OT: Public Employee Unions Attack the City of San Diego/Prop B

[paramount]

Cal WatchDog

Quick Video – Very Good Overview

[bearishgurl]

I’m in receipt of the 63 pg PERB decision of 2/11/13, but I haven’t had a chance to go over it with a fined-toothed comb.

But I will. This is my field of expertise.

Essentially, City put Prop B on the ballot without meeting and conferring with its unions first which is a violation of the MMBA (Cal. Gov Code sec 3500 et seq).

http://www.dcaasandiego.com/wp-content/uploads/2012/11/PERB-Decision.pdf

Essentially, this Decision and the certain litigation stemming from it will have the effect of holding Prop B in abeyance. And it has a better chance of striking it down through the courts than not.

Due to unlawfully jumping the gun, City has an arduous uphill climb in this case, IMO.

The employees City has hired since Prop B took effect (1/1/13?) may very well retroactively get DB plans after the “fat lady” finally sings her encores in this case.

City had until yesterday (3/1) to file objections to PERB’s Statement of Decision and request an oral argument of their objections to PERB.

Your “Cal Watchdog” commentator essentially claimed PERB is in the unions’ pockets. Nothing could be further from the truth. In disciplinary cases, PERB usually sides with the employer. PERB is simply following the law here. City of SD didn’t. It’s as simple as that.

Perhaps if the City hadn’t taken a “wild west” approach in putting poorly worded and too-far-reaching Prop B on the ballot without first meeting and conferring with its unions, they wouldn’t be in this mess to begin with. Now they’re no doubt wasting a whole team of attorneys at the City Attorney’s Office to fight the decision that they actually fought to get before themselves, lol.

Love it.

That’s your SD tax dollars at work, folks. In SD, politics ALWAYS wins out over potholes.

What I don’t understand is why City Attorney Jan Goldsmith didn’t advise those within the City supporting the Prop B pension reform initiative that they were going about it improperly and thus would never stick.

He’s smarter than this. Maybe he just figured he couldn’t change some of the mindsets of the council, mayor and city administration so they would just have to end up “learning the hard way.” After all, he and the attorneys in his office (one of the four “charging parties” in this case, lol) work 8 am to 5 pm regardless if they have six cases each or 60 cases each!

I noticed Goldsmith is not promising any particular outcome on the Cal Watchdog video.

Carry on, City. This “oral argument,” IF it happens, might be just juicy enough for me to trek on up to Oakland to watch it. WTH, I could take some city attorney employee friends along and visit some old haunts while we’re up there :=]

paramount, I’m not quite sure what your “Cal Watchdog” video was intended to accomplish.

[bearishgurl]

Here is a snapshot of the City and unions’ litigation leading up to the gathering of signatures to put Prop B on the ballot and subsequent PERB decision:

Closed Litigation

Ahem, nice try, City, but unfortunately, a “collective grass roots movement” isn’t the same as placing same issue on the ballot and getting said “grass roots petitioners” to vote for it and thus form the “majority” at the ballot box.

And it’s also not the same as the CA Supreme Court deciding to actually hear the matter, lol.

http://www.courts.ca.gov/opinions/archive/D058225.PDF

It appears that SD’s own attorneys were the chief defendants here, lol. The opinion was “Certified for Publication” and (wisely, for once) City decided not to appeal it.

Strike one …

http://www.dcaasandiego.com/wp-content/uploads/2012/05/Boling-Pet.-for-Review-to-Cal.-S.Ct_1.pdf

http://appellatecases.courtinfo.ca.gov/search/case/disposition.cfm?dist=0&doc_id=2017637&doc_no=S203478

And, as of 2/11/13:

http://www.dcaasandiego.com/wp-content/uploads/2012/11/PERB-Decision.pdf

Strike two … plus City has to now fight PERB ruling … an arduous uphill climb.

Active Litigation

http://www.courts.ca.gov/opinions/archive/D061724.PDF

http://appellatecases.courtinfo.ca.gov/search/case/disposition.cfm?dist=0&doc_id=2020766&doc_no=S204306

Strike three … City is … OUT.

I just saw this Fox5 News piece.

Goldsmith and other backers of the proposition have characterized PERB as an agency biased in favor of public employee unions. The city attorney said the ruling was expected.

“I view this with the fact that PERB acted so quickly last February in suing the city, I look at it as somebody at PERB or some group got together and said, `My God, the floodgates are beginning to open,”’ Goldsmith said.

“I think what they look at in this case is an effort to close the floodgates and to not allow citizens initiatives in the future — at least put so many roadblocks in front of it that they’re going to be less likely to happen,” he said. “I think that’s been what this is about since day one.”

. . . It was fiercely contested legally and during the election campaign by unions and a handful of City Council members. Current Mayor Bob Filner criticized the measure.

It was supported by former Mayor Jerry Sanders, Councilman Kevin Faulconer, ex-Councilman Carl DeMaio, the pro-business Lincoln Club of San Diego County and the San Diego County Taxpayers Association.

DeMaio, the Lincoln Club’s T.J. Zane and SDCTA Executive Director Lani Lutar said in a joint statement they will fight for the ballot measure.

Goldsmith is such a political animal. I guess we can’t blame him considering his position with the city frequently puts him between a “rock and a hard place” :=0

He’s clearly missing the reason for the ruling here (or at least “stoically” appearing that he is). Prop B was not actually a “citizen initiative.” It did not originate from the “citizenry” It may have appeared on the surface to have been but the proponents of it (SCTPA and the “Lincoln Club”) have always been well-known shills and strawpeople for City’s mayor and select councilmembers, lol.

City better hope this Decision on their unions’ ULPs never goes to trial in any “real” court of law. It might be better left to die in PERB while City sets up a special room just for “meet and confer” activities.

Even though they later dismissed it in light of finally hearing City’s unions’ ULP’s, PERB was correct to sue City over Prop B. The way that it was put before the voters was a violation of well-settled state law.

http://www.kpbs.org/news/2012/oct/25/perb-dismisses-its-lawsuit-against-san-diego-over-/

LOL. Maybe Goldsmith will be able to talk some sense into city officials.

Thank you for posting this thread, paramount. The City of SD has now been returned to my “lawsuit entertainment watch list” for the most time-and-money-wasting public entity.

***********

But . . . I’m still in a bit of a quandary here, however :=0.

Shouldn’t Real-Party-in-Interest/straw-plaintiff “April Boling” (on PERB v. City case) be content with her “infamous” unwavering support for Poway Prop C … which will end up bankrupting her beloved City and school district? Why didn’t she just decide to “rest on her laurels” and call it a day after that debacle? :=D

http://piggington.com/powaythe_real_debt_bomb#comment-217279

[CA renter]

Good stuff, as always, BG.

Once again, the “privatization movement” folks are trying to fool the uninformed about how pension costs have “spiked” in recent years. They always use the peak years of the stock market bubble (~1999-2001) as the base line — a period of time when pension funds were super-funded (over-funded) and many public employers were paying little to NOTHING toward pension costs because the investment returns were contributing so much to the funds. While it’s true that contribution rates and amounts have increased over time, it’s nowhere near as dramatic as they try to make it seem when using “pension holiday” periods as a starting point.

———-

When former Gov. Arnold Schwarzenegger briefly backed a proposal to switch new state and local government hires to 401(k)-style plans, he cited soaring state worker pension costs.

CalPERS dropped the state rate from $1.2 billion in 1997-98 to less than $160 million in 1999-00 and 2000-01. A booming market yielded a brief surplus, and CalPERS spread the wealth by sponsoring a major state worker pension increase, SB 400 in 1999.

But the market fell and the surplus vanished, causing CalPERS to push the taxpayer-paid state rate to $2.5 billion in 2004-05. Schwarzenegger cited skyrocketing pension costs as he urged a switch to debt-free individual investment plans.

Then a recession and market crash punched a huge hole in CalPERS investments expected to provide two-thirds of pension money. After peaking at $260 billion in 2007, the fund dropped to $160 billion in 2009 and now has climbed back to $255 billion.

The state payment to CalPERS jumped from $2.7 billion in 2007 to the current $3.8 billion. But this 40 percent increase over five years is far short of the eye-popping “2,000 percent” increase over five years cited by Schwarzenegger.

This time, employers had not been given a contribution “holiday.” State workers aided by agreeing to increase their pension contributions, though Schwarzenegger had to hold up the budget for 100 days to get a boost from 5 percent of pay to 8 percent for most.

CalPERS projects $200 million state rate hike
—————–

When looking at historical trends for pension contribution rates, current rates are generally in line with historical norms:

http://www.calpers.ca.gov/eip-docs/employer/actuarial-gasb/30-year-rate-hist.pdf

————————

For the record, I have been opposed to both the pension boost and contribution “holidays” from day one, and can list at least four different pension programs (all still defined benefit, which I think is important) that would *legally* and ethically reduce pension costs in very dramatic ways.

[CA renter]

Just so everybody understands, the “anti-union” propaganda is not being pushed by taxpayer advocates, and nothing that’s being proposed would result in lower taxes for taxpayer Joe Sixpack. The agenda is being pushed by the privatization movement, and their goal is not to reduce taxes for average Americans, but to privatize all public assets, resources, and cash flows…and further grow the income/wealth gap in this country. The private market has NOT lived up to the hype that they provide superior (or even similar quality) services for less (or even the same amount of) money. What they DO succeed at is eliminating middle-class, living-wage jobs from the economy and replacing them with low-wage jobs with no benefits, while creating a handful of “C-suite” positions in the private industry where the parasites can (individually) earn millions of dollars per year in taxpayer-paid compensation.

That is the goal of the privatization movement and the very wealthy people who are financing it, and the Lincoln Club is one of their shills.

The privatization movement has been privatizing more and more goods and services over the past few decades…have your taxes gone down (or service gone up) as a result?

Unions are the only obstacle standing in their way, and that’s why you’re hearing so much about the “evil” public sector unions the past few years. The privatization movement won’t let this economic crisis (caused 100% by those in the financial sector, NOT union workers) go to waste. If they weaken and eliminate the unions, they will own what little is left of this country, lock, stock, and barrel.

—————–

Lincoln Club officers:

While I can’t say for sure that these are the same people (just doing searches of their names), it’s a good guess, since they are all executives in San Diego, and (surprise, surprise) they all work in the FIRE sector.

1. Steve Williams – Chairman

Steve Williams, Partner, co-founded SENTRE Partners in 1989. Steve focuses on new clients, new concepts and new ideas. He developed a relationship with GE Pension Trust, which together with SENTRE Partners has become a major stakeholder in downtown San Diego. Steve also co-founded Vesta with Lorenzo Berho. Incorporated in 1997, Vesta is a Mexican industrial real estate fund, with approximately 8 million square feet of leased industrial properties located throughout Mexico.

Steve is a co-founder of Bandwidth Now which transforms commercial buildings into “next gen” environments, treating bandwidth as a utility and Wi-Fi as an amenity using its patent pending Building Optical Network (BON). Bandwidth Now and SENTRE were nominated by Intel for the Computerworld Honors Program’s 21st Century Achievement Award. Steve was formerly a partner with Trammell Crow Company, where he was responsible for the San Diego division. Prior to that, he was an investment salesman for Coldwell Banker in their Santa Ana office. Steve began his career as a certified public accountant with Arthur Young and Co.

Steve is a grandson of Arthur Banker, co-founder of Coldwell Banker (and now CB Richard Ellis).

http://www.sentre.com/bios/sbwilliams

2. Perry Dealy – Vice Chairman

Dealy Development, Inc.

Since 1992, Dealy Development, Inc. (DDI) is a full-service Real Estate Developer & Development Management Firm. DDI is experienced in large-scale, mixed-use, complex, and challenging to entitle public and private projects.

http://www.dealydev.com/

3. Bill Lynch – Vice Chairman

Bill joined ProFinance® Associates, Inc. in February 1999 to service and assist clients in arranging various forms of equity and debt financing as
well as facilitating M&A while focusing on service businesses in the Southwestern United States and security businesses nationally. He serves on
the Board for MIT Enterprise Forum San Diego. Bill is a registered representative with the National Association of Securities Dealers.

http://www.profinance.com/Biographies.html

…

Yep, developers, RE shills and “consultants”, and peddlers of financial services…just the sort of people you’d expect to be so concerned about Joe Sixpack’s tax bill. [/sarcasm]

[EconProf]

What these comments ignor is that the will of San Diego voters has been thwarted. We took a long look at public sector pensions and the ominous trends for taxpayers and voted to rein in the excesses. Because of a technicality, the voters’ choice will now be delayed, or perhaps denied, depending on what the courts decide.
In presenting the mountain of data above, CA Renter criticizes taxpayer advocates for cherry-picking dates to make the pensions’ rate of return look bad, such as the 2000 – present ROR. He is correct that that is not a fair benchmark, since the Dow Jones Average is up only about 20% from that dot-com bubble year. But neither is it fair to pick the near doubling of the DJA from four years ago–an anomally that will not likely continue.
Along those lines, public sector unions usually pick the past 30 years of market performance to judge their expected future rates of return in their portfolio. But the Dow was at 800 in 1982 and is 14,000 now. As a result, they appear reasonable when projecting a 7.75% rate into the future. This keeps their members’ contribution share artifically low as well as that of current taxpayers, hiding the exploding future liability of taxpayers. This keeps current politicians happy, as they kick the can down the road.
But in the new normal of our economy, 7.75% is illusory and dishonest. No one should reasonable expect that now. Companies are rapidly revising downward their expected ROR’s and responsibly setting aside money to cover their future obligations. The public sector needs to face reality as well.
Private sector taxpayers work well into their sixties before they can retire and get a far smaller pension or social security check than the unionized public sector workers who tend to retire in their fifties. That’s why San Diego voters voted as they did.

[bearishgurl]

[quote=EconProf]What these comments ignor is that the will of San Diego voters has been thwarted.

-snip-

That’s why San Diego voters voted as they did.[/quote]

The reality, EconProf, is that SD voters were, in effect, lied to during the City’s (yes, it WAS the City’s) campaign for Prop B. They were also (purposely) NOT told that the campaign, as it stood, was against the law and not only did City already know that and had been litigating thusly for years and lost, they knew it would invite future litigation … and rightly so.

The campaign for Prop B was a desperate attempt by City to circumvent contracts they already agreed to and get some new hires off DB pension plans … even those hired in a particular “window.”

However, practically speaking, this issue is really moot as any City “new hires” have to make it at least five years on the job (to vest). Since between ~now, when they are hired and five years from now they won’t get any credit for retirement purposes (it will all be thrown on their books at the five-year point or longer, taking into account any LWOP the employee takes), City and unions have enough time to litigate the outcome of Prop B.

If Prop B is struck down as unlawful by a CA court, those employees in the “window” who make it to vesting will undoubtedly sue City (likely through their union[s]) for their DB pension plans if City doesn’t voluntarily restore them for this group.

SD Taxpayers should actually be outraged that City chose to dupe them into voting for the Prop so they could spend taxpayer money in this way. State law allows City to get fee waivers for court costs, but they will undoubtedly have travel costs to OAK, SFO and SAC. They will also have to contract appellate work out to outside attorneys (ESP at the Supreme Court level), IMO. This is due to a blatant conflict of interest the City Attorney’s Office has in this case, as they are actually an original charging party to one of the underlying ULP’s.

City well knew how this “comedy of errors” would play out long ago and consciously chose to spend future taxpayer dollars in this way instead of fixing potholes, trimming trees, and setting up “meet and confer” meetings with their unions, as they were required to by law.

This whole debacle is just another egregious example of your elected officials and tax dollars at work, folks. Public-official arrogance and politics rule the day in SD and always have.

[bearishgurl]

Here is the link I discussed in my last post of yesterday but forgot to put in.

http://fox5sandiego.com/2013/02/13/city-to-appeal-ruling-against-pension-initiative/

I was able to do a little more research this morning and came up with DCAA’s explanation of my rather “disjointed” post of what happened leading up to the ill-fated Prop B election. This explains the history better than I ever could (since they were THERE) and also in a layperson’s terms:

Closed Litigation

City should be worried about a “McCarthy-era trial” before PERB, lol. They put themselves in that position. I don’t understand how Sanders, acting as Mayor of SD and “private citizen” simultaneously during the gathering of support for Prop B and also in the “back room” (with City’s shills, of course, and no doubt using his staff for the supervising and verifications of the gathering of signatures), was able to “stick to his story” with a straight face in the PERB v. City case and claim he was a acting ONLY as a “private citizen,” lol.

Sanders would be just one of several witnesses called in the event of a trial in this case. I can name off a few more at the top of my head, but I’ll just leave it to the Piggs to figure out who :=]

Although it could become quite ugly, it would be a trial worth watching, that is, IF it happens and you could get a seat in there!

Unfortunately, for City, all their “sheet-rolling-partner” witnesses waiting in the hallway to be called to testify would likely be supervised by a deputy out there. And they won’t be able to listen the testimony of their brethren inside in order to preplan how to testify. It will be every man/woman for themselves, as it was in the criminal prosecutions of the SDCERS pension board a decade-plus back.

Here are some more recent links of commentary on the recent PERB decision:

http://www.utsandiego.com/news/2013/feb/12/sd-pension-ruling-perb/?print&page=all

http://www.voiceofsandiego.org/government/article_aa3fe0f0-764e-11e2-85f3-001a4bcf887a.html

http://www.10news.com/news/city-attorney-pension-ruling-places-obstacles-on-initiatives

This one is an excellent local Op-Ed piece by longtime attorney for the MEA, Ann Smith, who hails from THE top labor law firm in SD, IMO. I couldn’t have said it any better myself:

….If the PERB board upholds the [administrative law judge’s] decision, the same appellate court will decide whether to grant any petition for review because the city has no automatic right of appeal. If review takes place, the court will defer to the findings of fact the administrative law judge already made based on the overwhelming evidence about the city’s role in Prop. B as employer…

(emphasis added)

http://www.utsandiego.com/news/2013/feb/27/perb-prop-b-san-diego/

Here is a very informative analysis of the recent Proposed PERB Decision, written by a CA firm representing public entities, aptly describing how the ALJ came to his conclusion.

. . . Analysis
As discussed above, the ALJ was asked to determine if the City, through its agents including Mayor Sanders, violated the MMBA by failing to meet and confer with the unions about the pension reform ballot initiative. The ALJ noted that the third scenario outlined by City Attorney Aguirre, as discussed above, was directly applicable in this case. The unions argued that Mayor Sanders developed and promoted a campaign that was designed to avoid the City’s obligation to meet and confer. Further, the unions contended that the City could not avoid its duty to meet and confer on the basis that the Mayor acted as a private citizen, because the City is liable for the acts of the Mayor through the law of agency. In response, the City argued that the Mayor was acting as a private citizen and he was lawfully entitled to pursue the citizen’s initiative strategy. Therefore, according to the City, it was not required to meet and confer.

The ALJ first analyzed whether a unilateral change in the terms of employment had occurred. He concluded that a unilateral change occurred because the Mayor acted on his intention to pursue pension reform, satisfying the requirement for taking concrete steps towards implementation of a new policy.

Next, the ALJ analyzed whether the City had a duty to meet and confer because of the Mayor’s sponsorship of the ballot initiative. First, the ALJ determined that by virtue of the MMBA the City and its representatives are required to meet and confer with unions. The ALJ concluded that the Mayor is unquestionably such a representative because he acts as the City’s chief negotiator. Moreover, based on the legal principle of agency liability, the Mayor was acting with actual and apparent authority on behalf of the City. In reaching this conclusion, the ALJ determined that the Mayor was acting within the scope of his employment with the goal of improving the City’s financial health and the City Council ratified the Mayor’s actions by consenting to the initiative and placing it on the ballot. In addition, the ALJ made a finding of apparent authority based on the Mayor’s numerous public pronouncements in support of the ballot initiative, and also found ratification because of the City’s failure to repudiate the Mayor’s actions.

Significance
. . . “As the case is litigated, it will present fascinating and novel issues arising out of the tension between the duty to bargain and the constitutional initiative process.”

http://www.aalrr.com/files/ESPG_ALERT_-_Feb_21_2013_PERB_Judge_Concludes_that_the_City_of_San_Diego_was_Legally_Obligated_to_Bargain_with_Its_Employee_Unions.pdf

[CA renter]

EconProf,

I’ve long said that the assumed return rate for the funds was too high, but I’m not just comparing the past five or ten years WRT the effects of the return rate on contribution rates. I’m talking about the **multi-decade** trend of return rates and contribution rates, which is what the opponents are intentionally leaving out in order to misguide a gullible public.

One more thing…the “privatization movement” should NEVER be confused with taxpayer advocacy groups. Their interests are diametrically opposed, though the former tries to disguise itself as part of the latter in order to push their propaganda. They are NOT the same thing at all.

[paramount]

The entitlement culture of public employee unions and their members is absolutely unreal.

[CA renter]

The entitlement culture of government contractors/the privatization movement is unreal.

[bearishgurl]

The entitlement culture of Big, BIG Development is unreal. In the case of Mr Williams of the Lincoln Club and his brethren, acting as occasional “strawpersons” for the Mayor and select councilmembers is a VERY small price to pay to all their “entitlements,” IMHO.

[ctr70]

Have not heard a good argument yet with what is wrong with simplifying all public employee retirement programs and just changing them all to employee funded 401k plans just like everyone in the private sector gets. Done, over, end of story.

[bearishgurl]

[quote=paramount]The entitlement culture of public employee unions and their members is absolutely unreal.[/quote]

Again, paramount, you’re taking your frustration out on the wrong people. I’ll make the same offer to you that I did to pri_dk/Harvey and NSR while back.

http://piggington.com/otcontest_to_guess_the_occupant_of_beautiful_new_building_in_rsf#comment-205009

http://piggington.com/surreal_state_of_the_state_speech#comment-177669

or: http://piggington.com/surreal_state_of_the_state_speech?page=2

http://piggington.com/more_public_pension_loony_tunes_now_providence_ri_is_in_trouble#comment-209643

. . . ad nauseam.

To help you get started, paramount, I’ll loan you my crank pencil sharpener. You’ll just have to mount it on the wall in a convenient place cuz you’ll be using it a lot 🙂

[bearishgurl]

[quote=ctr70]Done, over, end of story.[/quote]

ctr, you KNOW it’s not “done” and “over.”

You can assist paramount (remotely) in his gargantuan effort to be an “agent of change.”

I’ll be standing by to proofread both of your “redrafts” before you send your work to paramount’s PTB (since you don’t live here anymore) :=]

And, paramount, while ctr gets his pencils sharpened, why don’t you get a head start and go on up there and “introduce yourself” to your “receptive” Republican legislators …. just to break the ice?

http://arc.asm.ca.gov/member/AD75/

http://district36.cssrc.us/

[Author]

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