Thomas G. Neske, John T. Gaffigan, James H. Long, James R. Wurm, Joseph E. Ponder, Mary Nelson, Darlene Green, Sheryl Johnson, Thomas Stoff, and Leslie Bond Sr., Respondents, v. City of St. Louis, Francis G. Slay, James F. Shrewsbury, And Darlene Green,

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Eastern District Case Style: Thomas G. Neske, John T. Gaffigan, James H. Long, James R. Wurm, Joseph E. Ponder, Mary Nelson, Darlene Green, Sheryl Johnson, Thomas Stoff, and Leslie Bond Sr., Respondents, v. City of St. Louis, Francis G. Slay, James F. Shrewsbury, And Darlene Green, Appellants Case Number: ED86919 Handdown Date: 08/22/2006 Appeal From: Circuit Court of City of St. Louis, Hon. David L. Dowd Counsel for Appellant: Jay A. Summerville Counsel for Respondent: James C. Owen Opinion Summary: The city of St. Louis and the individual members of its board of estimate and apportionment, in their official capacities (collectively, the city), appeal from the trial court's grant of summary judgment in favor of the individual members of the board of trustees of the city's police retirement system (collectively, retirement system) with respect to their allegation, inter alia, that the city failed to appropriate and transfer the amount owed to the retirement for the fiscal year, July 1, 2003, to June 30, 2004. TRANSFERRED TO SUPREME COURT OF MISSOURI. Division One holds:1. The city does not have standing to raise the Hancock Amendment as a defense because the Supreme Court of Missouri has held that only taxpayers have standing to raise the Hancock Amendment. The city failed to preserve for appellate review its argument that section 86.810 confers standing on the city to raise the Hancock Amendment as a defense.

1. The trial court did not violate article VI, section 26(a) of the Missouri constitution when it ordered the city to pay

to the retirement system the actuarially certified amount.

1. The trial court did not err in ordering the city to pay to the retirement system the actuarially certified because

the statutory scheme mandates such payment to ensure that the retirement system remains actuarially sound.

1. Because of the general interest and importance of the issues involved in this case, we transfer this case to the

Supreme Court of Missouri pursuant to Rule 83.02. Citation: Opinion Author: PER CURIAM Opinion Vote: TTRANSFERRED TO SUPREME COURT OF MISSOURI. Hoff, P.J. and Ahrens and Cohen, J.J., concur Opinion:

Introduction The City of St. Louis and the individual members of the Board of Estimate and Apportionment, in their official capacities (collectively "the City"), appeal from the trial court's partial grant of summary judgment in favor of the individual members of the Board of Trustees of the Police Retirement System of the City of St. Louis (collectively "the PRS") with respect to their allegations, inter alia, that the City failed to appropriate and transfer the amount owed to PRS for the fiscal year, July 1, 2003 to June 30, 2004 ("FY2004"). On appeal, the City argues that the trial court erred in requiring the City to pay the amount the PRS claims is due because such a requirement: (1) violates the Hancock Amendment, Article X, Section 21 of the Missouri Constitution (2) violates Article VI, Section 26(a) of the Missouri Constitution and (3) is contrary to the plain language of Section 86.337 RSMo 2000.(FN1) We affirm and order the cause transferred because the case presents issues of general interest and importance. Rule 83.02.(FN2) Background Chapter 86 governs the Police Retirement System. Section 86.344 provides: On or before the first day of March of each year the board of trustees shall certify to the board of estimate and apportionment of the city the amounts which will become due and payable during the year next following for expenses pursuant to subsection 2 of section 86.343 and the cost of benefits as determined pursuant to section 86.337. The amounts so certified shall be appropriated by the city and transferred to the retirement system in equal payments in the first six months of the ensuing year. In a letter dated January 23, 2003, Mercer Human Resources Consulting, the actuarial consultant for the PRS, informed the PRS that the amount owed by the City for FY2004 was $9,575,892. The letter stated that the calculation was based on the provisions of Sections 86.200 to 86.366. On February 27, 2003, the PRS certified to the Board of

Estimate and Apportionment that the amount due for FY2004 was $9,575,892 and requested payment. The City's Budget Director, Frank Jackson, reviewed the PRS's request along with other financial information and recommended that the City pay $4,115,600 for FY2004. The City allocated and paid the amount recommended by Jackson. In August 2003, the PRS filed a Petition for Declaratory Judgment against the City seeking a declaration that Section 86.344 required the City to pay the PRS the amount certified by the PRS's actuary. In its answer, the City asserted, among other things, that the amount demanded by the PRS violated various provisions of the Missouri Constitution, including Article VI, section 26(a) and the Hancock Amendment. The parties filed cross-motions for summary judgment. The trial court granted summary judgment to the PRS declaring, as follows: (1) sections 86.200 to 86.366 require the City to appropriate and transfer to the PRS an amount that is not less than the amount certified by the PRS and its actuary as the "normal contribution rate;" (2) the provisions of Chapter 86 that require the City to appropriate and pay the certified amounts for "the cost of benefits as determined pursuant to section 86.337" are not an unconstitutional delegation of legislative authority and do not violate Article VI, section 26(a) of the Missouri Constitution; and (3) the City does not have standing to raise the Hancock Amendment as a defense. The trial court entered judgment in favor of plaintiffs for $5,460,292, the difference between the amount paid by the City and the certified amount, and denied the PRS's request for pre-judgment interest and injunctive relief. Standard of Review Our review of summary judgment is de novo. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We review the record in the light most favorable to the party against whom summary judgment was entered. Id. Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 74.04(c)(6). If an issue was not presented to or decided by the trial court, then it is not preserved for appellate review. State ex rel. Nixon v. American Tobacco Co., 34 S.W.3d 122, 129 (Mo. banc 2000). Review on appeal is limited to those theories that were properly brought before the trial court. Duncan v. American Commercial Barge Line, 166 S.W.3d 78, 88 (Mo. App. E.D. 2004); Heffernan v. Reinhold, 73 S.W.3d 659, 663 (Mo. App. E.D. 2002). Discussion In its first point, the City contends that the trial court erred in granting the PRS's motion for summary judgment because requiring payment of the certified amount violated the Hancock Amendment's prohibition against State-required increases in the expenditures of other political subdivisions beyond the 1981 funding level without a corresponding appropriation by the State to fund such increase.(FN3) The City further contends that the undisputed facts show that the

certified amount for FY2004 exceeded the funding level in 1981. The City's point is substantively identical to the first point raised in the FRS case and the City supports its contentions here with the same cases used in the FRS appeal. In the FRS case, we affirmed the trial court's conclusion that the City lacked standing to raise the Hancock Amendment as a defense. Addressing the standing issue, we stated as follows: Article X, section 23 of the Missouri Constitution provides in pertinent part: Notwithstanding other provisions of this constitution or other law, any taxpayer of the state, county, or other political subdivision shall have standing to bring suit in a circuit court of proper venue and additionally, when the state is involved, in the Missouri Supreme Court, to enforce the provisions of sections 16 through 22, inclusive of this article.... (Emphasis added). In two 1995 decisions, the Missouri Supreme Court stated clearly that in order to have standing to assert the Hancock Amendment as a plaintiff or as a defendant, a party has to be a taxpayer. In Fort Zumwalt School District v. State, 896 S.W.2d 918, 921 (Mo. banc 1995), the Missouri Supreme Court held that: The Hancock Amendment makes no pretense of protecting one level of government from another. By its clear language, Section 23 limits the class of persons who can bring suit to enforce the Hancock Amendment to "any taxpayer." In so doing Section 23 recognizes that any apparent injury to the school district is merely derivative of the taxpayers' injury. After analyzing Fort Zumwalt and State ex rel. Board of Health Center Trustees of Clay County v. County Commission of Clay County, 896 S.W.2d 627 (Mo. banc 1995), we held that the "import of these two cases is that in order to have standing to raise the Hancock Amendment either offensively or defensively, a party has to be a taxpayer. City is not a taxpayer, and Officers, who are parties in this case in their official capacity only, are also not taxpayers." Slip op. at 6-7. We adopt this analysis and apply it to this case and hold that the City lacks standing to raise the Hancock Amendment as a defense. In contrast to the FRS case, however, here the City also asserts standing by virtue of Section 86.810, which provides in relevant part: The provisions of any other law notwithstanding, the board of trustees of any retirement system, the provisions of which are governed by this chapter, or any political subdivision which funds such retirement system, shall have

standing to seek a declaratory judgment concerning the application of article X, section 21 of the Missouri Constitution to the provisions of this chapter. In the event a final judgment is rendered by a court which judgment determines that any provision of this chapter constitutes a new activity or service or increase in the level of an activity or service beyond that required by existing law under article x, section 21 of the Missouri Constitution, or any successor to that section, that provision of this chapter shall be void ab initio and any new benefit or feature required by such of this chapter shall be deemed not to have accrued and shall not be payable to members. In response, the PRS argues that the City made no attempt to assert standing on the basis of Section 86.810 in its motion or other pleadings and in any event the legislature cannot enact statutes that alter or vary the Constitution.(FN4) Before we reach the City's substantive argument, we consider whether the City adequately preserved for appellate review the issue of whether Section 86.810 confers standing upon the City to raise a Hancock Amendment defense. A review of the record establishes that the PRS first raised the general issue of the City's lack of standing in response to the City's cross-motion for summary judgment. In reply, the City contended that the grant of standing to taxpayers in Section 23 of the Hancock Amendment did not prevent a municipality from asserting violations of the Hancock Amendment. Although the City clearly had an opportunity to raise Section 86.810 as a potential alternative basis for standing, it failed to do so in reply to the PRS attack on standing. Not surprisingly, the trial court did not either discuss or rule on the Section 86.810 issue in its detailed 63-page Memorandum, Order and Judgment. Following issuance of the judgment, the City's next opportunity to argue that Section 86.810 conferred standing came with the filing of its motion for new trial. In its motion for new trial, the City argued only that it had standing to raise the Hancock Amendment because Fort Zumwalt and Clay County were distinguishable. Once again, the City failed to assert that Section 86.810 provided a basis for an assertion of standing. In its ruling on the motion for new trial, the trial court did not address the effect of Section 86.810. Accordingly, because the City failed to assert Section 86.810 as a basis for standing in its written pleadings, motions, responses and replies and the trial court likewise issued no ruling on the matter either in its judgment or post-judgment determinations, the City has failed to preserve the effect of Section 86.810 for our review. State ex rel. Nixon v. American Tobacco Co., 34 S.W.3d at 129. See also Smith v. White, 114 S.W.3d 407, 420 (Mo.App.W.D. 2003.) (FN5) In its second point, the City argues that requiring it to pay the certified amount constitutes an improper delegation of legislative power and violates Article VI, section 26(a) of the Missouri Constitution. The City further asserts that Article VI, section 26(a) provides that no city may become indebted beyond its income. Moreover, the City contends that its

revenue for 2003-2004 has already been appropriated and transferred to various recipients and if the City had to pay the certified amount it would be obligated in excess of its revenues. The City's point is substantively identical to its third point in the FRS case. The City also relies on the same cases identified in the FRS case. Accordingly, we adopt the analysis in the FRS case and hold that the statutory scheme that requires the City to pay the certified amount to the PRS is neither an improper delegation of legislative power nor a violation of Article VI, section 26(a) of the Missouri Constitution. Point denied. In its third point, the City argues that the trial court erred in entering judgment for the PRS because its payment was adequate as a matter of law. The City asserts that Section 86.337 provides that notwithstanding the certified amount, a payment by the City is sufficient if, when combined with assets of the retirement system, there is enough money to provide the benefits payable during the current year. The City further contends that the undisputed facts show that PRS's assets exceed the amount necessary to satisfy the benefits payable during the current year. Although the statutes at issue here differ from the relevant ordinance and statute at issue in FRS, the City's point is substantively identical to the fourth point in the FRS case and again the City relies on the same arguments and cases. Accordingly, we adopt the analysis in the FRS case, apply it here, and hold that the statutory scheme mandates payment of the actuarially certified amount to ensure that the PRS remains actuarially sound. Point denied. Conclusion The judgment of the trial court is affirmed. Because the issues presented are of general interest and importance, the cause is transferred to the Missouri Supreme Court. Rule 83.02. Footnotes: FN1.All further statutory references are to RSMo 2000, unless otherwise indicated. FN2.We simultaneously hand down this case with the Fireman's Retirement System v. City of St. Louis, ("FRS") which, we note, the trial court characterized as this case's "companion." We agree with the trial court that the FRS case and this case raise many of the same issues and our opinion in this case reflects the substantial overlap. FN3.Article X, section 21 provides that: "The state is hereby prohibited from reducing the state financed proportion of the costs of any existing activity or service required of counties and other political subdivisions. A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the general assembly or any state agency of counties or other political subdivisions, unless a state appropriation is made and disbursed to pay the county or other political subdivision for any increased costs."

FN4.During oral argument, the City's counsel suggested that because the constitutionality of Section 86.810 is at issue this Court lacks jurisdiction. The Missouri Supreme Court has exclusive appellate jurisdiction of cases involving the validity of a state statute. Mo. Const. article V, section 3. Even if we were to assume that the constitutional validity of Section 86.810 is at issue, to be properly preserved, the issue must be raised at the earliest opportunity, the issue must be preserved at each step of the judicial process and the trial court must rule on the issue. Sharp v. Curators of the University of Mo., 138 S.W.3d 735, 738 (Mo.App.E.D. 2003). These requirements have not been met. If the constitutional validity of a statute has not been properly preserved, then jurisdiction is in this Court, rather than the Missouri Supreme Court. Id. f1 FN5.In its brief, the PRS states that the City raised Section 86.810 in "the second oral argument." There is no citation to the record for this assertion. The PRS also implies that the trial court ruled on the Section 86.810 issues when it averred in its brief that "the trial court did not err in ruling that Section 86.810 is of no effect and does not confer standing upon the City." Having reviewed the trial court's memorandum and judgment, we see no reference to Section 86.810 as a basis for standing. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.