Travis County Commssioners Court
March 16, 2004
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Item 33
Going to item no. 33. 33. Consider and take appropriate action on request for proposal on deferred compensation and other financial services for Travis County employees. Late yesterday I put together a one pager where basically I tried to put together my thoughts my recommendation would be that we put in place the right committee, basically authorize the committee to go ahead and take a good look-see at deferred comp and other financial services that are available. And remain open to whatever recommendations the committee comes back with. At some point we would have to consider practicality of implementation and other factors. I guess the more I thought about this, the clearer it became to me. That -- that none of us really has spent any time trying to figure out what's available out there and really haven't had a reason to do so. This basically is an opportunity for us to do that. And I would rather others with a whole lot more expertise, more objectivity to do it and report back to us. I do think that the composition of the committee is important. And if we decide to proceed with this, I think that -- I think that in one of our future meetings, I guess in the first meeting in April, we basically look at composition of the committee. And I guess rather than personalities, it would be really to have different background represented on the committee if we do it. Those are the only thoughts that I had.
>> I guess I would like to have a list I guess of all of the professional services that Travis County is under contract with at this time. I don't have it in my backup. I don't know if this will be a part of the backup. But I do know that other than just compensation, deferred compensation being one of the one that's we have financial -- professional services under, I just need to look at the whole gamut, see who we all have out there. Really not -- I guess I知 not a big fan of changing. I guess it depends on what's in the r.f.p. If it does go out for an r.f.p., To what all [indiscernible] on the r.f.p. And also to -- to change in the middle of a streamline basically [indiscernible] dealing with deferred comp and at this time I知 quite sure that other Travis County employees are -- that are part of the program may be also involved. But then again what type of impact would that be if it were to change to someone else other than -- give everybody, other folks an opportunity to be a part of all of that process. So I guess wt I知 looking at is looking at all of the impacts that may be ventured into as far ashe -- as far as the professional service contracts that -- that Travis County honors right now under contract. Right now I知 not too familiar with all of them. I guess that's why I would like to request a listing of those so I could take a good peek and see where we are.
>> I saw the discussion that took place last week, even though I was out. And the thing that this is nationwide and the things -- the thought that occurred to me was that the reason that we have this in place is because of county governments being under naco, for instance. And they put this in place for county employees throughout the country. And I think it was just a couple of years ago that this went out for bid. To try to get the best possible rate for all employees in -- in the united states. So it's not like it's something that we went out for special, a special thing for here in Travis County. And so -- so it was started -- how long ago was this started? Mr. Sawyer?
>> 1980.
>> 1980.
>> in the '80s.
>> Travis County has been involved -- in.
>> my name is william sawyer, [indiscernible]
>> it hadn't been -- it wasn't in place before, but it has been in place since then. And so I don't know whether this would fall within the professional services that we do here in Travis County. But if we were going to go that route, then I would like to be given the opportunity to stay where I am. And not -- not -- I知 not a gambler. And I don't -- I think what the -- what naco has been able to get for us is -- is probably a little higher than other programs have been able to do. And so -- so I do want to make that real clear. I don't want --
>> I don't have any problem with that.
>> I don't want mine being messed with. I want to do it myself.
>> naco was saying the fixed rate may well be higher than available --
>> it's 4.45 now for Travis County employees.
>> I don't have any problems with that. The think that the committee would see that.
>> so I was hoping that what we would do is why don't we set up a committee and have the employees who are participating have a presentation from nationwide. To see what is in place. And then those -- if those employees want to have some other program looked at, well, you know, that's their choice. But I would like to be given an opportunity to say please don't leave mine untouched.
>> yes.
>> and so -- so but it -- but it -- that's fine. But it isn't something Commissioner Davis that would be on the list of -- of professional services that we would have on -- on our list because it's not -- it didn't come into place in that manner.
>> well, professional services, professional service -- [indiscernible]
>> right.
>> to a sense and if they have professional services, then of course dealing with our financial situation, there are other persons that we do business with here in Travis County that we are -- that are under contract and still under title of professional services. We were just talking about debt in particular, in particular situation of course I知 not willing to change from the deferred comp that I have right now. I just think that I stated that before.
>> yeah.
>> so I知 not really --
>> this is really a recommendation that we look. If there is nothing better, then we ought to stick with what we've got. The other thing is that I am told that there are other financial services that we don't know about.
>> uh-huh.
>> this will be an effort to find out exactly what they are. With the numerous public employers in this area, I don't see any harm in finding out what they have available, whether it's better than ours, it could be that what we ought to do is persuade them to follow our lead. But on the other financial services, I don't know what's out there. I believe we ought to take a look. We may look that what we have now is exactly what we ought to stick with. It's not having to look seriously in 24 years I guess that bothers me. But when naco does it, it has a whole lot more clout than one county, but it does have the naco perspective, not necessarily Travis County's. I can look with what are the look-see is giving us, I think we ought to look and see.
>> the other thing, the rope that I would want to have a presentation with the other employees is that the rules have changed on this -- on the deferred compensation account and from the way it used to be. So there have been some improvements made and so I need an update on it. But probably one of the things that -- that I could probably look at is instead of having money in a savings account, at a very small rate, it probably would make a lot more sense to defer it into this kind of account. Correct?
>> it is.
>> so -- so I mean those are the kinds of things that I want to do. That's not gambling, that's just shifting money from a low rate account to a higher rate. I知 willing to look at that.
>> well, half of the assets in nationwide retirement solutions in the 457 deferred compensation program that we have in Travis County are in the fixed account.
>> uh-huh.
>> and on Thursday, judge Biscoe if you don't mind, we are having an investment consultant come here to Travis County and present to you. That's an overview, an investment analysis of all of the fund that you have here. And it's really a good analysis and that way you can see how nationwide retirement solutions is overseeing your moneys. Quite a few people are now concerned about the mutual funds and they also are going to present and state how they have a draft with the mutual funds, they oversee the mutual fund companies for your account for Travis County. And also even if the fixed account, which is guaranteed that he's going to show you how that guaranteed is -- is sustained. And the interest rate is secure for you. I think that's wonderful.
>> yeah, even that, I have the opportunity to pick what I want.
>> you do.
>> to keep up with it. And remove it when I知 ready to remove it or change it. And -- and I want to have control over my own money.
>> and the changes, the 457 is a wonderful program. Equal to or better than the 401 k program. You have a loan provision that's available to you now, we are working on implementing that in Travis County. Again, naco, the national association of county officials, oversees your plan. And every year, twice a year, they meet. And they -- they hold nationwide accountable. Believe me they are very rigid. They oversee the fund. Very conservative. Very conservative. So you would have an overview.
>> okay.
>> we contract with you all for deferred comp and no other financial services.
>> just deferred comp. Your 457 deferred compensation program.
>> it's really -- the original contract in 1980 was with naco. In 1990 naco went out and contracted with nation-wide and made us party of to that particular contract. But this program has been in place since 1980.
>> all right. My motion is to approve a look-see r.f.p., That we ask alicia perez to work with others to bring back to the Commissioners court on April 6th I geas broad description -- I guess a broad description of what it is that we think we ought to take a good look at. Maybe recommend members of the committee, may be a good idea to look -- to work with purchasing, the auditor between now and then. That would be two weeks. Basically if we look at it, like what we see, we approve it. If we want to modify it, give us an opportunity to do that. What I知 looking at basically is a consensus from the court about exactly what we would look at. And if we need to reduce to writing how the look will be taken that's fine with me, too.
>> judge, sensitivity is -- I don't know if I need to wait, was something seconding it. Is there a second to the motion?
>> I second that, yes.
>> now we have discussion.
>> discussion.
>> yes, sir. Sensitivity a full blown r.f.p. And there's no such thing as a mini r.f.p. An r.f.p. Is serious business. And it takes an awful lot of time for anybody to who wants to be a vendor to answer an r.f.p. It takes time to put together an r.f.p. I want to be sensitive to the fact that there are people that have other responsibilities right now who I think might be likely candidates to go on a committee, we certainly need purchasing, likely auditing, p.b.o., Hr individuals, potentially the county attorney's office of course, they have some other deadlines related to the budget, not discretionary, but mandatory. The biggest one, a lot of these same individuals are redesigned in our health insurance plan which is huge and has strict deadlines because of open enrollment. So I would put in a substitute motion instead that this issue be referred to the employee benefits committee and that they get an update from nationwide as to what is the state of affairs with our current contract, and that they report back to the Commissioners court about whether there is a desire to move forward with a secondary or tertiary vendor. Because there is something lacking.
>> I am more comfort qulabl with that -- more comfortable with that approach, judge. I would second that.
>> who is on the employees benefits committee.
>> it's huge.
>> at this point we have representatives from the union frrks the sheriff's office -- from the sheriff's office, from the auditor, from p.b.o., T.n.r. Also, administrative operations, h.r., Also.
>> do you all have the time to deal with this under what we are going through? You really feel comfortable in having the personnel power, all of that to bring this under your belt? Really if it's going to be done, it's going to have to be done right, it's going to take time.
>> Commissioner -- my response to that would be the same for all issues. We take direction from the court.
>> okay.
>> my preference would be --
>> there is a motion not to do an r.f.p. Just to do a look and see. What services we would basically [indiscernible] [multiple voices]
>> [inaudible - no mic]
>> ... Request for services and the kinds of parameters in terms of what you have to put in an r.f.s. Legally are less specific, so you could be -- you could take less time in preparing an r.f.s. Than you would in terms of defining parameters in an r.f.p. So you could address a little bit of the issue by going with a less formal document requesting -- replies back from vendors.
>> I have no doubt we are going to get --
>> mine is a whole lot less than that, really. The other things -- mine would involve a whole lot less of the managers that are on that committee that you all just mentioned to me.
>> there's a lot of rang and file people -- [multiple voices]
>> there are also alternatives as I mentioned to the court where you -- for example, leave [indiscernible] in place and bring in other vendors as choices for the employees so that it remains kind of a -- of a more -- more of a multiple choice for -- for employees or -- so I mean that's -- that's an option or -- nation-wide.
>> that's a full blown process as well.
>> that's ain't what I知 talking b. Does your substitute motion cover other financial services or just deferred comp.
>> they should look at what is being offered through the deferred comp program, if there are additional financial services being offered through the naco program that we are not aware of, tell us what other things are out there. And available and are possible. Through our existing contract.
>> uh-huh.
>> any more discussion of a substitute motion?
>> yeah, let me ask -- let me ask a question.
>> the more we talk about this, the more uncomfortable that I am. Seems like there is something going on here that we don't want to look at something. I don't think you have to move your money. I don't think that you have to do anything if you don't want to. And I mean is the presentation that's going to be made Thursday, is it made from a third party that has nothing to do with y'all?
>> that's naco. [multiple voices]
>> so why are people afraid of looking at people that do this? I mean, if it's -- if naco is the one who ought to be doing business with, it's going to be real obvious. But I don't know. I mean, I知 just hearing that there seems to be some resistance about looking, but I don't understand that.
>> there's a big difference between adding a second or a third or a fourth or a fifth vendor versus a process that [multiple voices]
>> the real answer is this issue has gotten to be super political. From a member of this court contacting staff about something that was objected from the begin and politicizing. That's why I think we ought to kick it to a committee, have the committee look at it, bringing back recommendations. Commissioner Sonleitner has gotten political [indiscernible] on the last five years, asking the court to vote on whether we ought to take a look. That's the fact of the matter.
>> as opposed to the other people politicizing it by going to other people's offices and having other vendors coming in saying move the business to us. It's political all right. But it is not limited to what's going on with nation-wide.
>> i've got it. It's political.
>> that's the thing. Yes it is.
>> if that's the deal that's not what it ought to be.
>> we are not going to take an objective look, why should we waste our time. From my viewpoint if you like nation-wide, stay with it f. The committee comes back and says it's the best in the world with deferred compensation, I知 saying so be it. I had in my outline here the Commissioners court ought to stay out of it. With me taking the lead, stay out of it. At the same time if we take an objective look we ought to look at other financial services available. It shouldn't hurt us to look. Due process, democracy, the rest of that required it. But if we are not going to do it fairly, let's not do it at all, let's not kid ourselves. We ought to depoliticize this as well as other decisions take we make in my -- that we make in my view. That's the fact of the matter. My thinking, let's vote.
>> the question that I have is on this committee that's going to look at this. I mean I would like to make an appointment or have somebody sit in on this that is not part of the county. I mean is that something that I can could where I can call someone that is not going to try to sell us anything, but somebody that really understands deferred compensation? I mean, somebody -- we have that with all of our other investments. We have bankers, we have everybody else. Is that something that we can -- that we can put -- have the opportunity appoint somebody outside the county that would sit in with staff and whoever?
>> that would be up to the court.
>> we could do whatever the majority of us wants to. I do think that for us to look at it fairly would require a committee of our people, it doesn't matter to me whether we take six, 60 days or -- or hopefully not six years. But up to a year. And if we want to bring outside people in, we do that. At least we should check with the other employees and see what they have, see if it's something better. It may be that ours is better than theirs. But at the same time if we are just going through a charade and saying we are looking, that's no reason, don't waste our time. I have done my duty by putting it on the agenda. My second duty is for me to back out, what I知 willing to do. But I知 asking the other members of this court to do the same thing, to me it's fair. Substitute motion as I understand it is for the committee already in place to take a look at deferred compensation. Any other discussion of the substitute motion by the court?
>> not sure that I understand exactly what the substitute motion or a vote for -- what I知 voting for. Am I voting for this is going to be looked at?
>> yes.
>> looked --
>> until they look at it, I think, the intent of my motion is until they look at it, we will not make a decision about issuing an rfs.
>> the original motion was a description of exactly what we would go out and look at and for and a recommendation about who would be on the committee that this court would see, what I was trying to do basically is give us another opportunity to decide how much time we wanted to spend on it, what we would look at, exactly who at the county would do it. We want to bring in outside people, to me that's it also.
>> just so I make sure that if I vote for it, which sounds like, you know, we are voting to have it looked at. And fore we issue an rfs, then I知 fine. Now I would like to make sure that I can have somebody on that committee that may not be a county employee. Can I do that?
>> right now the employee benefits committee would look at it. It has a said composition. It may be friendly to add particular people if the mover will accept it.
>> [indiscernible]
>> don't we have a retiree on there.
>> yes. We have two retirees, then we have a representative of the union.
>> and union, that's correct.
>> but I don't know if there's anybody on it that has expertise in financial services -- [multiple voices]
>> that is friendly to maker.
>> with the exception of the staff that you have on that -- [multiple voices]
>> this is --
>> this is -- [multiple voices] this is a discussion before we even get to that point.
>> the other thing that you may want to consider is if you put another person on the committee, who has expertise in relation to deferred compensation, financial kinds of issues, is it their intent that their involvement be limited to this consideration? Because that's the same committee that looks at the health plan, et cetera. Is it your intent that they become a full member of the employee benefit committee? I知 just clarifying.
>> judge, between your motion and what Commissioner Sonleitner put up on as far as the substitute motion, is that you would have a look-see from a community -- from a committee, that committee has not been designated a name at this time. She named the benefits committee as the look see as far as looking at this. Would they have a certain name or certain individuals that you want to include on that look-see as far as the committee is concerned --
>> my motion was to ask alicia perez to work with the purchasing agent and others as appropriate to try to figure out what it is that we should look at and who ought to be on the committee.
>> okay. Commissioner Daugherty [multiple voices]
>> because I want -- would it be broader because I wanted to look at deferred comp as well as other financial services.
>> okay.
>> actually my thinking was that it would be less work.
>> okay.
>> substitute motion that Commissioner Sonleitner made? Any more discussion? All in favor? Show Commissioners Sonleitner, Gomez, Daugherty voting in favor. Voting against show Commissioner Davis and Biscoe.
Last Modified: Wednesday, March 24, 2004 1:40 PM