policymakers should be very reluctant indeed to harm cities, because as our cities go, so goes our entire beloved state. We look forward to working with all of you in these important months ahead as we advocate for municipal government in Texas. If you have any questions, please feel free to contact a member of the TML legislative department. Thank you, in advance, for your support and assistance. H HOW CITIES WORK • 6 • 2017 Chart 1 Distribution of Property Tax Collections Source: Texas Comptroller’s Biennial Property Tax Report How do Texas cities provide so many services with such a small share of a typical property tax bill? Is it with financial help from the state? Not quite. Unlike other states, Texas provides no general-purpose state aid to cities to help pay for streets, public safety, or other city services. The state forces cities to generate their Special Districts 12% Counties 16% Cities 20% Schools 52% 1985 2013 Special Districts 12% Counties 17% Cities 16%Schools 55% Texas cities depend heavily on property tax revenue. Property taxes help fund many of the services that residents demand including police, fire, streets, and parks. But as Chart 1 shows, city property taxes constitute a small portion of a typical home- owner’s property tax bill. CITY TREM E N D O U S BANG F O R THE B U C K : HOW CITIES WORK • 7 • 2017 own revenue. That’s why (as the chart below shows) per capita state tax revenue is relatively low, while per capita local tax revenue is comparatively high. Chart 2 State and Local Government Tax Revenue, 2013 Source: U.S. Census Bureau U.S. Texas Per capita state and local $4,604 $3,871 (31st) Per capita state $2,681 $1,955 (42nd) Per capita local $1,923 $1,915 (17th) Percent local 41.8% 49.5% But Chart 2 focuses on “local governments” (cities, coun- ties, schools, and districts). What about cities only? For this information, we turn to a publication of the National League of Cities (NLC), Cities and State Fiscal Structure. One section of this report tabulates, for each state, a sta- tistic the authors refer to as “own-source capacity.” This is a measurement of the extent to which decisions made by city officials actually determine the city’s fiscal direction. Since Texas cities take care of themselves without inter- governmental aid, it comes as no surprise that Texas ranks second the nation in municipal own-source capacity. The flip side of that coin, however, is the report’s measure of state aid to cities. Here again, the NLC report replicates previous research: Texas trails only Georgia, Oklahoma, and West Virginia in state aid—the share of municipal rev- enue that comes from state government sources. These two findings of the NLC report once again estab- lish these facts: (1) the State of Texas relies very heavily on Texas cities to generate the revenue necessary for mu- nicipal facilities and services; (2) the state gives cities the capacity to generate that revenue; but (3) the state gives cities virtually no state financial aid. In addition to forcing local governments to generate com- paratively large amounts of tax revenue, the State of Texas also forces those local governments to rely too heavily on property taxes. It does this by denying them other revenue sources. While this is especially true for public schools which rely almost exclusively on the property tax, it is also true for cities and counties. In fact, of the $1,915 shown in Chart 2 as per capita local government tax revenue in 2013 in Texas, a whopping $1,563 (81.6 percent) came from the property tax. These two fiscal conditions, which create the property tax mess in Texas, are unlikely to change unless the State of Texas takes one (or both) of two actions: 1. Inject more state money into public services and fa- cilities, especially public schools. This means even more state revenue than was provided through the public school funding reforms of 2006. 2. Open more revenue sources for counties and cities. Any other attempts to reduce the property tax burden in Texas will either be ineffective or will create unintended, negative consequences. In a nutshell: (1)Texas cities provide vital services that benefit their citizens; (2) Texas cities provide those services with less aid from the state, as compared to other states; and (3) Texas cities manage all this despite a very small share of the total property tax levy and with reasonable annual in- creases in those taxes. H HOW CITIES WORK • 8 • 2017 A 2015 TML survey shows that municipal general fund revenue in Texas is made up of the following sources: General Fund Revenue Conspicuously absent from this list is financial assistance from the state. This is unusual—most states provide direct financial assistance to cities in recognition of the fact that cities provide basic services on which the entire state depends. (See the article on “Reverse Intergovernmental Aid” in this publication.) Instead of revenue, Texas cities receive something equally important from the state—broad authority to govern themselves, including the authority to raise their own revenue. This local authority has worked to the benefit of cities and the state for many decades and should continue into the future. Here’s more information on each source of municipal revenue: Property Taxes Property taxes are the leading source of city revenue. Though crucial to city budgets, city property taxes make up just a fraction of a property owner’s total property tax bill. Most cities under 5,000 population have statutory authority to levy property taxes at a rate of up to $1.50 per $100 of assessed value. Most cities over 5,000 population have WHERE DO TEXAS CITIES GET THEIR MONEY? City government is where the rubber meets the road. Cities pave our streets, fight crime and fires, prepare us for disaster, bring water to our taps, take our trash away, build and maintain our parks—the list goes on and on. These services cost money. This article describes the sources of municipal revenue and expenditures. HOW CITIES WORK • 9 • 2017 statutory authority to levy property taxes at a rate of up to $2.50 per $100 of assessed value. Despite this broad authority, the average city property tax rate was only $.52 for tax year 2015. City property tax levies are tied by law to fluctuating property tax values. As values increase, the city must adjust its rate or face potential rollback elections. In reality, such tax rollback elections are rare. City rates have held relatively steady for years, both in terms of actual rates and in terms of total levy as adjusted for inflation and rising income. Sales Taxes Sales taxes are a major source of city revenue. Nearly 93 percent of Texas cities levy a basic one-cent city sales tax. The revenue can be used for any purpose other than payment of debt. Many cities, though not all, also impose additional sales taxes in varying amounts of up to one cent. These additional sales taxes are known as dedicated taxes, because their proceeds may be spent only for certain purposes. Some popular dedicated sales taxes include mass transit, economic development, street maintenance, property tax relief, and sports venue taxes. All city sales taxes, including the basic one-cent sales tax, require a local-option election of the citizens. Collection of sales taxes is performed by the Texas comptroller, who “rebates” the city share on a monthly basis. The comptroller retains a small portion of the city tax revenue to cover the state’s administrative costs. Right-of-Way Rentals When utilities and other industries use city property to distribute their services, cities are permitted by law to collect rental fees, also known as “franchise” fees, for the use of public property. Franchise fees are calculated by various methods, depending on industry type. Expenditures Core city services like police, fire, and EMS account for the majority of expenditures in a survey conducted by TML. In addition, cities spend revenue on streets, municipal courts, parks, and libraries. “Other Expenditures” in the survey include primarily administrative and personnel costs. Did You Know? Many people mistakenly believe that cities derive substantial general revenue from their courts. In reality, the first $84 of most traffic tickets goes directly to the state. What’s left over, if any, can be used by the city. Unfortunately, city courts are increasingly being used as a backdoor revenue source for the state. fines typically range from $200 for traffic violations, and up to $2,000 for city ordinance violations relating to health and safety. Much of a city’s fine revenue offsets the costs of law enforcement and operation of the municipal court system. Interest Earnings When a city invests its funds, it must closely follow the mandates of the Public Funds Investment Act. Because of the twin concerns of safety and liquidity, investment income is a relatively small source of city revenue. Transfers from Other Funds Many cities operate utilities and other optional services that generate substantial gross revenues. By law, the fees for such services must closely offset the cost of providing the service. In addition to the cost factor, cities are permitted to retain a reasonable “return,” which can then be transferred to the general fund. This return amounts to less than six percent of overall city revenue. Other Sources City revenue can take various other forms, including user fees for some services, amusement taxes, and hotel occupancy taxes. The Bottom Line The state could put municipal revenue at risk in at least two ways. First, the state could increasingly look to cities for revenue to fund state programs. When a state provides direct financial assistance to its cities, such trading of revenue might be workable. Texas is not such a state. Texas cities receive virtually no direct funding from the state, and cannot afford to fund the state’s obligations. Second, the state could erode the statutory authority under which cities raise their own revenue. While cities are indeed subservient to the state, city officials hope that the respectful nature of the fiscal relationship between Texas cities and the state will continue for years to come. Permits and Fees Cities may collect fees for issuing permits for building construction, environmental regulation, and for other services. Because cities incur costs to regulate in these areas, the permit fees must be tied to the cost of providing the service. Court Fines A city that operates a municipal court may impose fines for violations of traffic laws and city ordinances. Maximum HOW CITIES WORK • 10 • 2017 General Fund Expenditures The story about debt coming out of certain Austin think tanks goes something like this: the state has its fiscal house in order, but local governments are greedy, profligate spenders running up the taxpayers’ credit card. It’s a powerful narrative, but it isn’t true. A recent report issued by the Texas Bond Review Board shows total outstanding state and local debt for the past few years. From 2011-2015, total outstanding local debt increased from $192.74 billion to $212.44 billion, a 10.2 percent increase. Meanwhile, total outstanding city debt increased from roughly $63 billion to $70 billion, an 11 percent increase during the same time frame. For the same period, total outstanding state debt increased from $40.5 billion to $47.09 billion, a 16.2 percent increase. In other words, local debt (and city debt) is increasing at a significantly slower rate than state debt in recent years. At $212 billion, the amount of total local debt is certainly significant. However, only a small portion of that—$29 billion—is tax-supported city debt. Another $40 billion is city debt supported by the revenues of city utilities and not by property taxes. The largest portion is tax- supported school district debt, at $72 billion. School funding is a constitutional obligation of state government. The state has chosen to discharge that obligation by creating local school districts that levy the needed taxes. In reality, the $72 billion of school district debt ought to be thought of as a state debt because that’s how the state has chosen to fund schools. Shift that $72 billion over to the state debt column and a vastly different picture about which governments may be falling dangerously into debt emerges. In any event, the numbers show it clearly isn’t Texas cities. The recent focus on local debt (despite the fact that state debt is growing faster) likely relates to the reality that Texas state government, for better or worse, has gotten out of the business of building new state infrastructure with state dollars. Instead, locals are expected to pick up the slack for things like roads and reservoirs. Consider the recent water funding proposition that passed in November 2014 – it ultimately spends zero state dollars. Instead, through the use of a revolving fund, it encourages cities to take on debt to build our state’s important reservoirs and other water projects. This is a perfect example of the state essentially forcing locals to take on debt to do the state’s work, then blaming the same locals for having taken on the debt in the first place. Texas cities are willing to partner with state government to build infrastructure in our great state, but should not be considered scapegoats within that partnership. H Putting Local Debt in Context Police 30%Other Expenditures 32% Parks and Recreation 7%Streets, Highways and Bridges 7% Fire/EMS 19%Libraries 3% Municipal Court 2% HOW CITIES WORK • 11 • 2017 Everyone who loves living in Texas has his or her own list of things that make our state a great place. For some, it’s the people and our vibrant cities – along with the barbeque and breakfast tacos – that rise to the top of the list. One thing that’s often mentioned as an attraction for busi- nesses and people moving to Texas is our low taxes and, of course, no income tax. The latest state rankings from the Tax Foundation listed Texas as 46th in the amount of com- bined state and local taxes paid by residents. Even though the overall tax burden is low in Texas, there is one tax that has always drawn the most complaints from Texans: the property tax. A statewide poll last year found the property tax was the most unpopular of the major state and local taxes with 54 percent saying they were “dissatis- fied” with the amount of property taxes Texans pay. Last year, Lieutenant Governor Dan Patrick appointed a special Senate committee to examine property taxes in Texas and make recommendations for reforming and reducing property taxes. The committee has spent most of this year holding hearings in cities all across the state. In Texas, most of the revenue from property taxes, about 55 percent according to the State Comptroller, goes to school districts. Cities only collect about 16 percent of property taxes. But the Senate committee has refused to consider or even discuss ways to reduce school property taxes and they have pretty much ignored the fastest growing cate- gory of property taxes, which is taxes levied by the more than 2,000 special purpose taxing districts created by the legislature. Instead of focusing on the real causes of high property taxes in Texas, Lieutenant Governor Patrick and the chair CITY PROPERTY TAX CAP: DOESN’T ADDRESS THE REAL PROPERTY TAX PROBLEM IN TEXAS AND DOESN’T PROVIDE MEANINGFUL TAX RELIEF HOW CITIES WORK • 12 • 2017 of the Senate committee, Senator Paul Bettencourt of Houston, have made it clear they want to impose statewide restrictions on city property taxes and effectively put a state cap on the annual budgets of all Texas cities. Because their proposed solution – a four percent cap on city property tax revenue increases contained in S.B. 2 – does not address the real cause of property tax increases, it will not provide real tax relief. If a four percent cap had been in effect over the past decade, the average home- owner in San Antonio would have seen a reduction in city taxes of only $44 per year - or $3.67 per month. Any legisla- tor who tries to convince Texas homeowners that this is real tax relief will end up looking foolish. Remember, city property taxes, on average, make up only 16 percent of property tax bills statewide. And city property taxes are not “skyrocketing” as some state leaders want you to believe. From 2009 to 2014, the total amount of property taxes levied by Texas cities increased by only 19 percent while state revenue collections increased by 46 percent during the same period, according to the State Comptroller. The Senate committee has been a font of misleading information about city taxes. Earlier this year, Senator Bettencourt wrote in a column for a major daily: “In San Antonio between 2005 and 2014, city tax levies have grown 55 percent while median household income has grown only 22 percent.” That statement is true on its face but the comparison is misleading. “City tax levies” refers to the total amount of taxes on all property in the city and that amount increases from year to year as the population grows, as new areas are annexed into the city and as new construc- tion adds more homes and buildings to the tax rolls. San Antonio is one of the fastest growing major cities in the country so its total property tax collections will obviously increase from year to year. But Senator Bettencourt carried his misleading compari- son to the extreme by writing: “In other words, an average family faces a tax bill that is increasing two-and-a-half times as fast as income.” That qualifies as “pants on fire.” When a new office building is constructed in San Antonio and begins paying city property taxes, it increases the total amount of taxes levied and collected by the city but it does not increase the tax bill of the average family or any other family. Such attempts to mislead and scare Texans about the tax bills on their homes just distracts us and legislators from the real problem which is the way Texas depends on property taxes to pay for public education. The state legislature depends on high school property taxes to reduce the amount of state funds it has to spend on schools. A recent headline from the Texas Tribune tells the real story: “Rising local school property taxes ease state budget woes.” Under the state’s “Robin Hood” school finance scheme, 230 school districts were required to send part of their local property tax receipts to the state treasury this year. For example, this year the state “recaptured” more than $29 million in property taxes from the Alamo Heights School District which is about 40 percent of the taxes paid to the district. The Texas Education Agency has estimated that the amount of local property taxes sent to the state will increase from $3.7 billion in the current state budget to $5.1 billion in the next budget. The League is not an expert on the school finance system, but we do understand that the current system grew out of the need to equitably distribute education funding and that is an important goal. But when the legislature is using local school property taxes to balance the state budget, it explains why state lawmak- ers want to divert public attention from the school finance system and try to blame Texas cities for high property taxes. Imposing a statewide cap on city budgets will not solve the problem of high property taxes and it will create other serious problems. Public safety – police, fire and EMS – is the largest item in every city’s budget. A cap would prevent cities from hiring additional personnel, raising salaries and benefits, acquiring new technology (like body cameras) or dealing with under- funded pension systems. A cap would force cities to focus on funding basic, vital services and eliminate non-essential, non-mandated spending like the economic development incentives that helped attract the Toyota plant to San Antonio and thus would reduce job creation and damage the state’s economic growth. It would also make our traffic problems worse by limiting the amount of money cities vol- untarily contribute to state highway construction projects which amounts to well over $100 million per year. Decisions about city taxes and city budgets should con- tinue to be made by local voters and their locally elected officials. This obviously is working well as businesses and people from all over the world continue to flock to Texas cities because of the economic opportunities and quality of life they offer. Texans would be better served if state law makers focused their efforts on their own budget. H HOW CITIES WORK • 13 • 2017 REVERSE INTERGOVERNMENTAL AID: CITIES SUPPORT STATE PROGRAMS HOW CITIES WORK • 13 • 2017 HOW CITIES WORK • 14 • 2017 Regular readers of the Texas Municipal League’s Legislative Update newsletter will recognize this article. It first ran in 2008, and is updated annually. The 2015 state fiscal year numbers show that cities are still net donors of money to the state. The State of Texas, unlike almost all other states, provides virtually no financial assistance to its cities. State aid, defined as a grant made by the state to cities from revenue generated by the state, is practically non-existent in Texas. Research conducted by numerous entities over many years has shown this to be true. The most recent study, released in 2015 by the National League of Cities, found that Texas leads only Georgia, Oklahoma, and West Virginia in state aid to cities. State aid flows readily in other states, particularly in populous states. For instance, it is not uncommon for states to share state gasoline tax revenue with cities, or to split other sources of state general revenue with municipal governments. While city officials in Texas have seldom asked for state financial aid, they are increasingly aware of the numerous ways in which they are compelled to share city-generated revenue with the state in what can be described as a system of reverse intergovernmental aid. That’s not necessarily a problem, so long as the legislature continues to treat cities as partners in keeping Texas great. Of the numerous ways in which cities transfer revenue to the state, three stand out: 1. The state’s charge for administering the municipal sales tax. 2. “Local participation” in the cost of building and improving the state highway system. 3. State fees imposed on municipal court convictions. The State’s Charge for Administering the Municipal Sales Tax When a Texan purchases a product that is subject to the state and local sales tax, the merchant collects the entire tax due and remits it to the state comptroller. The comptroller, in turn, remits the local share back to the appropriate local government (city, metropolitan transit authority, county, and/or special district). For providing this service and for performing other administrative, enforcement, and reporting duties, the comptroller deducts two percent of the local share of the sales tax and deposits that amount in the state’s general revenue fund. The two-percent fee is high compared to the same fee in other states. Many states charge one percent or less; five states impose no charge at all. In Texas, the two-percent fee generated over $164 million in 2015, of which cities paid more than $107 million. In 2008, the Texas Municipal League (TML) undertook an effort to determine how much the comptroller’s office spends annually to provide sales tax services to local governments. The comptroller’s office informed TML that “(t)here can be no separate accounting of what costs are ultimately attributable to local tax administration that would not be arbitrary and potentially misleading.” A TML committee was then formed to try to estimate the cost of collection to the state. The committee’s estimate was at most $27.7 million per year, far less than the $107 million paid by cities, generating a “profit” of more than $79 million to the state. The comptroller’s baseline budget is in the neighborhood of $290 million per year. Thus, the total local government fee of more than $164 million is enough to cover almost 57 percent of the entire agency’s total expenses. Local Participation in State Highway Projects The best way to describe “local participation” is to quote from a state document titled “Background and Need for Partnering.” This state document makes the case that the Texas Department of Transportation (TxDOT) faces a funding shortfall because growth in population, vehicle- miles per capita, and total vehicle miles have grown at faster rates than growth in the highway system and growth in revenue available for highway projects. Those trends, according to the document, will continue. To help address this dilemma… TxDOT continues to seek additional ways to fund the state transportation program. For years, TxDOT has partnered with local public agencies to make transportation improvements on state highways. This local participation has come in many forms, including provision of right-of-way, financial contributions, maintenance agreements and other forms… Cooperative partnering between state and local agencies will be needed to meet future transportation needs. TxDOT will depend on local and regional leaders to provide both leadership and commitment to help carry projects forward…TxDOT is currently suggesting to local agencies that they consider increasing their participation in TxDOT projects in order to expedite scheduling of locally desired projects. HOW CITIES WORK • 15 • 2017 In short, “local participation” may become a “pay-to- play” system imposed by TxDOT on local governments that wish to see highway projects in their area move forward. How much do cities annually contribute in local participation? Over the last couple of years, cities pitched in more than $100 million in cash and much more in right-of-way donations and in-kind services each year. In addition, the state gasoline tax paid by cities accounts for many more millions of dollars paid by cities for the state transportation system. Here’s the bottom line. In most states, the state government makes grants to cities to help those cities build and maintain city streets. In Texas, city governments transfer municipal revenue to the state to help pay for the state highway system. State Fees on Municipal Court Fines Municipal courts in Texas collect funds on behalf of the state for a wide variety of state programs. These state programs range from the Criminal Justice Planning Fund to the Crime Victims’ Compensation Fund. In most cases, the fees are imposed on persons convicted of any criminal offense. For these collection efforts, cities are generally allowed to keep some small amount of revenue as reimbursement for the costs incurred to collect the fees and remit them to the state. Many city officials contend that state court costs adversely impact municipal courts in two ways. First, the state’s court costs are complicated to administer. While cities can keep a small percentage of the costs as an administrative fee, that amount is not sufficient to reimburse the cities for the bookkeeping and administrative problems connected with this function. Second, when setting an appropriate fine for an offense, a judge must consider the fact that the defendant will also be paying state court costs. As a result, municipal fine revenue is often lower than it would otherwise be because the judge has considered the state court costs when setting a defendant’s total fine. Municipal court clerks also point out that the state requires that in the event of a partial payment, the state court costs must be paid first before the city can keep any of the fine. This means that cities must do all the work collecting fines, but are not allowed to keep any money until the state court costs have been fully satisfied. In recent years, the number and amount of state fees collected by municipal courts have grown rapidly. For example, on a typical traffic offense conviction, a municipal court defendant must currently pay $84 in state-imposed fees before any city fine is collected. The following chart is a comparison of the present situation with fees imposed just 14 years ago. In many ways, municipal court collection of state fees is similar to the state’s collection of municipal sales tax. In each case, one level of government is processing a tax or fee levied by another level of government, is remitting it, and keeping a fee for providing those services. While there are similarities, there are also substantial differences. For example, the state doesn’t really “collect” the municipal January 2002 January 2016 Crime Victim Compensation $15.00 $15.00 Judicial/Court $ 2.00 $ 2.00 Personnel Training Fugitive Apprehension Fund $ 5.00 $ 5.00 Consolidated Court Costs $17.00 $17.00 Juvenile Crime/Delinquency $ 0.50 $ 0.50 (Prairie View A&M) Correction Management $ 0.50 $ 0.50 Institute (Sam Houston State) State Traffic Fine -- $30.00 Jury Pay -- $ 4.00 State Judges’ Salaries -- $ 6.00 Indigent Defense -- $ 2.00 Truancy Prevention Fund -- $ 2.00 Total $40.00 $84.00 HOW CITIES WORK • 16 • 2017 sales tax; it’s collected by the merchant. With regard to state fees on municipal court fines, however, a municipal court employee actually collects the fees and bears the brunt of any resulting fee-payer anger. Second, the state controls the level of the municipal sales tax, but cities certainly don’t control the level of state fees on municipal fines. So while cities can’t unilaterally raise the city sales tax without permission from the state, the state can (and frequently does) increase the amount of state fees that cities must collect and remit. How much state fee/fine revenue do municipal courts collect annually? For 2015, the amount was just over $217 million. Conclusion What’s the grand total amount of reverse intergovern- mental aid in Texas? After making various adjustments, the annual total is more than $250 million, just from these three sources of reverse intergovernmental aid. (Please note that simply adding the totals from the pre- vious sections yields a much higher amount. Certain adjustments were made to that number in relation to sales tax administration and court fees to arrive at $250 million.) And why does this transfer of revenue from cities to the state matter? It matters because these transfers of resources result in either reductions in municipal services or increased local fees or taxes—most often the local property tax, which is the only general-purpose municipal tax that a city council can easily raise or lower. Texas taxpayers remain concerned about property taxes. It is clear that some of the pressure on the property tax results from reverse intergovernmental aid, a system under which governments that must depend on the property tax (cities) transfer revenue to a level of government (the State of Texas) that has many revenue sources. It’s easy to grasp why some state legislators are tempted to turn to cities and ask them to generate revenue for the state. It’s much harder to understand why some of those same legislators have been trying for several years to limit the revenue-generating capacity of cities by placing caps on the municipal property tax. H HOW CITIES WORK • 17 • 2017 The building code of 4,000 years ago was simple but brutal. According to an ancient Hammurabi code, “If a builder builds a house and does not make its construction firm, and the house collapses and causes the death of the owner, that builder shall be put to death.” The first building codes in the United States, established in 1625, addressed fire safety and specified materials for roof coverings. In 1630, Boston outlawed wooden chimneys and thatch roof coverings. In the late 1770s, George Washington recommended height and area limitations on wood frame buildings in his plans for the District of Columbia. In 1788, the nation’s first-known formal building code was written in Winston-Salem, North Carolina. Larger cities in the United States began establishing building codes in the early 1800s. Today, most populous cities in Texas have adopted modern construction codes. The professionals enforcing current building codes in Texas maintain the vigilance of the ancient code of Hammurabi, but with a significantly more civilized approach that emphasizes knowledge and education. Building code regulations enforced in Texas cities ensure minimum standards for safe homes, schools, workplaces, and other buildings. Scott McDonald, the City of Amarillo’s director of the Office of Strategic Initiatives and the Building Officials Association of Texas representative on the Texas Municipal League Board of Directors, points out that “during these tough economic times, the enforcement of construction codes is even more important.” According to McDonald, “The active enforcement of construction codes not only provides a minimum standard for the structural and life safety components of the homes, schools, churches, and businesses, it can also provide energy efficiency standards.”  “Buildings constructed to meet updated codes and energy efficient standards protect property values for years into the future, and they provide a sustainable stock of housing and commercial options in a community,” he adds. Prior to 2001, Texas had no statewide standard for any residential or commercial buildings. Each city chose which, if any, building codes to adopt for construction within the city limits, and each city amended its code to meet local concerns. In 2001, the Texas Legislature adopted the International CRACKING THE CODE: CITIZEN SAFETY AND PROTECTION OF PROPERTY VALUES HOW CITIES WORK • 18 • 2017 Insurance 8% Taxes 25% Municipal Fee (fees are embedded in principal and interest) 1.8% of monthly mortage costPrincipal and Interest 67% Residential Code and the National Electrical Code as the standard building codes for residential construction in Texas cities. Under the statute, cities are authorized to make amendments to these codes to meet local concerns. The legislature also adopted requirements that homes and buildings meet energy conservation standards. In 2005, the Texas Legislature adopted the International Building Code for most commercial and multi-family construction, but nothing in the bill prohibits a city from adopting local amendments to the International Building Code. Later sessions included revisions to the International Energy Conservation Code. Uniform building codes can make construction and inspection easier and more cost-effective. However, because Texas is a vast state with many different climates and topographical features, uniform codes serve only as standards, and each city is allowed to amend codes to meet that city’s needs. In 2009, the legislature added procedures that larger cities must follow when reviewing or amending their building codes. Under most cities’ codes, a person who wishes to build a Chart 1 The Role of Municipal Fees in Monthly Mortgage Costs (Average of Eight Representative Texas Cities, 2003)* structure must apply for a permit. City officials review the necessary information and issue a permit if the structure complies with that city’s regulations. The amount of time needed to review the permit application varies from city to city and from project to project based on several factors, including the complexity of the city’s code and the project. Because of many issues affecting each individual city and building project, a blanket requirement that a permit be issued in a certain amount of time would place an untenable burden on city building officials. Similarly, a city is not limited by statute as to the amount the city can charge for building and related permits. Fees vary widely based on several factors, including the number and type of inspections and the sophistication of the city’s permitting process. While some have claimed that city fees are responsible for the rising costs of housing in Texas, a survey commissioned by the Texas Municipal League shows that building and inspection fees constitute only a tiny fraction of a homebuyer’s mortgage payment (see Chart 1). H HOW CITIES WORK • 19 • 2017 Texas cities are the first—and often only—engine of economic development in the state. Until the controversial Texas Enterprise Fund was created, only cities routinely granted incentives necessary to attract new business to the state. With the Enterprise Fund up and running, larger cities have partnered with the state to attract such major developments as a Texas Instruments facility and a Toyota plant. Smaller cities are usually on their own to attract business. Until the late 1980s, using city resources to attract business was arguably unconstitutional. In 1987, Article 3, Section 52-a of the Texas Constitution was added to make it clear that economic development serves a public purpose. From that point on, three major channels of city economic development began to open for cities: Chapter 380 agreements; the Type A/Type B economic development sales tax; and property tax incentives. Chapter 380 Agreements Chapter 380 of the Local Government Code authorizes cities to establish programs for grants and loans of city resources for economic development purposes. Though it is the broadest economic development tool for cities, Chapter 380 is often overlooked in favor of other incentives. Cities using 380 agreements must be careful not to simply present a blank check to business and industry prospects. A program providing for checks and balances on a business’s use of Chapter 380 money is required by law. Examples of these checks and balances might be performance agreements tying grant money to the creation of a certain number of jobs, or requiring the business to stay in the city for a certain length of time. Type A/Type B Economic Development Sales Tax More than 500 Texas cities have adopted a Type A or Type B economic development sales tax. Some cities have both taxes. The tax was created in 1989 and authority to spend Type A/Type B tax money gradually expanded over the next decade to cover all forms of commercial, retail, and traditional industrial economic development. An important bill, H.B. 2912, passed in 2003. H.B. 2912 scaled back the authority of some Type A and Type B economic development corporations. Following the passage of H.B. 2912, the sales tax could no longer be spent on retail, commercial, or service industries. Instead, the tax could be spent on basic industrial and manufacturing businesses, among a limited amount of other authorized expenditures. The authority for some, but not all, Type B corporations to engage in retail, commercial, and service economic development was restored in 2005. The Type A/Type B sales tax remains an important economic development tool for many cities that have the available land and workforce to attract industry. Additionally, instead of a Type A or Type B economic development sales tax, some cities have adopted a municipal development district (MDD) sales tax that may be levied in a specified area in the city or in the city’s extraterritorial jurisdiction. The MDD sales tax closely resembles the traditional economic development sales tax, but the scope of projects that may be funded with an MDD tax is slightly broader. Property Tax Incentives Property taxes may be directly tapped to promote economic development in two ways: tax abatement and tax increment financing. Both function either by forgiving (abatement) or by dedicating to improvements (increment financing) any net increase in property tax revenue as a result of a business moving to town or upgrading existing facilities. Property tax incentives can never forgive or decrease the present taxable value of the land and facilities upon which they are granted. This key feature of the incentives—that all current taxes must continue to be paid—belies the common stereotype that tax incentives are “giveaways.” On the contrary, when done properly, tax incentives create new taxable value that never would have come to town absent the incentive, thus lowering the overall tax burden on other properties. Tax and Appraisal Caps Threaten Economic Development Proposals to cap, limit, or freeze municipal property tax revenue or property appraisals will have the unfortunate side effect of undermining the rationale behind many economic development tools. While the purpose of economic development is often to put new taxable value on the rolls, tax caps will ensure that this cannot happen. Tax and appraisal caps restrict the very growth in appraised value that tax incentives are designed to generate, undermining the important role that cities play in facilitating job creation in Texas. H CITY ECONOMIC DEVELOPMENT HOW CITIES WORK • 20 • 2017 Collection and disposal of garbage is one of the most recognizable and widely used city services. This vital service protects the public health and environment. A city can choose to operate its own garbage collection and disposal system or grant a franchise to a private company (or companies) to handle those tasks. Waste generation is a function of two variables – population and economy – both of which are growing in Texas. In Texas, “municipal solid waste” is defined to include waste resulting from or incidental to municipal, community, commercial, institutional, and recreational activities including garbage, rubbish, ashes, street cleanings, dead animals, abandoned autos, and all other solid waste other than industrial solid waste. According to the Texas Commission on Environmental Quality (TCEQ), Texans CITIES KEEP THE GARBAGE FROM PILING UP disposed of approximately 32.37 million tons of municipal solid waste in 2014. That’s about 6.58 pounds per person per day, an increase over the 2013 rate of 6.33 pounds. During this period, the state’s population increased 1.9 percent. HOW CITIES WORK • 21 • 2017 Texas Total and Per Capita for MSW Landfill Disposal Source: TCEQ, Municipal Solid Waste in Texas: A Year in Review - FY2014 Data Summary and Analysis (October 2015) Did You Know? Texas cities have been authorized to provide, or contract with a private company to provide garbage collection services within city limits since 1971. Texas law recognizes that this authority is important to preserve the public health and safety of all the residents of a city. Uncollected garbage can easily result in various health problems. This law routinely comes under attack from certain groups, but the bottom line is that timely, efficient, and effective garbage collection through city service prevents problems from occurring. Open piles of garbage attract disease- carrying rodents and insects and often wash into drainage systems where they contribute to floods and waterborne disease. Where Does It Go After I Place It at the Curb? How Much Does This Service Cost? After household garbage is collected, it often goes to a facility known as a transfer station, where waste is consolidated into larger loads for shipment to its ultimate destination: a landfill or a waste-to-energy plant. Recyclables go to processing facilities where they become raw materials for new products. In 2013, 52.8 percent of municipal solid waste generated in the U.S. was ultimately disposed of in landfills; 12.9 percent was disposed of through waste incineration with energy recovery; and 34.3 percent was recovered for recycling or composting. According to data collected by the National Solid Wastes Management Association, the typical U.S. monthly household bill for waste collection in 2003-04 ranged between $12 and $20 per month. Collection and disposal costs have gone up in some commu- nities for various reasons including the rising costs of fuel and equipment, as well as the rising costs of complying with new envi- ronmental regulations. Despite these increases, residential trash collection and disposal is still a bargain for U.S. consumers when compared to other utilities and services like cellular phone and cable television service. Sources: EPA, Advancing Sustainable Materials Management: 2013 Fact Sheet (June 2015) National Solid Wastes Management Association, Residential Trash Collection: An Essential Service at a Bargain Price Cities have statutory authority to offer recycling programs to their citizens. Recycling helps reduce the production of solid waste that must be disposed of by a city and reduce the costs of operating a municipal solid waste disposal system. Recycling may also create more jobs than disposal. Of course, statewide recycling mandates wouldn’t take into account the various factors that make different parts of Texas unique. Recycling should be implemented locally in a way that is appropriate for each city. H Recycling of Municipal Solid Waste (MSW) in the United States Source: EPA, Advancing Sustainable Materials Management: 2013 Fact Sheet (June 2015) 1960-2013 HOW CITIES WORK • 22 • 2017 PUTTING THE “WORKS” IN PUBLIC WORKS Streets and Traffic Citizens expect to travel easily from one place to another. They want their drive to work to be problem-free. A city’s public works department makes that possible. Public works employees are constantly striving to keep driving conditions safe by building, maintaining, and repairing city streets. In addition, public works employees maintain and repair street lights, sidewalks, and other infrastructure. The task of funding the maintenance of city transportation facilities, which benefits the entire state’s economy, is a difficult one for Texas cities. Unlike many other states, Texas cities receive no state aid to offset the benefits that city streets provide. Other states return a portion of vehicle registration fees or gasoline taxes to cities for this purpose, but Texas doesn’t. However, the Texas Legislature has granted Texas cities the authority to impose a street maintenance sales tax to be used to maintain city streets. Many cities have adopted this tax. Right-of-Way Authority and Utilities Many Texas cities are experiencing an unprecedented level of activity in their streets and rights-of-way (ROWs). This is the result of an explosion in new communications technology, the growth of competition in the telecommunications industry, and the expansion of electric distribution lines to newly developing areas. With this activity sometimes comes a detrimental effect on public safety, traffic flow, city infrastructure, and efficient city administration. Major water lines have been breached during excavations. Traffic in many cities has become so heavy and ensnarled due to activities in the ROWs that the stories have been front- page news. Other cities have experienced the cutting of utility lines. City streets are being barricaded and torn up repeatedly, significantly shortening their life expectancies and suitability for traffic. Additionally, some utilities have taken the position that a city cannot require a utility to relocate facilities in the ROWs at their own expense for public works projects such as drainage or street construction. That position clearly contravenes the public interest, as well as established law, because the primary purpose of streets and ROWs is transportation. The ability of a city to adequately regulate activities in its ROWs is paramount to the safety of residents. Right-of-Way Compensation Texas law prohibits a city from allowing the use of its ROWs for free. Thus, cities collect compensation in the form of rent (based on various state and federal statutes) from utility providers such as video, telecommunications, and electric companies. Some have attempted to characterize this rent as a “tax.” That characterization is incorrect. Rather, the rent is a cost HOW CITIES WORK • 23 • 2017 of doing business for a utility that uses a city’s property. (Just as a utility would have to rent property or obtain an easement from a private landowner.) Utilities such as satellite providers do not pay the rent when they have no facilities on city property. In any case, the compensation is authorized by law and provides significant revenue for cities. Local Participation: Cities Help Pay for State Highways The best way to describe “local participation” is to use a quote from a state document titled “Background and Need for Partnering.” This state document makes the case that the Texas Department of Transportation (TxDOT) faces a funding shortfall because growth in population, vehicle- miles per capita, and total vehicle miles have grown at faster rates than growth in the highway system and growth in revenue available for highway projects. Those trends, according to the report, will continue. To help address this dilemma “TxDOT is currently suggesting to local agencies that they consider increasing their participation in TxDOT projects in order to expedite scheduling of locally desired projects.” In short, “local participation” may become a “pay-to-play” system imposed by TxDOT on local governments that wish to see highway projects in their area move forward. Cities pitch in more than $100 million annually in cash and much more in right-of-way donations and in-kind services. In addition, the state gasoline tax paid by cities accounts for many more millions of dollars paid by cities for the state transportation system. FEDERAL STORM WATER MANDATES AND MUNICIPAL DRAINAGE UTILITIES Federal Storm Water Mandates During rainfall, storm water runs off impervious areas such as paved streets, parking lots, and rooftops. The storm water contains pollutants that may adversely affect water quality. Thus, the federal Clean Water Act requires cities to obtain a permit from the United States Environmental Protection Agency (EPA) before allowing the discharge of storm water from a storm sewer system into rivers and lakes. In Texas, the EPA has delegated the administration of the storm water permitting program (known as the “National Pollution Discharge Elimination System” or “NPDES”) to the Texas Commission on Environmental Quality (TCEQ). Most medium and large cities in Texas currently operate under a “Phase I” permit. These cities include Dallas, Houston, San Antonio, Austin, Abilene, and several others. Beginning in the early 1990s, these cities were required to develop a storm water management program that would reduce storm water pollutants. Many other Texas cities are subject to the “Phase II” general permit. The Phase II program began in 1999 and requires more than 400 of the state’s smaller cities to develop storm water management programs as well. At a minimum, the programs must include public education and participation, detection of unwanted discharges into sewers, construction site storm water runoff controls, and pollution prevention measures. In addition, cities operating under the Phase II permit must issue an annual report to the TCEQ that includes information regarding the status of compliance with permit conditions, an assessment of the appropriateness of best management practices, a description of progress toward reducing the discharge of pollutants to the maximum extent practicable, the measurable goals for each of the minimum control measures, and an evaluation of the program’s progress. TCEQ, in compliance with federal law, reissued the Phase II general permit for small cities in 2013. All Texas cities subject to the NPDES program are required to identify and apply a number of best management practices to reduce storm water pollution. Obviously, the monetary costs of implementation of this unfunded mandate are high. H Municipal Drainage Utilities As a means to protect citizens from the devastating effects of flooding and to offset the costs of unfunded federal storm water mandates, the Local Government Code authorizes Texas cities to establish municipal storm water drainage utilities. The utilities are generally funded by fees on properties that are benefited by the improvements. The fees must be nondiscriminatory and must be directly related to drainage. In 2003, the Texas Legislature enacted a law that exempted state colleges and universities from paying municipal storm water utility fees. The rationale for that exemption (presumably) was that a taxpayer-funded entity shouldn’t be required to pay a fee to another taxpayer-funded entity. In 2007, private universities sought and obtained the same exemption. The exemption of private colleges and universities has had detrimental effects on some cities. These private entities benefit from the flood prevention and storm water control provided by storm water utilities, and both public and private universities generally have very large areas of impervious cover that contribute to runoff. The exemptions have resulted in a cost shifting to residents and businesses. HOW CITIES WORK • 24 • 2017 The population in Texas is expected to grow to 50 million by 2070. Additionally, by 2070, municipal water use is expected to constitute the highest demand of all water users. Providing safe, clean, and reliable drinking water to meet this demand presents a challenge for Texas cities. Investments in drinking water and wastewater systems protect public health, aid in protecting the environment, provide fire protection, and ensure that there is an adequate water supply to support the state’s growing population, businesses, and industries. Adequate water supply is often a determining factor in economic development opportunities. Businesses and industries are going to choose locations with a stable and sufficient water supply over those states or regions without quality water supplies. A recent wastewater survey found that America’s drinking water systems alone will have to invest up to $322 billion over the next 20 years in order to keep up with the growing demand for drinking water and the nation’s aging drinking water infrastructure. Over the next decade, Texas cities will have to expend millions of dollars on waste and wastewater systems to keep pace with the tremendous population growth in Texas. In addition to meeting the growing demands for water services and replacing aging infrastructure, the investment is also necessary to ensure compliance with the federally-mandated Clean Water Act and Safe Water Drinking Act. THE GROWING NEED FOR WATER AND WASTEWATER SERVICES Many water utilities in Texas were built decades ago. Some systems have come to the end of their useful life span, and upgrades may no longer be sufficient. Some cities are even faced with having to completely replace these essential utilities. Upgrading or replacing a water and wastewater system is an extremely expensive undertaking that requires the commitment of large sums of capital investment. However, the return is generally well worth the large expenditure. See Funding the State Water Plan article on page 28 for how some of these needed improvements should be funded. Municipal wastewater treatment plants prevent billions of gallons of pollutants from reaching our rivers and lakes each year. In addition, the provision of safe drinking water to our suburban areas has allowed our state to grow at unprecedented levels. Unfortunately, many Texas cities are struggling to keep up with the costs of complying with increasingly stringent federally and state mandated regulations. The budget pressures associated with meeting these new standards or facing stiff fines from regulating agencies often force cities to delay needed expansion of their water utility systems. H HOW CITIES WORK • 25 • 2017 TEXAS H Population Projections WATER DEMAND H Projections Source: Texas Water Development Board, State and Regional Population Projection for 2020-2070 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 2010 2020 2030 2040 2050 2060 25,145,561 29,650,388 33,712,020 37,732,422 41,924,167 46,323,725 2010 population is the ocial population count from the U.S. Census Bureau 2020-2060 represent projected population used in the 2012 State Water Plan. 02,000,0004,000,0006,000,0008,000,00010,000,000 2010 2020 2030 20402050 2060 IRRIGATIONLIVESTOCKMANUFACTURINGMININGMUNICIPALSTEAM ELECTRIC POWER12,000,000 Water demand projections for the livestock and mining water use categories are similar enough to be indistinguishable at this scale. 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 2010 2020 2030 2040 2050 2060 25,145,561 29,650,388 33,712,020 37,732,422 41,924,167 46,323,725 2010 population is the ocial population count from the U.S. Census Bureau 2020-2060 represent projected population used in the 2012 State Water Plan. 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 2010 2020 2030 20402050 2060 IRRIGATION LIVESTOCK MANUFACTURING MINING MUNICIPAL STEAM ELECTRIC POWER 12,000,000 Water demand projections for the livestock and mining water use categories are similar enough to be indistinguishable at this scale. HOW CITIES WORK • 26 • 2017 The heart of the water conservation issue is that, while everyone agrees that water conservation is important for Texas, city officials have traditionally resisted the imposi- tion of a uniform, statewide program that does not take into account the needs, financial and otherwise, of different parts of the state. In past years, the legislature has enacted numerous bills related to statewide water conservation standards. The requirement that cities draft, implement, and submit drought contingency and water conservation plans comes from bills passed by the legislature in recent years. Additionally, the legislature created the Water Conservation Advisory Council (WCAC) tasked with, among other responsibilities, developing numerous Best Management Practices (BMPs), including municipal BMPs, which are available at www.savetexaswater.org. Another conservation issue relates to mandatory conser- vation water rates. Cities have the exclusive authority to set water rates within city limits. Though there has been proposed legislation in the past related to water rates, no such legislation has passed. The ability to set water rates remains with each city’s governing body, which comports with the Texas Municipal League’s members’ view that local control is best. In recent years, bills have passed requiring that the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ) develop a uni- form, consistent methodology and guidance for calculating WATER CONSERVATION HOW CITIES WORK • 27 • 2017 water use and conservation to be used by a city in develop- ing water conservation plans and preparing certain reports required by state law. The methodology and guidance include: (1) a method of calculating total water use, includ- ing water billed and nonrevenue water used; (2) a method of calculating water use for each sector of water users; (3) a method of calculating total water use by a city in gallons per capita per day; (4) a method of classifying water users within sectors; (5) a method of calculating water use in the residential sector that includes both single-family and mul- tifamily residences, in gallons per capita per day; (6) a meth- od of calculating water use in the industrial, agricultural, commercial, and institutional sectors that is not dependent on a city’s population; and (7) guidelines on the use of ser- vice populations by a city in developing a per-capita-based method of calculation, including guidance on the use of permanent and temporary populations in making calcula- tions. The resulting “Guidance and Methodology for Reporting on Water Conservation and Water Use” is intended to guide water providers through the process. This guidance is avail- able at http://www.twdb.state.tx.us/conservation/doc/ SB181Guidance.pdf. While water was one of the main topics of the 2013 legislative session, fewer water-related bills were filed in the 2015 legislative session. Leading up to the 2017 legislative session, the only interim charge relating to water conservation was for the House Natural Resources Committee and the Committee on Agriculture and Livestock to examine current water delivery methods and water conservation goals for agricultural use and evaluate whether there are more efficient and effective water-usage management practices that could be employed in the agricultural industry.* Water restrictions, conservation education, and higher prices have achieved the result of Texans using less water. According to the League’s survey, the average monthly residential consumption is decreasing each year (with a few outliers), averaging a total of 6,404 gallons in 2016 compared to 8,581 in 2002. Which method of addressing water shortages—restricting usage, repairing/replacing inefficient infrastructure, or scarcity pricing—is the best?    Whatever a city council decides is right for its city is usually the correct method.  In other words, local control is the best method.    Interestingly, one side effect of lower use is a loss of millions of dollars in anticipated revenue to some cities. For example, the City of Wichita Falls has reported that conservation efforts have resulted in water revenue down nine million dollars from fiscal year 2012-2013 to fiscal year 2013-2014. Anticipated water revenue is generally Cities offer a variety of different programs to encourage water conservation. For example, the City of San Marcos offers: Tiered Water Rate System Water rates increase as consumption increases. Rebate/Incentive Programs The City of San Marcos provides rebates to those customers who purchase and install qualifying water conserving items. Irrigation System Evaluations Free irrigation system check-ups for both residential and commercial water customers. Indoor Water Surveys Free indoor water surveys to customers who would like to save water and money. City staff will evaluate your home or busi- ness to make sure you are using water as efficiently as possible. Public and School Education Programs budgeted to pay for fixed or infrastructure costs and in certain cases, to pay off debt. In some cases, the debt was issued to finance new wastewater plants or water-related projects. Each city has a unique perspective and resulting priorities for expending resources to save water. Climate, population density, availability of water resources, and the ratio of industrial to residential water use in the city are but a few of the various factors that affect conservation decisions across the state. Water conservation continues to be a major issue in many cities in Texas. Cities should continue implementing the water conservation strategies appropriate for their specific community. H *Interim Charge House Natural Resources: Determine the sources of water used by Texans in the production of food and fiber, and, and determine the impact of crop insurance requirements on producers. (Joint charge with the House Committee on Agriculture & Livestock) HOW CITIES WORK • 28 • 2017 The Texas State Water Plan is designed to provide for the orderly development, management, and conservation of water resources in the state. The plan is intended to provide that sufficient water will be available at a reasonable cost to ensure the public health, further economic development, and protect the agricultural and natural resources of the entire state. The State Water Plan is the culmination of a regional planning process that the Texas Legislature established in 1997.  Every five years, 16 planning groups – one for each regional water planning area – assess the projected population, water demands, and water supplies in their area for the next 50 years.  Each planning group holds public hearings and meetings to develop its regional water plan, which lists the water supply projects needed to meet their water shortages. Once a regional water planning group adopts its region- al water plan, the plan is then sent to the Texas Water Development Board (TWDB) for approval. The TWDB ulti- mately compiles the information to make the state water plan. The most recent iteration is the 2017 State Water Plan, which was adopted on May 19, 2016. The 2017 State Water Plan tells us that our population will continue its rapid growth. Texas’ population is expected to increase more than 70 percent between 2020 and 2070, from 29.5 million to 51 million, with more than half of this growth occurring in Regions C and H. Water demands are projected to increase less significantly, by approximately 17 percent between 2020 and 2070, from 18.4 million to 21.6 million acre-feet per year. Texas’ existing water supplies — those that can already be relied on in the event of drought — are expected to decline by approximately 11 percent between 2020 and 2070, from 15.2 million to 13.6 million acre-feet per year. Water user groups face a potential water shortage of 4.8 million acre-feet per year in 2020 and 8.9 million acre-feet per year in 2070 in drought of record conditions. FUNDING THE STATE WATER PLAN HOW CITIES WORK • 29 • 2017 The 2017 State Water Plan provides a roadmap for how to address the water needs that accompany our expected growth by identifying water management strategies and their associated costs for communities all across the state. Approximately 5,500 water management strategies that are recommended in the 2017 plan would provide 3.4 million acre-feet per year in additional water supplies to water user groups in 2020 and 8.5 million acre-feet per year in 2070. The estimated capital cost to design, construct, and imple- ment the approximately 2,400 recommended water man- agement strategy projects by 2070 is $62.6 billion. Water management strategies can include conservation, drought management, reservoirs, wells, water reuse, desalination plants, and others. The information in this plan is critical to ensuring that Texas has adequate and affordable water supplies both now and in the future. If strategies are not implemented, approxi- mately one-third of Texas’ population would have less than half the municipal water supplies they will require during a drought of record in 2070. If Texas does not implement the state water plan, estimated annual economic losses result- ing from water shortages would range from approximately $73 billion in 2020 to $151 billion in 2070. For more information on the 2017 State Water Plan as well as resources on how to get involved with your regional planning group and financial assistance for cities, visit the Texas Water Development Board at http://www.twdb.texas.gov/. H Regional Water Planning Areas HOW CITIES WORK • 30 • 2017 With the exception of construction, repair, and maintenance of the state highway system, infrastructure in Texas is primarily the responsibility of local governments. Streets, bridges, drinking water systems, and waste- water facilities are funded by local entities. Although some loans and very limited grant funds are avail- able for some water projects, the fact remains that city streets, water sys- tems, and wastewater utilities are built and maintained with city-generated revenue. Texas cities are on their own when it comes to paying for these infrastruc- ture projects. The paucity of state aid to Texas cities is well-documented. While most states (including virtually all of the most populous states) pro- vide substantial financial assistance to cities to help pay for infrastructure, such grant programs generally do not exist in Texas. In fact, it can be argued that funds flow the other way—from local entities to the state. In recent years, the Texas Department of Transportation received almost $100 million annually in revenue called “Local Participation” from cities alone. (Other entities provide local participation funds as well.) This is city money that helps pay for improvements to the state highway system. Chart 1 Cost-Saving Measures Percent of All Cities 2007 2009 2011 2012 2013 2014 2015 2016 Hiring freeze during past two years 4.9% 8.7% 17.9% 15.8% 7.6% 4.4% 3.8% 2.9% Wage freeze during past two years 2.9% 5.1% 23.8% 16.2% 5.9% 4.2% 3.4% 3.5% Reduced services 2.5% 4.0% 6.7% 7.6% 3.2% 2.6% 1.3% 2.5% Eliminated services 1.4% 2.2% 2.9% 3.4% 1.7% 1.5% 1.3% 0.6% Reduced salaries 0.8% 1.0% 1.7% 1.7% 1.3% 0.9% 0.4% 0.4% Laid off employees 5.9% 6.6% 10.7% 10.2% 4.5% 3.8% 3.0% 1.4% Postponed capital spending 49.4% 50.0% 52.4% 43.1% 36.9% 29.7% 36.0% 28.7% THE CONNECTION BETWEEN INFRASTRUCTURE AND REVENUE CAPS HOW CITIES WORK • 31 • 2017 The answer is yes. The evidence is in the Texas Municipal League’s biennial fiscal conditions survey. When asked which cost-cutting measures were employed to balance the current-year budgets, cities consistently identify “postponed capital spending” as the most com- monly used tactic. (Please see Chart 1 on page 30.) Much of the local revenue that is used to fund infrastruc- ture projects comes from the property tax. That fact raises an interesting ques- tion: if the Texas Legislature passes legislation that limits or caps municipal property tax revenue, will municipal investment in infrastructure decrese? Chart 2 If Revenues Remain Constant or Diminish, What Will Cities Do? Percent of All Cities First Response 2007 2009 2011 2012 2013 2014 2015 2016 Postpone capital spending 39.5% 45.0% 22.6% 24.6% 24.1% 27.6% 28.5% 29.4% Impose hiring freeze 19.1% 18.1% 42.3% 32.7% 32.1% 26.6% 22.0% 16.4% Increase user fees 21.1% 17.7% 12.4% 10.6% 10.9% 10.2% 14.5% 10.5% Raise property tax 10.0% 10.6% 6.2% 4.2% 8.2% 7.6% 8.0% 6.6% Impose wage freeze 3.4% 2.4% 10.6% 9.3% 7.3% 6.7% 6.5% 5.1% Similarly, when asked to identify how they would respond to dimin- ishing revenue in future years, city officials almost always select “post- pone capital spending” as the top choice. (Please see Chart 2.) Here’s the bottom line: Any legislation that would place new restrictions on the ability of cities to generate prop- erty tax revenue will result in reduced spending on infrastructure, particularly city streets and bridges. Those spend- ing cuts will harm regional economies and the state’s economy. Without municipal investment in the infrastructure needed for industri- al and commercial activity, the state’s job creation and economic growth will be severely damaged. And the most certain way to limit the construction and maintenance of infrastructure is to restrict the growth of tax revenue. H HOW CITIES WORK • 32 • 2017 Ensuring that citizens have a safe city in which to live and work is of the utmost importance to the state. Cities strive to promote the health, safety, and welfare of all of their citizens. Unfortunately, providing a high level of public safety does not come cheap. For most citizens, it is almost an automatic response to turn to government in times of need. In cities, that translates to spending tax dollars on public safety services. Cities expend considerable resources anticipating what the public at large generally doesn’t want to think about—emergencies. Public safety includes traditional fire protection, such as fighting house fires; traditional police protection, such as officers patrolling streets for traffic violations and criminal activity; and responding to numerous 911 calls. However, in today’s world, the task of providing public safety has expanded as threats have increased and citizen expectations have grown. Public safety now encompasses: • hurricanes and other natural disasters; • preventing and responding to terrorist threats and attacks; • federal homeland security mandates; • emergency medical services (EMS) and ambulance THE HIGH COST OF PROVIDING PUBLIC SAFETY services; • border security; • hazardous materials response; • response to pandemic disease and other public health disasters; • drug task forces; and search and rescue, along with a host of other activities. As the list illustrates, police, fire, and EMS are now expected to protect our homeland and be ready to respond to terrorist attacks with chemical, biological, and weapons of mass destruction. That’s a tall order, considering the cost of standard public safety training and equipment. For example, it costs approximately $2,000 to provide basic protective equipment for a single structural firefighter. Of course, the equipment needed to enter a burning building is specialized and much more costly than the standard issue equipment. (See firefighter diagram.) In addition to the expensive equipment necessary for firefighters to safely carry out their jobs, they must also receive continuous training. This training often comes with a high price tag and must be supplemented on an ongoing basis. H HOW CITIES WORK • 33 • 2017 Texas Cities Assist with Disaster Response and Relief Over the past several years, cities have played a major role in disaster response, relief, and rebuilding efforts as hurricanes, wildfires, and tornadoes hammered Texas. According to Texas Rebounds, a publication of the governor’s office, Hurricanes Ike and Dolly caused the City of Houston to sustain local government infrastructure damages of more than $100 million. The City rushed to repair vital infrastructure in the days following the storm, dedicating countless resources to restoring necessary services to citizens. The City of Galveston, also hard-hit by Hurricane Ike, expended $500 million to repair and replace housing, city buildings, and utility infrastructure, not to mention millions more to repair roads, revitalize the business community, and much more. Some of these expenditures were ultimately reimbursed by the federal government, but the ability of cities to react quickly and decisively during and after a natural disaster is an invaluable service. In 2013, the City of West responded to a fertilizer plant explosion that devastated its city. The City not only paid the price of emergency response in dollars, but also lost many of its volunteer firefighters, one being the city secretary. Disasters like the West explosion can lead to legislation that seeks to impose additional mandates on cities, but without commensurate funding. In 2014, cities like Dallas have already been asked to assist with the costs of Ebola response. The costs for these types of emergencies will continue to fall on cities because urban populations are often the hardest hit by public health emergenciesTotal cost of Firefighter Equipment $7,848 Helmet and hood $381 Self-contained breathing apparatus $4,268 “PASS” alarm to monitor firefighter while deployed $495 Heat-reflective, fire-resistant coat $1,200 Firefighter pager $459 Heat-reflective, fire-resistant pants $600 Puncture-proof, heat-resistant boots $358 Gloves $87 Median Salary for Police Officer and Firefighter Police Patrol Officer: $60,270.00 plus benefits annually Firefighter: $46,870.00 plus benefits annually Source: US Bureau of Labor HOW CITIES WORK • 34 • 2017 Texas cities, unlike the cities of other states, don’t receive general state financial assistance or state revenue-sharing. They don’t ask the state to help fund the facilities and services on which regions and the entire state rely. But cities do ask that their authority to take care of themselves not be eroded. The power to annex is one of those key authorities, and to lose it would not only be very detrimental to cities, it would also be detrimental to the economy of the entire state. Nonetheless, annexation powers have routinely come under attack in the legislature. The residents of unincorporated areas rarely favor being brought into a city involuntarily, and any city that has gone through a major annexation is well aware of how controversial the process can become. Rural landowners and others have regularly turned to their legislators for relief from city expansions, with the result that bills to curb unilateral annexations have surfaced in every session for the past 40 years. ANNEXATION: IT ISN’T A FOUR-LETTER WORD Texas cities are the fastest-growing in the United States. Evidence of the importance of unilateral annexation exists in other states where cities do not have that power. The broad power of Texas cities to annex has permitted cities in Texas to share in the benefits of growth in the surrounding areas. According to many national authorities, this annexation power is the primary difference between the flourishing cities of Texas and the declining urban areas in other parts of the nation. If San Antonio, for example, had the same boundaries it had in 1945, it would contain more poverty and unemployment than Newark, New Jersey. Without annexation, Texas cities would languish economically, as do northern cities with limited or no annexation power. A 2003 report issued by The Perryman Group, a well- respected economic and financial analysis firm, showed that overly restrictive annexation policies would harm the Texas economy by reducing gross state product, personal income, sales, employment, and population. The HOW CITIES WORK • 35 • 2017 study concluded that voter approval of annexations would essentially eliminate annexations and thus severely damage the state’s economy. The Perryman Group report concludes that restrictions on annexation would mean that “the entire character of the Texas economy will be changed in a way which notably limits its capacity to support future growth and prosperity.” If you think those numbers are exaggerated, just look at what happened to four once-great American cities that were prevented from growing. In 1950, Detroit, Baltimore, Cleveland, and St. Louis were the fifth, sixth, seventh, and eighth largest cities in the nation in population. All four of them were prevented from expanding their city limits. Sixty years later, in 2010, all four cities had about the same number of square miles they had in 1950. 1950 5 6 7 8 2010 20 24 48 61 -61% -35% -57% -63% $26,325 $41,385 $26,217 $34,582 Detroit Baltimore Cleveland St. Louis Land Area Sq. Mi.Population Rank City Population Population Change Median household Income in 20131950 1,849,568 949,708 914,808 856,796 2010 713,777 620,961 396,815 319,294 1950 140 79 75 61 2010 140 81 78 62 Certainly other factors were at play, but it seems clear that annexation authority plays a big role in the success of a city (and therefore the state). More recently, the League commissioned a study of only southern states with similar demographics to Texas. That study found that, among a comparison set of 13 states, three key findings emerge: 1. States in which city councils decide whether to annex have seen their cities grow faster over the past 25 years, both economically and demographically, than other states that limit annexation. 2. In terms of annexation activity (as measured by change in city size) states in which city councils decide whether to annex have actually seen their cities physically grow more slowly from 1990 to 2010 than other states that limit annex- ation. 3. When measured by bond ratings tied to the issuance of general obligation bonds, states in which city councils decide whether to annex have better ratings than other states that limit annexation. In short, municipal annexation is an engine that drives the Texas economy, and turning off that engine would be devastating to the state’s financial future. H 1950 14 25 22 73 2010 4 7 9 14 252% 225% 176% 497% $45,010 $45,722 $42,846 $53,946 Houston San Antonio Dallas Austin Land Area Sq. Mi.Population Rank City Population Population Change Median household Income in 20131950 596,163 408,442 434,452 132,459 2010 2,009,453 1,327,407 1,197,816 709,390 1950 160 70 112 32 2010 600 451 341 297 Over the six decades from 1950 to 2010, Detroit suffered a population loss of 61 percent. Baltimore’s population declined 35 percent. Cleveland lost 57 percent of its population and St. Louis lost 63 percent of its population. Without the ability to take in areas of growth, those cities died. Did You Know? San Antonio’s annexation of land on the south side of the city set the stage for Toyota’s decision to build a new manufacturing plant in the city. In contrast to the four cities that experienced a death spiral due to annexation limitations, look at what happened in four Texas cities between 1950 and 2010 without similar restrictions on their ability to grow. HOW CITIES WORK • 36 • 2017 Did You Know? Current law provides numerous protections for rural landowners on the outskirts of cities. For example, a city is prohibited from annexing property that is appraised as agriculture or wildlife management unless a city first offers a “non-annexation agreement” to the land- owner. Many landowners have accepted the agree- ments, which provide that the land won’t be annexed unless development of the property commences. If a landowner declines an agreement and is annexed, both the Agriculture Code and the Local Government Code prohibit a city from enforcing most regulations that would interfere with farming, ranching, and certain other operations. Why Is Annexation Authority So Critical to the Texas Economy? To understand the answer to this question, one must look to the most basic elements of municipal finance and intergov- ernmental relations. 1. Cities (city taxpayers) pay for a wide array of services and facilities that benefit entire regions and the entire state. For example, basic activities such as mail delivery couldn’t take place if cities didn’t construct and maintain streets. The economy of Texas would crumble without city investments in the basic infrastructure upon which business and industry rely. Cities are centers of employment, health care, entertainment, transportation, and merchandising used by non-city-residents throughout the region. This means that cities must support public safety services and a physical infrastructure sufficient to serve a daily influx of visitors from throughout the metropolitan region. 2. Most states recognize that cities should be assisted in making these expenditures that benefit entire regions and the whole state. Virtually every state transfers state-gener- ated revenue to cities to assist in the provision of services and facilities. They recognize that cities (city taxpayers) are making expenditures that benefit all residents of the state. For example, most populous states give a portion of state gasoline tax revenue to cities to assist in street construction and repair. Many states share vehicle registration revenue or motor vehicle sales tax revenue with cities. A survey conducted by the National League of Cities found that cities across the nation receive 13 percent of their revenue from state aid. 3. In Texas, there is virtually no state aid to cities. Take a look at a municipal budget and try to find a revenue line item called “Transfer from State” or “State Financial Assistance.” While such line items are common in other states, you won’t find them in Texas. 4. But Texas has allowed cities to annex. Cities have used that authority to bring adjacent areas into the city and into the system through which cities finance the services and facilities that benefit the region and state. 5. To erode or eliminate municipal annexation authority without considering the issues of municipal revenue and intergovern- mental relations would cripple cities and city taxpayers. If annexation authority were eliminated, Texas would become the only state in the nation that denies both state financial assistance and annexation authority to its cities. Opponents of annexation cannot point to a single state that has restricted annexation authority without implementing fiscal assistance programs under which the state helps cities pay for the infrastructure on which the entire state depends. HOW CITIES WORK • 37 • 2017 Zoning is the division of a city into districts that permit specific land uses, such as residential, commercial, industrial, or agricultural. Zoning authority empowers a city to protect residential neighborhoods, promote economic development, and restrict hazardous land uses to appropriate areas of the city. It is designed to reduce street congestion; promote safety from fires and other dangers; promote health; provide adequate light and air; prevent overcrowding of land; and facilitate the provision of adequate transportation, utilities, schools, parks, and other public services and facilities. As with all issues that affect a city’s residents, the power to zone is best exercised by the level of government closest to the people. For example, a person from a small town in the Panhandle cannot possibly know what type of zoning is best for a large coastal city. Chapter 211 of the Texas Local Government Code contains many procedural requirements that must be followed when zoning property, including strict notice and hearing provisions. The requirements ensure that residents of the city and affected neighborhoods have a strong voice any time a zoning change is considered. In addition, Chapter 211 provides for the creation of a planning and zoning commission to make recommendations on the adoption of initial regulations and to consider proposed amendments. Also, a board of adjustment may be appointed to hear requests for variances from the regulations. Zoning authority is generally demanded by the residents of cities, and citizens, through neighborhood and preservation groups, who support it wholeheartedly. In essence, zoning grants a city the authority to prohibit detrimental uses and to promote beneficial uses. For example, zoning authority allows a city to prohibit lead- smelting plants or junkyards from being located in or near residential areas, thereby protecting the quality of life and property values for residents. Without zoning authority, the property values in a city would certainly drop. Appropriate Use of Manufactured and Modular Housing The Texas Manufactured Housing Standards Act allows cities to regulate the location of “manufactured homes,” which must meet federal construction regulations. The Texas Industrialized Housing Act allows cities to require that “modular homes,” which meet the more stringent requirements of the International Residential Code, have an appearance and value similar to nearby homes. Many cities take advantage of these provisions to protect property values and the safety of residents, while at the same time offering viable housing alternatives for lower income families. “Manufactured and modular housing provides a solution to affordable housing in appropriate areas under consciously adopted, well-thought-out regulations,” says David Gattis, former deputy city manager in the City of Benbrook. The Texas Municipal League is not opposed to this type of housing, but strongly advocates the authority of cities to retain local control over when, where, and how this type of dwelling is installed. H A Primary Means to Protect Property Values and the Welfare of City ResidentsZONING: Zoning Changes and Property Values Because zoning is an essential power, statutes that require compensation when a property’s value is affected by a zoning change are extremely rare in the United States. Rather, the United States Supreme Court and various state courts have set forth tests that are used to determine whether a government regulation requires compensation to a property owner. In fact, the Supreme Court of Texas upheld a city’s authority to make reasonable zoning changes. In that case, a city rezoned a residential area to provide for larger lot sizes. The rezoning was designed to create more open space, less traffic, greater setbacks, less noise, and similar results. The Court concluded that a city has a legitimate governmental interest in such results and in preserving the rate and character of community growth. The Court also found that no “taking” of the owner’s property occurred, because the regulation did not impose a great economic impact on him. Any legislative requirement that compensation should be paid when a zoning change (or any other municipal regulation for that matter) reduces property value would create an untenable situation under which cities would either: (1) go bankrupt; or (2) be forced to give up the local power to zone property in the best interests of the community as a whole. And the reality is that most zoning changes are initiated by a property owner and increase the value of land. HOW CITIES WORK • 38 • 2017 Cities have various interests relating to how they and their citizens get electric service, how cities with municipally owned electric utilities provide service, and the prices that everyone pays for electricity. Cities also receive franchise fees from utilities that use their rights-of-way, and they have original jurisdiction over the rates of investor owned utilities in their cities. How electricity is provided in Texas is complex and based on many moving parts in an always changing puzzle. The following questions and answers provide a “primer” on the issues facing cities in this area. Note: See the article in this publication titled “Cities Refuse to Accept Utility Rate Hikes Without a Fight” to learn more about how cities without their own electric utility keep rates reasonable for their citizens. What are the different ways cities and their citizens get their electricity? Cities and their citizens generally get their electricity in one of three ways: (1) from a municipally owned utility (MOU); (2) from an investor owned utility (IOU); or (3) from a rural electric cooperative (Coop). Each of those providers usually has a monopoly in the areas they serve, based on a certificate from the Texas Public Utility Commission (PUC). (Note: a few areas of the state are served by river authorities and municipal power agencies. Also, with regard to an IOU, only the transmission and distribution component discussed below has a geographical monopoly in the deregulated market.) After deregulation, MOUs and Coops retain that monopoly status, unless they choose—by a vote of their governing body—to adopt customer choice. The reasons for allowing MOUs and Coops discretion to retain their monopoly status are many, but one of the most important is that MOU and Coop rates are governed by a city council or board of directors—the members of which are elected by the customers. The city council or board of directors is therefore accountable directly to the customers they serve. IOUs are also governed by a board of directors, but they are accountable to their shareholders, rather than their customers. The rates of investor-owned transmission and distribution utility (discussed below) are regulated by the PUC in a way that should—in theory—cover costs of operation and allow for a reasonable profit. What is electric deregulation, and why should city officials care? In 1999, legislation was enacted to deregulate the portion of the state that is served by IOUs. MOUs and Coops are given the option to participate in the deregulated market by “opting in” to competition. However, to date no MOU has opted in. Prior to deregulation being fully implemented in 2002, a single IOU performed all the things necessary to provide service to customers within its designated service area. In simple terms, the legislation “broke up” or “unbundled” investor owned utility monopolies. Those utilities were KEEPING THE POWER ON: CITIES AND ELECTRICITY HOW CITIES WORK • 39 • 2017 divided up into different components: generation, transmission and distribution, and retail service. Some utilities sold one or two of those parts of their business, while others created subsidiary companies to run them. Generation companies make the power with power plants, wind farms, and other means. Transmission and distribution companies move the power from the generators to other parts of the state with huge transmission lines, and ultimately distribute it to the customers through smaller distribution lines. While the generation and retail portions of the market are now deregulated, the rates of transmission and distribution utilities are still regulated by cities and the PUC. That is necessary because the companies that generate power must have a reliable way to get that power to the retail companies which actually sell the power to customers. The retail companies are numerous and essentially speculate as to how much generation will cost them. They then offer price plans to consumers accordingly. They are the ones with which customers in a deregulated area interact. Customers can switch retail companies to try to get the best possible rate. Certain areas of the state—including the Panhandle, El Paso, and certain areas in the northeast and southeast portions of the state—are served by IOUs, but have not been deregulated. Those areas are not a part of the main transmission grid in Texas, so deregulation is impractical. Whether deregulation has been beneficial to cities and their citizens remains the subject of heated debate. One thing is certain: deregulation has changed the way cities in the deregulated market purchase power for city facilities; one of the ways cities and other political subdivisions do that is by a process called aggregation. Aggregation means just what it says: cities join together or “aggregate” to purchase energy at a better price than they could obtain themselves. (Note: state law also authorizes citizens to aggregate, but the logistics of that process have made it all but useless. Previous legislative efforts to allow cities to automatically bundle-up their citizens and negotiate on the citizens’ behalf have failed.) The most well-known aggregation group is called the Texas Coalition for Affordable Power, which represents more than 100 cities. Why aren’t MOUs opting into the deregulated market? Even though they are not required to do so, MOUs have the discretion to opt in to the deregulated market. Many state leaders continue to applaud the Texas deregulated market as one that has created lower prices. For a number of reasons, that is questionable. It would also appear that MOUs aren’t convinced, and that their citizens prefer the consistently lower prices and better service that they provide. It’s a case of “if it ain’t broke, don’t fix it.” MOUs can wait and see if opting in to deregulation would really benefit their customers. Also, an MOU that opts in is essentially stuck with that decision. Further, opting into competition would require an MOU to undertake the complex and expensive process of breaking up its service into the three components of the deregulated market (generation, transmission and distribution, and retail). What are recent criticisms levied against MOUs? Some MOUs have been criticized recently for transferring some of their profits to the city’s general fund. Interestingly, even larger cities that transfer large amounts of revenue have electric rates that are comparable to, or lower than, IOUs serving the deregulated market. In addition, cities may or may not charge their MOUs franchise fees for the use of the city’s rights-of-way. Thus, the transfer is often analogous to a franchise payment that the city would receive from an IOU that uses the city’s rights-of-way. In any case, it is currently up to each city’s council to decide how to handle transfers. Another way to look at transfers is that they are very similar to the return on investment that IOUs give back to their shareholders. But in the case of an MOU, the “shareholders” are the taxpayers of the city. Transferred revenue is used to pay for services (police, fire, EMS, streets, and so on) that are used by the customers of the MOU. The transferred revenue is used to keep property tax rates low, which benefits the taxpayers served by the MOU. What are electric franchise fees? Electric franchise fees are fees paid by IOUs or Coops (and in some cases, MOUs that provide service in other cities) that use a city’s rights-of-way to provide service. Both state law and the Texas Constitution provide that a city may not allow a private entity to use city property for free. Some argue that franchise fees of any type are a “hidden tax” on utility service. Of course, the municipal position is that the fees are authorized by state law. In fact, the Texas Constitution prohibits a city from giving away anything of value (for example, the use of city property) to a private entity. Thus, the city position is that the fees are nothing more than “rental” payments for the use of city property. H HOW CITIES WORK • 40 • 2017 Texas cities have a long history of participation in the ratemaking process for both gas and electric utilities in the State of Texas. Prior to the enactment of the Public Utility Regulatory Act (PURA) in 1975 and the Gas Utility Regulatory Act (GURA) in 1983, utility rates were set exclu- sively at the city level, with any appeals of municipal rate ordinances decided in the courts. Currently, under PURA and GURA, cities have original jurisdiction over the utility rates within their city limits. This means that the Railroad Commission (RRC) and the Public Utility Commission (PUC) have original jurisdiction over gas and electric rates in service areas outside city limits and also within the city limits of those cities that have ceded their original jurisdiction to the agency. In addition, the PUC and RRC have appellate jurisdiction over rate ordinances and orders of cities concerning electric and gas utility ser- vice within a city’s limits. Recognizing the important role cities play in the regulation of utilities, hundreds of cities across the state participate in ratemaking proceedings at both the PUC and the RRC in order to ensure fair, just, and reasonable rates, as well as adequate and efficient services for the city and its resi- dents. Historically, cities have formed coalitions to represent the collective interests of cities and their citizens before the regulatory agencies and courts. By forming coalitions, cit- ies have been able to present a strong voice for consumers for more than 30 years. This has served to reduce the costs that cities and their residents pay for electric and gas ser- vice. Cities’ active participation in rate cases demonstrates their concern for reliability, quality of service, and the pric- es their citizens pay for gas and electricity. In numerous instances, without city participation, rate increases would have gone into effect without any party scrutinizing the utility’s application. Both PURA and GURA allow for cities to be reimbursed by the utility company for their reasonable rate case expenses associated with participation in ratemaking proceedings. In providing for the reimbursement of rate case expenses in the statutes, the Texas Legislature has acknowledged the important role that cities play in protecting citizens from unreasonable utility costs. Because these expenses are ultimately passed on to consumers by the utility, cities are always cost-conscious. Cities must balance the cost of participation in a ratemaking proceeding against the need to protect the interests of their residents. In prior cases, however, municipal participation has resulted in a net savings for ratepayers because the utility’s rate increase was reduced by an amount far in excess of the expenses incurred by the cities. Cities’ participation in utility ratemak- ing proceedings has proven time and again to be a good value for consumers. H CITIES REFUSE TO ACCEPT UTILITY RATE HIKES WITHOUT A FIGHT City coalitions have found expenses like these which utilities tried to pass on to customers: • Hotel expenses of nearly $1,000 per night for executives to stay at a New York City hotel. • Tens of thousands of dollars worth of art for the utility’s office. • Dinners in New York City, Dallas, and Philadelphia restaurants costing more than $200 per person.   • More than $1.5 million in employee “financial incentives.” A private, investor-owned utility is allowed to incur expenses like those listed above, but the company itself (i.e., its shareholders), not the utility customers it serves, should pay for those costs.  It’s unreasonable to ask to raise customer rates to cover these kinds of expenses, and cities are the first line of defense against such requests. HOW CITIES WORK • 41 • 2017 Many states around the country are faced with huge deficits in public worker pension plans. That has prompted lawmakers in those states to seek large-scale reforms in their retirement systems. Over the last few years, many states have undertaken major efforts to address those deficits by converting public pensions from defined benefit to defined contribution plans, which are similar to a 401(k). As those funding crises across the country continue, the drumbeat for “reform” in Texas pensions will continue to grow louder. In Texas, the Texas Municipal Retirement System (TMRS) is responsible for the administration of a majority of city retirement plans covering both public safety and civilian city employees. The system is made up of 850 member cities, 102,000 contributing members, and 43,000 annuitants. TMRS has taken great strides in recent sessions to make improvements in the system that provide retirement benefits THE TEXAS MUNICIPAL RETIREMENT SYSTEM: PROVEN SUCCESS to a majority of city employees in Texas. The reforms have stabilized benefits and lowered city contribution rates, while ultimately using fewer tax dollars to fund pensions. They will also require training by pension system employees. There are numerous reasons why TMRS has been so successful. TMRS relies on an advisory board of 19 members, including TMRS retirees, elected officials, pension experts, as well as representatives from both labor and employer groups. This advisory group thoroughly vets all legislative proposals while moving forward only with those that have consensus. The unified front during session provides for easy passage of the needed reforms. Although the drumbeat for reform may persist throughout the next legislative session, TMRS has proved to be a well- funded model for pensions around the country. It should not be included in discussion about other pension reforms. H HOW CITIES WORK • 42 • 2017 THRIVING LIBRARIES REFLECT THRIVING CITIES “Libraries allow children to ask questions about the world and find the answers. And the wonderful thing is that once a child learns to use a library, the doors to learning are always open.” ― Laura Bush The Texas Library Association (TLA) reports that there are 561 public libraries in Texas, with an additional 314 public branches and bookmobiles. Public libraries—both city and county—consistently rank high among taxpayers in terms of community services. Libraries impact the local economy and workforce development. In a 2008 public opinion survey, conducted on behalf of the TLA, 83 percent of Texas voters believed that public libraries support the economy through job skills training, career and job information, and resources for local businesses. A recent study conducted for the Texas State Library and Archives Commission (TSLAC) documented various, specific examples of libraries (1) enabling businesses and self- employed individuals to improve their economic activities; (2) assisting individuals to obtain employment; and (3) providing educational and occupational programs that meet the needs of Texas communities and regions. Some businesses— particularly those requiring a highly skilled workforce—look to the city’s library as a barometer of local commitment to workforce readiness. HOW CITIES WORK • 42 • 2017 HOW CITIES WORK • 43 • 2017 THRIVING LIBRARIES REFLECT THRIVING CITIES Libraries impact literacy and education. Public library patrons include preschoolers, afterschoolers, homeschoolers, distance learners, and researchers. Through story time hours, reading programs, English second language classes, and other local services, they represent the public’s bridge to structured educational campuses. The 2008 TLA public opinion poll found that Texas voters were nearly unanimous in their belief that public libraries create educational opportunities for all citizens (97 percent agreed). Libraries impact community. Communities value their city libraries not only as centers of information and learning, but also as a gathering point for ideas and discussion. The 2008 TLA public opinion survey found that 95 percent of Texas voters believed that public libraries improve the quality of life in their community. Approximately 75 percent of public libraries serve communities smaller than 25,000 in population. In small Texas cities, the library may be the only community gathering place. As shown in the accompanying chart, cities are the largest source of income for public libraries in Texas. H Texas Public Libraries: 2015 Income by Source Source: Texas State Library and Archives Commission, Texas Public Library Statistics, Statewide Comparison Statistics: 1997 to 2015 “Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation.” ― Walter Cronkite Federal .04% City 77% Other 3.7% County 19% School District .4% State .02% Texas Public Libraries: A Great Investment A study found that, in 2011, Texas public libraries collectively provided $2.407 billion in economic benefits while costing less than $0.545 billion. That is a return on investment of $4.42 for each dollar invested. This chart from the study shows how Texas compares to some other states and cities: JURISDICTION RETURN ON THE DOLLAR S TATES Colorado $4.99 Florida $8.32 Indiana $4.76 South Carolina $4.48 Texas – Statewide $4.42 Wisconsin $4.06 CITIES Charlotte $4.61 Southwestern Ohio $3.81 Texas – 14 cases $4.19 Table 7.1. Return on Investment in Selected Reports Note: Summary statistics were unavailable for Philadelphia and Seattle. Texas voters get it! In a 2008 public opinion survey, 94 percent of Texas voters agreed that public libraries are a good value for the tax dollar. Sources: Dec. 2012, Texas Public Libraries: Economic Benefits and Return on Investment, Prepared for TSLAC by Bureau of Business Research, IC2 Institute, Univ. of Tex. at Austin. Fall 2008, KRC Public Opinion Survey conducted on behalf of the Texas Library Association HOW CITIES WORK • 44 • 2017 TEXANS KEEP HEALTHY IN CITY PARKS HOW CITIES WORK • 44 • 2017 HOW CITIES WORK • 45 • 2017 City parks are the front line in the battle of the bulge, and they help keep Texans feeling their best at home and while away. Texas cities face extreme weather, modern lifestyles, and funding challenges in maintaining fitness. Texas cities provide programs that improve the quality of life for individual participants and the overall community. All Texans, including youth and seniors, benefit from the opportunity to increase their health and reduce stress. Communities are strengthened by opportunities to build partnerships, enhance diversity, and learn tolerance through teamwork. A 2006 study by The Perryman Group found that the physical health of individuals and environmental contributions are often the first benefits people associate with local parks. People with the best access to both built and natural facilities are 43 percent more likely to exercise 30 minutes most days of the week, clearly illustrating the importance of local parks in the fitness movement. According to the American Planning Association, there is evidence that when cities provide parks, it can make communities safer. City parks also encourage youth to step away from their televisions and computer games for real social interaction while playing basketball, softball, soccer, gymnastics, or simply enjoying sunshine and wildflowers. City parks provide outdoor recreation resources such as pools, softball fields, and Frisbee golf courses. Cities also provide indoor recreation activities for sports, arts, and nature programs. While most cities have hiking trails, some cities are investing in new interests such as dog parks and skate parks. Many cities even provide classes to encourage hobbies and various self-help classes such as income tax and language skills. H The Texas Economy Keeps Healthy in Local Parks • Parks contribute to residential and commercial real estate values. An analysis of approximately 30 studies found a positive impact of 20 percent on property values abutting or fronting a passive park area. • Local parks across the state lead to the creation of 45,623 jobs through their maintenance and operations activity, capital investment, and direct tourism. • By adding the effects of operations and maintenance, capital spending, and tourism, a total gross impact can be derived. Across the state, the total impact of local parks leads to an addition to business activity including $6.439 billion in spending. • The incremental net fiscal revenue to the state government from local parks activity is approximately $171.6 million per year. Information from Sunshine, Soccer, and Success: An Assessment of the Impact of Municipal Parks and Recreation Facilities and Programs on Business Activity in Texas by The Perryman Group for the Texas Parks and Recreation Foundation in December 2006. HOW CITIES WORK • 46 • 2017 Many Texas cities have created special programs to engage and involve youth. These programs can take many different forms—from presentations at local schools, to special recognition programs; mentoring or internship programs, to formal youth advisory commissions. At the heart of these programs is a desire to educate youth on the mechanics of city government, provide an outlet for youth to voice their ideas and concerns, and make sure that the city is nurturing their future leaders. Some of the most comprehensive youth programs are formal youth advisory commissions (YACs). YACs are often authorized by city ordinance; have a well- defined mission statement, bylaws, and application process; and meet regularly. YAC commissioners INVESTING IN TOMORROW’S LEADERS: CITY GOVERNMENTS INVOLVE YOUTH participate in community service projects, provide input to city staff and elected officials on city policy matters, develop and organize youth activities, and serve as role models to their peers. City officials know that, whatever the format, developing relationships with the city’s youth is an investment in tomorrow’s leaders and in the city’s future. H YAC HOW CITIES WORK • 47 • 2017 The Texas 85th Legislative Session began on January 10, 2017. Before, during, and after the session, League staff works directly with legislators on items of municipal interest. However, our influence is directly affected by your city’s efforts to be heard. Help your city plan an active and consistent role in the League’s legislative effort. Stay Well Informed The League provides several ways for members to stay informed about legislative issues. The Legislative Update is the primary legislative communication between the League and its members. It is sent electronically as part of the TML Exchange email to member city officials on Fridays. The legislative portion of the League website (www.tml.org; click on “Legislative Information”) is another important information source. There you will find a link to the current issue of the Legislative Update newsletter, as well as an index to past issues of the newsletter, summaries of legislative hot topics, and the League’s legislative program. The 2017 legislative session will address many issues that will involve Texas cities and their ability to meet citizen demands for services. The League’s best advocates for protection of municipal authority are its members—elected and appointed officials from cities of all sizes and geographic areas. TML needs your participation.     Contact Legislators Early and Often Your legislators need to hear from you, or they’re forced to make decisions on local government issues without fully appreciating the impact they will have on cities in their district. Meet formally at least once a year prior to the session to review key issues. Ask if phone calls, emails, letters, or personal contact works best for them during the session. Encourage your legislators to work with League staff, as well.   Keep the League Informed The League lobbying team includes Director of Legislative Services Shanna Igo, Assistant Director of Legislative Services Monty Wynn, Legislative Liaison JJ Rocha, and you. Always send copies of your correspondence to and from legislators to the League. League staff can work more effectively with your legislators when we know what you’ve said and what you received in return. It also allows us to incorporate your local circumstances into our commentary. Emails can be forwarded to legislative@tml.org, and copies can be faxed to 512-231-7490 or mailed to the League office.   Stick to It It’s a fact of life in public policy that things take time. Your consistent participation in the legislative process is essential to long-term success. H The League Leads Advocacy Efforts. One of the primary functions of the League is to speak as the voice for city government in Texas. Each legislative session, the League staff works with city officials to educate state legislators about the needs of Texas cities. ADVOCACY IS VITAL HOW CITIES WORK • 48 • 2017 ABOUT Whether you are a new or a seasoned elected official, TML has the resourc- es, tools, and training to help you suc- ceed in your leadership role. Since its formation in 1913, the Texas Municipal League’s mission has been to serve the needs of member cities and advocate for members’ interests. Membership in the League is voluntary, and is open to any city in Texas. From the original 14 members, TML now has more than 1,150 member cities. More than 16,000 mayors, councilmembers, city managers, city attorneys, and city department heads are member officials through their cities’ participation. How is TML Organized? TML has 15 sub-state regions that were formed in 1958 and are the League’s grassroots. Regions exist to promote interests in city government on a regional level, foster the exchange of information among cities in the region, and help the TML Board of Directors develop policy that represents the state’s diverse interests. Every TML region elects officers, including a representative who serves on the TML Board of Directors, and conducts regional meetings at least twice each year. The TML Board rep- resentative must be an elected offi- cial from a city within the region, and serves a two-year term of office with a maximum of two full terms. To help address the functional professional development needs of member officials, TML has 21 affiliate organizations. Affiliate organizations represent city officials engaged in specific professional disciplines. For example, the Texas City Management Association (TCMA) is the professional association for city managers in Texas. TCMA is its own association, as well as a TML affiliate with a representative on the TML Board. Each affiliate group has its own membership criteria and dues structure that is separate from the League’s. TML is governed by a board of directors composed of a representative from each of the 15 regions, a representative from each of the 21 affiliate organizations, eight at-large directors (one from each of the state’s largest cities), past TML presidents still in municipal office, a president and a president-elect, and two ex officio directors from the TML risk pools. The Board appoints an executive director to manage the affairs of the League under the Board’s general direction. Bennett Sandlin is the current executive director, and has been serving in this role since October 2010. Today, TML employs a staff of 32 full-time employees and has six departments: Administrative Services, Affiliate Services, Communications and Programs, Legal Services, Legislative Services, and Member Services. What Does TML Do? One of the principle purposes of the League is to advance and represent the interests of Texas cities at the state and federal levels. The Texas Legislature meets for 140 days each odd-numbered year and meets frequently in special “called” sessions. There are hundreds of bills that adversely impact cities among the thousands of bills introduced each legislative session. Most would erode the authority of Texas cities to govern their own affairs or impose mandates that do not provide a commensurate level of compensation. The League, working through its Legislative Services Department, makes every effort to assure that bad- for-city bills are defeated and bills that help cities operate more effectively are passed. Through the years, thousands of proposals that would have undermined city government have been defeated. The League’s legislative track record is one of unparalleled success. How Does TML Develop Policy? Protecting the interest of Texas cit- ies during each legislative session requires considerable planning to HOW CITIES WORK • 49 • 2017 TML AFFILIATES Association of Hispanic Municipal Officials (AHMO) Building Officials Association of Texas (BOAT) Government Finance Officers Association of Texas (GFOAT) Texas Association of Black City Council Members (TABCCM) Texas Association of Governmental Information Technology Managers (TAGITM) Texas Association of Mayors, Councilmembers and Commissioners (TAMCC) Texas Association of Municipal Health Officials (TAMHO) Texas Association of Municipal Information Officers (TAMIO) Texas Chapter of the American Planning Association (TXAPA) Texas City Attorneys Association (TCAA) Texas City Management Association (TCMA) Texas Court Clerks Association (TCCA) Texas Fire Chiefs Association (TFCA) Texas Municipal Clerks Association, Inc. (TMCA) Texas Municipal Human Resources Association (TMHRA) Texas Municipal Library Directors Association (TMLDA) Texas Municipal Utilities Association (TMUA) Texas Police Chiefs Association (TPCA) Texas Public Purchasing Association (TxPPA) Texas Public Works Association (TPWA) Texas Recreation and Park Society (TRAPS) establish legislative priorities. While the TML legislative philosophy is based on protecting the ability of cities to govern their own local affairs, positions must be taken on hundreds of issues that affect cities. The process of adopting positions on legislation begins a full year before the regular legislative session convenes. In January of a non-legislative year, the TML president appoints members to legislative policy committees to address specific issues. Each “spe- cific issue” committee is made up of approximately 20-25 members. These committees meet to review issues summarized in policy briefing books, as well as other issues brought up by committee members. Subcommittees may be appointed to tackle some of the more complex issues. Those “specific issue” committees combine to make up the General Government Committee, which meets once to cover any issues not addressed by those committees. The final reports of these commit- tees are forwarded to the Resolutions Committee, which meets during the TML Annual Conference. The Resolutions Committee is comprised of members from cities across the state. The committee reviews these reports, as well as any resolutions submitted by the general membership. After a decision is reached by the Resolutions Committee, the resolutions are then considered by the TML general mem- bership at the annual business meet- ing held the last day of the annual conference. The TML Board adopts a legislative program based on these resolutions. The League uses this process to deter- mine which issues are most important to Texas cities and how to best allocate its legislative resources. Legal Services The League employs full-time attor- neys who are available to provide legal information on municipal issues to member cities, as well as example documents to assist cities in drafting ordinances and other required legal notices. . The legal staff provides cities with information on changes in federal and state laws and regulations, as well as city-related developments in the courts. During legislative sessions, the legal staff is frequently called on to provide testimony to legislative com- mittees on a variety of city issues. In addition, the legal staff is available to deliver workshops on a variety of legal subjects to small cities problem solv- ing clinics, affiliate organizations, and regional groups. Information and Research The League was formed in 1913 to provide information to member cities. Today, this is still an important service. TML staff has information on virtually every topic affecting Texas cities and can be reached by telephone, snail mail, or email. The League library and files contain thousands of books, magazines, and periodicals that are available for use by member officials. League publications are another important member service. In addition to Texas Town & City, the League publishes a number of books and pamphlets to keep its member- ship informed on emerging municipal issues. TML also conducts several annual sur- veys that collect information on water and wastewater rates, taxation and debt levels, and general fiscal condi- tions. Conferences and Training TML conducts a variety of conferences, workshops, and webinars to enhance the knowledge and skills of municipal officials. HOW CITIES WORK • 50 • 2017 TML REGIONS Region 2 Amarillo Area Region 3 Caprock – Lubbock Area Region 4 Permian Basin Region – Odessa Area Region 5 Red River Valley – Wichita Falls Area Region 6 Hub of Texas – Abilene Area Region 7 Alamo Region – San Antonio Area Region 8 Where the West Begins – Fort Worth Area Region 9 Heart of Texas Region – Waco Area Region 10 Highland Lakes Region – Austin Area Region 11 Coastal Bend Region – Corpus Christi Area Region 12 Lower Rio Grande Valley – Rio Grande Valley Area Region 13 North Central Texas Region – Dallas Area Region 14 San Jacinto Region – Houston Area Region 15 Tyler- Longview Area Region 16 Golden Pine and Oil Region – Beaumont-Lufkin Area The TML Annual Conference and Exhibition is one of the nation’s larg- est gatherings of municipal offi- cials. The 2017 Annual Conference will be held October 3-6 at the George R. Brown Convention Center in Houston. In addition to keynote sessions, workshops, and the annual business meeting, the conference features an impressive exhibit hall with more than 350 companies pre- senting products and services that benefit Texas cities. The League also offers training oppor- tunities that are designed specifically for elected officials. The Elected Officials’ Conference, co-hosted by TML and the Texas Association of Mayors, Councilmembers and Commissioners, will be held in Allen, February 16-18, 2017. This event focuses on key issues for newly elected and veteran city officials on topics like economic development, media relations, infrastructure, citi- zen engagement, revenue sources, government trends, and leadership. In addition, TML holds several Newly Elected City Officials’ Orientations and Workshops each year. The 2017 summer orientations will be held July 13-14 in Round Rock, and August 3-4 in San Antonio. The winter work- shop will take place in December via a series of four webinars. These sessions offer training on the basics of serving on the governing body, and provide an overview on the fun- damentals of city regulation, finan- cial oversight responsibilities, ethical governance, council-staff relations, economic development, Texas Open Meetings Act, and more. TML conducts other timely work- shops and webinars for both elected and appointed officials throughout the year, including the Economic Development Conference; Public Funds Investment Act Training; Budget, Tax Rate, and Audit Workshops; Leadership Academy; Small Cities’ Problem-Solving Clinics; Grant Writing Workshop; and more. Federal Representation Through its membership in the National League of Cities, the Southern Municipal Conference, and other similar organizations, TML has a voice in Washington, D.C. Working with these groups, TML ensures that the voice of Texas cities is heard not only in congressional offices, but also in the headquarters of various feder- al agencies. Risk Pools For more than 40 years, the TML risk pools have provided Texas cities with quality risk coverage specifically designed to meet municipal needs. These pools are separate entities, but maintain a close administrative relationship with TML. The TML Intergovernmental Risk Pool (TMLIRP) works to reduce the cost of property and casualty risks in Texas cities. In addition to provid- ing a stable risk financing system, the TMLIRP offers education to its members to avoid and reduce risks, control losses, and stay informed on other aspects of risk management. Benefit coverage for municipal employees and their families has become a major expense item in virtu- ally every city budget. Cities through- out the state are holding the line on these costs by participating in the TML MultiState Intergovernmental Employee Benefits Risk Pool (TML MultiState IEBP). The League Today TML is committed to helping city leaders in Texas meet today’s gov- erning challenges. The League prides itself on 104 years of service to Texas cities, and looks forward to providing the resources, knowledge, and advocacy to support city officials into the future. H HOW CITIES WORK • 51 • 2017 HOW CITIES WORK • 52 • 2017 EMPOWERING TEXAS CITIES TO SERVE THEIR CITIZENS. Texas Municipal League 1821 Rutherford Lane, Suite 400, Austin, Texas 78754-5101 Phone 512-231-7400 • Fax 512-231-7490 • www.tml.org Frequently Asked Questions Form of Government What is the council-manager form of government, which is used today by so many cities, towns, and counties? Council-manager government combines the strong political leadership of elected officials with the strong managerial experience of an appointed manager or administrator. All power and authority to set policy rests with an elected governing body, which includes a mayor or chairperson and members of the council, commission, or board. The governing body in turn hires a nonpartisan manager who has very broad authority to run the organization. Born out of the U.S. progressive reform movement at the turn of the 20th century, the council-manager system was designed to combat corruption and unethical activity in local government by promoting effective management within a transparent, responsive, and accountable structure. Since its establishment, the council-manager form has become the most popular structure of local government in the United States. The form is also widely used throughout the world in countries such as Canada, Australia, the Netherlands, New Zealand, and the United Kingdom. How does council-manager government work? The elected council or board represent their community and develop a long-range vision for its future. They establish policies that affect the overall operation of the community and are responsive to residents’ needs and wishes. To ensure that these policies are carried out and that the entire community is equitably served, the governing body appoints a highly trained professional manager on the basis of his/her education, experience, skills, and abilities (and not their political allegiances). If the manager is not responsive to the governing body, it has the authority to terminate the manager at any time. How can council-manager government benefit my community? A city, town, or county benefits from the council-manager form of government in a number of important ways: 1. Political power is concentrated in the entire governing body. The mayor and council share legislative functions 2. Policy making resides with elected officials, while oversight of the day-to-day operations of the community resides with the manager. In this way, the elected officials are free to devote time to policy planning and development 3. The manager carries out the policies established by the elected governing body with an emphasis on effective, efficient, and equitable service delivery 4. Because decisions on policy and the future of the com- munity are made by the entire governing body rather than a single individual, council-manager governments more often engage and involve their residents in decision making. Residents guide their community by serving on boards and commissions, participating in visioning and strategic planning, and designing community-oriented local government services 5. The form is flexible enough to adapt to local needs and demands. For example, some communities elect their councils at large, while others elect them by district or by a combination of an at-large-and-by-district system. Also, the mayor can be directly elected by voters or selected by and from among the council. What is the role of the manager under council-manager government? The manager is hired to serve the council and the community and brings to the local government the benefits of his/her training and experience in administering municipal or county projects and programs. The manager prepares a budget for the council’s consideration; recruits, hires, terminates, and supervises government staff; serves as the council’s chief advisor; and carries out the council’s policies. Council members and residents count on the manager to provide complete and objective information about local operations, discuss the pros and cons of alternatives, and offer an assessment of the long-term consequences of their decisions. Appointed managers serve at the pleasure of the governing body. They can be fired by a majority of the council, consistent with local laws, or any employment agreements they may enter into with the council. The manager makes policy recommendations to the council for consideration and final decision. The manager is bound by whatever action the council takes, and control is always in the hands of the elected representatives of the people. What is the role of the council? The council is the community’s legislative and policy- making body. Power is centralized in the elected council, which, for example, approves the budget and determines the tax rate. The council also focuses on the community’s goals, major projects, and such long-term considerations as community growth, land use development, capital improvement and financing, and strategic planning. The council hires a professional manager to implement the administrative responsibilities related to these goals and supervises the manager’s performance. What is the role of the mayor or chairperson? Mayors or chairpersons in council-manager communities are key political and policy leaders, and their specific duties, responsibilities, and authorities depend on the organization’s charter. In council-manager communities, typically the mayor or chairperson is a voting member of the city council who presides at council meetings, represents the city in intergovernmental relationships, appoints members of citizen advisory boards and commissions (with the advice and consent of council), assigns agenda items to committees, facilitates communication and understanding between elected and appointed officials, and assists the council in setting goals and advocating policy decisions. What value does a professional manager contribute to a community? Professional managers contribute value to a community because they: • Work in partnership with elected officials to develop sound approaches to community challenges by bringing together resources to make the right things happen and produce results that matter • Bring a community-wide perspective to policy discussions and strive to connect the past and future while focusing on the present. They help the governing body develop the long-term vision for the community that provides a framework for policy development and goal setting • Promote ethical government through commitment to a set of ethical standards that goes beyond those required by law. Managers who are members of ICMA subscribe to the organization’s Code of Ethics, which requires them to “affirm the dignity and worth of the services rendered by government and maintain . . . a deep sense of social responsibility as a trusted public servant” • Encourage inclusion and build consensus among diverse interests (including those of elected officials, the business community, and citizens) by focusing on the entire community rather than the centralized interests of one or two individuals • Promote equity and fairness by ensuring that services are fairly distributed and that administrative decisions (such as hiring and contracting) are based on merit rather than favoritism • Develop and sustain organizational excellence and promote innovation. Professional managers focus relentlessly on efficient and equitable service delivery, policy implementation, and evaluation. They align the local government’s administrative systems with the values, mission, and policy goals defined by the community and elected officials. Does it cost more for a community to adopt the council- manager form and hire a professional manager? Many local governments have found that their overall costs are actually reduced under competent management. Savings can come from decreased operating costs, increased efficiency and productivity, improved revenue collection, and effective use of technology. The economic health of the community may also benefit from implementation of improved business development and retention strategies. What kinds of communities use the council-manager form of government? In 2007, more than 3,500 (49 percent) of the 7,171 U.S. cities and towns with populations of 2,500 residents or more operated under the council-manager form. This structure is also used by more than 370 counties. More than 92 million people in the U.S. live in communities that operate under this form. Is the council-manager form popular among larger communities? Of the 247 U.S. cities with populations greater than 100,000 residents, 144 (58 percent) use this form of government. Larger cities and counties that use the form include: • Broward County, Florida (pop. 1,623,000) • Charlotte, North Carolina (pop. 540,000) • Dallas, Texas (pop. 1,188,000) • Fairfax County, Virginia (pop. 969,000) • Las Vegas, Nevada (pop. 535,000) • Mecklenburg County, North Carolina (pop. 695,000) • Oklahoma City, Oklahoma (pop. 506,000)(continued) • Phoenix, Arizona (pop. 1,321,000) • San Antonio, Texas (pop. 1,144,000) • San Jose, California (pop. 894,000) • Virginia Beach, Virginia (pop. 425,000) • Wichita, Kansas (pop. 344,000) How can a community adopt the council-manager form of government? Most communities can adopt council-manager government through a charter, local ordinance, state enabling law, or by voter referendum. For information on how your community can adopt council-manager government, contact your state municipal league or association of counties. You can locate the addresses of these organizations on the Internet, or in the back section of ICMA’s Municipal Year Book, which you may find in your local library. Once a community adopts council-manager government, how does it choose a professional manager? The vacancy usually is announced in the ICMA Newsletter, and managers, assistants, and other individuals from across the country are invited to apply. Interested parties apply directly to the council, which reviews the applications and interviews qualified candidates. ICMA makes no recommendations regarding candidates. Additional information is available in ICMA’s Recruitment Guidelines Handbook. To download a copy, visit http://jobs.icma.org and click on “Recruitment Guidelines Handbook” under “Resources.” What kind of educational and professional experience do professional local government managers possess? Nearly 67% of managers surveyed by ICMA in 2006 indicated that they had earned a master’s (usually in public administration, business, or public policy), or other advanced degree. Respondents to the same survey said they had spent an average of 19 years in the local government management profession. Do professional local government managers have a membership organization? Yes. ICMA (the International City/County Management Association) is the premier local government leadership and management organization that serves as the (continued) professional and educational “home” for appointed professional managers and administrators. ICMA’s membership also includes directors of state associations of local governments, other local government employees, academics, students, and concerned citizens who share the goal of improving local government. ICMA’s mission is to create excellence in local governance by developing and fostering professional local government management worldwide. To that end, the organization provides technical assistance and publications for management professionals to help them improve their skills and increase their knowledge. ICMA also serves as a clearinghouse for the collection, analysis, and dissemination of information and data about local government. Why is membership in ICMA important for a professional local government manager? In addition to gaining access to valuable resources and lifelong professional development opportunities, managers who belong to ICMA are bound by its Code of Ethics, which states that every member of the organization shall act with integrity in all personal and professional matters so that they will merit the respect and trust of elected officials, employees, and the public. This stringently enforced Code specifies 12 ethical principles of personal and professional conduct, including dedication to the cause of good government. ICMA members believe in the effectiveness of representative democracy and the value of government services provided equitably to residents within a community. ICMA members are also committed to standards of honesty and integrity that go beyond those required by the law. For more information, contact ICMA or visit http://icma.org/ethics. Finally, ICMA defines professional management and recognizes individual members who are qualified by a combination of education and experience, adherence to high standards of integrity, and an assessed commitment to lifelong learning and professional development. ICMA members who meet these requirements may earn designation as an ICMA Credentialed Manager. For more information on ICMA’s Voluntary Credentialing Program, visit http://icma.org/credentialing. 07-267 Are there other, independent organizations that support council-manager government? The National Civic League (NCL) is America’s original advocate for community democracy. This nonprofit, nonpartisan membership organization is dedicated to strengthening citizen democracy by transforming democratic institutions. NCL accomplishes its mission through technical assistance, training, publishing, research, and promoting the All-America City Awards, America’s original and most prestigious community recognition program. Founded in 1895, NCL serves as a clearinghouse for information on methods of improving state and local government. The League’s Model City Charter, now in its eighth edition, has endorsed council-manager government since 1915. For further information, contact Jared M. Dailey Assistant Program Manager ICMA 777 North Capitol Street, NE, Suite 500 Washington, DC 20002-4201 jdailey@icma.org 202-962-3557 202-962-3500 fax http://icma.org/formofgovt National Civic League 1445 Market Street, Suite 300 Denver, Colorado 80202-1728 303-571-4343 303-571-4404 fax http://www.ncl.org Public Management  August 200924 T he legitimacy of an individual councilmember’s power comes directly from the electorate, but respect and influence cannot be presumed; they have to be earned through action. The manager’s position, however, comes from professional qualifications to manage and provide policy guidance. In contrast with members of the council, the local government manager and professional staff benefit from a long-term familiarity with issues, special- ization, and technical expertise and also from an organizational structure familiar to all. As we know, linking politics and the work of a governing body with the management of government involves an ongoing set of tasks and challeng- es. The idea of council-manager government is that political and adminis- trative realms can be in partnership and not dependent on the system of checks and balances that characterizes our state and federal governments, where separation of legislative and executive powers is valued. The relationship between the manager and the elected officials sets a tone for the entire local government. Although some elected officials shy away from acknowledging a team or partner relationship between and among members of council and between the council and the staff, it is critical that the professional manager prepares the council for its work. In part, this takes place as the manager helps the coun- cil build its capacity to work as a body, earning respect for one another and in an effective partnership with staff. In this article, we set out some of the ways the manager can facilitate the building of council capacity. Preparing Councils for Their Work by Julia Novak and John Nalbandian How managers can help build council capacity is going to be the topic of the authors’ presentation at the Eldon Fields Colloquium, which will be held at ICMA’s 2009 An- nual Conference in Montréal, Québec, Canada, Sept. 13–16. 2009 ICMA Conference ICMA.org/pm 25Public Management  August 2009 CeNtral tasks of a GoverNiNG Body In a formal sense, the role of a govern- ing body is set out in a typical state- ment such as “the council is charged with providing overall leadership for the local government by enacting laws and allocating resources for programs, services, and activities.” Individuals are elected by voters who, in turn, expect the council to listen to their concerns and address their individual issues. As accurate as these phrases are, they do not fully convey the work of the council, and they are insufficient to help new councilors understand what is expected of them. In fact, short phrases only rarely capture the council’s work. Local norms and tradition are as important as any charter when it comes to un- derstanding the council’s work. In addition, the composition of a council can influence how the council and the individual mem- bers see their roles. To be effective, councilmembers must talk about their work, what they think is expected of them, and what they expect of each other. oBstaCles to effeCtive GoverNaNCe Although councils differ, three ob- stacles to council effectiveness are fundamental. First, councils that are willing to deal with big issues will have to confront conflicting political values. These values include repre- sentation, efficiency, social equity, and individual rights. Choices among values are not choices between right and wrong, and councils searching for “correct” answers to policy issues are bound to become frustrated. Second, councilors must confront the difficult values work they are re- sponsible for in the absence of hierar- chy—the mayor is not the boss. How many jobs have you had where no one was in charge? The third obstacle is the difference in perspective between council and staff—differences that are often dif- ficult to understand because while council and staff use the same words, they speak a different language. The tools we identify below are intended to enable a willing council to deal with difficult issues by building council capacity. An important piece of that capacity is an effective partner- ship with staff. tools to Build Good GoverNaNCe Adopting policy in open session where political values are constantly collid- ing is not for the faint at heart. What can the manager do to prepare the council, largely made up of amateur politicians (no disrespect intended), for its work? First, we want to emphasize that staff can help prepare the council for its work, but the council is respon- sible for that work, and the council bears a good deal of responsibility for building its own capacity. The goal is a partnership, and staff members who take too much responsibility for the council’s work may actually create a dependency rather than an effective partnership. In our collective 50 years of expe- rience working with and for elected and appointed local government professionals, we have seen several practices that are effective tools in managers’ tool kits to help overcome the barriers to council and staff work- ing effectively. orieNtatioN Ideally, the orientation process begins before the election, when individuals declare their candidacy for council. The manager’s opportunity to prepare them begins then: open the doors of city hall to the candidates and provide them with nonconfidential correspon- dence and copies of agenda materials. After the election, meet individually with those elected to find out their concerns; offer to allow them to ex- plore areas of community business of particular interest. As soon as practical after the elec- tion, the manager should arrange for a full orientation for new members of the governing body—invite the continuing members to attend as well—and provide them with “Government 101.” Brief them on current issues, the status of long- range plans and capital projects, and the budget process. In its ori- entation, Shoreline, Washington, covers both the basics of members’ service on the council as well as specific government projects (see the box on page 26). Provide tours of operational facilities. Let them see the garage where the city cares for its fleet and even the shop where it stores and maintains its lawnmowers. A tour of water and wastewater treat- ment facilities is fascinating and allows the behind-the-scene work- ers who do the city’s business every day to shine. But also remember that if staff pre- pare the agenda for the orientation, the agenda likely will be based on what staff members think the council needs to know in order to be effective. Every new councilmember must face two crucial questions: How do I get my issues on the political agenda of other councilmembers and staff? How do I influence other councilmembers effectively? Rarely do staff-developed orientations include discussion of these kinds of questions. That is why it is essential to put new members in contact with former councilmembers who are regarded as exemplars and, if possible, make It is essential to put new members in contact with former councilmembers who are regarded as exemplars and, if possible, make them part of the orientation. Public Management  August 200926 them part of the orientation. Im- portantly, these exemplars should represent a range of styles so new members can become acquainted with and relate to at least one for- mer councilmember. retreats aNd Goal settiNG During a council retreat, probably the most important activity of the govern- ing body is spending time articulat- ing what it wants to accomplish, as a body, during its time in office. The most effective councils hold annual sessions where goals are revisited, up- dated, and validated. These sessions, like the orienta- tion, should be seen as annual events so there is no debate on whether they should take place. Goal setting occurs most effectively in a retreat environment where the entire day (or two) is set aside for the purpose of reaching consensus on council priorities. Having department heads attend these discussions provides staff with important context for un- derstanding the “why” behind the priorities. As part of setting goals, the council and staff should come to an agree- ment on how the council wants to be informed about progress on goals and objectives. During the retreat the council can also focus on improv- ing working relationships within the council by discussing norms and be- havior and exploring personal styles in a guided discussion with a trainer and facilitator. An exploration of styles should not be minimized. It is important because all councilmembers are equals. The unintended consequence of equal- ity is that no one has the power and authority to resolve conflict or set or legitimize plans and direction. In the absence of the hierarchical structure we are all accustomed to day in and day out, a gathering of equals who are dealing with problems for which there are no correct answers highlights differences in ways indi- vidual members exercise influence, how much information they need, the extent to which they see themselves as a group, how they deal with con- flict, and even the kinds of concerns individually they think are worth considering. reGular oNe-to-oNe MeetiNGs Although the formal relationship is between the manager and the coun- cilmembers as a body, nurturing in- dividual relationships is an important component of creating a productive working relationship between council New Councilmember Orientation Shoreline, Washington Part I: Nuts & Bolts 1. Council meetings • Open Public Meetings Act • E-meetings/public records 2. Council rules and procedures • Various types of council meetings: Business meeting, study session, work- shop dinner meeting, and executive sessions • Agenda process • First council meeting: Swearing-in ceremony and election of mayor 3. Council-staff communications 4. Council office • Council correspondence process: E-mail, letters • Business expense policy • Miscellaneous: Council voice mail, Web site, e-mail, payroll, health benefits, conferences, council photo Part II: Council Goals, Boards & Commissions, Projects, Issues 5. Council goals • Council goal-setting process: Retreat • 2008–09 council goals/council work plan • Council Work Plan quarterly reports 6. Council boards and commissions • Council of Neighborhoods • Library Board • Parks Board • Economic Development Advisory Committee • Planning Commission 7. Projects and emerging issues • Long-range financial planning • City Hall project • Point Wells • Aurora corridor project • Parks bond projects 8. Wrap-up • Additional information/briefings/tours? ICMA.org/pm 27Public Management  August 2009 and staff. At a minimum, the manager should have one-to-one time with members of council at least once each quarter. Many managers visit much more frequently with individual councilmembers. This is especially important when the council itself is divided. If the manager meets only with members of the majority, the manager plays into the perception that the staff is sup- porting the majority at the expense of the minority. Although the manager is bound to implement the policy ad- opted by the majority, the relationship the manager develops must be with the body as a whole as well as with each individual who makes up the body. Local government managers clearly are spending more time than ever with councilmembers. What is not clear is the changing role of department heads in light of the new allocation of the manager’s time. It used to be a bonus to find department heads who could understand the council’s politics and the work of the manager’s office. Today, that need has become im- perative because the manager does not have sufficient time to spend with department heads. appropriate aCCess to departMeNt Heads Having the council interact directly with staff can be a touchy issue for some managers, but it is a direct consequence of managers having to spend more time on the politics of the jurisdiction. The primary council-staff relationship should be with the man- ager, but allowing councilmembers access to department heads can actu- ally build trust between the council and the manager. Open dialogue between the man- ager and the department heads about how that interaction happens and what is shared back with the man- ager ensures that the manager is properly informed and the council is well served. Shoreline, Washington, has developed written guidelines for council-staff communications that strike an appropriate balance (see the box on this page). doCuMeNted BusiNess praCtiCes The day-to-day business of govern- ment involves responding to corre- spondence, e-mails, and constituent requests. Establishing a practice of how to handle these items ensures fair treatment among all members of the governing body. Some jurisdic- tions call these rules of procedure, and they are adopted by resolution and govern how the council con- ducts itself. Topics include everything from receiving and responding (or not) to public comment at public meetings and when it is appropriate to use official letterhead, to how items get placed on agendas and how many logo shirts each councilmember re- ceives—and everything in between. Council-Staff Communications Guidelines Shoreline, Washington Governance of a city relies on the cooperative efforts of elected officials, who set policy and priorities, and city staff, who analyze problems and issues, make recommendations, and implement and administer the council’s policies. Here are general guidelines to help facilitate effective communications between the city council and city staff. • Channel communications through the appropriate city staff. • All council members should have the same information with which to make decisions. • Depend upon the staff to respond to citizen concerns and complaints as fully and as expeditiously as practical. • The city council sets the direction and policy—city staff are responsible for administrative functions and city operations. • In order to provide the council with timely information, please strive to sub- mit questions on council agenda items ahead of the meeting. • Respect the will of the “full” city council. • Depend upon the staff to make independent and objective recommendations. • The city manager and staff are supporters and advocates for adopted council policy. • Refrain from publicly criticizing an individual employee. Criticism is differenti- ated from questioning facts or the opinion of staff. • Seeking political support from staff is not appropriate. tHe CouNCil Must MaNaGe itself The manager’s job is to create oppor- tunities for the council to be prepared so the members can operate in an en- vironment of mutual understanding. Each of the steps outlined in this ar- ticle can help create the environment for effective governance, but there will be exceptions. Individuals sometimes ignore rules, and toxic personalities sometimes cre- ate challenges for professionals. But do not forget—difficult personalities on the council create a challenging and uncomfortable environment for the council itself. This is not just a staff problem, and often there is no silver bullet. In the end, the council must man- age its own behavior and seek compli- Public Management  August 200928 ance from its own members. Staff can do only a limited amount to support a dysfunctional council, and inviting councilmembers to vent to the man- ager and staff about other councilors at worst can create an expectation that it is the manager’s job to some- how fix the council. That simply can- not happen. BeNefits of leadersHip In their training video, Leadership: An Art of Possibility, Ben and Rosamond Zander talk about the art of leadership as creating a possibility to live into rather than a standard to live up to. Preparing the council for its work lays the groundwork for establishing an environment where the council-staff partnership can flourish and good governance can be supported by good management. PM Julia Novak, ICMA-CM, is regional vice president, Management Partners, Inc., Cin- cinnati, Ohio, and is a former city manager (jnovak@managementpartners.com). John Nalbandian is a faculty member in the Pub- lic Administration Department at the Uni- versity of Kansas, Lawrence, Kansas. He is a former councilmember and mayor in Law- rence, Kansas (nalbandj@gmail.com). In the May 2009 issue of PM, readers were asked to submit their “two- minute elevator speech” that explains to someone they’ve just met or that helps a citizen quickly understand what they do for a living. Here are the replies that were received: My two-minute elevator speech does not last two minutes. I tell the pub- lic that any success I have had comes from having the ability do what I am told. In my role as a city manager, the city council sets the policy direc- tion, and it is my job to use the resources of the city, in partnership with the city employees, other governmental agencies, not-for-profits, busi- nesses, and citizens to carry out that policy with the highest degree of success possible. —Michael Van Milligen City Manager Dubuque, Iowa ctymgr@cityofdubuque.org Being part of a team of ethical professionals dedicated to facilitating our community’s success—that is my role in local government as a deputy city manager. My job is to assist the city manager in her efforts to implement tan- gible policies and programs that will shape the progress our city council seeks to achieve. Day to day, I apply best management practices to ensure that public resources are being used effectively and efficiently for the community’s benefit. I do that by leading a department focused on neighborhood services—the municipal functions that directly affect residents, like solid waste, transit, code enforcement, and animal services. As a professional manager, I maintain open lines of communication with division supervisors and field staff about the city council’s goals and objectives and the city manager’s direction. As a neighborhood services team, our common mission is to ensure that the work we do every day complements and is consistent with the direction that our elected offi- cials wish to lead the community. The work is fun, exhilarating, and very challenging. The best reward comes when we hear from a resident that a job is “well done!” and we see in our performance measurements that progress is being made in providing the highest quality services at the best value to taxpayers. Local government management is a great field, and I hope to pursue my career in it for years to come. —Cody Tubbs Deputy City Manager Elk Grove, California ctubbs@elkgrovecity.org PM What’s Your Elevator Speech? UpcomingPM Contents:  Public Safety Communication Systems  No Pre-Existing Conditions A Holistic Approach to Local Government Management Consulting ICMA ConsultI ng s erv ICes If you need help addressing the most critical issues in your jurisdiction, from community problem-solving, to police and fire mergers to smart growth codes, consider ICMA. If you want a team of local government management experts who can provide your community with a solution that will improve the lives of your residents, hire ICMA. For nearly 100 years, ICMA has provided technical consulting support to local governments nationwide. We’ve helped large and small communities solve some of their most critical problems by offering support in the following areas: Management Services Growth and Development Services Public Safety Services Call 202-289-ICMA Email us at customerservices@icma.org Or visit us online at icma.org/consultingservices 08-102 This is the question that rightly connects elected officials to those they represent. Seasoned staff members understand and pay attention to this question as well, but it will not be their primary focus. "What do you know?" is the professional question. What facts support the need to build a new public works facility? Which road design will best move traffic through downtown? What types of checks and balances in the finance department will ensure the proper use of city funds? What is the past history of this issue in our city? Can we realistically afford it? Is it legal? Through educa- tion and experience, staff members know how to answer such questions. Most major decisions have to incorporate both questions, and the strongest council and staff teams become adept at bringing those complementary perspectives together. For example, the question of how best to design a street to move traffic through the downtown needs both the professional input of traffic engineers, but equally, the political insights of the council about how the people of the city actually use downtown and how they would like their city to look. Creating a good relationship As you bring these different perspec- tives to the work of the city, how can you help ensure that your relation- ship with the staff is a productive and mutually rewarding one? First and foremost is good commu- nication. Staff should help you under- stand and negotiate your new duties as an elected official in your city. After each election, many cities hold a formal orientation session for new members of the council where they meet with department heads to be briefed on the operations headed by each. The orientation may also include a tour of city facilities with an eye to understanding the issues that lie ahead-streets that need major repair, utility plants that need to be expanded, and business parks that need to be filled up. If your city does not offer such formal orientation sessions, consider asking your chief administra- tive officer if he or she could set up informal meetings and tours for you. That commitment to good com.munication should continue with the information you and staff exchange prior to each meeting of the city council. Staff will usually provide an agenda for the meeting accom- panied by reports and memos that prepare you for the discussion and for voting on the scheduled items. Smaller cities with a small staff may have the ability to provide only more limited written information that will be supplemented with a broader oral report at the meeting. Either way, you should feel free and welcome to contact city staff prior to any meeting to ask questions or have further discus- sions that help prepare you for the council meeting. For your part, remember that communication is a two-way street! The staff cannot read your mind. Let them know what you need. Demonstrate openness, honesty, and transparency in your own interactions with staff, and usually you will find that they uphold the same standards in their interactions with you. Feel free to express your opinions and explore thoughts with staff. But remember that they cannot and should not take work direction from you as an individual member of the council; the governing body has to speak with one voice through majority vote . 20 TEXAS TOWN & CITY • J UN E 2 013 Clear expectations for all Another benefit of good communica- tion is that everyone knows what to expect. One way to ensure this is to set a "no surprises" rule for your meet- ings. This means that at meetings , no one will be surprised by unexpected items being added to the agenda or substantial new (and perhaps contro- versial) information being presented that you are expected to digest prior to making a decision. Another important way to keep everyone, council and staff alike , working from the same page is to have a mission statement, strategic plan, and at least a list of work goals and projects for your city. Lurching from issue to issue at each meeting tends to lead to frustration and a waste of resources. Have a focus on outcomes related to agreed-upon needs of the commu- nity rather than on personal agendas . And finally, understand that once those outcomes and the expectations for performance are outlined by the council, the details of administration are usually best left up to staff. At the end of the day, like most human relations, the relationship between elected officials and city staff comes down to one of mutual respect. Respect for roles, respect for differing perspectives, and respect for the good intentions of both to display an atti- tude of public service that focuses on the needs of the community and its citizens. When you demonstrate respect for others and set an expec- tation that they will respect you, you will be well on your way to having a great relationship with your city staff* You may contact Kevin Frazell at 651-281-1215 or kfrazell@fmc.org. Q-1 Q-1 Q-1 Q-1 Q-1 Q-1 Q-1 Q-1 Rev. March 2009 www.NationalCharterSchools.org (989) 774-2999 Introduction James Smithson, the British donor whose estate initially funded the creation of the Congressionally chartered Smithsonian Institution, might well regret his bequest if he knew what’s been going on at his namesake. Due to the actions of the Smithsonian’s immediate past secretary—its senior executive—the organization is in trouble. Among other issues, the secretary finagled a stratospheric salary, submitted lavish expenses for reimbursement, engaged in conflicts of interest, and spent a substantial amount of time fulfilling obligations serving other corporate boards. Though his actions were all egregious, responsibility for them ultimately rests where it always does in a non-profit organization: with the governing board. As a result the board’s failure to provide proper oversight, the sprawling conglomeration of museums, galleries and a zoo, which currently receives about 70 percent of its annual billion dollar budget from US taxpayers, may lose more than face. A House appro- priations subcommittee cut the Smithsonian’s proposed 2008 funds by four percent, an amount equal to $26 million (Trescott, 2007). Although the Senate will have to concur for this cut to take effect, the action has the Smithsonian’s attention. The governing board—the Board of Regents—recognizes that it must quickly rem- edy its colossal failures. Enveloped in a hailstorm of adverse media, Con- gressional ire and public disgust, the Smithsonian Board of Regents formed two investigative committees in March, 2007, each independent of the other. Both were given the charge of assessing what went wrong, and more importantly, with recommending solutions to the Smithsonian’s problems. The committees reported their findings in two reports, both of which contain valuable lessons for astute charter school boards and authorizers. Value Proposition If you have time to do the reading, the committee reports are fascinating. They are candid and detailed. You can learn an immense amount from these reports about how seriously things can go wrong when sloppy board governance is the organizational norm. Most charter school board members, while desir- ous of good governance, however, do not have the time to study hundreds of pages of board committee reports, regardless of the quality of those reports. In- stead, by synthesizing the committee reports into a few thousand words, this monograph holds forth a simple value proposition: In exchange for a brief in- vestment of board meeting time to read and discuss this monograph, your board can consider whether it is making similar governance mistakes and correct them. There are also lessons for authorizers to con- sider in their oversight of boards. Overview* When board members default on their oversight re- sponsibilities, bad things happen to good organizations. Consider the Smithsonian Institution, whose board ne- glect has recently been highlighted in the news—neglect that has tarnished that organization’s name and may re- sult in a partial loss of funding. In a series of articles beginning in January, 2007, The Washington Post reported a variety of issues that re- vealed poor governance. The Smithsonian board, for example, either blithely consented to, or was ignorant of, outrageous executive salaries. While the distinction is hard to discern, the results are not: at the top of this se- lect class, Lawrence M. Small, Secretary of the Smith- sonian, then his seventh year in that position, was receiv- ing current year cash compensation totaling $915,698— more than twice that of a US President (whose annual salary is $400,000). ȱ THEȱ SMITHSONIANȱGOVERNANCEȱ DEBACLE:ȱ TENȱLESSONSȱ CHARTERȱSCHOOLȱBOARDSȱCANȱ LEARNȱȱ ȱ CEOȱȱ NationalȱCharterȱSchoolsȱInstituteȱ ATȱ SOMEONEȱELSE’SȱEXPENSEȱ © 2007 National Charter Schools Institute 1 Brian L. Carpenter, Ph.D. * With some minor edits, the overview originally appeared as a column by Brian L. Carpenter in the Charter School Monthly, Aug 2007. Q-3 Rev. March 2009 www.NationalCharterSchools.org (989) 774-2999 In addition to this tidy sum, Small was reimbursed for a bewildering assortment of expenses. Many of these were so unreasonable that Senator Charles R. Grassley (R- Iowa) characterized Small as living a “champagne lifestyle [that] turns out to be Dom Perignon” (Grimaldi, 2007). Taxpayers may find this par- ticularly repugnant because the Smithsonian, as the Post notes, is a public institution. However, the board’s failure to exercise its fundamental duty of or- ganizational oversight didn’t end there. Additionally, the Post reported that Small also served as a paid di- rector of an insurance company that collected more than $500,000 a year in insurance premiums from the Smith- sonian. One seems hard pressed to characterize such a relationship as any- thing other than a conflict of interest. Consider a few other unethical actions such as management directing book- keeping to reclassify an expense to cover Small’s tracks, and it smells like there was a skunk at the picnic. Failing to see these as problems, the chair of the board’s executive commit- tee initially defended its executive (Grimaldi, 2007). Thus, as The Wash- ington Post editorial board opined on March 1, 2007, “As distressing as Mr. Small’s actions were, the real prob- lem lies with a board that opted to be more lap dog than watchdog.” Very well, you say, but what does any of this have to do with charter school governance? Plenty. Some charter school boards act like lap dogs. They approve murky transactions improperly benefiting management, their family mem- bers, or individual board members. Some boards fail to exercise due diligence with respect to school fi- nances; they recklessly approve, for example, whopping increases in capital indebtedness, thereby sad- dling the school with a strangling debt load, the responsibilities for which will exist long after manage- ment has changed hands. Many boards “delegate” auditor selection to management, forgetting that the word “independent,” as in the term “independent auditor,” means that the auditor should be independent of the management. Even worse, in some cases, char- ter school boards are largely com- posed of longtime personal friends of management—and even relatives in some states where the law al- lows. Instead of engaging in gov- ernance as a solemn responsibility on behalf of taxpayers, these board Primary Source Documents for this Monograph Two committees, a Governance Committee (GC) and an Independent Review Committee (IRC), conducted investigations and produced reports independent of the other. The reports, number 54 pages and 112 pages (plus 280 pages of supporting documentation), respectively. Both reports, along with numerous articles from The Washington Post, constituted the sources of information about the Smithsonian in this monograph. Links to the committee’s reports appear below, while The Washington Post articles can be accessed through its archives (for a fee) The Board of Regents Governance Committee. (2007). Report of the governance committee to the board of regents, June 14, 2007. Re- trieved July 28, 2007, from http://newsdesk.si.edu/releases/Governance_Committee_Report.pdf (In-text citations in this monograph refer to this report as “GC”) Bowsher, C. A., Potts, S. D., & A.W. Pete Smith, Jr. (2007). A report to the board of regents of the Smithsonian Institution [Electronic Ver- sion]. Retrieved July 31, 2007 from http://www.si.edu/about/regents/documents/IRC_report.pdf. (In-text citations in this monograph refer to this report as “IRC”) members arrive at meetings with their rubber stamps in tow, conducting school affairs like they’re running a family-held business. They are incog- nizant that their laissez-faire decision making is harmful to their school and to the broader charter movement. Like the Smithsonian board, such boards forget (or ignore) the fact that charter schools are public institutions; and that each board member has a duty to the taxpayers who fund the school. It hasn’t been that long since the charter world played its own rendition of the Smithsonian tragicomedy. Re- member the California Charter Acad- emy scandal of 2004? Failure by the boards and the authorizer resulted in the overnight displacement of 10,000 students as 60 schools under CCA collapsed (Rotherham, 2005). The movement ended up with a shiner visible to the country when the story was carried above the fold on the front page of The New York Times (Dillon, 2004). It’s true, in these two examples, the organizations suffered due to poor executive leadership. Rather than ex- cuse sloppy governance, however, these examples should serve to strengthen every charter school board member’s resolve to govern well. There is much at stake. © 2007 National Charter Schools Institute 2 at www.washingtonpost.com.You can download copies of both committee reports by entering the following links into your Web browser: Q-3 Rev. March 2009 www.NationalCharterSchools.org (989) 774-2999 The concept of the board acting as the representa- tive of the organization’s owners is one that has been clearly articulated by Dr. John Carver, the world’s foremost expert on board governance. In his book, Boards That Make a Difference, he explains this idea more completely, along with Policy Governance™ fundamentals. For more information on this model of governance, go to carvergovernance.com or contact the National Charter Schools Institute. Ten Governance Failures and How to Remedy Them In a number of instances, the GC and IRC reports (see p. 2) indi- cate that the Smithsonian board either failed to enact or revise poli- cies necessary for proper manage- ment, or in some instances, failed to monitor compliance by the ex- ecutive with its existing policies. For example, the Smithsonian board established a conflict of in- terest policy, but the board failed to monitor organizational compli- ance with it. Many charter schools have in- adequate policies or none at all. In schools where policies do exist, board members often aren’t even conversant in them. A critical role of the board is to establish major policies and then monitor compli- ance with them. After all, what’s the point of enacting policies if compliance is never monitored? The IRC report makes a state- ment from which every charter school board should learn: “Historically, the Smithsonian Board of Regents appears to not have taken a strong oversight role. Mr. Small’s predecessor tried to in- crease the involvement of the Re- gents in the affairs of the Smith- sonian, but found a limited interest on the part of the Regents in taking a more active role” (IRC, p. 3). The duty of oversight is a legal concept under which governance Talent Isn’t Enough One of the interesting things that the current Smithsonian “governance crisis” (IRC, p. 1) illustrates is that a group of talented, high-achieving individuals does not necessarily make a competent board. The Smithsonian Board of Regents includes the Chief Justice of the Supreme Court, the Vice President of the US, and six Congres- sional Regents. Clearly as individuals, these people have ascended to the heights of their chosen careers. How- ever, as a group, they failed to fulfill the board’s very purpose for exist- ing: to ensure that the organization, on behalf of its owners, accom- plishes what it should, while avoid- ing the things that should be avoided (Carver, 2006). Herein lies an important lesson for charter schools and authorizers: even the most talented individuals need to develop their capacity for board governance. It’s also critical to understand that this development process has to involve a lot more than learning compliance with open meetings laws and the Freedom of Information Act (FOIA). Learning how to govern means learning how to do the work of the board. It does not, mean, however, learning how to do the work of the organization’s executive; an error that the Smith- sonian appears poised to make as the pendulum now swings in the other direction. In the discussion that follows, I briefly discuss ten aspects of gov- ernance using examples of board failures from the Smithsonian case. These ten aspects do not constitute the entire work of the board, but when taken together, they help form a more complete picture how boards should operate. 1. Failure to enact, revise, and monitor compliance with policies. 2. Failure to actually provide oversight. © 2007 National Charter Schools Institute 3 Q-3 Rev. March 2009© 2007 National Charter Schools Institute 4 www.NationalCharterSchools.org (989) 774-2999 “Nevertheless, board members must under- stand that they cannot delegate the duty of over- sight to others, including other board members. Ultimately, every individ- ual board member can be held liable for the acts and omissions of the entire board.” A governing board should estab- lish its own agenda. The board should always consult its executive in the process, but the final decision as to what the board should discuss should be determined by the board. In order to effectively perform its duty of oversight, the board should ask probing questions about the con- dition of the organization, the as- sumptions which its executive uses to manage and lead it, and the ethi- cal propriety by which decisions and actions are executed. Critical ap- praisal of such factors is part of the board’s work. Skillful, honest ex- ecutives value such deliberations because they appreciate that trans- parent accountability is in the best interest of the organization. Instead, the Smithsonian Board “failed to ask very basic questions about the Smithsonian’s opera- tions” (IRC, p. 80). No surprise then, that it learned too late that its second-in-command earned $10.3 million in cash, stocks, and options on other boards during her six years of employment at the Smithsonian. The IRC report also stated that “she spent 400 work days away from her office performing non-Smithsonian activities” (p. 78). That such abuses existed within clear potential scru- tiny of the board for six years proves it wasn't asking many questions. Does your board ask probing ques- tions and engage in robust delibera- tion? Does your management react defensively when you probe for infor- mation not presented in reports? Be wary. Questioning is part of the gov- ernance process. laws take shape. In essence, the duty of oversight means that every board member has a responsibility to be informed about the organiza- tion’s operations for the purpose of making reasonable decisions (Charney & Hyatt, 2003). This does not mean, as some busybody charter school board members will think, that the duty of oversight is an open-ended invi- tation to walk the school’s hall- ways and sit uninvited in class- rooms, or direct the administration to reproduce volumes of records for the board member’s individual inspection. Such actions are not part of board oversight. In fact, they constitute a misuse of author- ity that the board should prohibit. In contrast, the duty of oversight is properly fulfilled when the board as a whole monitors the ongoing condition of the organization, espe- cially the organization’s financial condition. Nevertheless, board members must understand that they cannot delegate the duty of oversight to oth- ers, including other board members. Ultimately,every individual board member can be held liable for the acts and omissions of the entire board. The Smithsonian Board erred when it did what many charter school boards do: It delegated the establishment of its meeting agenda to the senior executive. As a result, Small tightly controlled the flow of information to the board thereby preventing the board from focusing on various issues it should have con- sidered (GC, p. 4; IRC p. 70). 3. Failure to establish and control its own agenda. 4. Failure to ask probing ques- tions of management or engage in robust board deliberation. Q-3 Rev. March 2009© 2007 National Charter Schools Institute 5 www.NationalCharterSchools.org (989) 774-2999 the law recognizes that certain docu- ments supersede other documents. For example, an organization’s bylaws are senior to an organization’s policies, meaning that if the policies contradict the bylaws, the policies are invalid unless the bylaws are appropriately amended. If a charter school has a management agreement, the board’s policies are senior to that agreement. Arising from this concept is the duty of obedience which requires a board to obey documents, including its own, based on the authority of those documents. In effect, the au- thority of the board is constrained by various documents. In the decision making process, the board must, therefore, actively consult those documents in order to make in- formed decisions. Here too, the Smithsonian Board failed a basic responsibility of govern- ance. By permitting the executive committee to approve Small’s com- pensation, not only did the board vio- late the integrity of the governance process, it also disobeyed its own char- ter and bylaws (IRC, p. 67). A charter school board needs to regularly review key documents which it has a duty to obey (like its charter). It should also ensure that documents such as policies and management agreements conform to senior docu- ments (such as state laws and its char- ter). A generalized sequence of the seniority of those documents to which the board has a duty to obey appears in Figure 1. Be forewarned that this is more than an academic concept. Charter school board members can be sued for failing to fulfill their duty of obedience. A board action that violates your by- laws, for example may land you in court. Avoid this by reviewing sen- ior documents with your attorney. A central tenet of governance is that a board should never permit anyone—individual board mem- bers, including the board chair or groups such as committees—to come between it and its CEO (Carver, 2006). The board must preserve the integrity of this rela- tionship in order to ensure that proper delegation takes place. In practice, this means, among other things, that committees should not make decisions that are properly the purview of the whole board. This includes limiting the power of the “Executive Commit- tee,” which is commonly misused as a mini-board to make decisions in between board meetings. The Smithsonian Board botched this responsibility as well. It allowed individuals and committees to make decisions—such as Small’s compensa- tion—for the whole board. In fact, the IRC report noted, that not only did this occur, “some Regents did not learn all the details of Mr. Small’s compensa- tion until they read about it in press accounts” (IRC, p. 5). Decisions that belong to the whole board should never be delegated or relegated to committees. Governance also includes the process of holding committees accountable to the board. There is an important governance concept embedded in corporate law known as “seniority of docu- ments” (Charney & Hyatt, 2003). Essentially, the concept means that 5. Failure to preserve the role and authority of the board by flawed usage of committees. 6. Failure to perform its duty of obedience by ignoring its own arti- cles of incorporation and bylaws. Federal education and govern- ance laws such as No Child Left Behind and the Freedom of Infor- mation Act (FOIA). Other federal laws such as the Asbestos Haz- ard Emergency Response Act (AHERA) also apply to charter schools. Figure 1. Generalized Seniority of Documents for Charter Schools State statute regarding charter schools, not-for-profit organiza- tions, and applicable conven- tional public school laws (in some states). The school’s articles of incorporation and bylaws.* The performance contract (a.k.a., the charter) between the board and the school’s authorizer. Also, other authorizer compliance requirements. Polices and resolutions adopted by the board. Agreements governing the rela- tionship between management and the board. Procedures, such as those con- tained in parent and student handbooks, etc. The board has a duty to obey the documents above. Documents below may not contradict those above and must also be obeyed, but the board generally has the authority to alter these, if done properly. * Generally, the corporation comes into existence before the charter is issued, but the point here is that the school may not receive a charter unless the authorizer is satisfied with the bylaws. Q-3 Rev. March 2009© 2007 National Charter Schools Institute 6 www.NationalCharterSchools.org (989) 774-2999 Lastly, I want to add a strong word of warning about family members (spouses of teachers, administrators, etc.) serving on a board at the school where their family member is em- ployed. Although this is permissible under some existing state laws, I urge the movement to clean house before we have a crisis precipitated by such improper governance, and thereby end up as the subject of a media investiga- tion like the Smithsonian. Charter schools are public institutions and should be governed with the highest degree of fidelity—not nepotism. Authorizers should lead the way. One of the things most evident in reviewing the reports by the com- mittees is that the Smithsonian Board didn’t understand govern- ance. As previously noted, that’s not because the people on the board were incompetent as leaders in their chosen professions. It’s simply be- cause governance is a discipline, mastery of which, like any other, requires study and practice. The GC report recommends that the Smithsonian develop an orienta- tion program for new Regents. That’s a good start, but it falls short of recognizing that ongoing board development is needed in order to learn and practice the tenets of good governance. Charter school boards can de- velop their own governance capacity by consistently doing three things: 1. Orienting new board members. At a minimum, each new board mem- ber should receive copies of various documents that are foundational to the school’s existence, along with training to understand how the board The GC report states that “Press reports and Congressional inquiries have questioned the relationship be- tween the Regent nominations and the prior Secretary” (GC, p. A-14). Such inquiries are rightly premised on an underlying governance con- cept: the decisions of a board should embody the highest degree of objec- tivity. This is hard to achieve when the board is composed of manage- ment’s personal friends since they are unlikely to exert rigorous over- sight necessary to governance. This doesn’t mean that an executive shouldn’t cultivate friendly relation- ships with his board. It means that friends don’t make objective boards. Unfortunately, maintaining board independence is a commonly over- looked aspect of governance in the charter sector. Yet, charter school boards need independence in order to make certain key decisions objec- tively—such as whether the school’s current management is getting the job done right. There’s a lesson for authorizers here. Since board members aren’t likely to withdraw themselves from the board based on a prior relation- ship with management, it is incum- bent on authorizers to examine those relationships before appointing or reappointing board members. Full disclosure of prior relationships should not only be required on board member applications; the ex- tent of those relationships should also be judiciously evaluated by au- thorizers. If longtime friends and colleagues of the executive are per- mitted to serve on a charter school board, such members should never constitute a majority. “Full disclosure of prior relationships should not only be required on board member applica- tions; the extent of those relationships should also be judiciously evaluated by authorizers.”ȱ 7. Failure to promote board independence from management. 8. Failure to engage in ongoing board development. Q-3 Rev. March 2009© 2007 National Charter Schools Institute 7 www.NationalCharterSchools.org (989) 774-2999 Even better, a board can assess its performance following each meeting. Such assessments can raise red flags which might prevent a full scale deba- cle like the kind that occurred at the Smithsonian. Through its numerous governance failures, the Smithsonian board ulti- mately failed to promote organiza- tional transparency. By not holding its executive accountable, the board unwittingly created a culture in which wrong things were allowed to happen. In so doing, the board dam- aged the organization. Ultimately, it is the board that creates the ethical climate in a char- ter school. In large part, it does this through selecting the right CEO (see Chapter 16 of Charter School Board University). Larger yet, however, is the role played by the board in culti- vating an ethical climate by insisting on organizational transparency from that CEO. A board that fails to de- mand this runs the risk of not only finding themselves unfavorably written about in the morning paper, but also of jeopardizing the very existence of the organization. The board’s actions should also be transparent. As well as setting the standard for the rest of the organiza- tion to follow, transparency is a pre- requisite for democratic organiza- tions. In fact, one of the purposes of open meetings acts is to ensure ac- countability of public organiza- tions—like charter schools—by re- quiring that their business be done in public view. Considering that char- ters exist at the pleasure of the tax- paying public, should we be ex- pected to do anything less? uses those documents to do its work. Some of these documents were mentioned on p. 5. For more infor- mation, see Chapter 5 of Charter School Board University (Carpenter, 2006). 2. Allocating time on its regular agenda for the purpose of discussing governance. Reading books or arti- cles like this one on governance, then coming prepared to discuss those readings is a great way to fa- cilitate board development. Ensur- ing that this development regularly takes place is a prime responsibility of the board president or chair. 3. Conducting at least one board development retreat each year (not to be confused with conducting stra- tegic planning). The board should avoid all regular business during the development retreat so it can focus its attention specifically on improv- ing its governance. Incidentally, I strongly recommend that the CEO or school leader participate in this retreat because the real secret to a successful school is learning how to navigate the intersection of governance (the board’s responsibility) and management (the CEO’s responsibility). Congruent with regularly devel- oping the board’s governance capac- ity is regularly assessing the board’s performance—something the Smith- sonian board didn’t do. At a mini- mum, a board should assess its own performance at least annually. I rec- ommend doing it in conjunction with the board’s assessment of its CEO—for which a consultant can be useful because of the knowledge and objectivity they provide. 9. Failure by the board to assess itself. 10. Failure to promote organiza- tional transparency. References & Resources Carpenter, B. L. (2006). Charter school board university: An intro- ductory course to effective charter school board governance (1st ed.). Mount Pleasant, MI: National Charter Schools Institute. Carver, J. (2002). John Carver on board leadership: Selected writ- ings from the creator of the world's most provocative and sys- tematic governance model. San Francisco, Calif.: Jossey-Bass, A Wiley Co. Carver, J. (2006). Boards that make a difference: a new design for leadership in nonprofit and public organizations (3rd ed.). San Francisco, CA: Jossey-Bass A Wiley Imprint. Dillon, S. (September 17, 2004). Collapse of 60 charter schools leaves Californians scrambling. The New York Times. Grimaldi, J. V. (March 19, 2007). Smithsonian documents detail chief's expenses. The Washington Post. Hyatt, J., & Charney, B. (2003). The legal and fiduciary duties of directors Board Leadership, 78 (Mar - Apr 2005). Rotherham, A. (2005). The pros & cons of charter school closures. In R. J. Lake & P. T. Hill (Eds.), Hopes, fears & reality: A balanced look at American charter schools in 2005. Seattle (Center on Rein- venting Public Education). The Washington Post Editorial Board. (March 1, 2007). Smithsonian spending. The Washington Post. Trescott, J. (2007, May 24, 2007). With budget cuts, House panel scolds troubled Smithsonian. The Washington Post, p. C4. Q-3 Rev. March 2009© 2007 National Charter Schools Institute 8 www.NationalCharterSchools.org (989) 774-2999 Summary The Smithsonian’s governance errors extend beyond the ten that were briefly discussed in this mono- graph. Due to space constraints, it simply wasn’t possible to describe all of the ways in which the board failed the organization. In fact, by my count, there were at least 17 major governance errors described in the committee reports, which means that there are another seven errors that didn’t even get mentioned in passing in this monograph. Fellow researchers and consultants will, no doubt, want to read about these for themselves in the source documents. For charter school board members, however, the ten failures noted in this monograph provide ample illustrations to begin a discussion about the seriousness of pro- viding proper organizational oversight. The point of the monograph is not a case of governance consultant schadenfreude. While the Smith- sonian board should have taken its governance responsibilities more seriously, many boards in the profit and not-for-profit sector, including some charter school boards I’ve observed, wait until its too late. In this respect, the Smithsonian board performed no more poorly than many charter school boards. It’s just that some of them haven’t made the newspaper—yet. Board members need to realize they have been granted a weighty privilege to make decisions in behalf of others, but that the privilege is coupled with an equally as great responsibility. An appropriate re- sponse is to embrace the privilege and the responsibility by committing oneself to reading and studying governance in order to perform the board member role well. When reading about the failures of the Smithsonian board in this monograph, consider that some lessons are cheaper when learned at someone else’s expense. Disclaimer: This monograph is not intended to substitute for legal advice. Charter school boards should retain and consult their own independent attorney. Further, the opinions stated herein are those of the author and do not necessarily reflect thos e of the National Charter Schools Institute. © October 2008 National Charter Schools Institute 8 (989) 774-2999 www.NationalCharterSchools.org References Carpenter, Brian L. (2008a) Understanding how charter school boards impact school dissolution: An explanatory mixed methods study. Ph.D. dissertation, Capella University, United States -- Minnesota. Carpenter, B. L. (2008b). The seven outs: Strategic planning made easy for charter schools. Mt. Pleas- ant, Michigan. National Charter Schools Institute. Center for Education Reform. (2002, October). Charter school closures: The opportunity for accountability. Retrieved October 11, 2006, from http://www.edreform.com/ _upload/closures.pdf. Washington, DC: Allen, J., & Looney, M. Center for Education Reform. (2006, February). Charter schools today: Changing the face of American education. Part 3: Charter school closures: The opportunity for accountability. Washington, DC: Allen, J., Beaman, G., & Hornung, K. Center for Education Reform. (2008, July). Annual survey of America's charter schools. Washington, DC: Allen, J., & Consoletti, A. Center for Education Reform. Collins, J. (2001). Good to great: Why some companies made the leap . . . and others don’t. Collins Business. Gau, R. (2006). Trends in charter school authorizing. Washington, DC: Thomas B. Fordham Institute. Hassel, B. C. (2003). Friendly competition [Electronic Version]. Education Next. Winter 2003. Retrieved May 25, 20007 from http://www.hoover.org/publications/ ednext/3354521.html Hill, P. T., & Lake, R. J. (2006). Charter school governance. Paper presented at the National Conference on Charter School Research at Vanderbilt University, September 28, 2006. Hill, P. T., Lake, R. J., & Celio, M. B. (2002). Charter schools and accountability in public education. Washington, D.C.: Brookings Institution Press. Whitman, D. (2008). Sweating the small stuff: Inner-city schools and the new paternalism. Washington, D.C.: Thomas B. Fordham Institute. From the CEO of the National Charter Schools Institute Affiliated since its inception in 1995 with Central Michigan University in Mt. Pleasant, through the increased availability of high performing charter schools. We accomplish this through publications (such as this one), conference presentations, workshops, training and technical assistance. We are privileged to work with individual school boards, state associa- tions, universities, authorizers and other leaders across the country. If you found this publication useful, I invite you to visit www.NationalCharterSchools.org where you will find similar monographs on other topics, provided free of charge. And you’re welcome to reprint and distribute these documents, as long as they are presented unaltered in their entirety with proper attribution. For questions or comments, please contact us at (989) 774-2999, Monday through Friday, 8:00 am to 5:00 pm EST. You can also correspond by email with us at resources@nationalcharterschools.org. Institute publications are not intended to render or substitute for legal advice. Michigan, the National Charter Schools Institute exists that students in charter schools excel Brian L. Carpenter, Ph.D. Q-3 CHARTER SCHOOLS CREATING EFFECTIVE GOVERNING BOARDS Produced under a grant from the Annie E. Casey Foundation ABOUT THE AUTHOR Creating an Effective Charter School Governing Board was created by Frank Martinelli,president of the Center for Public Skills Training in Milwaukee. He has provided training and management assistance to nonprofit organizations and public agencies since 1976. Frank has a special interest in charter school start-ups by non- profit youth and family serving organizations and has assisted in the planning of three such charter schools in Milwaukee. Areas of expertise include volunteer management, strategic planning facilitation, designing and leading high priority meetings and conferences, board and staff retreats, and forging community collaborations and alliances. Frank is also a member of the faculty of The Learning Institute, a national joint venture of the Society for Nonprofit Organizations, United Way of America, and the University of Wisconsin-Extension designed to deliver training through a range of emerging technologies. Q-4 1. BUILDING THE FOUNDATION 2. IDENTIFYING AND RECRUITING BOARD MEMBERS 3. ORIENTING AND TRAINING BOARD MEMBERS 4. MAKING EFFECTIVE DECISIONS 5. STRATEGIC PLANNING AND THINKING 6. CARRYING OUT LEGAL AND FINANCIAL RESPONSIBILITIES 7. DEVELOPING EFFECTIVE BOARD-STAFF RELATIONS 8. DEVELOPING FRUITFUL BOARD- COMMUNITY/PARENT RELATIONS 9. ENCOURAGING BOARD MEMBER MOTIVATION & ACCOUNTABILITY 10. CREATING EFFECTIVE COMMITTEES 11. FOSTERING FUND-RAISING 12. DEVELOPING EFFECTIVE BOARD SELF-ASSESSMENT 1www.uscharterschools.org/gb/governance/ CREATING EFFECTIVE GOVERNING BOARDS INTRODUCTION The ability of a charter school to carry out its mis- sion depends heavily upon the strength of its governing board. An effective board provides strategic direction for the school, chooses and nurtures strong school leaders, and ensures the school’s financial and legal soundness. For a charter school to succeed, it must form a board that is committed to the school’s mission, pos- sesses substantial leadership skills and expertise, sets policy that guides the school’s work, and evaluates both the school and itself with an eye toward continuous improvement. Assembling and mobilizing a group of individu- als to carry out these responsibilities is a daunt- ing task, requiring commitment, careful plan- ning, and wisdom. In response -- by building on the best of the nonprofit, district, charter and pri- vate school governance training and resources -- the Charter Friends National Network offers Creating an Effective Charter School Governing Board, written by Frank Martinelli, with the Center for Public Skills Training in Milwaukee, Wisconsin. Created with funding from the Annie E. Casey Foundation, the guidebook is designed to help prepare and sustain board members to lead an autonomous public school. The much more extensive guidebook, available online at www.uscharterschools.org/gb/governance/, details governance principles and concepts, models of best practice, and essential resources. This overview of the larger guidebook summa- rizes twelve critical challenges that charter school developers must meet to build and main- tain an effective charter school board. Following each challenge is a set of issues that boards may encounter along the way, and a discussion of possible strategies. At the conclusion of the dis- cussion of each challenge is a list of some of the numerous resources available in the larger online guidebook and elsewhere. CHARTER SCHOOLS Q-4 CHALLENGE 1: BUILDING THE FOUNDATION An effective governance model requires that everyone is clear and in agreement about their roles and responsibilities. With that in mind, the board developers initial challenge is to clearly define the boards roles, responsibilities and philosophy of governance. 2 www.uscharterschools.org/gb/governance/ 1 Grignano, Chenzie, Guidance for Charter School Operators, Charter Schools Project, Duquesne University, 1999. 2 Ingram, Richard T., Basic Responsibilities of Nonprofit Boards, National Center for Nonprofit Boards, 1996. STRATEGIES Many of these problems arise when there is a lack of clarity regarding roles and responsibilities between the board and staff of the charter school. However, all of these problems are preventable. Several steps can be initiated early in the board- building process to institute effective board practices. Be clear and in agreement about roles and responsibilities. An effective governance model requires clear and detailed descriptions of the roles and responsibilities of the board, its committees, its officers, and staff. The National Center For Nonprofit Boards has developed the following list of the basic roles and responsibilities of a non- profit board of directors which can serve as a guide for charter school governing boards as well:2 ¥ determine the charter schools mission and purpose ¥ select the charter school administrator ¥ support the charter school administrator and review his or her performance ¥ ensure effective organizational planning ¥ ensure adequate resources ¥ manage resources effectively ¥ determine and monitor the charter schools programs and services ¥ enhance the charter schools public image, and ¥ assess its own performance. Create a strategic plan for growth in school and board development. Charter school developers will need to plan for the orderly transition from the emerging or planning stage when volunteer founders do most of the work to the growth or operational stage of devel- opment when founders take on new roles as staff, teachers and/or board members. According to the Northwest Regional Educational Laboratory (NWREL) Charter Starters Leadership Training Academy, the following are some questions that are important to consider: 3 ¥ What is the relationship between founders, the board, and day-to-day operators? ¥ Do all the founders want to remain involved in the school and if so, do they want to serve on the governing board, as non-board school volunteers, or as members of the paid staff? ¥ How will new board members be recruited as some or all founders leave the governing board in the future? ¥ What skills and areas of expertise are needed in different stages of development? ¥ Will the board be able to maintain the workload of a committee of the whole or will the board need to establish standing committees as the school grows? ¥ How will the board transition from operational/managerial tasks to governance, policy and strategic planning? 3 Northwest Regional Educational Laboratory (NWREL), Charter Starters Leadership Training Academy Workbook,1999. Module 4: Management and Governance, 1999. Visit www.nwrel.org. 3www.uscharterschools.org/gb/governance/ Q-4 4 www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Sample Articles Of Incorporation For Charter Schools That Are Separately Incorporated Nonprofit Organizations Bylaws Checklist Sample Bylaws Charter School Board Governance Framework Chart The Annual Board Development Sequence Chart Additional Resources for Defining Board Roles, Responsibilities, and Governance Philosophy Carver, John,Boards that Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations.Jossey-Bass, 1990. Carver, John,Reinventing your Board. A Step-by-Step Guide to Implementing Policy Governance.Jossey-Bass, 1997. Chait, Richard,How to Help Your Board Govern More and Manage Less.National Center for Nonprofit Boards, 1994. Gardner, Laurie and Premack, Eric,Charter School Governance Toolkit, First Edition, Charter Schools Development Center,1999. [Section 1 includes a selection of sample foundation documents (bylaws and articles of incorporation that can be adapted to meet your charter schools specific needs).] Ingram, Richard T.,Basic Responsibilities of Nonprofit Boards, National Center for Nonprofit Boards, 1996. Mathiasen, Karl,Board Passages: Three Key Stages in a Nonprofit Boards Life-cycle , National Center for Nonprofit Boards. (This publication is probably the only one that focuses in detail on how to understand, anticipate and manage Founders Syndrome.) Zeitlin, Kim Arthur, and Dorn, Susan E., The Nonprofit Boards Guide to Bylaws: Creating a Framework for Effective Governance, National Center for Nonprofit Boards. (This publication contains advice on the pros and cons of common bylaw language, a checklist of elements bylaws should contain as well as sample language. Adiskette is available with 11 complete sample bylaws that can be easily adapted to meet your needs.) Learn More about Building the Foundation Full Resource Guide www.uscharterschools.org/gb/governance/ Q-4 5www.uscharterschools.org/gb/governance/ 6 www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Invitation Letter And Packet Position Descriptions For Individual Board Members Prospective Board Member Application Form Board Profile Worksheets Additional Resources for Board Recruitment Board Member Orientation. Published by Aspen Publishers, Inc. (In spite of the title, this publication includes a number of sample forms and documents useful in every step of the board recruitment process. As an added feature, all of the forms and worksheets in the manual are available on a diskette.) Building Board Diversity, by Jennifer M. Rutledge. Published by the National Center for Nonprofit Boards. (This publication provides a comprehensive approach to developing and implementing a plan to build a board that is more diverse and inclusive. One of the few resources of its kind, it includes a number of worksheets.) Learn More about Identifying and Recruiting Board Members Full Resource Guide www.uscharterschools.org/gb/governance/ Q-4 CHALLENGE 3: ORIENTING AND TRAINING BOARD MEMBERS A central challenge of governance is to help charter school board members acquire the skills and knowledge they need to be effec- tive leaders and decision-makers. 7www.uscharterschools.org/gb/governance/ ISSUES Because charter school board members are likely to come to their positions with very different perspectives on their roles and responsibilities, as well as the mis- sion, vision, major goals, and strategies of the charter school, the lack of an effective orientation and training program can cause several problems, including: ¥ internal dissension and division of the board into various factions ¥ inability of new board members to fully function in their roles ¥ lack of productivity, and ¥ a general sense of personal dissatis - faction. STRATEGIES Develop a long-term orientation strategy. There must be a commitment to develop- ing a well-informed board, one with the knowledge needed to lead an effective charter school. Providing new board members with the information they need to perform effectively is the next critical step in developing strong leadership for the charter school. Consider developing a long-term orienta- tion strategy that is thorough, provided in a timely manner, and follows the board members from the recruitment stage, through the first three months, and beyond. Assess the orientation and training needs of board members. In order to learn what new board mem- bers really need from the orientation and training program, past and current board members can be asked the following question: "What do you know now that you wish you had known when you first joined the board?" Their responses can be used to develop the core curriculum. Create a board member manual. The written board member manual is an indispensable tool in the orientation and training of board members both cur- rent and new. The board manual is never a substitute for face-to-face interaction, but without it, effective orientation and training is made much more difficult. The board manual will be a reference used in new board member orientation, as well as ongoing board training and education, and it will help to ensure efficient orga- nization and access to these materials. Develop a variety of orientation/train- ing strategies. New board member orientation and ongoing board education training pro- grams are obvious ways to educate your board members. However, you may want to consider incorporating training into each board meeting, providing mini-sem- inars on special interest topics, helping set up study groups, and providing access to publications and conferences. 8 www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Sample Board of Directors Handbook Table of Contents Sample Board Member Orientation Outline Parliamentary Procedure Overview Additional Resources for Board Orientation and Training Board Member Orientation. Published by Aspen Publishers, Inc. (This publication includes a number of sample forms and documents useful in every step of the board orientation process. As an added feature, all of the forms and worksheets in the manual are available on a Macintosh and IBM compatible diskette.) How Do We Keep Board Members Informed? National Center for Nonprofit Boards.Go to: www.ncnb.org.Click on Frequently Asked Questions. Learn More about Orienting and Training Board Members Full Resource Guide www.uscharterschools.org/gb/governance/ Q-4 9www.uscharterschools.org/gb/governance/ ISSUES A board that meets monthly for two hours has only 24 hours a year in which to make a number of major decisions and still have time to address unforeseen issues and challenges. Without a frame- work for making decisions, problems can often arise, including: ¥ confusion and lack of agree- ment about who decides what ¥ lack of ownership of tasks, and ¥ time-consuming duplication of efforts. STRATEGIES There are several tools that can be used to increase the effectiveness of board deci- sion-making. Create a board policy manual. Staff members need to be clear about what they are supposed to implement and board members should not have to reinvent similar policies over and over again. Therefore, board policies should be kept organized and accessible. For this reason, it is advisable to have a written board policy manual in which all the policies the board adopts are maintained. CHALLENGE 4: MAKING EFFECTIVE DECISIONS As the board of an independent public school (in many cases also a separately incorporated nonprofit organization) the charter school board is the source of all authority — much of it delegated to others — and has the ultimate responsibility as a result. Therefore it is critical to the suc- cess of the charter school that the board makes effective decisions. Develop a decision-making flowchart. It will be very helpful to have a written description of the decision-making process the board intends to use. This approach reflects clarity about who is responsible for what. The flowchart offers visual details about where issues may originate from, where issues can be delegated to, how issues are to be dealt with, and how actions and recommendations are to be made. Use a decision matrix. The purpose of a decision matrix is to define the authority and decision-making roles and responsibilities of the board clearly in relation to the authority and decision-making roles and responsibilities of other groups and constituencies within the charter school. The matrix identifies decisions needing to be made in a number of broad categories such as: school goals, curriculum and instruction, personnel, staff development, communication, bud- get, assessment and evaluation, record- keeping, and school culture. For each of these decision categories, the matrix then specifies: the decision to be made; who should decide; who should recommend; who should be solicited for input; who should be informed; and which decision- making process should be followed. 10 www.uscharterschools.org/gb/governance/ Use an executive committee to help facilitate decision-making. Another critical element in effective decision- making is a functioning executive committee. The executive committee facilitates effective decision-making by the full board by playing the following three critical roles: planning the agen- da of board meetings, making decisions on behalf of the full board, and serving as a com- munication link with other members of the board. Utilize consent agendas. To expedite business at a charter school board meeting, the board can approve the use of a con- sent agenda that includes those items considered to be routine in nature. Full information about these items should be provided to the board in advance in the board packet and any questions or concerns can be directed to the makers of the motions and answered prior to the meeting. This process allows thorough examination of routine items without using up precious board meeting time. Any item that appears on the consent agenda may be removed from the consent agen- da by a member of the board. The remaining items will be voted on by a single motion. Create an annual calendar of major board decisions. Another tool that can help charter school boards maintain their focus on governance policy and critical emerging issues is an annual calendar of major decisions. Major decisions (such as setting the annual budget, setting goals, and selection of new board members) can be scheduled on an annual basis, allowing other decisions and work to be scheduled in a timely manner. This can also facilitate decision-making by the boards com- mittees and help the charter school administra- tor organize his or her priorities. Display an organizational dashboard. Another tool that can be used to increase the effectiveness of board decision-making is the "organizational dashboard."4 The dashboard dis- plays up-to-date information about key success factors of the charter school — the most essential areas of performance. Once the critical success factors have been identified, the board and the charter school administrator (and other key staff) can then propose and consider strategic performance indicators — the qualitative and quantitative data that most accurately measure and convey the critical areas of performance. As the "dashboard" metaphor implies, the board can regularly refer to the organizational dash- board for information about how well the school is doing relative to its critical success factors. In this way, corrective action can be taken before — not during or after — a crisis erupts. Provide board members with a board book and other timely communications. An effective way to provide board members with needed information in a timely manner is through a written "board book" or board member packet that goes out before board meetings. The book may include outlines of significant devel- opments, an updated copy of the organizational dashboard, an agenda, minutes from other meet- ings, executive summaries of accompanying doc- uments, etc. In addition, consider using your website and email for distributing information between board meetings. 4 Chait, Richard, Holland, Thomas, and Taylor, Barbara, Improving the Performance of Governing Boards, Oryz Press, 1996. Q-4 11www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Flow Chart: How Board Decisions Are Made Executive Committee/Board Meeting Planning Form Questions Before Making Sound Decisions Sample Board Meeting Agenda Decision-making Matrix Board Communication Plan Policy Development Steps Board Meeting Evaluation Form Sample Board Operations Calendar Additional Resources for Board Decision-making and Meetings Sample Board Policies in Critical Areas:conflict of interest, enrollment, etc. See the following websites: ¥ Independent Schools Association of the Central States at www.isacs.org; click on "Monographs", then scroll down and click on " Board of Trustees" and "Business Operations" for sample policies. ¥ Also see Minnesota Council of Nonprofits management resources at http://www.mncn.org/manage.htm#2. ¥ Also see the Free Management Library of The Management Assistance Program for Nonprofits (MAP) at http://www.mapnp.org/library/boards/boards.htm#anchor1322914. Fletcher, Kathleen,The Policy Sampler, National Center for Nonprofit Boards, 2000. Contains a diskette with over 70 policies covering critical areas such as conflict of interest, grievances, sexual harassment, nepotism, confidentiality and more. Comes with printed user guide. Gardner, Laurie, Charter School Governance Toolkit, First Edition, Charter Schools Development Center, 1999. (Section 2 includes a good selection of sample policies that can be adapted to meet your charter schools specific needs.) Smoley, Eugene, Effective School Boards, Jossey-Bass, 1999. Learn More about Making Effective Decisions Full Resource Guide www.uscharterschools.org/gb/governance/ Q-4 CHALLENGE 5 STRATEGIC PLANNING AND THINKING The charter school board has a critical role to play in strategic planning. Charter school board developers need to determine how the board can organize itself in order to function as an effective, future-focused leadership team. 12 13www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Description of Strategic Planning Model Strategic Planning Committee Description Strategic Planning Information Gathering Worksheets Critical Issue Worksheet Worksheet: Foremost Critical Issues Facing the Charter School Sample Strategic Planning Timetables Additional Resources for Strategic Planning Allison, Michael, and Kaye, Jude, Strategic Planning for Nonprofit Organizations, New York: John Wiley & Sons, Inc., 1997. Barry, Bryan W., Strategic Planning Workbook for Nonprofit Organizations, Revised, Saint Paul, Minnesota: Amherst H. Wilder Foundation, 1997. Bryson, John M., and Alston, Farnum K., Creating and Implementing Your Strategic Planning, San Francisco: Jossey-Bass Publishers, 1996. Bryson, John M., Strategic Planning for Public and Nonprofit Organizations, Revised, San Francisco: Jossey-Bass Publishers, 1995. Hundley DeKuyper, Mary, Trustee Handbook: A Guide to Effective Governance for Independent School Boards, National Association of Independent Schools, 1998. (Especially useful is Chapter 4 - "Developing a Shared Vision and Planning Strategically".) McNamara, Carter, PhD, Facilitators Guide to Nonprofit Strategic Planning , Minneapolis, Minnesota: The Management Assistance Program, 1997. OConnor, Judith , The Planning Committee: Shaping Your Future, National Center for Nonprofit Boards, 1997. Learn More about Strategic Planning and Thinking Full Resource Guide www.uscharterschools.org/gb/governance/ Q-4 CHALLENGE 6 CARRYING OUT LEGAL AND FINANCIAL RESPONSIBILITIES All charter school developers and opera- tors face complex legal issues in starting and running their schools. Charter board developers need to learn the best possi- ble ways for the charter school board to carry out its legal and financial oversight responsibilities. 14 ISSUES As a relatively new phenomenon, charter schools involve legal requirements and responsibilities which not only differ widely from state to state, but which may also change over time. The following are just some of the issues that can mire boards into prolonged bouts of putting out fires, being reactive, rather than for- ward-thinking and proactive: ¥ conflicts of interest ¥ uncertainty regarding whether an appropriate education is being provided to all students (especially special education children), and ¥ unresolved fiduciary and legal matters. Charter schools are operating under intense public scrutiny. Powerful forces opposed to charter schools continue to raise questions about the legitimacy of the movement, making it critical for char- ter school boards to pay special attention to carrying out their legal and financial responsibilities. STRATEGIES Educate board members about their legal and financial responsibilities. Board members of the charter school are the ethical, legal and financial stewards of the school. As such, the board must actively exercise oversight functions in four governance areas: corporate law, internal policies, and procedures/con- tracts with third parties; local, state, and federal laws/regulations; the charter schools financial resources, facilities, and equipment; and risk management. Board members must be well-informed about all four areas, know how to monitor the organizations financial position, and understand their roles versus board and committee roles in the oversight responsi- bilities. Implement a conflict of interest policy. When the personal or professional con- cerns of a board member or a staff mem- ber affect his or her ability to put the wel- fare of the charter school before personal benefit, a conflict of interest exists. The charter school board should institute a system of checks and balances to circum- vent actual or potent