HR Focus

Fall 2007 -- Contents

President's Message Incoming Outgoing IPMA-HR affiliation Officer Election IPMA-HR International Training Conference

Upcoming Events

Conference Highlights TMHRA Affiliates Day Small Cities Employment Law

TMHRA Sponsors

Articles of Interest aka News You Should Use New Members to TMHRA TMHRA E-Solutions IPMA-CP Certification Countering the FInancial Burden Shift -A HR Legal Updates Recent Texas Cases of Interest to Cities Mandatory Collective Bargaining Bill Addressing Political Activism in the Workplace Employers: Benefits Are Key to Retention Cities Attend TMRS Training Seminar about Changes

Newsletter Input Needed

Board of Directors

PDF version of Fall 2007 HR Focus

TMHRA archives HTML versions of previous newsletters.

December 2005	February 2006	May 2006
August 2006	December 2006	Winter 2007
Spring 2007

PRESIDENT’S MESSAGES

INCOMING PRESIDENT’S MESSAGE

Thank you so much for allowing me the opportunity to serve you as your president for 2007-2008. TMHRA is a wonderful organization, full of very talented individuals. I realize I have very large shoes to fill. George Mones has done an outstanding job during this last year, and I thank him for his leadership. I love the diversity of people, locations, and ideas that everyone who serves on our Board, committees, or attends our workshops and conferences brings to the table. This is what makes our organization so vibrant. Thank you to our 2006-2007 Board of Trustees – your hard work shows in each and every thing we do.

You have an outstanding 2007-2008 Board of Trustees. Bonita Hall brings several years of service on the board to her role as Vice President. Don Byrne, our new secretary/treasurer, moves up from the role of trustee. Janie Mehrens, Gayle Sims, Debbie Maynor, and Richard Hodapp are returning to the Board this year as chairs of the New Member, Legislative/Salary Survey, Newsletter, and Technology Committees, respectively. Our two new trustees are Martha Butz (programs chair) and Tadd Phillips (sponsorships chair). Please join me in welcoming them to their roles this year.

What exciting times we are in! TMHRA is at a crossroads of sorts. Changes are coming more quickly, including more and more new federal and state laws to deal with (collective bargaining, anyone?), upcoming TMRS changes, employee relations issues, more and more focus on ethics, the list seems endless. We will be working to make sure you have the tools to handle your jobs through our programming, newsletter, legislative efforts, and liaisons.

As legislative issues are remaining in the forefront, we will consider the role TMHRA needs to play in the future. Over the years, Phyllis Stadler has done a yeoman’s job of keeping everyone notified of pending legislation. Phyllis, thank you so much for the tremendous effort you have given over the years. This last year, the task was split between Phyllis and Gayle Sims, and it was burdensome for both of them. It is becoming more and more apparent that TMHRA needs to not only know what new legislation is being proposed, but we also need to be a voice as well. So, this year our Legislative Committee will be looking at our role for the future.

Several years ago, we developed a strategic plan and created Vision (to be the source for human resource development and solutions for Texas cities) and Mission Statements (TMHRA Promotes Professional Human Resource Development and Organization Solutions for Texas Cities). We will be addressing our strategic plan this year and reviewing our vision and mission statements.

We will continue to bring excellent programming to you this next year, and will work to provide optimum service to you, our members.

TMHRA is your organization – let us know your ideas and the issues you face so we can ensure we are meeting your needs. Want to be more involved? Contact any of our Board members to sign up for a committee or task force.

Have a wonderful holiday season!

Laura Morrow, SPHR, IPMA-CP
Director of Human Resources, City of Allen

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OUTGOING PRESIDENT’S MESSAGE

The TMHRA administrative year ended with the TML Annual Conference on November 6-9 in Dallas. On Thursday, November 8, I passed the gavel to Laura Morrow, director of human resources with the City of Allen. Laura has served on the TMHRA Board, and on most of its committees, for many years. I am looking forward to continuing on the Board as past president under her leadership.

Last year’s Board takes pride in knowing we leave TMHRA a little better than when we arrived. I will reflect on the accomplishments of the 2006-2007 leadership:

• Closed the year financially solid, with a substantial reserve in the bank. Total net assets in TMHRA increased by more than $20,000. This is due to our successful workshops, which have exceeded expenses.
• Increased sponsor revenue from $12,000 to a new high of $40,000. We discovered that sponsors are eager to support TMHRA in return for the opportunity to interact with our membership.
• Hosted the IPMA-HR Southern Region Conference of IPMA, which includes Texas and 12 other states. This hugely successful event was praised by our visitors from the Southern Region.
• Held successful workshops: TexPelra, Civil Service, Employment Law, and Nuts and Bolts, all of which produced surplus revenue.
• Developed a new online list serve, which is useful to survey members on topics of interest.
• Hosted an NPELRA Academy in Dallas, allowing members a convenient opportunity to attend two of the three academies required for professional certification in public labor relations.
• Completed a membership satisfaction survey. This survey showed that most of our members come from cities that have fewer than 500 employees and that most have human resource staffs of five or fewer. Members are highly satisfied with the workshops and programs.
• Held a membership vote, which resulted in our discontinuing our affiliation with IPMA-HR. This vote emphasized that we are a membership-driven organization. We stay in-tune with our membership’s needs and desires.

TMHRA is a great professional organization that owes its success to countless people who have given their time, talents, and spirit to the profession about which they are deeply passionate…..human resources. It has been a gratifying year to serve the membership and work with the superior leadership you have elected to the Board.

George Mones
TMHRA Past President 2006-2007
Director of Human Resources, City of Mesquite

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TMHRA membership votes on IPMA-HR affiliation

TMHRA membership has voted to discontinue affiliation with IPMA-HR. I have notified IPMA-HR Executive Director Neil Reichenberg of this decision.

This vote followed the IPMA-HR decision to require IPMA-HR membership of all members of affiliated chapters. If we had remained an affiliated chapter of IPMA-HR, our association would have been required to pay national dues for all 275 TMHRA members. Sixty-five percent of the membership voted to discontinue our chapter affiliation with IPMA-HR.

Of course, the TMHRA Board still actively supports IPMA-HR. After all, this is the national organization that represents our profession in the public sector. In fact, 58 of our members have individual or agency membership with IPMA-HR. Our association has greatly benefited from our relationship with IPMA-HR and the Southern Region Chapters. The Board encourages membership in IPMA-HR for those who choose to do so. It is also possible that the IPMA-HR members in Texas could form a separate state chapter that is not affiliated with TMHRA.

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TMHRA members elect new officers and Board members for 2008

The TMHRA Board has canvassed ballots and announces the new officers and Board members. Congratulations to Don Byrne as the elected secretary/treasurer. He succeeds Bonita Hall, who will advance to vice president. Laura Morrow will succeed George Mones as president.

Welcome to the newly elected Board members:

Debbie Maynor, HR Director, City of Killeen, re-elected to second term
Jane Mehrens, HR Director, City of Brenham, re-elected to third term
Tad Phillips, HR Director, City of San Angelo, newly elected
Martha Butz, HR Director, City of Highland Village, newly elected

Outgoing Board members:

Melanie Caballero, HR Director, City of Bryan, President 2006
LaShon Ross, HR Director, City of Plano, Board member 2007

Recognition of incoming and outgoing officers/Board members was made at the Employment Law Seminar on September 13 in Dallas. The actual effective date for new Board terms is November 8, during the TMHRA business meeting held at the TML Annual Conference in Dallas.

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IPMA-HR International Training Conference
The Future of HR: Mapping the Course
Sept. 29 – Oct. 3, Chicago, Illinois

It was my pleasure to attend this conference, along with more than 700 public sector human resource professionals from around the world. One of the benefits of the presidency is the TMHRA paid attendance at this international conference. I was surprised to see attendees from South Africa, Japan, England, Canada, Turkey, and various Caribbean islands, to name a few. There were 22 Texans registered, but most were not from municipalities. I met TMHRA members Cynthia Garcia from Corpus Christi and Martha Butz from Highland Village; if others were there, I regret not seeing them.

David Etheridge, HR Director from the City of Dallas, is not a TMHRA member, but he is interested in starting a Texas IPMA-HR Chapter. Anyone interested in forming such a chapter should contact him.

The program committee brought many fine speakers and presentations. There were 20 different concurrent sessions, in addition to five plenary sessions. Dr. Dave Ulrich and Dr. Richard Boyatzis were top national speakers in their field. I would love to have them present at a TMHRA conference.

Dr. Boyatzis is a management professor at Case Western Reserve University in Cleveland, Ohio. He presented on “Resonant Leadership: Inspiring Us and Developing Others to Be Our Best.” He is an expert on Emotional Intelligence and has written several books on the subject. He describes Resonant Leadership as “Being in tune with or on the same wavelength as the others.” Great leaders are themselves attuned: mind, body, heart, and spirit. They inspire through hope and vision. They spread compassion.

Are you a resonant leader?

• Are you inspirational?
• Do you create a positive, hopeful emotional tone?
• Are you in touch with others: Do you know what is on people’s hearts and minds? Do you experience and demonstrate compassion?
• Are you mindful – authentic and in tune with yourself, others, and the environment?

The Texas Health and Human Services Commission presented a concurrent session on “Texas Health and Human Services – Human Resources Transformation.” They merged 12 state agencies into five new agencies. They consolidated administrative areas such as human resources, payroll, civil rights, procurement, regional administrative services, and information technology.

The City of Dallas presented a concurrent session on “How aggressive health care negotiations with third-party administrators may yield tremendous cost savings to self insured organizations” and a second presentation on “Steps to avoid million dollar workers compensation costs.”

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UPCOMING EVENTS

TexPelra Workshop – February 13, 2008 – Galveston
Civil Service Workshop – February 14-15, 2008 – Galveston
Mid-Year Conference – May 21-23, 2008 – South Padre

MARK YOUR CALENDARS NOW!!!

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CONFERENCE HIGHLIGHTS

TML ANNUAL CONFERENCE
DALLAS, TEXAS
TMHRA AFFILIATES DAY – NOVEMBER 8, 2007

TMHRA conducted our bi-annual business meeting with a welcome by outgoing President George Mones. Attendance at our Affiliates Day business meeting has dwindled over the last few years; as a result, the formal recognition of TMHRA Board members was held this year at the Employment Law Conference in September. George recognized them again at the meeting and talked about the service that our outgoing Board Members gave. These special folks included Melanie Caballero, past president, and LaShon Ross, trustee.

George discussed the past year’s activities, such as the institution of the TMHRA Yahoo! list serve, which has seen much traffic since its inception. He also revealed the canvass of votes for this year’s election and then introduced the new TMHRA Board.

The TMHRA/IPMA-HR Southern Region Conference was discussed. The TMHRA Board voted to host this conference a few years ago, and it was a huge and successful undertaking. We set the bar for IPMA-HR regional conferences in the future.

TMHRA members voted to discontinue our chapter of IPMA-HR. As a result, our constitution will need to be revised (when TMHRA became an IPMA-HR chapter, changes were made to our constitution to reflect this status). We are also refining our membership definitions. All changes will be sent to our active membership to vote on.

George then “passed the gavel” to Laura Morrow, incoming president, who discussed the upcoming year, as well as the workshop and conference schedule for 2007-2008.

Jim Parish, TMRS liaison, updated the group on the latest news from TMRS. Jim will be attending all TMRS Board meetings and will be reporting back to the membership to keep us better informed.

Things I’ve Learned the Hard Way…, presented by Matthew Scott of Bell Nunnally and Martin LLP, looked at practical tips in dealing with vital personnel issues. He discussed best practices and strategies to help evaluate employment policies and practices and successfully manage critical personnel issues.

This year’s TML Annual Conference had a good selection of sessions across the board this year. Our own Janie Mehrens, LaShon Ross, and Phyllis Stadler, along with the city manager of Fate, presented Small Cities and Human Resources-Related Issues: Ask a Professional, which Janie has recapped for you elsewhere in this newsletter.

Thanks to the TML staff for their hard work and dedication to present another successful TML conference!

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BIG ISSUES FOR SMALL CITIES

Several TMHRA members—LaShon Ross, Director of Human Resources, Plano; Phyllis Stadler, Director of Human Resources, Richardson; and Janie Mehrens, Director of Personnel, Brenham; along with City Manager Gary Boren of Gun Barrel City—presented a concurrent session titled Small Cities and Human Resources-Related Issues: Ask a Professional at the recent TML Annual Conference in Dallas.

Small cities, usually defined as having a population of less than 15,000, make up almost 90 percent of TML member cities. Just as sustaining an adequate infrastructure and promoting local economy are issues facing large and small cities across Texas, dealing with a shrinking workforce and state and federal regulation are also common ground.

The panel presented a number of resources that are available to all cities from state and federal sources, as well as services available to small cities through TML, such as the HR Toolkit for Small Cities and the Small Cities Advisory Council. Resources and educational opportunities provided through TMHRA were also shared with the group, as well as the offer to assist cities in sharing resources and experience when requested.

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Employment Law Seminar
September 13-14, 2007
DoubleTree Campbell Center, Dallas, Texas

TMHRA President George Mones opened this year’s session of Employment Law. A packed room was in attendance for the presentations, which included drug-free workplace, conducting investigations effectively, First Amendment issues, our FAVORITE subject—FMLA, our semiannual legal update, and a TMRS update.

Our first speaker was George Hyde, with Denton, Navarro, Rocha & Bernal, P.C., who presented Drugs: Which Employees Got ‘em, How to Find ‘em, and What to Do Next. George stressed that failure to comply with the Drug-Free Workplace Act of 1988 would result in no federal grants. He also discussed Fourth Amendment search and seizure issues in dealing with our employees, as well as using the “standard of reasonableness under all circumstances” test. Lastly, he provided tips to help tip the scales in our favor.

Joseph Parks with Bell Nunnally & Martin LLP discussed Getting to the Bottom of He Said, She Said: Conducting Effective Internal Investigations. Joseph reminded us of why the investigation was so important and how to conduct that all-important interview – from conducting the interviews, to preparing the investigative report, to taking action. He also talked about preventing claims such as defamation from arising, as well as some special issues that affect public employers.

After lunch, we learned that managing like Darth Vader is probably not a good idea, in the session First Amendment in the Workplace (What do you mean I can’t discipline for that?), presented by Ryan Henry with Denton, Navarro, Rocha & Bernal, P.C. Ryan discussed the elements of a claim, matters of public concern, balance of interests, and policy/custom/practice. He also talked about “political patronage,” as well as general and political speech considerations.

George Mones recognized all the Board members for this year, especially those who were outgoing, including Melanie Caballero (leaving after eight years of service to TMHRA), former City of Bryan HR Director; and LaShon Ross, City of Plano HR Director. Newly elected Board members were recognized, including Tadd Phillips, HR Director of San Angelo; and Martha Butz, HR Director of Highland Village; as well as re-elected trustees City of Brenham Personnel Manager Janie Mehrens and City of Killeen HR Director Debbie Maynor. George passed the gavel to Laura Morrow, incoming TMHRA president.

Julie Ross of Lynn Pham and Ross, LLP, presented a FMLA Update. We learned that 6.1 million employees take FMLA annually, 50 percent of employees taking leave do not provide prior notice, and there is a huge problem with chronic abuse of unscheduled intermittent leave. DOL sought public comment on the regulations earlier this year, and SHRM has asked that DOL revise several regs, including intermittent leave changes, clarification of “serious health condition,” allowing employers to make light duty assignments, and several other changes. Julie elaborated on several cases, including issues of fitness for duty, restoration to equivalent position, and certifications.

Our bi-annual Employment Law Update – Legislative and Court Developments was presented by Bettye Lynn of Lynn Pham and Ross, LLP. Bettye discussed several cases, including the only Supreme Court employment case, Congress potential action (including the Public Safety Employer-Employee Cooperation Act, which has passed the House), EEOC charge increases, and state statutes. Bettye also covered ADA, harassment, retaliation, and USERRA.

Our final speaker was Eric Henry, the new executive director of TMRS, who discussed issues that TMRS and all member cities will be facing in the future, as well as suggested future actions. He stressed that the fiduciary duty of the TMRS Trustees was to act solely and exclusively in the interest of members and beneficiaries, although they do want to meet city concerns as well. TMRS is currently communicating more than ever before, and will continue to do so. All contribution rates will remain the same for 2008 as previously communicated, and as a result of this last legislative session, cities will have the opportunity to contribute additional amounts above the recommended rate.

With that, another successful TMHRA Employment Law Seminar closed. We will see you next year!

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TMHRA SPONSORS

TMHRA is grateful for the continued support of our sponsors. The sponsorships allow us to keep all events reasonably priced and affordable for all members. Thank you to the following sponsors for their support and contributions through the year:

Gold Level Sponsors
Holmes Murphy
MetLife
Monster.Com
PARS
TexPelra

Silver Sponsors
International Public Management Association for Human Resources (IPMA-HR)
The Hartford Retirement Plans Group
TML Intergovernmental Employee Benefits Pool

Bronze Level Sponsor
CPS Human Resource Services
Delta Dental Insurance Co.
First Financial Capital Corporation
Gabriel, Roeder, Smith & Co.
Great-West Retirement Services
Hay Group, Inc.
IPS Advisors, Inc.
McGriff, Seibels & Williams of Texas, Inc.
Nationwide Retirement Solutions
Scott & White Health Plan
Taylor Olson Adkins Sralla & Elam, L.L.P.
Texas Municipal Retirement System (TMRS)
The Mercer Group, Inc.
The Waters Consulting Group, Inc.

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ARTICLES OF INTEREST aka NEWS YOU SHOULD USE

INTRODUCING…New Members to TMHRA

WELCOME, NEW MEMBERS

The following human resource professionals have chosen to join our great organization, and the Board has unanimously approved their applications. Your involvement is so important to the success of TMHRA, and we hope you will find opportunities to participate in the planning of educational sessions and all other activities sponsored by our organization.

Our newest members (July-October) are:

Vickie Bennett, HR Director – City of Lubbock

Rachel Buckley, HR Manager – City of Fort Worth

Bernie Eldridge, HR Director – TMRS

Angie Harris, Asst. City Secretary – City of River Oaks

Sonja Havens, HR Director – City of Harker Heights

Karri Hyko, HR Director – City of Longview

Terri Kurtz, Sr. HR Analyst – City of Victoria

Irene Nicks, HR Coordinator – City of Livingston

Shirley Parmer, City Secretary – City of Chandler

Margaret A. Ragus, Wellness/Safety Coordinator – City of North Richland Hills

Janet Robinson, HR Director – City of Irving

Judy Webster, HR Manager – City of Lucas

Joyce Williams, Workforce Services Director – City of Arlington

There is always room for fresh ideas and new faces, and we appreciate your interest in helping TMHRA remain a tremendous professional resource throughout the State of Texas.

Welcome aboard!

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TMHRA E-Solutions

Do you have questions or issues on which you would like to receive advice or feedback from your colleagues? Are you looking for solutions? Do you want to stay connected? TMHRA has recently created a new list serve for its members. This service is available to all TMHRA members. The purposes of this service are to:

1. Provide quality service to our membership.
2. Provide a forum by which TMHRA members can discuss daily human resources issues.
3. Promote professional development.
4. Promote high ethical standards.
5. Encourage colleague support.

Guidelines
E-Solutions is a wonderful way to exchange information and learn what others are doing. However, like many things on the Web, a list serve can be abused. To help prevent abuse or inappropriate postings, the following guidelines have been established:

1. Posts to this list are the opinions of the individuals making the post, not TMHRA.
2. Do not forward any information gathered from this list unless you have received permission from the author(s). This includes referrals to vendors.
3. Be careful about attachments that may contain viruses.
4. Stay on topic. Replies to a question posted to the group should benefit the entire group —and will be seen by the entire group. If you want your reply to be seen by only one person, e-mail that person directly.
5. Always fill in the subject line. This information helps readers find specific messages.
6. Do not post a file over 500kb. Provide a link to the file or allow members to request it individually.
7. Members from the private sector, please refrain from soliciting through this service.

Technical Issues
A major shortcoming of Yahoo’s list serve is that it does not archive or store attachments that are attached to e-mailed replies. There are three ways to avoid losing the information contained in e-mailed replies with attachments:

1. When replying to a request for information, rather than attach a file to the e-mail, cut and paste the information into the body of the return e-mail.
2. Another method is to provide a link to the information requested or your contact information so that if others wish to access the information, there is a method to do so.
3. A third method is for end-users to choose to receive all replies directly rather than in digest form. End-users can then organize and archive the replies according to their own preferences.

If you have questions or technical difficulties, please contact Lonne Parent-Smith at 512-231-7452 or lparent@tml.org. This group is limited to TMHRA members, is password protected, and is by invitation only.

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IPMA-CP Certification

Congratulations to Margaret Brennan, Assistant Director of Human Resources, City of Richardson, for her recent award of IPMA-CP certification!

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Countering the Financial Burden Shift (First Article)

• One in three workers over the age of 30 will become disabled for at least three months during his or her career, according to America’s Health Insurance Plans (AHIP) and the Society for Actuaries.
• According to the Life Insurance Marketing and Research Association, in 2004, one-third of adults did not have life insurance.
• The risk is high for Americans to outlive their retirement as the life expectancy continues to increase significantly.

In the era of personal responsibility, where can people turn to make sure they remain financially secure both now and in the uncertain future? The key to financial security is building a personal safety net to adequately and efficiently insure risks faced throughout life. With an increasingly risk averse populace, the importance of guarantees is at the forefront.

Unfortunately, investments, though a powerful tool for helping consumers grow wealth, cannot themselves adequately fund and finance the cost of caring for a long-term illness or that of a loved one. Nor can they adequately ensure that individuals won’t run out of money if they live a long and prosperous life. Since consumers can’t invest away their financial risks, they must insure for them.

There’s no silver bullet that will prepare consumers for future financial burdens, but there are some simple steps to help mitigate the risk:

• Understand your options. This includes learning about the types of products that can help you achieve your goals – products for protection now and products to help prepare for the future. It’s not enough to know which product can fulfill which need. The key is knowing which option is right for you now depending on your individual circumstances. Recent college graduates, baby boomers, and retirees, for example, all have drastically different risk tolerances and needs.
• Work with your insurer. An insurer can help you build a solid financial foundation. Many consumers don’t understand which insurance coverage they need to protect themselves and their family or how much coverage is enough. Insurance providers can help consumers match the right products with the right life stage or life situation.
• Work with your financial professional. An experienced financial professional can help you understand how insurance and related income products can fit into your overall portfolio to protect and grow wealth over time.

The future is uncertain, but being proactive about creating your own personal safety net can pay big dividends down the road.

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HR Legal Updates

Welcome to Legal Briefs for HR! This update on issues that matter to employers is provided to human resource professionals, in-house counsel, business owners, and others who can benefit from receiving monthly updates on new laws, court cases, helpful Web sites, and more. Anyone is welcome to join . . . just email me to be added to (or removed from) the group. Past editions are posted at www.munckbutrus.com under E-Newsletter.

A warm welcome to new subscribers who attended talks I gave to the Texas Association of Business (TAB) Fort Worth chapter, Dallas CEBS, on Court TV radio, and the Wichita Falls HRMA. I’m looking forward to upcoming speeches for East Texas HRA (Oct. 3) and at HR Southwest in Fort Worth (Oct. 24).

Here’s the latest:

1. Mix and Match – The stand-off continues between the Department of Homeland Security (DHS) and those who believe its final “no-match letter” rule should be junked. A temporary restraining order (TRO) is in place, and there will be an Oct. 1 hearing on a preliminary injunction. The TRO was filed by the AFL-CIO, the ACLU, and the National Immigration Law Center, granted on Aug. 31, and stopped the rule from taking effect on Sept. 14. The SBA’s Office of Advocacy chimed in on Sept. 18, saying DHS should stop the rule because it failed to take account of the cost to small businesses. DHS’ brief in opposition to the motion for injunction, filed on Sept. 18, takes the position that the final rule imposes no new requirements, and employers should be complying with any “no match” letter received. DHS says the final rule was meant to clear up employers’ confusion over what steps they could take to avoid liability, since “receipt of letters has always been considered evidence of constructive knowledge” that the entity is employing a person who may not be authorized to work in the U.S.

2. Make Me! – The federal government is inching toward mandatory use of E-Verify (fka Basic Pilot) by employers with every hire, and Illinois says, “Make me!” A state law, due to take effect on Jan. 1, 2008, prohibits employers from using E-Verify unless the system can verify eligibility to work within three days, 99 percent of the time. DHS has countered by seeking an injunction to stop implementation and enforcement of the law, saying the Illinois law is pre-empted by federal law and the program will not work if Illinois does not participate. Further, DHS says they are adding a photo utility, so that employers can compare a photo on the E-Verify database with the one offered by a new hire, to nip identify fraud in the bud. Stay tuned!

3. Not-So-Independent Contractors – Add New York to the list of states that sense they are losing money over employees misclassified as contractors and are doing something about it. Their former attorney general turned governor, Eliot Spitzer, created a task force on Sept. 7 to coordinate investigation/enforcement among the state’s offices of the Attorney General, Labor, Workers’ Comp, and Taxation/Finance and to work with local district attorneys to identify and prosecute significant cases of misclassification. In August, the State of Illinois enacted a new law to automatically deem construction workers as employees unless certain exceptions are met, joining Massachusetts, New Mexico, and Oregon, which had done the same. In 2006, New Jersey tightened its definition of an employee and amped up enforcement efforts against employers (see LB4HR #4 – 2006 for details). A cleaning company with janitors in Illinois and Texas just settled FLSA, RICO, and ERISA claims for $1.2 million based, in part, on claims that they were misclassified as independent contractors, to avoid overtime. Vega v. Contract Cleaning Maintenance, Inc. (N.D. Ill. 9-17-07).

4. More Social Correctness – Last month, LB4HR listed states with current (i.e., California, Michigan, Pennsylvania, and Nebraska) or pending (New York) laws that limit employers’ use of their employees’ SSN as an identifier. These laws contain exceptions where federal law requires use of an SSN, such as on employees’ paychecks, but California says that employers may use only the last four digits of the SSN on employee paychecks, starting on January 1, 2008. See CAL LABOR CODE sec. 226(a)(private sector) and (h)(public sector).

5. Policy Matters (It Does!) – Every self-respecting human resource practitioner knows that a well-written and uniformly enforced policy can go a long way in defending against discrimination and other types of claims. But did you realize that one, in particular, can be helpful in nixing the formation of a wage and hour class? A California judge recently denied plaintiffs’ motion for conditional certification of a collective action in FLSA litigation, for failing to establish a common policy or practice of wrongdoing (as evidenced by the wide variety in individual complaints among prospective class members). In contrast, the judge noted, the company was able to show it had corporate policies relating to payment of overtime and prohibiting employees from working off the clock. Smith v. T-Mobile USA Inc. (D.C. Cal. 8-15-07). If your policies lack a “no working off the clock” policy (including an instruction to report any such demand or request by a supervisor/manager to human resources, pronto), it may be left to a jury to decide who’s lying when an employee claims that’s what he or she was told to do. But when you have such a policy, properly acknowledged in writing by the employee, it makes it much harder for the employee to explain his or her actions.

6. Policy Matters (Again) – In another case that turned on the pages of an employee handbook, plaintiffs prevailed on their motion for summary judgment by showing that the company had a practice (as immortalized in the handbook) of docking exempt workers’ pay for partial day absences and disciplinary reasons (that presumably did not satisfy the narrow exceptions explained in the FLSA “white collar” regulations). Further, the court said it wasn’t necessary to show the plaintiffs actually experienced such improper deductions, only that there was a policy in place that likely resulted in improper deductions. Ergo v. International Merchants Services, Inc. (N.D. Ill. 9-13-07). As is often the case, your handbook can be your best buddy or your worst enemy . . . make sure yours is up to snuff and subject it to periodic review and update by someone who knows the ropes.

7. Slap at the Supremes – A number of bills have been filed in Congress lately to undercut U.S. Supreme Court decisions. There was the Ledbetter Fair Pay Act (HR 2831), designed to start a new Title VII/ADEA/ADA/Rehab Act statute of limitations period each time compensation is paid, contra to the Court’s decision less than a month earlier. More recently, the ADA Restoration Act of 2007 (HR 3195/S 1881) proposes to roll back the effects of four U.S. Supreme Court decisions made between 1999 and 2002 that tended to narrow the definition of “disability.” Now comes the Fair Home Health Care Act of 2007 (S 2061), which would extend the FLSA’s minimum wage and overtime requirements to home health care workers, contra to the Court in Long Island Care at Home v. Coke (2007). If you are interested in reading the full text of these bills, checking the status, and seeing who’s a sponsor, go to www.thomas.loc.gov and fill in the bill number.

8. Got Milk? – Add New York to the list of states mandating job-protected time off during the workday for new mothers to express breast milk. The law was signed August 22, 2007, and took effect immediately. It gives mothers the right to use unpaid break time or paid break/meal time each day, for up to three years following child birth. Further, employers are to make reasonable efforts to provide a room or other location, near the work area, to engage in this activity in privacy. You can read the press release at www.state.ny.us/governor/press/0822072.html, and full text of the law is at http://assembly.state.ny.us/leg/?bn=A01060&sh=t. You can check out all states’ laws on this issue at www.lalecheleague.org (but note that some information has not been updated since March 2007).

9. To Affinity and Beyond? – While addressing employers at the Industry Liaison Group national conference, the new chair of the EEOC mused that racial or ethnic affinity groups, as part of company diversity programs, may have “outlived their usefulness” and even become counterproductive. She gave the example of visiting a banking firm, at the invitation of the black employees’ group, and observing that racial groups were self-segregating themselves when dining in the company cafeteria. It’s not news to you, but some well-meaning managers may need help in seeing that diversity is becoming “more complicated to understand” and more difficult to achieve.

10. Attention SHRM Shoppers - Have you heard about “dot jobs”? In order to make it easier for prospective employees to find your online job postings, companies can now purchase a URL with the company named followed by .jobs (Examples: www.att.jobs or www.hertz.jobs), and SHRM members can take advantage of a special negotiated rate of $114.95 per year. For more information, check out www.shrmspecial.jobs.

11. R U Texting? – The City of Phoenix has banned reading or sending text messages while driving, after an 18-year-old drifted across the center line while texting and crashed into an oncoming car. Both drivers were killed. The city council is urging expansion of the ban to include all handheld cell phones and a similar statewide ban is being pushed. If your employees drive in the course of performing their duties, and you know they are using phones and/or PDAs while behind the wheel, you will want to a) be aware of and take steps to comply with applicable law; and b) consider whether your policy should be more restrictive than what’s required. A Web site that will help you out with (a) can be found at www.cellular-news.com/car_bans/.

12. Need Ammo? – If you’ve been lacking the time and/or the budget to review your nonexempt/exempt classifications, time-keeping procedures, and overtime pay calculation methods, you might want to read the cover story of the Oct. 1 issue of Business Week magazine, entitled “Does Your Boss Owe You Overtime? Wage Wars.” If your pleas for the resources to address this issue have been rebuffed, print a copy of the article for the rebuffer and see if he or she has a change of heart. Disregard the incorrect overtime calculation definition on page 54 (“90 minutes’ pay for every hour worked beyond 40 in a week”) . . . I’ve already had a chat with the reporter to explain the difference between a week and a workweek and the difference between 1.5 times the straight time vs. the “regular rate.”

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Butrus, P.C.
900 Three Galleria Tower
13155 Noel Road
Dallas, TX 75240

972-628-3661 (direct)
972-628-3616 (fax)
214-868-3033 (cell)
amross@munckbutrus.com
www.munckbutrus.com

Legal Briefs for HR (“LB4HR”) is provided to alert recipients to new developments in the law and with the understanding that it is guidance and not a legal or professional opinion on specific facts or matters. For answers to your specific questions, please consult with counsel. If you wish to be removed from the group, reply and put “Remove” in the subject line. You may also reply to notify the author of an additional or changed e-mail address.

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Recent Texas Cases of Interest to Cities

Want to keep abreast of recent court cases related to human resources in Texas? Just visit the Texas City Attorneys Web site (www.texascityattorneys.org). When on this Web site, click on “Newsletter,” and you will find that recent court cases are published in each monthly newsletter. The first three cases below come from the September newsletter.

Employment: City of Comanche v. Michelle Florence, No. 11-06-00285-CV (Tex. App.—Eastland August 23, 2007). A former city employee claimed that the city’s personnel manual acted as an employment contract that changed the relationship between her and the city from an at-will relationship to a contractual relationship, and that by breaching that contract, the city waived its sovereign immunity. The trial court agreed, and denied the city’s plea to the jurisdiction. The city appealed the trial court’s denial, and the court of appeals held that, because both the city’s personnel manual and application for employment contained language explicitly stating that the documents did not constitute a contract, the trial court wrongfully denied the city’s plea to the jurisdiction.

Civil Service: City of DeSoto v. Justin White, No. 05-06-01469-CV (Tex. App.—Dallas Aug. 28, 2007). The City of DeSoto appealed the trial court’s order for summary judgment in favor of White, a former police officer suspended by the city. The city had delivered a letter of indefinite suspension to White, which did not advise White that appealing his suspension to a hearing examiner rather than the Civil Service Commission would limit the issues he would be entitled to raise on appeal. White argued that the failure to comply with the notice requirement deprived the hearing examiner of jurisdiction. The court of appeals held that the city must perform all conditions established by the civil service laws, including the notice provisions, before a hearing examiner obtains jurisdiction, and that the trial court was authorized to award attorney’s fees in an appeal from a ruling from the hearing examiner.

Public Information Act: City of Dallas v. Greg Abbott, Attorney General of Texas, No. 07-06-0161-CV (Tex. App. - Amarillo, August 13, 2007). The City of Dallas filed a petition in district court seeking a writ of mandamus against the Texas attorney general. The petition requested the court to order the attorney general to declare documents relating to the examination process for firefighters that the city sought to withhold from public disclosure under the Public Information Act as confidential attorney-client communications. The trial court concluded that the city had failed to timely request a decision from the attorney general, and that while the documents were attorney-client privileged documents, the city had failed to present a compelling reason for excepting the documents from public disclosure. The court of appeals affirmed the trial courts ruling, holding that the city did not waive its claim of attorney-client privilege by virtue of untimely requesting an attorney general opinion, but the city failed to provide additional information demonstrating a compelling reason to except documents purporting to contain attorney-client communication.

Tort: City of Dallas v. Forrest Furgason, et al., No. 05-06-00875-CV (Tex. App.—Dallas Sept. 18, 2007). The plaintiffs in this case sued the city for injuries allegedly caused by the city’s use of the mosquito repellent “Scourge.” The court of appeals held that there was legally insufficient evidence that Scourge caused the plaintiffs’ injuries. The court of appeals also affirmed the trial court’s holding that the plaintiffs’ expert witness was unreliable because the expert witness had not conducted sufficient Scourge testing, and had not determined the concentration of Scourge that may have affected the plaintiffs.

Civil Service: City of Round Rock, et al. v. Mark Whiteaker, No. 03-07-00009-CV (Tex. App.—Austin Sept. 14, 2007). Firefighter Mark Whiteaker alleged that the City of Round Rock violated Chapter 143 of the Local Government Code when the city bypassed him on its promotion eligibility list and promoted another fire fighter. The trial court denied the city’s plea to the jurisdiction and held that whether Whiteaker had standing or not was intertwined with the merits of the case. The court of appeals affirmed the trial court’s denial of the plea to the jurisdiction, but held that Whiteaker’s claim for back pay and back benefits was barred by governmental immunity because the legislature has not waived governmental immunity in Chapter 143.

Civil Service: Ruben Mendoila, et al. v. City of Laredo, No. 04-07-00279-CV (Tex. App.—San Antonio Sept. 12, 2007). Ruben Mendoila and other firefighters sued the city for back pay and retroactive promotions under the Civil Service Act. The position of fire captain was filled with a retroactive promotion, causing a “domino effect” of vacant positions that should have been filled according to the city’s promotion eligibility list and schedule. Mendoila and others argued that they should have been promoted earlier. The trial court granted the city’s motion for summary judgment and dismissed the firefighters’ claims. The court of appeals held that the firefighters were not appropriately appointed to their positions under the city’s promotion eligibility list and schedule and so might be eligible for retroactive promotions and back pay. The court of appeals remanded the case back to the trial court for a determination of whether the city was protected by governmental immunity on the issue of back pay.

Civil Rights: Delores A. Zarnow v. City of Wichita Falls, et al., No. 06-10693 (5th Cir. Sept. 13, 2007). Dr. Zarnow kept explosives, weapons, and ammunition at his clinic and home. While on vacation, Dr. Zarnow’s cache of weaponry at his clinic was discovered and seized by the police. The police also searched his home and seized weaponry there. Weapons charges were filed, but later dropped. Dr. Zarnow sued the city and its police officers for civil rights violations and sought money damages for his unreturned weaponry and explosives. The trial court denied the city’s motion for summary judgment and denied the police officers’ qualified immunity. The court of appeals held it did not have jurisdiction over a denial of summary judgment. The court of appeals then reviewed whether the officers had qualified immunity in their role in securing the warrants to search Dr. Zarnow’s house. The court held that the search of Dr. Zarnow’s house after finding explosives at his office was reasonable, partially based on the proximity of the clinic to the previously-bombed federal building in Oklahoma City, which is only “a short two-hour drive from Wichita Falls.” The court held that the trial court erred in not granting the police officers qualified immunity.

Hotel Occupancy Tax: City of Orange v. Hotels.com, LP, et al., Civil Action No. 1:06-CV-413 (E.D. Tex. Sept. 21, 2007). The City of Orange sued Hotels.com and other online hotel room companies because the online companies were not remitting the hotel occupancy tax based on the amount the actual occupant paid to the online company. These companies only paid the tax based on the amount the online company originally paid to the hotels for the block of rooms it later sold to occupants online. The district court held that the amount of tax paid by the online companies was appropriate under the city’s ordinance, because the wording of the City of Orange’s ordinance only required tax based on the amount of consideration paid to the hotel or motel. The ordinance’s payment requirements did not include the amount paid by occupants to the online companies since the online companies were not hotels or motels.

Vested Rights: City of Helotes v. Miller, No. 04-06-00564-CV (Tex. App.—San Antonio Oct. 3, 2007). Miller sued the city after the city tried to annex Miller’s property (on which Wal-Mart was planning to build a store) and tried to pass development controls on the property. Wal-Mart then backed out of the development project and out of its contract with Miller. Miller argued that he had vested rights in his development project and therefore the city’s development controls could not affect his project. The city argued that, because Wal-Mart backed out, there was no longer a development project, and the case was moot. The trial court denied the city’s plea to the jurisdiction. The court of appeals held that Miller had produced some evidence of a development project and therefore his claim of vested rights should be determined by the trial court.

Employment: City of Weslaco v. Baudelio Castillo, et al., No. 13-06-023-CV (Tex. App.—Corpus Christi-Edinburg September 27, 2007). The City of Weslaco appealed the confirmation of an arbitration award in favor of Mr. Castillo and other former city police officers. The city argued that the trial court erred in: (1) confirming the award because the arbitration panel exceeded its authority under the terms of a collective bargaining agreement (CBA) between the city and its police officers, and (2) awarding attorney’s fees to the former city employees. The original arbitration concerned alleged acts of discrimination, harassment, official oppression, and retaliation against the employees by the police chief and other police department personnel. The arbitration panel held in favor of the employees and awarded monetary damages. The city subsequently filed a suit seeking declaratory judgment, arguing that the arbitration panel had exceeded its authority under the CBA. The employees filed a counter-claim, seeking confirmation of the award, and later filed a motion for summary judgment, claiming that the city as the losing party had the burden to produce a complete record of the arbitration. The trial court granted the employee’s motion for summary judgment and affirmed the arbitration award. The order did not address the city’s claims, attorney’s fees or interest, nor did it contain a “Mother Hubbard” clause stating that “all relief not expressly granted is denied.” When the court subsequently awarded the employees’ attorney’s fees and interest, the city filed the current appeal. The court held that, among other things, that because the city could not produce an adequate record, the presumption must be that there was adequate evidence to support the panel’s ruling.

Attorney General Opinions of Interest to Cities

Opinion No. GA-0573 (Texas Municipal Police Association): concludes that a policy under which the Texas Municipal Police Association (TMLPA) reduces the tuition for required continuing education charged to Association members is rationally related to a legitimate state purpose. The TMPA therefore may charge its members a reduced tuition without contravening constitutional equal protection guarantees, and the Texas Commission on Law Enforcement Officer Standards and Education need not require the TMPA to revise its policy.

Opinion No. GA-0576 (County Maintenance of City Roads): concludes that, if a county determines that a particular municipal street is a connecting link or an integral part of a county road or state highway, the county may use the proceeds of road bonds issued under Article III, Sections 52(b) and (c) of the Texas Constitution to construct, maintain, or operate the municipal street. You can view attorney general opinions at www.oag.state.tx.us . On the same site, you can also sign up to receive e-mail updates of opinion requests and newly released opinions.

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Senator Gregg (R-NH) Introduces Mandatory Collective Bargaining Bill

On October 1, 2007, Sen. Judd Gregg (R-NH) introduced S. 2123, the Senate version of the Public Safety Employer-Employee Cooperation Act. The bill has 20 cosponsors, including nine Republicans. The strong Republican support for the bill means that it could pass this session.

Forty-one votes are required to keep a bill from moving and with nine Republican cosponsors, that leaves only 40 Republican votes, and not all 40 of those senators have indicated their opposition to the measure. The bill requires state and local governments to engage in collective bargaining with their police, fire and emergency medical services personnel. The bill requires all states to either pass a collective bargaining law or to submit to the regulations developed by the Federal Labor Relations Authority. Even states that currently have collective bargaining laws may need to change them in order to comply with the federal law.

IPMA-HR has joined several other associations, including the National League of Cities, the National Association of Counties, the National Public Employer Labor Relations Association, the International Association of Chiefs of Police, and the National Sheriffs Association, in opposing the measure. The coalition has been meeting with Senate staff to educate them about the reasons for our opposition to the bill, which include:

• Collective bargaining is a state and local function.
• State and local governments are in the best position to determine their collective bargaining needs and to allocate resources.
• Most states already have some form of collective bargaining.
• There is no evidence that requiring collective bargaining will improve public safety.

Neil E. Reichenberg, IPMA-HR’s executive director, testified in opposition to the bill before the House Subcommittee on Health Employment Labor and Pensions on June 5, 2007. A copy of a letter that was sent to the Senate Health Education Labor and Pension Committee shortly after the bill’s passage in the House is available at (http://www.ipma-hr.org/pdf/AdvoAct.pdf).

Reprinted from the October issue of the IPMA-HR News

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Addressing Political Activism in the Workplace

Although many people tend to avoid discussing controversial topics at work, the mantra of "Don’t talk about politics" is becoming increasingly difficult to follow as election talk heats up. Because of this and the current war climate, it is inevitable that political debate, and possibly activism, will arise in the workplace.

How should employers address this issue? Although the First Amendment allowing freedom of speech applies to employees in the public sector, it technically does not apply to employees in the private sector. However, most employers allow their employees to verbally express their political views during work hours. Management retains the authority to halt the conversation if the discussion appears to be getting disruptive or if it is impairing working relationships. Workplace harassment laws protect individuals from any speech that creates a "hostile or abusive work environment,” as political commentary at work falls under harassment law doctrine.

When the conversation turns to politics, it is important for all parties to remember that everyone has a right to an opinion. Whether he/she is a Democrat, Republican, or an Independent, every employee should be able to voice his/her opinion without fear of discrimination. Likewise, employees must keep in mind that they should not criticize the beliefs of others while voicing their own opinions. It is imperative that all employees and members of management “agree to disagree” and still maintain professional, positive relationships.

Depending on your organization’s work culture, there may be specific rules and guidelines regarding political activities. Universities and other tax-exempt organizations, for example, take great strides in maintaining a non-partisan atmosphere. The University of Washington’s “Laws and Policies Surrounding Political Campaign Activities of University Employees” and the University of Vermont’s “Policy Statement on Political Activities: Tax Exempt Organization Restrictions” are excellent examples of such policies.

At times, employees may decide to actively participate in politics, either locally or nationally, and may ask their company for financial contributions. Many state laws prohibit or limit contributions by companies to political parties or candidates. Be sure to check your state government’s Web site for more detail.

Employees have the right to run for office if they choose to do so. According to Workforce Management’s Q&A article “Dear Workforce: Should Employees be Involved in Politics?,” employees must be clear that when they express their political views, they are individual views and not the views of the company. In addition, employees must notify and receive approval prior to performing political activities on company time. If serving in public office, the employee must avoid conflicts of interest by not participating in any political matters involving the employer. For more information, go to http://www.doi.gov/ethics/political.html. While written for Department of the Interior employees, the site is still a helpful guideline.

Employees with strong political views should consider how they want to express themselves and how much they want to reveal to their coworkers. By allowing others into a private part of their lives, they are possibly leaving themselves open for conscious or subconscious judgment.

Keep in mind that employees who wear campaign buttons or shirts, or who pass out campaign literature during work hours, are in violation of the National Labor Relations Act. Section 7 of the NLRA states that it is an unfair labor practice for employees “to interfere with, restrain, or coerce employees in the exercise of rights guaranteed.” Therefore, the act of wearing a political button is considered a form of solicitation, since it can be construed as an attempt to “coerce” fellow employees to vote for a particular candidate. This includes displaying campaign posters in individual work areas if these areas are in view of others. If employers choose to ignore the NLRA and allow this behavior, they can, in a sense, be “opening a can of worms,” since the Act protects against solicitation by unions. If you allow one group to solicit, you may be opening the floodgates to an array of other activities that are not welcomed in your organization.

If handled with respect and tolerance, political debate and activism shouldn’t be considered negative. It is a positive sign when employees show passion, rather than apathy, regarding the future of our nation.

Reprinted courtesy of HRN Management Group, www.hrnonline.com.

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Countering the Financial Burden Shift (Second Article)

Source: Monster December 2006

Employers: Benefits Are Key to Retention
The U.S. workforce is in transition. Over the next 25 years, as the baby boomer population retires, new — but smaller — generations will be taking the helm of the workforce.

As workforce growth slows, employers will face a tightening market for new employees and will need to place greater emphasis on retaining the workers they have. A competitive compensation and benefit plan will be more important than ever to attract and retain key employees.

To help employers better understand the competitive marketplace for employee compensation and benefit plans, Monster Intelligence recently surveyed 650 human resources managers. The goal of the research is to help employers determine the best recruiting and retention strategies to meet their staffing objectives.

Are your compensation and benefit plans competitive?
Most employers believe that their compensation and benefit plans play an important role in retaining workers, and four out of five believe that they "fairly" compensate their employees for the work they perform.

However, significantly fewer employers view their compensation and benefit plans as highly competitive. Just over half of employers strongly or somewhat agree that their company offers higher-than-average salaries (55 percent) or a competitive package of benefits (54 percent). Even fewer are sure they are competitive in their local markets, with 43 percent strongly or somewhat agreeing that their company provides greater benefits than nearby companies.

With increased pressure to retain employees, many human resources managers are seeking ways to reinforce their compensation plans by increasing the value of the benefits they offer or adding new benefits.

Refining compensation plans
Keeping compensation plans competitive is a critical goal for the vast majority of human resources managers, and many are looking to provide options beyond salary alone.

Human resources managers are targeting annual performance bonuses to reinforce workers' compensation, tying these incentives to company performance. Such bonuses are second only to salary as a means to attract and retain workers, closely followed by 401(k) programs with some level of matching funds.

Company equity such as stock options and restricted stock plans are a low priority, however, with such benefits typically reserved for high-level recruitment efforts.

Enhancing non-compensation benefits
Among non-compensation benefits, companies are focusing on health care or health-care-related benefits. However, rising costs have made these benefits a challenge, and many companies are shifting health-care costs to employees. Accepting the role of health-care provider is an area in which companies can gain a competitive advantage.

Other key benefits findings included:

• Fitness and health club memberships — a benefit offered or considered by very few employers — may present an opportunity to reduce health-care costs by keeping the workforce healthy.
• Time off is offered by many companies in a variety of formats, since it is seen as valuable for retention and recruitment. This includes paid vacation, personal time off (non-paid), and carrying vacation time over to the following year. Schedule flexibility — such as working from home, flex time, and job sharing — is also popular.
• Among family-oriented benefits, only maternity and paternity leave are offered or under consideration by many companies. Few companies offer subsidized or free child care or assistance with fertility treatments or adoption.
• Few companies have formal programs to recognize employee contributions. Companies that recognize the potential these programs have to engage and motivate employees could gain a competitive advantage in retaining their employees.
• Professional development programs that help workers stay current in their fields represent an untapped opportunity, as nearly 40 percent of companies are not even considering such benefits. Organizations that continuously develop their human capital may have a competitive advantage over those that do not.
• Few companies offer convenience-oriented benefits, such as on-site dry cleaning, banking, and postal services. However, these services can increase productivity by keeping employees at work. Small businesses generally don't provide these services since they require scale; as a result, they may be an advantage for larger companies with an employee population that can justify them.

End the "status quo"
The standard set of compensation and benefit plans has served employers well during a time when workers have been plentiful. However, as the workforce growth rate falls, the status quo will no longer be sufficient to attract and keep employees.

When Monster asked human resources managers what types of compensation and benefits they are considering outside the standard set, the vast majority was at a loss to state anything new or innovative. Human Resources managers need to create "fresh" compensation and benefit plans that meet the needs of a new workplace and provide a competitive business advantage.

Download the complete Monster "Benefits of the Future: Employer Perspective" study: http://intelligence.monster.com/11691_en-US_p1.asp

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Cities Attend TMRS Training Seminar to Hear about Important Changes Ahead

Cities are thinking a lot about TMRS these days because the System is providing plenty of advance notice about changes in the retirement program coming in 2008 and 2009. In addition to numerous e-bulletins and letters, TMRS hosted its Annual Training Seminar on October 14–16 in Austin, with the theme “Focus on Funding.”

This year’s seminar at the downtown Hilton Austin had the largest attendance ever for the annual event. More than 500 people attended the two days of programming and got information straight from TMRS Executive Director Eric Henry and other TMRS staff. The retirement system’s new investment consultant, R.V. Kuhns, also presented a session on the advantages of asset diversification. More than 220 cities were represented, along with employee and employer associations. TMRS encouraged cities to send city managers and finance staff this year, as well as human resources personnel, because the changes ahead for the System involve actuarial methods, contribution rates, and a potential change in the way TMRS invests money.

Three key areas of change will likely occur over the next two years:

• Changing the actuarial funding method from Unit Credit to Projected Unit Credit to better account for future liabilities.
• Adopting a closed 25-year amortization period instead of the current 25-year open period to improve cities’ funded ratios over time.
• Changing investment policy and strategy to diversify investments and improve investment returns. The TMRS Board of Trustees will make decisions on these changes at their December meeting.

TMRS is considering the changes in its actuarial methodology in response to city concerns about rising liabilities associated with the annually repeating cost-of-living adjustments (COLAs) that many cities have adopted. Cities with this TMRS feature will see significantly higher annual contributions to advance-fund those benefits. Cities that have not adopted annually repeating COLAs will see relatively little change in their contribution rate.

To prepare for these changes, TMRS is ramping up its communications to member cities and will be working hard to give cities the information they need for their members, their local media, and their city councils. TMRS is spreading the word that it will continue to provide a quality retirement benefit at a reasonable cost to employers, will develop better long-range rate forecasts for budget purposes, and will make employers more aware of costs associated with annually repeating benefits. To disseminate both general and city-specific data, TMRS began a series of mailings and e-bulletins to city managers and finance officers earlier this year. The third mailing and e-bulletin will be sent to cities in the next few weeks.

TMRS’ total membership is currently 824 municipalities, each with a separately funded plan chosen by its city council from TMRS’ menu of options. TMRS as a system has been and continues to be soundly funded, but is taking steps to help its member cities pre-fund more of their retirement liabilities. Long a conservative investor in primarily the bond market, TMRS is also taking steps to change its investment strategy to increase investment returns and lower the portfolio’s overall risk. The task of this year’s seminar was to present the changes under consideration and help cities to understand the full measure of their partnership with TMRS, as well as how individual cities will handle future challenges.

After the overwhelming response to the funding-themed annual seminar, TMRS plans to divide its upcoming Annual Training Seminars into two events and to establish additional training and educational programs, including Regional Funding Workshops. Administrative training is also available through the City Correspondent Certification classes held several times each year. In addition to these seminars, TMRS will continue to send field representatives to cities upon request.

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NEWSLETTER INPUT NEEDED!!!

This is YOUR newsletter and we want to ensure it provides you with a valuable source of information from TMHRA. If you have any ideas, articles, or information you would like to see included in future newsletters, please submit them to the Newsletter Committee.

2007-2008 Newsletter Committee Chair
Debbie L. Maynor
Human Resources Director
City of Killeen
p.O. Box 1329
Killeen, TX 76540-1329
254-501-7834 phone
254-501-7780 fax
dmaynor@ci.killeen.tx.us

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