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Appeals Court Upholds Proposition B

San Diego City Hall administration building.
Angela Carone
San Diego City Hall administration building.
Appeals Court Upholds Proposition B
Appeals Court Upholds Proposition B GUEST:Andrew Bowen, metro reporter, KPBS News

This is KPBS Midday Edition I am Maureen Cavanaugh. Yesterday a ruling by a state appeals court upheld the legality of the city employees pension cutbacks setback and proposition be that ballot initiative. Way defined benefit pensions for all newly higher city workers except police. The affirmative appeals court ruling does not change anything but if it had gone the other way the city of San Diego may have been on the hook for millions of dollars in retroactive pension contributions. The legal battle may not be over yet. Joining me is Andrew Bowen.. City voters approved prop the and it has been in effect for about five years now. They approved it by a large margin almost 2/3. They filed a complaint with the public relations board and this is a quasijudicial agency and this is over bargaining with various employers in California. The ruled in favor of the unions. To set it was a legitimate and ordered back payment of pensions for new employees. The city Council voted in December 2015 to appeal that decision to a higher court and the ruling yesterday from the Court of Appeals overturned the rolling and found that it is legal and it is here to stay. It was more violation of labor laws so it was placed on the ballot by signature gathering campaign also known as a citizens initiative and none of the authors were elected at the time. They argued that city officials have sort of orchestrated behind the scenes. The mayor had at the time and doors measure he had a good at press conference is. The unions argued that he was basically the one behind the that the city had to meet and confer with the unions over pop -- proposition be. Is it basically this was not a citizens initiative. This was the city placing on the ballot through a shadow campaign. The state appeals court found that this was a genuine citizens initiative despite the involvement of the mayor. The city had argued that they have the right to free speech and he cannot endorse any measure that he wants and appear at press conferences to voice his support. He also did his own time as a private citizen. I spoke yesterday at the press conference with the current mayor and he saw this as a validation of the process at a whole -- as a whole that they have the right to amend it when the government cannot or will not. I think it is important that you have the ability of the initiative and I think it is important that when you get to the bargaining table try to set that tone since been elected. They do not see it as an up and in of California labor law -- labor law that the union says it is. How are they taking this appeals court ruling. I spoke with the head of that union yesterday and they said the board of directors is meeting this afternoon to seek review by the Supreme Court. The court declines to review the case this would settle it for good. If the court does take up the case decisions from that court sometimes take years to come through so this could be drawn out even more. About how much money with the city have to pay if it were found to be invalid. The city hired an actuarial firm to put a trace -- price tag for all that had been hired since pop the past. That was about $20 million. It was a little bit over a year ago and it will get more expensive as time goes on San Diego is only city in California not to offer pensions to its city workers. Do we know if it is affecting hiring. I think there is widespread acknowledgment that yes there is. I spoke with the head of the municipal employees Association. Here is what he said. They told us and the voters that San Diego would be a leader in pension reform. All the other jurisdiction would follow with 401(k) plans. Nobody has followed. We are the only without defined-benefit pension for new hires. The practical impact is that we have a recruitment and retention problem. There was an interesting thing that I noticed during the press conference yesterday. The supporters said several times that voters in other cities should follow suit that we should eliminate pensions through citizens initiatives to can read that as to ways. On the one hand they are trying to pass on the solution to a statewide problem that they feel is working it's impossible for us to get the most qualified employees in San Diego because these people that keep the city running and engineers and everything I live in San Diego and can just go down to Chula Vista or National City or the County and get a defined benefit pension. Even with that in effect the city is still encountering rising pension costs. Tell us about that. This week the mayor will be unveiling his budget for the next fiscal year. Is facing an operating deficit of up to $30 million because the retired employees of San Diego are living longer than had previously been calculated so we will be keeping and payment pensions for longer so that is being filled from the general fund and that will likely mean cuts to neighborhood services. I've been speaking with Andrew Bowen thank you.

An appeals court Tuesday overturned a ruling by the state Public Employment Relations Board that threatened to invalidate Proposition B, which San Diego voters passed five years ago to reform the city's employee retirement plan.

RELATED: City Pension Reform In San Diego Not Welcomed By All

The PERB ruled in December 2015 that the city should have negotiated the terms of Proposition B with its six unions before putting it on the ballot.

The measure, passed overwhelmingly, closed the debt-ridden pension system to new employees other than police officers. Since the provisions of the ballot measure were implemented, most new employees have been offered 401k- style plans.

The proposition was opposed by organized labor groups, which took their case to the PERB.

The city contended that private citizens do not have to negotiate with organized labor before proceeding with a ballot measure, and that even though municipal officials like then-Mayor Jerry Sanders backed Proposition B, they did so on their own time.

RELATED: Ruling On San Diego’s Pension Reform Initiative Not End Of Debate

A three-justice panel of the Fourth District Court of Appeal returned the case to PERB with directions to dismiss the union complaints.

The justices also called on PERB to order other "appropriate relief" consistent with the views they expressed in their opinion and determined that each side to the litigation will bear its own costs.