State PERS To Wade Into San Diego Pension Change Dispute

A state board says it will seek a court injunction to keep the city of San Diego’s 401(k) initiative off the June ballot until it makes a final determination on whether Mayor Jerry Sanders violated labor law by crafting and advocating for the measure as a private citizen to avoid negotiations with employee unions.

In response to a complaint filed last month by the city’s largest union, the state Public Employment Relations Board will ask a Superior Court judge to table the initiative while it expedites an administrative hearing to determine if an unfair labor practice occurred. Even if a violation is confirmed, a judge would still have to agree.

Les Chisholm, a division chief with the board, said there were no findings of fact made, but there was “reasonable cause” to believe labor law has been violated in the case.

The board’s move, made late Friday, opens the possibility that the “Comprehensive Pension Reform” initiative may not go before city voters although supporters say the board action is preliminary and remain confident the measure will withstand legal scrutiny and stay on the ballot. The initiative — crafted by Sanders and City Council members Carl DeMaio and Kevin Faulconer — would replace guaranteed pensions for most new hires with a 401(k)-style plan.

Sanders, who was in Washington, D.C., Monday to tout the city’s recent financial turnaround and the initiative, called the board’s decision unfortunate given the nearly 116,000 city voters who signed a petition to put the measure on the ballot.

“The bottom line is this measure has rightly qualified for the ballot,” he said. “The public deserves the opportunity to vote on this. We will vigorously fight to give voters the right to decide this matter.”

Rep. Bob Filner, the lone major Democrat running to replace Sanders, opposes the initiative and calls it unfair because it puts the pension fix on the backs of city workers. He has promised an alternative plan but has yet to release it publicly.

“The PERB ruling changes a lot,” he said. Even if it is deemed legal, Filner said, “The substance of it and the attempt by the mayor and the proponents of this is exceedingly wrong.”

At issue is whether Sanders acted properly by pushing for the initiative as a private citizen.

The complaint filed by the Municipal Employees Association alleged that Sanders created the so-called citizens initiative as a “sham device” to avoid the city’s obligations to meet-and-confer with unions over significant changes to the pension system.

“As the city’s CEO and chief labor negotiator, this mayor has used his city-paid time, resources, power, prestige, visibility and ‘good offices’ to inspire, write, negotiate, endorse and sponsor the proposed citizens initiative which he has described as his legacy as mayor,” the complaint said.

Sanders and City Attorney Jan Goldsmith have maintained that because the initiative is a citizen initiative — placed on the ballot via signatures rather than legislative action — there is no need to negotiate its terms with labor.

Jonathan Heller, a spokesman for Goldsmith, reiterated that the city doesn’t have the authority to make changes to the initiative or keep it from going on the ballot because it is a citizen initiative. He also noted that PERB hasn’t made any formal decision yet.

“PERB has made no findings of fact and could not do so as there was no hearing,” Heller said. “PERB simply took what the labor unions wrote and repeated it. We were given 48 hours notice to provide a written response.”

The initiative was created in response to the city’s decade-long fiscal woes that stemmed from decisions by past city leaders to increase retirement benefits for workers while also neglecting to make full pension payments. The ensuing deficit — currently $2.2 billion — fueled by the recession crippled city finances and led to cuts to parks, libraries and public safety.

DeMaio, Sanders and other raised nearly $1.2 million last year for a six-month-long petition drive to gather enough signatures from registered city voters to trigger an election.

DeMaio said he remains confident a judge will dismiss the lawsuit.

“It is outrageous that government unions and their Sacramento defenders are trying to claim they can veto the citizens’ constitutional rights in this matter, but it provides yet another example of the contempt the government unions have for the taxpayers of San Diego and the lengths they will go to in protecting their unsustainable pension payouts,” he said.

The Municipal Employees Association explained the ruling in a Monday email to its members.

“Now that PERB — the quasi-judicial state agency responsible for enforcing the law related to bargaining and public employees — has agreed to our request to file litigation, the argument has become even more powerful,” it read.

The PERB lawsuit is expected to be filed later this week.

From The San Diego Union-Tribune.

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