Pacific Grove City Initiative To Void Ordinance 02-18 Pension Increase (November 2014)

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A Pacific Grove City Initiative To Void Ordinance 02-18 ballot question was not put on the November 4, 2014 election ballot for voters in the city of Pacific Grove in Monterey County, California. A June 26, 2014 judicial hearing on a cross-complaint filed by the city ultimately scrapped the initiative.[1]

This measure was originally proposed for the November 5, 2013 election ballot, but it was put off through legal and judicial delays sought by the Pacific Grove City Council.

This initiative proposed to reverse an allegedly illegal 3% at 50 pension benefit increase given to public safety employees of Pacific Grove in 2002. Proponents of this measure said that the increase was approved based on false information and understated fiscal impact.[2] Specifically, it refered to the CalPERS actuarial forecast, which showed that state costs for pensions could rise to as much as $3.9 billion in 2010 under the new SB 400 pension increase. This report was withheld from legislators in 2002, who instead were shown a 17-page CalPERS brochure saying that SB 400 would not increase state costs. The lawmakers were not shown the CalPERS actuarial forecast that accurately predicted how much costs would soar if investment earnings faltered.[3]


Supporters of this measure argued that the increase in pensions that happened over a decade ago was done illegally and in the midst of misinformation and understatement of fiscal effects. Daniel Davis, an initiative backer, said that the 2002 pension increase decision was "an issue of government corruption." He went on to say "that we just can't let it go."

Other supporters focused on the future and argued that escalating costs under the state Public Employees Retirement System were pushing Pacific Grove towards financial disaster.[4]


Those who opposed the measure joined with many city officials to voice concerns that this measure would result in extremely expensive litigation, ending with the initiative being over-ruled in the courts, much like in the case of Measure R in 2010.[4]

Councilman Robert Huitt, who was the only council member present for the 2002 pension increase decision and the 2013 ballot initiative, suggested discussion about whether the proposed measure was a "legitimate exercise of legislative powers" or if it belonged in the realm of the courts. "As far as I can tell it's silent on legislative intent," he said.[4]

Councilman Ken Cuneo said that the city council needed a report and deliberation to decide if the measure "is going to be a turkey or if it will fly."[4]

Michael G. Colantuono, Esq. and Matthew T. Summers, Esq. were charged with preparing a report on this measure and, based on their findings, they gave the opinion that the measure would cause harm to the city service work force and that it was very likely illegal. Based on these findings, the report suggested that the city council seek judicial relief from a decision on this measure or pass it on to the voters and strongly urged them to vote against it.[5]

Path to the ballot

The initiative was originally proposed for, but did not make, the November 5, 2013 election ballot. When the valid initiative petition was presented to the City council for adoption or referral to the voters, the council voted 6-0, with one absentee, to seek judicial relief for investigation into the legality of the initiative, thus preventing the initiative from immediately going to the ballot.[5]

The initiative petition was first presented to the City Council on May 1, 2013, with 1,195 valid signatures, requiring the council to either enact the ordinance into law, present it to the public for voters to decide at the ballot or call for a report on the effects of the initiative. The council members voted 7-0 to commission a judicial report on the initiative.[4]

After the results of the report were presented to the Pacific Grove council members in the May 15, 2013, meeting, there was a 6-0 vote to seek judicial relief, postponing any decision on the adoption of this initiated ordinance until the courts had investigated its legality.[3][6]

Judicial outcome

In January, Monterey County Superior Court Judge Thomas Wills ruled in an initial decision that the initiative had sufficient legal compliance to go before voters. The city filed a cross-complaint, scheduled for June 26, 2014, and was also considering an appeal of the ruling by Wills. The Pacific Grove City Council met on March 12, 2014, to decide whether to abandon its legal efforts against the measure, putting it on the ballot and dealing with expected litigation if it had been approved by voters, or to continue working to keep the initiative off the ballot.[7] The council voted five against two to continue with the cross-complaint and await a second judicial ruling after the scheduled June hearing.[1]

In his final decision after the city's cross-complaint on June 26, 2014, Judge Wills overruled his own decision, saying that the 2002 pension increase was legally enacted, invalidating the proposed pension initiative to roll back the 2002 council vote.[8][9]

In response to the decision, Pacific Grove City Manager Tim Frutchey said, “This ruling benefits the City by avoiding a costly election, and litigation."[9]

Mayor Bill Kampe, who recently announced his candidacy for re-election, said, "I'm hoping we can put the past of 12 years ago behind us. I thank the citizens for putting the focus on pension reform, but now's the time to look forward, and look at the additional changes we need at the state level to give us the flexibility we need to manage pension costs."[9]

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