Opinion ID: 2611911
Heading Depth: 3
Heading Rank: 3

Heading: The PERS Statutes

Text: (7) As discussed above, the ordinances exempt from referendum under section 25123, subdivision (e) are those specifically [relating] to the adoption or implementation of a memorandum of understanding with an employee organization. (Italics added.) The Court of Appeal and VFRR correctly point out that it was not the November 5, 1991, adoption of the MOU's with the Employee Associations that effectively amended the County's contract with PERS, but rather the subsequent vote on the PERS amendment itself (Ordinance No. 1161) on December 17, 1991, that constituted the ratification of the amendment. Ordinance No. 1161, therefore did not adopt a memorandum of understanding within the meaning of section 25123, subdivision (e); if the ordinance is to be covered by this subdivision, it would have to be by virtue of the fact that the ordinance implemented an MOU. We must therefore consider whether and in what sense Ordinance No. 1161 implemented the November 5, 1991, MOU's and, more generally, how section 25123, subdivision (e), and the MMBA, can be reconciled with the statutory provisions governing the ratification of amendments to PERS contracts. Although VFRR does not raise arguments as to the applicability of section 25123, subdivision (e) to the present case, we address these questions briefly for purposes of clarification. The process whereby the employees of a local public agency join PERS is closely regulated by statute. That process begins when the governing body of a public agency requests of the PERS board of administration a quotation of the approximate contribution to this system which would be required of the agency for such participation. (§ 20451.) After receiving the quotation, the governing body may elect to approve the proposed contract with PERS and may state its intention to approve the contract via a resolution. (§ 20457.) Once the resolution is passed, the employees who are proposed to be included in PERS must approve the contract by secret ballot. ( Ibid. ) Once the employees have approved the contract, then the contract is officially approved by the public agency in the following manner: by ordinance adopted by the affirmative vote of a majority of the members of the governing body, not less than 20 days after the adoption of the resolution of intention, or by ordinance adopted by a majority vote of the electorate of the public agency voting thereon. (§ 20460.) Excluded employees may be included through amendments to the PERS contract in the manner prescribed for the approval of the contracts, with some distinguishing features not pertinent here. (§ 20461.) In addition, section 7507 provides that the local legislative body, before adopting increases in public retirement benefits for its employees, must obtain actuarial evaluations of future annual costs of the plan, and make that cost information public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits. In this case, the adoption of the amendment to the County's PERS contract, within the meaning of sections 20460 and 20461, took place on December 17, 1991, with the passage of Ordinance No. 1161, the ordinance which VFRR seeks to challenge via referendum. We reject the County's contention that, after having approved the MOU's on November 5, it had no discretion to reject Ordinance No. 1161 on December 17. Indeed, the MOU's make explicit that the County's initial approval of the retirement plan amendment on November 5 was tentative only, and depended for its final approval on fulfilling the relevant statutory requirements. As paragraph 08.03.00 of both MOU's provide: Implementation of the PERS program as outlined above is contingent upon the agreement of all County bargaining groups and ratification of the Board of Supervisors, as well as, the approval of the majority of County employees through the required PERS election. Should the retirement plan not be implemented, due to any of these reasons, the County and the Association shall immediately reopen negotiations. Thus, as the MOU's properly recognized, the Board could not commit itself definitively to the retirement plan amendment until all the prescribed statutory steps had been taken. Consequently, there is no conflict in this instance between the PERS statutes and either the MMBA or section 25123, subdivision (e). Here, both the PERS statutes and the memoranda of understanding negotiated under the MMBA required that the County not ultimately commit itself to amendment of the PERS contract at the time of the adoption of the MOU's, but undertake additional procedures dictated by those statutes. What the County did commit itself to in the MOU's was to either (1) approve the amendment to the retirement plan, or (2) to immediately reopen negotiations regarding a county retirement plan. In other words, it had committed itself to in some fashion alter the present retirement plan, regarded by all parties as unsatisfactory. On December 17, 1991, the County chose the first option by the approval of Ordinance No. 1161, thereby fulfilling its commitment under the MOU's. As such, the choice that the Board made in passing Ordinance No. 1161 was specifically related to the implementation of a memorandum of understanding with an employee organization within the meaning of section 25123, subdivision (e), and was therefore not subject to referendum.