Prop. B Pension Reform Process Faulted by Labor Agency Judge

By Gene Cubbison
|  Wednesday, Feb 13, 2013  |  Updated 9:02 PM PDT
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SD Fact Check: Proposition B

NBC 7 San Diego

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Pension Reform Challenged

A challenge to San Diego's voter-approved pension reform measure has just been upheld by a state labor agency ruling.

SD Fact Check: Proposition B

Voice of San Diego editors Scott Lewis and Andrew Donohue discuss Proposition B, a pension reform measure, is going before San Diego voters in June. Much of the attention given to it focuses on its switch to 401(k)s for most new city workers. Get more from voiceofsandiego.org here.
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A challenge to San Diego's voter-approved pension reform measure has just been upheld by a state labor agency ruling.

But the measure's supporters say that's a minor setback that'll be reversed in the courts.

In issuing the ruling, an administrative law judge for the state's Public Employment Relations Board (PERB) posted a notice ordering city to rescind Proposition B, which replaced "defined benefits" pensions with 401(k)-style retirement plans.

He also called for city employees hired under “interim” 401(k) plans in the wake of Prop. B’s passage be given benefits they otherwise would have received under the traditional pension scheme, plus 7 percent annual interest on those amounts.

But nothing of the sort will take place, pending further legal wrangling in the courts of law.

The administrative law judge, Donn Ginoza, concluded that then-Mayor Jerry Sanders violated laws requiring him to "meet and confer" with employee groups on changes in their working conditions.

Attorneys for the city’s labor unions opponents say Sanders and other city officials collaborated with citizens groups to circumvent bargaining over a new retirement setup, at a time when the unions were agreeing to cost-cutting proposals.

"Never once did he bring any one of those issues to the bargaining table -- though we were bargaining during the relevant time about employee health,” said Ann Smith, who represents the San Diego Municipal Employees Assn., in an interview Wednesday.

"I stand by a proven track record of making bargaining work in this city,” Smith added. “And there was no reason to thwart the law and create the uncertainty and expense to this city that is now associated with Proposition B."

Said Frank De Clercq, president of San Diego Firefighters Local 145: "They know the right place to bring that was the negotiating table. And that's evidenced by eight years of the fire fighters meeting and conferring in good faith. Eight years of concessions, no pay increases."

The Prop. B campaign gathered a record 116,000 voters' signatures, at a cost of more than $1 million, and got it passed last June by two a two-thirds majority.

Its organizers insist it was a grass-roots effort -- even though Sanders and other city officials were on board and holding news conferences to promote it as “private citizens”.

"That does not mean we were agents of the mayor; we were never controlled by the mayor,” says Lani Lutar, president of the San Diego County Taxpayers Assn. “And that's essentially what this ruling seems to be making the claim (for)."

City Attorney Jan Goldsmith says he has standing authority to keep defending the measure, in a process that could lead to reviews by a state appellate court and the California Supreme Court if PERB’s three-member governing board certifies Ginoza’s ruling.

Goldsmith told reporters Wednesday that he sees PERB as a labor-friendly agency with a political agenda.

"I think they look at this case as an effort to 'close the floodgates', and to not allow citizens initiatives in the future,” Goldsmith said. “Or at least, put so many roadblocks in front of it that they're less likely to happen."

As for the ultimate outcome of the case: "I'm very confident that when this gets into the judicial arena, the Constitution applies, and the rule of law applies. We know what PERB was going to do. This was no surprise to us."

Labor officials want the city to set up a contingency fund to cover retroactive benefits for new hires, now working under the interim 401(k) plans, in the event Prop. B is overturned.

Goldsmith said that’s a subject he’ll reserve for discussions with City Council members in closed session.

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