Court Opinion

ID: 3183211
Source: CourtListenerOpinion
Date Created: 2016-03-07 21:12:51.09248+00
Date Added: 2024-06-11T13:13:52.388711
License: Public Domain

Filed 3/7/16
                           CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                           SECOND APPELLATE DISTRICT

                                      DIVISION ONE

JACK FRY et al.,                                  B259791

        Plaintiffs and Respondents,               (Los Angeles County
                                                  Super. Ct. No. BS140201)
        v.

CITY OF LOS ANGELES,

        Defendant and Appellant;

BOARD OF FIRE AND POLICE
PENSION COMMISSIONERS OF THE
LOS ANGELES FIRE AND POLICE
PENSIONS,

       Real Party in Interest and
       Respondent.

        APPEAL from a judgment of the Superior Court of Los Angeles County, Joanne
O‟Donnell, Judge. Reversed and remanded.
        Renne Sloan Holtzman Sakai, Arthur A. Hartinger, Linda M. Ross, Jennifer L.
Nock, Kevin P. McLaughlin; Meyers Nave, Harry W.R. Chamberlain II, Anya J.
Freedman for Defendant and Appellant.
        Irell & Manella, David A. Schwarz, Josh Geller for League of California Cities as
Amicus Curiae on behalf of Defendant and Appellant.
        Rosen Bien Galvan & Grunfeld, Ernest Galvan, Margot Mendelson, Jenny S.
Yelin for Plaintiffs and Respondents.
      Mastagni Holstedt, David E. Mastagni, Issac S. Stevens, Ian B. Sangster for Los
Angeles Airport Peace Officers‟ Association, as Amicus Curiae on behalf of Plaintiffs
and Respondents.
      Reed Smith, Harvey L. Leiderman, Jeffrey R. Rieger, May-tak Chin for Real Party
in Interest and Respondent.
                                _____________________

                                      SUMMARY
      Appellant City of Los Angeles (City) appeals from the trial court‟s issuance of a
writ of mandate authorizing the Board of the Los Angeles Department of Fire and Police
Pension Commissioners (Board)1 to exercise its discretion, previously delegated to it by
the City in an ordinance, to set the maximum subsidy contributed by the City to police
and firefighter retirees‟ insurance premiums without regard to later City ordinances
“freezing” the subsidy until review and increase by the City Council and requiring
payment of a voluntary contribution to join an opt-in program.
      We previously stayed the trial court‟s writ of mandate and all proceedings below,
pending this appeal. (Fry v. City of Los Angeles (Nov. 12, 2014, B259814).)
      We now reverse.

                              FACTUAL BACKGROUND
I.    1974 Charter Amendment Authorizing Creation of Subsidy Program
      In 1974, Los Angeles voters amended the City Charter to “enable the City Council
of the City of Los Angeles to provide by ordinance a program . . . whereby” retired City
police officers and firefighters “may become eligible to have subsidy payments made on

      1
         The Board was named as real party in interest in the petition below for a writ of
mandate. On appeal, the Board takes no position on the issues, stating that it is bound to
follow the City‟s Administrative Code unless and until instructed by a court otherwise.
The Board is a separate entity from the boards administering the other retirement systems
within the City, which include the Los Angeles City Employees Retirement System for
civilian employees and the Water and Power Employees‟ Retirement Plan. We hereby
deny respondents‟ May 21, 2015, motion for judicial notice of the biographies of five
members of the Board.

                                            2
their behalf for health insurance . . . or health care plan coverage” “as determined by the
City Council and subject to such conditions of entitlement as may be set forth in any
ordinance adopted in accordance with the provisions of this section.” (Charter, art.
XVIII, former §§ 189(a) & 190.50(a).) The 1974 Charter Amendment limited the
maximum amount of the subsidy the Council could authorize, stating in sections 189(c)
and 190.50(c) that “[a]n ordinance adopted pursuant to this section may not provide for a
subsidy . . . the total amount of which . . . would be in excess of” either the maximum
available subsidy for retired civilian employees or the subsidy allowed to active police
officers and firefighters. (Charter, art. XVIII, former §§ 189(c) & 190.50(c).)
       The 1974 Charter amendment also provided that the Board of Pension
Commissioners would administer “[a]ny subsidy program adopted by ordinance pursuant
to this section” and “in its discretion, may by resolution increase or decrease the amount
of subsidy payments on the following conditions only: (1) to reflect changes in subsidies
provided to active members or (2) to offset any increases or decreases in the level of
benefits referred to [earlier in section] . . . or the cost thereof as a result of changes in
existing benefits . . . .” (Charter, art. XVIII, former §§ 189(c) & 190.50(c).)
II.    Original Ordinance
       In 1975, the City Council passed Ordinance No. 147,014 (Original Ordinance) to
implement the authorized subsidy program in 1975. The Original Ordinance established
that, subject to the 1974 Charter Amendments limitations and provisions, “the maximum
monthly subsidy [for police and fire retirees] shall be the amount provided by the Council
for [civilian retirees].” The Original Ordinance also provided that Board of Pension
Commissioners responsible for administering the program may, in its discretion,
“increase or decrease the maximum monthly amount of the health insurance subsidy in
accordance with the authority conferred” in the 1974 Charter Amendments provisions.
III.   Charter Amendment Removing Limitations on Council’s Authority to
       Establish Subsidy
       In 2005, City voters amended the Charter sections governing the subsidy program
for retired police and firefighters to eliminate the limits on the Council‟s authority to

                                                3
establish the maximum subsidy. Specifically, the 2005 Charter Amendment deleted
former sections 189(c) and 190.50(c) which capped the maximum subsidy the Council
could establish to either the amount of subsidy received by active police officers and
firefighters or the maximum available subsidy for retired civilian retirees. It replaced that
provision with: “The Council may establish by ordinance the maximum subsidy
payments for beneficiaries under any programs established by the Council . . . .”
(Charter, art. XI, §§ 1330(c), 1428(c), 1518(c) & 1618(c).)2
       The 2005 Charter Amendment also deleted the provision from the 1974 Charter
Amendments allowing the Board to increase or decrease the subsidy, in its discretion,
only under the conditions specified in the 1974 Charter Amendments. Instead, the
amendment replaced that provision with: “The Council may by ordinance authorize the
Board to increase or decrease the subsidy payments pursuant to factors, standards, and
limitations prescribed in the ordinance.” (Charter, art. XI, §§ 1330(e), 1428(e), 1518(e)
& 1618(e).)
IV.    2005 Fixed Subsidy Amount Ordinance
       Pursuant to the authority granted in the 2005 Charter Amendment, the City
Council passed Ordinance No. 176731 (Subsidy Ordinance), establishing “the maximum
monthly subsidy towards the health insurance premium, effective July 1, 2005 . . . is
fixed at $735.38 per month.”
V.     Delegation Ordinance
       A year later, in 2006, the Council passed Ordinance No. 177630 (Delegation
Ordinance) amending subsection (e) of section 4.1154 of the Los Angeles Administrative
Code. In the Delegation Ordinance, the City Council noted that the maximum monthly
subsidy, effective July 1, 2005, “is fixed at $735.38,” and authorized the Board “to make
discretionary changes, on an annual basis beginning in 2006, to the maximum monthly
subsidy,” so long as no increase exceeded the lesser of a 7 percent increase or the
actuarial assumed rate for medical inflation. The Delegation Ordinance also stated if the

       2
         In the new City Charter, sections 189 and 190.50 have been renumbered as
sections 1330, 1428, 1518 and 1618, reflecting four different pension plan tiers.

                                             4
Board‟s changes exceed this limitation, it must be submitted to the Council for review
accompanied by an actuarial report; if the Council rejected a subsidy set by the Board,
“the Council shall determine the amount, if any, by which the subsidy shall be increased
and shall adopt this increase by resolution”; and if the Board fails to act timely to grant an
increase or if the Council desires to approve an increase in excess of the amount
authorized by the Board, the Council retains the right to establish by ordinance the
maximum subsidy.
VI.    2006 to 2011 Board Subsidy Increases
       From 2006 to 2011, the Board, exercising the delegation of authority granted to it
“to increase or decrease the maximum monthly amount of the health insurance subsidy,”
increased the subsidy each year.3 On March 3, 2011, the Board voted to increase the
monthly subsidy to $1,097.41 effective July 1, 2011.
VII.   2011 Freeze Ordinance
       On July 25, 2011, the Council passed Ordinance No. 181814 (Freeze Ordinance),
adding a new section 4.1166 to the Los Angeles Administrative Code which froze the
maximum subsidy at “the rate in effect as of July 1, 2011.” (L.A. Admin. Code, §
4.1166.) The freeze applied to employees who retired after July 15, 2011, who opted not
to make a contribution for vesting increases in the maximum subsidy as allowed by an
applicable memorandum of understanding. The Freeze Ordinance stated that “[t]he
freeze established by this Section may be revisited periodically by the City Council, with
appropriate discussions with the affected labor organizations, to determine whether, in
the Council‟s discretion, the freeze may be lifted or adjusted in light of improving
economic conditions, or other factors.”

       3
        Specifically, the Board passed resolutions to increase the amount of the monthly
subsidy from $735.38 in 2005 to $782.44 in 2006, to $837.21 in 2007, to $895.81 in
2008, to $958.52 in 2009, and to $1,025.62 in 2010.

                                              5
VIII. Letters of Agreement With Unions
       Between June and August 2011, the City entered into Letters of Agreement
(LOA‟s) with the unions representing fire fighters and police officers.4 The LOA‟s
recited that “the parties have a dispute as to whether retiree health benefit increases
provided in the Los Angeles Administrative Code („LACC‟) are a vested benefit” and
described the freeze on the subsidy. Thus, “in order to resolve this dispute and in mutual
efforts to provide permanent and stable funding for the retiree health benefit,” members
of the unions would have the “option to voluntarily contribute a maximum of two percent
(2%) of their base salary to [the pension plan] to defray a portion of the City‟s cost of
providing retiree health benefits,” and the parties agreed that employees who opted in “to
make the two percent (2%) maximum contribution from their base salary shall be entitled
to receive upon retirement the retiree health benefit in effect as of the date of the effective
date of this LOA and thereafter the maximum amount of each annual increase presently
authorized by the LACC” and the “entitlement to retiree health benefits increases shall be
a vested right for those employees.”5
IX.    Opt-In Ordinance
       On October 5, 2011, the City Council passed Ordinance No. 181893 (Opt-In
Ordinance) which amended section 4.1166 of the Administrative Code to reflect that the
freeze did not apply to “[e]mployees who irrevocably opt to make voluntary Additional
Contributions in exchange for vested rights to increase in subsidies . . . .”

       4
        The Los Angeles Police Protective League entered an LOA dated June 24, 2011,
the United Firefighters of Los Angeles City entered an LOA dated July 1, 2011, the Los
Angeles Port Police Association entered an LOA dated July 30, 2011, the Los Angeles
Port Police Command Officers Association entered an LOA dated August 5, 2011, the
Los Angeles Police Command Officer‟s Association entered an LOA dated August 9,
2011, and Los the Angeles Fire Chief Officer‟s Association entered an LOA dated
August 9, 2011.
       5
         The meaning of the LOA‟s language is the subject of another litigation. (Los
Angeles Police Protective League v. Board of Fire and Police Pension Commissioners
for the City of Los Angeles (June 24, 2014, B247539) [nonpub. opn.].)

                                              6
                                 Procedural Background
       On November 1, 2012, respondents on appeal—four City employees in the fire
and police departments and the Los Angeles Retired Fire & Police Association, Inc.—
filed a petition for writ of mandate, as well as a complaint for promissory estoppels,
restitution, violation of the Charter, injunctive relief and declaratory relief. The petition
alleged that through the Freeze Ordinance and the Opt-In Ordinance (Ordinance Nos.
181814 & 181893), the City “permanently froze the maximum health insurance premium
subsidy available” to police officers and firefighters who retire after July 14, 2011, and
made periodic increases to the subsidy contingent on the employee‟s agreement to make
a contribution of their post-tax salary and that these ordinances impaired the “vested
contractual rights of these employees to receive increases to the subsidy without the
payment of any additional contribution” in violation of the California Constitution.
According to the petition, the 1974 Charter Amendment created a “vested benefit” based
on the analysis of the then city attorney and a later city attorney. Similarly, the petition
contended that upon enactment of the 2005 Charter Amendment and the Delegation
Ordinance (Ordinance No. 177630), police officers and firefighters earned “a vested
contractual right to the system for providing increases to the maximum monthly health
insurance subsidy conferred by those legislative changes.” According to the petition, the
City “has not—through legislation or otherwise—reserved the right to freeze or impair in
any manner” the subsidy and the Freeze Ordinance and Opt-In Ordinance “impermissibly
impair the vested contractual rights” of respondents. Thus, pursuant to Article I, section
9 of the California Constitution which prohibits the passage of any “law impairing the
obligation of contracts,” the petition seeks writ of mandate compelling the City “to
provide increases” to the subsidy without regard to the Freeze Ordinance and the Opt-In
Ordinance or to stay enforcement of those ordinances.
       After briefing and argument, the trial court on July 28, 2014, ruled on the petition
granting in part respondents‟ request for a writ of mandate. The trial court rejected
respondents‟ “assertion that they have a vested right to increases in the amount of the
health insurance subsidy.” However, the trial court granted a writ “authorizing the Board

                                              7
to exercise the discretion delegated to it under LAAC § 4.1154(e), notwithstanding
LAAC § 4.1166‟s freeze” and explained that the basis for the grant was the trial court‟s
“determination that § 4.1166 is unconstitutional as it substantially impairs Petitioners‟
vested right to a health insurance subsidy.” The trial court noted that the writ “only
permits the Board to disregard § 4.1166; it does not mandate any other action.”6
       On September 5, 2014, the writ of mandate was entered authorizing the Board “to
exercise the discretion delegated to it under [the Delegation Ordinance] without regard to
[the Freeze and Opt-In Ordinances].” The City timely appealed.
       On November 3, 2014, the City filed in this Court a petition for a writ of
supersedeas and other relief with this Court seeking a stay of the trial court‟s writ of
mandate. After a temporary stay and briefing, we issued a writ of supersedeas on
November 12, 2014. Our order stated, “[e]xecution of the September 5, 2014 order of
respondent court and all further trial proceedings . . . are hereby stayed pending appeal.”

                                       DISCUSSION
       The City contends that the trial court‟s grant of a writ of mandate was in error
because the City Charter grants the City Council the authority to set the amount of the
subsidy and, as a consequence, the Delegation Ordinance can neither restrict the
Council‟s authority nor create a vested right to a Board-determined subsidy as such
would conflict with the Charter. We agree and reverse.
I.     Standard of Review
       Under Code of Civil Procedure section 1085, subdivision (a), the trial court may
issue a writ of mandate “to any . . . person . . . to compel the performance of an act which
the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel
the admission of a party to the use and enjoyment of a right or office to which the party is
entitled, and from which the party is unlawfully precluded by that . . . board, or person.”

       6
          The court took no action on respondents‟ claims for promissory estoppels and
restitution, transferring those matters for assignment to a general trial court for “all
matters not related to the writ.”

                                              8
“A traditional writ of mandate under Code of Civil Procedure section 1085 is a method
for compelling a public entity to perform a legal and usually ministerial duty. [Citation.]
The trial court reviews an administrative action pursuant to Code of Civil Procedure
section 1085 to determine whether the agency‟s action was arbitrary, capricious, or
entirely lacking in evidentiary support, contrary to established public policy, unlawful,
procedurally unfair, or whether the agency failed to follow the procedure and give the
notices the law requires. [Citations.] „Although mandate will not lie to control a public
agency‟s discretion, that is to say, force the exercise of discretion in a particular manner,
it will lie to correct abuses of discretion. [Citation.] In determining whether an agency
has abused its discretion, the court may not substitute its judgment for that of the agency,
and if reasonable minds may disagree as to the wisdom of the agency‟s action, its
determination must be upheld. [Citation.]‟” (Klajic v. Castaic Lake Water Agency
(2001) 90 Cal. App. 4th 987, 995, fn. omitted.)
       “„In reviewing a trial court‟s judgment on a petition for writ of ordinary mandate,
we apply the substantial evidence test to the trial court‟s factual findings.‟ [Citation.]
Thus, foundational matters of fact are conclusive on appeal if supported by substantial
evidence.” (Klajic v. Castaic Lake Water Agency, supra, 90 Cal.App.4th at pp. 995-996.)
We independently review findings on legal issues and the interpretation of a statute is a
legal issue subject to de novo review. (Farahani v. San Diego Community College Dist.
(2009) 175 Cal. App. 4th 1486, 1491.)
II.    Contract Clause
       “Under the California Constitution, a „law impairing the obligation of contracts
may not be passed.‟ (Cal. Const., art. I, § 9.) Similarly, under the federal Constitution,
„No state shall . . . pass any . . . law impairing the obligation of contracts . . . .‟ (U.S.
Const., art I, § 10, cl. 1.)” (San Bernardino Public Employees Assn. v. City of Fontana
(1998) 67 Cal. App. 4th 1215, 1222.) The contracts clause limits the power of public
entities to, by enacting a law, unilaterally modify their own contracts with other parties.
       The terms and conditions of public employment—unlike those of private
employment—are generally established by statute or ordinance, rather than by contract.

                                                9
(White v. Davis (2003) 30 Cal. 4th 528, 564.) However, “with regard to at least certain
terms or conditions of employment that are created by statute, an employee who performs
services while such a statutory provision is in effect obtains a right, protected by the
contract clause, to require the public employer to comply with the prescribed condition.”
(Id. at pp. 564-565.) California law treats a pension as an element of compensation
which is a vested contractual right. (Id. at p. 565; Betts v. Board of Administration (1978)
21 Cal. 3d 859, 863.) “„By entering public service an employee obtains a vested
contractual right to earn a pension on terms substantially equivalent to those then offered
by the employer.‟” (California Assn. of Professional Scientists v. Schwarzenegger (2006)
137 Cal. App. 4th 371, 383.)
   However, obtaining a vested contractual right to earn a pension upon acceptance of
public employment does not mean that all terms governing the pension system then in
effect become vested contractual rights of the employee. “[A]n employee may acquire a
vested contractual right to a pension but . . . this right is not rigidly fixed by the specific
terms of the legislation in effect during any particular period in which he serves.” (Kern
v. City of Long Beach (1947) 29 Cal. 2d 848, 855.) Thus, we must analyze “[t]he nature
and extent of the city‟s obligation” as ascertained from the language of the pension
provisions and the judicial construction of similar legislation. (Id. at p. 850.)
       “Under well recognized principles of law, a legislative act which would, if
construed to be a contract, limit or extinguish the power of the government completely to
control the subject matter of the enactment, will not be so construed unless the legislative
intention to create a contract clearly appears, and all doubts must be resolved in favor of
the continuance of the power of the government.” (Taylor v. Board of Education (1939)
31 Cal. App. 2d 734, 742; United States Trust Co. v. New Jersey (1977) 431 U.S. 1, 17, fn.
14 [statute will be treated as a contract with binding obligations when the statutory
language and circumstances accompanying its passage clearly “evince a legislative intent
to create private rights of a contractual nature enforceable against the State”].) “„Thus, it
is presumed that a statutory scheme is not intended to create private contractual or vested
rights and a person who asserts the creation of a contract with the state has the burden of

                                               10
overcoming that presumption.‟” (Retired Employees Assn. of Orange County, Inc. v.
County of Orange (2011) 52 Cal. 4th 1171, 1185-1186, 1888 [in deciding whether private
contractual rights should be implied from legislation, a court should “„proceed cautiously
both in identifying a contract within the language of a . . . statute and in defining the
contours of any contractual obligation‟”].) In other words, a party asserting a violation of
the contract clause must show a clear and unambiguous constitutional violation. (Floyd
v. Blanding (1879) 54 Cal. 41, 43.)
         Here, the trial court correctly rejected respondents‟ contention that they had a
vested right to increases in the subsidy. As the trial court noted, the Delegation
Ordinance granted the Board discretion to change the level of the subsidy and placed a
cap on the amount of any increase, but did not require that the subsidy increase. The trial
court nonetheless found that respondents had a vested right to a subsidy as determined by
the Board exercising discretion under the Delegation Ordinance. The City contends the
trial court erred in granting the writ of mandate on this basis because, inter alia, the
Delegation Ordinance did not create a vested right to a Board-determined subsidy. We
agree.
         The 2005 Charter Amendment eliminated the limits on the Council‟s authority to
set the subsidy from the 1974 Charter Amendments which in effect capped the maximum
possible subsidy to the lower of the civilian retiree subsidy or the active police officer
and firefighter subsidy; instead the new charter amendments granted the Council broad
authority, stating that “[t]he Council may establish by ordinance the maximum subsidy
payments for beneficiaries under any programs established by the Council . . . .”
(Charter, art. XI, §§ 1330(c), 1428(c), 1518(c) & 1618(c).) Significantly, the 2005
Charter Amendment also removed the delegation in the 1974 Charter Amendments to the
Board of Pension Commissioners the discretion to increase or decrease the subsidy under
conditions delineated in those amendments; instead, under the 2005 Charter
Amendments, it now provided that “[t]he Council may by ordinance authorize the Board
to increase or decrease the subsidy payments pursuant to factors, standards, and
limitations prescribed in the ordinance.” (Charter, art. XI, §§ 1330(e), 1428(e), 1518(e)

                                               11
& 1618(e).) In other words, the “factors, standards, and limitation” to be considered by
the Board in increasing or decreasing the subsidy payments would be prescribed by the
Council in an ordinance just as the authority—if any—of the Board to make increases or
decreases to the subsidy would be authorized by the Council in an ordinance.
       Exercising its authority under the 2005 Charter Amendment to set the subsidy
amount, the City Council passed the Subsidy Ordinance establishing that the subsidy “is
fixed at $735.38 per month” effective July 1, 2005. The Subsidy Ordinance did not
provide for a fluctuating subsidy amount and did not set any schedule for when the
subsidy would be reviewed for possible increase or decrease, and it also did not exercise
the City Council‟s authority under the 2005 Charter Amendment to delegate to the Board
the authority to change the subsidy amount.
       A year later, in 2006, the City Council passed the Delegation Ordinance which,
after noting that the subsidy then in effect was fixed at $735.38, authorized the Board to
make discretionary changes to the amount. The Delegation Ordinance, inter alia,
delegated to the Board authority to making changes on an annual basis beginning in
2006, but limited the Board‟s authority by capping any discretionary increase by the
Board to the lesser of actuarial assumed rate for medical inflation7 or 7 percent unless the
Board submitted the change to the Council, and reserved to the City Council the right to
reject the Board‟s subsidy amount and for the Council to set the subsidy by resolution.
The Delegation Ordinance states that “[n]otwithstanding the authority given to the Board
in this subsection, the Council retains the right to establish, by ordinance, the maximum
monthly subsidy either if the Board fails to act timely to grant an increase or if the
Council desires to approve an increase in excess of the amount authorized by the Board.”
Thus, while the Delegation Ordinance described situations in which the Council might re-
assert its authority to set the subsidy despite or instead of a decision from the Board, it
did not state that the delegation of authority to the Board was absolute or in perpetuity or

       7
         The Delegation Ordinance set a cap only on the allowable increase in the subsidy
as set by the Board in its discretion; it did not prescribe a formula that automatically set
the increase at the rate of the medical inflation with a 7 percent cap.

                                              12
that the Council was divesting itself of authority to set the subsidy under other
circumstances.8
       Generally, “legislation in California may be said to create contractual rights when
the statutory language or circumstances accompanying its passage „clearly “. . . evince a
legislative intent to create private rights of a contractual nature enforceable against the
[governmental body].”‟” (Retired Employees Assn. of Orange County, Inc., supra, 52
Cal.4th at p. 1187.) Taken together, the 2005 Charter Amendments and the later Subsidy
Ordinance and Delegation Ordinance do not evince a “legislative intent” to create a
vested right to a Board-determined subsidy amount. Rather, they evince an intent to
reserve to the City Council the final decision authority over the subsidy.
       The cases cited by the trial court and respondents are not to the contrary. In
Carrancho v. California Air Resources Board (2003) 111 Cal. App. 4th 1255, 1268, the
court held that mandamus may be used to compel an agency to exercise its discretion, but
not to force the exercise of the discretion in any particular manner or to reach a particular
result. Thus, while the case affirmed the power of the courts to compel the exercise of
discretion when such discretion is authorized by legislation, it does not address whether
legislation authorizing the use of discretion creates a vested right so that the authorizing
legislation cannot be unilaterally modified by the public entity. In Valdes v. Cory (1983)
139 Cal. App. 3d 773, 782, 787, the statute from which the vested right arose provided that
the rates for public employer contributions to fund pension benefits “shall be adjusted
thereafter from time to time by the board pursuant to actuarial valuation of the liability
for benefits” and thus did not involve the exercise of discretion by the board in setting the
contribution rates. (See Board of Administration v. Wilson (1997) 52 Cal. App. 4th 1109,
1119 [the relevant statute directed the board to make actuarial calculations of the funds
and liabilities of the system and the appropriate contribution rates to achieve equality and
therefore did not involve the exercise of discretion by the board]; Int’l Ass’n of

       8
         Indeed, as amicus curiae League of California Cities notes, a delegation of
legislative function to an unelected body requires adequate safeguards such as the
revocability of such delegation.

                                              13
Firefighters v. City of San Diego (1983) 34 Cal. 3d 292, 299-300 [based on valuations and
actuarial tables, board to revise rates of employee contributions as necessary to provide
the benefits].)
       By passing the Freeze Ordinance in July 2011, the City Council in effect revoked
its delegation of authority to the Board, exercised its own discretion and authority to set
the subsidy, and fixed the subsidy at the July 1, 2011 amount. These actions were within
the City Council‟s authority under the 2005 Charter Amendments. The Freeze Ordinance
maintains the Council‟s discretion to set the subsidy amount, stating that the “freeze
established by [it] may be revisited periodically by the City Council . . . to determine
whether, in the Council‟s discretion, the freeze may be lifted or adjusted . . . .” To the
extent respondents assert a vested right to an annual discretionary review of the subsidy
amount by the Council, the 2005 Charter Amendment does not require that the Council
exercise its discretion on any set schedule. However, we note that when delegating the
authority to set the subsidy to the Board, the City Council prescribed an annual review for
the discretionary changes. (L.A. Admin. Code, § 4.1154, subd. (e).) Based on this
ordinance, the City Council presumably viewed an annual review to be a reasonable
interval and we agree.
       While freezing the subsidy may have been appropriate under the circumstances
existing in July 2011, the City Council must continue to reasonably exercise its discretion
to set the subsidy, including reviewing the subsidy to determine what changes to the
subsidy, if any, are appropriate. An obligation to review the subsidy does not equate to
an obligation to increase the subsidy and we make no prejudgment on how the Council
exercises its broad discretion to set the subsidy.
       The trial court erred in granting respondents‟ petition for a writ of mandamus.
“The requirement of a „clear showing‟ that legislation was intended to create the asserted
contractual obligation [citation] should ensure that neither the governing body nor the
public will be blindsided by unexpected obligations.” (Retired Employees Assn. of
Orange County, Inc., supra, 52 Cal.4th at pp. 1188-1189.) Respondents did not carry

                                              14
their heavy burden of demonstrating a clear intent in the Delegation Ordinance to create a
vested right to a Board-determined subsidy.

                                      DISPOSITION
       The order granting the writ of mandate is reversed. The matter is remanded to the
trial court for proceedings consistent with this opinion. Appellant is to recover its costs
on appeal.
       CERTIFIED FOR PUBLICATION

                                                   CHANEY, Acting P. J.

We concur:

              JOHNSON, J.

              LUI, J.

                                              15