Town attorney issues legal opinions that form basis for Frisco resignations
Editor’s note: The following opinion by Frisco town attorney Patricia Tisdale, dated Sept. 4, was declassified by a unanimous vote Tuesday of the Frisco Town Council. It provides background into the medical coverage dispute and why two elected officials resigned.
You have requested that I provide an opinion on whether and to what extent the town’s current practice of providing medical insurance coverage to the mayor and members of council, at no cost to them, complies with Frisco’s charter and ordinances, and whether it may be changed with respect to present or future office holders.
The town’s practice of providing medical insurance coverage to its mayor and council members has, since 1994, violated the town’s charter. This benefit should be eliminated at the end of this fiscal year unless the council, by ordinance, adopts the benefit as part of council compensation.
The adoption of this benefit cannot take effect during any current council member’s term of office. Therefore, it would take effect as to the mayor and council members elected in April 2004, in 2004, and as to those council members elected in 2006, it could take effect at that time.
Section 2-5 of the Frisco charter provides as follows:
“The council members shall receive such compensation, and the mayor shall received such additional compensation, as the council may prescribe by ordinance. The council shall neither increase nor decrease such compensation during the member’s term of office
You have provided me with copies of Ordinance Nos. 89-2, 90-14 and 96-4, together with minutes from the meetings of Feb. 20 and March 5, 1996, at which Ordinance No. 96-4 was adopted.
Ordinance No. 89-2 amended and re-enacted Chapt. 10-3 of the Frisco code, to read as follows:
“The mayor shall receive compensation at the rate of $650 monthly; council members shall receive $125 monthly. All members shall be eligible to be covered by health and life insurance.”
From this ordinance, I conclude that council monthly salaries were set at $650 for the mayor and $125 for the council members.
The ordinance is ambiguous about whether it was intended that the town would provide insurance benefits to all members of council at no cost to them, or whether they would simply be eligible to purchase insurance coverage.
Since the charter commands that compensation is to be set by ordinance, it is my view that this ordinance should have specified that the town pay for the insurance coverage if indeed that was the intent.
This issue was solved by Ordinance No. 90-14, which repealed and re-enacted Chapt. 10-3 of the town code to read as follows:
“The salaries of the mayor and the council shall be set as part of the annual budgetary process. In no instance shall incumbants (sic) have the ability to raise their own salary. Any increase in salary for mayor or council shall take effect the first meeting following an election to office. “
This ordinance repealed any reference to eligibility for insurance benefits.
The ordinance speaks only to “salaries” So long as the budget was adopted by ordinance, it is my view that a reasonable interpretation can be made that the setting of salaries or compensation through the budget process satisfies Chapt. 2.5 of the charter.
However, an examination of Frisco’s budgetary process demonstrates that while the amounts paid to the mayor and council members as their salaries is specifically set as a line item, the amount of money that the town spends on medical insurance coverage for members of council is not set as a line item in the budget.
Therefore, it cannot be said that the council has “prescribed by ordinance” an amount of compensation to include medical insurance coverage.
Moreover, Ordinance No. 90-14 only authorizes “salaries” to be set by the budget and does not include any fringe benefits.
It is my opinion that commencing in 1991 (the first fiscal year after the adoption of Ordinance No. 90-14), the council ceased to prescribe by ordinance any medical insurance coverage as a part of the compensation
You have confirmed to me that the current monthly salary paid to the mayor and council members of $650 and $250 respectively, has been included as a line item in the budget for a number of years, and that until last year, the budgets were adopted by ordinance.
It is my conclusion that the council has properly “prescribed by ordinance” these current monthly salary levels. These levels may therefore continue indefinitely unless amended by ordinance.
In 1996, then clerk-treasurer Vivian Touve, proposed an ordinance that would have increased the monthly salaries to $750 for the mayor and $300 for each council member.
The ordinance also provided for extra compensation for the mayor pro tem under certain circumstances, and then repealed Chapt. 10-3 of the code entirely. Although the ordinance, No. 96-4, passed with those provisions on first reading, on second reading the “raises” were removed from the ordinance.
Therefore, the ordinance provided for additional compensation for the mayor pro tem and repealed Chapt. 10-3. That state of affairs results, in my opinion, in a situation where the council is no longer authorized to set any compensation level by the budget and therefore must do so by a separately enacted ordinance, in accordance with the charter.
The effect of repealing the provisions of Ordinance No. 89-2, which had made all members of council eligible to be covered by health and life insurance, was to reduce their compensation by eliminating that benefit.
According to the charter, the then-mayor’s and council members’ compensation could not be reduced while they were in office, and so the practical effect would have been that no one on council was legally affected by this change until the elections of 1992 and 1994.
However, after the election of 1994, everyone serving on the council had been elected to a new term since the adoption of Ordinance No. 90-14, and therefore was no longer entitled to the insurance benefits as part of their compensation.
Since that benefit has never been re-established by ordinance, it is my reluctant opinion that the town has been providing free medical insurance benefits to its elected officials in violation of the town’s charter since at least 1994.
Since the town has already budgeted and appropriated the expenditures associated with medical insurance coverage for the members of council for 2003, and because this longstanding practice predates everyone currently on the council so that, as to the current members of the council, this has been an innocent error, my practical advice is to permit the coverage to continue through the end of this year.
However, because the medical coverage is not part of their compensation as prescribed by ordinance, it should not be continued into 2004 absent the adoption of a new ordinance.
And, because the adoption of such a new ordinance would be an increase in each elected official’s compensation, it cannot take effect during the current term of any member
I do not know what thinking was behind the succession of ordinances adopted with respect to this issue.
I do recommend that in any event, the council adopt an ordinance addressing “compensation” rather than “salary” and that that ordinance be made a part of Chapt. 10 of Frisco’s code
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