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Challenge to SD Pension Reform Plan for city workers -- may keep the initiative off the ballot

February 16, 2012 1:33 p.m.


Carl DeMaio, San Diego City Council Member, District 5

Michael Zucchet, General Manager, San Diego Municipal Employees Association

Related Story: Will The San Diego Pension Reform Initiative Make It To Ballot?


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh, this is KPBS Midday Edition. It's Thursday, February 16th. Our top story on Midday Edition, despite getting signatures from nearly 116,000 San Diegans, the initiative that would end guaranteed pensions for new city workers may not be on the June ballot after all. The San Diego municipal employees' association filed a complaint alleging Jerry Sanders violated laborer law in his initiative. And a state laborer board believes the argument should be considered. They will ask to take the initiative off the June ballot to give it time to make a decision on the case. We'll are hearing from both sides of the pension debate in regards to this. In morning, I spoke with Carl DeMaio. Councilman DeMaio, this challenge to the initiative is not about the substance of pension reform but rather the involvement of city officials with the initiative. What's your response to the allegations that the mayor violated laborer law by crafting the language and campaigning for this ballot measure?

DEMAIO: Well, first of all, anyone who doesn't think that the unions oppose the substance of this initiative and are trying to block it and defeat it by keeping it off the ballot just doesn't -- hasn't witnessed what's been going on in the city government. This is a citizens' initiative. That was not put on the mayor, not put by the council. The unions control the City Council. There's no way that we would ever presume to get votes for putting this on the ballot through this City Council. So the only way pension reform was going to be put to a public vote is iffy woo used the initiative judicious process and citizens drove the process to collect the signatures to force it on the ballot. That's what happened. We've seen this play out over the summer. San Diegans are not stupid. They saw it themselves, they signed it themselves, over 145,000 San Diegans signed the measure, and at the end of the day, the citizens have a constitutional right under the state constitution, a right under the city charter to put anything we so choose up for a public vote if we collect enough signatures, and in this case that clearly happened.

CAVANAUGH: Now, the push for this measure, though, obviously came from mayor Sanders and elected officials like yourself. In what sense is this a citizens' initiative.

DEMAIO: It is because it was put through the initiative process, we had to collect enough signatures. Had we not collected enough signatures do you think the unions would have said, oh, well, since this is a city initiative, by all mean, put it on the ballot? This is an absolute desperate attempt to stop pension reform in the City of San Diego, to continue the gravy train that the government unions have created for themselves at taxpayers' expense. So there really is no merit to this complaint. I believe a judge will toss it out of court, laugh it out of court, really. But I think it really does reveal the desperation and arrogance of government employee unions and what we're up against. This is not a sustainable system. And our city government is currently in the stranglehold of the government unions. This board up in Sacramento, the state employee relations board is also the cheerleader for the laborer unions, and I'm not surprised that they've come running to the defense of the government unions here locally. But look, at the end of the day, the citizens have a right to amendment their constitution, to amendment the city charter whenever, however they'd like. And in this case, they collected enough secretaries, and they should be given the right to council on pension reform.

CAVANAUGH: Councilman DeMaio, the law the mayor allegedly violated is calls Meyers-Milias-Brown Act, which requires city leaders to meet and confer with unions and not go directly to voters. Isn't that exactly what you and the mayor have done with this initiative and go directly to voters?

DEMAIO: If the mayor and the council put a ballot measure up with their own votes, with the five votes of the City Council and the signature of the mayor, then you have to meet and confer. However, if you collect 115,000 signatures, if this is a citizens' initiative, it does not go before the unions. You cannot say that citizens have a constitutional right to amend their state constitution or city charter except when the union says that they disagree. That's absurd, Maureen! And that's exactly what this lawsuit is claiming there is absolutely no way that the unions are going to be able to rewrite our constitution and say, hey, you can put anything up except for things that we don't want put up for a public vote. That's what they're trying to claim with the lawsuit. They will not be successful. The public will have a right to vote on pension reform.

CAVANAUGH: City unions and the city recently successfully negotiated a deal for retired city workers. That will reportedly save the city more than $25 million in the next 25 years. And it was negotiated between the city and unions. Why not go that route which is in compliant with state laborer law?

DEMAIO: Let's take a look at that agreement, which I voted against, and I think taxpayers are going to end up paying dearly for. That agreement costs taxpayers more than a billion dollars for retirement healthcare benefits that taxpayers themselves don't get. City employees are eligible for Medicare with the exception of a very small group, and they will receive on top of Medicare $8,800 cash per year for supplemental insurance. That's what that deal was about. Want so I think that is a perfect example of the power of the government unions, and the fact that politicians cannot reform these benefits if it's just left to the council vote. That's why if you want real reform, if you want real pension reform, we have to entrust it in the hands of the voters.

CAVANAUGH: Councilman DeMaio, you've made this initiative the central focus of your candidacy to mayor. What happens to your hopes if it's not on the ballot in June?

DEMAIO: Well, I think that not only do we need it on the ballot in June so that voters can impose these reforms on city government of closing the pension system, moving all new hires into 401Ks, but you have to elect a mayor and a City Council that are going to faithfully implement the measure. How many ballot measures, propositions, initiatives have we passed in the State of California only to have them ignored by the legislature or the governor or the mayor or the council? I can put out proposition C that I championed for managed competition. It took us five years, and that was in large part because I kept beating the drum and saying we have to have these savings. At the end of the day, we have to have more than this ballot measure. You have to have a mayor that can hit the ground running that understands how to stand up to the government employee unions, and I think I've demonstrated time and time again that I will always fight for the interests of the taxpayers. If they give me this mandate by approving this ballot measure, I will have the tools I need as mayor to finish the job of pension reform so we can close this very troubling chapter in our city's history and move forward.

CAVANAUGH: But realistically, if this isn't on the ballot, won't it hurt you in the mayor's race?

DEMAIO: I don't think so. I think that obviously I want to get this on the ballot so I have the legislative authority to hit the ground running. But at the end of the day, these benefits are not sustainable. Of and the public wants reformers. They want someone who's going to stand up and fight for them every single day, whether it's on managed competition, and the fact I was able after five years to finally force them to start competitively bidding city services, saving $6 million in the last several months. Or pension reform which is going to require a continued presence by the mayor at the bargaining table to force these reforms to insure they're fully implemented, and make sure that taxpayers are protected.

CAVANAUGH: If this injunction actually works, if this measure does not go on the ballot, what's your next step?


DEMAIO: First of all, I don't think that's going to happen, but if it does, the government unions will have awoken a sleeping giant. The taxpayers who signed this measure, we broke records in the greatest number of signatures ever submitted for a ballot measure, I believe it will sweep all of the incumbent council members out of office. It will be that significant. I believe any judge that decides to take away a constitutional right from the public to use the initiative process to put items on the ballot, that that judge will be recalled in a New York second. I believe that this will be an earthquake in San Diego. Because financially, San Diegans get it. We have to make reform happen. But Democratically, the right of the citizens to amend their constitution, that is as fundamental -- it's civics 10 one, and anyone who tries to deprive the public of the initiative of the right to vote, I think that the public will deal with them in their own way, that they will lose their office, that they'll be thrown out of office, and the public will just redouble its efforts for reform. But I don't think that's going to happen. I think we are going to be able to get a vote on this June, and we will impose pension reform finally on the City of San Diego.

CAVANAUGH: I've been speaking with San Diego City Council man, Carl DeMaio. Thank you so much.

Now joining me in the studio is Michael Zuchett, general manager of the San Diego municipal employees association. Welcome to the show.

ZUCHETT: Thanks for having me.

CAVANAUGH: Now, since you go second, you get a chance to respond. Do you want to briefly respond to what you just heard from councilman DeMaio?

ZUCHETT: It's always fun to listen to council member DeMaio who's able to put more sound bites and hyperbole in a segment than humanly possible. He gets an A for sound bites but an F for factual content. What's going to become clear in the independent fiscal analysis that's going to be coming out on the initiative that he claims ownership of, it will demonstrate that what he and the other proponents told the voters about this initiative and its fiscal impacts was a lie. Upon and the short-term costs, that's right, costs of this initiative are significant and the alleged long-term savings are not there. But more importantly to the point today and this action by the public employment relations board, with all of his hyperbole about the constitution and the law, I would hope he would -- he and the mayor would respect the rule of law, which has been broken here, very clearly by the mayor and the city. And with all of his respect for citizens' initiatives, he should remember the citizens' initiative to make a strong mayor form of government. That made mayor Sanders the cheer laborer negotiator of the city. And when he violets state bargaining law so profoundly as has happened here, there's a problem.

CAVANAUGH: Let me ask you specifically, what is the union saying mayor Sanders did in regards to this pension initiative that does violate state laborer law?

ZUCHETT: These are the mayor's words, not mine, he has been quoted as saying that he did not want to go through the meet and confer process. And that's the technical term for having to sit down with your employees and talk. It doesn't mean as Carl says that employees somehow veto power, it means that you have to talk. Of and the mayor didn't even want to do that. So explicitly, he says he wanted to get around that and go quote unquote straight to the voters as a private citizen. The problem is, mayor Jerry Sanders, not private citizen Jerry Sanders, used the power of his office, the taxpayer funded resources of his office, the state of the city addressed when he first announced he was going to do this in January of 2010 -- or excuse me, 2011. Not that citizens were going to do it. He has sponsored this initiative. And when he does that, as the chief laborer negotiator, he has a requirement to meet and confer with laborer unions. He didn't want to do that, and here we are.

CAVANAUGH: Did the union complain to the city about the way this comprehensive pension initiative was being promoted and all of these things that you just mentioned that the mayor was doing before the signatures were validated and this actually qualified for the ballot?

ZUCHETT: Yes we did. We began in June with a series of explicit letters putting the city attorney and the mayor on notice as to what was going on. Those were ignored. DeMaio in his remarks starts to threaten everybody, including judges with recall is what I heard had him say, that the citizens are going to have some sort of revolt. If the citizens are upset about this, they need to ask their mayor and city attorney, why didn't they heed the clear and written warnings that they were getting back in June that this was exactly what was going to happen?

CAVANAUGH: Why is the state laborer board known as PERB asking for the initiative to be taken off the ballot when it hasn't even made a finding about the allegations?

ZUCHETT: Because the allegation is that if it is left on the ballot, are the administrative process that PERB has to go to to make that final ruling will take anywhere from 3 to 6, 9, maybe even 12 months. And if it does take that long, and the initiative passes, and it's implemented, the relief being sought will be stolen from us because the initiative will go forward. It's an ask to call a timeout. Whether or not a judge will have the courage to do that in a few weeks, that's up for debate. But what's not up for debate is that in the -- one way or another through the administrative process or through the Courts or both, this initiative is going to be found to be invalid.

CAVANAUGH: Mayor Sanders and councilman DeMaio say they've tried to negotiate with the unions for city pensions, but they're not great enough to solve the pension burden.

ZUCHETT: How ironic it was that on the day the public employee relations board comes out with its action on Monday, mayor Sanders was in Washington DC boasting about the fiscal turnaround of the City of San Diego, boasting about the retiree healthcare deal, saving nearly $1 billion that you just talked about DeMaio about. Boasting about having a structural budget balance for the first time in anybody's recollection. About all the reforms that have taken place with benefits for new hires. How did all those things come about? Through agreement with employees. All the pay freezes, the compensation reductions, the decimation of the benefits for new hires. I think the record is very clear about what's happened in San Diego, and only those on the extreme of the argument like council member DeMaio would argue that that progress hasn't been made. Jerry Sanders wouldn't have made that argument. He made the opposite argument to the press club on Monday.

CAVANAUGH: Now, who knows whether or not an injunction will be granted or what the ultimate findings will be? But we know for certain that an awful lot of San Diegans signed the petition to get the comprehensive pension reform measure on the ballot. Many of those people might be angry to see this board step in and say you can't vote on this measure that you want to vote on. How do you address the concerns and perhaps even the anger of people when faced with that kind of impediment to expressing their beliefs in the ballot box?

ZUCHETT: Well, unfortunately, if you listen to council member DeMaio who's already making threats, if that were to happen, I think there are politicians out there who will try and capitalize on the anger that a lot of people have in terms of what they believe is going on with the pension system, based on the information they've gotten from people like Carl DeMaio, which is not accurate information. The bottom line is, are the employees I represent, represent the majority of employees in the City of San Diego, they earn $55,000 a year on average, librarians, 911 dispatchers, city planners, and they retire on a pension of $32,000 a year with no Social Security. And so there's a very different reality as to what's going on with a typical city employee versus the top ten list that Carl loves to talk about, which those employees are not represented by unions, in fact, their salaries and their pension benefits can be controlled on an at-will basis by mayor Sanders and the City Council. Rather than focusing on them, it's much more fun to have fun with us, and so we've certainly lost the PR campaign on this, but at some point, the facts matter, and most importantly, the law matters, and at the end of the day, I think the public understands that when the law has been broken, there's consequences to it.

CAVANAUGH: Finally, when will we know what the ruling is on whether this is going to be on the ballot?

ZUCHETT: I think March 9th is the date, is the no turning back date, so I would expect a judge to do something before then. No matter what happens in the immediate future, the longer term future is that PERB is still going to go through this process. And I would predict still make the finding.

CAVANAUGH: Michael, thank you so much.

ZUCHETT: Thank you for having me.