This guest post was authored by Alison Neufeld
The City of San Diego has been ordered to delay implementation of the pension reform initiative that was approved by an overwhelming majority of voters at the election on June 5, 2012. In our previous blog dated June 12, 2012, we described how Proposition B – also known as the Comprehensive Pension Reform Initiative (CPRI) – modifies employee pension benefits under the San Diego City Charter.
This week, San Diego Superior Court Judge Luis Vargas issued a temporary restraining order (TRO) prohibiting the City from taking action to implement the CPRI. Judge Vargas was following the directive handed down by the Court of Appeal in a published decision on June 19, 2012.
This controversial case has been closely watched as charter cities throughout California struggle to address budget gaps due in large part to pension obligations. The drama began on September 30, 2011, when three citizens submitted a petition to place the CPRI on the ballot for the June 5, 2012, election. On January 30, 2012, the City Council adopted an ordinance to place the CPRI on the voter ballot for the election on June 5, 2012.
Members of the San Diego Municipal Employees Association (MEA) claimed that the voter initiative was a “sham” because City officials had allegedly co-authored, promoted and funded the initiative. MEA filed an unfair practice charge and requested that PERB seek an injunction order preventing the City from placing the CPRI on the ballot. PERB issued an unfair practice complaint and, on February 14, 2012, filed an application for a TRO.
On February 21, 2012, PERB sought a temporary restraining order (TRO) from the San Diego Superior Court. The Superior Court denied PERB’s request a week later. Within days, PERB ordered that a hearing be held on the UPC. The hearing was scheduled to begin on April 2, 2012.
The City filed motions in the Superior Court seeking to stay the PERB hearing. The City argued that PERB’s application for injunctive relief demonstrated that it had already decided the City had violated the MMBA, and that PERB lacked jurisdiction to resolve issues involving a voter initiative. PERB and MEA claimed that PERB has exclusive initial jurisdiction over an unfair practice charge, and that the request for a temporary injunction was necessary to preserve the status quo pending the administrative proceedings.
On March 27, 2012, Judge Luis Vargas ruled in favor of the City and stayed the PERB proceeding. MEA challenged the order in the Court of Appeal.
At the election on June 5, 2012, the CPRI was approved by a two-thirds majority.
On June 19, 2012, the Court of Appeal issued its decision holding that PERB has the exclusive initial jurisdiction to determine whether the City violated the MMBA by placing the CPRI on the ballot before meeting and conferring with MEA. The Court rejected the City’s argument that PERB’s action in seeking injunctive relief demonstrated that it would be futile for the City to appear before PERB. The Court also rejected the argument that PERB lacks the authority to hear the matter, since the MEA claimed that the City had actually been behind the voter initiative. In addition the Court found that participating in the PERB administrative process would not have interfered with the City’s ability to present the CPRI to the voters, because the trial court had rejected PERB’s motion for a preliminary injunction. (San Diego Municipal Employees Assn. v. Superior Court, 206 Cal.App.4th 1447, — Cal.Rptr.3d —-, 2012 WL 2308142, Cal.App. 4 Dist., 2012.)
On July 10, 2012, the San Diego Superior Court issued a temporary restraining order but “purposefully taper[ed] the TRO to be effective until July 27, 2012.” Judge Vargas’ Order reads, in part:
“Preservation of the status quo pending negotiations contemplated by the language of Proposition B requires a temporary delay in implementing the CPRI. The Court underscores that the voters of the City of San Diego have overwhelmingly approved the local ballot measure CPRI, and only grants this application amid assurances by both the City and PERB to timely meet and confer regarding priority implementation of time sensitive issues of the CPRI. Both parties represent the imposition of the TRO will not halt meet and confer efforts.”
The Order also states that the July 27 deadline will allow the parties to continue meet and confer efforts, and to attend the PERB hearing on the CPRI. In any event, the CPRI cannot take effect until the election results are filed by the Secretary of State’s Office. This should occur in late July or early August.
San Diego is not alone. On June 11, 2012, the California Attorney General gave the Bakersfield Police Officers Association leave to bring a quo warranto action against the City of Bakersfield to determine whether the City met its meet and confer obligations before placing an initiative measure on the November 2010 ballot that resulted in the enactment of ordinances that set a new and different pension benefit calculation formula and contribution level for City public safety officers hired on or after January 1, 2011, and provided that the new benefit formula and contribution level may be amended or repealed only by a vote of the electorate. The Attorney General is also considering a similar request for leave to sue by the San Jose Police Officers over its initiative measure modifying pension rights and benefits.