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CITY ALLENTOWN v. LOCAL 302 (07/23/86)

decided: July 23, 1986.

THE CITY OF ALLENTOWN, APPELLANT,
v.
LOCAL 302, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, ET AL., APPELLEES



Appeal from the Order of the Commonwealth Court Dated September 6, 1984 at No. 1569 C.D. 1982 which Reversed the Order of the Court of Common Pleas of Lehigh County (Backenstoe, J.) Dated June 7, 1982 at No. 81-C-888

COUNSEL

Richard DiSalle, Washington, Joseph L. Rosenfeld, City Solicitor, and Jack I. Kaufman, Asst. City Solicitor, Allentown, for appellant.

Ronald Lucas, Harrisburg, for amicus Pa. League of Cities.

Nicholas J. Marcucci, Harrisburg, for amicus Municipal Retirement Systems.

Stephen C. Richman, Philadelphia, for appellees.

Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Papadakos, J., did not participate in the consideration or decision of this case. Larsen, J., filed a concurring opinion.

Author: Zappala

[ 511 Pa. Page 277]

Opinion

The Commonwealth Court has determined that under the Pennsylvania Municipal Retirement Law, 53 P.S. §§ 881.101-881.501, a municipality may not maintain more than one pension system for its firemen. Consequently, the court held invalid the actions of the Appellant, City of Allentown, closing enrollment in the City's Paid Firemen's Pension Fund (Pension Fund) as of July 8, 1976 and mandating enrollment of all firemen hired after that date in the Pennsylvania Municipal Retirement System (Retirement System). Because of the importance of the question for municipalities throughout the Commonwealth, we granted allocatur to review this interpretation of the statute.

In 1969 the City of Allentown passed Ordinance No. 11576 establishing the Paid Firemen's Pension Fund. Subsequent collective bargaining agreements between the City and Local 302 of the International Association of Firefighters, including the agreement in effect between January 1, 1976 and December 31, 1977, made reference to this Pension Fund. In 1976, with the passage of Ordinance No. 12185, the City closed membership in the Pension Fund and elected to join the Retirement System established by the Pennsylvania Municipal Retirement Law, Act of February 1, 1974, P.L. 34, No. 15, 53 P.S. §§ 881.101-881.501. As a result of this act all firemen hired after June 8, 1976 were ineligible for membership in the Pension Fund and were required to participate in the Retirement System.

This action was commenced on July 27, 1977 with the filing of a Petition for Review in the Commonwealth Court. The Appellees Roxberry, Sell, and Klechner, three firemen hired after the effective date of Ordinance No. 12185, and Local 302, their union, sought an order declaring the Ordinance invalid, construing the collective bargaining agreement

[ 511 Pa. Page 278]

    so as to require the City to enroll all firefighters, including those hired after June 8, 1976 in the Pension Fund, and enjoining the Pennsylvania Municipal Retirement Board from accepting further contributions for the Retirement System on their behalf. Resort to the grievance procedure provided for in the collective bargaining agreement was waived by the parties. Commonwealth Court determined that it had neither original nor appellate jurisdiction and transferred the case to the Court of Common Pleas of Lehigh County. That court dismissed the action against the Board for lack of jurisdiction. Having received a stipulation of facts and cross-motions for summary judgment, the court determined that the City's actions did not violate the contractual rights of the Union or its individual members. The court also held that the Pennsylvania Municipal Retirement Law permitted the City to maintain the local Pension Fund for those firemen enrolled prior to June 8, 1976, and join the Retirement System for all firemen hired after that date. Because of the absence of any factual dispute, the court granted the City's motion for summary judgment and denied the summary judgment motion of the Petitioners/Appellees. As previously noted, the Commonwealth Court reversed based on a contrary reading of the statute.

The Pennsylvania Municipal Retirement Law provides in part:

§ 881.303. Existing local retirement systems and compulsory membership.

Where a municipality elects to join the system established by this act, and is then maintaining a retirement or pension system or systems covering its employes in whole or in part, those employes so covered, and employes thereafter eligible to join such pension system, shall not become members of the retirement system established by this act, unless at the time the municipality elects to join the system, the members of each such existing retirement or pension system shall, by the affirmative vote of seventy-five per cent of all the members of each pension

[ 511 Pa. Page 279]

    system, elect to be covered by the retirement system established by this act. At any time thereafter, within a period of three years after the municipality has elected to join the system, but not thereafter, the members of an existing retirement or pension system may, in like manner, elect to join the system established by this act . . . .

No liability, on account of retirement allowances or pensions being paid from any retirement or pension fund of the municipality, shall attach against the fund, except as provided in the agreement, making a transfer of an existing system in accordance with this section. The liability to continue payment of pensions not so transferred shall attach against the municipality, which shall annually make appropriations from its tax revenues sufficient to pay the same. In cases where workers covered by an existing retirement or pension system elect to join the system created by this act, the election to join shall be deemed to have been made at the time the municipality elected to join the system, and the liabilities of the municipality shall be fixed accordingly.

If a municipality elects to cover its municipal firemen under the provisions of the system created by this Article III, then each municipal fireman shall be required to become a member of the system.

If a municipality elects to cover its municipal police under the provisions of the system created by this Article III, then each municipal policeman shall be required to become a member of the system.

[ 511 Pa. Page 280]

    relevant pension law covering that class of municipality. The other requirements of this section for joining the system shall be observed.

The foundation of the Commonwealth Court's analysis is the third paragraph of this section. The court read this language to mean that under no circumstances could two retirement systems exist for municipal firemen; either all firemen would be required to be covered by the Retirement System or none of the firemen could be so covered. Finding that this section is "clear and can be interpreted in only one manner," the court applied the rule of statutory construction which holds that "[w]hen the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit," 1 Pa.C.S. § 1921(b), and concluded that the City's Ordinance attempting to enroll only new firemen in the Retirement System was invalid. Given this interpretation of paragraph three, the court's implicit understanding of the first paragraph was that a municipality's decision to join the Retirement System could not become effective without an affirmative vote of seventy-five per cent of the members of the existing pension fund. Maj.op. at p. 278-279.

The City argues that the Commonwealth Court erred by interpreting the third paragraph of Section 881.303 in a way which conflicts with other provisions of the statute when an interpretation avoiding conflict and giving effect to all provisions is available. See 1 Pa.C.S. § 1921(a). The City reads the first and final paragraphs of the Section as indicating statutory approval of the existence of more than one pension plan for firemen. The first sentence is read as simply providing the means by which an existing plan might be joined into the Retirement System after the municipality has elected to enroll other employees in the Retirement System; the seventy-five per cent vote is understood as an affirmative act unrelated to the municipal decision, ...


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