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Article 2 Administration

Section 5-201. Board of Trustees.
 
(a)  Composition.  This Chapter shall be administered by a Board of Trustees, which also shall supervise and control the Fire and Police Disability and Retirement Fund and the Reserve Fund.  The terms of the existing eleven-member Board shall terminate on December 31, 2006, but members shall remain in office until the new Board is sworn in.  Beginning January 1, 2007, the Board of Trustees shall be composed of five members who shall be the following:  The Mayor or the Mayor’s designee approved by the City Council (who shall act as Chairperson); one Active Member serving in the Bureau of Fire, to be elected to the Board by the Active Members in the Bureau of Fire; one Active Member serving in the Bureau of Police, to be elected to the Board by the Active Members in the Bureau of Police, and two citizens of the City of Portland who shall have relevant experience in pension or disability matters and shall be nominated by the Mayor and approved by the City Council.  Neither the Mayor nor the Mayor’s designee nor either of the citizen members shall be an active or past Member or a beneficiary of the Fund or have been employed by the City of Portland Bureau of Fire or Bureau of Police.  Notwithstanding the change in Board memberships, the Board of the Fund shall continue in existence without interruption.  All members of the Board shall receive orientation to the Board and serve without compensation.  References in this Chapter to the "Board" shall mean the Board of Trustees created by this Section.  The Chairperson shall designate another member of the Board who shall act as Chairperson in the event of the Chairperson’s absence.  At least three members of the Board must be present in order to constitute a quorum.  An affirmative vote of at least three members of the board shall constitute an action of the Board.  The Board shall keep a record of all of its proceedings and shall hold regular meetings at a time to be set by the Board.
 
(b)  Election of Board Members.  Elections of the Board members representing the Members of the Bureau of Fire and Bureau of Police shall be under the supervision of the City Auditor and shall be held in the month of December, at which election one Active Member from the Bureau of Fire and one Active Member from the Bureau of Police shall be elected to the Board for three‑year terms to succeed the members whose terms expire the month following the time of said election.  Members so elected in December shall take office the following January.  Similar elections for unexpired terms shall be held to fill other vacancies within thirty days after they occur.  Elections shall be held in a manner prescribed by the rules and regulations adopted by the Board, which must be in writing and filed with the Administrator of the Fund.  A Board member who ceases to be an Active Member may complete the remainder of the Board member's term. 
 
(c)  Appointment of Board Members.  The appointments of the two citizen members shall be as follows:  one for an initial one year term and every three years thereafter and the other for an initial two year term and every three years thereafter.  The appointments shall be made in the month of January.
 
(d)  New Board members shall be appointed or elected for terms to begin January 1, 2007 or as soon thereafter as they are elected or approved by the City Council.  Appointments or elections for unexpired terms shall be made to fill vacancies within thirty days after they occur.  The Board may set rules for attendance and any member may be removed by the Board for failure to abide by the attendance rules of the Board.
 
(e)  Indemnity.  The members of the Board and the Fund Administrator appointed under subsection 5‑202(f) shall be indemnified by the Fund from any claim or liability, including the cost of legal defense by counsel approved by the City Attorney, that arises from any action or inaction in connection with their functions under this Chapter subject to the following:
1.  Coverage shall be limited to actions taken in good faith that the person reasonably believed were not opposed to the best interest of the Fund.
 
2.  Coverage shall be reduced by the extent of any insurance coverage.

Section 5-202. Powers of Board and Fund Administration.

(a)  As to Benefits.  The Board shall not decide applications for disability benefits provided by this Chapter.  The Board shall have the power to prescribe rules and regulations for administration of this Chapter and to provide for enforcement of the same by forfeiture of any benefit payment or by denial of any claim, if such rules and regulations are not followed.  The rules may provide for suspension or reduction of any disability benefit if the Member does not cooperate in treatment of the disability or in vocational rehabilitation or does not pursue other employment.  The rules may provide for the designation of one or more licensed physicians or psychologists to act at any time with the physicians appointed by the City Personnel Director in the mental and physical examinations of applicants for membership in the Bureau of Fire or Bureau of Police.  The rules may require applicants for benefits from the Fund and persons receiving benefits from the Fund to submit to and undergo mental and physical examinations by one or more licensed physicians or psychologists designated by the Fund Administrator for that purpose.  The Board is hereby authorized and empowered to administer oaths, subpoena and examine witnesses, and to require the production and examination of papers and documents for the purpose of rulemaking. 

 

(b)  The Board shall retain one or more independent hearings officers who shall be members of the Oregon State Bar, have relevant disability training and experience, and who shall not be a Member or beneficiary of a Member.  The Board shall establish rules of evidence and procedure for the conduct of hearings. 

 

(c)  The Board shall establish an independent panel to consider appeals from the hearings officer’s decisions.  One panel member shall be appointed for an initial one year term and then every three years thereafter; the second panel member shall be appointed for an initial two year term and every three years thereafter and the third panel member shall be appointed for an initial three year term and every three years thereafter.  Panel members shall be members of the Oregon State Bar, shall have relevant disability training and experience, and shall not be a Member or beneficiary of a Member.  Panel members may be removed by the Board for cause.

 

(d)  The Board shall pay from the Fund the expenses of vocational rehabilitation of disabled Members established in a vocational rehabilitation plan approved by the Fund Administrator to reduce disability benefits.  The Board may, but has no obligation to, pay other financial incentives that demonstrate a reduction in disability costs.

 

(e)  The Board may pay its administrative expenses from the Fund and may borrow from the General Fund.  The Board may purchase bonds or insurance covering any act or failure to act. 

 

(f)  The Fund shall have a Fund Administrator.  The Fund Administrator shall be appointed by the Mayor, approved by the Board and confirmed by the City Council.  The Fund Administrator shall be a qualified disability expert.  The Fund Administrator shall have the position of a bureau director and shall report to the Mayor and the Board.  The Mayor may remove the Fund Administrator, for any reason, after seeking the advice of the Board.  The Board and the Fund Administrator may appoint other agents or advisers to assist the Board or Fund Administrator, including actuaries and attorneys.

 

(g)  The Fund Administrator shall have the authority to settle and discharge all or part of the Fund’s future obligations to any Member or Member’s eligible beneficiaries for disability, retirement or death benefits as to any and all claims or entitlements to disability, retirement or death benefits as part of  a settlement.  The Board shall adopt Administrative Rules regarding the maximum amount that the Fund Administrator may expend to discharge all or part of the Fund’s future obligations to any Member or Member’s eligible beneficiaries for disability, retirement or death benefits as to any and all claims or entitlements to disability, retirement or death benefits as part of a settlement without the approval of the Board of Trustees.  Any amount exceeding the maximum amount set by Administrative Rule shall require approval of the Board. 

 

(h)  Disability Claims Processing. 

 

1.   Restoring injured workers physically and economically to a self-sufficient status in an expeditious manner and to the greatest extent practicable is an important aspect of any disability system.

 

2.  All claims by FPDR Two and FPDR Three Members for service connected and occupational disability benefits under Sections 5-306 and 5-308, for nonservice connected disability benefits under Sections 5-307 and 5-309, benefits on service connected or occupational death before retirement under Section 5-308 and benefits for non service connected death before retirement under Section 5-309 shall be adjusted, administered and decided by the Fund Administrator.  The decision of the Fund Administrator shall be made in accordance with this Charter and the rules and regulations adopted by the Board.

 

3.  A FPDR Two or FPDR Three Member or a Surviving Spouse or Dependent Minor Child adversely affected by a determination of the Fund Administrator may appeal that decision to a hearings officer within 60 days of the date of the decision of the Fund Administrator.  The hearings officer shall conduct an evidentiary hearing under the rules of procedure and evidence established by the Board.  The hearings officer shall have the power to administer oaths, subpoena and examine witnesses, and require the production and examination of papers and documents.  The decision of the hearings officer shall be in writing and shall be issued within 30 days after the close of the evidentiary record.  The decision shall be based on the evidence presented at the hearing. 

 

4.   The decision of the hearings officer shall be final unless an appeal to the independent panel is filed by the Member, Surviving Spouse, Dependent Minor Child or the Fund Administrator with the Fund within 30 days of the hearings officer’s decision. The decision of the independent panel shall be de novo on the record and shall be the final decision of the Fund and may be appealed to the circuit court as provided by state law.

 

(i)  Subrogation.

 

1.   By filing a claim for disability benefits the Member or the beneficiary of a Member agrees to be bound by the subrogation provisions of this Chapter.

 

2.  If injury, death or medical condition of a Member is due to the negligent, intentional or wrongful action of a third party or product manufactured by a third party, the Member or beneficiary of the Member shall bring a cause of action or other claim against that third party or assign the cause of action or claim to the Fund.  As used in this Chapter, “third party” includes any provider of medical care or vocational assistance to the Member and does not include any City employee acting in the course and scope of his or her employment.

 

3.   In the event a Member or the beneficiary of a Member collects damages from a third person for injury, death or medical condition inflicted on such Member for which benefits are paid or payable by the Fund, the Member or beneficiary shall pay to the Fund the money so collected or the total amount paid to such Member for any benefits paid or payable by the Fund that are authorized to be recovered by any law or this Chapter.  The amount so collected by the injured Member shall be distributed as provided in the Oregon Workers’ Compensation statutes governing similar damage recoveries.

 

4.  The Fund shall have a lien on any recovery equal to the value of all benefits paid or payable by the Fund, including but not limited to, disability payments, vocational rehabilitation expenses paid on behalf of a Member, and medical expenses for the injury or medical condition.  The Fund lien shall include the present value of the Fund’s reasonably expected future benefit payments.

 

5.  No compromise or settlement of a cause of action or claim described in this Subsection (i) by a Member or the beneficiary of a Member shall be valid without the approval of the Fund Administrator. In the event the Member, beneficiary or third party fails to obtain the approval of the Fund Administrator for the compromise or settlement, the Fund Administrator retains the right to pursue any causes of action against the third party.

 

6.  The Fund Administrator shall have the right to offset disability payments in the amount that is the lesser of the Fund’s unsatisfied lien or the amount recovered by the Member or beneficiary of the Member from the third party.

 

7.  The Fund Administrator shall have the authority to suspend, offset or reduce benefits if a Member or the beneficiary of a Member does not pursue or assign to the Fund the Member’s or beneficiary’s cause of action against a third party who causes the injury, death or medical condition of a Member for which the Fund pays or is obligated to pay benefits, or does not pay a Fund lien on recoveries from such third parties.  Benefits so suspended or reduced shall not be payable to the Member or beneficiary at any time unless the Fund lien has been satisfied.

 

8.  The Board’s right to bring a cause of action against a third party in the name of the Member or Member’s beneficiaries shall be separate and independent of any other cause of action the City or Board may have.


Section 5-203. Custodian and Disbursing Officer.
 
The funds created in Sections 5‑101 and 5‑104 shall be in the care and custody of the City Treasurer, and shall be paid out by the Treasurer on warrants or checks signed by the Mayor and countersigned by the Fund Administrator and not otherwise; provided, however, that no warrants or checks shall be drawn upon either of said funds except by order of the Board, which order shall be duly entered upon the record of the proceedings of the Board.

Section 5-204. Books and Accounts.
 
The books and accounts of the Fund, shall, at all times, be subject to the inspection of any person interested, and shall be audited annually at the expense of the Fund by a licensed public accountant or firm of accountants approved by the City. The City Auditor may audit the activities of the Fund.  All securities, moneys and properties of the Fund which have come into the possession of the Treasurer shall be delivered at the expiration of the Treasurer's term to the Treasurer's successor.

Section 5-205. Claims Recordkeeping and Assessment of the Fund.
The Fund shall keep disability claims records in a manner comparable to the City’s Workers’ Compensation records.  The Board shall retain an outside independent expert in disability management to conduct an initial audit to create benchmarks for comparison of the Fund going forward.  The initial audit shall be conducted not later than nine (9) months after January 1, 2007.  Twelve (12) months after the initial baseline audit, a subsequent audit shall be conducted.

Section 5-206. Legal Adviser.
 
It shall be the duty of the City Attorney to give advice to the Board of Trustees and Fund Administrator in all matters pertaining to their duties and the management of either of the Fund or the Reserve Fund whenever required by the Board or the Fund Administrator, and the City Attorney shall represent and defend the Board and the Fund Administrator as their attorney in all suits or actions at law or in equity that may be brought against them, and institute all suits and actions in their behalf that may be required or determined upon by said Board or Fund Administrator; provided that the foregoing shall not prevent the Board or Fund Administrator from retaining other legal counsel to advise or represent them as provided in Section 5‑202.

Section 5-207. Monthly Payments.
 
All benefits and allowances payable out of the Fund and hereinafter provided for and allowed by the Board shall be paid monthly out of the Fund by warrants or checks as herein provided, except where a different schedule of payment is provided in Article 3.

Section 5-208. Applications.
 
All applications under this Chapter except applications for FPDR Three retirement benefits or other benefits provided by PERS shall be made within such time and in such form as may be fixed by the rules and regulations of the Board.  Applications for FPDR Three retirement benefits or other benefits provided by PERS shall be made within such time and in such form as may be fixed by PERS statutes, rules and regulations.