Judge delays pension reform

While Prop. B's supporters were celebrating victory on June 5, a few folks I chatted with that evening talked about how tricky the measure would be to implement.

"It's a very ugly baby," one City Hall staffer told me.

This was underscored at a hearing on Tuesday, July 10, where attorneys for the state's Public Employment Relations Board (PERB) and the city's Municipal Employees Association (MEA), asked a judge to halt the measure's implementation. In a ruling issued July 11, Judge Luis Vargas ordered the city to delay Prop. B's roll-out until at least July 27.

Here's where it gets tricky: City Attorney Jan Goldsmith says Prop. B requires the city to close its pension system to new hires as soon as California Secretary of State Debra Bowen certifies the election. That's supposed to happen within the next few weeks. By law, the city and its labor unions need to meet to negotiate a new retirement plan for anyone hired after Prop. B takes effect. Not only is that expected to be a lengthy process; it's yet to begin.

"We have no proposals, no meeting date, and the City Council will be taking a legislative recess for the month of August," MEA attorney Ann Smith told the judge Tuesday.

Meanwhile, Prop. B's proponents have made much about a quick implementation. Immediately following the election, Goldsmith said there'd need to be a hiring freeze until the details of the new retirement plan were worked out. At the July 10 hearing, he seemed to back away from that position, though he argued that voters were "very clear" that no new employees could be enrolled in the city's pension plan. Without a new retirement plan, and without the ability to enroll employees in the old plan, "we're between a rock and a hard spot," Goldsmith said. He told Smith at the hearing that he'd be happy to start the negotiation process the next morning at 9 a.m. Problem is, he can't.

"He's not the negotiator for the city," Smith told Vargas "the mayor is."

Vargas' ruling asks the parties to return to court on July 27 for a review hearing and encourages them to work something out before then.

"Both parties represent [that] the imposition of the [temporary restraining order] will not halt meet and confer efforts," he wrote. The restraining order also allows time for a state-appointed administrative law judge to hear arguments in a challenge to Prop. B's legality. That hearing starts July 17 and is expected to last six days.

Three of the measure's proponents—T.J. Zane, April Boling and Steve Williams, the president, treasurer and chairman of the Lincoln Club, which spent $415,000 supporting Prop. B—asked the state Supreme Court to stop that hearing. On July 10, the court denied that request.