On Friday afternoon, City Council member and mayoral candidate Carl DeMaio posted a photo to his Facebook page featuring one of July 4's massive fireworks-barge explosions and the words "The San Diego Pension System" at the bottom. In the comments, he wrote: "One of our campaign staffers has a perfect description of San Diego's pension system without full implementation of Prop. B." Looming over "full implementation" is a hearing tomorrow, July 10, at which the state's Public Employment Relations Board (PERB) will ask Judge Luis Vargas to stop the city from enacting Prop. B until PERB sorts out questions about the measure's legality. A hearing in front of a PERB administrative-law judge is scheduled for July 17.
Prop. B seeks to freeze city workers' base pay—also known as "pensionable" pay—through June 30, 2018, and put new employees into a 401(k)-style retirement plan. (The latter provision doesn't apply to police officers.) State law says that any legislative changes to public-employees' compensation are subject to labor negotiations. While unions and lawmakers don't have to reach an agreement, they at least have to meet at the bargaining table. The only way to get around that is to gather enough signatures to put a measure on the ballot. The city's labor unions are arguing that Mayor Jerry Sanders intentionally circumvented state law by crafting Prop. B and then recruiting political allies to fund a costly signature-gathering campaign.
So, DeMaio's is an apt analogy for both sides. While the pension system won't collapse, payments are expected to increase through 2024. All sides agree that something needs to be done in the intervening 12 years to lower those payments. But, if Prop. B gets tied up in court, making those changes could prove complicated. For Prop. B to actually save money, the pay freeze and switch to a 401(k) plan have to go hand-in-hand. The 401(k) change alone—which the unions aren't challenging—will cost the city an estimated $54 million between 2014 and 2016. If all this hasn't provided enough political fireworks, at the heart of the labor unions' legal case is an opinion from divisive former City Attorney Mike Aguirre, written in response to questions from City Council members in May 2008, after the mayor proposed a pension-reform measure that would, among other things, change how pensions are calculated. Among those questions:
Can the Mayor initiate or sponsor a voter petition drive to place a ballot measure to amend the City Charter provisions related to retirement pensions? So so, what, if any are the meet-and-confer requirements under the California Government Code, and how would this be fulfilled.
Aguirre's answer (emphasis added):
The Mayor has the same rights as a citizen with respect to elections and propositions.... He has the right to initiate or sponsor a voter petition drive. However, such sponsorship would legally be considered as acting with apparent governmental authority because of his position as Mayor, and his right and responsibility under the Strong Mayor Charter provisions to represent the City regarding labor issues and negotiations, including employee pensions. As the mayor is acting with apparent authority with regard to his sponsorship of a voter petition, the City would have the same meet and confer obligations with it unions....
Though Sanders followed Aguirre's advice in 2008, and met with labor unions—resulting in what Sanders referred to at the time as "comprehensive pension reform"—he told CityBeat editor David Rolland last December that Aguirre's opinion is "worth the paper it's printed on," adding, "Is it printed on toilet paper?" City Attorney Jan Goldsmith, who defeated Aguirre in 2008, has said, too, that Aguirre's wrong. Goldsmith maintains that Prop. B, by the nature of how it got to the ballot, is a citizens' initiative; it doesn't matter if the mayor authored and supported it. In a June 19 interview, Goldsmith drew a comparison between Sanders' involvement in Prop. B and Gov. Jerry Brown's tax initiative.
"Of course [Sanders] supported [Prop. B], just like the governor's supporting his tax initiative. So what?" Goldsmith said. "Gov. Brown is doing a tax initiative to avoid getting a two-thirds vote of the state Legislature to pass a tax. And that’s... a constitutional requirement, a two-thirds vote."
Though, the state Constitution also allows the governor to pass a tax via a two-thirds vote of the people. And, Sanders defense is that he authored and supported Prop. B as a "private citizen," not as mayor. Whether San Diego's strong-mayor form of government forbids the mayor from putting a measure on the ballot to bypass labor negotiations—and whether Aguirre's interpretation of state labor law was right—is yet to be seen.