petition for writ of mandamus

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1 DAVID P. MASTAGNI, ESQ. (SBN 57721) KATHLEEN N. STORM, ESQ. (SBN 244298) 2 JEFFREY R. A. EDWARDS, ESQ. (SBN 265597) STUART K. TUBIS, ESQ. (SBN 278278) 3 MASTAGNI, HOLSTEDT, AMICK, MILLER & JOHNSEN 4 A Professional Corporation 1912 "I’ Street 5 Sacramento, California 95811-3151 Telephone: (916) 446-4692 6 Attorneys for Petitioner 7 Santa Clara County Correctional Peace Officers’ Association 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 IN AND FOR THE COUNTY OF SANTA CLARA 11 12 SANTA CLARA COUNTY CORRECTIONAL ) CASE NO.: PEACE OFFICERS’ ASSOCIATION, ) 13 ) VERIFIED PETITION FOR WRIT Petitioner, ) OF MANDAMUS 14 ) [Code Civ. Proc. § 10851 V. ) 15 COUNTY OF SANTA CLARA; 16 and DOES 1 to 1000, inclusive, 17 Respondents. 18 19 Petitioner, SANTA CLARA COUNTY CORRECTIONAL PEACE OFFICERS’ 20 ASSOCIATION, alleges: 21 1. This case arises from Santa Clara County’s ongoing failure to comply with a 2010 22 decision of the Ca1PERS Board of Administration, resulting in artificially low retirement benefits 23 for retired and soon-to-retire members of the Santa Clara County Correctional Peace Officers’ 24 Association. This action therefore seeks a writ of mandate compelling the County to comply with 25 the final and binding decision, make appropriate adjustments to its reports to Ca1PERS and transfer 26 appropriate funds to CAPERS in order to comply with the decision and make correctional 27 employees whole. Further, the County’s prolonged and unexcused failure to comply with the 28 decision is arbitrary and capricious, warranting an award of attorneys fees and costs. MASTAUNI, 1-IOLSTEDT, MILLER & buNSEN A PROPESSIONAL CORP 1912 I STREET SACRAMENTO, CAUPO[ ’lED PETITION FOR SCCCPOA v. COUNTY OF SANTA CLARA, et al. OF MANDAMUS

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County of Santa Clara to go before Judge in response to not honoring CPOA's 2010 judgment victory for CalPERS 5.75 hours compensation.

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Page 1: Petition for Writ of Mandamus

1

DAVID P. MASTAGNI, ESQ. (SBN 57721) KATHLEEN N. STORM, ESQ. (SBN 244298)

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JEFFREY R. A. EDWARDS, ESQ. (SBN 265597) STUART K. TUBIS, ESQ. (SBN 278278)

3 MASTAGNI, HOLSTEDT, AMICK, MILLER & JOHNSEN

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A Professional Corporation 1912 "I’ Street

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Sacramento, California 95811-3151 Telephone: (916) 446-4692

6 Attorneys for Petitioner

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Santa Clara County Correctional Peace Officers’ Association

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9 SUPERIOR COURT OF THE STATE OF CALIFORNIA

10 IN AND FOR THE COUNTY OF SANTA CLARA

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SANTA CLARA COUNTY CORRECTIONAL ) CASE NO.: PEACE OFFICERS’ ASSOCIATION, )

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) VERIFIED PETITION FOR WRIT Petitioner, ) OF MANDAMUS

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) [Code Civ. Proc. § 10851 V. )

15 COUNTY OF SANTA CLARA;

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and DOES 1 to 1000, inclusive,

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Respondents.

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Petitioner, SANTA CLARA COUNTY CORRECTIONAL PEACE OFFICERS’

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ASSOCIATION, alleges:

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1. This case arises from Santa Clara County’s ongoing failure to comply with a 2010

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decision of the Ca1PERS Board of Administration, resulting in artificially low retirement benefits

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for retired and soon-to-retire members of the Santa Clara County Correctional Peace Officers’

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Association. This action therefore seeks a writ of mandate compelling the County to comply with

25 the final and binding decision, make appropriate adjustments to its reports to Ca1PERS and transfer

26 appropriate funds to CAPERS in order to comply with the decision and make correctional

27 employees whole. Further, the County’s prolonged and unexcused failure to comply with the

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decision is arbitrary and capricious, warranting an award of attorneys fees and costs.

MASTAUNI, 1-IOLSTEDT, MILLER & buNSEN A PROPESSIONAL CORP 1912 I STREET SACRAMENTO, CAUPO[

’lED PETITION FOR SCCCPOA v. COUNTY OF SANTA CLARA, et al. OF MANDAMUS

Page 2: Petition for Writ of Mandamus

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2. SANTA CLARA COUNTY CORRECTIONAL PEACE OFFICERS’

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ASSOCIATION ("CPOA") is and at all times herein mentioned was, the exclusively recognized

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employee organization within the meaning of Government Code section 3501 (b) for employees in

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the County of Santa Clara correctional employees unit, including the Santa Clara County

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classifications Correctional Officer (U85), Sheriff Correctional Officer (U84), Correctional Sergeant

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(U57), Sheriff Correctional Sergeant (U74), Correctional Lieutenant (U53), Sheriff’s Correctional

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Deputy (T84), Sheriffs Correctional Sergeant (T74) and Sheriff’s Correctional Lieutenant (T58)

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("Correctional Employees").

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3. Respondent COUNTY OF SANTA CLARA ("COUNTY") is, and at all times herein

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mentioned was, a political subdivision organized and existing under the laws of the State of

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California and the Charter of the County of Santa Clara. The Public Employment Retirement Law

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("PERL"), and is obligated to comply with the PERL and Santa Clara County Charter,

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4. The COUNTY is, and at all times herein mentioned was, an "employer" within the

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meaning of Government Code section 20030.

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5. The COUNTY is, and at all times herein mentioned was, a "contracting agency"

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within the meaning of Government Code section 20460.

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6. The PERL is enforced by the California Public Employees’ Retirement System

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("Ca1PERS")

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7. The governing body of CaIPERS is the Ca1PERS Board of Administration.

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8. Pursuant to Government Code section 20160 and 20163, the Ca1PERS Board of

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Administration has the power to correct the amount of contribution required of any contracting

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agency and correct any errors affecting covered employee or retiree.

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9. At all times relevant herein, COUNTY has contracted with CaIPERS to provide

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pension benefits to Correctional Employees.

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10. Pursuant to COUNTY’s contract with Ca1PERS, Correctional Employees pension

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benefits are determined, in part, by their highest compensation in any single year. This "single

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highest year" is a measuring year and can occur at any point during an employee’s employment.

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11. An employee’s "single highest year" is one component of the formula that

MASTAUNI, HOLTEDT, 11 K, MILLER &JOIINSEN VERIFIED PETITION FOR SCCCPOA V. COUNTY OF SANTA CLARA et al, A PROFESSIONAL CORPORA ION 1912 ISTREET WRIT OF MANDAMUS 2 SACRAMENTO, CALIFORNIA5811

Page 3: Petition for Writ of Mandamus

determines the employee’s pension benefits. As a result, under-reporting an employee’s

compensation in their single highest year negatively affects other components of the formula and

reduces the pension benefits received by the employees.

12. Most Correctional Employees received more annual compensation before the current

fiscal year than during the current fiscal year.

13. Many Correctional Employees’ highest compensation in a single year occurred

between fiscal years 2003/2004 and 2010/2011.

14. Petitioner is informed and believes and thereon alleges that many Correctional

Employees will retire from service with the COUNTY in the next twelve months.

15. Beginning before January 1, 2003 and continuing until approximately August 2011,

Correctional Employees were regularly assigned to work 85.75 hours per two-week pay period.

16. Beginning before January 1, 2003 and continuing until approximately March 2011,

the COUNTY reported to Ca1PERS only 80 hours of work per two-week pay period performed by

Correctional Employees regularly assigned to work 85.75 hours during the same two-week pay

periods.

17. On or about August 18, 2010, the Ca1PERS Board of Administration adopted as its

decision, the proposed decision In the Matter of the Appeal of the Characterization of Payroll

Pursuant to the "Twelve Plan "Memorandum of Understanding by: COUNTY OF SANTA CLARA,

Ca1PERS Case Number 8511, Office of Administrative Hearings Case Number 2009080309

("Ca1PERS’ Decision"), A true and correct copy of Ca1PERS’ Decision is attached hereto and

incorporated herein as Exhibit A.

18. Ca1PERS’ Decision reads in part:

The determination of the California Public Employees’ Retirement System that the County shall report as compensation all the hours that correctional employees work over 80 and up to 85.75 under the Twelve Plan retroactive to the 2003/2004 fiscal year is SUSTAINED.

19. Pursuant to Government Code sections 11523 and 20134, the COUNTY had thirty

(30) days from Ca1PERS Board of Administration’s adoption of the Ca1PERS Decision to appeal

the decision.

MA$TAONI HOLSTPDT, MILLI9R & JOI2NS19N A PROFESSIONAL CORP 1912 I STREET SACRAMENTO, CAUPO

IED PETITION FOR SCCCPOA v. COUNTY OF SANTA CLARA, et al, OF MANDAMUS 3

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Page 4: Petition for Writ of Mandamus

20, The COUNTY did not appeal the Ca1PERS Decision at any time relevant herein.

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21. The Ca1PERS Decision is final and binding on the COUNTY.

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22. The COUNTY has not complied with CAPERS’ Decision.

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23. As a result of the foregoing, the single highest year of compensation used for

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determining the pension benefits for Correctional Employees who have retired since January 1, 2003

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is artificially low and these Correctional Employees are not receiving the full pension owed to them.

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24. Retired Correctional Employees are currently receiving pension benefits based on

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the COUNTY’s artificially low reported total compensation in their single highest year.

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25. Soon-to-retire Correctional Employees will receive pension benefits based on the

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COUNTY’s artificially low reported total compensation in their single highest year unless the

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COUNTY complies with the Ca1PERS Decision, corrects its reports to Ca1PERS and transfers

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appropriate funds to Ca1PERS.

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FIRST CAUSE OF ACTION

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(Violation of the Government Code sections 20532 and 20831)

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26. Petitioner incorporates each and every allegation above as if set forth fully herein.

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27. The COUNTY is, and at all time herein mentioned was, a contracting agency of the

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California Public Employees’ Retirement System pursuant to Government Code section 20460.

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28. Government Code section 20532 provides:

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The contracting agency shall make the contribution for its employees in this system, as recommended by the actuary and approved by the

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board and certified by it to the contracting agency.

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The contribution may consist of fixed sums, percentages of compensation of contract members, or both, and shall be paid to this

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system as provided in the contract.

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The actual contribution is subject to adjustment by the board as may be necessary on account of any additional prior service credits that

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the contracting agency may desire to provide for its employees in this system or on account of experience under this system as determined

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by periodical investigation, valuation and determination required to be made by the board, including adjustments determined as

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necessary by the board, even after the total contributions determined, plus subsequent adjustments, if any, have been completely paid.

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MASTAGNI, HOLSTEDT, MILLER & JOIINIIIN A PROFESSIONAL CORP 1912 I STREET SACRAMENTO, CALIFOS

lED PETITION FOR OF MANDAMUS

SCCCPOA v. COUNTY OF SANTA CLARA, et a].

Page 5: Petition for Writ of Mandamus

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29. Government Code section 20831 provides:

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Notwithstanding any other provision of law, neither the state, any school employer, nor any contracting agency shall fail or refuse to

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pay the employers’ contribution required by this chapter or to pay the employers’ contributions required by this chapter within the

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applicable time limitations.

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30. Respondents, and each of them, have a clear, present, and ministerial duty to comply

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with Government Code sections 20532 and 20831 by complying with the Ca1PERS Decision,

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correcting the COUNTY’s reports to Ca1PERS and transferring to Ca1PERS appropriate funds

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resulting from the corrected reporting.

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31. Petitioner has a clear, present, and beneficial right to Respondents’ performance of

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this duty to comply with Government Code sections 20532 and 20831 by complying with the

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Ca1PERS Decision, correcting the COUNTY’s reports to Ca1PERS and transferring to Ca1PERS

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appropriate funds resulting from the corrected reporting because Petitioner represents affected

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Correctional Employees on matters related to their employment with the COUNTY, including

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pension benefits.

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32. Respondents, and each of them, breached their duty to comply with Government

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Code sections 20532 and 20831 by failing to comply with the Ca1PERS Decision, failing to correct

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the COUNTY’s reports to Ca1PERS and failing to transfer to Ca1PERS appropriate funds resulting

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from the corrected reporting.

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33. Petitioner has exhausted all available administrative remedies.

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34. No plain, speedy, or other adequate remedy exists at law.

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35. In bringing this action, Petitioner seeks enforcement of an important right affecting

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the public interest which will result in the conferring of a significant benefit upon a large class of

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persons, to wit, Correctional Employees, retired Correctional Employees and their families, thereby

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entitling Petitioner to an award of attorneys’ fees pursuant to Code of Civil Procedure section

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1021.5.

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36. Petitioner is informed and believes and thereon alleges the COUNTY possesses all

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the knowledge and skill necessary to promptly comply with the Ca1PERS decision.

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37. Nonetheless, the COUNTY has failed and refused to comply with the decision.

MAS’TAON, HOLTEDT, AM K, MILLER &JOUNON VERIFIED PETITION FOR SCCCPOA V. COUNTY OF SANTA CLARA et al A PROFESSIONAL CORPORA ION 19121 STREET WRIT OF MANDAMUS 5 SACRAMENTO, CALIFORNIA5811

Page 6: Petition for Writ of Mandamus

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These actions are therefore arbitrary and capricious and Petitioner is entitled to recover attorneys’

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fees pursuant to Government Code section 800.

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(Violation of Government Code section 20636)

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38. Petitioner incorporates each and every allegation above as if set forth fully herein.

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39. COUNTY has, and at all times relevant herein has had, a clear, present, and

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ministerial duty to comply with Government Code section 20636 by correctly reporting to Ca1PERS

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Correctional Employees’ total compensation in any given year.

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40. Petitioner has a clear, present, and beneficial right to COUNTY’s performance of

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this duty to comply with Government Code section 20636 by correctly reportingto Ca1PERS

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Correctional Employees’ total compensation in any given year because Petitioner represents affected

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Correctional Employees on matters related to their employment with the COUNTY, including

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pension benefits.

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41. Since before January 1, 2003 and continuing until approximately March 2011, the

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COUNTY failed to report Correctional Employees’ total compensation in any given year because

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County only reported up to 80 hours of work performed in a two-week pay period even though

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Correctional Employees were regularly scheduled and generally did work more than 80 hours in a

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two-week pay period. The County therefore breached its duty to comply with Government Code

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section 20636.

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42. Petitioner has exhausted all available administrative remedies.

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43. No plain, speedy, or other adequate remedy exists at law.

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44. In bringing this action, Petitioner has seeks enforcement of an important right

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affecting the public interest which will result in the conferring of a significant benefit upon a large

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class of persons, to wit, Santa Clara County employees and their representatives, thereby entitling

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Petitioner to an award of attorneys’ fees pursuant to Code of Civil Procedure section 1021.5.

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45. Petitioner is informed and believes and thereon alleges the COUNTY possesses all

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the knowledge and skill necessary to promptly comply with the Ca1PERS decision,

MASTAUNI HOLSTEDT, MILLER & JOHNSEN A PROFESSIONAL CORN 19121 STREET SACRAMENTO, CALIFOS

]ED PETITION FOR SCCCPOA V. COUNTY OF SANTA CLARA, et al. OF MANDAMUS 6

Page 7: Petition for Writ of Mandamus

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MATAON1 HOLsrRDT, MILLI1R & JOFNS19N A PROFESSIONAL CORP 1912 I STREET SACRAMENTO, CALIFOI

46. Nonetheless, the COUNTY has failed a refused to comply with the decision. These

actions are therefore arbitrary and capricious and Petitioner is entitled to recover attorneys’ fees

pursuant to Government Code section 800.

WHEREFORE, Petitioner prays judgment as follows:

1. For issuance of a Peremptory Writ of Mandate compelling COUNTY to comply with

Ca1PERS decision In the Matter of the Appeal of the Characterization of Payroll Pursuant to the

"Twelve Plan" Memorandum of Understanding by: COUNTY OF SANTA cLARA, CaIPERS Case

Number 8511.

2. For issuance of a Peremptory Writ of Mandate compelling COUNTY to comply with

Government Code sections 20532, 20831, and 20636 by correctly reporting to Ca1PERS

COUNTY’s Correctional Employees’ compensation from fiscal year 2003/2004 to the present;

3. For issuance of a Peremptory Writ of Mandate compelling Respondents to pay

Ca1PERS the amount due to Ca1PERS on account of correctly reporting to CaIPERS COUNTY’s

Correctional Employees’ compensation from fiscal year 2003/2004 to the present;

4. For reasonable attorneys’ fees pursuant to California Code of Civil Procedure

sections 800 and 1021.5;

5. For costs incurred herein;

6. For such other and further relief as the court deems proper;

7. For a statement of decision.

Dated: March 5, 2012 MAST , HOLSTEDT, AM! JOHNSEN

Y R. A. EDWARDS for Petitioner

IED PETITION FOR

SCCCPOA v. COUNTY OF SANTA CLARA, et al. OF MANDAMUS 7

811

Page 8: Petition for Writ of Mandamus

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VERIFICATION

1, EVERETT FITZGERALD, declare:

I I am the President of the Santa Clara County Correctional Peace Officers’

Association.

2. 1 am fully familiar with the facts in the above-titled matter, and if necessary,! would

be able to offer true and accurate testimony regarding the same.

3, I verify each and every paragraph of this Petition for Writ of Mandamus as true and

correct based upon my personal knowledge of the above-referenced events, except where alleged

by information and belief, and if called upon to testify hereto, I could and would do so competently.

I declare under penally of perjury, under the laws of the State of California, that the

foregoing declaration is true and correct to the best of my knowledge, and if called upon to testify

thereto, I could and would competently do so.

Executed on Marcb0, 2012 in ,California.

MATAGNt, POISTEOT, AMJCK VERIFIED I!

MILLER AOHNSEN II WRIT OF PETITION FOR

MANDAMUS 8 A PROFESSIONAL CO1U’ORATJOJ 9t2ISTREET

SACRAMENTO. CAUEORNrA 95IlI

SCCCI-’OA v. COUNTY OF SANTA CLARA, etal.

Page 9: Petition for Writ of Mandamus

ION Me I 1 0011

Page 10: Petition for Writ of Mandamus

ATTACHMENT C

BEFORE THE BOARD OF ADMINISTRATION

01- T T -PQRNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEVI,

In the Matter of the Appeal of the

Case No. 8511 Characterization of Payroll Pursuant to the "Twelve Plan" Memorandum of Understanding by:

This matter was heard before Karen J. Brandt, Administrative Law Judge, Office of Administrative Hearings (OAH), State of California, on January 27, 2010, in Sacramento, California.

Diane Eggler, Staff Counsel, represented the California Public Employees’ Retirement System (CaIPERS).

Nancy J. Clark, Deputy County Counsel, represented the County of Santa Clara (County).

Evidence was received on January 27, 2010. The record was left open for the parties to file closing briefs. On March 15, 2010, the County filed its closing brief, which was marked for identification as Exhibit BB, On April 29, 2010, the Santa Clara County Correctional Peace Officers Association (CPOA) filed an amicus brief, which was marked for identification as Exhibit 15. On May 18, 2010, the County filed its reply brief, which was marked for identification as Exhibit CC. CaIPERS did not file a closing brief.’ The record was closed, and the matter was submitted for decision on May 18, 2010.

/ On May 24, 2010, CaIPERS submitted a letter, which was marked for identification as Exhibit 16,

confirming that it waived the filing of a closing reply brief, and that it intended to rely upon the brief that it had filed at the close of the hearing on January 27, 2010.

Page 11: Petition for Writ of Mandamus

ISSUES

The following issues are before the Board of Administration (Board) for determination:

2. If so, should the County be required to report this information retroactively?

The County and CaIPERS stipulated to the following factual findings:

1. The County is a public agency contracting with Ca1PERS for retirement benefits for eligible employees.

2. The County’s Department of Correction (DOC) was formed in 1987. The Board of Supervisors removed the Sheriff from administration of the County’s correctional facilities and took over the administration by appointing a Chief of Correction reporting directly to the Board of Supervisors.

3. CPOA is a union entity that was formed in 1988, and is comprised of non-peace officer correctional employees working in the DOC.

4. Prior to the formation of CPOA in 1988, correctional officers who worked in the County’s jail facilities were represented by the Santa Clara County Deputy Sheriffs’ Association (DSA), which also represented deputy sheriffs.

5. As part of labor negotiations between and the County and the DSA in 1978- 1979, the DSA proposed a "Twelve Plan" an option that would allow the officers to work a 12-hour day. In the 1978-79 discussions with the DSA regarding the proposed Twelve Plan, the County expressed cor ens about the increased benefits costs, especially those costs associadwit1etirement, and advised the DSA that it would only agree to the Twelve Plan if there were noadditionatc6sts to the County.

6. In 1979, the County and the DSA negotiated a Memorandum of Understanding (MOU) that included a "Twelve-Plan" option. Section 11(b) of the 1979-1981 MOU stated as follows: "The sheriff has stated his intentions regarding the 12 Plan. Based on his intentions, the County agrees that upon implementation all hours worked by personnel on the

Page 12: Petition for Writ of Mandamus

12 Plan (and their briefing time) will be compensated at straight time up to 12.25 hours/day and 85.75 hours/pay period. Excess hours will be considered overtime."

7. On January 24, 1980, the County advised the DSA that it was experiencing problems implementing the Twelve Plan. The County expressed its position that time worked after 80 hours and up to 85.75 hours would be paid as straight time, but would be treated as overtime and not reported to Ca1PERS. The County’s contribution to Ca1PERS for each employee was based on the amount of non-overtime, straight time paid. The DSA did not respond to the County. On January 8, 1982, the 1981.4983 MOU was signed. It repeated the 19794981 MOU overtime definition,

8. In 1988, the DOC was formed and the Sheriffs Office employees who performed correctional officer functions formerly employed by the Sheriffs Office became employees of the newly formed DOC. Between 1988 and 1989, the correctional officers (not deputy sheriffs) formerly represented by the DSA joined CPOA.

9. In 1989 the County and CPOA negotiated their first MOU. Many, if not all, of the contract provisions from the previous DSA MOU were incorporated into the first CPOA MOU. Specifically, the language regarding the Twelve Plan and the parties’ intent to include only 80 hours per work week as compensation for purposes of Ca1PERS remained unchanged.

10. On July 5, 1984, retired Deputy Sheriff Robert Bartoo (Bartoo) asserted to Ca1PERS that the Twelve Plan MOU language required the County to report to CaIPERS the hours between 80 and 85.75 hours.

11. On October 5, 1984, Ca1PERS responded to Bartoo that the County had correctly reported only 80 hours to Ca1PERS.

12. On June 21, 1985, the DSA notified CaIPERS that it agreed with this conclusion.

13. On October 24, 1985, Bartoo challenged Ca1PERS’s decision and an Administrative Law Judge (AU) rendered a proposed decision in favor of Bartoo. CaIPERS declined to adopt the AL’s proposed decision, held a hearing, and denied Bartoo’s appeal.

14. On May 24, 1988, Bar -too filed a petition for writ of mandate in superior court and the superior court granted the writ and directed Ca1PERS to set aside its decision. The County and CaIPERS, in agreement at that time, then appealed the superior court decision.

15. On November 28, 1994, the Sixth District Court of Appeal issued its decision in Robert V Bartoo v. Board ofAdministration Public Employees Retirement System (Bartoo) finding, among other things, "in keeping with the parties’ intent to provide more time off for certain deputy sheriffs and to incur no additional costs, the parties agreed that the hours between 80 and 85.75 would be reported to CaIPERS as overtime and would not be considered in computing the employee’s retirement benefits."

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Page 13: Petition for Writ of Mandamus

16. After the Bartoo decision in 1994, the County continued to report correctional officers’ payroll information to Ca1PERS consistent with the language contained in the 1989-1991 and 2001-2003 CPOA MOU’s, There was no labor contract between 1991 and 2001 as the parties were not able to come to an agreement. The County, however, continued to honor all aspects of the expired 1989-1991 contract.

17. In May 2003, the County was negotiating a successor MOU with CPOA. In the context of these labor negotiations, CPOA, for the first time, questioned the validity of how the County reported payroll for its correctional officers on the Twelve Plan. In a letter dated July 8, 2003, to Ken Marzion of CaIPERS, David Clisham, CPOA’s attorney and chief negotiator, asked CaIPERS to review the County’s reporting of the payrate for its correctional officers.

18. On October 7, 2003, Virginia Tellez, Retirement Program Specialist II, the supervisor of Ca1PERS ’ s Compensation Review Unit, responded to Mr. Clisham and stated that "without a pending action related to the language and its statutory basis, we continue to rely on the fact that the language of the MOU directs that this is not considered reportable compensation for retirement purposes by PERS. After review of the MOU, Santa Clara County is in compliance with the language of the MOU. If there is a change in the MOU we would certainly consider that language in making an updated determination."

19. In letters to Ms. Tellez dated October 16, 2003, and February 9, 2004, Mr. Clisham expressed his disagreement with Ms. Tellez’s decision and asserted that the County’s payroll reporting practices, as memorialized in the CPOAICounty MOU’s, violate the Public Employment Retirement Law (PERL). On March 30, 2004, Ms. TelIez responded to Mr. Clisham advising him that she was waiting for an opinion from the CaIPERS Legal Division.

20. In 2005, the County and CPOA reached agreement on a successor MOU for the period June 6, 2005, through June 1, 2008.

21. In February 2006, Ms. Tellez verbally confirmed with Luke Leung, Deputy County Executive, that there was no change in the newly ratified MOU between the County and CPOA regarding reportable compensation for correctional officers on the Twelve Plan, and that the County’s reporting procedures still complied with CaIPERS regulations.

22. On November 1, 2006, Mr. Clisham again wrote to CaIPERS asserting his earlier claims that the MOU that CPOA and the County had reached in negotiations was illegal under the PERL.

23. On November 3, 2006, Angel Gutierrez, Retirement Program Specialist I, Compensation Review Unit, issued a letter to Mr. Clisham indicating that pursuant to Government Code section 206362 the County should be reporting 85.75 hours to Ca1PERS as

2 All further statutory references are to the Government Code unless otherwise indicated.

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Page 14: Petition for Writ of Mandamus

normal working hours. Gutierrez then copied Mr. Leung on his "findings" and did not mail a copy of the decision to Mr. Leung until January 2007.

24. 22, 2007, Angel Gutierrez sent a letter regarding CalPERS’s ilecision on CPOA Twelve � hours reporting to Mr. Leung.

25. On April 6, 2007, Karen DeFrank from CaIPERS sent a letter to Peter Kutras, Jr. regarding reporting of compensation for members on the Twelve Plan.

26. On April 27, 2007, Mr. Leung wrote to CaIPERS objecting to the Twelve Plan decision.

27. On June 7, 2007, Ca1PERS responded that the determination was correct and that the County was required to adjust compensation of CPOA Twelve Plan members back to fiscal year 2003-2004.

28. By letter dated August 10, 2007, CaIPERS notified the County that it was entitled to appeal Ca1PERS’s decision regarding payroll reporting for CPOA employees assigned to the Twelve Plan.

29. On September 21, 2007, the County filed a written appeal.

30. On October 4, 2007, CaIPERS notified the County that its request to appeal CaIPERS’s decision was granted.

31. The County employs approximately 700 correctional officers, sergeants, lieutenants and other supervisory personnel assigned to guard, supervise, rehabilitate and transport inmates incarcerated in the County correctional facilities. The DOC operates seven days a week, 24 hours a day.

32. Employees are assigned to one of four teams, two day shifts and two night shifts to cover 24/7 operation. A Team works a 12.25 hour day shift from 5:45 a.m. to 6:00 p.m. on Sunday, Monday, Tuesday, and every other Wednesday. B Team works a 12.25 hour day shift from 5:45 a.m. to 6:00 p.m. on Thursday, Friday, Saturday, and every other Wednesday. C Team works a 12.25 hour night shift from 5:45 p.m. to 6:00 a.m. on Sunday, Monday, Tuesday, and every other Saturday. D Team works a 12.25 hour night shift from 5:45 p.m. to 6:00 a.m. on Wednesday, Thursday, Friday, and every other Saturday.

33. The 12.25 hour shifts are referred to as the Twelve Plan. Employees assigned to work the Twelve Plan are scheduled to work 12.25 hours a day, 85.75 hours each 14-day pay period, 171.5 hours each 28-day work period.

In their stipulations, the parties stated that this date was "June 6, 2007." A review of the letter from CaIPERS to the County shows that the correct date was June 7, 2007.

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34. Correctional employees are paid in accordance with Santa Clara County Master Salary Ordinance as adopted by the Board of Supervisors. The Master Salary Ordinance reflects payrates and amounts to be paid on a 14-day period. Payrates adopted by the Board are in accordance with agreements reached between the County and its bargaining units, including the MOU’s between CPOA and the County.

35. Section 7. 1, "Hours of Work" in the current MOU between the County and CPOA (June 6, 2005 June 1, 2008 and June 2, 2008 - 2011) states as follows:

Forty (40) hours of work shall constitute a full week’s work, unless otherwise provided by law, code, or this Agreement. The normal workday shall consist of a shift of either eight (8), ten (10), or twelve and one-quarter (12.25) hours per workday, depending upon assignment and as set forth hereinafter.

(a) Employees assigned by the Chief of Correction to the Twelve Plan will continue to work on the Twelve (12) Plan during the term of this Memorandum. All hours worked by such employees on the Twelve Plan (and their briefing time) shall be compensated at straight time, up to 12.25 hours per day and 85.75 hours per pay period, with all hours in excess thereof to be considered overtime.

(b) The Appointing Authority reserves the right to convert assignments on the Twelve Plan to either a 5/8 or a 4/10 Plan, upon the giving of forty-five (45) calendar days’ advance notice of such change to the Association, which shall be afforded the opportunity to meet and confer on such a proposed change prior to its implementation.

36. Section 7.5, entitled "Overtime Work" in the MOU states as follows:

(a) Overtime Defined - Employees Exempt from Fair Labor Standards Act Overtime is defined as time worked beyond eighty (80) hours in any biweekly pay period or beyond eight (8), ten (10), or twelve and one quarter (12.25) hours in any workday (depending upon the number of hours and the duty shift to which the employee is assigned). For the employees in the Twelve (12) Plan all hours worked from 80 to 85.75 hours per pay period shall be considered for PERS purposes as overtime paid at the straight time rate. All hours worked in excess of 85.75 hours per pay period will be paid at the overtime rate. Time for which pay is received but not worked (such as vacation, sick leave, leave of absence with pay) shall be counted towards the base period.

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For all employees except those in the twelve (12) plan, overtime is defined as time worked beyond eighty (80) hours in any biweekly pay period or beyond eight (8) or ten (10) hours in any workday (depending upon the number of hours and the duty shift to which the employee is assigned.) For employees in the twelve (12) plan, overtime is defined as all work in excess of 12.25 hours per day or 85.75 hours per pay period. Time for which pay is received but not worked (such as vacation, sick leave, leave of absence with pay) shall be counted towards the base period.

(b) Overtime Defined - Employees Covered by FLSA As allowed by the 7k exemption, the County has designated a fourteen day work period. Overtime is define as time worked beyond eighty (80) hours in any fourteen consecutive day work period or beyond eight (8), ten (10) or twelve and one quarter (12.25) hours in any workday (depending on the number of hours and the duty shift to which the employee is assigned). For employees in the Twelve (12) Plan, all hours worked from 80 to 85.75 hours per work period shall be considered for PERS purposes as overtime paid at the straight time rate. All hours in excess of 85.75 hours per work period shall be paid at the overtime rate. Time for which pay is received but not worked (such as vacation, sick leave, leave of absence with pay) shall be counted towards the base period.

(c) Rate of Pay When overtime work is assigned and performed, payment for such time worked shall be paid in cash at the rate of one and one-half (1 1/2) times the regular hourly rate of pay, except for employees on the Twelve (12) Plan who shall be paid overtime consistent with (a) & (b) of this section.

37. The County has not paid CaIPERS contributions on hours above 80 in a two-week pay period based upon: agreements between CPOA and the County as set forth in the MOU’s that correctional employees working under the Twelve Plan would be considered to work 80 hours per week for purposes of CaIPERS compensation, decisions and statements from Ca1PERS that the County’s agreement with CPOA to report 80 hours per pay period as compensation for correctional employees complied with CaIPERS law, and the Sixth District Court of Appeal’s decision in Bartoo.

38. Mr. Leung testified at the hearing. His testimony generally confirmed the factual stipulations agreed to by the parties.

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LEGAL CONCLUSIONS

Correctional Employees ’ "Compensation " under the Twelve Plan

1. The County argues that, given the language of its MOU with CPOA, it is not required to report to CaIPERS the hours that correctional employees work over 80 and up to 85.75 in a two-week pay period for retirement benefit calculation purposes. As set forth below, the County’s arguments are not persuasive.

2. CalPERS is a defined benefit plan. The benefits CalPERS pays to its members are funded by member and employer contributions, and by interest and other earnings on those contributions. A public agency employer’s contributions are deten -nined based upon the "compensation" of its member employees. (§§ 20532 and 20533.)

3. Section 20630, in relevant part, defines "compensation" to mean:

the remuneration paid out of funds controlled by the employer in payment for the member’s services performed during normal working hours

(b) When compensation is reported to the board, the employer shall identify the pay period in which the compensation was earned regardless of when reported or paid. Compensation shall be reported in accordance with Section 20636 and shall not exceed compensation earnable, as defined in Section 20636. (Bolding added.)

4. Pursuant to section 20635, the employee "compensation" upon which employer contributions are based does not include "overtime" as follows:

When the compensation of a member is a factor in any computation to be made under this part, there shall be excluded from those computations any compensation based on overtime put in by a member whose service retirement allowance is a fixed percentage of final compensation for each year of credited service. For the purposes of this part, overtime is the aggregate service performed by an employee as a member for all employers and in all categories of employment in excess of the hours of work considered normal for employees on a full-time basis, and for which monetary compensation is paid. (Bolding added.)

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5. Section 20636 defines the terms "compensation eamable" and "payrate," in relevant part, as follows:

(a) "Compensation earnable" by a member means the payrate and special compensation of the member, as defined by subdivisions (b), (c), and (g), and as limited by Section 21752.5.

(b) (1) "Payrate" means the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules.... (Bolding added.)

6. As set forth in section 7.1 of the MOU between the County and CPOA, the "normal workday" of correctional employees working under the Twelve Plan is 12.25 hours. That section provides further that all hours up to 12.25 hours per day and 85.75 hours per two-week pay period worked by employees under the Twelve Plan shall be compensated at straight time, with all hours worked in excess of these hours compensated as overtime. (Finding 35.) Even though the normal working hours of employees working under the Twelve Plan are up to 12.25 hours per day and 85.75 hours per two-week pay period, and employees are paid overtime only when they work more than these hours, the MOU, in section 7.5, states that, "For employees in the Twelve (12) Plan, all hours worked from 80 to 85.75 hours per work period shall be considered for PERS purposes as overtime paid at the straight time rate." (Finding 36.)

7. The County asserts that it has the right to set the "normal working hours" for its employees. While this may be true, as evidenced by the County’s having set the normal daily working hours for correctional employees under the Twelve Plan as 12.25, the County may not thereafter define "overtime" one way for the purpose of paying its employees and another way for the purpose of making contributions to CaIPERS. By setting the normal working hours for correctional employees under the Twelve Plan as 12.25 per day, the County is bound by that setting and must adhere to the definition of "overtime" set forth in section 20635. The County may not through a collective bargaining agreement create its own definition of "overtime" for the purpose of calculating the contributions it makes to Ca1PERS for its employees, which contradicts its determination of "normal working hours" for the purpose of compensating these employees.

As the court explained in Service Employees International Union v. Sacramento City Unified School District (1984) 151 Cal.App.3d 705, 709-710, "...there is nothing in section 20025.2 [now 20635] to suggest the statutory definition of ’overtime’ is subject to qualification by a collective bargaining agreement entered into between a school district and its employees. To accept Union’s argument would expand the statutory definition of overtime to encompass a variety of meanings and would result in similarly circumstanced employees receiving disparate retirement benefits because the final compensation upon which such benefits are based would be subject to the vagaries of each employee’s

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bargaining agreement." (See also, Oden v. Board ofAdministration (1994) 23 Cal.App.4th 194, 201, ["...public agencies are not free to define their employee contributions as compensation or not compensation under PERL-the Legislature makes those determinations. Statutory definitions delineating the scope of CaIPERS compensation cannot be qualified by bargaining agreements."] and Pomona Police Officers ’Association v. City of Pomona (1997) 58 Cal.App.4th 578, 585 ["there is no question that the employer-paid salary-addition employee contributions paid by the City are not included in compensation under the PERL. There is also no question that this result cannot be changed either by the collective bargaining agreement or by PERS."].)

8. Because correctional employees working under the Twelve Plan normally work up to 12.25 hours per work day and 85.75 hours per two-week pay period, pursuant to sections 20630, 20635, and 20636, the County is required to report all these hours when it reports these employees’ compensation to Ca1PERS.

Collateral Estoppel and Laches

9. The County argues that Ca1PERS and CPOA are precluded by the doctrines of collateral estoppel and laches from as that the County is required to report the hours that correctional employees work under the Twelve Plan over 80 and up to 85.75 to Ca1PERS for retirement benefit calculation purposes. As set forth below, the County’s arguments are not persuasive.

10. As the California Supreme Court explained in People v. Sims (1982) 32 Cal.3d 468, 477, "[c]ollateral estoppel precludes a party to an action from relitigating in a second proceeding matters litigated and determined in a prior proceeding." The County argues that CaIPERS should be precluded from relitigating issues in this proceeding that were determined or "could have been determined" in Bartoo. As set forth in Pacific Lumber Co. v. State Water Resources Control Board (2006) 37 Cal.4th 921, 943-944, to prevail on its defense of collateral estoppel against Ca1PERS, the County must establish:

First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.

In addition, because the County is seeking to apply the doctrine of collateral estoppel against CaIPERS, a public agency, it must establish that such application will not be contrary to public policy. As the court explained in Housing Authority v. Workers’ Compensation Appeals Board (1998) 60 CaI.App.4th 1076, 1084-1085, quoting Palmdale Hospital Medical Center v. Department of Health Services (1992) 8 Cal.App.4th 1306, 1311, when an action "involves a public agency’s ongoing obligation to administer statutes and regulations which

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were enacted for the benefit of the public[, t]he public interest requires full litigation of the question, and application of collateral estoppel against the [public agency] would therefore be unjust."

11. In its 1994 unpublished Bartoo decision, the Sixth District Court of Appeal did not address all the legal issues raised in this proceeding. The only legal issue directly addressed by the court in Bartoo was whether the superior court erred by excluding extrinsic evidence of the County’s and DSA’s intent when negotiating the terms of the MOU regarding the Twelve Plan, Because the court in Bartoo did not address all the legal issues raised in this proceeding, the County did not establish that CaIPERS should be collaterally estopped by Bartoo from challenging the County’s failure to report all the compensation it pays to its correctional employees under the Twelve Plan. Moreover, because this matter involves Ca1PERS’s ongoing obligation to administer the PERL for the benefit of the public and public employees, it would be contrary to public policy to apply the doctrine of collateral estoppel to prevent Ca1PERS from seeking a review of the legal issues raised in this matter.

12. The same reasoning applies to the doctrine of laches. The equitable doctrine of laches may be applied when a public agency unreasonably delays in taking action against a party and the party is prejudiced as a result of the delay. (City and County of San Francisco v. Pace/lo (1978)85 Cal.App.3d 637, 644-645.) But the doctrine of laches will not be applied to preclude a state agency from taking action when the action concerns a public policy. (City and County of San Francisco v. Ballard (2006) 136 Cal.App.4th 381, 395.)

13. From the court decisions cited in Legal Conclusion 7, it is apparent that there is a strong public policy to ensure that the provisions of the PERL are implemented as drafted by the Legislature, free from any changes developed through the collective bargaining process. Given this public policy, it would not be appropriate to apply the doctrine of laches against CaIPERS, notwithstanding its long history of taking the opposite position from that which it is pursuing in this proceeding.

14. The same public policy reasons that prevent the County from relying upon the doctrines of collateral estoppel and laches against CaIPERS also preclude the application of these doctrines against CPOA and its members.

Retroactive Application

15. By letter dated January 22, 2007, Ca1PERS notified the County that it was required to report all the compensation earned by correctional employees under the Twelve Plan, retroactive for three years. (Findings 24.) By letter dated June 7, 2007, CaJPERS notified the County that it had to submit "retroactive payroll adjustments for all affected members beginning with fiscal year 2003/2004." (Finding 27.) Ca1PERS did not explain in these letters or at the hearing how it established three years as the time period for retroactive application of the County’s reporting obligation. As set forth below, even though CaIPERS did not explain its reasons for determining that the County had to submit retroactive payroll

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adjustments for all affected members beginning with fiscal year 2003/2004, given the stipulated facts and applicable law, Ca1PERS’s determination is reasonable and appropriate.

16. In its amicus brief, CPOA argues that the County should be ordered to report the total compensation earned by correctional employees under the Twelve Plan retroactive to 1989, the first year that CPOA negotiated an MOU with the County. As set forth below, CPOA’s argument that the County should be required to submit payroll adjustments for all affected members retroactive to 1989 is not persuasive.

17. Section 20160 sets out the Board’s authority and duties to correct errors as

follows:

(a) Subject to subdivisions (c) and (d), the board may, in its discretion and upon any terms it deems just, correct the errors or omissions of any active or retired member, or any beneficiary of an active or retired member, provided that all of the following facts exist:

(1) The request, claim, or demand to correct the error or omission is made by the party seeking correction within a reasonable time after discovery of the right to make the correction, which in no case shall exceed six months after discovery of this right.

(2) The error or omission was the result of mistake, inadvertence, surprise, or excusable neglect, as each of those terms is used in Section 473 of the Code of Civil Procedure.

(3) The correction will not provide the party seeking correction with a status, right, or obligation not otherwise available under this part.

Failure by a member or beneficiary to make the inquiry that would be made by a reasonable person in like or similar circumstances does not constitute an "error or omission" correctable under this section.

(b) Subject to subdivisions (c) and (d), the board shall correct all actions taken as a result of errors or omissions of the university, any contracting agency, any state agency or department, or this system.

(c) The duty and power of the board to correct mistakes, as provided in this section, shall terminate upon the expiration of obligations of this system to the party seeking correction of the

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error or omission, as those obligations are defined by Section 20164

(d) The party seeking correction of an error or omission pursuant to this section has the burden of presenting documentation or other evidence to the board establishing the right to correction pursuant to subdivisions (a) and (b).

(e) Corrections of errors or omissions pursuant to this section shall be such that the status, rights, and obligations of all parties described in subdivisions (a) and (b) are adjusted to be the same that they would have been if the act that would have been taken, but for the error or omission, was taken at the proper time. However, notwithstanding any of the other provisions of this section, corrections made pursuant to this section shall adjust the status, rights, and obligations of all parties described in subdivisions (a) and (b) as of the time that the correction actually takes place if the board finds any of the following:

(1) That the correction cannot be performed in a retroactive manner.

(2) That even if the correction can be performed in a retroactive manner, the status, rights, and obligations of all of the parties described in subdivisions (a) and (b) cannot be adjusted to be the same that they would have been if the error or omission had not occurred.

(3) That the purposes of this part will not be effectuated if the correction is performed in a retroactive manner.

18. Section 20164, in relevant part, sets forth the time limits for the Board’s corrections as follows:

(a) The obligations of this system to its members continue throughout their respective memberships, and the obligations of this system to and in respect to retired members continue throughout the lives of the respective retired members, and thereafter until all obligations to their respective beneficiaries under optional settlements have been discharged. The obligations of the state and contracting agencies to this system in respect to members employed by them, respectively, continue throughout the memberships of the respective members, and the obligations of the state and contracting agencies to this system in respect to retired members formerly employed by them, respectively, continue until all of the obligations of this system

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in respect to those retired members, respectively, have been discharged. The obligations of any member to this system continue throughout his or her membership, and thereafter until all of the obligations of this system to or in respect to him or her have been discharged.

(b) For the purposes of payments into or out of the retirement fund for adjustment of errors or omissions, whether pursuant to Section 20160, 20163, or 20532, or otherwise, the period of limitation of actions shall be three years, and shall be applied as follows:

(1) In cases where this system makes an erroneous payment to a member or beneficiary, this system’s right to collect shall expire three years from the date of payment.

(2) In cases where this system owes money to a member or beneficiary, the period of limitations shall not apply.

[11]...M1]

19. As CPOA correctly points out in its amicus brief, although section 20164, subdivision (b)( 1), imposes a three-year limitations period when CaIPERS seeks to collect an erroneous payment made to a member, there is no limitations period when a member seeks to collect payments through CaIPERS. (§ 20164, subd. (b)(2).)

20. Given this absence in section 20164 of a limitations period against collection through Ca1PERS, CPOA argues that CaIPERS should require the County to account for all compensation paid to correctional employees under the Twelve Plan retroactive to the first CPOA MOU in 1989. In making this argument, CPOA relies upon the holding in City of Oakland v. Public Employees’ Retirement System (2002) 95 Cal.App.4th 29 (City of Oakland).

21. In City of Oakland, the court ordered the retroactive reclassification of local government employees from "miscellaneous" to "firefighter," a safety membership which earns better pension benefits. The period of retroactive application was 22 years. In City of Oakland, the court made clear that, in section 20160, subdivision (b), the Legislature has expressed a preference for retroactive corrections when a mistake has been caused by a contracting public agency. (City of Oakland, supra, 95 Cal.App.4th at p. 46.) The court held that, "[b]ecause a misclassification is a mistake not caused by the members, the PERS Board’s duty to correct it continues throughout their membership and the lifetime of retired members." (Id. at p. 50.) The court in City of Oakland recognized, however, that, "notwithstanding the lifelong obligations that CaIPERS has to member employees and beneficiaries, there will be circumstances when retroactive adjustment is simply not warranted at all." (City ofOakiand, supra, 95 Cal.App.4th at p. 47.)

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22. The County’s failure to report to CaIPERS, for retirement benefit calculation purposes, the hours that correctional employees work under the Twelve Plan over 80 and up to 85.75 is an error that must be corrected under section 20160, subdivision (b). Pursuant to section 20160, subdivision (e), the Legislature has vested in the Board the discretion to determine whether and to what extent this error should be corrected retroactively based on consideration of any one or more of the following three factors: (1) the corrections cannot be made in a retroactive manner; (2) the status, rights, and obligations of the parties cannot be adjusted to be the same as they would have been had the error not occurred; or (3) the purposes of the PERL would not be effectuated if the corrections are performed in a retroactive manner. As set forth below, when these factors are considered, they support Ca1PERS’s determination that the correction of this error should be made retroactive to 2003, and not to 1989.

23. As set forth in section 20160, subdivision (e)(l), the Board may deny retroactive correction of an error when the "correction cannot be performed in a retroactive manner." The evidence presented at the hearing included only CaIPERS ’s determination that the error in this matter should be corrected retroactive to the 2003/2004 fiscal year. It was not until CPOA submitted its amicus brief on April 29, 2010, that it argued that the County’s error should be corrected to 1989. There was no evidence offered at the hearing about whether there are sufficient records to make the corrections CPOA seeks all the way back to 1989. (§ 20160, subd. (e)(l).)

24. Even if the corrections could be performed retroactively to 1989, section 20160, subdivision (e)(2), grants the Board discretion to determine that the County’s error should not be corrected retroactively when the status, rights, and obligations of all the parties cannot be adjusted to be the same as they would have been had the implementation of the Twelve Plan not occurred. In addition, section 20160, subdivision (e)(3), grants the Board discretion not to order the retroactive correction of the County’s error when "the purposes of [the PERL] will not be effectuated if the correction is performed in a retroactive manner." When the factors set forth in subdivisions (e)(2) and (e)(3) are considered, and for the reasons set forth below, the corrections should be made retroactive to 2003, and not 1989.

25. Since 1979, the County has negotiated the terms and conditions of the Twelve Plan with the union representing the affected employees. As the Bartoo court found, the Twelve Plan was first proposed by the employees’ union:

Prior to January 1980, deputy sheriffs worked five eight-hour work days per week and were required to work overtime for staffing reasons. The required overtime resulted in insufficient time off for deputy sheriffs. Therefore, the DSA proposed a "Twelve Plan" option which would permit deputy sheriffs in specified positions to work 12-hour days. However, the County was concerned about the increased costs of employee benefits. Since all deputy sheriffs accrued vacation time, sick leave, and additional PERS contributions based on the number of hours

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worked, the County was concerned that adopting a schedule with additional scheduled hours would result in substantial costs which the County could not afford. Thus, the County stated it would agree to the Twelve Plan only if there were no additional costs. (Bartoo at p. 2.)

As the court in Bartoo stated, " ...in keeping with the parties’ intent to provide more time off for certain deputy sheriffs and to incur no additional costs, the parties agreed that the hours between 80 and 85.75 would be reported to PERS as overtime and would not be considered in computing the employee’s [sic] retirement benefits." (Bartoo at p. 6.)

In the 1989-1991 and 2001-2003 MOU’s, CPOA agreed to the terms and conditions of the Twelve Plan. Since 1989, the correctional employees that it represents have obtained benefits from the Twelve Plan with regard to their pay and work hours that they would not otherwise have received. The County has made decisions about paying correctional employees and scheduling them for duty based upon the implementation of the Twelve Plan as set forth in the MOU’s. Although Bartoo initiated his action against the Twelve Plan in 1984, CPOA did not challenge the Twelve Plan before May 2003. (Finding 17.)

Given these factors, requiring the County to retroactively report back to 1989 all hours normally worked by correctional employees would not properly adjust the rights of all the parties to be the same as they would have been had the Twelve Plan not been implemented. (§ 20160, subd. (e)(2).) In addition, given CPOA’s willing participation in the County’s continued implementation of the Twelve Plan prior to 2003, it would not effectuate the purposes of the PERL if the County were required to report all hours that correctional employees normally worked under the Twelve Plan retroactive to 1989. (§ 20160, subd. (e)(3).)

26. But the balance in favor of the County shifted in 2003. In May 2003, during collective bargaining negotiations, CPOA questioned the County’s reporting to Ca1PERS of the correctional employees’ compensation under the Twelve Plan. (Finding 17.) By letter dated July 8, 2003, addressed to Ca1PERS and copied to the County, CPOA laid out the legal arguments against the County’s continued exclusion of the hours worked by correctional employees in a two-week pay period over 80 and up to 85.75 from its reporting to CaIPERS. (Finding 17.) Even though CPOA agreed to the inclusion of language in the 2005-2008 and 2008-2011 MOU’s that explicitly states that "all hours worked from 80 to 85.75 hours per work period shall be considered for PERS purposes as overtime paid at the straight time rate," because CPOA placed the County on notice of its objection to the manner in which the County was reporting correctional employees’ compensation to CaIPERS, CPOA gave the County the opportunity to change either the Twelve Plan or its method of reporting correctional employees’ compensation to CaIPERS. Since 2003, CPOA has consistently argued that the manner in which the County was reporting correctional employees’ compensation under the Twelve Plan violated the PERL. (Findings 19 and 22.) Notwithstanding CPOA’s arguments, the County continued to implement the Twelve Plan as set forth in the MOU.

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Given these facts, when the factors set forth in section 20160, subdivisions (e)(2) and (e)(3), are considered, it is within the discretion of the Board to determine that, after 2003, the County’s continued adherence to the language of the MOU, which permitted it to underreport correctional employees’ compensation, was an error that should be corrected retroactive to the 2003/2004 fiscal year.

27. When all the evidence is weighed and balanced, Ca1PERS established that it was reasonable and appropriate for it to determine that the County should be required to report to CaIPERS all the hours normally worked by its correctional employees under the Twelve Plan retroactive to the 2003/2004 fiscal year.

1. The appeal of the County of Santa Clara is DENIED.

2. The determination of the California Public Employees’ Retirement System that the County shall report as compensation all the hours that correctional employees work over 80 and up to 85.75 under the Twelve Plan retroactive to the 2003/2004 fiscal year is SUSTAINED.

DATED: May 25, 2010

KAE, BRA Adrninistrati’veaw Judge Office o mitrative Hearings

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