SF ballot measures: will courts revisit pensions?

SAN FRANCISCO — One of two competing pension measures on the San Francisco ballot next month is said by opponents to be an illegal assault on the “vested rights” of public employees, a cost-cutting plan certain to be overturned by the courts.

The measure does not raise the issue that the Little Hoover Commission and others say urgently needs a new look by the courts: whether the pensions of current workers not yet earned by time on the job can be cut.

But Measure D by Jeff Adachi, the city public defender, does raise the annual payments employees must make toward their pensions without bargaining or providing an offsetting benefit.

“As written, D raises contribution rates on current employees, but fails to include offsetting reductions in good economic times when the city’s costs are reduced,” said a ballot pamphlet rebuttal written by Mayor Ed Lee and others. “D is not only unfair, legal experts say it’s unlawful and will be invalidated by the courts, leaving taxpayers with zero savings.”

In a ballot pamphlet reply, Adachi urges voters not to let the opponents “scare” them: “Last year, a San Francisco Superior Court ruled that the city could change the contribution rates of its employees in order to protect the fiscal integrity of the system, which is what Prop D does.”

Whether voter approval of Measure D on Nov. 8 would result in a court ruling making a significant statewide change in case law is not clear.

Many legal experts, but not all, believe that a series of past court rulings mean that pensions promised state and local government employees on the date of hire cannot be cut without providing other benefits of equal value.

The Little Hoover Commission said the standard attempt to curb soaring pension costs (raising worker contributions and lowering new-hire pensions) does not yield enough savings for cities and other government employers in deep financial distress.

Last February the commission recommended that the Legislature give state and local governments the authority to cut pension amounts earned by current workers in the future, while protecting pension amounts already earned by years on the job.

The legislation presumably would be challenged in court. A challenge is likely if San Diego voters approve an initiative next June that switches new city hires to 401(k)-style plans and puts a five-year cap on current worker pay that counts toward pensions.

San Jose Mayor Chuck Reed planned to put a measure on the November ballot capping city contributions to current worker pensions earned in the future. But he pushed the plan back to March, trying meanwhile to negotiate an optional plan with unions.

In San Francisco, Mayor Lee pushed negotiations with labor resulting in an alternative to Adachi’s initiative. Measure C has the same basic structure as Adachi‘s Measure D: higher worker contributions and lower pensions for new hires.

According to the city controller, Adachi’s Measure D would yield an estimated $400 million more in city cost reductions over the next 10 years than Measure C — $1.3 billion to $1.7 billion versus $1 billion to $1.3 billion.

Jeff Adachi at San Francisco State forum

Measure D would, among other things, authorize higher contributions from employees with higher salaries but does not, like Measure C, lower employee contributions when city contributions fall below current levels.

The triggers in Measure C that can lower employee contributions are the “offsetting reductions in good economic times” mentioned in the mayor’s ballot statement.

But if Measure C is approved by voters, some are skeptical about whether the potential for lower employee contributions in good times is enough to satisfy all of the factions and individuals that could mount a legal challenge.

Measure C has unusually broad support: all 11 members of the San Francisco board of supervisors, the San Francisco Chamber of Commerce and the San Francisco Labor Council.

A Bay Citizen/University of San Francisco poll released last week showed Measure C leading Measure D. A provision in Measure C would nullify Measure D even if voters approve both measures.

The poll showed Measure C with 45 percent support, 19 percent opposed and 36 percent undecided. Measure D had 36 percent support, 23 percent opposed and 41 percent undecided.

A San Francisco Chronicle editorial earlier this month endorsed Measure C, but gave a big tip of the hat to Adachi.

“Adachi deserves great credit for forcing City Hall to confront an inconvenient truth: It has been making grand promises to city workers for pensions and retiree health care without making provisions to pay for them,“ said the Chronicle. “His 2010 tough-love pension reform plan, Prop. B, while falling short, jolted the establishment into action.”

Ed Lee in campaign website photo

Adachi’s measure last year would have increased employee pension contributions and employee payments for dependent health care. A well-funded labor opposition campaign featured emotional ads about higher costs depriving persons of health care.

This year Adachi’s Measure D does not deal with rising health care costs. Measure C requires new and some recent employees to make small contributions toward retiree health care, saving the city an estimated $85 million over 10 years.

Adachi said last year he sponsored pension reform because soaring costs were cutting into funding for government services, including his public defender office that provides attorneys for the poor. This year he entered the crowded race for mayor.

“One of the reasons that I am running for mayor is because there are additional reforms that have to happen,” he said last week.

Lee was appointed interim mayor in January, replacing Gavin Newsom, the newly elected lieutenant governor. Some said Lee broke a promise not to run when he entered the race for mayor.

The new poll showed Lee with a lead, 36 percent, over the next candidate at 8 percent. Adachi was sixth at 5 percent. Former mayor Willie Brown warned that top vote-getters often lose in ranked-choice elections, which factor in second and third place votes.

The Chronicle editorial said Measures C and D “offer only modest down payments” on reforms needed to prevent pensions and retiree health care costs from “overwhelming the city’s ability to maintain basic services.”

If voters do not approve either of the measures, the editorial said, annual city pension obligations could be about $800 million by fiscal 2015-16, double the current payment from the general fund.

The newspaper endorsed Measure C because the agreement between labor and business leaders “sets the stage” for productive talks needed to address the retirement cost shortfall.

“Prop. D invites lawsuits by peeling back vested pension rights without offering new benefits in return,” said the Chronicle. “Case law seems pretty clear on this point: Vested rights can be revoked only in exchange for something of comparable value.”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 24 Oct 11

25 Responses to “SF ballot measures: will courts revisit pensions?”

  1. Rex The Wonder Dog! Says:

    Many legal experts, but not all, believe that a series of past court rulings mean that pensions promised state and local government employees on the date of hire cannot be cut without providing other benefits of equal value.
    ==

    BALONEY.

    There is not a SINGLE court case out there that says the pensions proimised on the hire date are locked in forever. Total BS. In fact the case law states otherwise VERY CLEARLY.

    The pensions are good for the length of the contract on the date of hire, and can be changed up or down in ANY new contract.

    Stop drinking the trough feeder entitlement Kool-Aid.

  2. Rex The Wonder Dog! Says:

    “Prop. D invites lawsuits by peeling back vested pension rights without offering new benefits in return,” said the Chronicle. “Case law seems pretty clear on this point: Vested rights can be revoked only in exchange for something of comparable value.”

    ==
    So said the public pension mouth piece

  3. Dr. Ted Steele Says:

    LOL Rex the troll poodle from the ocRegister with another of his now infamous legal opinions ! God Bless ya little buddy ! Hey, remember your much touted legal prediction about this very fact on the deputy’s lawsuit with the County ?? LOL lost that one too ! Oh my– let me catch my breath ! Bam !

  4. SkippingDog Says:

    Be sure to look at the section titled “Vested Pension Rights.” You’ll find a long series of appellate and Supreme Court cases noting that the vesting of pension benefits at the time of employment are “settled law” in California.

    Did you ever bother to read the OC case, Rex?

    http://www.courtinfo.ca.gov/opinions/archive/B218660.PDF

  5. john moore Says:

    Read the Supreme Court case that said “pensions promised state and city employees on the date of hire can not be reduced without providing something of equal value”. That case is Allen v, City of Long Beach. The case said that. But in two separate places in that opinion,the Supreme Court(Ca.) noted that in the case before the court,there was no financial hardship because of the pension plan,but if financial hardship was present,that rule would not apply.Also,in Allen,it was not contested by the City that the employees had “vested rights”. Whether a city has granted vested rights is a question for each city. In Pacific Grove,all employees are “at will” and the Charter prohibited vest pension rights.Read Allen.

  6. Bournemouth Cardinal OD Says:

    Read Allen??? Well, do you mean Allen one or Allen Two?? The laches issue in Allen Two trumpted the vesting minority argument in Bird’s dissent which was later cited as controlling in the 4th DCA Allen One holding. What’s the matter with you two????

  7. Dr. Ted Steele Says:

    I think Bournemouth is correct, seriously.

  8. Rex The Wonder Dog! Says:

    You’ll find a long series of appellate and Supreme Court cases noting that the vesting of pension benefits at the time of employment are “settled law” in California.
    ===============
    Long series of court cases!!! Hahahaha…there are NO court cases directly on point, much less a long series”.

    Stop drinking that Lone Star beer, it is making you goofy again Skippy.

    BTW- Allen v City of Long beach is a 1955 case, it involves the City charter-their constitution, which obviously does NOT apply to every muni in the state.

    I would be careful about citing to a case 55 years old.

    And here is the DIRECT quote out of Allen;

    An employee’s vested contractual pension rights may be modified prior to retirement for the purpose of keeping a pension system flexible to permit adjustments in accord with changing conditions and at the same time maintain the integrity of the system. (Wallace v. City of Fresno, 42 Cal.2d 180, 184 [265 P.2d 884]; Packer v. Board of Retirement, 35 Cal.2d 212, 214 [217 P.2d 660]; Kern v. City of Long Beach, 29 Cal.2d 848, 854-855 [179 P.2d 799].)”

    Ted Steal, what di you think??? Are you now convinced you will be taking a haricut!

  9. Rex The Wonder Dog! Says:

    THESE THESE PENSIONS WILL COME DOWN TO JUST WHAT OCO SAID, THAT MR. MATH WILL BE THE ULTIMATE RULE MAKER. IF NO MONEY IS THERE THEN THEY SIMPLY WILL NOT BE PAID.

    JERRY CLOWN IS TRYING TO EXTEND THE “TEMPORARY TAXES” FOR ANOTHER 5 YEARS (HOW IS 7 YEARS OF MAJOR TAXES “TEMPORARY”???), AND THAT TAX EXTENSION WILL BE MET WITH THE SAME OUTCOME AS THE ONE ARNOLD TRIED TO PASS, A MAJOR FLOP. JUST NOT GOING TO HAPPEN WHEN THERE IS A 22% CA UNEMPLOYMENT RATE (U-6 RATE), AND THAT 22% HAS BEEN CONSISTANT SINCE 2008.

    THROW IN THE PUBLICS COMPLETE AWARNESS NOW OF THE PUBLIC PENSION SCAM (THOUGH http://WWW.PENSIONTSUNAMI.COM ) AND THE TAX HIKES ARE DOA.

    It is too bad about what happened in 2000-2010-the huge pension increases- is now going to drag down everyone, not just the 2.7%@55 and 3%@50 crowd, but everyone in government employment. It was flat out greed, pure greed that caused this meltdown. 2% multipliers at age 67 is the MAX that any government employee should get. Including the so called “public safety” jobs, which there are now 21 different jobs with that classification. Brown just vetoed a bill that would have made MILK INSPECTORS eligible for that pension. A milk inspector. I hear cows are very dangerous animals.

  10. SkippingDog Says:

    Once more, Rex: Have you ever bothered to actually read the cases cited in the DCA’s opinion? Many of them were decided long after 1955, and when the Supreme Court writes things like “this is long settled law” in their own opinions, your hyperventilation looks nothing more than silly.

  11. odie Says:

    Hey Rex, Lets see how much wonder would be in your dog if you had to walk the mainline of a Ca. level 4 prison! Your tail would be between your legs! Prison guards earn their public safety pensions! Yes the Union is screwed up but the people who walk the toughest beat do deserve their pensions! Even you cant imagine a 60 year old Prison Guard responding to a major riot (hundreds) of inmates. So I bet your ambulance chasing days are consumed with suing small businesses for not having menues in Spanish, but stay away from criminals, you just might need our help someday! Your a hater and jealous! Also, thank a vet, it might make you feel better! I doubt it tho! Sgt. ODIE

  12. Rex The Wonder Dog! Says:

    Hey Rex, Lets see how much wonder would be in your dog if you had to walk the mainline of a Ca. level 4 prison! Your tail would be between your legs! Prison guards earn their public safety pensions!
    ==
    Right “hero”.

    Prison guard is a GED job, there were 125K applications for 900 openings last year.

    As for the age, there are plenty of things we can rotate you old clowns into after you’re too old for baby sitting pot smokers. We can have you picking up trash on the freeway-even a 60 y/o GED Wonder could do that.

    Your a hater and jealous!”

    GED Wonder, I know you never made it past 12th grade, but it is “You’re”, not “your”. And you think you’re worth $200K per year! Please🙂

    The “toughest beat” is a joke and you clowns know it, OK Mike Jimenez.

    Your laughable “talking points” might go over good at a CCPOA BBQ, but no where else GED Wonder.

    BTW-I NEVER said GED prison guards do not desevre a pension-did I. I said they do NOT deserve a $3-$10 MILLION pension at age 50. Get the story straight, stop the spin, the gravy train jig is up.

  13. Rex The Wonder Dog! Says:

    “Once more, Rex: Have you ever bothered to actually read the cases cited in the DCA’s opinion”

    Yes I haver read them-I even posted a direct verbatim passage from the 1955 Allen case-did you miss that????…. and NO, there is no case or law that is “long settled”, your claim. That is pure spin, the same kind of spin that you spouted when you said pensions could not be reduced by a BK court and then went on to cite CA state law, and THEN you claimed you could re litigate the case in a federal court if a state court ruled against you in a state court case like the OC case (you remember that one don’t you??).

    Central Falls RI reduced vested pensions, for future and current pensioners, in their BK case. This now will apply as precedent in that federal circuit, and as persuasive precedent nationwide.

    Plus there was no collective bargaining in CA back when these cases, cited here, were decided. Collective bargaining all came in the early/mid 1970’s or later in CA.

  14. Rex The Wonder Dog! Says:

    Hey Rex, Lets see how much wonder would be in your dog if you had to walk the mainline of a Ca. level 4 prison! Your tail would be between your legs! Prison guards earn their public safety pensions! ”

    So tell us, do support “milk inspectors” receiving a 3%@50 pension?

    They also claim to have a tough beat. It was reported an angry and contankerous old cow sprayed a “milk inspector” with a good shot of milk from one of her more powerful udders😉 😛 🙂

  15. SkippingDog Says:

    Nice to see you back Rex – as confident, misinformed, and incorrect as you’ve ever been.

    I’ve missed your crazy rants.

  16. john moore Says:

    The Allen case that says pensions cannot be lowered without giving something of equal value is the Ca. Supreme court case that says that the rule does not apply if the pension plan causes financial hardship to the city.The case has not been overruled and is cited more than any other case re vested pension rights.Did laches wipe out the equal value rule?Or,do you just accept the part of the case that you like.Get honest or we can’t talk. Read the case.

  17. Dr. Ted Steele Says:

    zzzzzzz my god poodle boi— very dull as usual. i have read every published citable Calif. and fed case in this entire area. I remain confident little buddy ! LOL carry on ! PLEASE MAKE MORE LEGAL PREDICTIONS !!!

  18. SeeSaw Says:

    Sgt Odie, I don’t care what they pay prison guards–whatever it is, it is not enough, in my opinion. But, why do you backstab the union?The union helped you get where you are–or, perhaps you are a member of management, who does not need to belong to a union, to get fair treatment?

  19. Rex The Wonder Dog! Says:

    Sgt Odie, I don’t care what they pay prison guards–whatever it is, it is not enough, in my opinion.
    ==
    Oh wow, there is a shocker. Seesaw claiming GED prison guards earning more than medical docotrs “do not make enough”.

    Hahahaha. You are now officially as bad as Ted Steal seesaw🙂😛😉

  20. Rex The Wonder Dog! Says:

    “Nice to see you back Rex – as confident, misinformed, and incorrect as you’ve ever been.

    I’ve missed your crazy rants.”

    And I have missed spanking you back into the stone ages with the truth Skippy🙂😛😉

  21. Dr. Ted Steele Says:

    “And I have missed spanking you back into the stone ages with the truth Skippy”

    Poor poor rex the poodle. Once again having delusions of adequacy. Hey rex— hate to break it to ya kid….the only thing you’ve spanked out here is your carrot. zzzzzzzzzzzzz

    Ever ben in a level 4 SHU poodle boi? LOL God bless little buddy—- and good luck on your continued “predictions” LOL Oh my !@

  22. Rex The Wonder Dog! Says:

    Ted, I will put my “shu” in your …..well where the sun don’t shine junior.

    I will teach you what it feels liek to get kncoked into last week🙂😛😉

    BTW, when did Ted Steal become a doctor?

  23. Dr. Ted Steele Says:

    lol ok poodle boi— zzzzzzzz another tough computer guy zzzzzzzzzzzzzzzzz…….

  24. Jo Says:

    This is an incredibly childish banter. Less name, calling, more respectful debate, please. It’s hard to take any of you seriously.

  25. Ted Steele, Janitor Says:

    well what do I call him? Rex the Wonder Dog? Seems pretty childish as well.

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