       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: _______________

Filing Date: August 29, 2013

Docket No. 31,606 (consolidated with Docket No. 31,632)

ALBUQUERQUE POLICE OFFICERS’
ASSOCIATION, JOEY SIGALA, FELIPE
GARCIA, TOM NOVICKI, and MATT
FISHER,

       Plaintiffs-Appellants,

v.

CITY OF ALBUQUERQUE,
ALBUQUERQUE POLICE DEPARTMENT,
and MAYOR RICHARD BERRY,

       Defendants-Appellees.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Clay P. Campbell, District Judge

Sanchez, Mowrer & Desiderio, P.C.
Frederick M. Mowrer
Albuquerque, NM

Rose Bryan, P.C.
Rose Bryan
Albuquerque, NM

for Appellants

David Tourek, City Attorney
Rebecca E. Wardlaw, Assistant City Attorney
Albuquerque, NM

Conklin, Woodcock & Ziegler, P.C.
Robin A. Goble
Albuquerque, NM


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for Appellees

                                         OPINION

GARCIA, Judge.

{1}     In this action alleging breach of a collective bargaining agreement, Plaintiffs,
Albuquerque Police Officers’ Association and select individuals (collectively, the Plaintiffs
shall be referred to as APOA), appeal from a summary judgment entered in favor of
Defendants, City of Albuquerque, Albuquerque Police Department, and Mayor Richard
Berry (the Mayor) (collectively the Defendants shall be referred to as the City). This dispute
concerns APOA’s contention that the City violated the parties’ multi-year collective
bargaining agreement (CBA) when it failed to implement the final phase of a salary increase
for police officers set forth in the CBA. We reverse.

BACKGROUND

{2}     In 2008, the City and APOA executed the CBA running from July 1, 2008 through
June 30, 2011. The CBA covered many areas including provisions related to salary, hours,
and conditions of employment. The salary schedule provided for annual raises based on
employee rank within the police department at the time the annual raises were to take effect.
In addition, the CBA contained a provision that provided compensation increases for the
second and third fiscal years, contingent upon City Council approval as set forth in Section
3-2-18 of the City’s Labor Management Relations Ordinance (LMRO). Albuquerque, N.M.,
Code of Ordinances ch. 2, art. II, § 3-2-18 (2002). Section 3-2-18 provides that:

               Any contract between the [C]ity and an employee organization, which
       contains provisions that result in expenditures greater than the amount
       appropriated for wages and benefits in an adopted city budget for the initial
       fiscal year of the contract or which contains a multi-year commitment shall
       require the review and approval by the City Council. In order for any
       contract to be approved by the City Council, the City Council must approve
       the economic components of the contract through an executive
       communication and adopt a resolution providing an appropriation or
       deappropriation or both to cover the cost of the contract. All such contracts
       shall contain re-opening language for economic items.

(Emphasis added.)

{3}    The City implemented the two salary increases contemplated by the contract during
the 2009 and 2010 fiscal years. However, at the time of the April 1, 2010 submission of the
Mayor’s 2011 fiscal year budget proposal to the City Council, the City’s department of
finance and administrative services projected a budget shortfall of approximately $66.6
million. As a result of the revenue shortfall carrying into the fiscal year 2011 budget, City

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revenues would only support an appropriation level of $455 million. This was $20 million
less than the $475 million appropriation level previously anticipated for fiscal year 2011.
The 2011 salary increases provided for in the CBA were expected to cost $9.8 million.

{4}     Rather than risk increasing the City’s unemployment rate through potential layoffs
of City employees, the Mayor proposed to balance the budget by utilizing a sliding scale
wage reduction plan for all City employees. The City Council adopted the Mayor’s proposal
to balance the budget, and enacted a budget for the 2011 fiscal year that did not include
funding for CBA pay raises scheduled to begin on July 1, 2010.

{5}     The APOA initiated this legal action challenging the City’s failure to implement the
negotiated annual salary increase for the 2011 fiscal year. APOA’s breach of contract theory
hinged on its allegations that, in approving the CBA in 2008, the City Council appropriated
the funding to cover the entirety of the annual wage increases through fiscal year 2011, or
that sufficient funding was appropriated and available for the City to comply with the CBA
wage increases in fiscal year 2011. The City moved for summary judgment, arguing that the
wage increases proposed in the CBA were contingent on annual appropriations made by the
City Council. The district court agreed and granted summary judgment in favor of the City,
finding that APOA did not raise an issue of material fact regarding whether the City
appropriated funds to cover the entirety of the CBA in 2008 or had not appropriated
sufficient available funds to comply with the CBA wage increases in fiscal year 2011. APOA
timely appealed the district court’s grant of summary judgment in favor of the City.

STANDARD OF REVIEW

{6}     Our review of summary judgment is de novo. Stennis v. City of Santa Fe, 2008-
NMSC-008, ¶ 12, 143 N.M. 320, 176 P.3d 309. “Summary judgment is proper if there are
no genuine issues of material fact and the movant is entitled to judgment as a matter of law.”
Roth v. Thompson, 1992-NMSC-011, ¶ 17, 113 N.M. 331, 825 P.2d 1241. “[W]e view the
facts in a light most favorable to the party opposing the motion and draw all reasonable
inferences in support of a trial on the merits[.]” Handmaker v. Henney, 1999-NMSC-043,
¶ 18, 128 N.M. 328, 992 P.2d 879. “Summary judgment should not be granted when material
issues of fact remain or when the facts are insufficiently developed for determination of the
central issues involved.” Vieira v. Estate of Cantu, 1997-NMCA-042, ¶ 17, 123 N.M. 342,
940 P.2d 190; see Nat’l Excess Ins. Co. v. Bingham, 1987-NMCA-109, ¶ 13, 106 N.M. 325,
742 P.2d 537 (noting that summary judgment is not appropriate where further factual
resolution is essential for determination of the central legal issues involved).

{7}    We review the district court’s interpretation of the Public Employee Bargaining Act
(PEBA), NMSA 1978, §§ 10-7E-1 to -26 (2003, as amended through 2005), and local
ordinances as questions of law and subject to de novo review. Am. Fed’n of State, Cnty. &
Mun. Emps., Council 18 v. City of Albuquerque, 2013-NMCA-012, ¶ 6, 293 P.3d 943, cert.
granted, 2013-NMCERT-001, 299 P.3d 863. “In construing a statute, our charge is to
determine and give effect to the Legislature’s intent.” Marbob Energy Corp. v. N.M. Oil

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Conservation Comm’n, 2009-NMSC-013, ¶ 9, 146 N.M. 24, 206 P.3d 135. “In discerning
the Legislature’s intent, we are aided by classic canons of statutory construction, and we
look first to the plain language of the statute, giving the words their ordinary meaning, unless
the Legislature indicates a different one was intended.” Id. (alteration, internal quotation
marks, and citation omitted). “We will not depart from the plain wording of a statute, unless
it is necessary to resolve an ambiguity, correct a mistake or an absurdity that the Legislature
could not have intended, or to deal with an irreconcilable conflict among statutory
provisions.” Regents of Univ. of N.M. v. N.M. Fed’n of Teachers, 1998-NMSC-020, ¶ 28,
125 N.M. 401, 962 P.2d 1236.

DISCUSSION

{8}     The requirements and obligations of the parties regarding the funding of a public
employee collective bargaining agreement are statutorily controlled by the PEBA, the
LMRO, and the specific terms of the parties’ collective bargaining agreement. The PEBA
was designed “to guarantee public employees the right to organize and bargain collectively
with their employers, to promote harmonious and cooperative relationships between public
employers and public employees and to protect the public interest by ensuring, at all times,
the orderly operation and functioning of the state and its political subdivisions.” Section 10-
7E-2. The purposes of the LMRO are similar to those in the PEBA, including allowing
employees of the City “to organize and bargain collectively with” the City. Albuquerque
N.M., Ordinance § 3-2-2(A) (1977).

{9}     In this case, the City’s expenditure of funds to comply with the CBA was subject to
both “the specific appropriation of funds” and “the availability of funds” under Section 10-
7E-17(E). Albuquerque N.M., Ordinance § 3-2-18. In pertinent part, Section 10-7E-17(E)
requires “an agreement provision by a public employer other than the state . . . that requires
the expenditure of funds shall be contingent upon the specific appropriation of funds by the
appropriate governing body and the availability of funds.” The language of the CBA
recognized this limitation and specifically cited Section 3-2-18. The district court explained
it was obvious that the funds were both available and appropriated for the annual salary
increases for fiscal years 2009 and 2010 “simply because everybody has conceded that the
raises were given in those two years[.]” For fiscal year 2011, the district court found that
APOA raised a genuine issue of material fact with respect to the issue of “availability of the
funds.” It granted summary judgment in favor of the City, however, because it found that
APOA failed to raise a genuine issue of material fact regarding the “specific appropriation
of funds” to cover the 2011 fiscal year funding under the CBA.

{10} On appeal, APOA contends that the district court erred in holding it failed to raise
a material issue of fact regarding the City’s “specific appropriation of funds” sufficient to
fulfill the 2011 CBA increase. APOA argues that consistent with Section 3-2-18, the City
Council passed the required resolution to appropriate sufficient funds to cover the entire term
of the CBA at the time it was entered into and submitted in 2008. The City responded that
it only appropriated the funds necessary to cover the annual costs in the CBA as part of each

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year’s budgeting cycle. The annual compensation commitments set forth in the CBA were
subject to the approval of the City Council, as set forth in Section 2.1.1.5 of the CBA.
However, the plain language of Section 3-2-18 of the LMRO, as referenced in Section
2.1.1.5 of the CBA, required the City Council to “adopt a resolution” appropriating funds
to cover the economic components of the contract when the CBA was approved by the City
in 2008. As such, we agree with APOA that the City adopted the appropriate resolution in
2008 to cover the economic obligation for the new three-year CBA.

{11} Multi-year collective bargaining agreements are beneficial to both sides and provide
stability and continuity for both management and public employees. Section 3-2-18 of the
LMRO does not prohibit the City from adopting a contract that has fiscal implications over
several years. As a fiscal protection to the City, the CBA and LMRO provide a vehicle to
re-open the CBA to address “economic items.” This re-opening requirement in Section 3-2-
18 ensures that the City has a mechanism to address unexpected deficit spending or
budgetary shortfalls that arise during the subsequent years of multi-year collective
bargaining contracts. See also NMSA 1978, § 6-6-11 (1968) (prohibiting municipalities from
contracting debt of any kind which cannot be paid out of the money actually collected and
belonging to that current year). However, the City did not comply with the requirements of
its own ordinance. Thus, subject to the City’s absolute right to reopen the CBA for
unexpected economic circumstances that occur, we construe the City Council’s approval and
resolution to establish a binding contractual obligation to provide the annual compensation
for 2009, 2010, and 2011 that is set forth in the CBA.

{12} The commitment to provide this compensation structure through the adoption of a
City Council resolution was the only requirement under the LMRO. “[T]his rule furthers the
[City’s] own long-run interest as a reliable contracting partner in the myriad workaday
transaction of its agencies.” State v. Am. Fed’n of State, Cnty. & Mun. Employees, Council
18, 2012-NMCA-114, ¶ 29, 291 P.3d 600 (internal quotation marks and citation omitted),
cert. granted, 2012-NMCERT-011, 297 P.3d 1227; see Salazar v. Ramah Navajo Chapter,
567 U.S.___, ___, 132 S.Ct. 2181, 2190 (2012) (explaining that under federal law, “[o]nce
‘Congress has appropriated sufficient legally unrestricted funds to pay the contracts at issue,
the Government normally cannot back out of a promise on grounds of ‘insufficient
appropriations,’ even if the contract uses language such as ‘subject to the availability of
appropriations,’ and even if an agency’s total lump-sum appropriation is ‘insufficient to pay
all the contracts the agency has made’”).

{13} Subject to the City’s right to reopen the contract, the parties to a multi-year collective
bargaining agreement must be able to rely upon the negotiated terms of their initial
agreement. As a result, APOA was entitled to the multi-year salary increases specifically set
forth in the CBA and appropriated by the City Council’s resolution in 2008. APOA
submitted an affidavit as evidence that the City had sufficient available funds to fulfill the
CBA contractual obligation at the time the promise was made and approved in 2008.
Although the record reflects that the City also had sufficient funds to fulfill the
2011contractual obligation under the CBA when the Mayor proposed his budget for fiscal

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year 2011, rather than reopen the CBA for economic reasons, the Mayor unilaterally chose
to exclude the CBA salary increases from the proposed budget. The evidence indicated that
the Mayor chose to breach the CBA contractual obligation in order to “share the burden so
that no single class of employee shoulders an unfair share of the [City’s budgetary
shortfall,]” or otherwise increase the City’s unemployment rate through layoffs. These
reasons and goals do not legally justify a departure from the City’s contractual obligation to
reopen the CBA to address unexpected economic items. Under the appropriate standard of
review, APOA, as the party opposing summary judgment, must be given the benefit of all
reasonable doubts in determining whether a genuine issue of material fact exists. Skarda v.
Skarda, 1975-NMSC-028, ¶ 30, 87 N.M. 497, 536 P.2d 257.

{14} APOA presented evidence that sufficient funds were available to fund all three years
of the annual salary increases outlined in the CBA, and that the City Council adopted the
required resolution to appropriate those funds in 2008 when it adopted and approved the
CBA. The City also presented evidence that funds were available to pay the 2011 fiscal
salary increase required under the CBA but the Mayor chose not to make the required
allocation of those funds in his 2011 budget proposal for other policy reasons. Because the
City did not exercise its right to reopening and renegotiate the economic terms of the CBA
for fiscal year 2011, Section 3-2-18 does not permit the moneys available to pay the City’s
multi-year contractual obligations to be diverted to other programs and services. Thus, the
factual issues presented by the parties do not support summary judgment in favor of the City.

CONCLUSION

{15} Accordingly, the summary judgment decision of the district court is reversed. This
matter is remanded to the district court for further proceedings.

{16}   IT IS SO ORDERED.

                                              ____________________________________
                                              TIMOTHY L. GARCIA, Judge

WE CONCUR:

____________________________________
MICHAEL D. BUSTAMANTE, Judge

____________________________________
MICHAEL E. VIGIL, Judge




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