In an Opinion handed down yesterday by the Third District Court of Appeal, the appellate court affirmed the trial court’s final summary judgement in favor of the City of North Miami Beach.

At issue was the overturning of a previous ordinance approving section 1.05(a)(1) of the Retirement Plan’s provision that “Approval of 66-2/3% of the active participants shall be required before the Plan may be amended by the City Council.”  The appellate court opined, “The Retirement Committee maintains that, in amending the pension plan, the City failed to comply with a condition precedent established in the City’s own previously-enacted ordinance. We affirm the trial court’s conclusion that, as a matter of law, the City had no such obligation.”

The court based its opinion on several issues, one being that “a municipality has broad home rule powers to legislate.”  The appellate court declared that the “66-2/3% vote was an improper delegation of the City Council’s authority to a minority of the active members of the retirement plan,” adding that “as the City had the authority to enact the condition precedent contained in section 1.05 of the Retirement Plan (putting aside the constitutional infirmity described above), the City had the same undivided authority to eliminate that condition,” adding “if the condition precedent had been imposed by Florida statute or municipal charter provision, the analysis might be different.”

The City also defended its decision based on the financial solvency of the Plan.  The court ruled that, “Benefits payable by the Retirement Plan are constitutionally mandated to be funded on a sound actuarial basis,” and that the City “is permitted to adopt prospective amendments to the Retirement Plan, and to collectively bargain for such changes, consistent with its budget.”

A similar disagreement is being played out between the City of North Miami Beach and the police pension board and union.  It will be interesting to see what effect, if any, this appellate decision may have on those negotiations.

Update:  North Miami Beach Mayor George Vallejo reacted to the decision by stating, “This is an important victory for the residents of NMB. The court affirmed the obvious, which is that the city controls what pensions it offers, not the recipients of those pensions.  Now that the court has spoken, I look forward to working with our employees to reform pensions so that they are reasonable and sustainable into the future.”

Stephanie Kienzle
“Spreading the Wealth”