Borders v. City of Atlanta

In the Supreme Court of Georgia
Decided: November 2, 2015
S15A0816. BORDERS et al. v. CITY OF ATLANTA et al.
HINES, Presiding Justice.
This is an appeal in a class action challenging a 2011 City of Atlanta
(“City”) ordinance (“Ordinance”) and the consequent amendment
(“Amendment”) by the City of its three defined benefit pension plans (“Plans”),
i.e., the City’s General Employees’ Pension Plan; the City’s Police Officers’
Pension Plan; and the City’s Firefighters’ Pension Plan; the Ordinance and
Amendment increased the percentage of salary required as the annual
contributions of the members of the Plans.1 The action, filed against the City,
the Mayor, and members of the Atlanta City Council (collectively
“Defendants”), is on behalf of City employees who participated in the Plans
prior to November 1, 2011, and had not retired prior to that date, which was the
1
The terms of the Plans are set forth in the Related Laws division of the Atlanta City Code
(“City Code”), specifically City Code Part I [Charter and Related Laws], Subpart B [Related Laws
Division], and Chapter 6 [Pensions].
start date for the increase, and were otherwise subject to the Amendment
(“Plaintiffs”).2 For the reasons which follow, we affirm the grant of summary
judgment in favor of Defendants on Plaintiffs’ claims of breach of contract and
unconstitutional impairment of contract and their consequent requests for
declaratory and injunctive relief.
As noted, the Plans are defined benefit pension plans. As such, they
provide each eligible member3 with a monthly income upon retirement for the
remainder of the member’s life and a monthly income to the member’s surviving
eligible beneficiary, if applicable, for the remainder of the surviving eligible
beneficiary’s life. The member’s annual benefit amount is a percentage of the
member’s annual salary, and is calculated at retirement by using a pre-
determined formula.4
Prior to November 1, 2011, members were required to contribute 7% of
their annual salary to their pension plan if they did not have a designated eligible
2
The class is comprised of more than 6,000 Plaintiffs.
3
The Plaintiffs are all eligible members.
4
The benefit formula for all three Plans calculates an annual pension amount by multiplying
the member’s years of service by a multiplier established in the pension plan in which the employee
is enrolled.
2
beneficiary, and 8% of their annual salary to their pension plan if they had a
designated eligible beneficiary. The contributions were made subsequent to
enrollment in the Plans, as memorialized by the execution of enrollment cards
at the onset of employment. The Plans, as they existed at the time of Plaintiffs’
enrollments, contained provisions (collectively “Enrollment Provisions”) which
stated that the receipt of an executed enrollment or application card would
constitute the irrevocable consent of the applicant to participate under the
provisions of the governing act, as amended, or as might thereafter be amended.
On June 29, 2011, the City enacted Atlanta Ordinance 11-O-0672, which
amended the Plans. Section 5 of the Ordinance, inter alia, increased Plaintiffs’
prospective annual contributions to the Plans by an additional 5% of the
member’s annual compensation.5 Section 9 of the Ordinance further provided
that members’ contributions might be increased by an additional 5%, up to 17%
or 18% of their annual compensation, if the City’s actual required contributions
5
The Ordinance provides in Section 5 (d) (2) in pertinent part:
Beginning on November 1, 2011, each DB [defined benefit] Plan Participant
hired prior to that date shall contribute 12% of his/her Compensation to the
applicable DB Plan if [he/she] does not have a designated beneficiary, and
shall contribute 13% of [his/her] Compensation to the applicable DB Plan if
[he/she] does have a designated beneficiary [.]
3
to the Plans exceed 35% of the City’s total payroll.6 The pension contribution
increases were not retroactive and did not change a member’s benefit formula,
calculation of pension benefit, or actual benefit amount payable at the time of
retirement.
The complaint, which was filed on November 14, 2013, alleged that
Defendants breached Plaintiffs’ employment contracts and violated the
impairment clause of the State Constitution (“Impairment Clause”), Ga. Const.
of 1983, Art. I, Sec. I, Par. X,7 when Defendants passed the portions of the
Ordinance which increased the amounts that the Plaintiffs were required to
contribute to the Plans, even though Plaintiffs would receive the same amount
of retirement benefits to which they were already entitled prior to passage of the
Ordinance. Plaintiffs sought a declaration that the subject portions of the
Ordinance violated the Impairment Clause and that Plaintiffs were not required
6
Section 9 of the Ordinance also provides:
In the event that the unfunded liability amount reaches 15% or less, the City may
reduce the DB Plan Participants’ contribution amount through duly enacted
legislation.
7
Ga. Const. of 1983, Art. I, Sec. I, Par. X, provides:
No bill of attainder, ex post facto law, retroactive law, or laws impairing the obligation of
contract or making irrevocable grant of special privileges or immunities shall be passed.
4
to continue to make the increased contributions to the Plans, and an order
enjoining and restraining Defendants from collecting or attempting to collect the
increased contributions. Plaintiffs moved for class certification on November
14, 2013. On January 2, 2014, Defendants filed an answer and motion to
dismiss, or in the alternative, motion for summary judgment. On March 20,
2014, Plaintiffs filed a motion for partial summary judgment on the issue of
Defendants’ liability. A consent order certifying the suit as a class action was
entered on April 3, 2014. Following a hearing on the motions on May 15, 2014,
the superior court entered on November 10, 2014, the “final order”8 now at
issue, denying Plaintiffs’ motion for partial summary judgment and granting
summary judgment to Defendants. The superior court did so after concluding
that government employees and their beneficiaries have no vested rights in an
unchanged benefit plan where the pension or retirement plan at issue
8
On December 26, 2014, Defendants filed a motion for attorney fees and expenses of
litigation pursuant to OCGA § 9-15-14, which was pending at the time of this appeal. Also,
following the filing of their notice of appeal, Plaintiffs filed in superior court a motion for new trial
based upon alleged newly discovered evidence, specifically, a 2009 letter written by then Atlanta
mayor, Shirley Franklin, which purported to acknowledge that the City could not legally decrease
existing employees’ pension benefits. The superior court denied the motion on February 18, 2015,
after finding that the letter was of no legal relevance or material evidentiary value. That ruling is not
before us for consideration.
5
unambiguously provides for subsequent modification or amendment, and that
there was no ambiguity in the City’s Enrollment Provisions - that they clearly
authorized the City to amend the Plans without breaching Plaintiffs’
employment contracts or violating the Impairment Clause.
Plaintiffs’ claims of breach of their employment contracts and violation
of the Impairment Clause, in the context of litigation such as this, are subject to
the same analysis inasmuch as allegations of violation of the Impairment Clause
have historically been treated as raising breach of contract issues. City of East
Point v. Seagraves, 240 Ga. App. 852, 854 (1) (524 SE2d 755) (1999); see also
Pulliam v. Ga. Firemen's Pension Fund, 262 Ga. 411 (419 SE2d 918) (1992).
The analysis must begin with the recognition that municipal corporations
are creations of the State, and therefore, have only those powers that have been
expressly or impliedly granted to them. Porter v. City of Atlanta, 259 Ga. 526(1) (384 SE2d 631) (1989). Such powers are delegated by the State via the State
Constitution, State laws, and municipal charters. Id. In such context, assessing
the validity of a city ordinance generally involves a two-step process: the first
inquiry is whether the city possessed the power to enact the ordinance at issue,
6
and if the power exists, the second question is whether the exercise of that
power is clearly reasonable. Id.I. City’s Power to Enact Ordinance
Ga. Const. of 1983, Art. IX, Sec. II, Par. II provides “home rule” for
municipalities, that is:
The General Assembly may provide by law for the
self-government of municipalities and to that end is
expressly given the authority to delegate its power so
that matters pertaining to municipalities may be dealt
with without the necessity of action by the General
Assembly.
The State Constitution also explicitly confers upon municipalities
authority in regard to maintaining and modifying retirement or pension systems,
e.g., a municipality has:
[t]he power to maintain and modify heretofore existing retirement
or pension systems, including such systems heretofore created by
general laws of local application by population classification, and
to continue in effect or modify other benefits heretofore provided
as a part of or in addition to such retirement or pension systems and
the power to create and maintain retirement or pension systems for
any elected or appointed public officers and employees whose
compensation is paid in whole or in part from county or municipal
funds and for the beneficiaries of such officers and employees.
7
Ga. Const. of 1983, Art. IX, Sec. II, Par. III (a) (14).
In addition, the General Assembly has expressly authorized municipalities
to establish and finance retirement systems and to provide retirement and
pension benefits. OCGA § 36-34-2 (4) confers upon the governing body of any
municipal corporation,
[t]he power to establish merit systems, retirement
systems, and insurance plans for all municipal
employees and to establish insurance plans for school
employees of independent municipal systems and to
provide the method or methods of financing such
systems and plans; . . .
(Emphasis added.) Furthermore, OCGA § 36-35-4 (a), in relevant part,
authorizes a municipal corporation’s governing authority to provide retirement
and pension benefits:
The governing authority of each municipal corporation
is authorized to . . . provide . . . retirement, and pension
benefits, . . .for its employees, their dependents, and
their survivors . . . .
And, subsection (d) of OCGA § 36-35-4 defines the terms “retirement”
and “pension” as used in subsection (a) of the statute,
As used in subsection (a) of this Code section, the
words “retirement” and “pension” shall mean
8
termination from municipal service with the right to
receive a benefit based upon all or part of such
municipal service in accordance with the terms of the
ordinance or contract pursuant to which the
municipality provides for payment of such benefits.
(Emphasis added.) Thus, the cited legislation explicitly contemplates that
a municipal corporation’s provision of retirement or pension benefits to its
employees be read in conjunction with the terms of local law and ordinances,
that is, that such provision of benefits be supplemented by local law such as that
contained in the Code of the City of Atlanta (“City Code”) and the Charter of
the City of Atlanta (“City Charter”). Duty Free Air & Ship Supply Co./Franklin
Wilson Airport Concession, Inc. v. City of Atlanta, 282 Ga. 173, 174 (646 SE2d
48) (2007).
II. Reasonableness of Ordinance
The pivotal question as to the reasonableness of the exercise of power, i.e.,
the Ordinance, is whether it constitutes a breach of Plaintiffs’ employment
contracts, and consequently, amounts to a violation of the Impairment Clause.
It is certainly true,
that a statute or ordinance establishing a retirement plan
for government employees becomes a part of an
9
employee's contract of employment if the employee
contributes at any time any amount toward the benefits
he is to receive, and if the employee performs services
while the law is in effect; and that the impairment
clause of our constitution . . . precludes the application
of an amendatory statute or ordinance in the calculation
of the employee's retirement benefits if the effect of the
amendment is to reduce rather than increase the
benefits payable. It is not necessary for an application
of this rule that the rights of the employee shall have
become vested under the terms of the retirement plan
while the amendment is in effect. Rather, if the
employee performs services during the effective dates
of the legislation, the benefits are constitutionally
vested, precluding their legislative repeal as to the
employee, regardless of whether or not the employee
would be able to retire on any basis under the plan.
Withers v. Register, 246 Ga. 158, 159 (1) (269 SE2d 431) (1980) (Internal
citations omitted.) However, that is not the end of the inquiry as to any
violation of the employment contracts or the Impairment Clause. Indeed, as the
superior court aptly stated,
where the legislation establishing a pension plan itself
provides that the plan may be subject to modification or
amendment, the participant does not acquire a vested
contractual right in an unchanged plan and the plan
may be amended without breaching employment
contracts or violating the Impairment Clause.
In Pulliam v. Georgia Firemen's Pension Fund, supra, the pensioner, who
10
had been receiving a disability pension from the Georgia Firemen’s Pension
fund for almost 20 years, received notice that his pension would be terminated
as a result of a 1989 statutory amendment which provided for termination of
benefits in the event a pensioner was employed in any capacity at least half-time.
On appeal to this Court, the pensioner, inter alia, contested the legality of the
1989 amendment to the pension statute. He contended that it was error for the
trial court to determine that he had no contractual right to benefits under the
terms of the pension statute as it existed prior to the 1989 amendment; that the
1989 legislation could be applied to him without an unconstitutional impairment
of contract; and that the 1989 amendment did not violate the Georgia statutory
prohibition against retroactive legislation. Pulliam at 412 (1). This Court
observed that all such claims raised the core issue of whether the pensioner had
a property right in the pension benefits, which right could not be taken by
legislative action; relying on Withers v. Register, supra, the pensioner contended
that he did indeed have such a property right. Id. This Court quoted from its
decision in Pritchard v. Bd. of Comm. of Peace Officers Annuity & Benefit Fund
of Georgia, 211 Ga. 57, 59 (84 SE2d 26) (1954), which involved a statutory
11
provision equivalent to that involved in Pulliam:
[Pritchard] paid his money into the fund with the act
providing that it was subject to legislative change and
that he should not have any vested right to annuities or
benefits in the fund. There was no contract that the plan
of annuities and benefits should never be changed. On
the contrary, it was recognized that the legislature
might find it necessary to make changes ....
And, this Court concluded that the constitutional vesting of rights in
pensions is grounded in the principle that pension rights are property and cannot
be taken; however, that they are property because they become part of the
contract of employment. Pulliam at 412 (1). In that case, the provision for
subsequent amendment was part of the contract of employment when the
pensioner entered into it. Id. And, significantly because a benefit that had been
paid to a pensioner was being taken away from the pensioner, the legislative act
not only provided for future change but also expressly stated that members of
the pension fund did not have vested rights to any benefits. Id. This explicit
legislative statement that pensioners did not acquire any vested rights was
likewise the situation in Pritchard. Pritchard supra at 59. Consequently, in both
Pulliam and Pritchard, there was no breach of the contracts or unconstitutional
12
impairment of contract by virtue of the legislative changes.
The present case is not one in which there is an express legislative
statement regarding the acquisition of vested pension rights, or the lack thereof;
however, it is also not a situation in which pension benefits, which have already
been conferred upon pensioners, are being reduced, suspended, or terminated.
In Hartsfield v. Mitchell, 210 Ga. 197 (78 SE2d 493) (1953), a teacher in the
Atlanta School System, pursuant to the Retirement Act of 1927, Ga.L.1927, p.
265, had salary deductions from the effective date of the act, so that he would
have been entitled to receive one-half of the salary he was receiving at the time
of his retirement in 1945, as provided in that act. However, the original act of
1927 was amended in 1935, Ga.L.1935, p. 445, to, inter alia, change the amount
of salary deductions and fix the amount of retirement benefits not to exceed
$100 per month. In 1935, the teacher had signed and filed with the board of
trustees, a written statement containing the clause, “I hereby authorize City
Controller to make necessary deductions from my wages or salary in order that
I may participate in the pension benefits of the 1927 Pension Laws as amended,”
and then approximately ten years later in 1945, signed and filed a similar
13
statement with the board of trustees. This Court determined that such statements
evidenced, inter alia, the teacher’s irrevocable consent to the law as changed by
amendment. Hartsfield v. Mitchell, supra at 197. Subsequent cases have also
focused on the circumstance of the legislative act creating the pension rights or
benefits expressly stating that it is subject to legislative change. See City of E.
Point v. Seagraves, 240 Ga. App. 852 (524 SE2d 755) (1999) (city employee did
not have vested right in retirement plan benefits where retirement plan
specifically provided that city could terminate plan by adoption of ordinance);
DeKalb Cnty. Sch. Dist. v. Gold, 318 Ga. App. 633 (734 SE2d 466) (2012) (the
statute establishing benefits plan for government employees provides that it is
subject to change; therefore, there is no contract that the plan of benefits should
never be changed); Murray Cnty. Sch. Dist. v. Adams, 218 Ga. App. 220 (461
SE2d 228) (1995) (class action by school employees for terminating employer
matching of employees' voluntary contributions to retirement plan for
previously established annuity retirement savings plan; plan itself provided for
future modification or termination, so employees did not have property right in
unchanged benefits); Webb v. Whitley, 114 Ga. App. 153 (150 SE2d 261) (1966)
14
(by executing written statement authorizing deductions from wages for
participation in pension benefits provided by statute as amended, city fireman
irrevocably consented to the law as changed by amendment and surrendered any
right to claim benefits as originally provided by the pension law).
As noted, the General Assembly expressly contemplated that a municipal
corporation’s provision for employee retirement or pension benefits would be
subject to being supplemented by local law, such as that contained in the City
Code and the City Charter. Also as noted, the Plans as set forth in the Related
Laws expressly provide for modification by explicit notice in the Plans’
Enrollment Provisions. The precise language of these Enrollment Provisions
was established by the General Assembly in 1980.9
The City’s General Employees’ Pension Plan set forth in Related Laws §
6-39 states:
The receipt of an applicant’s executed enrollment or
application card by the commissioner of finance or his
agent shall constitute the irrevocable consent of the
applicant to participate under the provisions of this
9
The language of the enrollment provision of the City’s General Employees’ Pension Plan
is set forth in 1980 Ga. Laws 3691, § 1; that of the City’s Police Officers’ Pension Plan is set forth
in 1980 Ga. Laws 3206, § 1; and that of the City’s Firefighters’ Pension Plan is stated in 1980 Ga.
Laws 3204, § 1.
15
Act, as amended, or as may hereafter be amended.
(Emphasis supplied.)
The City’s Police Officers’ Pension Plan set forth in Related Laws §6-223
and the City’s Firefighters’ Pension Plan set forth in Related Laws § 6-368
contain virtually the identical statement, the only language difference being use
of the word “hereinafter” instead of “hereafter.”
As discussed, the statute or ordinance establishing a retirement plan for
government employees becomes part of the employee's employment contract
once the employee makes a contribution toward the benefits the employee is to
receive, and performs services while the law is in effect. Withers v. Register,
supra at 159 (1). Consequently, the Plans which include their legislatively-
established Enrollment Provisions are part of Plaintiffs’ employment contracts,
so the next step in the analysis is an examination of the contractual Enrollment
Provisions, that is, construction of the contracts.
In general,
[t]he construction of contracts involves three steps. At
least initially, construction is a matter of law for the
court. First, the trial court must decide whether the
language is clear and unambiguous. If it is, the court
simply enforces the contract according to its clear
16
terms; the contract alone is looked to for its meaning.
Next, if the contract is ambiguous in some respect, the
court must apply the rules of contract construction to
resolve the ambiguity. Finally, if the ambiguity remains
after applying the rules of construction, the issue of
what the ambiguous language means and what the
parties intended must be resolved by a jury.
City of Baldwin v. Woodard & Curran, 293 Ga. 19, 30 (3) (743 SE2d 381)
(2013), quoting Record Town, Inc. v. Sugarloaf Mills Ltd. Partnership of Ga.,
301 Ga. App. 367, 368 (687 SE2d 640) (2009). As stated, the superior court
found the Enrollment Provisions to be unambiguous in authorizing the City to
amend the Plans. On appeal, this Court’s review of a trial court's construction
of a contract is de novo. Unified Gov't of Athens-Clarke Co. v. Stiles
Apartments, Inc., 295 Ga. 829, 832 (1) (764 SE2d 403) (2014). The cardinal
rule of contract construction is to ascertain the intention of the parties; however,
when the contract terms are clear and unambiguous, the reviewing court looks
solely to the contract itself to determine the parties' intent. Id.; Lloyd's Syndicate
No. 5820 v. AGCO Corp., 294 Ga. 805, 812 (2) (756 SE2d 520) (2014). Here,
the language of the Enrollment Provisions is plain, unambiguous, and capable
of only one reasonable construction in regard to the two points critical to the
17
resolution of the challenge in this case: that the receipt of an applicant’s
executed enrollment or application card evidenced the applicant’s irrevocable
consent to participate in the applicable retirement plan, and that the applicant
would do so under the plan’s governing laws as then amended, or as might be
amended in the future. Thus, Plaintiffs did not acquire a vested contractual right
in a retirement plan unaltered in the manner at issue. Pulliam, supra at 412 (1).
This is so irrespective of the fact that there was no express statement in the
governing laws that participants in the Plans would not have vested rights. See,
e.g., Hartsfield v. Mitchell, supra.; City of E. Point v. Seagraves, supra.; DeKalb
Cnty. Sch. Dist. v. Gold, supra.; Murray Cnty. Sch. Dist. v. Adams, supra.; Webb
v. Whitley, supra. Indeed, in Pritchard, this Court, citing the United States
Supreme Court case, Wright v. Minnesota Mut. Life Ins. Co., 193 U.S. 657 (24
SCt. 549, 48 LEd 832) (1904), stated that even if the appellant pensioner had
vested rights in his plan’s benefits, he had no vested rights to a continuation of
the original plan in all respects. Pritchard at 59. In Pulliam, this Court
explained that,
[t]he basis for the constitutional vesting of rights in
pensions is that the pension rights are property and
18
cannot be taken. However, they are property because
they become part of the contract of employment, and as
this court pointed out in Pritchard, the provision for
subsequent amendment was part of the contract when
appellant entered into it.
Pulliam at 412 (1). This comports with the principle that
[t]o be vested, in its accurate legal sense, a right must be complete
and consummated, and one of which the person to whom it belongs
cannot be divested without his consent. A divestible right is never,
in a strict sense, a vested right.
Merchants' Bank v. Garrard, 158 Ga. 867, 871 (2) (124 SE 715) (1924).
Recently, in Taylor v. City of Gadsden, 767 F3d 1124 (2014), the United
States Court of Appeals for the Eleventh Circuit considered a class action
brought by firefighters against the City of Gadsden, Alabama, and its mayor
challenging increases in the pension contribution rates of firefighters with more
than ten years of creditable service into the state-administered retirement fund
as violative of the Contract Clause of the State and Federal Constitutions.10
10
In the opinion’s introductory paragraph, the Court observed,
This case presents a problem common to most cities in the United States.
Their pension funds have been operating at a substantial loss, and the cities'
long-term liabilities are becoming unfunded at an exponentially increasing
rate. That is, the contributions employees and cities are making to pension
funds – as a percentage of the employees' salaries – are being used to pay the
pensions earned by retirees instead of being set aside and invested for
employees' retirements.
19
Gadsden had raised its employees' pension contributions by 2.5% of their total
compensation pursuant to state legislation mandating the increase for state
employees and permitting, but not requiring, localities to do the same. Id. The
responding lawsuit was brought by a class of Gadsden firefighters whose
contribution rate was raised from 6% to 8.5%; they alleged that such action by
the City of Gadsden impaired the terms of their employment contracts, in
violation of both the United States Constitution and the Alabama Constitution.
Id. at 1126-27. The plaintiff firefighters sought a declaratory judgment and
preliminary and permanent injunctive relief restraining Gadsden from
implementing the increased pension contribution rate of the affected pension
plan participants. Id. at 1131. Upon consideration of cross-motions for
summary judgment, the District Court rejected the constitutional claims and
dismissed the case with prejudice, after finding that the firefighters had failed
to demonstrate that any contractual right had been impaired. Id. at 1127, 1131.
The Eleventh Circuit affirmed the judgment of the District Court after
finding that the increase in the firefighters’ pension contributions did not impair
Id. at 1126.
20
their employment contracts in the contexts of both the United States and
Alabama Constitutions. Id. at 1136. Pretermitting any differences in contract
impairment analysis under federal law and Alabama law, key portions of the
Eleventh Circuit’s analysis are instructive in the present case. Those plaintiffs
argued that the Gadsden firefighters who had complied with certain statutory
requirements possessed a vested right to the 6% employee contribution rate. Id.
at 1134. The Court observed that such argument “[relied] on the assumption that
there exists an implied promise not to raise the employee contribution rate once
a firefighter becomes eligible for retirement benefits.” Id. Noting, inter alia,
that the retirement system employee handbook “explicitly stated that the
‘member contribution rate is determined by statute and subject to change by the
Alabama Legislature,’” the Court then found that “whatever contractual terms
preside over the employment relationship between the [City of Gadsden] and its
firefighters, a promise to refrain from raising contribution rates is not one of
them.” Id. at 1134-1135. This was followed by the Court’s astute observations
that:
the [City of Gadsden] did not alter plaintiffs' pension
benefits; instead, it altered their pension obligations.
21
This distinction – between pension benefits and
pension obligations – is warranted by the well-worn
difference between earned and anticipated
compensation under the Contract Clause. . . . Nothing
in the challenged legislation divests plaintiffs of their
earned pension benefits. Instead, the increased
contribution rate simply reduces plaintiffs' anticipated
compensation by deducting an additional 2.5% from
their future take-home pay. . . . [I]ndirect effects on
pension entitlements do not convert an otherwise
unvested benefit into one that is constitutionally
protected.
Id. at 1135, in part quoting San Diego Police v. San Diego Ret. Sys., 568
F3d 725, 738 (9th Cir.2009) (Internal citations and quotation marks omitted.)
The Eleventh Circuit concluded,
In sum, plaintiffs have no contractual right to a static,
inviolable 6% contribution rate. The City was free to
amend the employee contribution rate without
constitutional consequence.
Taylor v. City of Gadsden, at 1135-1136.
In this case, as in Taylor, the local legislation at issue, i.e., the Ordinance,
did not alter Plaintiffs' pension benefits, but rather modified their pension
obligations, and in no manner divested Plaintiffs of their earned pension
benefits, so as to implicate constitutional concerns. Simply, in the present case,
22
there was no breach of the employment contracts or the Impairment Clause in
the manner urged by Plaintiffs, and therefore, such alleged breach and
impairment fail to provide a basis upon which to find that the Ordinance is
unreasonable. Furthermore, inasmuch as the increases in pension contributions
pursuant to the Ordinance and Amendment were not retroactive and the
Ordinance and Amendment do not alter benefit formulas, calculations of
pension benefits, or the actual benefit amounts payable to the participants at the
time of retirement, such circumstances likewise do not negatively impact the
Ordinance. And, Plaintiffs have not provided any other meritorious legal basis
upon which to find the Ordinance unreasonable.
Accordingly, we conclude that the superior court properly granted
summary judgment in favor of Defendants on Plaintiffs’ claims of breach of
contract and unconstitutional impairment of contract.
Judgment affirmed. All the Justices concur.
23