Thursday, December 29, 2011

California Supreme Court Upholds Abolition of Redevelopment Agencies

In an opinion sure to have state-wide impact on the nearly 400 existing redevelopment agencies, the California Supreme Court held, “Redevelopment agencies ... do not have protected right to exist that immunizes them from statutory dissolution by the legislature.”  The ruling in California Redevelopment Assn. v. Matosantos (Cal., Dec. 29, 2011, S194861) 2011 WL 6822391, has broad implications for for public safety services.  Redevelopment agencies had been used to siphon local revenue away from core services, such as law enforcement and fire protection, but Thursday’s ruling makes it much more difficult for cities and counties to continue the practice.

The Court ruled on two state laws addressing so-called “Redevelopment Agencies.”  The Court held, “Assembly Bill 1X26, the Dissolution Measure, is a proper exercise of the legislative power vested in the legislature by the State Constitution.”  The Court explained that the power to create entities such as redevelopment agencies carried with it the corollary power to dissolve those entities.  However, the Court invalidated the measure’ companion bill, A.B. 1X27, which conditioned further redevelopment agency operations on additional payments by the agencies’ community sponsors to state funds benefitting schools and special districts.  The Court found this mandate violated Proposition 22, which amended the Constitution to prevent the state from redirecting redevelopment funds.

The opinion also chronicles how community redevelopment agencies, formed to combat urban decay, developed into the principal instrument of economic development for most cities.  These agencies principally acquire and transfer property on favorable terms for residential or commercial development.  Unable to levy taxes, the agencies rely on tax increment financing, whereby the property tax revenues for government entities other than the redevelopment agency are frozen, while revenues from any increase in values are awarded to the redevelopment agency on the theory that the increase is the result of redevelopment. The tax increment financing has, “sometimes been misused to subsidize the city’s economic development through the diversion of property tax revenue for other tax entities.”  The agencies are used to shield property tax revenue from other governmental agencies and create a shell game amongst local governments with respect to property tax funds.

The tax increment financing is a hot political issue because of the arguable unfair advantage it provides cities over school districts and local taxing agencies, and the loss of revenue to the state’s general fund.  While Governor Brown considered eliminating redevelopment agencies altogether as a partial mean of closing the state’s projected budget deficit, the legislation enacted “freezes” conditions by placing restrictions on modification of existing plans and barring creation of new agencies.  The legislation was intended to preserve redevelopment assets and revenues to fund core local services, i.e. public safety and education.  The dissolution component transfers control of redevelopment agency assets to the local public entity that created the agency and requires performance of existing obligations.  The Court invalidated the provision that created an exemption for agencies that agreed to make specified payments to other governmental funds.

Saturday, December 17, 2011

Paper: Police vs. Stockton, Round 1

The Stockton POA was in court Friday trying to block the city's attempt to impair their MOU based on a purported fiscal emergency.  The city claims it can impair existing labor contracts because the city council passed a resolution declaring a fiscal emergency.  Mastagni Law attorneys David P. Mastagni, David E. Mastagni, William M. Briggs, Isaac S. Stevens and B.J. Pierce represent Stockton POA in the action.  A ruling is expected before the end of the year.  Read more about the case in the Stockton Record's article Police vs. Stockton, Round 1.

Thursday, December 15, 2011

CalPERS Refutes Stanford Pension Claims

CalPERS released a rebuttal Tuesday to the Stanford Institute for Economic Policy Research's (SIEPR) most recent claims about CalPERS' long-term liabilities.  The Stanford report grabbed headlines claiming CalPERS has a significant unfunded liability, based largely on artificially low estimates of CalPERS investment returns.  The SIEPR projections getting the most attention are based on very conservative projected rates of return for CalPERS investments, between 4.5% and 6.2%.  However, as CalPERS points out, its 20-year average investment return is 8.4% and it earned 21.7% on its investments last year. Using these historical rates, rather than Stanford's hypothetical rates, CalPERS is close to funding levels most experts agree are adequate for pension systems and is rapidly recovering from investment losses in 2008 and 2009.

Wednesday, December 14, 2011

Full Disclosure Network Profiles ASA-DOJ Lawsuit

On Sunday, December 11, 2011, the Full Disclosure Network released a profile of the lawsuit filed by the Association of Special Agents- Department of Justice.  The lawsuit challenges budget cuts that defunded of the DOJ’s Bureau of Narcotic Enforcement (BNE) and Bureau of Intelligence and Investigations (BII).  Mastagni Law attorneys David P. MastagniDavid E. Mastagni and Isaac S. Stevens represent ASA-DOJ in the action.

Monday, December 12, 2011

Private-Sector Firefighters File Class Action Against Wackenhut Over Alleged Employer Abuses

Several private-sector firefighters filed a class action lawsuit Tuesday against private security company Wackenhut, alleging several serious wage and hour violations and other employer abuses.  The lawsuit alleges firefighters working on Department of Defense contracts in Afghanistan and Iraq were required to work 24 hours a day, but only paid for 12 hours, required to have walkie talkies to their ear during sleep, and were frequently called out on a fire or other emergency only to be sent back to bed in the middle of the night and denied pay for their time.

The lawsuit alleges firefighters who complained were told “You have two choices, aisle or window,” or, “chicken or beef,” meaning they would be fired and flown back to the United States.  The eleven-count complaint seeks damages for unjust enrichment, breach of contract, fraud and deceptive trade practices.  Wackenhut has faced several lawsuits in the past about its employment practices.  In 2008, Mastagni Law attorneys David P. Mastagni and David E. Mastagni won a seven-figure award for Wackenhut employees over wage and hour violations.

Monday, December 5, 2011

Fox News: Stockton Cops Waging War Over Contract Rights

Fox News Commentator Tom Sullivan says he's "with the police on this one," weighing in on a lawsuit between the Stockton POA and city manager Bob Deis.  He notes the number of officers is down 25% and crime is at record levels in Stockton.  See the full clip here.  Mastagni Law attorneys David E. Mastagni, Isaac S. Stevens, and B.J. Pierce represent the Stockton POA in the matter.

Thursday, December 1, 2011

Court of Appeal Recognizes Corrections Professionals' Special Expertise

In Ochoa v. Superior Court (2011) 199 Cal.App.4th 1274, the Sixth District Court of Appeal ruled superior courts must consider inmates' rights to view confidential information to challenge parole denials on a case-by-case basis and directed the court to consult corrections professionals to help it decide what the inmate's attorney could receive. The case went on appeal after a superior court judge ordered a warden to choose between producing unredacted copies of confidential information to a prisoner or opposing prisoner's petition without relying on confidential information. The Court rejected such a blanket rule and acknowledged corrections professionals have a special role to play in determining why records should be confidential.

In reaching its decision, the Court observed:

[Q]uestions of confidentiality are complex and can only be made by trained, experienced correctional authorities knowledgeable about the inmate in question, the entire content of his file (not just the contested documents the court reviews), prison life in general, morality and ethics of the prison setting, prison relationships, and the rehabilitative process.  In many cases the reasons for confidentiality may not spring from the face of the document but may be based on other factors in the inmate's file or other conditions in the institution, or a psychological factor that would require expert analysis to appreciate.’ ... ‘Such a hearing would allow the custodian of records ... to explain the significance of the documents and the reasons for their being withheld.  Anything less would have the court acting in a vacuum, unable to obtain or use the factual tools which are essential to an informed judgment.’

As a result, the Court of Appeal ordered the superior court to set an in camera hearing with corrections professionals to determine how much, if any, of the confidential files could be turned over to the inmate's attorney.