Agenda Item 4A
October 4,2016
Introduction
MEMORANDUM
September 30,2016
TO:
FROM:
SUBJECT:
County Council
Robert
H.
Drummer, Senior Legislative Attorney
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Introduction:
Expedited Bill 40-16, Consolidated Retiree Health Benefits Trust
Board - Authority to Delegate - Amendments
Expedited Bill 40-16, Consolidated Retiree Health Benefits Trust Board - Authority to
Delegate - Amendments, sponsored by Lead Sponsor Council President Floreen at the request of
the County Executive, is scheduled to be introduced on October 4, 2016. A public hearing is
tentatively scheduled for October 25 at 1:30 p.m.
The Consolidated Retiree Health Benefits Trust (CRHBT) Board ofTrustees is responsible
for investing the funds designated to pay for all or a portion of benefits provided under the County
retiree benefit plans or a County-funded agency retiree benefit plan, such as retiree health
insurance. Bill 40-16 would amend the County's law to authorize the Board ofTrustees to delegate
signature authority to the Executive Director, or a similarly situated County employee, consistent
with its fiduciary duties, in its written policies and procedures. This authority would better align
the roles and responsibilities of the Board Staff in the oversight of the investment program and
increase the efficiency of the operation.
In 2012, the Council enacted Bill 24-12, which approved similar delegation authority for
the Board of Investment Trustees who oversee the investment programs for the County's
retirement plans.
In
addition, the State of Maryland, along with numerous other pension systems,
currently provide for the Boards, overseeing the investment of the Trust Fund assets, to delegate
certain functions to the Executive Director, or other staff, if such delegation is established in
policies and procedures. The County's Chief Administrative Officer, in his role as Plan
Administrator, currently has the authority within the Code to delegate his duties.
This packet contains:
Expedited Bill 40-16
Legislative Request Report
County Executive Memo
Fiscal and Economic Impact statement
Circle #
1
4
6
7
F:\LAW\BILLS\I640 Consolidated Retiree Health Benefits Trust Fund\lntro Memo.Docx
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Expedited Bill No.
40-16
Concerning: Consolidated Retiree Health
Benefits Trust Board - Authority to
Delegate - Amendments
Revised:
9-26-2016
Draft No.
_1_
Introduced:
October
4. 2016
Expires:
April
4. 2018
Enacted:
[date]
Executive:
[date Signed]
Effective:
[date takes effect]
Sunset Date:
_N'-!.o~n-,""e,---
_ _ _ _ __
Ch,
~,
Laws of Mont. Co.
[year]
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the request ofthe County Executive
AN EXPEDITED ACT
to:
(1)
(2)
pennit the Board of Trustees for the Consolidated Retiree Health Benefits Trust to
assign or delegate signature authority through a written policy; and
generally amend the law regarding the Consolidated Retiree Health Benefits Trust
Fund.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-160
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves thefollowing Act:
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ExPEDITED BILL
No. 40-16
1
2
Sec.
1.
Section 33-160 is amended as follows:
33-160. Board of Trustees.
3
*
(f)
*
*
4
5
Officers. The Board must select a chair, vice chair, and secretary from
the Board's members.
(1) The chair must preside at meetings of the Board and may take
administrative action [, including executing an instrument,] on
behalf of the Board. [A person may rely in good faith on an act
of the chair as legally valid.]
(2) The vice chair must perform the duties and exercise the powers
of the chair when the chair is unavailable, or the Board
determines is otherwise unable to perform the duties ofthe chair.
(3) The secretary must record the proceedings and actions of the
Board and may certify a document or action of the Board. A
person may rely in good faith on the secretary's certification as
proof of the document or action.
6
7
8
9
10
11
12
13
14
15
16
17
18
(g) Meetings and actions.
(1) The Board must meet at least once during each calendar quarter.
The chair, or 10 members ofthe Board, may call a meeting ofthe
Board, in the manner and at times and places provided under the
policies ofthe Board. The Board is a public body under the State
Open Meetings Act.
(2)
(A)
(B)
(C)
Ten trustees constitute a quorum.
Each trustee has one vote.
Ten trustees must agree for the Board to act.
19
20
21
22
23
24
25
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ExPEDITED BILL
No. 40-16
26
27
(3)
The Board may act without a meeting. All of the trustees must
concur in writing for the Board to approve any action the Board
takes without a meeting.
28
29
30
31
(4)
(5)
The Board may adopt procedures consistent with this Section.
In its written policies and procedures, the [The] Board may
authorize a
trustee~
the Executive Director, or
~
similarly situated
County employee, to execute instruments on behalf ofthe Board.
[The authority must be in writing and specifically describe the
instrument and how the trustee must execute the instrument.]
32
33
34
35
*
Sec. 2. Expedited Effective Date.
*
*
36
37
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date on which it
becomes law.
Approved:
38
39
40
41
Nancy Floreen, President, County Council
Date
42
Approved:
43
Isiah Leggett, County Executive
Date
44
This is a correct copy o/Council action.
45
Linda M. Lauer, Clerk of the Council
46
Date
F:\LAW\BILLS\I640 Consolidated Retiree Health Benefits Trust Fund\BiJI I.Docx
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LEGISLATIVE REQUEST REPORT
Expedited Bill 40-16
Consolidated Retiree Health Benefits Trust Board
-
Authority to Delegate
-
Amendments
DESCRIPTION:
The Bill would amend the County's law to authorize the Board of
Trustees, which oversees the investment program for the County's
Consolidated Retiree Health Benefits Trust (CRHBT), to delegate
signature authority to the Executive Director, or a similarly
situated County employee, consistent with its fiduciary duties and
its written policies and procedures.
The Bill would permit the Board to delegate signature authority,
such as the execution of contracts. This authority would better align
the roles and responsibilities of the Board Staff in the oversight of
the investment program and increase the efficiency of the operation.
The goal of the Bill is to provide the Board with the necessary
authority
to
meet its fiduciary duties in overseeing the investment
programs for the County's CRHBT in the appropriate manner.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
The Board of Trustees and the County Attorney's Office have
reviewed this Bill.
FISCAL IMPACT:
Office of Management and Budget
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
Office of Management and Budget
N/A
In 2012, in Bill 24-12, the County Council approved similar
legislation for the Board of Investment Trustees which oversees
the investment programs for the County's retirement plans. In
addition, the State of Maryland, along with numerous other
pension systems, currently provide for the Boards, overseeing the
investment of the Trust Fund assets, to delegate certain functions
to the Executive Director, or other staff, if such delegation is
established in policies and procedures. The County's Chief
Administrative Officer, in his role as Plan Administrator, currently
has the authority within the Code to delegate his duties.
(j)
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SOURCE OF
INFORMATION:
Linda Hennan, Board of Trustees
Amy Moskowitz, Office of the County Attorney
APPLICATION
WITIllN
MUNICIPALITIES:
NI
A
PENALTIES:
N/A
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE. MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
September 21, 2016
:-WNTGOHERY COUNTY
RECEIVED
rni
''Irq
TO:
FROM:
SUBJECT:
Nancy Floreen, Council President
Isiah Leggett, County
Executive~
~
-;
./2
Expedited Bill to Amend the County's Law on the Consolidated Retiree
Health Benefits Trust
I am attaching for the Council's consideration a bill that would amend the
County's law to allow the Board of Trustees, which oversees the investment program for
the County's Consolidated Retiree Health Benefits Trust, to delegate signature authority
to the Executive Director, or a similarly situated employee, to execute instruments on
behalf of the Board consistent with its fiduciary duties and its written policies and
procedures.
The County Code establishes the Board of Trustees in Section 33-160 and
gives the Board the power to invest the assets of the trust fund, authority to direct the
payment of benefits, and describes other actions to be taken in Section 33-160. The
Board has been advised by its legal counsel that the delegation of its duties is permitted
under common law. However, the Board's counsel has advised them that the delegation
authority should be provided in its governing document, the County Code. The
legislation would provide similar delegation of duties as set forth in Section 33-47(d)(l4)
which allows the Chief Administrative Officer to delegate any power or duty. In
addition, in 2012 Bill 24-12, the County Council approved similar legislation for the
Board of Investment Trustees which oversees the investment programs for the County's
retirement plans.
Thank you for your prompt consideration of this bill.
Attachments
montgomerycountymd.gov/311
~
301-251-4850
nY
-3.
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Fiscal Impact Statement
Bill XX-16 - Consolidated Retiree Health Benefits Trust Fund - Delegation of Authority
1. Legislative Summary
The bill would permit the Board of Trustees to delegate certain duties as it deems
appropriate and consistent with its fiduciary duties and its written policies and
procedures. The authority to delegate certain duties was provided to the Board of
Investment Trustees in Bill 24-12, and this bill provides the same authority to the Board
of Trustees.
2. An estimate of changes in County revenues and expenditures regardless ofwhether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions, and methodologies used.
This bill has no impact to revenues or expenditures.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
This bill has no impact to revenues or expenditures.
4. An actuarial analysis through the entire amortization period for each bill that would
affect retiree pension or group insurance costs.
Not applicable.
5. An estimate of expenditures related to County's information technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
Not applicable.
6. Later actions that may affect future revenue and expenditures if the bill authorizes
future spending.
Not applicable.
7. An estimate of the staff time needed to implement the bill.
Not applicable.
8. An explanation of how the addition of new staff responsibilities would affect other
duties.
Not applicable.
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9. An estimate of costs when an additional appropriation is needed.
Not applicable.
10. A description of any variable that could affect revenue and cost estimates.
Not applicable.
11. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not applicable.
12.
If
a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
13. Other fiscal impacts or comments.
Not applicable.
14. The following contributed to and concurred with this analysis:
Corey Orlosky, Office of Management and Budget
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Economic Impact Statement
Bill ##-16E, Consolidated Retiree Health,;Benefits Trust Fund
Background:
This legislation would permit the Board ofTrustees (Board) to assign or delegate
signature authority through policy. The purpose of Bill ##-16E is to better align the roles
and responsibilities of Board Staffin the oversight of the investment program for the
County's Consolidated Retiree Health Benefits Trust (CRHBT) and further enhance the
efficiency of the operation ofthe investment program.
Bill ##-16E amends Section 33-160(g)(5) of the County Code to add the phrase "In its·
written policies and procedures" before "the Board may authorize a trustee" and add the
phrase "the Executive Director or a similarly situated County employee" immediately
after "the Board may authorize a trustee." The legislation deletes the phrase related to
"the authority must be in writing and specifically describe the instrument and how the
trustee must executive the instrument."
1.
The sources of information, assumptions, and methodologies used.
There are no sources of information, assumptions, or methodologies used by the
Department of Finance in the preparation of the economic impact statement.
2. A description of any variable that could affect the economic impact estimates.
There are no variables that could affect the economic impact estimates.
3. The Bill's positive or negative effect, if any on employment, spending, savings,
investment, incomes, and property values
in
the County.
Bill ##-16E would have no effect on employment, spending, savings, investment,
incomes, and property values in the County.
4.
If
a Bill is likely to have no economic impact, why is that the case?
Bill ##-16E amends County Code 33-160 to allow the Board to delegate certain duties
and therefore has no economic impact.
5. The following contributed to or concurred with this analysis:
David Platt and Robert Hagedoorn, Finance; Linda Herman, Executive Director,
Montgomery County Employee Retirement Plans; and Corey Orlosky, OMB.
Department
Alexan~~_
Finance
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