City of Del City v. Fraternal Order of Police, Lodge No. 114, AFL-CI

CourtSupreme Court of Oklahoma
Citation869 P.2d 309,1993 OK 161
Docket NumberNo. 73138,S,AFL-CI,73138
PartiesCITY OF DEL CITY, a municipal corporation, Appellant, v. FRATERNAL ORDER OF POLICE, LODGE NO. 114; and International Association of Firefighterstate of Oklahoma, Local 2171, Appellees, and State of Oklahoma, Intervenor.
Decision Date21 December 1993

Page 309

869 P.2d 309
1993 OK 169
CITY OF DEL CITY, a municipal corporation, Appellant,
Association of Firefighters AFL-CIO, State of
Oklahoma, Local 2171, Appellees,
State of Oklahoma, Intervenor.
No. 73138.
Supreme Court of Oklahoma.
Dec. 21, 1993.
Rehearing Denied March 16, 1994.

Page 310

Appeal from the District Court of Oklahoma County; Bryan C. Dixon, District Judge.

The District Court upheld the constitutionality of 11 O.S.1991 § 51-105. On appeal we hold that the "Evergreen" provision contained in 11 O.S.1991 § 51-105 violates Okla. Const. Art. 10 Section 26 by extending a city's obligation beyond one year.


Sherry Blankenship, Ted N. Pool, Pool, Thompson, Coldiron, Blankenship & Vincent, Oklahoma City, for appellant, City of Del City.

James R. Moore, Horning, Johnson, Grove, Moore & Hulett, Oklahoma City, for appellee, International Ass'n of Firefighters.

Richard A. Mildren, Chapel, Riggs, Abney, Neal & Turpen, Oklahoma City, for appellee, Fraternal Order of Police, Lodge No. 114.

Douglas B. Allen, Asst. Atty. Gen. of Oklahoma, Oklahoma City, for intervenor, State of Okl.

Diane Pedicord, Sue Ann Nicely, Oklahoma City, for amicus curiae, Oklahoma Mun. League, Inc.

Thomas A. Woodley, Erick J. Genser, Mulholland & Hickey, Washington, DC, for amicus curiae, International Ass'n of Fire Fighters, AFL-CIO.

SUMMERS, Justice:

At issue is the constitutionality of the "Evergreen" clause as it appears in the Oklahoma Fire and Police Arbitration Act, 11 O.S.1991 § 51-105. The contested statute by its terms would continue an existing collective bargaining agreement with a city beyond its stated date of expiration, and into the future "until a new agreement is reached." The City of Del City challenges the Evergreen statute on the basis that it offends the Oklahoma Constitution, Article 10, Section 26, which prohibits municipal indebtedness from exceeding revenue provided for any year without assent of three-fifths of the voters. The Police and Firefighter's Unions defend the statute's validity. We must agree with the City. The Evergreen Clause violates our Oklahoma Constitution.

The collective bargaining agreement between Del City and the Fraternal Order of Police and International Association of Firefighters (Unions) expired before a new agreement had been reached. There is no allegation of bad faith dealing. The City filed a suit in District Court asking for a declaratory judgment as to the constitutionality of the Evergreen clause. The City alleged that a continuation of the collective bargaining agreement with respect to salaries and benefits as required by the Evergreen clause would cause a deficit in the City's budget by extending it past the constitutionally permitted one year. The City also urged that the Evergreen clause conflicted with the Municipal Budget Act. In the alternative, the City claimed that the parties had reached impasse.

The Unions urged the validity of the clause, stating (1) the collective bargaining agreement did not establish a debt within the meaning of Article 10, Section 26, and (2) that even if it did, the debt fell within the judicially-recognized exception created for legislatively-mandated obligations. The trial court held that the clause was constitutional under Section 26, that it did not conflict with the Municipal Budget Act, and that no impasse

Page 311

had been reached in bargaining. The City appealed.

The complete text of Section 51-105 is as follows:

It shall be the obligation of the municipality, acting through its corporate authorities, to meet at reasonable times and confer in good faith with the representatives of the fire fighters or police officers within ten (10) days after receipt of written notice from said bargaining agent requesting a meeting for collective bargaining purposes. The obligation shall include the duty to cause any collective bargaining agreement resulting from negotiations to be reduced to a written agreements, the term of which shall not exceed one (1) year; provided, any such agreement shall continue from year to year and be automatically extended for one-year terms unless written notice of the request for bargaining is given by either the municipal authorities or the bargaining agent of the fire fighters or police officers at least thirty (30) days before the anniversary date of such negotiated agreement. Within ten (10) days of receipt of such notice by the other party, a conference shall be scheduled for the purposes of collective bargaining, and until a new agreement is reached, the currently existing written agreement shall not expire and shall continue in full force and effect. (Emphasis Added)

The emphasized final portion is what all parties refer to as the Evergreen clause and is the focus of the lawsuit.


Article 10, Section 26 of our Oklahoma Constitution provides in pertinent part as follows:

Except as herein otherwise provided, no county, city, town, township, school district, or other political corporation, or subdivision of the state, shall be allowed to become indebted, in any manner, or for any purpose, to an amount exceeding, in any year the income and revenue provided for such year without the assent of three-fifths of the voters.... (Emphasis Added)

The purpose behind this constitutional provision is to force cities and municipalities to operate on a cash basis, and to prevent indebtedness extending beyond one year. Independent School District No. 1 v. Howard, 336 P.2d 1097 (Okla.1959); Town of Red Fork v. Gantt-Baker Co., 130 Okl. 175, 266 P. 444, 447 (1928). This section restricts the power of a city to incur indebtedness payable out of tax revenues beyond the year. Fairbanks, Morse, & Co. v. City of Wagoner, 81 F.2d 209 (10th Cir.1936). It serves not only as a restriction on the city but also on the legislature; the legislature cannot relieve the city of the burden of following the mandate of Section 26. Protest of Carter Oil Co., 148 Okl. 1, 296 P. 485, 488 (1931); Perrine v. Bonaparte, 140 Okl. 165, 282 P. 332, 333 (1929); St. Louis-San Francisco Ry. Co. v. Andrews, 137 Okl. 222, 278 P. 617 (1929).

Recently, in City of Tulsa v. Public Employees Relations Board, 845 P.2d 872, 876 (Okla.1990), we addressed the constitutionality of a judicially-created equivalent of the Evergreen clause. There the unions urged the application of a doctrine called the "dynamic status quo." If applied the doctrine would accomplish the same result as the Evergreen clause by extending the old bargaining agreement in effect until a new agreement was reached. The continuation of the bargaining agreement would not be mandated by statute but solely by a principle created and adopted by some courts. The unions urged its application because the timing of the City of Tulsa case did not permit application of the Evergreen clause. We declined to adopt the doctrine, holding that the perpetuation of a collective bargaining agreement beyond one year would violate the Oklahoma Constitution, Article 10, Section 26.

Del City maintains that City of Tulsa is thus dispositive of today's case. It is not, except as to the issue of whether the collective bargaining agreement falls within the "debt" provision of Section 26. In City of Tulsa, we recognized that a municipality is required to run on a "cash basis" to maintain the integrity of Section 26. Quoting News

Page 312

Dispatch Printing & Audit Co. v. Bd. of County Comm'rs, 177 Okl. 162, 57 P.2d 1156, 1158 (1936), we agreed that "[a]ny liability sought to be incurred by contract, express or implied, executed or executory, in excess of such current revenue in hand, or legally levied, is void, unless it be authorized by a vote of the people, and within the limitations therein provided." 1 In Buxton & Skinner Stationery Co. v. Bd. of Comm'rs, 53 Okl. 65, 155 P. 215 (1916), we held that the indebtedness, for purposes of Section 26, was created at the time the contract was made and not when the claim was presented for payment. See also Brians v. Consolidated School Dist. No. 5, 79 P.2d 798, 800 (Okla.1938).

News Dispatch, as quoted in City of Tulsa, resolves the first issue raised by the Unions. Contrary to the Unions' assertion that the collective bargaining agreement does not fall within the "debt" provision of Section 26, we hold that the bargaining agreement is an obligation incurred by Del City to pay the police and fire fighters a specific wage and certain benefits. The Unions urge that the contract was merely a fee schedule. We disagree. If the wages and benefits owed were not an obligation of Del City, the collective bargaining agreement would have lost its force and effect, which is to secure these wages and benefits for police and fire fighters. If it were not an obligatory debt, Del City would not be required to pay the contractual amount, but could pay some lesser amount. See Faught v. City of Sapulpa, 145 Okl. 164, 292 P. 15 (1930) (a debt under Section 26 exists when a contractual obligation is created). The Unions' argument is unpersuasive.


The second argument raised by the Unions was left unsettled by City of Tulsa, and that is whether the Evergreen clause can avoid a constitutional collision due to the fact the debt was legislatively imposed rather than voluntarily incurred. We must agree with them that Section 51-105 is a legislatively-enacted obligation imposed on municipalities.

However, that fact alone does not resolve the controversy. Although this Court has on occasion stated that a legislatively-imposed obligation is not subject to Section 26, the history of this exception--and especially this Court's discussion of the exception in later opinions--is of particular...

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