The Texas Supreme Court has held that a city cannot delegate authority to a third-party to veto changes in a city ordinance.
The City of Dallas v. The Employees’ Retirement Fund of the City of Dallas (No. 22-0102; March 15, 2024) arose from a long-running dispute between the city and the fund efforts to bring the fund’s board of trustees under the city’s term-limits ordinance for city boards and commissions. The first run-in occurred in 1994, when the three board members elected from the membership of the fund refused to step down at the end of their terms as directed by a term-limit provision applying to “appointed” members of city boards. The spat heated up again in 2017, when the city council extended the term-limits to elected board members as well. The fund board refused to acknowledge the amendment on the basis that the ordinance establishing the fund required the board to sign off on any changes to the ordinance before they could be enacted and voted on by Dallas citizens. The fund sued the city to enjoin the application of the term-limits ordinance to the fund’s elected board members. The city counterclaimed. Both parties moved for summary judgment. The trial court sided with the city. The fund appealed and won at the Dallas Court of Appeals. SCOTX accepted review.
In an opinion by Justice Young, SCOTX reversed. The fund argued that the Trust Code, not the city, governs the fund and authorizes the trust to require the approval of the board of trustees for changes in the selection method of trustees. The Court rejected this argument for two reasons. First, the statute that authorized the creation of the fund required the city to adopt an ordinance to to do so. The fund, consequently, is a creature of city law promulgated under a grant of authority from the legislature. The term-limits ordinance (or any other ordinance) thus amends another ordinance, not the terms of a “trust” or separate legal entity. Under the “nonentrenchment doctrine,” a legislative body, which includes a city council, cannot bind a future legislative body to act in a particular way. To the extent that the ordinance governing the fund purports to require the fund board’s approval of any proposed amendment to the ordinance, therefore, that requirement violates the doctrine.
Second, as creatures of the constitution and legislature, home-rule cities have only the authority the Legislature gives them, and “[a] city’s authority over the law is not within a city’s power to give away any more than the legislature could hand away its own power.” Whether the Trust Code applies to the fund is beside the point. In short, the city never had the authority to give the fund board veto power over ordinances affecting the fund. As Justice Young put it, “[e]mbracing the Fund’s approach would represent an earthquake in our constitutional order. It would amount to an escape hatch both from the principle that one legislature cannot bind its successors and the principle that core lawmaking authority vested by the State cannot be given away.”
The Court sent the case back to the court of appeals for a determination of whether voter approval is necessary for the application of the term-limits ordinance to the elected members of the board.
