CaliforniaCityNews.org

Legal Challenge to Pension Benefits Dropped by SD Officials after OC Case Sets Precedent

The outcome of a case in Orange County has led San Diego city officials to abandon a potential legal fight regarding $900 million in pension benefits grants. The city actually dismissed the lawsuit two months ago, bringing to a close an issue that was previously pushed by former San Diego City Attorney Michael Aguirre, who argued that “San Diego violated the state’s debt-limit laws by awarding retroactive pension benefits to its public employees in 1996 and 2002 without getting approval from voters,” according to the Union Tribune. So why did the city see the case as a losing battle? Orange County attempted to argue in court that a retroactive increase in retirement benefits for deputy sheriffs – established back in 2001 – was a violation of the state’s Constitution, but the State Supreme Court eventually denied the county’s appeal and thereby upheld a decision from 2009 that posited voter approval was not necessary for the enhancement in deputy sheriffs’ retirement benefits. The Tribune reports:

“Current City Attorney Jan Goldsmith dismissed the lawsuit June 15 at the direction of the City Council after the state Supreme Court denied an appeal in an Orange County case challenging retroactive benefits for deputy sheriffs. ‘We pursue cases that have a chance of success,’ Goldsmith said in a statement Tuesday. ‘That’s why we have won every pension case during the past two years.’ Goldsmith had previously said that an appeals court decision in the Orange County case drove a stake through the city’s lawsuit, which he admittedly never gave much credence. Still, he said he waited until the Supreme Court weighed in on Orange County’s appeal in April before seeking a dismissal.”

The unions involved in the matter have also withdrawn their request for $4.5 million in attorney fees. Despite the city’s decision, Aguirre contends the dismissal of the case is a betrayal to the taxpayers because he calls it “winnable.”

Replacement Selected to Lead CRA in Legal Battle against the St; Shirey to Start New CM Role

Sacramento’s new City Manager, John Shirey, will take the reins of his new position on Thursday. Shirey was previously the Executive Director of the California Redevelopment Association. Those following Mayor Kevin Johnson’s push for a strong-mayor initiative may be interested in knowing that Shirey’s new contract stipulates that he is allowed to walk away from his job if the mayor somehow manages to get voters (not to mention the council) to approve the strong mayor proposal. It’s a bit of an escape clause, if you will; however, the clause should come as no surprise to those familiar with Shirey’s past statements about the strong-mayor form of governance, as he once said that “The manager’s position becomes untenable. He constantly has to broker between the mayor and the council in order to survive. The manager becomes a politician. […] If you really want to go that way, you really ought to change the city manager’s title because the manager really becomes the chief of staff.” In addition, he was the city manager of Cincinnati during its transition to a strong mayor system. An extra little tidbit to throw into the mix: Mayor Johnson was the only councilmember to vote against Shirey’s appointment to CM.

Now that Shirey has taken on a new role, his shoes needed to be filled for the CRA. It has been announced that retired Contra Costa County Redevelopment Chief Jim Kennedy will serve as the interim executive director through mid-2012. Back in March, Kennedy hung up his spurs, but he’s being called up from the bench and in his words, will “bridge the transition to the post-litigation realm when the shape of redevelopment will be better known.” You’ll recall the CRA and the League of CA Cities are in the middle of a legal battle against the state over the ransom payments that agencies have to pay in order to survive under new legislation. Kennedy is a 35-year veteran of Contra Costa County and once he returns to retirement, he plans to teach, work for a nonprofit, or write a nonfiction book on transit-oriented development.

Petition Thrown Out: Appeals Court Rejects Costa Mesa’s Request to Lift Injunction on Layoffs

Back in July we relayed that a judge had approved the Orange County Employees Association's request for a preliminary injunction so that the city of Costa Mesa would be temporarily blocked from cutting hundreds of workers’ jobs. In an update, the city’s layoff plan will still be on hold because a state appeals court rejected the city’s request to lift the injunction. Recently Costa Mesa filed a 43-page petition for a writ of mandate, but the three-judge panel threw it out, and in the process dismissed the city’s argument that although the city has not enacted any legislation, the injunction assumes illegality. In response to the appeals court’s action, City Attorney Tom Duarte commented that “Obtaining writ relief is difficult. It is even more difficult still where there is a right to appeal the original ruling, which is the case here. The city will now proceed with a formal appeal of the trial court's preliminary injunction ruling.”

You’ll recall the lawsuit against the city was filed by the Orange County Employees Association on behalf of the Costa Mesa City Employees Association, as the labor groups are arguing that the layoffs are a violation of the union’s contract and state law. OCEA spokeswoman Jennifer Muir applauded the court’s rejection of the city’s writ of mandate, commenting that “Courts continue to reject any justification for the City Council majority's outsourcing scheme. We sincerely hope this latest rebuke by the courts will motivate the council to abandon its needless campaign against its employees and all the residents who have urged them to stop dismantling the city.”

Since the injunction will remain in place for now, it will not be lifted until a final ruling on the city’s outsourcing plan is issued by a judge or jury as the case proceeds. That being said, Costa Mesa wants to file a formal appeal against the trial court's injunction.

The Construction Slump Continues for CA Cities; Associated Contractors Group Releases Stats

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The Associated General Contractors of America has released new analysis that shows construction jobs continue to lag in the state’s cities. And with local governments grappling with tight budgets, funds are lacking to invest in infrastructure improvements and thereby stimulate the weak industry. Ken Simonson, chief economist of the Associated General Contractors of America, commented that “The big worry for construction workers is that private demand will again slip while governments continue to cut back on infrastructure investments.” Poor investment in construction has proven to be a huge drag on the state and nation’s economic recovery, as commercial and residential development are crucial for achieving growth. The slump is evident in California based on the stats released by the AGCA. Take the metro area of Fresno, as construction employment fell 11% from July 2010 to July 2011. Here are some key stats for other cities:

Modesto: -12%
Napa: -11%
Oakland-Fremont-Hayward: -4%
Los Angeles Metro Area: -5%
Yuba City: -5%
Redding: -17%

Some bright points on the list are San Jose saw 7% growth, the Santa Rosa-Petaluma area saw 9% growth, and the Santa Ana-Irvine-Anaheim metro area saw 6% growth. Read the full employment numbers for California and the nation here.

SB 791: Locals Could Seek New Fuel Surcharges to Fund Transit Projects w/ a Lower Voter Threshold

Described as an anti-congestion charge, Senate President Pro Tem Darrell Steinberg (D-Sacramento) has introduced several amendments to SB 791 so that local transportation agencies can seek voter approval for a "regional transportation congestion reduction charge" on gasoline or diesel. Steinberg is touting the bill as a way to give local governments more power for funding transit projects because local transportation planning agencies would have the means to reduce vehicle congestion with revenue-backed proposals. Notably, under the proposal, these anti-congestion fees could be approved regionally by a majority of voters rather than 2/3. Steinberg posited that the bill reflects the transition of services/functions from the state to local authorities enumerated in the recently approved budget, such as realignment. Steinberg commented the following:

“The state does not have the financial capacity to adequately fund transit and road improvements, and if we can't afford it we ought to at least give the regions of this state the ability to go to the voters and raise money for important priorities like transit and road improvements.”

The Legislature’s current session is about to end so Steinberg has said if the bill cannot clear both houses by then, it could be back in play next year. The California Taxpayers Association is strongly opposed. On the flip side, Maria Elena Durazo, Executive Secretary-Treasurer of the Los Angeles County Federation of Labor, AFL-CIO, has spoken in favor of the legislation, arguing that “The transportation improvements that would be made possible by SB 791 would create desperately needed good jobs in California. Every $1 billion invested in transportation creates about 47,500 jobs. SB 791 will put Californians back to work, especially those who have been hit hardest by the recession.”

You can read a letter to Steinberg in support of the bill from various organization leaders, such as the Los Angeles Business Council, California Transit Association, and Mayor Kevin Johnson. See the letter here.

Data Dump: Census Bureau Stats Count Up Number of Government Employees in CA

According to new data from the Census Bureau, local government agencies lost nearly 48,000 part-time workers during a one-year period from 2009 to 2010. In comparison, state government added 2,836 part-timers. The data is part of the Bureau's annual census of government employment, which was compiled back in March 2010. When taken as a whole, state and local governments employ a total of 2.16 million employees and of those workers, 1.79 million are "full-time equivalent." All of these government employees are paid about $10 billion a month and are a huge factor in California’s $2 trillion per year economy. The Bee points out:

“Higher education, with the full-time equivalent of 158,064 workers, was by far the state government's largest category of employment, followed by the prison system's 61,710. Education, with the full-time equivalent of 722,847 workers, accounted for more than half of local government employment, followed by law enforcement with 90,263, public hospitals with 66,260, and welfare with 64,879.”

You can find the list of data for local government here.

Rialto, in its 100th Year of Cityhood, is Next City Profiled for Strong Cities, Strong St Campaign

This is the fourth week since the “Strong Cities | Strong States” campaign launched, and Rialto is the proud 16th city to be profiled. In its 100th year of cityhood, Rialto is home to about 100,000 diverse residents in the heart of the Inland Empire. Rialto is a great place to live, work and play, with the city’s steadfast commitment to public safety, quality community services, abundant recreation and fitness programs, and affordable housing. Rialto’s success stories include the following:

• Community Redevelopment: The Rialto Redevelopment Agency will invest well over $60 million in a variety of local construction projects that will create hundreds of jobs and improve the community.
• Chosen City of New Fuels: Two Audi A3 TDI models running on Rentech, Inc. synthetic RenDiesel® fuel flawlessly completed the 1,000-mile “Eureka! Diesel Drives the Future” tour spanning the length of California.
• Award-Winning Community: The City of Rialto recently received several awards for its ongoing efforts to improve and revitalize the community.

Read more, see photos and connect with Rialto on their new profile page here.

Guest Feature from Jim Madaffer: CA City Leaders Mourn the Tragic Death of Jere Melo

Guest Feature

By Jim Madaffer
Past President, League of California Cities

The murder of Ft. Bragg Councilmember (and former Mayor) Jere Melo is a tragedy.  Jere was full of life, an incredible person, always giving of himself for Cities all over California. 

Jere was murdered this past Saturday morning as he and a friend were patrolling remote land owned by his employer Campbell Timber Management company in his capacity as a security worker.  They were near the railroad tracks along the Noyo River when they stumbled upon an opium garden.  Jere had frequently found sites where squatters would cultivate marijuana on his employer’s land -- he would note the location and report it to the local sheriff’s office.  He worked in the local timber industry for more than 50 years.  On Saturday morning, a transient allegedly fired a high-caliber automatic rifle at Melo from a hillside above him, striking him multiple times.  His friend escaped and alerted authorities.  The suspect is still at large.

Jere was one of my most trusted advisors during my tenure as President of the League of California Cities.  Whether he was protecting coastal issues for local cities as chair of the League’s Coastal Issues Committee or serving as chair of the Nominating Committee for the League’s Board of Directors, Jere’s gentle and calm approach to issues was a blessing. I will always remember how proud he was to serve the League -- in fact we all loved him so much, we drafted him to serve an extra year on the Board after his term expired. Always with a smile on his face, he was a caring and compassionate public servant.  He loved wearing his California Flag tie to our meetings and did far more to help the Cities of California than most will ever know.

I hope authorities find and prosecute his killer. His family and wife Madeleine are in my prayers.  RIP.

More information is available at the League’s website here. In addition, there will be a celebration of life for Councilmember Jere Melo on Saturday, September 10th at 2:00 p.m. at the Timberwolf Stadium.  More information will be released when available. A Facebook event page can be found here.

A Facebook page in memoriam of Jere has also been created and can be seen here. A website in his memory can be seen here.

Legislative Defeat for Assembly Speaker as Senate Rejects Disincorporation of Vernon

Despite making the bill his top priority, Assembly Speaker John Perez has lost his bid to disincorporate the city of Vernon, thereby giving local control advocates a victory. On Monday the State Senate rejected the proposal on a vote of 13-7.  You’ll recall that the Assembly already passed the bill earlier this year on a 62-7 vote. Perez has appeared confident all along that he would get his way, but the city of Vernon fought back with a spirited defense. Local government officials, along with unions and business interests, spoke out against AB 46 for the dangerous precedent it would set in allowing Sacramento politicians to dictate which cities should be allowed to exist. Furthermore, the economic implications were also worrisome due to the tens of thousands of jobs the industrial city provides to the region. Under the terms of the bill, any California city with fewer than 150 residents would have been disincorporated, and that criteria was met only by the tiny Vernon. In response to the vote, Perez commented that Senators were “chos[ing] to ignore decades of corruption in Vernon." However, the Bee points out that Vernon has implemented major reforms and support has corralled around giving the city more time to improve:

“The Senate vote on the measure city came days after the Vernon City Council voted to adopt a package of reforms aimed at providing more oversight of the city proposed by state Sen. Kevin De Leon, D-Los Angeles. De Leon, who also represents Vernon, recently withdrew his support of Pérez's bill, saying the city should have a chance to enact its own changes before facing disincorporation.  ‘You simply do not build something with a sledgehammer. It's not that simple,’ De Leon said, adding: ‘(Vernon) unquestionably has had well chronicled problems, but this is not the way out.’”

Under De Leon’s plan, Vernon would have to sell off city-owned housing, establish an environmental mitigation fund and adopt further reforms. According to a spokesperson for the speaker, he does not plan to continue trying to disincorporate Vernon. Perez released the following statement:

“Today's action by the Senate is a deep disappointment to the men and women of the Southeast Communities. I introduced AB 46 to finally end the toxic corruption that has poisoned the Southeast Communities by disincorporating Vernon. The Senate chose to ignore decades of corruption in Vernon, and AB 46, like multiple bills that came in response to the Bell scandals last year, could not gather a majority of senators.

The fact is clear: Senators Calderon and De León, along with their colleagues, have given Vernon a free pass to continue doing business as usual, and those senators will own the responsibility for any misdeeds that may occur in the future. I am proud of the fact that I stood with the men and women of the Southeast Communities in this effort."

Montebello Banking on Private Loan to Keep Afloat or Future Involves Deep Cuts

The city of Montebello is continuing to take steps toward securing its financial stability and Interim City Manager Larry Kosmont is stressing the importance of a $3.9 million private loan as a way to right the city’s fiscal ship. According to Kosmont, without that loan, the cash-strapped municipality will be forced to implement some major cuts in the fall and payroll costs will simply be unaffordable. In light of the loan’s importance, the council voted to approve the course of action. We relayed back in June that Kosmont had unveiled a plan entitled “Montebello's Road to Financial Recovery," and the loan was named as a solution. The Whittier Daily News reports:

“Montebello will have to pay $350,000 in interest and fees for borrowing the money for nine months, Kosmont said. The loan will have to be fully repaid by June, Kosmont said. The city will begin soliciting lenders on Sept. 7, Kosmont said. He said he hopes to secure a loan by Sept. 15. Kosmont said he expects Montebello to pay about 5 percent interest since the city isn't financially stable enough to secure a public loan at 2percent.”

We’ve relayed previously that the Los Angeles County District Attorney’s Office has also been investigating the city over” off the books" city bank accounts and the State Controller’s office is conducting a "Bell-type" audit to investigate financial irregularities. In addition, the FBI and federal prosecutors are investigation the city over allegations of misuse of funds and fraud involving federal housing money.