Costa Mesa voters last week rejected a proposed city charter, a switch to home rule from state general law that would have allowed the city to bypass a court ruling blocking the outsourcing of some services to private firms.
The city of 110,000 in Orange County drew national attention last year when a 29-year-old city employee jumped to his death from the five-story city hall as nearly half of the city workers received pink slips, a six-month notice of possible outsourcing.
Now a ruling last August by a three-judge appeals court panel, upholding a superior court stay on Costa Mesa outsourcing, has some worried that outsourcing to private firms by other general law cities could be blocked or even rolled back.
The Costa Mesa city council, which reportedly has spent more than $1 million on the legal battle so far, voted 4-to-1 last month to appeal the panel’s ruling to the state Supreme Court.
“It matters more to other cities than it does to us,” Jim Righeimer, Costa Mesa city councilman, told the Orange County Register newspaper. He said other cities urged Costa Mesa to appeal.
The League of California Cities plans to request “depublication” of the appeals court ruling (preventing citation in other lawsuits) and to file a letter of support for the Costa Mesa appeal to the high court, said Eva Spiegel, a League spokeswoman.
Soaring public pension costs have helped renew interest in an old issue: attempts to cut government costs by contracting for services. Along with the work, governments can outsource some of the risky long-term debt of pensions and retiree health care.
Bankrupt San Bernardino, more than $5 million behind in payments to the California Public Employees Retirement System, is considering outsourcing police services. The city council voted last week to ask the sheriff’s office for a cost estimate.
When the Costa Mesa outsourcing plan was unveiled last year, Righeimer pointed to an estimate that city pension costs could soar from $15 million to $26 million in five years, a projection disputed by others.
The Costa Mesa charter proposal, Measure V, was rejected 59 percent to 41 percent. Voters also may have cut support on the city council for the sweeping outsourcing plan approved last year on a 4-to-1 vote.
Outsourcing opponent Wendy Leece remains on the council. One outsourcing supporter, Mayor Eric Bever, was replaced by former Mayor Sandy Genis. Another supporter, Gary Monahan, had a 319-vote lead with many ballots still uncounted.
Costa Mesa has been an outsourcing battleground. A private investigator reportedly trailed Righeimer from Monahan’s bar and restaurant last August and phoned police to report that the councilman might be driving drunk.
A Costa Mesa policeman went to Righeimer’s home and gave him a sobriety test in front of his family. Righeimer, who said he only had a diet Coke, passed the test. A union denied involvement, but fired a law firm that has employed the private investigator.
The private investigator told the Register last week that he was in the bar to catch Monahan in a compromising situation with a woman operative sent into the bar. An attractive woman wearing a low-cut top is said to have flirted with Monahan.
The district attorney’s office reportedly is investigating. The private investigator told the Register he was “hired to get dirt” on several council candidates supporting outsourcing, but he declined to identify his client.
Labor unions opposing Measure V reportedly spent $500,000, ten times the $50,000 reported by supporters. One of the objections was the lack of public participation in the creation of the proposed charter.
The charter had several provisions aimed at curbing union power: voter approval required for pension increases, no requirement for union “prevailing” wages on public works contracts, and a ban on the use of union fees and dues for political activities.
Righeimer was the author of a failed forerunner of Proposition 32, a statewide initiative rejected by voters last week. Proposition 226 in 1998 would have required public employee unions to get individual consent to use dues for political purposes.
After the vote last week, Righeimer said he would work on another proposed city charter, this one drafted with the aid of a citizen’s committee. “It was loud and clear from the public that they want to be more involved,” he told the Register.
Some think the appeals court ruling last August may set a new precedent by saying that general law cities are only authorized to outsource “special services” to private firms that are mentioned in state statutes.
The limit does not apply to contracts with other local governments, as considered in San Bernardino, or to cities that operate under their own charters, about 121 of the 482 California cities.
Costa Mesa was urged to appeal because the ruling may conflict with some current city contracts and prevent others in the future. A few cities contract for nearly all services, among them Lakewood, a pioneer in 1954, and more recently Maywood.
But cities contract for a variety of services. The California Contract Cities Association lists 67 members, ranging from Los Angeles to the troubled small cities of Bell and Vernon, where high salaries and pensions have been rolled back.
The appeals court ruled in Costa Mesa City Employees Association v. the City of Costa Mesa that the superior court’s injunction against outsourcing should continue because the union may prevail in its lawsuit and would be harmed if the stay is lifted.
The three-judge panel agreed with the union that the city did not discuss outsourcing with the union, as required by a labor contract, and more importantly that contracting with a private firm for anything but “special services” is prohibited.
The ruling said several cases “make clear that courts will not hesitate to invalidate a service contract between a local agency and a private entity if the contract involves services that are not considered special.”
So, what are “special” services?
One of two similar state statutes cited says a city “may contract with any specially trained and experienced person, firm, or corporation for special services and advice in financial, economic, accounting, engineering, legal, or administrative matters.”
In the case of Costa Mesa, said the appeals court panel, there is statutory authority for only two of the many services the city wants to outsource: operation of the jail and administration of payroll services.
The Costa Mesa outsourcing plan also includes street sweeping, graffiti abatement, animal control, special event safety, information technology, graphic design, reprographics, telecommunications, employee benefit administration, building inspection, and park, fleet, street and facility maintenance.
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 12 Nov 12