Bailey v. City of Tampa, 4041

• Decision Date: 17 April 1964
• Docket Number: No. 4041,4041
• Citation: 163 So.2d 528
• Parties: Dewitt C. BAILEY et al., Appellants, v. CITY OF TAMPA, a municipal corporation of the State of Florida, et al., Appellees.
• Court: Florida District Court of Appeals

Page 528

163 So.2d 528

Dewitt C. BAILEY et al., Appellants, v. CITY OF TAMPA, a municipal corporation of the State of Florida, et al., Appellees.

No. 4041.

District Court of Appeal of Florida, Second District.

April 17, 1964.

Rehearing Denied May 14, 1964.

Edward D. Cowart, of Cowart, Dollar & Glassford, Miami, for appellants.

Theodore C. Taub, Paull e. Dixon, A. Broaddus Livingston and Robert H. Carlton, Tampa, for appellees.

RAWLS, JOHN S., Associate Judge.

Six retired police officers of the City of Tampa brought this class suit requesting construction and determination of the laws and ordinances authorizing, establishing and financing their pension system; seeking an accounting for moneys received pursuant to Chapter 185, Florida Statutes, F.S.A.; and requesting a decree that the funds derived from Chapter 185 be used to provide benefits to policemen and their dependents in addition to those benefits received under the pension system esablished pursuant to a 1941 Special Act, as amended.

Chapter 21590, Laws of Florida, Acts of 1941, created the City Pension Fund for Firemen and Policemen in the City of Tampa, and pursuant ot this act the pension plan in question was established. This plan required participating policemen and firemen to contribute 2% of their wages and required the City to levy a one mill property tax to be paid into the fund until such time as the fund reserve reached $500,000. Thereafter the City was required to contribute ad valorem taxes which together with other revenues would be sufficient to maintain the fund balance at the $500,000. The City was authorized to levy a tax not exceeding two mills and to use other available funds.

This pension system is an elective one solely for qualified firemen and policemen, and those not electing to participate therein are covered by a general city employees' retirement system. Each member of the firemen's and policemen's system executed an individual contract with the City setting forth the duties, benefits and liabilities of each party. To satisfy its obligations under the 1956 contracts, the City of Tampa continued, as it had in the past, to levy at least a one mill ad valorem tax until 1960. Although neither the employee contribution rate nor the city tax for the firemen's and policemen's pension fund had ever been based upon the actual soundness of the program, the City had adopted a policy of varying its property tax contribution so that the fund balance at the end of each year showed a gradual increase. In accordance with this policy and because the 1959 fund balance was $1,427,077.33, the City contributions in 1960, 1961 and 1962 were materially decreased below the revenue which would be produced by a one mill levy.

From the inception of the program there has been deposited into the pension fund the reoceeds from a 1% tax on fire insurance policy premiums as authorized by Chapter 175, Florida Statutes, F.S.A., for financing pension plans for the exclusive benefit of municipal firemen. In addition the fund has been financed by employee contributions and a one mill ad valorem city tax levy. In 1953 the City adopted ordinance 1571-A which imposed a 1% tax on casualty insurance premiums as authorized by the 1953 legislature in Chapter 185, Florida Statutes, F.S.A., for the exclusive benefit of policemen. Thereafter the proceeds from the casualty insurance tax were also deposited in the instant pension fund. Even with this additional source of revenue it was not until 1956 that the pension fund reserve reached the minimum $500,000 balance required. In that same year the city increased its ad valorem tax levy and the pension contracts were revised to provide substantially greater benefits at an increased employee contribution rate.

Appellants take the position that they are entitled to: (1) benefits provided by their respective contracts which the City, and (2) benefits accruing by reason of the City's imposition of the 1% premium tax on casualty insurance policies as authorized by Chapter 185. They reason that the City was contractually liable to each of them irrespective of the passenge or nonpassage of Chapter 185 and that by the terms of the statute the City is required to grant to them additional benefits beyond their existing contractual righs. Both parties in construing Chapter 185 rely primarily upon two cases in support of their respective positions. Each of these cases dealt with the Firemen's Pension Fund as authorized by Chapter 175; however, it is obvious that Chapter 185 is patterned after Chapter 175 and those decisions are controlling in this cause.

In Jackson v. McGrath, ¹ the Supreme Court of Florida considered the utilization by the City of Miami Beach of the proceeds of funds generated by Chapter 175. The Supreme Court affirmed that portion of the chancellor's final decree approving the depositing of such funds in the General Employee Pension, Annuity and Retirement Fund of Miami, Beach, but reversed that portion of the decree holding that the proceeds of the funds could be used for the benefit of all City employees. In so holding the Court stated:

'It appears to us from a study of the applicable statutes that the monies received from the state comptroller may be lawfully placed and kept in the General Employee Pension, Annuity and Retirement Fund of the City of Miami Beach, but that they must be there held and administered for the sole use and benefit of firemen members and their dependents and not for all employees in the service of the city.'

Thus, in this first construction of Chapter 175, the Supreme Court clearly held that the funds must be utilized exclusively for the purpose set out in the chapter, the same being for the exclusive benefit of firemen.

Basically, the same complaint was lodged by the City of Miami firemen in City of Miami v. Carter. ² There, in an exhaustive pinion, the author, Justice O'Connell, analyzed in detail the purposes, intent and constitutionality of Chapter 175 and the Supreme Court's opinion in the Jackson case. The City of Miami imposed the tax authorized by Chapter 175 and then utilized the funds thus derived to reduce the City's contribution to the Miami City Employees' Retirement System. In holding that the...