TEXAS COUNCIL Board Training: Trustee Roles and Responsibilities

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1 TEXAS COUNCIL Board Training: Trustee Roles and Responsibilities MAY 30, 2012 Presented by: Carvan Adkins, Legal Counsel Taylor, Olson, Adkins, Sralla, & Elam LLP 6000 Western Place, Suite 200 Fort Worth, Texas

2 The abandonment of the mentally ill to the grim mercy of custodial institutions too often inflicts on them a needless cruelty which this Nation should not endure. President John F. Kennedy 1963 State of the Union Address 2

3 Community Mental Health Act of 1963 Funding for Community MH Centers Community-based service philosophy Emphasized natural support systems, new medications, regionalized relationship with state facilities Catalyst for state legislation & funding 3

4 Texas Mental Health and Mental Retardation Act of 1965 Authorized local agencies to assume administration of MHMR services Created Texas Department of MHMR Established partnerships between local agencies, the State, the Federal Government Vague in terms of legal definition and authority of local entity 4

5 Section Texas Health & Safety Code Authorizes county, municipality, hospital district, school district [or organizational combination] to establish and operate a Community Center. Community Center plan requires state approval Once approved, Center functions as unit of local government subject to the Open Meetings Act, the Public Information Act and other rules and regulations designed to safeguard the public s property. 5

6 Section (c) Texas Health & Safety Code A Community Center is 1. An agency of the state, a governmental unit and a unit of local government as defined and specified by Chapters 101 and 102, Civil Practice and Remedies Code (tort claims protection); 2. A local government as defined by Section , Government Code (Interlocal Cooperation Act); 3. A local government for the purposes of Chapter 2259, Government Code (allows for self insurance by governmental entities); and 4. A political subdivision for the purposes of Chapter 172, Local Government Code (allows for group benefits programs). 6

7 Section Purpose and policy (a) A community center created under this subchapter is intended to be a vital component in a continuum of services for persons in this state who are mentally ill or mentally retarded. (b) It is the policy of this state that community centers strive to develop services for persons who are mentally ill or mentally retarded, and may provide requested services to persons with developmental disabilities or with chemical dependencies, that are effective alternative to treatment in a large residential facility. 7

8 8

9 Section (e) HB 2303 (81 st Session) (e) Except as provided by this section, a Community Center operating under this subchapter may operate only for the purposes and perform only the functions defined in the center s plan. In addition to the services described in the center s plan, the center may provide other health and human services and supports as provided by a contract with or a grant received from a local, state, or federal agency. 9

10 Section (f) Texas Health & Safety Code (f) Each function performed by a community center under this title is a governmental function if the function is required or affirmatively approved by any statute of this state or of the United States or by a regulatory agency of this state or of the United States duly acting under any constitutional or statutory authority vesting the agency with such power. Notwithstanding any other law, a community center is subject to Chapter 554, Government Code. 10

11 Section Texas Health & Safety Code ADMINISTRATION BY BOARD (a) The board of trustees is responsible for the effective administration of the community center. (b) The board of trustees shall make policies that are consistent with the department s rules and standards. 11

12 Standards of Administration for Board of Trustees Department of State Health Services: 25 TAC Rule Department of Aging and Disability Services: 40 TAC Rule

13 Board of Trustees: General Duties 1. Govern organization by establishing broad policies and providing strategic direction; 2. Select, appoint, support and review the performance of the Executive Director; 3. Ensure the availability of adequate financial resources; 4. Approve annual budgets; 5. Account to stakeholders for organization s performance. 13

14 Board of Trustees Fiduciary Responsibility In law, a person who is obliged to discharge faithfully a responsibility of trust toward another. One that stands in a special relation of trust, confidence, or responsibility in certain obligations to others. 14

15 Fiduciary Responsibility Basic Obligations Attend all meetings Prepare for meetings Be attentive and actively participate Ensure information is available for informed decisions Examine the information thoroughly Request more information if materials raise issues or highlight problems Do not passively await signs of problems or red flags 15

16 Fiduciary Responsibility Business Judgment Rule In retrospect, decisions made may be judged right or wrong. The fiduciary obligation requires that decisions are arrived at in an appropriate way not that decisions are always right. 16

17 Section Qualifications; Conflict of Interest; Removal (a) As a local public official, a member of the board of trustees of a community center shall uphold the member s position of public trust by meeting and maintaining the applicable qualifications for membership and by complying with the applicable requirements relating to conflicts of interest. (b) A person is not eligible for appointment as a member of a board of trustees if the person or the person s spouse: (1) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization receiving funds from the community center by contract or other method; or 17

18 Section cont d (2) uses or receives a substantial amount of tangible goods or funds from the community center, other than: (A) compensation or reimbursement authorized by law for board of trustees membership, attendance, or expenses; or (B) as a consumer or as a family member of a client or patient receiving services from the community center. (c) The primary residence of a member of the board of trustees must be in the local service area the member represents. 18

19 Section cont d (d) A member of the board of trustees is subject to Chapter 171, Local Government Code. (e) A member of the board of trustees may not: (1) refer for services a client or patient to a business entity owned or controlled by a member of the board of trustees, unless the business entity is the only business entity that provides the needed services within the jurisdiction of the community center; (2) use a community center facility in the conduct of a business entity owned or controlled by that member; 19

20 Section cont d (3) solicit, accept, or agree to accept from another person or business entity a benefit in return for the member s decision, opinion, recommendation, vote, or other exercise of discretion as a local public official or for a violation of a duty imposed by law; (4) receive any benefit for the referral of a client or a patient to the community center or to another business entity; (5) appoint, vote for, or confirm the appointment of a person to a paid office or position with the community center if the person is related to a member of the board of trustees by affinity within the second degree or by consanguinity within the third degree; or 20

21 Section cont d (6) solicit or receive a political contribution from a supplier to or contractor with the community center. (f) Not later than the date on which a member of the board of trustees takes office by appointment or reappointment and not later than the anniversary of that date, each member shall annually execute and file with the community center an affidavit acknowledging that the member has read the requirements for qualification, conflict of interest, and removal prescribed by this chapter. (g) In addition to any grounds for removal adopted under Section (A), it is a ground for removal of a member of a board of trustees if the member: 21

22 Section cont d (1) violates Chapter 171, Local Government Code; (2) is not eligible for appointment to the board of trustees at the time of appointment as provided by Subsection (b) and (c); (3) does not maintain during service on the board of trustees the qualifications required by Subsection (b) and (c); (4) violates a provision of Subsection (e); (5) violates a provision of Section ; or 22

23 Section cont d (6) does not execute the affidavit required by Subsection (f). (h) If a board of trustees is composed of members of the governing body of a local agency or organizational combination of local agencies, this section applies only to the qualifications for and removal from membership on the board of trustees. 23

24 Section Nepotism (a) The board of trustees or executive director may not hire as a paid officer or employee of the community center a person who is related to a member of the board of trustees by affinity within the second degree or by consanguinity within the third degree. (b) An officer or employee who is related to a member of the board of trustees in a prohibited manner may continue to be employed if the person began the employment not later than the 31 st day before the date on which the member was appointed. 24

25 Section cont d (c) The officer or employee or the member of the board of trustees shall resign if the officer or employee began the employment later than the 31 st day before the date on which the member was appointed. (d) If an officer or employee is permitted to remain in employment under Subsection (b), the related member of the board of trustees may not participate in the deliberation of or voting on an issue that is specifically applicable to the officer or employee unless the issue affects an entire class or category of employees. 25

26 MEETINGS Section Texas Health & Safety Code (a) The board of trustees shall adopt rules holding regular and special meetings. (b) Board meetings are open to public to extent required by and in accordance with Chapter 551, Government Code. (c) The board of trustees shall keep a record of its proceedings in accordance with Chapter 551, Government Code. The record is open for public inspection in accordance with that law. 26

27 Section (d) Texas Health & Safety Code Board of Trustees shall send to the department of each appointing local agency a copy of approved board meeting minutes. 27

28 BOARD ACTION Board acts only by majority vote at a meeting posted in accordance with the Texas Open Meetings Act in which a quorum of the Board is present. Individual Board members, including the Chair, have no express authority. Action, or votes, may only be taken on properly posted items, which usually means listed on the Agenda. 28

29 Government Code: Chapter 551 Texas Open Meetings Act Every meeting of a governmental body is open to the public Board of trustees must keep minutes or tape recordings of its meetings A quorum must be present for a meeting to begin If officials gather in numbers of less than a quorum with the intent of circumventing the Act, criminal penalties may be imposed 29

30 Texas Open Meetings Act What is a meeting? A meeting occurs when a quorum of a governmental body is present and discusses public business, including a gathering: conducted by the governmental body; and at which members receive or give information about public business or public policy over which the body has control Formal action is not required 30

31 Texas Open Meetings Act What is a quorum? Defined as a simple majority under the Act, but may be dictated by Board bylaws or other similar local governance document, such as your inter-local agreement. 31

32 Texas Open Meetings Act What constitutes deliberation? Defined as a verbal exchange ( giving and receiving of spoken words ) during a gathering of a governmental body concerning an issue within the jurisdiction of the governmental body or any public business. 32

33 Texas Open Meetings Act [Exceptions to this Definition] Where no formal actions are taken and the discussion of public business is incidental to the events, the following are exceptions: purely social gatherings; attendance of public officials at conferences or training; and closed meetings/executive sessions; where permissible by law. 33

34 Texas Open Meetings Act Common Misconceptions The Act does apply to: workshop meetings town hall meetings informal gatherings before or after meeting in a quorum to discuss center business Board retreats 34

35 Texas Open Meetings Act Does not apply to purely advisory committees, unless: Board of trustees generally rubber stamps action Inter-local or similar governing agreement renders committees subject to Act Other state law or regulation requires compliance with the Act Committee has tradition of complying with Act 35

36 Notice Requirement Notice must be posted 72 hours in advance of the meeting in a well-lit place accessible to the public 24 hours a day An item may not be added to the notice within 72 hours of a meeting unless it meets the criteria for an emergency meeting At a place convenient to the public in a administration office of the district or authority 36

37 Notice Requirement (con.) Provided to the Secretary of State Provided to each county clerk where the district or authority is located 37

38 Contents of Notice Notice must contain: a description of each subject that will be deliberated in sufficient specificity to alert the public, in general terms, of matters to be considered at the meeting 38

39 Contents of Notice Descriptions such as old business or staff reports are not sufficient courts have held that the more important an issue is to the public, the more specific the notice must be 39

40 Items Not Posted Cannot deliberate or decide items not posted If public brings up unposted item, board may only: request to place item or subject matter on next agenda make statement of factual information recite existing policy 40

41 Emergency Meetings Action is necessary because of an imminent threat to public health and safety or because of a reasonably unforeseeable situation Notice must be posted at least two hours in advance of the meeting, and the notice must clearly identify with specificity the nature of the emergency 41

42 Closed Meetings Exception (Executive Session) A closed meeting is a meeting to which the public does not have access No action may be taken in a closed meeting Members may indicate how they intend to vote, but the courts and the Attorney General have ruled no straw votes 42

43 Closed Meetings: Who may attend? The Board decides who it needs in a closed meeting It should be limited to trustees and staff necessary for the discussion An officer or employee being discussed may attend only with permission of the Board, unless matter is posted as a personnel matter in which case unique rules discussed below apply Third parties are not allowed in a closed meeting, meaning non-employees, vendors or contractors Attorney is necessary for legal consultation exception, such consultation may be done by telephone, video or internet conference in accordance with Section of the Act 43

44 Closed Meetings: What subjects are allowed? Personnel matters concerning specific individuals appointment, evaluation, duties, or discipline of a public officer or employee hearing of a complaint or charge against an officer or employee, but only if the employee does not request the discussion be open does not permit discussion of an advisory committee member or an independent contractor 44

45 Closed Meetings: What subjects are allowed? does not authorize the discussion of general personnel policies or procedures, or an entire class of employees if the officer or employee requests a public hearing, executive session is not permitted officer or employee may not require the discussion take place in executive session 45

46 Closed Meetings: What subjects are allowed? Consultation with the board s attorney pending or contemplated litigation settlement offers any matter about which the attorney s duty requires that advice be given in a closed meeting If a closed session with the attorney is listed on the agenda and a legal question arises concerning an agenda item during the meeting, the board may consult with the attorney in closed session on that subject. 46

47 Closed Meetings: What subjects are allowed? Purchase, exchange, lease or value of real estate Security personnel or devices Discussion of gifts and donations Economic development negotiations 47

48 Procedures for Meeting in Closed Session First convene in a properly posted open meeting Chair announces the closed session and identifies the section or sections of the Act that authorize the session In the session, the Chair must announce the date and time the session starts End of the session, the Chair must again announce the date and time 48

49 Record of Closed Meetings Must maintain a record of closed meetings except for consultation with an attorney certified agendas tape recordings Must be preserved for two years from the date of the meeting May not be disclosed except upon the order of a court 49

50 Disclosure of Executive Session Discussion Except disclosure of tape or certified agenda, no criminal penalty All Board members have fiduciary duty to the Center and should not disclose substance of discussion May be civilly liable if cause harm to government entity because of disclosure 50

51 Disclosure of Executive Session Discussion (con.) May waive attorney/client privilege Malfeasance in office removal by appointing authority Stifles questions and information 51

52 Criminal Enforcement Some violations are criminal offenses (With a penalty of a fine of $100 to $500, up to 6 months in jail, or both) a member participates in any way in an unauthorized closed meeting meet in numbers of less than a quorum for the purpose of circumventing the Act Ignorance is no defense 52

53 Criminal Enforcement Other violations participating in a closed meeting knowing that a certified agenda or tape recording is not being made: Class C misdemeanor, with a fine up to $500 releasing a copy of the certified agenda or tape recording of a closed meeting: Class B misdemeanor, with a fine up to $2,000, up to 6 months in jail, or both 53

54 Affirmative Defense It is an affirmative defense to criminal liability if you attended an illegal executive session upon the reasonable reliance of a court order, written opinion of court of record, Attorney General opinion, or Center s general counsel. 54

55 Public Participation No right to speak under the Act Public hearings may be required under other laws Courts recognize constitutional right to address and petition governing body If permitted to speak, limitations may be established and all speakers should be treated equally 55

56 Disruption of Meeting Texas Penal Code provides: Class B misdemeanor if a person with intent to disrupt, obstructs or interferes with a lawful meeting by physical action or verbal utterance (subject to First Amendment) Class A misdemeanor if the person has been warned 56

57 Texas Public Information Act Formerly Texas Open Records Act Provides that public records are generally open and available to the public for inspection and duplication What is public information recorded information in any medium including electronic, paper, video tape includes 57

58 Texas Public Information Act includes most personnel notes related to Center business (unless invasion of privacy or clearly for personal use) may include information on personal computer related to Center business AG recently ruled: mayor s personal journal is subject to open records request 58

59 Section Texas Health & Safety Code EXECUTIVE DIRECTOR. (a) The board of trustees shall appoint an executive director for the Community Center. (b) The board of trustees shall: (1) adopt a written policy governing the powers that may be delegated to the executive director; and (2) annually report to each local agency that appoints the members the executive director s total compensation and benefits. 59

60 Executive Director Executive Director (CEO) implements policy and budgetary directives of full Board as expressed by majority vote at properly posted meetings. Is liaison between Board and Staff Responsible for employment of all other Center employees. Generally serves as spokesperson for the Center. 60

61 Board Hires Executive Director Board of Trustees Hires Executive Director 61

62 Section Texas Health & Safety Code PERSONNEL (a) The executive director shall employ and train personnel to administer programs and services; (b) The board shall provide employees appropriate rights, privileges and benefits; (c) The board may provide worker s compensation benefits; (d) The board shall prescribe the number of employees and salaries using a market analysis, internal salary study or (e) state position classification plan and the General Appropriations Act; (f) during management audit the department is entitled to confirm the method used to determine salaries and benefits. 62

63 Staff Administration Executive Director Staff 63

64 Hour Glass Model Board Executive Director Staff 64

65 The RED Zone Board Executive Director Staff 65

66 Section Budget; Request for Funds (a) Each community center shall annually provide to each local agency that appoints members to the board of trustees a copy of the center s: (1) approved fiscal year operating budget; (2) most recent annual financial audit; and (3) staff salaries by position. (b) The board of trustees shall annually submit to each local agency that appoints the members a request for funds or inkind assistance to support the center. 66

67 Section Acquisition and Construction of Property and Facilities by Community Center (a) A community center may purchase or lease-purchase real and personal property and may construct buildings and facilities. (b) The board of trustees shall require that an appraiser certified by the Texas Appraisers Licensing and Certification Board conduct an independent appraisal of real estate the community center intends to purchase. The board of trustees may waive this requirement if the purchase price is less than the value listed for the property by the local appraisal district and the property has been appraised by the local appraisal district within the preceding two years. (c) The board of trustees shall establish in accordance with relevant department rules competitive bidding procedures and practices for capital purchases and for purchases involving department funds or required local matching funds. 67

68 Section Approval and Notification Requirements (a) A community center must receive from the department prior written approval to acquire real property, including a building, if the acquisition involves the use of department funds or local funds required to match department funds. In addition, for acquisition of nonresidential property, the community center must notify each local agency that appoints members to the board of trustees not later than the 31 st day before it enters into a binding obligation to acquire the property. (b) A community center must notify the department and each local agency that appoints members to the board of trustees not later than the 31 st day before it enters into a binding obligation to acquire real property, including a building, if the acquisition does not involve the use of department funds or local funds required to match department funds. The commissioner, on request, may waive the 30-day requirement on a case-by-case basis. (c) The board shall adopt rules relating to the approval and notification process. 68

69 Presented by: Carvan Adkins, Legal Counsel Taylor, Olson, Adkins, Sralla, & Elam LLP 6000 Western Place, Suite 200 Fort Worth, Texas

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