08-004766 City Of Wilton Manors, Florida, For The Benefit Of The City Of Wilton Manors Pension Plan For General Employees And Police vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Monday, June 15, 2009.

Summary: City's retirement plan was not rendered ineligible to receive premium tax distributions when the plan's board of trustees failed to hold an election, as required by statute, on whether a new plan should be established for police only.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF WILTON MANORS, FLORIDA, )

FOR THE BENEFIT OF THE CITY OF )

WILTON MANORS PENSION PLAN FOR )

GENERAL EMPLOYEES AND POLICE, )

)

Petitioners, )

)

vs. ) Case No. 08-4766

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

) )

Respondent. )

CITY OF WILTON MANORS POLICE )

(2000), )

)

Petitioner, )

) Case Nos. 09-0933

vs. ) 09-0934

) 09-0935

DEPARTMENT OF MANAGEMENT ) 09-0936

SERVICES, DIVISION OF ) 09-0937

RETIREMENT, ) 09-0938

)

Respondent. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

April 16, 2009, at sites in Tallahassee and Lauderdale Lakes,

Florida.

APPEARANCES

For Petitioner: Robert D. Klausner, Esquire

Adam P. Levinson, Esquire

Klausner & Kaufman, P.A.

10059 Northwest 1st Court

Plantation, Florida 33324

For Respondent: Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue in this case is whether a city, which sponsors a

retirement plan covering its general employees and police

officers, became ineligible to receive funds that the state

distributes for the benefit of police pensions when, in 1999,

the board of trustees for the retirement plan failed to hold an

election affording the member police officers a chance to vote

on whether a new plan for police officers only should be

established.

PRELIMINARY STATEMENT

By letter dated November 29, 2000, Respondent Department of

Management Services, Division of Retirement, notified Petitioner

City of Wilton Manors that premium tax revenues collected in the

1999 tax year for the purpose of providing funds for the benefit

of the local pension plan covering Petitioner's general

employees and police officers would not be distributed as in

previous years, because (Respondent alleged) the pension plan

was no longer in compliance with Chapter 185 of the Florida

Statutes. Petitioner timely requested a formal hearing to

contest the withholding of such funds.

Respondent did not immediately grant the request for

hearing because the parties agreed that all reasonable efforts

to resolve the dispute besides litigation should be exhausted.

In time, various solutions were proposed, but the parties were

unable to settle the matter. Meantime, years passed, and

Respondent continued annually to withhold the premium tax

distribution that otherwise would have been payable for the

benefit of Petitioner's pension plan, were Respondent to deem

the plan in compliance with Chapter 185.

On September 23, 2008, Respondent forwarded the case to the

Division of Administrative Hearings ("DOAH"), where it was

assigned Case No. 08-4766. While Case No. 08-4766 was pending,

Respondent transmitted to DOAH six additional requests for

hearing, which Petitioner had timely filed, on an annual basis,

in connection with Respondent's withholding of the monetary

distributions associated with tax years 2000 through 2005.

These cases——assigned Case Nos. 09-0933, 09-0934, 09-0935, 09-

0936, 09-0937, and 09-0938——were consolidated, together with

Case No. 08-4766. Each case presented the very same dispute,

and this Recommended Order applies to all of them.

The final hearing on the consolidated cases took place as

scheduled, after several continuances, on April 16, 2009.

Petitioner called as its witnesses Theora Braccialarghe, Brenda

Clanton, and Patricia Shoemaker. Petitioner's Exhibits 1, 4-7,

9-12, and 14-16 were received in evidence as well. Respondent

elicited testimony from Patricia Shoemaker and Joseph Gallegos.

In addition, Respondent's Exhibits 1-28 were admitted into

evidence.

The final hearing transcript, comprising two volumes, was

filed on May 4, 2009. Each party submitted a Proposed

Recommended Order in compliance with the deadline (May 26, 2009)

that had been established at hearing.

FINDINGS OF FACT

1. The City of Wilton Manors (the "City") is an

incorporated municipality located in Broward County, Florida.

The City has a population of about 12,000 and occupies

approximately two square miles.

2. In its capacity as an employer, the City established a

General Employees' And Police Officers' Retirement Plan (the

"Plan"). The Plan is a defined benefits pension plan covering

both the City's general employees and police officers.

(Hereafter, the categorical description of the Plan will be

"combined local law plan.") The terms and conditions of the

Plan are set forth in ordinances adopted by the City Commission.

3. Exercising an authority conferred by statute on

municipalities that provide retirement benefits to police

officers, the City imposed on insurance companies an excise tax

against premiums earned on casualty insurance policies covering

property situated within its municipal boundaries. Such premium

taxes are remitted to the Florida Department of Revenue and

transferred to the Police and Firefighters' Premium Tax Trust

Fund, which is overseen by the Division of Retirement (the

"Division"). The Division is responsible for making annual

distributions of the tax revenues to municipalities, such as the

City, which impose the premium tax. The premium tax revenues

are to be used exclusively to fund retirement benefits for

police officers. (There is a companion premium tax program for

the benefit of municipal firefighter pensions.)

4. In 1999, the Florida Legislature substantially amended

Chapter 185 of the Florida Statutes. 1 (Chapter 175, Florida

Statutes, which governs municipal firefighter pensions, was

similarly amended in 1999, in the same legislation that amended

Chapter 185.)

5. One of the newly enacted statutory provisions, namely

Section 185.05(b)3., Florida Statutes (1999), gave instructions

regarding the composition of boards of trustees——the bodies

responsible for administering pension plans subject to the

requirements of Chapter 185. The relevant statutory language

will be examined in detail below. One sentence, however, must

be quoted in full here to provide context for the findings of

fact which follow:

Any board of trustees operating a local law

plan on July 1, 1999, which is combined with

a plan for general employees shall hold an

election of the police officers, or police

officers and firefighters if included, to

determine whether a plan is to be

established for police officers only, or for

police officers and firefighters where

included.

§ 185.05(b)3., Fla. Stat. (1999).

6. The Division interpreted (and continues to understand)

Section 185.05(b)3 as requiring municipalities, such as the

City, whose combined local law plans as of July 1, 1999, covered

both general employees and police officers (or police officers

and firefighters), to establish a new plan for police officers

(or police officers and firefighters) only , i.e. no general

employees included——or forfeit the opportunity to continue

receiving distributions of premium tax revenue.

7. By letter dated April 27, 1999, the Division notified

the Plan's board of trustees (the "Board") of the new law, under

which the Board would need to "hold an election of the police

officers" if, as the Division believed (and as was in fact the

case), the Plan covered both general employees and police

officers.

8. The Board did not hold an "election of the police

officers." 2 The evidence is insufficient to support a finding as

to why the Board failed to carry out this particular statutory

duty. Ultimately, however, while it would be interesting to

know this fact, the reason for the Board's inaction is

irrelevant.

9. The City Commission never created a retirement plan for

police officers only, which would have entailed amending the

existing Plan (to remove the police officers) in addition to

establishing a new pension (for the police officers). Efforts

to set up a police-only plan ultimately failed due to concerns

that administering two plans in place of the existing one would

be too expensive.

10. By letter dated November 29, 2000, the Division

informed the City's mayor that the Division was withholding

payment of the City's share of the premium tax revenue for 1999,

based on the Division's determination that the Plan was no

longer in compliance with Chapter 185, Florida Statutes, due to

its inclusion of general employees. It was (and remains) the

Division's position that combined local law plans, which provide

benefits for general employees in addition to police officers

(or police officers and firefighters), do not conform to minimum

statutory requirements——and hence are ineligible to receive

funding pursuant to the premium tax program, even though such

plans had been acceptable before 1999 and, like the Plan, had

received premium tax monies for years preceding that date.

Consistent with its position, the Division since 2000 has

refused annually to distribute premium tax revenue to the City.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569 and 120.57(1), Florida Statutes (2008).

12. As the party asserting that the City's rights and

benefits under Chapter 185, Florida Statutes, are forfeit, the

Division bears the burden of proof in this proceeding. See ,

e.g. , Florida Department of Transportation v. J.W.C. Co., Inc. ,

396 So.2d 778, 788 (Fla. 1st DCA 1981). Because none of the

material historical facts relevant to the instant case is

genuinely in dispute, however, neither the burden of proof nor

the standard of proof (preponderance of the evidence) is outcome

determinative.

13. The statutory framework supporting the premium tax

program for assisting municipalities with the funding of police

pensions is composed of several statutes which can be understood

without explanation. Key provisions will be quoted below.

14. To begin, the power to adopt a new retirement plan, or

to amend an existing plan, belongs to the municipality (or, in

some cases, but not this one, the legislature). Section

185.35(2), Florida Statutes (1999) 3 , provides as follows:

No retirement plan or amendment to a

retirement plan shall be proposed for

adoption unless the proposed plan or

amendment contains an actuarial estimate of

the costs involved. No such proposed plan

or proposed plan change shall be adopted

without the approval of the municipality or,

where permitted, the Legislature. Copies of

the proposed plan or proposed plan change

and the actuarial impact statement of the

proposed plan or proposed plan change shall

be furnished to the division prior to the

last public hearing thereon. Such statement

shall also indicate whether the proposed

plan or proposed plan change is in

compliance with s. 14, Art. X of the State

Constitution and those provisions of part

VII of chapter 112 which are not expressly

provided in this chapter.

(Emphasis added.)

15. If a municipality establishes a pension plan for

police officers, Chapter 185 applies, according to its plain

language:

This act applies to all municipalities,

chapter plans, local law municipalities, or

local law plans presently existing or to be

created pursuant to this chapter. Those

plans presently existing pursuant to s.

185.35 and not in compliance with the

provisions of this act must comply no later

than December 31, 1999. However, the plan

sponsor of any plan established by special

act of the Legislature shall have until July

1, 2000, to comply with the provisions of

this act, except as otherwise provided in

this act with regard to establishment and

election of board members. The provisions

of this act shall be construed to establish

minimum standards and minimum benefit

levels, and nothing contained in this act or

in chapter 185 shall operate to reduce

presently existing rights or benefits of any

police officer, directly, indirectly, or

otherwise.

§ 185.39, Fla. Stat. (There is no dispute that the Plan is a

"local law plan" as that term is used in Chapter 185.)

16. The authority to assess a premium tax is grounded in

Section 185.08(1), Florida Statutes, which provides as follows:

Each incorporated municipality . . . may

assess and impose on every insurance

company, corporation, or other insurer now

engaged in or carrying on, or who shall

hereafter engage in or carry on, the

business of casualty insurance as shown by

records of the Department of Insurance, an

excise tax in addition to any lawful license

or excise tax now levied by each of the said

municipalities, respectively, amounting to

.85 percent of the gross amount of receipts

of premiums from policyholders on all

premiums collected on casualty insurance

policies covering property within the

corporate limits of such municipalities,

respectively.

17. To receive distributions of premium tax revenue, the

plan sponsor must ensure that its plan conforms to the minimum

"benefits and standards" prescribed in Chapter 185:

For any municipality, chapter plan, local

law municipality, or local law plan under

this chapter, in order for municipalities

with their own pension plans for police

officers, or for police officers and

firefighters where included, to participate

in the distribution of the tax fund

established pursuant to s. 185.08, local law

plans must meet the minimum benefits and

minimum standards set forth in this

chapter[.]

§ 185.35, Fla. Stat.

18. Regarding the collection and distribution of revenue

obtained via the premium tax, Section 185.10, Florida Statutes,

provides:

(1) The Department of Revenue shall keep a

separate account of all moneys collected for

each municipality under the provisions of

this chapter. All moneys so collected must

be transferred to the Police and

Firefighters' Premium Tax Trust Fund and

shall be separately accounted for by the

division. The moneys budgeted as necessary

to pay the expenses of the division for the

daily oversight and monitoring of the police

officers' retirement plans under this

chapter and for the oversight and actuarial

reviews conducted under part VII of chapter

112 are annually appropriated from the

interest and investment income earned on the

moneys collected for each municipality or

special fire control district and deposited

in the Police and Firefighters' Premium Tax

Trust Fund. Interest and investment income

remaining thereafter in the trust fund which

is unexpended and otherwise unallocated by

law shall revert to the General Revenue Fund

on June 30 of each year.

(2) The Comptroller shall, on or before

July 1 of each year, and at such other times

as authorized by the division, draw his or

her warrants on the full net amount of money

then on deposit pursuant to this chapter in

the Police and Firefighters' Premium Tax

Trust Fund, specifying the municipalities to

which the moneys must be paid and the net

amount collected for and to be paid to each

municipality, respectively. The sum payable

to each municipality is appropriated

annually out of the Police and Firefighters'

Premium Tax Trust Fund. The warrants of the

Comptroller shall be payable to the

respective municipalities entitled to

receive them and shall be remitted annually

by the division to the respective

municipalities. In lieu thereof, the

municipality may provide authorization to

the division for the direct payment of the

premium tax to the board of trustees. In

order for a municipality and its retirement

fund to participate in the distribution of

premium tax moneys under this chapter, all

the provisions shall be complied with

annually, including state acceptance

pursuant to part VII of chapter 112.

(Emphasis added.)

19. Municipalities are not required to participate in the

premium tax program. Section 185.60, Florida Statutes, states:

A municipality may revoke its participation

under this chapter by rescinding the

legislative act, or ordinance which assesses

and imposes taxes authorized in s. 185.08,

and by furnishing a certified copy of such

legislative act, or ordinance to the

division. Thereafter, the municipality

shall be prohibited from participating under

this chapter, and shall not be eligible for

future premium tax moneys. Premium tax

moneys previously received shall continue to

be used for the sole and exclusive benefit

of police officers, or police officers and

firefighters where included, and no

amendment, legislative act, or ordinance

shall be adopted which shall have the effect

of reducing the then-vested accrued benefits

of the police officers, retirees, or their

beneficiaries. The municipality shall

continue to furnish an annual report to the

division as provided in s. 185.221. If the

municipality subsequently terminates the

defined benefit plan, they shall do so in

compliance with the provisions of s. 185.37.

20. Boards of trustees have particular powers and duties,

including the following:

The sole and exclusive administration of,

and the responsibilities for , the proper

operation of the retirement trust fund and

for making effective the provisions of this

chapter are vested in the board of trustees ;

however, nothing herein shall empower a

board of trustees to amend the provisions of

a retirement plan without the approval of

the municipality. The board of trustees

shall keep in convenient form such data as

shall be necessary for an actuarial

valuation of the retirement trust fund and

for checking the actual experience of the

fund.

§ 185.06(4), Fla. Stat. (emphasis added).

21. Boards of trustees, moreover, are empowered to operate

independently. Section 185.31 provides as follows:

In the enforcement and interpretation of the

provisions of this chapter for any

municipality, chapter plan, local law

municipality, or local law plan under this

chapter, each municipality shall be

independent of any other municipality, and

the board of trustees of the municipal

police officers' retirement trust fund of

each municipality shall function for the

municipality which they are to serve as

trustees. Each board of trustees shall be

independent of each municipality for which

it serves as board of trustees to the extent

required to accomplish the intent,

requirements, and responsibilities provided

for in this chapter.

(Emphasis added.)

22. Section 185.05, Florida Statutes, addresses the

subject, among others, of the composition of boards of trustees.

Paragraph (b) of this Section——specifically subparagraph 3 of

such paragraph——is at the heart of the instant dispute and

provides as follows:

(b) The membership of boards of trustees

for local law plans shall be as follows:

1. If a municipality has a pension plan for

police officers only, the provisions of

paragraph (a) shall apply.

2. If a municipality has a pension plan for

police officers and firefighters, the

provisions of paragraph (a) shall apply,

except that one member of the board shall be

a police officer as defined in s. 185.02 and

one member shall be a firefighter as defined

in s. 175.032, respectively, elected by a

majority of the active firefighters and

police officers who are members of the plan.

3. Any board of trustees operating a local

law plan on July 1, 1999, which is combined

with a plan for general employees shall hold

an election of the police officers, or

police officers and firefighters if

included, to determine whether a plan is to

be established for police officers only, or

for police officers and firefighters where

included. Based on the election results, a

new board shall be established as provided

in subparagraph 1. or subparagraph 2., as

appropriate. The municipality shall enact

an ordinance to implement the new board by

October 1, 1999. The newly established

board shall take whatever action is

necessary to determine the amount of assets

which is attributable to police officers, or

police officers and firefighters where

included. Such assets shall include all

employer, employee, and state contributions

made by or on behalf of police officers, or

police officers and firefighters where

included, and any investment income derived

from such contributions. All such moneys

shall be transferred into the newly

established retirement plan, as directed by

the board.

With respect to any board of trustees

operating a local law plan on June 30, 1986,

nothing in this paragraph shall permit the

reduction of the membership percentage of

police officers or police officers and

firefighters.

23. As mentioned earlier, the Division understands Section

185.05(b)3., Florida Statutes, to require, when it applies, that

a municipality timely create a new retirement plan, one which

does not cover general employees. Further, according to the

Division, if the municipality fails to comply with this supposed

mandate, then the Division must deem the municipality's existing

plan noncompliant with Chapter 185——and bar the municipality

from participating in the premium tax program.

24. Neither Section 185.05(b)3, however, nor any other

provision of Chapter 185, explicitly mandates that a combined

local law plan must be split in all circumstances on pain of

forfeiting future distributions of tax revenue. The undersigned

concludes that the Division, in attempting to implement the

plain language of Section 185.05(b)3, has misread the statute,

which, though not the best written law in the books, is

nevertheless comprehensible according to the everyday meaning of

the words comprising it, without resorting to legal

interpretation. This conclusion will be supported by a closer

examination of the Division's position, which follows, and by a

discussion of the statute's unambiguous meaning, further below.

25. The Division's interpretation of Section 185.05(b)3

runs into trouble almost immediately, inasmuch as the clear

directive to the affected boards of trustees——which is, to "hold

an election" to "determine whether a new plan is to be

established"——is seemingly at odds with the idea that the

legislature intended to mandate that every combined local law

plan be split (or lose the tax revenue). After all, if the

legislature had meant to require that a new plan be established,

why would it have compelled any board of trustees to hold an

election to determine whether the required new plan is to be

established? Such an election would appear to serve no useful

purpose.

26. Nevertheless, according to the Division, 4 if the

existing combined local law plan covered general employees and

police officers, but not firefighters, as does the Plan, then

the police officer-members needed to vote in an election held by

the board of trustees. Their only government-approved choice,

however, would be to cast their ballots in favor of establishing

a new plan for police officers only. If the police officer-

members voted yes to such a plan, then the city would be

required to establish the new plan, or be precluded from

receiving future distributions of tax revenue. If, on the other

hand, the police officer-members voted no to the notion of a

new, police-only plan, then the city would be required to

establish the new plan anyway (thereby thwarting the will of the

voters), or be precluded from receiving future distributions of

tax revenue.

27. The election was to offer additional state-sanctioned

choices, contends the Division, if the existing combined local

law plan covered general employees, police officers, and

firefighters. In that event, the police officer-members and

firefighters together would vote on whether to establish: (a) a

new plan for police officers only; (b) a new plan for

firefighters only 5 ; (c) a new plan for police officers and

firefighters combined; or (d) a new plan for police officers

only and a new plan for firefighters only. If "option c"

claimed the most votes, then the city would be required to

establish a new plan for police officers and firefighters, or be

precluded from receiving future distributions of tax revenue.

If "option d" received a majority (or plurality) of the votes,

then the city would need to set up two new plans, one for police

only and another for firefighters only, unless it preferred to

combine the police officers and firefighters in a single plan,

which the Division would approve.

28. But if the voters preferred "option a" or "option b,"

then the city would be in a quandary because, according to the

Division, local law plans covering both general employees and

police officers (or firefighters) would not be in compliance

with Chapter 185 (or Chapter 175). Thus, if the voters elected

either "option a" or "option b"——which comprise half of the

statutorily permissible outcomes according to the Division——the

city would have to ignore the election results and proceed with

"option c" or "option d," or be precluded from receiving future

distributions of tax revenue.

29. Finally, if a majority (or plurality) of the police

officer-members and firefighter-members voted for no change in

the status quo, then the city would be required, under the

Division's interpretation, to establish a new plan anyway, or be

precluded from receiving future distributions of tax revenue.

30. As the Division conceives the "election" called for in

Section 185.05(b)3., Florida Statutes, then, it is a proceeding

in which the government tells the voters how they should vote,

if not quite how they must vote. But this is not how elections

are commonly understood to work in this country. The

inescapable conclusion is that the Division's interpretation of

the statute subverts the plain and ordinary meaning of the word

"election," which is ordinarily used to describe a proceeding

wherein voters freely and without governmental coercion or

control make meaningful choices concerning public policies and

personnel. The Florida Legislature would not likely have used

the term "election" as the Division would apply it.

31. The Division's interpretation also reverses the

meaning of the subordinate clause which introduces the second

sentence of Section 185.05(b)3, namely: "Based on the election

results . . . ." The Division effectively reads this to mean:

regardless of the election results. There are two

insurmountable problems with the Division's position. First, in

everyday discourse, the words "based on" connect one thing to

another, whereas the term "regardless of" severs or

disassociates things. No one fluent in the English language,

therefore, would use the words "based on" to denote the concept

"regardless of." Second, to allude to an earlier point, the

clause regardless of the election results is jarring, because in

this country election returns are understood to count, always ,

not merely when the outcomes please the politicians. 6 To direct

that an election be held whose outcome was to be of no practical

use would make a mockery of the electoral process; the Florida

Legislature would not have done that.

32. So, what does Section 185.05(b)3., Florida Statutes,

plainly mean, if not what the Division contends? Recall the

first sentence:

Any board of trustees operating a local law

plan on July 1, 1999, which is combined with

a plan for general employees shall hold an

election of the police officers, or police

officers and firefighters if included, to

determine whether a plan is to be

established for police officers only, or for

police officers and firefighters where

included.

This sentence tells clearly that certain boards of trustees (but

not, significantly, municipalities )——i.e. those boards operating

combined local law plans as of July 1, 1999——must hold an

election.

33. The purpose of the election is unambiguously stated as

being "to determine whether a plan is to be established . . . ."

The term whether is a conjunction that plainly signifies a

question involving alternatives. The alternatives here are

clear: whether or not to voice approval for the establishment

of a new plan. 7

34. The voters in this election are to be "police

officers, or police officers and firefighters if included

. . . ." The statutory language is somewhat awkward on this

point. At first blush, the phrase "if included" might be taken

to mean that firefighters can vote in the election if the board

of trustees decides to include them. This, however, is plainly

not what was meant, as the context makes clear. The intended

meaning is that firefighters will get to vote if they are

included (together with police officers and general employees)

in the combined local law plan. If firefighters are not

included in the combined local law plan, then they do not get to

vote on the question at hand, which in that event does not

concern them.

35. The new plan under consideration in the election is

one to be established for the benefit of "police officers only,

or for police officers and firefighters where included." Here,

again, the language is a bit clumsy, but ultimately unambiguous.

The potential for confusion arises from the tendency to

associate the conjunction or with the earlier appearing

conjunction whether , which a casual reader might reasonably be

inclined to do given that "whether" and "or" are correlative

conjunctions. Making such an association here would lead one to

believe that the question to be put before the electorate is a

choice between either (a) approving a new plan for police

officers only or (b) approving a new plan for

police縪�⠡뗪. In other words, one might think that the

voters should be asked to express a preference for one of two

possible new plans——as opposed to voting on whether or not there

should be a new plan.

36. The problem with associating whether and or in this

instance is that doing so ignores the phrase "where included" at

the end of the sentence. Indeed, if the choice for the voters

were whether to approve (a) a new plan for police officers only

or (b) a new plan for police縪�⠡뗪, then the phrase

"where included" would be surplusage, adding nothing but the

potential to cause confusion. In contrast, the words "where

included" make sense, and are not mere surplusage, when

understood to correlate with the preceding conjunction or .

Under this reading, which is the correct one, the word or

signals an alternative which applies only where firefighters are

"included." Hence, the intended meaning of the words "where

included" clearly is: "where firefighters are included in the

electorate because they are covered under the existing combined

local law plan." In that event, a new plan, if established,

would cover, not police officers only, but, alternatively, both

police officers and firefighters together.

37. In sum, in any given election under Section

185.05(b)3., Florida Statutes, there is only one new-plan option

on the table, and that option is intended to match the

electorate, which will consist either of police officers or

police縪�⠡뗪, depending on whether firefighters are

covered under the existing combined local law plan. If police

only are voting (because firefighters are not included in the

combined local law plan), their choice is between these two

alternatives: approve/disapprove a new plan for police only.

If, on the other hand, the voters are police縪�⠡뗪

(because firefighters, being covered under the combined local

law plan, are included in the electorate), then their choice is

between these two alternatives: approve/disapprove a new plan

for police縪�⠡뗪. 8

38. The second and third sentences of Section 185.05(b)3.,

Florida Statutes, address the consequences of an election, as

follows:

Based on the election results, a new board

shall be established as provided in

subparagraph 1. or subparagraph 2., as

appropriate. The municipality shall enact

an ordinance to implement the new board by

October 1, 1999.

39. The subordinate clause "[b]ased on the election

results" was examined above, where the Division's interpretation

of the language was shown to be incorrect. What this adverbial

clause actually does, according to its plain terms, is tell

under what condition a new board is to be established. The

draftsmanship here, to be sure, is not as precise as it might

have been. The statute, however, plainly describes a

governmental response to the will of the electorate that, if

"[b]ased on the election results" as required, makes sense only

if the voters approved a new plan. (Obviously, if the voters

elected not to support the establishment of a new plan, then a

new board for such rejected plan could not be formed "[b]ased on

the election results," but only in contravention of the election

results.)

40. Properly understood in context, therefore, the sense

of the words "based on" here is: depending on or contingent on .

Thus, a new board shall be established based on the election

results if the voters approved a new plan . The idea behind the

foregoing italicized proviso is necessarily implicit in the

statutory language.

41. The statute, regrettably, is silent as to what must

happen next after the voters disapprove the creation of a new

plan. The logical response to such an outcome, however, would

be, not to move full steam ahead with creating a new plan, but

to take no further action to implement the rejected idea. The

legislature might have considered this so obvious as to render

superfluous any instruction on the matter. 9

42. The third sentence requires the municipality to adopt,

on or before October 1, 1999, an ordinance "implementing" the

new board. (Presumably this also requires the municipality to

enact ordinances amending the existing combined local law plan

and establishing the new police-only or police縪�⠡뗪

plan). Clearly, however, the statutory duty to enact such

ordinances belongs to a municipality only if a new board must be

established based on the election results.

43. The remaining sentences address actions to be taken by

the newly established board. These sentences do not bear on the

disposition of the instant dispute.

44. The operation of Section 185.05(b)3., Florida

Statutes, can be summarized as follows. Each board of trustees

operating a combined local law plan on July 1, 1999, was

required to hold an election. In this election, the police

officer-members of the combined local law plan would vote to

approve or disapprove the establishment of a new retirement plan

for police only. (If firefighters, too, were covered under the

combined local law plan, then the police officer- and

firefighter-members, collectively, would vote to approve or

disapprove the establishment of a new retirement plan for

police縪�⠡뗪.) If the voters approved the establishment

of a new plan, then, based on the election results, the

municipality would be required to create a new plan and form a

new board of trustees, by October 1, 1999. If, on the other

hand, the voters disapproved the establishment of a new plan,

then, based on the election results, the municipality could do

nothing and be fully in compliance with the statute.

45. As found above, it is a fact that the Board never held

an election as required under Section 185.05(b)3. It was

plainly the Board's independent duty to conduct the election,

however, not the City's . Whether the Board's failure to carry

out its responsibility to hold an election exposed the Board to

civil or administrative sanctions is of no moment here, for that

question was not presented and need not be decided. What

matters is that nothing in Chapter 185 or elsewhere in the

Florida Statutes authorizes the Division to take punitive

action, such as withholding premium tax revenue, against the

City for the Board's noncompliance with the statute. 10

46. The City, for its part, was under no obligation to

hold an election, nor was it required, much less authorized, to

take action against the Board to compel the Board to perform its

duty in this regard. Indeed, the City had no duty to take any

action with regard to the establishment of a new board or plan

except based upon the election results, which results (if

favorable to the establishment of a new plan) clearly and

unambiguously constitute a condition precedent to the City's

statutory obligation to split its combined local law plan (or

possibly forfeit the premium tax revenue). Because there was no

election (due to the Board's neglect of duty), the City never

needed to form a new board or establish a new plan.

Consequently, the City did not violate Chapter 185 by not

establishing a new plan.

47. Because the City, in the absence of an election held

in accordance with Section 185.05(b)3., Florida Statutes, was

not obligated to split its Plan, the Plan itself cannot be

deemed noncompliant with Chapter 185, even though the Plan

continues to extend benefits to general employees as well as

police officers.

48. In sum, the City has demonstrated that its Plan

remained in compliance with Chapter 185 at all times in dispute.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, enter a Final Order

determining that the General Employees' and Police Officers'

Retirement Plan of the City of Wilton Manors is in compliance

with Chapter 185, Florida Statutes, and that the City is now,

and at all times relevant to this dispute has been, eligible to

participate in the distribution of premium tax revenue. It is

further recommended that the Division of Retirement cause all of

the premium tax revenue that has been withheld from the City of

Wilton Manors to be released for the benefit of the General

Employees' and Police Officers' Retirement Plan. Finally,

because the prevailing party in this proceeding is entitled to

recover litigation costs and reasonable attorney's fees pursuant

to Section 185.05(5), Florida Statutes, it is recommended that

the Division of Retirement, in its Final Order, make an

appropriate award thereof, unless a genuine dispute of material

fact arises concerning the amount of such award, in which event

the matter should be referred to the Division of Administrative

Hearings for a formal hearing.

DONE AND ENTERED this 15th day of June, 2009, in

Tallahassee, Leon County, Florida.

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.stae.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of June, 2009.

ENDNOTES

1 / See 1999 Fla. Laws ch. 99-1.

2 / In or around December 2004, the Broward County Police

Benevolent Association ("PBA") apparently polled the City's

police officers, who reportedly voted in favor of a police-only

pension plan. There is no evidence suggesting that this

"election" was held under the aegis of the Board——or that the

Board had anything to do with it. The PBA's poll therefore did

not, in fact, satisfy the Board's obligation to conduct an

election.

3 / Hereafter, unless otherwise provided, all statutory citations

will reference the 1999 Florida Statutes.

4 / The undersigned has attempted to describe the Division's

position fairly and accurately. The testimony offered by the

Division at hearing on this subject, however, was equivocal and

sometimes inconsistent, making it difficult for the undersigned

to nail down with precision the Division's understanding of the

statute.

5 / See § 175.061(b)3., Fla. Stat.

6 / There is, to be sure, such a thing as a non-binding election

or referendum, the outcome of which is advisory or consultative

in nature. When this type of an election is held, however, it

is (or should be) clearly described as such. Thus, if the

legislature had intended that the election called for under

Section 185.05(b)3., Fla. Stat., be a non-binding referendum, it

surely would have said so explicitly. And even if this were the

legislature's intent, conducting a non-binding election on a

policy matter that had already been decided (as here, according

to the Division) would be frivolous, and directing a

municipality to take a particular action regardless of a non-

binding election would be an insult to the electorate. At

bottom, even a non-binding election is supposed to be

meaningful.

7 / In view of the Division's interpretation of the statute, it

should be noted that the indefinite article " a " is used before

the noun plan , which signifies that such plan is unspecified.

If the legislature were requiring the establishment of a new

plan (as the Division maintains), it would have made better

sense, grammatically, to use the definite article " the " before

the word plan , because in that event there would have been a

specific referent, namely the statutorily required plan .

8 / At the risk of belaboring the point, it can be added that, if

police officers only are voting, they do not have the option of

voting in favor of (or against) a new plan for

police縪�⠡뗪. Likewise, if the electorate consists of

police縪�⠡뗪, the voters in that event do not have the

option of voting in favor of (or against) a new plan for police

officers only.

9 / Another reason, perhaps, for the legislature's silence on the

matter of what to do if the voters reject the new-plan option is

that the legislature wanted to avoid encouraging (or appearing

to require) inaction on the municipality's part. Keep in mind

that, notwithstanding the election results, the municipality

would still be free at any time to establish a new plan on its

own initiative, if it wanted to——not because of a statutory

duty, but for reasons of its own.

10 / There can be no doubt that the withholding of premium tax

distributions penalizes the City, not the Board or the members

of the Plan. This is because, as the Plan sponsor, the City is

ultimately responsible for funding all promised benefits and

paying the associated administrative expenses. See , e.g. , Art.

Stat.; § 112.64, Fla. Stat; § 112.66(8), Fla. Stat. When

deprived of the premium tax money, therefore, the City must use

other revenue in its budget to cover the shortfall.

COPIES FURNISHED :

Robert D. Klausner, Esquire

Adam P. Levinson, Esquire

Klausner & Kaufman, P.A.

10059 Northwest 1st Court

Plantation, Florida 33324

Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

Kerry L. Ezrol, Esquire

Goren, Cherof, Doody & Ezrol, P.A.

3099 East Commercial Boulevard

Suite 200

Fort Lauderdale, Florida 33308

Sarabeth Snuggs, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315-9000

John Brenneis, General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.