FIFTH DIVISION
November 24, 2010
No. 1-09-0917
ROBERT J. SMITH, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. )
)
)
)
THE BOARD OF TRUSTEES OF THE )
WESTCHESTER POLICE PENSION BOARD, ) Honorable
) Sophia H. Hall,
Defendant-Appellee. ) Judge Presiding.
JUSTICE HOWSE delivered the opinion of the court:
Robert J. Smith, plaintiff-appellant, appeals from an order
of the circuit court that affirmed a decision of the Board of
Trustees of the Westchester Police Pension Board (pension board).
The pension board determined that a salary increase Smith
received before his retirement as a result of a pay grade
increase, a merit pay increase, and holiday pay for the year
2007, cannot be considered as salary for purposes of calculating
Smith’s pension.
For the reasons set forth below, we affirm the decision of
the pension board and the circuit court.
BACKGROUND
Smith retired as the police chief of the Village of
Westchester on July 13, 2007, after serving as a police officer
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for more than 32 years. At the time of his retirement, Smith was
59 years old. Since Smith had served as a police officer for
more than 30 years and was over the age of 50 at the time of
retirement, Smith was entitled to receive a pension in the amount
of 75% of the salary attached to the rank held on his last day of
service or for one year prior to the last day, whichever is
greater. 40 ILCS 5/3-111 (West 2008).
In a letter dated March 23, 2007, Smith informed the Village
of Westchester of his intent to retire in July 2007. Smith also
requested a salary increase before his retirement. In the
letter, Smith stated:
“As you are aware, prior to Chief
Rafferty’s retirement from the fire
department, he received a raise from pay
level 4 to level 6. It is my understanding,
at that same time, it was agreed that this
same consideration would be afforded to me
upon my retirement.
I ask you, with Board concurrence, to
grant me the same increase, with an effective
date of May 1, 2007.”
Smith’s salary increase
Village manager Goldsmith sent a memo to the village
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director of finance on May 7, 2007, which stated:
“Pursuant to the direction of the Village
President and Board of Trustees, the benefits
outlined on the attached page should be bestowed
upon Chief Smith.”
Attached to Goldsmith’s memo was a chart that compared the
salary and deductions of Smith’s 2006 grade 4 pay compared with
the grade 6 salary. The attached chart stated Smith would have a
grade 6 salary beginning May 2007.
The 2006 appropriation ordinance and budget had set Smith’s
grade 4 annual base salary at $94,742.1 The increase to grade 6
boosted Smith’s annual base salary to $102,966. The village
board also implemented an employee evaluation system for all
village employees and created an additional 1% merit pool.
Employees were eligible to receive a share of the 1% merit pool
based upon the results of an evaluation which was to take place
within 60 to 90 days.
Pension Board Proceedings
On June 21, 2007, Smith submitted an application for
retirement benefits to the pension board that was certified by
1
The village board authorized a 3% salary increase to all
nonunion personnel effective May 1, 2007. The pension board
included this 3% increase in Smith’s pensionable salary and it is
not at issue in this appeal.
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the deputy village manager. The application alleged Smith’s
total pensionable salary was $113,262, which included the pay
raise from level 4 to level 6, the 1% merit pay raise and 2007
holiday pay.
On July 11, 2007, the pension board sent Smith a letter
stating the pension board would consider the issue of Smith’s
salary at an administrative hearing. To prepare for the hearing,
the pension board requested an advisory opinion from the Illinois
Department of Insurance concerning the question of whether
Smith’s salary increase that resulted from the step increase from
grade 4 to grade 6, is pensionable. This procedure is authorized
under section 1A-106 of the Illinois Pension Code. 40 ILCS 5/1A-
106 (West 2008).
Michael Langenfeld, administrative compliance officer for
the Illinois Department of Insurance, submitted his advisory
opinion on September 25, 2007, where he opined:
“A retirement incentive can be given by
the city, but it is not considered salary for
pension calculation purposes. The letter
sent by Chief Robert J. Smith dated March 23,
2007, would indicate the change from level 4
to level 6 was an incentive for submitting
his intention to retire. This is clearly a
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retirement incentive and would not be added
to the salary attached to rank for pension
calculation purposes.”
Smith was represented by counsel at the administrative
hearing. The parties agreed to send Langenfeld another memo,
written by Smith’s counsel and containing additional information
in reply to the advisory opinion. The parties requested an
updated advisory opinion. The parties agreed to continue the
hearing to a later date after receipt of the updated advisory
opinion.
Langenfeld responded by letter on March 6, 2008, where he
opined:
“After review [of] the additional
information provided and the original
information provided earlier, my opinion has
not changed. The letter dated March 23, 2007
sent by Chief Robert J. Smith, requesting a
change from level four to level six as it was
previously granted to a retiring fire chief,
indicates this is either a pay spike or a
retirement enhancement. No matter how it is
labeled, this would not be considered salary
for pension purposes.”
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Langenfeld acknowledged that the pension law made no
specific mention of pension spikes but alleged the increase of
Smith’s salary qualified as a bonus.
On June 5, 2008, the pension board reconvened and heard
testimony from Smith. In a written order dated October 20, 2008,
the pension board set Smith’s salary for pension purposes at
$103,324, retroactive to the date of his retirement. The salary
was based upon: (1) Smith’s 2006 salary of $94,742 as provided in
the municipal appropriation ordinance and budget, (2) his 2006
holiday pay of $5,573, and (3) a 3% cost of living adjustment
amounting to $3,009. The pension board made a finding that the
approximate $10,000 in salary increase resulting from Smith being
awarded a pay grade increase from level 4 to level 6, along with
the 1% merit pay increase, was a pension spike and is not salary
under section 3-125.1 of the Pension Code (40 ILCS 5/3-125.1
(West 2008)) and section 4402.40 of Title 50 of the Illinois
Administrative Code (50 Ill. Adm. Code §4402.40 (1996)).
The pension board found:
“Under this directly relevant case law,
that the Applicant’s pay grade increase could
be classified as a bonus, award or merit pay
under the relevant statutes and not part of
Applicant’s regular ‘salary’ defined by the
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relevant Pension Code and Administrative Code
statutes.”
On November 18, 2008, Smith filed a complaint for
administrative review in the circuit court of Cook County. In
his complaint, Smith alleged the decision of the pension board to
exclude the pay upgrade and merit pay from his salary in
calculating his pension is “contrary to law and contrary to the
actual facts of the case, that it is against the manifest weight
of the evidence, and also arbitrary, capricious and
unreasonable.”
The trial court conducted a hearing on March 20, 2009.
After noting the 2007 appropriation ordinance was not passed
until 11 days after Smith’s retirement, the trial court affirmed
the decision of the pension board, finding its decision was not
clearly erroneous. Smith filed this appeal.
ANALYSIS
The issue presented for review is whether the Board of
Trustees of the Westchester Police Pension Board erred in finding
that the salary upgrade, the merit pay increase awarded to Smith
and the 2007 holiday pay cannot be included in the calculation of
his pension.
The parties agree the issues presented for review in this
case involve a mixed question of law and fact and that an
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administrative agency’s determination involving a mixed question
of law and fact should not be disturbed unless it is clearly
erroneous. City of Belvidere v. Illinois State Labor Relations
Board, 181 Ill. 2d 191, 205, 692 N.E.2d 295, 302 (1998). “[T]he
agency decision will be deemed ‘clearly erroneous’ only where the
reviewing court, on the entire record, is ‘left with the definite
and firm conviction that a mistake has been committed.’” AFM
Messenger Service, Inc. v. Department of Employment Security, 198
Ill. 2d 380, 395, 763 N.E. 2d 272, 282 (2001), quoting United
States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct.
525, 542, 92 L.Ed. 746, 766 (1948). We will review the issues in
this case accordingly.
In administrative review proceedings, our role is to review
the decision of the administrative agency, rather than that of
the circuit court. Roselle Police Pension Board v. Village of
Roselle, 232 Ill. 2d 546, 551-52, 905 N.E.2d 831, 834 (2009).
I. Smith’s Base Salary for Calculating Smith’s Pension
The pension board set Smith’s salary for pension purposes
based upon Smith’s 2006 salary of $94,742 as provided in the
municipal appropriation ordinance and budget. Smith claims his
salary for pension purposes should include the pay raise from
level 4 to level 6, the 1% merit pay and his 2007 holiday pay.
The amount of a retired police officer’s pension is
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determined by his age, length of service and his salary at the
time of retirement. 40 ILCS 5/3-111 (West 2008). The Pension
Code provides a police officer:
“shall receive a pension of 1/2 of the salary
attached to the rank held by the officer on
the police force for one year immediately
prior to retirement or, beginning July 1, 1987
for persons terminating service on or after
that date, the salary attached to the rank
held on the last day of service or for one
year prior to the last day, whichever is
greater. The pension shall be increased by
2.5% of such salary for each additional year
of service over 20 years of service through 30
years of service, to a maximum of 75% of such
salary.” 40 ILCS 5/3-111 (West 2008).
It is undisputed that under these guidelines Smith was
entitled to a pension in the amount of 75% of the salary attached
to the rank of police chief on the last day of service or for one
year prior to the last day, whichever is greater.
The Pension Code also provides a definition of salary for the
purpose of calculating a pension:
“‘Salary,’ for purposes of this Part, means
any fixed compensation received by an employee
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of a municipality that participates in one of
the pension funds established under Article 3
or 4 of the Illinois Pension Code, which has
been approved through an appropriations
ordinance of the municipality ***.” (Emphasis
added.) 50 Ill. Adm. Code §4402.30 (1996).
The requirement that the pensionable salary be determined by
the salary attached to the rank and approved in an appropriation
ordinance is further emphasized in the pension statutes:
“‘Salary’ means the annual salary, including
longevity, attached to the police officer's
rank, as established by the municipality's
appropriation ordinance, including any
compensation for overtime which is included in
the salary so established ***.” (Emphasis
added.) 40 ILCS 5/3-111 (West 2008).
The cardinal rule of statutory construction is to ascertain
and give effect to the legislature’s intent. Moore v. Green, 219
Ill. 2d 470, 479, 848 N.E.2d 1015, 1020 (2006). Like any other
exercise in statutory construction, the court’s analysis begins
with the specific language contained in the statute because the
words used provide the best indication of legislative intent.
Hernandez v. Kirksey, 306 Ill. App. 3d 912, 914, 715 N.E.2d 669,
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672 (1999). Where an enactment is clear and unambiguous, we are
not at liberty to depart from the plain language and meaning of
the statute by reading into it exceptions, limitations or
conditions that the legislature did not express. DeSmet v. County
of Rock Island, 219 Ill. 2d 497, 510, 848 N.E.2d 1030, 1039
(2006).
The plain language of the Pension Code reveals that reference
must be made to the salary attached to Smith’s rank as
established in the municipality’s appropriation ordinance when
determining Smith’s pensionable salary. 50 Ill. Adm. Code
§4402.30 (1996); 40 ILCS 5/3-125.1 (West 2008); Board of Trustees
of the Policemen’s Pension Fund v. Department of Insurance, 42
Ill. App. 3d 155, 157-58, 356 N.E.2d 171, 173 (1976).
A police officer with Smith’s age and length of service is
eligible for a pension in the amount of 75% of the salary attached
to the rank of police chief in the village appropriation
ordinance. The pension board was authorized to calculate Smith’s
pension based on the salary in the village appropriation ordinance
on Smith’s last day of service or for one year prior, whichever is
greater. 40 ILCS 5/3-125.1 (West 2008); 50 Ill. Adm. Code
§4402.30 (1996).
Here, the Village of Westchester’s 2006 appropriation
ordinance lapsed on April 30, 2007. The Village of Westchester
did not pass its 2007 appropriation ordinance until July 24, 2007,
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11 days after Smith had retired. The 2007 appropriation ordinance
is part of the record. We have examined the 2007 appropriation
ordinance and note that it does not contain a line item for the
salary of the chief of police, in contrast to the 2006
appropriation ordinance that did contain a line item for the
salary of the chief of police. Based on the record before us we
have no evidence that when Smith retired on July 13, 2007, an
appropriation ordinance existed which increased his salary over
the 2006 grade 4 levels provided for in the 2006 appropriation and
budget.
When it calculated Smith’s pension, the pension board used
the salary provided for Smith in the 2006 appropriation ordinance
and budget. This calculation reflected Smith’s salary for one
year prior to his retirement as required by law. We cannot say
the decision was clearly erroneous because the 2007 appropriation
ordinance was not passed until after Smith retired and the copy of
the appropriation ordinance contained in the record does not
contain a line item for Smith’s salary to substantiate a salary
increase for police chief.
Smith argues he is entitled to grade 6 pay because the
village manager sent a May 7, 2007, memorandum to the municipal
finance officer which stated the village board and village
president authorized a pay grade increase for Smith. The record
contains a copy of the village manager’s memo.
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A pay grade increase approved by the trustees and the village
president cannot be a part of Smith’s pension calculation unless
that increase was also reflected in the village’s formally adopted
appropriations ordinance. 40 ILCS 5/3-125.1 (West 2008); 50 Ill.
Adm. Code §4402.30 (1996), Department of Insurance, 42 Ill. App.
3d at 157-58, 356 N.E.2d at 173; Holland v. City of Chicago, 289
Ill. App. 3d 682, 687-90, 682 N.E.2d 323, 326 (1997). We have
examined the record and there is no evidence the village undertook
the formal act of amending the 2006 appropriation ordinance or
that it passed an appropriation ordinance to change Smith’s salary
from grade 4 to grade 6. The instructions the trustees and the
village president gave to the village manager do not satisfy the
requirements that a pension be based on an appropriation ordinance
because obviously the instructions they gave to the village
manager were not an appropriation ordinance. Therefore, we cannot
say the pension board’s decision to use the grade 4 salary
provided for Smith in the 2006 appropriation ordinance and budget
to calculate Smith’s pension was clearly erroneous. 40 ILCS 5/3-
125.1 (West 2008).
Smith argues the village board’s new personnel code and pay
plan resolution passed on June 12, 2007, authorized the pay
increase for Smith for purposes of the calculation of his pension.
The pay plan resolution recited that it had the goal of paying all
village employees a salary on a pay scale that established a range
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of pay for all employees. The resolution listed a pay range for
all village employees. The job title of police chief was assigned
grade 6 salary with a pay range of $88,187 for a minimum, $103,749
for a midpoint and $119,312 as a maximum salary. The pay plan
stated that no employee should be paid less than the minimum pay
for a position or more than the maximum.
The pay plan resolution however cannot be fairly construed to
be an appropriation ordinance. An appropriation involves the
“setting apart from public revenue a certain sum of money for a
specific object ***.” Schwartz v. City of Chicago, 223 Ill. App.
184, 192 (1921), citing 4 Corpus Juris, 1460. The pay plan
resolution approved by the village did not authorize a specific
salary for Smith or the other village employees, and did not set
apart any funds to pay for the salaries. The pay plan merely
recited that it was the goal of the village to pay the employees
within the range of pay contained in the resolution. The
resolution makes no mention of amending the 2006 appropriation
ordinance. Smith’s pay grade increase from grade 4 to grade 6,
therefore, was not legislated in an appropriation ordinance when
the pay plan resolution was passed. 40 ILCS 5/3-125.1 (West
2008).
II. Merit Pay and 2007 Holiday Pay
Smith also claims he is entitled to the 1% merit pay increase
because the merit pay was to be considered permanent pay. Merit
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pay has been allowed as part of a pension calculation when the
merit pay was included in the appropriation ordinance and attached
to the rank. Policemen’s Pension Fund v. Department of Insurance,
42 Ill. App. 3d 155, 159, 356 N.E.2d 171, 174 (1976). Here, the
merit pay was not included in an appropriation ordinance and the
pension board’s decision to exclude it was not clearly erroneous.
Smith also claims he is entitled to holiday pay for 2007
based on the grade 6 salary increase. It is undisputed that
Village of Westchester police officers are entitled to holiday
pay. The pension board included the 2006 holiday pay based on
Smith’s grade 4 salary in the calculation of Smith’s pension. If
the pension board included the 2006 holiday pay and the 2007
holiday pay in the calculation of Smith’s annual salary, it would
be a double payment. Furthermore, we have determined the rate of
pay for Smith’s claimed 2007 holiday pay was not appropriated in
an ordinance as required by law. The pension board’s decision to
exclude the 2007 holiday pay was not clearly erroneous.
Based upon the entire record, we do not have a definite and
firm conviction that the pension board made a mistake when it
based Smith’s pension on the grade 4 salary, excluded the merit
pay from Smith’s pension calculation and excluded the 2007 holiday
pay. Therefore, the pension board’s decision was not clearly
erroneous and should not be disturbed. AFM Messenger Service,
Inc. v. Department of Employment Security, 198 Ill. 2d at 395, 763
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N.E.2d at 282.
CONCLUSION
We affirm the decision of the pension board and the circuit
court.
AFFIRMED.
FITZGERALD SMITH, P.J., and TOOMIN, J., concur.
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REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
(Front Sheet to be Attached to Each Case)
Please use ROBERT J. SMITH,
following form:
Plaintiff-Appellant,
Complete v.
TITLE
of Case THE BOARD OF TRUSTEES OF THE WESTCHESTER POLICE
PENSION BOARD,
Defendant-Appellee.
Docket Nos. No. 1-09-0917
COURT Appellate Court of Illinois
First District, 5th Division
Opinion
Filed November 24, 2010
(Give month, day and year)
JUSTICES JUSTICE HOWSE delivered the opinion of the court:
FITZGERALD SMITH, P.J., and TOOMIN, J., concur.
APPEAL from the Lower Court and Trial Judge(s) in form indicated in margin:
Circuit Court of
Cook County; the Appeal from the Circuit Court of Cook County.
Hon.___________,
Judge Presiding. The Hon. Sophia H. Hall, Judge Presiding.
For APPELLANTS, Indicate if attorney represents APPELLANTS or APPELLEES and
John Doe, of include attorneys of counsel. Indicate the word NONE if
Chicago. not represented.
For APPELLEES, For Appellant, Stanley H. Jakala and Barbara J. Bell,
Smith and Smith, of Berwyn, Illinois.
of Chicago.
For Appellee, Richard J. Reimer and Jeffrey A. Goodloe,
Joseph Brown, RICHARD J. REIMER & ASSOCIATES LLC, of Hinsdale, Illinois.
of Counsel).
Also add attor-
neys for third-
party appellants
and/or appellees.
(USE REVERSE SIDE IF NEEDED)
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