Costa Mesa’s Bold and Meaningful Government Cost-Efficiency Plan on Hold Until November 6, When Citizens Vote on a Proposed Charter (Measure V) and for Three City Council Members

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The Costa Mesa City Council has received significant state and national news coverage in the past 18 months as four of the five council members have attempted to implement bold and meaningful efforts to make city services more cost-efficient. (See “Costa Mesa Gets National Exposure” – Orange County Register – Column by Frank Mickadeit – June 1, 2011)

Of course, legislative initiatives are bold and meaningful when they challenge the agenda of public employee unions. Aggressive union opposition indicates legitimate potential cost savings for taxpayers.

The California 4th Appellate District Court, Division 3 issued an unpublished decision yesterday (August 17, 2012) in Costa Mesa City Employees Association v. City of Costa Mesa that affirms the July 15, 2011 decision of an Orange County Superior Court judge to suspend a plan of the Costa Mesa City Council to layoff city employees and contract out their jobs to private firms. The appeals court ruled that the lower court’s preliminary injunction to stop the plan was proper.

This means the Costa Mesa City Council cannot proceed with its cost-efficiency plan until the courts fully consider and decide the plan’s legality. It means that future advancement of such a plan will depend on two factors to be decided in the November 6, 2012 elections: (1) whether or not Costa Mesa voters approve Measure V and enact a city charter that gives the city more authority to contract out services; and (2) whether or not public employee unions and their political allies can replace three current city council members with pro-union city council members, thus bringing the cost-efficiency plan to a screeching halt.


As described in the unpublished court decision, “On March 1, 2011, the City Council of Costa Mesa approved an outsourcing plan to contract out for a variety of city services, including street sweeping, graffiti abatement, animal control, jail operations, special event safety, information technology, graphic design, reprographics, telecommunications, payroll, employee benefit administration, building inspection, and park, fleet, street and facility maintenance. Thereupon, on March 17 and March 31, 2011, the City’s Public Services Director sent layoff notices to over 100 city workers who are represented by CMCEA.” The decision notes that the plan did not “just target one particular position or department; rather, it is aimed at 18 different sectors of the City’s workforce that provide a wide array of services to the citizens of Costa Mesa.”

CMCEA is the Costa Mesa City Employees Association (a public employees’ union that is part of the independent Orange County Employees Association), which has a collective bargaining agreement with the city established in 2004 and scheduled to expire in 2013. It responded on May 16, 2011 to the city council’s cost-efficiency plan with a lawsuit against the city to stop it. Its complaint alleged the City’s government reduction plan violates the Government Code in that it calls for the outsourcing of jobs that do not involve “special services” (California Government Code Section 37103 and California Government Code Section 53060) and alleged the plan violates the parties’ collective bargaining agreement because the City did not meet with CMCEA to determine which specific services should be contracted out and how to best mitigate layoffs.

How meaningful was this government cost-efficiency plan? The appeals court felt it was highly meaningful:

Indeed, defendant Hatch, the City’s CEO, admitted in his declaration, “City leadership is earnestly pursuing the outsourcing of City services[.]” While he said there was a “possibility” the RFP process would not actually result in the outsourcing of any jobs, it is readily apparent CMCEA’s members were in serious peril of being terminated.

That was made evident by the many layoff notices that the City sent out. The trial court’s interpretation of the notices as a “significant step” in the outsourcing process is supported by the fact the notices set September 30, 2011 as the expected date the recipients would be terminated. The notices did state they were contingent on the recipient’s job being outsourced and were subject to being rescinded, but they also made clear the City Council was presently determined to pursue a plan that called for the recipient’s job to be outsourced. And, according to CEO Hatch, the City was pursuing that plan in earnest. The notices also referred the recipients to the City’s Human Resources Divisions for help with job loss issues and expressed regret “the City’s current conditions require that City employees be laid off.” (Italics added.) Clearly, the recipients of the layoff notices were facing a very real threat of losing their jobs.

Obviously no one wants to lose a job, and the CMCEA appealed to the emotions inherent in the government cost-efficiency plan:

Job loss is always a serious matter, and in this post-recession era of high unemployment, it cannot be taken lightly. Defendants admit that losing a job, and the income it entails, amounts to irreparable harm. (White v. Davis, supra, 30 Cal.4th at p. 559 [lost wages and other benefits during lawsuit over budget impasse constituted serious hardship to those affected by impasse].)

The court recognized this argument is balanced by “the citizenry’s interest in cost-effective government”:

Notwithstanding the prospect of city workers losing their jobs, however, defendants contend, “The residents and taxpayers of Costa Mesa have a substantial interest in a local government that is able to provide better municipal services while improving its financial security.” Defendants also submit that, unless the preliminary injunction is lifted, the City cannot even attempt to further that interest by putting its outsourcing plan in motion. We do not question the citizenry’s interest in cost-effective government… 

This court decision outlines the fundamental clash over the future of California. One side (the Costa Mesa City Council majority) tries to reduce the city bureaucracy and its control over most aspects of city operations, thus freeing the taxpayers from the costly commitments made through collective bargaining with unions when times were prosperous. The unions doesn’t want to lose jobs (both for economic reasons and because of the honest commitment of some of their members to be public servants).

Obviously the primary solution as seen by unions is to obtain more revenue for city operations through tax increases. In the meantime, they can derail any outsourcing plan by appealing to their collective bargaining agreement and using the courts to enforce it. Of course, they also have the threat of going on strike and of election campaign activity to change the city council.


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  2. […] The city quickly earned national news media attention for taking on the public employee unions, which aggressively fought outsourcing. Its public meetings attracted every element of the Left intent on preserving and expanding the power and size of government. I have written about the Costa Mesa situation extensively; for more details, see Costa Mesa’s Bold and Meaningful Government Cost-Efficiency Plan on Hold Until November 6, When Ci…. […]