CEO 14-25 –September 17, 2014
DISCLOSURE OF FINANCIAL INTERESTS
TRUSTEES OF A VOLUNTARY EMPLOYEES' BENEFICIARY ASSOCIATION
To: Name withheld at person's request (Fort Lauderdale)
The Trustees of a voluntary employees' beneficiary association are not "local officers" subject to the financial disclosure requirements of Section 112.3145, Florida Statutes.
Are the trustees of a voluntary employees' beneficiary association "local officers" subject to the requirements of financial disclosure of Section 112.3145, Florida Statutes?
Your question is answered in the negative.
You write that you represent the Board of Trustees of the Fort Lauderdale Firefighters' Insurance Trust Fund ("Trust Fund"). The Trust Fund operates pursuant to an Agreement and Declaration of Trust ("Trust Agreement"). The purpose of the Trust Fund, according to the Trust Agreement, is to administer the Voluntary Employees' Beneficiary Association ("VEBA") Retiree Health Benefit Plan ("Retiree Plan"). The Trust Fund is a VEBA as defined by IRC § 501(c)(9).1 A Plan Document establishes the terms of eligibility, benefits, contributions, and governance of the Retiree Plan.
The Trust Agreement states that there are five Trustees on the board of the Trust Fund. The board consists of three ex officio Trustees—the President, Vice President, and Treasurer of the International Association of Firefighters Local 765 ("Union")—and two Trustees elected by actively employed members of the Retiree Plan—one must be a retiree and member of the Union and the other may be either an active member of the Union, an active Retiree Plan participant, or a retiree currently receiving benefits under the Retiree Plan.
You write that the Trust Fund has few entanglements, possibly none, with the City of Fort Lauderdale. The City does not appoint the Trustees. The City is not a signatory to the Trust Agreement; only the Trustees are. The Retiree Plan does not operate pursuant to any City ordinance and the City has no authority to change the Retiree Plan's terms of eligibility, benefits, contributions, or governance. The City does not pay contributions for the Retiree Plan; only active firefighters do, and that payment is realized through payroll deductions facilitated by the City. The City and the Union have negotiated a Collective Bargaining Agreement ("CBA") and the CBA allows for the payroll deductions for the Retiree Plan. The CBA does not, however, set forth eligibility criteria or benefits.
It is with this factual background that you write, "As a matter of custom, the Board of Trustees has long complied with various laws that normally apply to public sector employee benefit plans, including the Florida Code of Ethics." You write that the Trustees question whether their compliance with the financial disclosure requirements of the Code of Ethics is required by law.
Relevant to this inquiry, Section 112.3145(3), Florida Statutes, provides, "Each . . . local officer . . . shall file a statement of financial interests no later than July 1 of each year," and Section 112.3145 provides other filing requirements for "local officers." There are three definitional categories of "local officers." Section 112.3145(1)(a), Florida Statutes.
One category concerns those individuals with specifically enumerated job titles or responsibilities, as specified in Section 112.3145(1)(a)3, Florida Statutes:
Any person holding one or more of the following positions: mayor; county or city manager; chief administrative employee of a county, municipality, or other political subdivision; county or municipal attorney; finance director of a county, municipality, or other political subdivision; chief county or municipal building code inspector; county or municipal water resources coordinator; county or municipal pollution control director; county or municipal environmental control director; county or municipal administrator, with power to grant or deny a land development permit; chief of police; fire chief; municipal clerk; district school superintendent; community college president; district medical examiner; or purchasing agent having the authority to make any purchase exceeding [$20,000] on behalf of any political subdivision of the state or any entity thereof.
This category captures certain public officials and employees by specific title or function. We do not find that the Trustees of the VEBA are encompassed within it.
Another category of "local officer" includes:
Any appointed member of any of the following boards, councils, commissions, authorities, or other bodies of any county, municipality, school district, independent special district, or other political subdivision of the state:
a. The governing body of the political subdivision, if appointed;
b. A community college or junior college district board of trustees;
c. A board having the power to enforce local code provisions;
d. A planning or zoning board, board of adjustment, board of appeals, community redevelopment agency board, or other board having the power to recommend, create, or modify land planning or zoning within the political subdivision, except for citizen advisory committees, technical coordinating committees, and such other groups who only have the power to make recommendations to planning or zoning boards;
e. A pension board or retirement board having the power to invest pension or retirement funds or the power to make a binding determination of one's entitlement to or amount of a pension or other retirement benefit; or
f. Any other appointed member of a local government board who is required to file a statement of financial interests by the appointing authority or the enabling legislation, ordinance, or resolution creating the board.
Section 112.3145(1)(a)2, Florida Statutes.
We find that the VEBA does not fit within this second category, either.2 The VEBA operates as a result of a Plan Document, not by ordinance or other governmental function. Similarly, the municipality has not bargained for any authority to oversee, manage, provide input in the operation of, or determine eligibility for the Retiree Plan through collective bargaining. With regard to the Retiree Plan, the CBA merely provides a mechanism for the municipality to enact payroll deductions at the VEBA's request. The VEBA is an entity of its Trustees, the sole signatories of the Trust Agreement that created the VEBA, and of its present and future beneficiaries, who, through their Union, created, by contract, the VEBA for their own benefit. It is not a public board of the municipality.
The last category of the "local officer" definition concerns those elected to office in a political subdivision and those appointed to fill such vacancies. Section 112.3145(1)(a)1, Florida Statutes. This category is inapplicable to the Trustees because, for the reasons stated above, they are not elected to any public office.
For these reasons, we find that the Trustees of the Trust Fund are not "local officers" subject to the financial disclosure requirements of Section 112.3145, Florida Statutes.3
ORDERED by the State of Florida Commission on Ethics meeting in public session on September 12, 2014, and RENDERED this 17th day of September, 2014.
Linda McKee Robison, Chair
The general characteristics of a VEBA are: (1) the organization is an association of employees or individuals with an employment-related common bond; (2) membership in the organization is voluntary; (3) the purpose of the organization is to provide for the payment of life, sick, accident, or other benefits; and (4) none of the organization's funds inures to the benefit of any private shareholder or individual other than by payment of the previously-mentioned benefits.
Regarding this category, only sub-subparagraph "e" needs treatment herein. The other boards listed in the category obviously have no similarity to the VEBA.
Your letter also inquired as to whether the Florida Constitution requires the Trustees to file full and public disclosure of financial interests (CE Form 6). We find that the Trustees are not required to file CE Form 6 pursuant to Article II, Section 8, Florida Constitution, and we are aware of no statute requiring them to do so.