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9.A -8 SB 402 frorn page 1 ...... ' ......... The bill was passed and signed by the governor in 2000 over the strong objections of the League, the California State Association of Counties, and hun- dreds of cities and counties that wrote letters, passed resolutions or personally contacted legislators and the governor urging opposition to the bill. The case decided by the Court originated in Riverside County in 2001, when public safety unions invoked SB 402 to resolve a disagreement with county officials on wage and benefit issues. The League had filed a friend-of-the-court brief in the case, urging the court to find that the law violates state constitutional protections for local control. (For details, see "What the Court Said About SB 402 ".) WHAT THE COURT SAID ABOUT SB 402 The League and other local agencies believed that SB 402 was constitutionally flawed in three respects: Unlawful Delegation to Private Person. SB 402 violates section 11(a) of article XI of the California Constitution. That provision prohibits-the Legislature from delegating powers over municipal functions and municipal finance to private persons. This section was added to the Constitution to prohibit the Legislature from authorizing private persons who do not have to live with the financial consequences of their decisions from creating financial obligations binding on California's cities and counties. "This is good news for local democracy," said League Executive Director Chris McKenzie. "The League opposed SB 402 because the legislation turned critical budget decisions over to private arbitrators, irrespective of local voters' wishes." "We're gratified to have resolution," said River- side Mayor Ron Loveridge, First Vice President of the League. "Cities throughout the state are in the middle of painful budget decisions, made difficult by both the stalled economy and the uncertainty about state budget cuts that could dramatically affect local services. These decisions are tough enough without the additional uncertainty surrounding the binding arbitration legislation." "Both local agencies and public safety employees will benefit simply from knowing what rules apply to the collective bargaining process," Loveridge added. In its opinion the Supreme Court observed that almost anything a local agency does, including determining employee compensation, can have effect outside its borders. But the Court noted that this circumstance does not mean the Court can eviscer- ate "Gear constitutional provisions" or that the Legis- lature may do what the Constitution expressly prohib- its it from doing. In focusing on the Constitution's language, the Court was steadfast in its refusal to be drawn into a policy debate about SB 402. The opinion also re- confirms that the Constitution operates as a restric- tion on the Legislature's power. Charter City Authority. As applied to charter cities, SB 402 violates article XI, section 5(b) of the California Constitution. Section 5(b) gives charter cities "plenary authority," subject only to the restrictions of article XI itself, to control the compensation of their employees. County Prerogatives. As it applies to counties, SB 402 violates article XI, section 1(b) of the California Constitution. That section gives the governing body of each county the responsibility for providing for the compensation of its employ- ees. Characterizing the constitutional language as clear," the Court's opinion indicates that there were sound reasons for local agencies' concerns. The Prohibition Against Delegating Munici- pal Functions to a Private Party The unlawful delegation issue generated the strongest consensus among the justices. The resolution of this issue benefits both cities (charter and general law) and counties. All seven justices agreed that the plain lan- guage of this constitutional prohibition forbids the Legislature from doing what SB 402 does. The Court also found that: Decisions relating to employee compensa- tion are a "municipal function," relying heavily on decisions determining compensation are "municipal affairs" for charter cities (but also noting that the concepts are distinct). Continued on Page 9 PAGE 8 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org