I am a new county attorney, and have come across an issue that doesn't quite pass the smell test.

In 2008 (before I arrived), the Commissioners approved $10,000.00 in life insurance benefits for Crane County Retirees. The Commissioners provided that the benefit "will be on a year to basis and shall continue so long as the budget will support this additional expenditure."

The $10K benefit is provided by Crane County, and has nothing to do with the benefit provided by TDCRS.

I have some concerns about the legality of this situation.

Have any of you faced this situation before? Any help would be appreciated.

Congratulations on the job. Section 177.001 of the Texas Local Government Code provides the county the optional power to procure life and other forms of insurance for employees and retirees of the county. Their qualification that in the event money is not forthcoming recognizes that for every year there is a new budget and a new challenge to balance that budget.

Thank you for your help. I appreciate it.

The declaration that the plan is for a single year may also make a difference in whether or not you have to account for that benefit on your financial statements as a lifetime liability...although the accounting profession does not recognize Texas law. Retiree benefits must be calculated for the life of the retiree and posted as a debt of your county. The accounting standard states that benefits are those agreed upon by employer and employee, but also state that you are considered to have long term benefit if the retiree got the benefit in the past and thinks they should get it in the future.

Because this definition ignores constitutional and statutory law, some counties have been very careful in how they describe a post-employment benefit. Your county can prepare its statements on a different set of standards, but your external auditor will probably penalize your county for doing so.

Be thoughtful in how you discuss, draft, and adopt retiree benefits.