Maryland’s highest court has ruled that the Montgomery County Council acted within its authority in 2011 when it decided not to pay for retirement and health benefits included in a collective bargaining agreement with police.

In an opinion issued Friday, the Maryland Court of Appeals upheld two lower court rulings saying, in essence, that the County Council — which controls the Montgomery budget — is not bound by labor contracts negotiated by the union and the County Executive.

The first paragraph of the 19-page opinion, written by Judge Glenn T. Harrell, Jr., set a stinging tone: “‘Proximity to power deludes some into thinking they wield it,’ observed the character Francis Underwood, portrayed by Kevin Spacey, in the U.S.-version of the television series ‘House of Cards.’”

The union, Harrell said, “fell under such a spell in maintaining this litigation.”

Specifically, the court ruled that the council did not violate collective bargaining law when it rejected a 3.5 percent wage hike and other retirement and health benefits proposed by police for funding in the FY 2012 budget. The union representing Montgomery officers, the Fraternal Order of Police Lodge 35, filed a lawsuit challenging the decision in June 2011. It argued that the council did not have the authority to unilaterally change the benefits package.

The ruling is the latest development in the litigious relationship between the county and its police union. In March, a state circuit court judge ruled that County Executive Isiah Leggett and public information director Patrick Lacefield violated Maryland election law by using public funds to campaign for the 2012 ballot proposition that eliminated certain collective bargaining rights for police.

But the court declined to award monetary damages sought by the FOP. The union and the county are both appealing the ruling.

Friday’s decision addresses a legal dispute that began in the spring of 2010 when the county moved to cut costs in the depths of the recession. Leggett, who by law negotiates collective bargaining agreements and submits them to the council for funding, reopened the second year of an existing two-year contract with the FOP.

Leggett proposed cutting negotiated wages by about half, which led to an impasse. The matter went to a neutral arbitrator, who ruled in favor of the FOP’s proposal for a 3.5 percent wage hike. The ruling did not address existing retirement and health benefits that were part of the original two-year contract.

In May 2011, the council rejected the settlement, triggering a provision in the law that called for council representatives to meet with the county executive and union leaders in an attempt to re-negotiate. The union alleges that the council terminated those talks prematurely.

Later that month the council passed a 2012 budget that excluded the 3.5 percent pay increase. It also changed the existing contract provisions covering police pensions, prescription drugs and group insurance. Among the changes for example, were reductions in the county’s contribution to group insurance premiums.

Council members said they wanted to bring police benefits in line with employees of other county-funded agencies as a matter of equity.

The court held that the council had the authority to make changes when the two sides (FOP and Leggett) could not reach a renegotiated agreement and did not pursue binding arbitration.

“By the very nature of the Council’s budgetary approval function, if the parties do not set forth an acceptable agreement, then the Council must have the authority to finalize the budgetary process and determine which provision in the CBA [collective bargaining agreement] should be cut, and in what manner,” Harrell wrote.