Travis County Commissioners Court
January 2, 2007
Item 22
22. Discuss and take appropriate action on the following recommendations: a, designate plan oversight to the deferred compensation committee, structured to include a broad spectrum of plan participants; and b. Award contract to the retirement store to provide ongoing plan consulting services to the Commissioners court and the oversight committee. O on b the contract is not available. We won't approve the contract today, but you are hoping to get direction from the court on how to proceed.
>> that's correct, yes.
>> the item has two parts as you mentioned. What we are recommending to the Commissioners court is that we create a standing committee that serves
>> [indiscernible] 457 plan. We have a committee in place now that did the negotiation and review. What we are simply asking is that a new committee be formed that will serve as fiduciary oversight of the plan. We -- we recommend a nine member committee with some support coming from risk manager, executive manager and the
>> [indiscernible] and the county attorney. The nine members, one of the directions that we want from Commissioners court is whether or not -- pardon me -- whether or not the members should be participants in the 457 plan or if there should be a couple of positions open for non-participant members. So that's the first question that we have for the -- for the direction from the court.
>> but the hope is that if the -- if the two non-members would have some kind of special interest or expertise in deferred compensation?
>> yes.
>> otherwise we think getting that person or those persons to attend meetings and really become engaged with the -- with this work would be limited. Plus we have an example, the example that we have is.
>> mary mays from cash management has indicated her interest in serving on the committee. She is a non-participant.
>> the reason if you have got a spouse at another place, it may make a lot more sense for the family deferred comp to be there than here and so there are good reasons why you wouldn't participate but would yet be keenly interested.
>> that's true. She's a valuable asset because of her back grunge and experience.
>> yeah, the other thing is if 209 I think would be a good seven members must be participants in the program, two not necessarily, you wouldn't really just target two non-member, you would leave those two slots open in case there were non-members interested?
>> that's right. We would recruit the same for the active member serving on the seven positions and the other two if we had non-participants who did submit an application to -- to be considered, those two slots would be available.
>> who --
>> if we didn't receive the application it would be filled by participants.
>> judge, you also have participants, people who invest in small amounts. You have people who -- who invest in a -- larger amounts. You really want to have both groups represented. I don't know where the cutoff would be. But I think, you know, the -- that way you have -- you have the different groups of employees represented. In there.
>> you ought to try to get as much diversity as possible.
>> we can ask that question on the -- on the application.
>> okay.
>> by the way, we were supposed to get surveyed. When is that going to happen?
>> we hope to be able to work with -- with consultant to develop questions and be able to get that out sometime late January. Late January.
>> yes.
>> anything else regarding the structure of the committee.
>> move that we approve the staff recommendation after membership.
>> second.
>> discussion? All in favor? That passes by unanimous vote. The problem -- if you have problems of some sort you will let us know.
>> I'm sorry, do we need to change the wording to make plain that it doesn't require all plan participants? Through a broad spectrum of employees --
>> okay the recommendation that you had is for two non-member participants, right?
>> uh-huh.
>> that was the recommendation, the motion approved. So -- for record clarity, though, we are leaving two slots open for non-members if there are two available and suitable.
>> that's correct.
>> right.
>> so you wouldn't pass up on a member who was clearly more qualified just to get a non-member.
>> no. I think if a non-member is applying, we are looking at the criteria that we have in the selection process, if they met that, then they would be nominated to come back to court for approval. What we would do once we -- once the nominations have been made, finalized, we would come back to Commissioners court for approval of the committee.
>> okay.
>> small, medium, large participant, some words like that that won't really give away the personal wealth of the participant.
>> a question, judge. Had a hand up.
>> barbara.
>> the motion addressed composition of the committee. The posting specifically asked that you designate the committee as the -- as responsible for plan oversight. The court has never actually done that and it would probably be a nice thing if -- if that were either added to the motion or a second motion were proposed that that oversight responsibility was designated to the committee.
>> the plan to bring back specific names at some point as well as a carefully drafted charge.
>> yes.
>> we can wait for that.
>> fine.
>> when I read that, that's what I had in mind. If we talk about the structure, really at some point we ought to approve nine specific individuals. At that point we really ought to land on that, exactly what does this committee do for us? So -- so the plan oversight is good, kind of general, a little bit more specific as would help us, I think. Okay?
>> that's fine. Just didn't want that to get overlooked.
>> we would not dare overlook that, barbara.
>> okay. We just touched on briefly before, that's why it's back.
>> we did -- we did and the posting says aword a contract, but we are asking the -- award a contract, but we are asking the court for additional direction in this regard. A 457 plan is a complex item technical plan, we feel that the committee as well as working with Commissioners court would require the services of an expert in the 457 program. We worked with retirement
>> [indiscernible] for about 18 months, the committee members if you questioned them I think would tell you they are satisfied with recommending that they continue as the consultant to the committee and the Commissioners court. The question we have is where the funding should come from. The allocated reserve, of course I wrote the backup, that's where I suggest it be taken. But the alternative is that it could come from the general fund for the department division of
>> [indiscernible], my side kick is here to --
>> sort of a -- a slightly more delicate issue than that.
>> the last time we talked about nation-wide making a $10,000 contribution to the county. Which we would use to -- to fund part of the consultant's salary. Some members of the court raised questions about that. The other thing that we could do with the same $10,000, but you know have nationwide do it, that is put it in an employee sort of education employee enrichment type of effort, I still wish that somebody had hammered me over the head a bit more about deferring compensation when I was much younger than I am today. So that would be a good use. We have a pretty good participation rate at the county. But it could always be improved. There are certain strategies that you can use to make increasing your investment and deferred compensation easier to absorb but a lot of individuals especially young ones don't think of these things. If we were to put together an employee education program that did that and other stuff, I'm thinking that the benefit to our workforce would be great. The money would stay at nation-wide, what we get from them is a commitment basically to enhance their Travis County employee outreach program a lot more.
>> they have already done that within the contract in terms of increasing their outreach to I think 52 educational programs within the year. So a lot of that they have already agreed to in addition to the -- to the -- to the.
>> $10,000.
>> $10,000, yes.
>> also, it's -- it's my understanding that in the private sector it's not at all unusual to ask a vendor to contribute toward their own compliance and performance oversight. Is that -- is that correct.
>> we have taken the model, the first one that alicia perez, executive manager for administrative operations and a member of the committee. The first one that we used that technique where in the contract you asked for rei am reimbursement for contract monitoring was with the telephone jail inmate or the -- are the telephones for jail inmates. It's worked really quite well. Just a -- just a funding mechanism so that the general fund, which is, you know, usually scarce with money doesn't have to provide monitoring for contracts. That we wouldn't have to hire a full-time f.t.e. For. Sometimes a part-time or this one is just payment for services.
>> my understanding is that we don't -- we don't have a -- a division within county government that is -- that does comprehensive performance or compliance audit of contracts; is that correct.
>> that is my understanding, yes, ma'am.
>> so we are essentially putting in provisions contract by contract on the case-by-case basis. To -- to handle contract compliance and performance auditing?
>> yes, but this is a situation where -- where it could go to -- that the money that was involved in this contract could go to that as long as the money is used for something that is plan related -- the thing that came up at one point is that you have got a -- an oversight committee being cob templated, education for them will be an important aspect of it. There may be a seminar like about two years ago there was a -- there was a conferencing seminar that a number of staff were present for. Disblooinchth that money would be sfoant things like that. I'm not aware of one that we know about. It could be spent on the consultant or spent on education of the oversight committee or can be spent on additional services for employees related to deferred compensation. So the $10,000 wasn't enumerate understand the contract specifically for oversight?
>> what it says is that they would give us 10,000 and that it acknowledged that it could be spent in relation to payments for a consultant. I have forgotten the exact full description, but it did not specifically say oversight of this contract. It would have been more likely to say oversight of the program or the plan than the contract. Because the program or the plan -- the idea or the intent was to provide oversight and performance management for the plan. That was the intent.
>> two questions. Regarding the ten thousand dollars. One is whether we want to require nation-wide to use it or put it up and two is how would we use it.
>> right.
>> well, no, the $10,000 is already part of the contract that was approved by the court. It's ours.
>> based on questions raised last time, the question is whether we want to leave that there or whether we want to pull it out, right? Or is that no longer a concern?
>> no, the issue that came up last time, for me I can only speak for myself, it just appears to be a little bit of a conflict there.
>> the language
>> [multiple voices]
>> to me it just represents a conflict of interest here.
>> how so?
>> well, it's -- it's nation-wide we are asking them to set aside 10,000 to be an oversight on themselves?
>> we are asking for them to contribute toward the cost of performance and compliance audit of the arrangement.
>> to me that's --
>> I have something to say here.
>> joel.
>> robert?
>> time out.
>> this is a good topic for discussion. Unfortunately the posting does not support going this far in this direction about this aspect.
>> but it has an impact on my decision as to how we are going to vote on this. It's a question I need answered before I can vote on this.
>> nothing will happen between now and next week. We will have precisely wording, precise wording, general language, next week for a full discussion of this. In the end the question boils down to whether we want to require nation-wide to put up $10,000 to cover part of the cost of oversight. Right? Whether 10,000 -- et cetera, if we don't want to allocate it for the cost of oversight, then we have to amend the contract that we approve a couple of weeks back, right?
>> if you -- if you don't want it to if you don't want nation-wide to pay the county the money then you need to amend the contract. The contract is sufficiently broad that as long as the money is dedicated to, used for plan related activities, whether oversight --
>> I agree with the education part of it. I totally agree with that. No oversight auditing. I think somebody else ought to do that. Not they themselves or they pay for it to audit themselves.
>> and -- and whether or not --
>> are you okay with both --
>> I move that we bring back language and may as well bring back a contract that authorizes a $10,000 by nationwide to be used for general oversight and employee education about the advantages of the deferred compensation.
>> is that okay?
>> can you restate that?
>> that the $10,000 from nationwide be accepted by Travis County, or whatever is in the current contract, and that the money be used for -- for general oversight responsibilities and employee education about the benefits of -- of employee deferred compensation. Is there a motion? We may not -- we may need to discuss this further. Is there a motion, a second to that? That motion dies for lack of a second. Where are we left? Having it brought back next week?
>>
>> [indiscernible]
>> my question is going to be our contract with -- with the retirement store, not to compete $10,000 amounts or what dollar amount --
>> 25,000.
>> not to exceed $25,000.
>> we will have this back on the court's agenda next week with appropriate agenda language.
>> and address both the budget transfer and approval of the contract at the same time.
>> right.
>> okay.
>> and -- I have to say one other thing to Commissioner eckhardt because you mentioned about oversight on contracts. Each department that -- that comes forward with some type of a contract has a responsibility to monitor the performance. That scope of services that the court or that you have approved that contract for. So, you know, each department has responsibility in end shooing that the service that's we contracted for was contract that they are giving. They have to verify that through payment because the auditor will not pay for those services unless there's some type of monitoring going on. So I did want you to -- didn't want you to go away with the idea that no want was monitoring these contracts.
>> I'm driving at independent audit.
>> it's unusual for us to ask contractors to give us money to hire consultants to oversee. I agree with Commissioner Gomez. I know that it's allowed we actually got some laws changed in the insurance industry so we could hire brokers to do that. But I don't think that it's a good practice. But that's my opinion.
>> my point was not that we aren't monitoring compliance with our contracts division by division. But that we don't have a comprehensive performance audit system set up in house. So that is what drives us to -- to hire consultants. For instance, I understand this is a contract that's been in place for 26 years and certainly that's --
>> long --
>> but regardless of what the history is, when you have a contract in place for that long, of course, regardless of what the history is you would want to have the ability to have an independent review of the performance of that relationship. Relationship.
>> especially if you did not think --
>> even if you thought that you were getting great service.
>> this is fascinating. That's why we have it back on next week for discussion and action hopefully.
>> to the to cut you off, we have our consult tant here on the clock.
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Last Modified:
Wednesday, January 210, 2007 8:14 AM