Pomona Police Officers' Assn. v. City of Pomona

• Decision Date: 16 October 1997
• Docket Number: No. B109647,B109647
• Citation: 68 Cal.Rptr.2d 205,58 Cal.App.4th 578
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 8072, 97 Daily Journal D.A.R. 13,018 POMONA POLICE OFFICERS' ASSOCIATION, Plaintiff and Appellant, v. CITY OF POMONA et al., Defendants and Respondents.

Page 205

68 Cal.Rptr.2d 205

58 Cal.App.4th 578, 97 Cal. Daily Op. Serv. 8072,

97 Daily Journal D.A.R. 13,018

POMONA POLICE OFFICERS' ASSOCIATION, Plaintiff and Appellant, v. CITY OF POMONA et al., Defendants and Respondents.

No. B109647.

Court of Appeal, Second District, Division 5, California.

Oct. 16, 1997.

Rehearing Denied Nov. 5, 1997.

Review Denied Jan. 14, 1998.

Silver, Hadden & Silver and Stephen H. Silver, Santa Monica, for Plaintiff and Appellant.

Liebert, Cassidy & Frierson, Richard M. Kreisler and Peter J. Brown, Los Angeles, for Defendants and Respondents.

GRIGNON, Associate Justice.

Appellant Pomona Police Officers' Association appeals from the judgment denying the Association's petition for writ of mandate entered in favor of respondent City of Pomona. ¹ The Association seeks to compel the City to take all action necessary to increase the compensation for retirement purposes of its members by the amount of employer-paid employee contributions to the Public Employees' Retirement System (PERS). The collective bargaining agreement between the Association and the City gives the members of the Association the option to convert the employer-paid employee contributions to salary for retirement purposes. We conclude that this retirement conversion option violates the Public Employees' Retirement Law (PERL) and is thus unenforceable. We conclude further that the City cannot be compelled to amend its contract with PERS to retroactively validate the retirement conversion option at a substantial cost to the City. Nor can the City be compelled to provide alternative economic benefits. We affirm.

FACTS AND PROCEDURAL BACKGROUND

The Association is the employee organization recognized by the City as the exclusive representative of all nonmanagement City police officers. Management City police officers are represented by a different employee organization. The City contracts with PERS to provide retirement benefits to City employees in accordance with the provisions of the PERL (Gov.Code, § 20000 et seq.). ² Pursuant to the PERS contract, City police employees contribute nine percent of their compensation to PERS. As part of its collective bargaining agreement with the Association, the City has agreed to pay the required PERS employee contributions of the Association's members. This payment of the employee contribution by the City increases actual net compensation by nine percent, but does not increase compensation for retirement purposes under the PERL. In 1993, the City and the Association entered into an amendment of the collective bargaining agreement, providing an option to convert the employer contribution into additional compensation for retirement purposes. By this amendment, the parties intended to increase compensation for retirement purposes.

The retirement conversion option provision of the amendment to the collective bargaining agreement reads in full as follows: "A. Effective September 1, 1991, employees with at least twenty (20) years of service as a police officer and at least ten (10) years with the City, shall be allowed the option to convert their 9-percent City-paid PERS member contribution to 9-percent salary for retirement purposes. The higher salary resulting in this option will only apply to employees who take a service retirement. Disability retirement and industrial disability retirement are excluded from this option, unless the work-related disability occurs after this conversion is taken. Employees wishing to exercise this option must do so in writing. [p] B. This retirement conversion is a one-time option and cannot be revoked, once it is opted for, without specific written approval by the City Administrator. [p] C. The higher salary resulting from exercising this option shall not be applied to any vacation leave payoff, compensatory leave payoff, sick leave payoff, sick leave buy-back or sick leave conversion plan for which the affected employee may be eligible. [p] D. The City recognizes the benefit of maintaining a uniform application of the conditions and procedures of the Retirement Conversion benefit among the various safety service units; in response to this recognition and notwithstanding the foregoing provisions, the conditions and procedures applicable to an affected Police employee who seeks to exercise this benefit shall be uniform with and among Subsequently, the City informed the Association that it had discovered the retirement conversion option violated the PERL and thus the City would no longer offer the option to the Association's members. Effective July 1, 1994, the PERL was amended to validate a retirement conversion option such as the one contained in the Association's collective bargaining agreement, provided the public entity amend its contract with PERS at a substantial additional cost to the public entity. The City amended its collective bargaining agreement with management police officers to provide for a valid retirement conversion option in exchange for a reduction in the salary of management police officers. The City thereafter amended its contract with PERS as to the retirement conversion option of management police officers. The Association and the City were unable to agree on a similar amendment to the Association's collective bargaining agreement with respect to nonmanagement police officers.

the conditions and procedures applicable to employees in the other safety service units."

The Association filed a petition for writ of mandate pursuant to Code of Civil Procedure section 1085 seeking to compel the City to amend its contract with PERS to validate the retirement conversion option or to take all action necessary to cause the retirement allowance of qualifying member to be increased by the amount of the employer-paid employee contribution to PERS. The trial court denied the petition and entered judgment in favor of the City. The Association filed a timely notice of appeal.

DISCUSSION

Standard of Review

" 'A traditional writ of mandate under [Code of Civil Procedure] section 1085 is a method of compelling the performance of a legal, usually ministerial duty[.]' " (Bollengier v. Doctors Medical Center (1990) 222 Cal.App.3d 1115, 1123, 272 Cal.Rptr. 273.) "Generally, a writ will lie when there is no plain, speedy, and adequate alternative remedy; the respondent has a duty to perform; and the petitioner has a clear and beneficial right to performance." (Payne v. Superior Court (1976) 17 Cal.3d 908, 925, 132 Cal.Rptr. 405, 553 P.2d 565.) "When there is review of an administrative decision pursuant to Code of Civil Procedure section 1085, courts apply the following standard of review: ' " '[J]udicial review is limited to an examination of the proceedings before the [agency] to determine whether [its] action has been arbitrary, capricious, or entirely lacking in evidentiary support, or whether [it] has failed to follow the procedure and give the notices required by law.' " [Citations.]' " (Los Angeles Lincoln Place Investors, Ltd. v. City of Los Angeles (1997) 54 Cal.App.4th 53, 59, 62 Cal.Rptr.2d 600.) Where the case involves the interpretation of a statute, we engage in de novo review of the trial court's determination to issue the writ of mandate. (Ibid.)

PERS

"The [PERL] establishes PERS, a retirement system for employees of the state and participating local public agencies.[ ] PERS is a prefunded, defined benefit plan which sets an employee's retirement benefit upon the factors of retirement age, length of service, and final compensation. [Citation.] Retirement allowances are therefore partially based upon an employee's compensation. An employee's compensation is not simply the cash remuneration received, but is exactingly defined to include or exclude various employment benefits and items of pay. [Citation.] The scope of compensation is also critical to setting the amount of retirement contributions, because PERS is funded by employer and employee contributions calculated as a percentage of employee compensation." (Oden v. Board of Administration (1994) 23 Cal.App.4th 194, 198, 28 Cal.Rptr.2d 388.)

"[E]mployer and employee contributions ..., distinguished more by form than substance, are nevertheless subject to disparate tax treatment." (Oden v. Board of Administration, supra, 23 Cal.App.4th at p. 198, 28 Cal.Rptr.2d 388.) "Employers' contributions are not taxable income to the employee until benefits are paid upon separation or retirement, whereas employees' contributions are ordinarily taxable income when made, but not taxed at disbursement "Statutory definitions delineating the scope of PERS compensation cannot be qualified by bargaining agreements." (Oden v. Board of Administration, supra, 23 Cal.App.4th at p. 201, 28 Cal.Rptr.2d 388.) Nor can the PERS Board characterize contributions as compensation or not compensation under the PERL; those determinations are for the Legislature. (Ibid.) The Legislature has excluded employer-paid salary-addition employee contributions from compensation under the PERL and included employer-paid salary-deduction employee contributions. (Id. at p. 203, 28 Cal.Rptr.2d 388.)

                of benefits.  [Citation.]  Accordingly, tax deferral is achieved where retirement contributions are made by the employer, rather than the employee."  (Id. at pp. 198-199, 28 Cal.Rptr.2d 388.)   However, tax deferral can be achieved for employees of state or local governments, if the government employer "picks up" the employee contributions.  (Id. at p. 199, 28 Cal.Rptr.2d 388.)   The government employer may "pick up" the [58 Cal.App.4th 585] employee contributions in two ways:  the salary of the employee may be increased and the contribution can be made from the increased salary as a salary deduction, or the employer may pay the employee contribution as an addition to the salary of the employee.  (Id. at pp. 199-200, 28 Cal.Rptr.2d 388.)  "Both salary deduction and salary addition methods of paying employees' contributions

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