A Santa Clara County Superior Court judge denied a group's request to intervene in settlement framework San Jose reached with its unions over pension reform Measure B passed in 2012.
Judge Beth McGowan announced her decision during a hearing Tuesday in San Jose and upheld her decision to invalidate the measure.
Attorneys representing the Silicon Valley Taxpayers Association, San Jose resident Steven Haug and former City Councilman Pete Constant had made their arguments to intervene in the case.
Constant's attorney Marguerite Leoni said outside of court that they asked to intervene last month to provide a defense for Measure B, which was passed by 70 percent of voters in 2012.
"(Constant) is a beneficiary of the retirement system and feels that Measure B provides an element of fiscal stability that will make that retirement system sustainable for many years," Leoni said.
Measure B sparked controversy between the city and its unions that required new workers to pay 50 percent of their pension costs and current employees to choose a lower-cost plan or contribute more to their current plan.
The unions filed lawsuits against the city and in 2013 the court ruled against the city regarding certain portions of the measure, including requiring city employees to give more to their pension plans.
The city and unions have been bargaining since then and agreed on the alternative settlement framework last year to replace Measure B.
Tuesday's hearing also considered the San Jose Police Officers' Association's challenge against the city for not bargaining in good faith leading up to the June 2012 election, when voters passed Measure B, police union attorney Gregg Adam said outside of court.
In her proposed judgment and order filed last Wednesday, McGowan wrote that provisions under Measure B were invalid because the city didn't meet with its unions before the measure was placed on the ballot, which was a "procedural defect in bargaining."
The judge's decision is a "building block toward the future to a post-Measure B world where everyone has agreed to the broad agreement on pension reform and moving forward collaboratively," Adam said.
The attorneys said outside court that they were unaware of the judgment signed off by McGowan on Measure B prior to Tuesday.
After the hearing, attorney Kenneth Lounsbery, who represents the taxpayers association and Haug, said the city "hastily" finalized the settlement last month, a day after one of their clients told them they planned to intervene on the case.
"The big picture is the question of whether or not the taxpayers, the voters of San Jose, have any protection left that was afforded by Measure B and we don't know," Lounsbery said.
Attorney Alena Shamos, who also represents the taxpayers
association and Haug, said they were "blindsided" by the city and said the rights of the 70 percent of voters who supported Measure B need to be protected.
The judge took some of the attorneys' arguments under submission and will make a decision at a later date, Shamos said.
SJPOA president Paul Kelly said he supported the judge's decision, which approved the agreement reached between the union and city last July.
"I think our officers are going to be able to breathe a little
easier today. There's still a few hurdles, but after all these years we did it," Kelly said.
"I am pleased that we are one step closer to implementing our negotiated pension reform settlement. This agreement will save taxpayers $3 billion over the next 30 years, create a more sustainable pension system, and put an end to the lingering pension battles that have hampered our ability to recruit and retain police officers and other city employees," Mayor Sam Liccardo said in a statement.
"We will continue to move quickly to implement this agreement, which will culminate with a ballot measure in November where voters will be asked to approve key elements of the agreement and lock in protections to secure the savings," Liccardo said.