• Report on citizens’ initiative is in: Conclusion is that Pacific Grove should not enact it

    By Marge Ann Jameson

    On May 2, 2013, the Pacific Grove City Council, presented with a completed and filed citizens’ initiative to declare null and void the 2002 ordinance which set in place a “3%@50” retirement plan for public safety employees, and required to take take action within 30 days, voted to commission a report on the impact of the citizens’ initiative. The report is in, and has few surprises for either side of the question.

    Michael G. Colantuono of Colantuono and Levin prepared a six-page report which will be presented at the May 15, 2013 City Council meeting, at which time the Council must make a decision whether to: 1) adopt the ordinance, 2) place it on the regularly scheduled general election ballot in 2014; or 3) call a special election to consider the matter earlier than the 2014 general election.

    None of these options would be inexpensive. In 2010, faced with a citizens’ initiative brought by the same faction which has brought the current one, decided to enact it rather than to put it on the ballot, going against advice from the City Manager and City Attorney. The result was an expensive suit brought by the Police Officers Association, which has not yet been settled. A ballot measure in 2014 would mean legal costs and, depending on the outcome, more potential suits. The third option, to call a special election, likely would at least save the city the cost of putting the measure on the ballot because the initiative does not request a special election and therefore puts the city under no obligation to pay for one.

    A fourth option exists, according to the report: Take no action and seek relief in Superior Court.

    According to the Colantuono report, “Retroactive remedies are not available and seeking to pursue them will be costly in terms of legal fees, litigation exposure, and potential liability.” The City has already spent hundreds of thousands of dollars on the question, mostly in legal fees.

    In his discussion in the report, Colantuono states that the initiative is likely illegal because “the voters have no power to adjudicate the lawfulness of an ordinance and contract amendment adopted 11 years ago,” and he cites case law establishing that the intent is not to enact future legislation – which is a power granted to the people – but to “adjudicate alleged procedural violations and to impose a remedy,” a power which is limited by the Constitution to the courts.

    Also, as had been previously pointed out by City Attorney David Laredo, a local initiative may not challenge the legality of a City ordinance after the statute of limitations runs. Colantuono restates this in his report and points out that the statute of limitations ran out in 2005 and that the 2002 ordinance and the CalPERS contract “cannot be amended or repealed with retroactive effect.”

    The citizens’ initiative seeks to declare the 2002 ordinance, 02-218, null and void based on either erroneous or purposely withheld information regarding the financial impact of the agreement. But Colantuono further points out that there is still a question whether financial impact requirements, a pillar of the case brought by the citizens’ initiative, are mandatory or not. And the question, he repeats, is superfluous because of the statute of limitations.

    Another point made by Colantuono is that the citizens’ initiative would violate the Brown Act, which requires “meet and confer” with employees before making material changes in their compensation and benefits. Under the Meyers-Milias-Brown Act, a charter city such as Pacific Grove is obliged to negotiate before calling an election on charter amendments. He reiterates that, although Pacific Grove is a charter city, Article 16 of the charter states that the right of initiative and referendum is given to the citizens t”to be exercised in accordance with procedures prescribed by the Constituion and General Laws of this State.”

    He points out that voter-approved pension reform efforts in San Jose and San Diego are currently before the courts and they do not go as far as this one does. The San Jose and San Diego initiatives try only to affect current employee agreements whereas the one before the Pacific Grove City Council attempts to rescind agreements with employees who have already retired and are collecting benefits. It would also attempt to strip current retirees of their benefits under 02-218. Colantuono says doing so would violate the Fifth Amendment to the federal Constitution as well as comparable state laws.

    Colantuono states that City employees appear to have vested rights. It has been argued by proponents of the citizens’ initiative that they do not.

    Further muddying the waters, and as questioned by Councilmember Robert Huitt at the May 3 City Council meeting, the citizens’ initiative does nothing to deal with contracts, such as a subsequent pension bond, which have been enacted based on 02-218 in the interim. Colantuono points out that CalPERS has made “vigorous legal response” to the bankruptcies of the cities of Stockton and San Bernardino and that “it would be naïve to expect PERS to allow the City to evade its responsibility to fund the cost of those pensions.”

    In his conclusions, he concludes that “a Court would not require retirees to repay a portion of their pension benefit received to date because Pacific Grove has come to regret the adoption of Ordinance 02-218” and he does not expect PERS to back down. He expects that PERS will ignore the initiative and may even treat it as potential breach of contract and seek litigation.

     

    The City had, until March, been working with the citizens’ initiative group and an outside attorney, Karol Deniston, to avoid local action and instead form a coalition with other citizens to force the State of California to make pension reforms and revise the CalPERS system. On March 6, 2013, the Council designated a subcommittee to discuss a “term sheet” with the working group of citizens as an alternative to the citizens’ pension initiative. The citizens working group chose to file the initiative anyway, and did so on March 26, 2013. Monterey County Elections Office certified the petition, signed by some 1,300 people, on April 18, 2013.

    The Pacific Grove City Council will take up the question at its May 17, 2013 meeting, which begins at 6:00 p.m. in City Council chambers at 300 Forest Ave. in Pacific Grove.

    posted to Cedar Street Times on May 13, 2013

    Topics: Front PG News

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