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ESD 101
SAFE-D
12th Annual Conference
March 6, 2013
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
w...
What is an ESD?

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
What is an ESD?
• ESDs are local political subdivisions that may
provide fire, rescue, EMS and other
emergency services
– ...
Why create an ESD?
• ESDs Ensure adequate funding of local
fire, EMS, rescue and other emergency
services
• ESDs spread fu...
ESD Statistics
•
•
•
•
•

Over 300 known ESDs in Texas
Nearly 50% are SAFE-D members
100 ESDs with Tax Rates >$0.09/$100
A...
Most Current Map of
ESDs in Texas

Texas Department of Rural
Affairs
Prepared February 2010

Website:
http://www.tdra.stat...
History
• Rural Fire Prevention Districts
Amendment to Constitution Approved
November 1949
– Tax Cap of $0.03
– Enabling S...
History
• Emergency Services Districts
Amendment to Constitution Approved
November 1987
– Tax Cap of $0.10
– Enabling Stat...
Oversight of ESDs
•
•
•
•

State Laws
State Agencies
County Commissioners/Voters
Residents

2705 Bee Cave Road, Suite 200
...
Constitution
• Article 3, Section 48-e
– Laws may be enacted to provide for the
establishment and creation of special dist...
Constitution
• Article 3, Section 48-e (cont.)
– Such a district may provide emergency
medical services, emergency ambulan...
The Statutes
• Chapter 775 – ESDs
• Chapter 776 – ESDs in Counties with
less than 125,000 population –
repealed in 2011 (a...
Creating an ESD

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
Basic Creation Process
• Petition by Qualified Voters
– Consent of City Required if Area includes ETJ
or City Limits

• Ac...
Canvassing Election
• District Created if Majority of Votes In
Favor
• Must be Majority of Voters within City
Limits or ET...
You’re created…who runs
the show?
The Board of Commissioners

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) ...
ESD Commissioners
• Board of five commissioners.
• Appointed by Commissioners Court for 2
years
– at least 18 years of age...
Commissioner Appointment
• The commissioners court shall consider
relevant factors in determining the
individuals to appoi...
Elected Commissioners
• In Harris County (31 ESDs), you are not
eligible to be an ESD commissioner if :
– you are related ...
Elected Commissioners
• In Harris County (31 ESDs), you are not
eligible to be an ESD commissioner if :
– you are employed...
You Are an ESD
Commissioner…
Now What?

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonla...
Board of Commissioners
Requirements
• Oaths of office and statements for
Commissioners.
• Open Meetings and Open Records
T...
Sworn Statement
• Texas Constitution, Article XVI, Section 1. All elected or
appointed officers, before taking the Oath or...
Official Oath
• Texas Constitution, Article XVI, Section 1. All
elected and appointed officers, before they enter
upon the...
Open Government Training
• Effective January 1, 2006, elected and appointed
public officials are required by a state law t...
Open Meetings Act
• Chapter 551, Texas Government Code
• Attorney General Approved Training
Required
• Open Meetings Made ...
Open Meetings
• 72 Hours Notice of meeting (unless
emergency)
• Notice must state time, date and place of
meeting
• Notice...
Open Meetings
Closed Sessions
•
•
•
•
•

Consult with District’s attorney
Real Property Acquisition
Personnel Matters
Gift...
Public Information Act
• Chapter 552, Texas Government Code
– formerly the Open Records Act

• Attorney General Training R...
Public Information
• Districts and “the part, section, or portion of an
organization, corporation, commission,
committee, ...
Public Information
• Making a Request
– A request for records or information triggers
the Act.

• Creating Records to Resp...
Public Information
• Charges to the Requestor
– Generally no charges allowed to view or
inspect records and information. C...
Public Information
• Exceptions to the Act
– the governmental body generally must, within ten business
days of receiving t...
More Training!

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
Training
• Effective June 17, 2011, ESD Commissioners
must obtain
and may carry forward not more
than three hours from one...
What Kind of Training?
• Training topics under HB 1619 as originally
filed:
–
–
–
–
–

district responsibilities;
board re...
Other Training
•
•
•
•

NIMS 100
NIMS 200
NIMS 700
NIMS 800
– All needed to comply with terms of federal
grants

2705 Bee ...
Getting Organized
“Growing beyond the apple
box…”
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www...
Offices and Meetings
• Establish District Administrative Office
and publish notice of location in
newspapers within 60 day...
Miscellaneous Financial Issues
• Adopt Resolution Establishing District
Fiscal Year
• Establish District Depository
• Open...
Reporting and Registrations
• Register/File Report with Texas
Department of Rural Affairs (now TDA)
• Obtain a federal tax...
Records of District Actions
How can you prove what you
have done?
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(5...
Recordkeeping
• Approve a Records Management
Program, including:
– Order Establishing Records Management
Program, Appointi...
Records of District Actions
• Minutes
• Resolutions
• Orders

2705 Bee Cave Road, Suite 200
Austin, Texas 78746
(512) 614-...
Meetings & Minutes
• The Board shall:
– hold regular monthly meetings and other
meetings as necessary.
– keep minutes and ...
Record of Open Meeting
• Open Meetings Act Requirement:
– A governmental body shall prepare and keep
minutes or make a tap...
Record of Open Meeting
• Public Record
– The minutes and tape recordings of an open
meeting are public records and shall b...
Record of Open Meeting
• Recording by Others
– A person in attendance may record all or any part of
an open meeting of a g...
Records of Governing Bodies
• Agendas
(a) Open meetings. RETENTION: 2 years.
(b) Closed sessions. RETENTION: 2 years.

• M...
Records of Governing Bodies
cont...
• Minutes

•

(c) Audio tapes of open meetings, except as described in (d), for which
...
Resolutions & Orders
• Resolutions
– Used to more formally record actions of the
Board beyond just a recitation in the min...
Laws Governing ESDs
“The rules for how you can
operate.”
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0...
Financial Basics
“Taking Care of Public Money”

•
•
•
•
•
•

Audits
Payment of District Funds
Annual Reports
Depositories
...
Audit
• A district located wholly in one county shall
prepare and file with the commissioners court of
the county on or be...
Audits
• If a district fails to complete and file the required
audit report by September 1 and a county
auditor is not ord...
Payment of District Funds
• District funds may be disbursed only by check
signed by the treasurer and countersigned by
the...
Annual Report
• Uncertainty surrounding transfer of TDRA to
Department of Agriculture
• On or before January 1 of each yea...
Annual Report (cont.)
– the name, mailing address, and term of
office of each commissioner
– the name, mailing address, an...
Depositories
• The board shall designate one or more banks
to serve as depositories for district funds.
• The board shall ...
Depositories
• The district may not deposit funds in a
depository or trustee bank in an amount that
exceeds the maximum am...
Public Funds Investment Act
• Government Code, Chapter 2256
• A district may invest funds only in:
– obligations of, or gu...
Public Funds Investment Act
• unless the treasurer, chief financial
officer (if not the treasurer), and the
investment off...
Public Funds Investment Act
• A district must adopt by rule, order,
ordinance, or resolution, as appropriate, a
written in...
Public Funds Investment Act
• A district must designate, by rule,
order, ordinance, or resolution, as
appropriate, one or ...
Public Funds Investment Act
• Not less than quarterly, the investment
officer shall prepare and submit to the
district a w...
Public Funds Collateral Act
• Government Code, Chapter 2257
• A deposit of public funds shall be secured
by eligible secur...
Revenues & Expenditures
• Ad Valorem Taxes
• Sales Tax
• Fees
•
•
•
•

Purchases/Leases/Sale
Bonds
Loans
Bidding
2705 Bee ...
Ad Valorem Taxes
• Schedule meetings and public hearings
on Budget and Tax Rate to comply with
Truth-in-Taxation requireme...
Ad Valorem Taxes
• Constitutional Cap of 10 Cents for each
ESD
– Harris County/Former RFPD/Former 776
ESD Specific Issues
...
Ad Valorem Taxes
• Small Taxing Unit Exception
– <$0.50 per $100 tax rate
– <$500,000 annual ad valorem tax revenue
– Simp...
Sales Tax
•
•
•
•

Maximum 2% Local Sales Tax
Increments of 1/8%
Sales Tax Election
Exclusion of area at 2% cap –
the “Car...
Fees
• A district, or a person authorized by
contract on the district's behalf, may
charge a reasonable fee for emergency
...
Revenues & Expenditures
• Ad Valorem Taxes
• Sales Tax
• Fees
•
•
•
•

Purchases/Leases/Sale
Bonds
Loans
Bidding
2705 Bee ...
Acquiring Property
• A district may acquire, purchase, hold,
lease, manage, occupy, and sell real and
personal property or...
Acquiring Equipment
• A district may lease, own, maintain,
operate, and provide emergency services
vehicles and other nece...
Sale of Real Property
• Must seeks bids to sell real property with
certain exceptions
– Before land may be sold or exchang...
Sale of Real Property
Exceptions
• Narrow strips of land, or land that
because of its shape, lack of access to
public road...
Sale of Real Property
Exceptions
• Land or a real property interest originally
acquired for … easements that the political...
Real Property Option
• A political subdivision may donate or sell for less
than fair market value land or an interest in r...
Sale of Personal Property
• Recommend sale by public auction or
bidding unless specific statutory authority
for alternativ...
Personal Property Option
• "Salvage property" is personal property …
that because of use, time, or accident is so
damaged,...
Personal Property Option
• May sell surplus firefighting equipment to
any VFD or district in this state for fair
market va...
Personal Property Option
• May contract to supply surplus property
to any VFD or district in this state at fair
market val...
Leasing to Political Subdivisions
• To promote a public purpose of the
political subdivision, a political subdivision
may
...
Stations and Buildings
• A district may construct, lease, own, and
maintain real property, improvements,
and fixtures nece...
Contracting for Stations
• A district may contract with other entities,
including other districts or municipalities,
to ma...
Debt
Four letters….

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
Limitation on Indebtedness
• A district may not contract for an amount
of indebtedness in any one year that is in
excess o...
Bonds
• A district may issues bonds or notes
secured by a pledge of ad valorem taxes,
other revenues or both for up to 40 ...
Loans
• The district may borrow money and make
other financial arrangements to purchase
real property or emergency service...
Loans
• A loan may be secured by
that are not otherwise
pledged to pay a debt of the district or the
real property acquire...
Loans
• Limits
– 20 years for real estate
– 10 years for personal property

• Subject to Appropriations Issues
– Any “pled...
Bidding
“How do we buy stuff?
Lots and lots of stuff…”
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-090...
Bidding
• A district must submit to competitive bids
an expenditure of more than $50,000 for
one item or service or more t...
Bidding - Exceptions
• the purchase or lease of real property
• an item or service that the board
determines can be obtain...
Bidding - Exceptions
• purchase of bunker gear
• an emergency expenditure
• contract with state to participate in general
...
Bidding - Options
• Solicit at least three bids
• Advertise for Bids – Local Government
Code Chapter 262 or Government Cod...
Bidding – Chapter 2267
• Competitive Bidding
• Competitive Sealed Proposals
• Construction Manager-Agent Method
(“CMA”)
• ...
Bidding - Prohibitions
• Professional Services Procurement Act
prohibits bidding the following professional
services:
–
–
...
Bidding - Prohibitions
• Additional Prohibitions
–
–
–
–
–

Medicine
Optometry
Professional engineering
Real estate apprai...
Bidding – Professional Services
How to secure contracts for architectural,
engineering, and surveying services:
• Select m...
Bidding – Professional Services
How to secure contracts for architectural,
engineering, and surveying services:
• If negot...
Construction Projects
• Payment and Performance Bonds
– A governmental entity making a public work
contract must require t...
Construction Projects
• Prevailing Wage Rates
– District must pay prevailing wage rates for
public work construction contr...
Commissioner
Accountability
“Who is looking over your
shoulder?”
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(51...
Ethical Issues
• Conflict of Interest
• Nepotism
• Dual Office Holding/Incompatibility
AG Handbook: Public Officers: Traps...
Conflict of Interest
• Common Law
If a public official directly or indirectly has a pecuniary
interest in a contract, no m...
Conflict of Interest
• A local public official commits an offense if the official
knowingly:
– violates Local Government C...
Conflict of Interest
• If a local public official has a substantial interest
in a business entity or in real property, the...
Conflict of Interest
• A person has a substantial interest in a business
entity if:
– the person owns 10 percent or more o...
Conflict of Interest
• In Harris County, person is ineligible for
ESD board if person or spouse, child,
parent, etc. is me...
Nepotism
• A public official may not appoint, confirm the
appointment of, or vote for the appointment or
confirmation of t...
Nepotism
• Except as provided by Texas Government
Code, Section 573.043, this chapter
applies to relationships within the ...
Nepotism

2705 Bee Cave Road, Suite 200
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
Nepotism
Consanguinity
Civil Law Degrees Of Relationship
1st
Officer

2nd

3rd

4th

Child

Grandchild

Great
Grandchild

...
Nepotism
Affinity
Civil Law Degrees Of Relationship

1st
Officer

2nd

3rd

Spouse

Spouse’s Sibling

Child of Spouse’s
Si...
Dual Office Holding
• Article XVI, Section 40, of the Texas
Constitution prohibits a person from
holding or exercising mor...
Incompatibility
• Self Appointment
• Self Employment
• Conflicting Loyalties

2705 Bee Cave Road, Suite 200
Austin, Texas ...
Incompatibility
• Self Appointment
– “It is because of the obvious incompatibility of
being both a member of a body making...
Incompatibility
• Self Employment
– Ordinarily, self-employment incompatibility will
arise only where one position is an o...
Incompatibility
• Conflicting Loyalties
– both positions must be “offices”
– the relationship between the positions create...
Incompatibility
• Conflicting Loyalties
– SB 917, adopted in 2011, specifically states
that holding positions on two ESD b...
Removal
“What can happen when you
mess up… BAD?”
2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www....
Removal
Appointed Commissioners
• Section does not apply unless adopted by the county
commissioners court by resolution.
•...
Grounds for Removal
• Incompetency
– No training as required
– Definition in Chapter 87 of Local Gov’t Code:
• gross ignor...
Grounds for Removal
• Official misconduct
– “intentional, unlawful behavior relating to
official duties by an officer entr...
Grounds for Removal
• Misconduct
– violating a law relating to the office of director;
or
– misapplying any thing of value...
Removal
Elected Commissioners

• Section requires use of the procedures set forth in
the Local Government Code for removin...
Other Oversight and
Assistance

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin....
State Agencies with Oversight
• Texas Commission on Fire Protection
– for entities with paid fire fighting staff

• Texas ...
Organizations/Agencies for
Assistance
• SFFMA (Volunteer Departments)
• Texas Forest Service
• Texas Department of Rural A...
Helpful Websites
• TX State Assoc. of Fire & Emergency
Districts
– www.safe-d.org

• Texas Attorney General
– www.oag.stat...
Laws that Apply to ESDs
•

The Texas Constitution, Art. 3, Section 48-e
– http://www.statutes.legis.state.tx.us/Docs/CN/ht...
Questions?

2705 Bee Cave Road, Suite 200
110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2013
ESD 101
John J. Carlton
The Carlton Law Firm, PLLC
2705 Bee Cave Road, Suite 200
Austin, Texas 78746
(512) 614-0901
john@c...
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SAFE-D 12th Annual conference, 2013 - ESD 101

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Basic introduction to the legal aspects of the administration and operation of Emergency Services Districts in Texas, including meetings, finances, contracting and ethical issues.

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Transcript of "SAFE-D 12th Annual conference, 2013 - ESD 101"

  1. 1. ESD 101 SAFE-D 12th Annual Conference March 6, 2013 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  2. 2. What is an ESD? 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  3. 3. What is an ESD? • ESDs are local political subdivisions that may provide fire, rescue, EMS and other emergency services – Governed by 5 commissioners appointed by County Commissioners Court - except in Harris County and multi-county ESDs, where they are elected – Primarily funded by property taxes not to exceed $0.10 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  4. 4. Why create an ESD? • ESDs Ensure adequate funding of local fire, EMS, rescue and other emergency services • ESDs spread funding for emergency services among everyone that might receive those services 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  5. 5. ESD Statistics • • • • • Over 300 known ESDs in Texas Nearly 50% are SAFE-D members 100 ESDs with Tax Rates >$0.09/$100 Approx. 50 ESDs collecting Sales Tax Median Assessed Value Approx. $700,000,000 (as of December 2010) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  6. 6. Most Current Map of ESDs in Texas Texas Department of Rural Affairs Prepared February 2010 Website: http://www.tdra.state.tx.us/TxDR A/Libraries/sorhDocs/Emergency _Service_Districts.sflb.ashx 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  7. 7. History • Rural Fire Prevention Districts Amendment to Constitution Approved November 1949 – Tax Cap of $0.03 – Enabling Statute Adopted in 1957 • According to the Interpretive Commentary, the Texas farm bloc supported the creation of a special district to purchase modern fire-fighting equipment and reduce insurance rates by decreasing response times in rural areas – even envisioning fire fighting via helicopter response to rural 2705 Bee Cave Road, Suite 200 areas Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  8. 8. History • Emergency Services Districts Amendment to Constitution Approved November 1987 – Tax Cap of $0.10 – Enabling Statutes Adopted same year 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  9. 9. Oversight of ESDs • • • • State Laws State Agencies County Commissioners/Voters Residents 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  10. 10. Constitution • Article 3, Section 48-e – Laws may be enacted to provide for the establishment and creation of special districts to provide emergency services and to authorize the commissioners courts of participating counties to levy a tax on the ad valorem property situated in said districts not to exceed Ten Cents (10¢) on the One Hundred Dollars ($100.00) valuation for the support thereof; provided that no tax shall be levied in support of said districts until approved by a vote of the qualified voters Cave Road, Suite 200 2705 Bee Austin, Texas 78746 residing therein. (512) 614-0901 www.carltonlawaustin.com ©2013
  11. 11. Constitution • Article 3, Section 48-e (cont.) – Such a district may provide emergency medical services, emergency ambulance services, rural fire prevention and control services, or other emergency services authorized by the Legislature. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  12. 12. The Statutes • Chapter 775 – ESDs • Chapter 776 – ESDs in Counties with less than 125,000 population – repealed in 2011 (all ESDs operate under 775) • Chapter 794 – Rural Fire Prevention Districts – repealed in 2003 (all RFPDs converted to 775 ESDs) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  13. 13. Creating an ESD 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  14. 14. Basic Creation Process • Petition by Qualified Voters – Consent of City Required if Area includes ETJ or City Limits • Acceptance by County Commissioners Court • Order for Election • Conducting the Election • Canvassing the Election • Order Creating the District 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  15. 15. Canvassing Election • District Created if Majority of Votes In Favor • Must be Majority of Voters within City Limits or ETJ in favor of creation to include those areas in District • If election fails, must wait one year to try again 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  16. 16. You’re created…who runs the show? The Board of Commissioners 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  17. 17. ESD Commissioners • Board of five commissioners. • Appointed by Commissioners Court for 2 years – at least 18 years of age; and – a resident citizen of the state that is: • a qualified voter within district; or • owner of land subject to taxation in the district. • Commissioners of Multi-County and Harris County ESDs are elected at-large for 4 years 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  18. 18. Commissioner Appointment • The commissioners court shall consider relevant factors in determining the individuals to appoint as emergency services commissioners, including 2705 Bee Cave • Health & Safety Code §775.034(g) or 776.033(g)Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  19. 19. Elected Commissioners • In Harris County (31 ESDs), you are not eligible to be an ESD commissioner if : – you are related within the third degree to: • someone providing professional services to the district; • a commissioner of the district; or • someone who is an employee or volunteer of an organization providing emergency services to the district; 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  20. 20. Elected Commissioners • In Harris County (31 ESDs), you are not eligible to be an ESD commissioner if : – you are employed by a district commissioner, or an attorney or other person providing professional services to the district; – your serve in a professional capacity for the district or an organization providing emergency services to the district; or – you fail to maintain the qualifications required by law to serve. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  21. 21. You Are an ESD Commissioner… Now What? 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  22. 22. Board of Commissioners Requirements • Oaths of office and statements for Commissioners. • Open Meetings and Open Records Training to be completed by all Commissioners. – Must be completed within 90 days of taking office. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  23. 23. Sworn Statement • Texas Constitution, Article XVI, Section 1. All elected or appointed officers, before taking the Oath or Affirmation of office prescribed by this section and entering upon the duties of office, shall subscribe to the following statement: "I, _______________________, do solemnly swear (or affirm) that I have not directly or indirectly paid, offered, promised to pay, contributed, or promised to contribute any money or thing of value, or promised any public office or employment for the giving or withholding of a vote at the election at which I was elected or as a reward to secure my appointment or confirmation, whichever the case may be, so help me God." 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  24. 24. Official Oath • Texas Constitution, Article XVI, Section 1. All elected and appointed officers, before they enter upon the duties of their offices, shall take the following Oath or Affirmation: "I, (State your Name), do solemnly swear (or affirm), that I will faithfully execute the duties of the office of ______________________of the State of Texas, and will to the best of my ability preserve, protect, and defend the Constitution and laws of the United States and of this State, so help me God." 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  25. 25. Open Government Training • Effective January 1, 2006, elected and appointed public officials are required by a state law to receive training in Texas open government laws. • The law requires at least two hours of open government training, consisting of: – a one-hour educational course on the Open Meetings Act and – one-hour educational course on the Texas Public Information Act. • Officials who are elected or appointed have within which to complete the required training. • https://www.oag.state.tx.us/open/og_training.shtml#3 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  26. 26. Open Meetings Act • Chapter 551, Texas Government Code • Attorney General Approved Training Required • Open Meetings Made Easy • Open Meetings Handbook • https://www.oag.state.tx.us/open/publications_og.shtml 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  27. 27. Open Meetings • 72 Hours Notice of meeting (unless emergency) • Notice must state time, date and place of meeting • Notice must describe matters to be discussed sufficiently • Public has right to attend 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  28. 28. Open Meetings Closed Sessions • • • • • Consult with District’s attorney Real Property Acquisition Personnel Matters Gifts to District Other Exceptions 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  29. 29. Public Information Act • Chapter 552, Texas Government Code – formerly the Open Records Act • Attorney General Training Required • Public Information Act Made Easy • Public Information Handbook • https://www.oag.state.tx.us/open/publications_og.shtml 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  30. 30. Public Information • Districts and “the part, section, or portion of an organization, corporation, commission, committee, institution, or agency that spends or that is supported in whole or in part by public funds “ are subject to the Act. • Unless excluded, all public information is subject to disclosure under the act. • VFD records that involve expenditures of public funds are subject to the Act. However, the portion of the entity that is not supported by public funds is not necessarily subject to the Act. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  31. 31. Public Information • Making a Request – A request for records or information triggers the Act. • Creating Records to Respond to Request – The Act does not require a governmental body to create new information, to do legal research, or to answer questions. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  32. 32. Public Information • Charges to the Requestor – Generally no charges allowed to view or inspect records and information. Charges may be allowed for copies and certain staff time. • Amount of Charges – All charges must comply with the Texas Building and Procurement Commission’s rules. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  33. 33. Public Information • Exceptions to the Act – the governmental body generally must, within ten business days of receiving the open records request, refer the matter to the Office of the Attorney General (the OAG) for a ruling. • Questions or Complaints. (877) 673-6839 (877-OPEN TEX). • Complaints Regarding Charges. Contact the Texas Building and Procurement Commission (512) 4752497. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  34. 34. More Training! 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  35. 35. Training • Effective June 17, 2011, ESD Commissioners must obtain and may carry forward not more than three hours from one period to the next. • For purposes of removal of a commissioner, “incompetency” includes failure to comply with training requirements. • Training must be certified by an institution of higher education 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  36. 36. What Kind of Training? • Training topics under HB 1619 as originally filed: – – – – – district responsibilities; board responsibilities; government administration; ethics laws relating to public officers; and the governance and management of emergency services. • HB 1619 did not pass and these requirements are not in current law, but serve as guidance 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  37. 37. Other Training • • • • NIMS 100 NIMS 200 NIMS 700 NIMS 800 – All needed to comply with terms of federal grants 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  38. 38. Getting Organized “Growing beyond the apple box…” 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  39. 39. Offices and Meetings • Establish District Administrative Office and publish notice of location in newspapers within 60 days of Commissioner qualification. • Election of President, Vice President, Treasurer, Secretary and Assistant Treasurer. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  40. 40. Miscellaneous Financial Issues • Adopt Resolution Establishing District Fiscal Year • Establish District Depository • Open District bank account(s), and investment account(s) • File Audit with County • Adopt Investment Policy 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  41. 41. Reporting and Registrations • Register/File Report with Texas Department of Rural Affairs (now TDA) • Obtain a federal tax identification number for the District • Obtain a taxing unit identification number from the Texas Comptroller 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  42. 42. Records of District Actions How can you prove what you have done? 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  43. 43. Recordkeeping • Approve a Records Management Program, including: – Order Establishing Records Management Program, Appointing Records Management Office, and Appointing Public Information Coordinator; and – Declaration of Compliance with Records Scheduling Requirement of the Local Government Act. – File with State Library and Archives Commission. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  44. 44. Records of District Actions • Minutes • Resolutions • Orders 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  45. 45. Meetings & Minutes • The Board shall: – hold regular monthly meetings and other meetings as necessary. – keep minutes and records of its acts and proceedings. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  46. 46. Record of Open Meeting • Open Meetings Act Requirement: – A governmental body shall prepare and keep minutes or make a tape recording of each open meeting of the body. – The minutes must: • state the subject of each deliberation; and • indicate each vote, order, decision and other action taken. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  47. 47. Record of Open Meeting • Public Record – The minutes and tape recordings of an open meeting are public records and shall be available for public inspection and copying on request to the governmental body’s chief administrative officer or the officer’s designee. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  48. 48. Record of Open Meeting • Recording by Others – A person in attendance may record all or any part of an open meeting of a governmental body by means of a tape recorder, video camera, or other means of aural or visual reproduction. – A governmental body may adopt reasonable rules to maintain order at a meeting, including rules relating to: • the location of recording equipment; and • the manner in which the recording is conducted. – The rules may not prevent or unreasonably impair a person from exercising a right granted to record. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  49. 49. Records of Governing Bodies • Agendas (a) Open meetings. RETENTION: 2 years. (b) Closed sessions. RETENTION: 2 years. • Minutes (a) Written minutes. RETENTION: PERMANENT (b) Notes taken during meetings from which written minutes are prepared. RETENTION: 90 days after approval of minutes by governing body. (Except from destruction request requirement) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  50. 50. Records of Governing Bodies cont... • Minutes • (c) Audio tapes of open meetings, except as described in (d), for which written minutes are not prepared. RETENTION: PERMANENT (d) Audio tapes of workshop sessions of governing bodies in which votes are not made and written minutes are not required by law to be taken. RETENTION: 2 years (e) Audio tapes of open meetings for which written minutes are prepared. RETENTION: 90 days after approval of minutes by the governing body (Exempt from destruction request requirement) (f) Audio tapes of closed meetings. RETENTION: 2 years [by law – Government Code, Section 551.104(a)] (g) Supporting documentation – One copy of each document of any type submitted to a meeting of a governing body for consideration, approval, or other action; if such action is reflected in the minutes of the meeting. RETENTION: 2 years. Open Meetings Notices. RETENTION: 2 years 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  51. 51. Resolutions & Orders • Resolutions – Used to more formally record actions of the Board beyond just a recitation in the minutes (eg. adoption of budget, policy statement, etc.) • Orders – Used to adopt rules, regulations and other formal actions that may require enforcement in court or other proceedings (eg. levying taxes, issuing debt, etc.) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  52. 52. Laws Governing ESDs “The rules for how you can operate.” 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  53. 53. Financial Basics “Taking Care of Public Money” • • • • • • Audits Payment of District Funds Annual Reports Depositories Public Funds Investment Act Public Funds Collateral Act 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  54. 54. Audit • A district located wholly in one county shall prepare and file with the commissioners court of the county on or before June 1 of each year an audit report of the district's fiscal accounts and records. * • The person who performs the audit and issues the report must be an independent certified public accountant or firm of certified public accountants licensed in this state. *except Harris County - 30 days after receipt. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  55. 55. Audits • If a district fails to complete and file the required audit report by September 1 and a county auditor is not ordered to prepare the report, the board president and treasurer are automatically removed and the commissioners’ court is required to fill the vacancies. • Only applies to district in a single county, and not in Harris County. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  56. 56. Payment of District Funds • District funds may be disbursed only by check signed by the treasurer and countersigned by the president. • If the treasurer is absent or unavailable, the assistant treasurer may sign for the treasurer. If the president is absent or unavailable, the vice president may sign for the president. • An expenditure of more than $2,000 may not be paid from tax money unless a sworn itemized account covering the expenditure is presented to the board and the board approves the expenditure. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  57. 57. Annual Report • Uncertainty surrounding transfer of TDRA to Department of Agriculture • On or before January 1 of each year, a district shall file with the Texas Department of Rural Affairs an annual report that includes the following: – the district's name – the name of each county in which the district is located – the district's business address 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  58. 58. Annual Report (cont.) – the name, mailing address, and term of office of each commissioner – the name, mailing address, and term of office of the district's general manager, executive director, and fire chief – the name of each legal counsel or other consultant for the district; and – the district's annual budget and tax rate for the preceding fiscal year. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  59. 59. Depositories • The board shall designate one or more banks to serve as depositories for district funds. • The board shall deposit all district funds in a depository bank, except that the board: (1) may deposit funds pledged to pay bonds or notes with banks named in the trust indenture or in the bond or note resolution; and (2) shall remit funds for the payment of the principal of and interest on bonds and notes to the bank of payment. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  60. 60. Depositories • The district may not deposit funds in a depository or trustee bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the excess funds are secured in the manner provided by law for the security of county funds. (Currently $250,000) • The resolution or trust indenture securing the bonds or notes may require that any or all of the funds must be secured by obligations of or unconditionally guaranteed by the federal government. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  61. 61. Public Funds Investment Act • Government Code, Chapter 2256 • A district may invest funds only in: – obligations of, or guaranteed by, governmental entities, – certificates of deposit and share certificates – or investment pools 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  62. 62. Public Funds Investment Act • unless the treasurer, chief financial officer (if not the treasurer), and the investment officer of the district attend and successfully complete the training requirements under the Act. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  63. 63. Public Funds Investment Act • A district must adopt by rule, order, ordinance, or resolution, as appropriate, a written investment policy regarding the investment of its funds and funds under its control. • A district must review its investment policy and investment strategies not less than annually. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  64. 64. Public Funds Investment Act • A district must designate, by rule, order, ordinance, or resolution, as appropriate, one or more officers or employees of the district as investment officer to be responsible for the investment of its funds consistent with the investment policy adopted by the entity. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  65. 65. Public Funds Investment Act • Not less than quarterly, the investment officer shall prepare and submit to the district a written report of investment transactions for all funds covered by this chapter for the preceding reporting period. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  66. 66. Public Funds Collateral Act • Government Code, Chapter 2257 • A deposit of public funds shall be secured by eligible security to the extent and in the manner required by Chapter 2257. • A public entity may contract with a bank that has its main office or a branch office in Texas to secure a deposit of public funds. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  67. 67. Revenues & Expenditures • Ad Valorem Taxes • Sales Tax • Fees • • • • Purchases/Leases/Sale Bonds Loans Bidding 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  68. 68. Ad Valorem Taxes • Schedule meetings and public hearings on Budget and Tax Rate to comply with Truth-in-Taxation requirements. • Adopt Budget by September 30th and before adopting a Tax Rate. • Adopt Tax Rate by September 30th or within 60 days after tax roll certification. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  69. 69. Ad Valorem Taxes • Constitutional Cap of 10 Cents for each ESD – Harris County/Former RFPD/Former 776 ESD Specific Issues • Truth-in-Taxation Process – Notice and Hearings if exceed Effective Rate • Rollback Elections – 108% of Previous Effective O&M Rate • http://www.window.state.tx.us/taxinfo/proptax/tnt1 1/ 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  70. 70. Ad Valorem Taxes • Small Taxing Unit Exception – <$0.50 per $100 tax rate – <$500,000 annual ad valorem tax revenue – Simplified Notice Requirement – No Hearings – No Effective Tax Rate or Rollback Rate Issues 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  71. 71. Sales Tax • • • • Maximum 2% Local Sales Tax Increments of 1/8% Sales Tax Election Exclusion of area at 2% cap – the “Carve Out” 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  72. 72. Fees • A district, or a person authorized by contract on the district's behalf, may charge a reasonable fee for emergency services performed for or on behalf of a person or entity, including a fee for responding to a false alarm or for a fire code inspection. • Provide notice and conduct public hearing to adopt false alarm fees (penal in nature). 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  73. 73. Revenues & Expenditures • Ad Valorem Taxes • Sales Tax • Fees • • • • Purchases/Leases/Sale Bonds Loans Bidding 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  74. 74. Acquiring Property • A district may acquire, purchase, hold, lease, manage, occupy, and sell real and personal property or an interest in property. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  75. 75. Acquiring Equipment • A district may lease, own, maintain, operate, and provide emergency services vehicles and other necessary or proper apparatus, instrumentalities, equipment, and machinery to provide emergency services 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  76. 76. Sale of Real Property • Must seeks bids to sell real property with certain exceptions – Before land may be sold or exchanged for other land, notice of the offer must be published in either the county in which the land is located or, if there is no such newspaper, in an adjoining county – Statute prescribes conditions for sale below fair market value too 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  77. 77. Sale of Real Property Exceptions • Narrow strips of land, or land that because of its shape, lack of access to public roads, or small area cannot be used independently under its current zoning or under applicable subdivision or other development control ordinances • Streets or alleys, owned in fee or used by easement 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  78. 78. Sale of Real Property Exceptions • Land or a real property interest originally acquired for … easements that the political subdivision chooses to exchange for other land to be used for … easements, or other public purposes, including transactions partly for cash • Land that the political subdivision wants to have developed by contract with an independent foundation • A real property interest conveyed to a governmental entity that has the power of eminent domain 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  79. 79. Real Property Option • A political subdivision may donate or sell for less than fair market value land or an interest in real property to another political subdivision if: – the land will be used for a purpose that benefits the public interest of the donating or selling political subdivision; – the donation or sale of the land is made under terms that maintain the public purpose for which the donation or sale is made; and – the title and right to possession of the land revert to the donating or selling political subdivision if the acquiring political subdivision ceases to use the land for the public purpose. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  80. 80. Sale of Personal Property • Recommend sale by public auction or bidding unless specific statutory authority for alternative method – County process provides good guidance • Cannot give away property acquired with public funds 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  81. 81. Personal Property Option • "Salvage property" is personal property … that because of use, time, or accident is so damaged, used, or consumed that it has no value for the purpose for which it was originally intended. • "Surplus property" is personal property that is in excess of the needs of its owner, that is not required for the owner's foreseeable needs, and that possesses some usefulness for the purpose for which it was intended or for some other purpose. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  82. 82. Personal Property Option • May sell surplus firefighting equipment to any VFD or district in this state for fair market value if the equipment: – met the National Fire Protection Association Standards at the original time of purchase; and – at the time of the sale meets NFPA Standards in effect at the original time of purchase; or meets the NFPA Standards in effect. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  83. 83. Personal Property Option • May contract to supply surplus property to any VFD or district in this state at fair market value • May sell salvage property to any person in this state for fair market value. If unable to sell the property… , the district may destroy or otherwise dispose of the property as worthless 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  84. 84. Leasing to Political Subdivisions • To promote a public purpose of the political subdivision, a political subdivision may – lease property owned by the political subdivision to another political subdivision or an agency of the state or federal government; or – make an agreement to provide office space in property owned by the political subdivision to the other political subdivision or agency. • Can be for less than Fair Market Value 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  85. 85. Stations and Buildings • A district may construct, lease, own, and maintain real property, improvements, and fixtures necessary to house, repair, and maintain emergency services vehicles and equipment . 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  86. 86. Contracting for Stations • A district may contract with other entities, including other districts or municipalities, to make emergency services facilities and emergency services available to the district 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  87. 87. Debt Four letters…. 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  88. 88. Limitation on Indebtedness • A district may not contract for an amount of indebtedness in any one year that is in excess of the funds then on hand and anticipated revenues for the year except through bonds or authorized loan. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  89. 89. Bonds • A district may issues bonds or notes secured by a pledge of ad valorem taxes, other revenues or both for up to 40 years. – The “Pledge” allows a bond holder to force District to levy tax to make debt payments • A district must hold an election to authorize the issuance of bonds or notes. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  90. 90. Loans • The district may borrow money and make other financial arrangements to purchase real property or emergency services equipment or construct emergency services facilities in the amount and subject to a rate of interest or other conditions the board considers advisable. • Loans are different from bonds. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  91. 91. Loans • A loan may be secured by that are not otherwise pledged to pay a debt of the district or the real property acquired or improved or equipment acquired with the borrowed money. • Recent changes to the law clarify that loans do not require voter approval 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  92. 92. Loans • Limits – 20 years for real estate – 10 years for personal property • Subject to Appropriations Issues – Any “pledge” of future ad valorem tax revenues must be subject to appropriations – Loan section allows pledge of “tax revenues or funds on hand” – No Attorney General or Court Decision on this Issue Yet 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  93. 93. Bidding “How do we buy stuff? Lots and lots of stuff…” 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  94. 94. Bidding • A district must submit to competitive bids an expenditure of more than $50,000 for one item or service or more than one of the same or a similar type of item or service in a fiscal year. – A district may solicit bids for lesser amounts as well. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  95. 95. Bidding - Exceptions • the purchase or lease of real property • an item or service that the board determines can be obtained from only one source • a contract for fire extinguishment and suppression services, emergency rescue services, or ambulance services • purchase of vehicle fuel • the purchase of insurance 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  96. 96. Bidding - Exceptions • purchase of bunker gear • an emergency expenditure • contract with state to participate in general services commission state purchasing program • purchases made pursuant to local government co-op purchasing program • purchases made under federal supply schedules of the United States General Services Administration 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  97. 97. Bidding - Options • Solicit at least three bids • Advertise for Bids – Local Government Code Chapter 262 or Government Code, Chapter 2267 • Public Works (ie Buildings) – Must Use Government Code, Chapter 2267, Contracting and Delivery Procedures for Construction Projects 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  98. 98. Bidding – Chapter 2267 • Competitive Bidding • Competitive Sealed Proposals • Construction Manager-Agent Method (“CMA”) • Construction Manager-At-Risk Method (“CMAR”) • Design-Build Contracts • Job Order Method Government Code Chapter 2267 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  99. 99. Bidding - Prohibitions • Professional Services Procurement Act prohibits bidding the following professional services: – – – – Accounting Architecture Landscape architecture Land surveying 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  100. 100. Bidding - Prohibitions • Additional Prohibitions – – – – – Medicine Optometry Professional engineering Real estate appraising Professional nursing • Government Code Chapter 2254 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  101. 101. Bidding – Professional Services How to secure contracts for architectural, engineering, and surveying services: • Select most qualified provider on basis of demonstrated competence and qualifications • Attempt to negotiate contract at fair and reasonable price 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  102. 102. Bidding – Professional Services How to secure contracts for architectural, engineering, and surveying services: • If negotiations fail: 1) formally end negotiations 2) select next most highly qualified provider 3) attempt to negotiate contract at fair and reasonable price 4) continue process until contract is entered 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  103. 103. Construction Projects • Payment and Performance Bonds – A governmental entity making a public work contract must require the contractor, before beginning the work, to execute to the governmental entity: – a payment bond, if the contract is in excess of $25,000 – a performance bond where contract is in excess of $100,000 Government Code Chapter 2253 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  104. 104. Construction Projects • Prevailing Wage Rates – District must pay prevailing wage rates for public work construction contract (not maintenance) – Must either: • Survey wage rates prevailing in the area; or • Use wage rates determined by US Department of Labor under Davis-Bacon Act – Must specify wage rates in bid solicitation and contract documents 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  105. 105. Commissioner Accountability “Who is looking over your shoulder?” 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  106. 106. Ethical Issues • Conflict of Interest • Nepotism • Dual Office Holding/Incompatibility AG Handbook: Public Officers: Traps for the Unwary https://www.oag.state.tx.us/open/publications_og.shtml 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  107. 107. Conflict of Interest • Common Law If a public official directly or indirectly has a pecuniary interest in a contract, no matter how honest he may be, and although he may not be influenced by the interest, such a contract so made is violative of the spirit and letter of our law, and is against public policy. Meyers v. Walker 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  108. 108. Conflict of Interest • A local public official commits an offense if the official knowingly: – violates Local Government Code Section 171.004 (Next Slide) – acts as surety for a business entity that has work, business, or a contract with the governmental entity; or – acts as surety on any official bond required of an officer of the governmental entity. • An offense under this section is a Class A misdemeanor – punishable by up to 1 year in jail and/or up to $4000 penalty. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  109. 109. Conflict of Interest • If a local public official has a substantial interest in a business entity or in real property, the official must: – file an affidavit stating the nature and extent of the interest before a vote or decision on any matter involving the business entity or the real property, and – abstain from further participation in the matter if: • the action on the matter will have a special economic effect on that business entity that is distinguishable from the effect on the public; or • it is reasonably foreseeable that an action on the matter will have a special economic effect on the value of the property that is distinguishable from its effect on the Road, Suite 200 2705 Bee Cave Austin, Texas 78746 public. (512) 614-0901 www.carltonlawaustin.com ©2013
  110. 110. Conflict of Interest • A person has a substantial interest in a business entity if: – the person owns 10 percent or more of the voting stock or shares of the business entity or owns either 10 percent or more or $15,000 or more of the fair market value of the business entity; or – funds received by the person from the business entity exceed 10 percent of the person's gross income for the previous year. • A person has a substantial interest in real property if the interest is an equitable or legal ownership with a fair market value of $2,500 or more. • Applies to Spouse, Child and Parent Interests Too. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  111. 111. Conflict of Interest • In Harris County, person is ineligible for ESD board if person or spouse, child, parent, etc. is member of service provider (could have state-wide implications) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  112. 112. Nepotism • A public official may not appoint, confirm the appointment of, or vote for the appointment or confirmation of the appointment of an individual to a position that is to be directly or indirectly compensated from public funds or fees of office if: – the individual is related to the public official within a degree described by Texas Government Code, Section 573.002; or – the public official holds the appointment or confirmation authority as a member of a state or local board, the legislature, or a court and the individual is related to another member of that board, legislature, or court within a degree described by Section 573.002. Suite 200 2705 Bee Cave Road, Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  113. 113. Nepotism • Except as provided by Texas Government Code, Section 573.043, this chapter applies to relationships within the third degree by consanguinity or within the second degree by affinity. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  114. 114. Nepotism 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  115. 115. Nepotism Consanguinity Civil Law Degrees Of Relationship 1st Officer 2nd 3rd 4th Child Grandchild Great Grandchild Great Great Grandchild Parent Sibling Niece/Nephe w Grand Niece/Nephe w Grandparent Great Grandparent Great Great Grandparent Aunt/Uncle Great Aunt/Uncle 1st Cousin 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  116. 116. Nepotism Affinity Civil Law Degrees Of Relationship 1st Officer 2nd 3rd Spouse Spouse’s Sibling Child of Spouse’s Sibling Spouse’s Parent Spouse’s Grandparent Spouse’s Great Grandparent Child’s Spouse Parent of Child’s Spouse Grandparent of Child’s Spouse Sibling’s Spouse Parent of Sibling’s Spouse Spouse’s Aunt/Uncle 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  117. 117. Dual Office Holding • Article XVI, Section 40, of the Texas Constitution prohibits a person from holding or exercising more than one civil office of emolument at a time. • SB 917 specifically prohibits fees of office for office held on second ESD board, making emolument prohibition not applicable 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  118. 118. Incompatibility • Self Appointment • Self Employment • Conflicting Loyalties 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  119. 119. Incompatibility • Self Appointment – “It is because of the obvious incompatibility of being both a member of a body making the appointment and an appointee of that body that the courts have with great unanimity throughout the country declared that all officers who have the appointing power are disqualified for appointment to the offices to which they may appoint.” • Ehlinger v Clark, 8 S.W.2d 666 (Tex. 1928). 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  120. 120. Incompatibility • Self Employment – Ordinarily, self-employment incompatibility will arise only where one position is an office and the other an employment. – But, can arise when position is subordinate to the governing body in some of its principal duties. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  121. 121. Incompatibility • Conflicting Loyalties – both positions must be “offices” – the relationship between the positions creates conflict • if authorized to contract with each other • if both have the power of taxation – even if one district imposes an ad valorem property tax and the other imposes a sales tax that must be approved by the voters. • if boundaries overlap • whenever one governmental body has authority to impose its will on the other in any matter whatsoever. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  122. 122. Incompatibility • Conflicting Loyalties – SB 917, adopted in 2011, specifically states that holding positions on two ESD boards is not incompatible, whether they overlap or not. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  123. 123. Removal “What can happen when you mess up… BAD?” 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  124. 124. Removal Appointed Commissioners • Section does not apply unless adopted by the county commissioners court by resolution. • Adds as grounds for removal of an appointed board member: – incompetency – official misconduct – misconduct • Removal deliberation subject to 551.0745, Government Code (providing for closed meeting to discuss certain personnel matters). • Opportunity is provided for the board member to show cause why the board member should not be removed. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  125. 125. Grounds for Removal • Incompetency – No training as required – Definition in Chapter 87 of Local Gov’t Code: • gross ignorance of official duties; • gross carelessness in the discharge of those duties; or • unfitness or inability to promptly and properly discharge official duties because of a serious physical or mental defect that did not exist at the time of the officer's election. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  126. 126. Grounds for Removal • Official misconduct – “intentional, unlawful behavior relating to official duties by an officer entrusted with the administration of justice or the execution of the law”, including “an intentional or corrupt failure, refusal, or neglect of an officer to perform a duty imposed on the officer by law.” 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  127. 127. Grounds for Removal • Misconduct – violating a law relating to the office of director; or – misapplying any thing of value belonging to a special district that has come into the custody or possession of a director by virtue of the director's office. 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  128. 128. Removal Elected Commissioners • Section requires use of the procedures set forth in the Local Government Code for removing county officers (Chapter 87 of Local Government Code). • Provides the grounds for removal: – – – – incompetency official misconduct intoxication misconduct • Removal process initiated by filing of petition in court 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  129. 129. Other Oversight and Assistance 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  130. 130. State Agencies with Oversight • Texas Commission on Fire Protection – for entities with paid fire fighting staff • Texas Department of State Health Services – for entities providing EMS services • Texas Attorney General – for Open Government and Records Issues 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  131. 131. Organizations/Agencies for Assistance • SFFMA (Volunteer Departments) • Texas Forest Service • Texas Department of Rural Affairs (Now a Division of the Texas Department of Agriculture) • State Library and Archives Commission (Records) • Texas Comptroller (Sales Tax) • Texas Secretary of State (Elections) 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  132. 132. Helpful Websites • TX State Assoc. of Fire & Emergency Districts – www.safe-d.org • Texas Attorney General – www.oag.state.tx.us • Texas Comptroller of Public Accounts – www.window.state.tx.us • Texas Secretary of State – www.sos.state.tx.us • Texas Department Agriculture – www.texasagriculture.gov 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  133. 133. Laws that Apply to ESDs • The Texas Constitution, Art. 3, Section 48-e – http://www.statutes.legis.state.tx.us/Docs/CN/htm/CN.3.htm#3.48-e • Health and Safety Code, Title 9, Subtitle B, Chapter 775 – http://www.statutes.legis.state.tx.us/Docs/HS/htm/HS.775.htm • Local Government Code, Title 5, Subtitle C, Chapter 171 – http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.171.htm • Local Government Code, Title 8, Subtitle B, Chapter 262 – http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.262.htm • Local Government Code, Title 8, Subtitle C, Chapter 271 – http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.271.htm • Government Code, Title 5, Subtitle A, Chapter 551 – http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.551.htm • Government Code, Title 5, Subtitle A, Chapter 552 – http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.552.htm • Government Code, Title 10, Subtitle F, Chapter 2256 – http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2256.htm 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  134. 134. Questions? 2705 Bee Cave Road, Suite 200 110 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013
  135. 135. ESD 101 John J. Carlton The Carlton Law Firm, PLLC 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 john@carltonlawaustin.com 2705 Bee Cave Road, Suite 200 Austin, Texas 78746 (512) 614-0901 www.carltonlawaustin.com ©2013

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