The State Worker

From The Bee's Dale Kasler :

California's two pension funds reported their biggest investment gains in years today as they continue to climb out of the hole caused by the market crash of 2008.

CalSTRS said it earned 23.1 percent, its highest in 25 years, in the fiscal year that ended June 30.

CalPERS did nearly as well, posting a 20.65 percent gain. That was its best in 14 years.

Click here for the rest of Dale's story.

IMAGE: www.freefoto.com

State Controller John Chiang will not cut paychecks for lawmakers, in keeping with his interpretations of Propositions 25 and 58. Click here for the breaking news reported by our Bee colleague, Kevin Yamamura.

PHOTO: John Chiang talks to Bee reporters last year. Sacramento Bee / Hector Amezcua

A Caltrans worker was killed on the job in San Diego this morning, state officials announced just a few minutes ago. It's the third department employee's death in the line of duty in the last two months. Caltrans hasn't yet released the name of the victim pending notification of family.

In response, the department is ordering a statewide halt to all projects so that employees can review safety procedures. Caltrans also will use the time to plead for public caution in construction and maintenance zones. Officials haven't yet said when it will OK employees to resume work.

All three recent deaths happened in Caltrans District 11, which encompasses San Diego and Imperial counties.

On May 4, a trolley struck and killed 64-year-old Stephen Palmer Sr. in National City near San Diego. Then on June 7, Jaime Obeso , 53, was killed by an errant vehicle while he was working on Interstate 8 in Imperial County.

Caltrans roadwork jobs are among the most dangerous in state government. In the past 87 years, 178 Caltrans workers have died in the line of duty, most after being hit by inattentive or reckless drivers.

IMAGE: www.dot.ca.gov

The state Fair Political Practices Commission is investigating more than four dozen CalPERS board members and employees over allegations that they failed to accurately report gifts.

The 49 names on a list obtained by The Bee from the FPPC include CalPERS Board Chairman Rob Feckner and board members George Diehr and J.J. Jelincic. Chief Investment Officer Joe Dear is named, as is former CEO Fred Buenrostro. Buenrostro has been named separately in an ongoing investigation of influence peddling at the fund that is unconnected to the FPPC matter.

FPPC Executive Director Roman Porter confirmed that the commission is investigating and the employees and board members involved. CalPERS has cooperated fully and without subpeona, he said. In keeping with the commission's policy, Porter provided no other information.

CalPERS CEO Anne Stausboll said in a statement that, "CalPERS has been fully cooperating with the FPPC on this investigation over the last several months. These matters are still pending and our staff involved have due process rights."

Here's the full list of those named in the investigation:

The Legislative Analyst's Office has given a thumbs down on Gov. Jerry Brown's budget proposal to give CalPERS $1.5 million to develop a hybrid pension plan study.

"We have no idea what the Governor is contemplating in his hybrid proposal or whether the study to be funded from this money would have any value at all," the LAO says in a report released this afternoon, calling the plan "amorphous" and inscrutable."

And then it blasts charging CalPERS with leading the effort: "This is not meant as a condemnation of the considerable skills and abilities of CalPERS staff. Instead, our recommendation is intended to preserve CalPERS' hard-won and important independence under Article XVI, Section 17, of the California Constitution."

Brown's May budget revision calls for lawmakers to set aside the money for CalPERS to "identify alternatives for hybrid pension systems for consideration" for "all public employee pension systems in the State of California." Hybrids blend 401(k)-type retirement plans with a smaller guaranteed pension than the straight defined benefit plans that nearly all public employees receive now.

But CalPERS' interests don't necessarily line up with the interests of other pension systems in California, it already has the mission and the means to analyze legislation affecting pension funds and has already signaled its opposition to hybrid plans, the LAO says.

In the final analysis, we would recommend that the Legislature reject this request for funding. Alternatively, if it wishes to provide the administration with some such funding, perhaps the amount could be lowered. In any event, actuaries, legal experts, and other policy experts independent of CalPERS and other California public pension systems should be utilized in this study.

IMAGE: www.lao.ca.gov

Gov. Jerry Brown's office has announced a plan to merge the Department of Personnel Administration and the State Personnel Board into the California Department of Human Resources. The new acronym: CalHR. Projected savings from the merger: $5.8 million.

Bee colleague Torey Van Oot has more on The Bee's Capitol Alert blog.

Here's the press release.

From our sister blog, Capitol Alert:

Gov. Jerry Brown today issued an executive order banning state employee travel that is "not mission-critical."

The order targets all in- and out-of-state travel that costs the state money and is not "directly related to enforcement responsibilities, audits, revenue collection or other duties required by statute, contract or executive directive."

Capitol Bureau colleague Torey Van Oot has the story and the executive order, which you can read by clicking here.

The Department of Personnel Administration, which represents Gov. Jerry Brown in contract negotiations, has put out a press release on the deal reached this morning with the California Correctional Peace Officers Association:

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment has told its members that union negotiators have reached a tentative labor agreement with Gov. Jerry Brown.

The deal, significant as the first reached by the Brown administration, sets out the labor terms for a 3,700-member union that has been without a current labor pact for nearly four years. The agreement also hews closely to the deal reached by SEIU Local 1000 last October.

Here are the highlights of the deal, according to a letter released to members this afternoon:

• Three-day-per-month furloughs end for all furloughed employees on April 1, 2011, conditioned upon the proposed MOU being ratified by CASE membership.

• 3% increase to employee pension contribution (total of 9% for Bargaining Unit 2 miscellaneous employees, 10% for Bargaining Unit 2 safety employees).

• 4% increase to top of salary step for all classes at end of contract (July 1, 2013), effective after employee has been at top step for a minimum of 12 months.

• All employees to receive 1.73 hours of additional leave credit per month (equal to 1% of gross salary per year) during the term of the MOU. This additional leave credit does not expire, and may be used or cashed out in the same manner as vacation leave or annual leave.

• One day of unpaid personal leave (under a program named "PLP 2010" by DPA) per month for 12 consecutive months beginning the pay period following ratification. Employees have until June 30, 2016, to use accrued PLP 2010 time, at which time it expires. PLP 2010 time must be used before any type of leave except sick leave, and has no cash value.

• Bargaining Unit 2 employees at State Compensation Insurance Fund are exempted from PLP 2010 days for the term of the contract in recognition of the successful CASE litigation and Insurance Code section 11873(c).

• Increased state health care contributions (80%-80% formula) for 2011, 2012, and 2013. Employer health care contribution for 2011 increased to $486 (employee only), $986 (employee plus one dependent), and $1,241 (employee plus two or more dependents). State health care contribution to be increased on January 1, 2012, and January 1, 2013, using the 80%-80% formula.

• Bargaining Unit 2 members will receive two additional professional development days (for a total of five professional development days) per fiscal year, to be used for either professional or personal development activities at the employee's discretion, and to be requested and granted in the same manner as annual or vacation leave.

• Consistent with legislation passed during the prior administration, the parties agree to delete Lincoln's Birthday and Columbus Day as state holidays.

• State agrees not to seek the unilateral imposition of furloughs during term of PLP 2010.

• State agrees to introduce and support legislation to continuously appropriate funding for state employee salaries and benefits during the term of the contract, to ensure employee salaries and benefits are maintained in the event of an untimely State budget.

• Employees hired after January 15, 2011, shall participate in a reduced (pre-SB400) defined benefit pension plan (2% at 60 formula).

• Contract protection ("Most Favored Nation Clause" or "Me Too Clause") which ensures that should any other bargaining unit currently without a contract receive a better overall compensation package, the members of Bargaining Unit 2 would be entitled to the difference.

• The remainder of the prior MOU, including side-letter agreements and the CUIAB caseload stipulation previously negotiated, were rolled over into the new contract.

CASE also told its members that the agreement has no impact on furlough litigation that the union hopes will eventually win back pay for unpaid days off forced on its members during former Gov. Arnold Schwarzenegger's administration and carried forward by Brown.

Click here to read the CASE announcement to members.

Editor's note: This post has been changed to clarify the impact of furloughs on employee pay for the 2010-11 fiscal year.

Five of six state employee unions without contracts whose members are furloughed three days per month have asked an Alameda Superior Court judge to stop the policy.

Professional Engineers in California Government, California Association of Professional Scientists, California Correctional Peace Officers' Association and California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment are the union plaintiffs in the lawsuit now before Judge Steven Brick.

The Association of California State Supervisors, which speaks on behalf of management-level exempt workers, is also a party to the lawsuit.

California Statewide Law Enforcement Association didn't join the other unions in the litigation, which names Gov. Jerry Brown as defendant.

A hearing is set for Friday, April 8, at 9 a.m. in Alameda Superior Court.

State lawmakers today ranged from skeptical to dismissive of a controversial new proposal to freeze and then lower current public employee pensions.

During a joint meeting this morning of Assembly and Senate committees that oversee public employee compensation, some legislators said the bipartisan Little Hoover Commission's report on state and local public retirement funds added to public debate, but others called its ideas unrealistic and legally suspect.

"Frankly, I just don't see this happening," said Sen. Alex Padilla, D-Los Angeles.

Assemblywoman Fiona Ma, D-San Francisco, noted that public employee pensions currently average less than $30,000 per year. Retirees aren't living the high life, she said, adding that hyperbolic pension reform talk is part of a general "attack" on public employees.

"But not by this commission," said the commission's director, Stuart Drown, who defended the report during 30 minutes of testimony this morning before the Assembly Public Employees, Retirement and Social Security Committee and the Senate Public Employment and Retirement Committee.

The Little Hoover Commission acknowledged the legal questions that surround changing pensions for current public employees. Conventional wisdom holds that it would break the law. "But the commission made a policy analysis, not a legal analysis," Drown said, based on nearly a year's research and testimony from a wide variety of pension experts and interest group representatives.

The 12-member Hoover commission made a splash last week with a 100-page report that suggested public pensions at all levels are overextended. Its solutions included freezing pensions and moving employees into hybrid plans that incorporate a small guaranteed component with a 401(k)-style savings account and Social Security benefits for those employees who aren't now in the federal program.

VIDEO CREDIT: Little Hoover Commission Executive Director Stuart Drown answers questions before a joint legislative hearing Wednesday, March 2, 2011, about the recent Little Hoover report that advises -- among other things -- that the state's state and local governments should roll back pensions for existing employees. Hector Amezcua / Sacramento Bee

Union reactions to today's Little Hoover Commission pension report and proposals have started rolling in. Here's what Professional Engineers in California Government says:

"The Little Hoover Commission is recommending something that it admits the courts have already determined is illegal and would violate the promise that government made to its public servants when they were hired," said Bruce Blanning, PECG Executive Director.

The report also concludes that putting in lower benefits for new hires "will not deliver savings for a generation."

Blanning added, "All surveys show that public servants are paid less than their private sector counterparts. The Legislature and Governor should direct their focus to legitimate savings rather than illegally violating long-standing commitments to those who serve the public."

PECG represents 13,000 state-employed engineers and related professionals responsible for designing and inspecting California's highways and bridges, ensuring that schools and hospitals are safe during earthquakes, and protecting our air, water and beaches from polluters.

And here's the statement from California Association of Professional Scientists:

This just in: Gov. Jerry Brown has dropped a lawsuit filed by former Gov. Arnold Schwarzenegger that asserted his right to impose a minimum wage order on state workers during a budget stalemate.

Colleague Susan Ferriss has the details over at our sister blog Capitol Alert.

A Santa Barbara-based organization that wants to end union representation of California government employees has revved up its campaign contribution collection machinery for a run at putting the idea to a statewide vote.

Although Secretary of State records indicate that Californians for Public Union Reform hasn't reported that it has taken in any money yet -- it just filed with the state last week -- it is positioning itself to accept contributions with an aim toward putting an initiative on the ballot next year.

Lanny Ebenstein, UC Santa Barbara economist, head of the California Center for Public Policy and president of the Santa Barbara County Taxpayers Association is named in the state filing as the reform group's treasurer.

If his name seems familiar, it's probably because Ebenstein authored "Reforming Public Employee Compensation and Pensions." a report that purported to show that California public employees' pay and benefits are "unjust." We told you about the report in this blog post.

The Orange County Board of Supervisors has lost an appeal to invalidate a 2001 labor pact that retroactively gives county deputies a 3 percent at age 50 formula for retirement. The county has argued the agreement violates provisions of the California Constitution.

The decision by the 2nd District Court of Appeal in Los Angeles, published today, is a big win for the Association of Orange County Deputy Sheriffs. The union also had CalPERS and Jerry Brown, in his former capacity as Attorney General, on its side.

After approving the initial contract in 2001 and renewing it three times, the board shifted positions in 2008. Worried about the $187 million price tag of retroactively applying the enhanced formula, the county filed a lawsuit against the pension's board. Eventually the deputies' union joined the lawsuit.

The case raised several legal issues, but the biggie focused on article XI, section 10 of the state constitution, which prohibits payment of extra compensation to public employees. The county said that applying the formula bump to service years before 2002 amounted to "extra compensation to public employees 'after service has been rendered.' "

The court's three-justice panel said, in essence, "A deal's a deal; live with it."

Here's the ruling. (Hat tip to Blog User E for flagging this.)

Enhanced retirement benefits can't be applied retroactively for state workers represented by the California Statewide Law Enforcement Association, a state appeals court has ruled.

The decision by three justices in Sacramento's 3rd District Court involves a dispute over the terms of a 2002 contract between the union and the state Department of Personnel Administration that raised the retirement formula for about half of the union's 7,400 or so members from 2 percent at age 55 (the so-called "miscellaneous" employee formula) to the state "safety" employee pension plan that allows 2.5 percent at age 55.

The union maintained that the contract called for the safety formula's retroactive application to former miscellaneous employees' first day of service. The administration countered that the upgraded benefit should apply only for service on July 1, 2004, and later.

An arbitrator in 2008 sided with the union and a Sacramento Superior Court judge confirmed the arbitration award.

But the appellate court decision by Justices George Nicholson, Kathleen Butz and Arthur Scotland agreed with the administration's contention that the contract couldn't be retroactively enforced because the impact of that policy wasn't sufficiently analyzed:

The MOU presented to the Legislature did not contain language that the change to safety member status would apply retroactively to convert prior miscellaneous member status to safety member status; (the legislation) was "silent" as to whether the benefit would apply retroactively to prior service; and the Legislature was not provided with a fiscal analysis of retroactive application of the agreement.

Union spokesman Kasey Clark said that CSLEA hasn't decided whether to appeal the 7-year-old case. Last month the union thought it had a contract that included pension and pay concessions, only to see it yanked off the table by the Schwarzenegger administration at the last minute.

"We understand this isn't a good time for courts to be reviewing pension enhancement cases," Clark said this afternoon. "Obviously, a contract like this wouldn't be negotiated right now."

Here's the court's decision, which was published today:

Senate President Pro Tem Darrell Steinberg wants to clear out California's regulatory deadwood. Here's part of what The Bee's Susan Ferriss wrote after a 90-minute conversation with the Sacramento Democrat today:

In an interview with The Bee Capitol Bureau, Steinberg said he'll propose "urgency legislation that directs each state agency to review its regulations, identify any duplicative, archaic or inconsistent rules."

Steinberg said lawmakers could then act on the recommendations over the next six months, perhaps expunging some rules from the 5,000-page California Code of Regulations as part of the state budget negotiations.

Click here to read Susan's report on the Capitol Alert blog, which she's fleshing out for a more expansive story in tomorrow's fiber/cyber Bee.

Correction, Jan. 20, 11:30 p.m.: An earlier version of this post incorrectly reported that attorney David Tyra signed the letter submitted to the 3rd District Court of Appeal.

Citing "the unique circumstances" of transition to a new administration, attorneys representing Gov. Jerry Brown and Attorney General Kamala Harris have asked an appellate court to push back deadlines for submitting briefs in what has been a running feud over furloughs between the executive branch and other statewide-elected officials.

The request asks the 3rd District Court of Appeal in Sacramento to add at least 30 days to the Jan. 26 date that the first documents are due. The court had said on Jan. 11 that it wouldn't grant any extensions.

A suspicious package prompted officials to clear one floor of the Secretary of State office building this afternoon. Torey Van Oot at our sister blog, Capitol Alert, has a bit more about what happened. Click here for the details.

Legislative Analyst Mac Taylor explains the state's finances in a new 10-minute video titled Introduction to the California Budget (above). The topics include the difference between general and special funds, the state's major sources of revenue, and the state's largest categories of expenditure.

The video is part of a new initiative by the Legislative Analyst's Office to broaden its reach. It now has an LAO_CA Twitter account and has started a new section on its website that explains fundamental issues and concepts.

110114 Newton v. Schwarzenegger ruling
Update, 1:49 p.m.: This story has been updated with a response from CCPOA.

A judge in San Francisco has struck down a class action lawsuit over correctional officer furloughs that alleged the policy violates federal labor laws. The case is the first furlough litigation orally argued by state attorneys since Gov. Jerry Brown took office on Jan. 3.

"We are disappointed in the court's ruling today and will be reviewing the decision to determine what steps to take next." said Ryan Sherman, spokesman for the California Correctional Peace Officers Association, which backed the lawsuit.

The ruling by U.S. District Court Judge Vaughn Walker comes just one day after arguments in Newton v. Schwarzenegger. The union's attorneys argued that "self-directed" furloughs of correctional officers violated the Fair Labors Standards Act. The case applied only to members of Bargaining Unit 6.

CCPOA said that cutting employee pay but deferring the furlough time off violates the law because employees aren't paid in full for hours worked within a given pay cycle, that time worked on an unpaid furlough day should be calculated in figuring overtime and that the state hasn't kept adequate payroll records.

In essence, the judge ruled that the plaintiffs didn't make the case to support their claims or misinterpreted the policy as forcing employees to work for free. "The furlough program, while perhaps convoluted in execution, ensures that plaintiffs are compensated for all hours worked during the pay period," Walker wrote. "Because plaintiffs are compensated for all hours worked, and because that compensation exceeds federal minimum standards, plaintiffs claim of violation of FSLA fails."

And federal law, Walker said, authorizes only the secretary of labor to sue for recordkeeping violations, so "plaintiffs here lack standing to raise a separate claim relating to alleged recordkeeping violations."

Click here for a previous post with more details and documents about the lawsuit. We've embedded Walker's decision above.

Sacramento offices of the Department of Justice are closed due to a broken water main that has affected water service to two buildings. The problem affects about 800 employees. Click here for a few more details on our sister blog, Capitol Alert.

The Bee's Jim Sanders is reporting that Gov. Jerry Brown has ordered half the state's 96,000 cell phones turned in by June 1. Click here for more about it on our sister blog, Capitol Alert.

The eight words tucked into page 175 of Gov. Jerry Brown's 2011-12 budget proposal hint at changes for some state workers who carry a gun and a badge. We've underlined the key phrase:

Efficiencies in State Operations
While there have been a number of reductions in state operations costs in recent years, there continue to be opportunities for additional savings. The Governor's Budget includes $200 million in savings associated with identification of efficiencies in state operations. For example, identification of agencies, departments, and programs that can be reorganized to eliminate duplication and unnecessary functions; review of state peace officer and safety classifications; and reductions in other areas like contracting; fleet operations; and, cell phone use.

CalPERS says it's partnering with the University of California San Francisco to study health complications that could be avoided with better care. CalPERS says in this announcement that so-called "potentially avoidable complications" account for nearly 25 percent of U.S. private sector health care costs.

The one-year pilot program starts this month with university researchers examining chronic conditions, surgeries and acute medical events involving CalPERS members in the PERSCare, PERS Choice and PERS Select health plans.

The goal is to figure out how to cut down on avoidable health complications, which will drive down costs and improve the well-being of those who need medical care.

Click here for a September CalPERS Health Benefits Committee agenda item that analyzes the pilot program's advantages and disadvantages. CalPERS staff supported the project.

Gov. Jerry Brown has just released a short list of appointees to key positions. As we reported on Tuesday, labor attorney Ronald Yank has been picked to lead the Department of Personnel Administration. Other appointments on today's list include:

>> John Laird, Secretary of the California Resources Agency
>> Marty Morgenstern, Secretary of the Labor and Workforce Development Agency
>> Mary Nichols, Chair of the California Air Resources Board

Brown also made seven appointments to the state Board of Education, including former Superintendent of Public Instruction Bill Honig. Click here to view the press release.

PHOTO: Ronald Yank, 2007 / Courtesy Carroll Burdick & McDonough LLP

State workers may be having trouble getting in to work this morning as police are diverting traffic from the area around 7th and Q streets in downtown Sacramento as they search a parking garage for an armed subject. Click here for The Bee's Sacto 9-1-1 report.

The California Statewide Law Enforcement Association has issued a press statement disclosing that it had a contract agreement with the Schwarzenegger administration that was pulled off the table by the governor's side. It was an "inexplicable last-minute change of mind," the union's release says.

Our column in today's Bee points out that Gov.-elect Jerry Brown is now the final legislative word on any labor deals. The full Legislature -- which has to approve any contracts that go to the governor's desk -- probably won't be back at work until Jan. 3, the same day that Brown takes office. CSLEA has had a rocky relationship with the guv-to-be.

Still, the union wants the Schwarzenegger administration to OK the deal. "CSLEA believes that finalization of a contract is in the best interest of its members, as well as the state of California, due to the cost savings the contract would achieve," its press release says. "The ball remains in the Administration's court."

Click here to read the CSLEA release.

Editors note 12:10 p.m.: The vote tallies in this post have been updated.

Incumbent Chuck Alexander will continue as executive vice president of the California Correctional Peace Officers Association after winning nearly 90 percent of 431 delegate votes this morning.

According to Bob Walsh, our man on the ground at CCPOA's convention at the Rio All-Suite Hotel in Las Vegas, Alexander opponents Charlie Mohammed received 41 votes and Walter Tucker netted eight votes. Alexander received 374 votes. Eight delegates abstained. Four were absent.

Walsh, a CCPOA retiree who writes for the Paco Villa Corrections Blog, said that Mohammed told assembled delegates that "a vote for Chuck is a vote for cop killers" before he walked out of the convention.

That was a reference to CCPOA's support for Senate Bill 399, which would have allowed re-sentencing for minors who receive life without parole for murder. The union's position on the bill, which didn't clear the Legislature, rallied CCPOA dissidents.

Click here and here for our earlier posts about the CCPOA convention, which ends today.

The Associated Press is reporting that federal officials in Idaho are investigating whether guards at a private prison facility in Idaho violated inmates' civil rights.

Nashville-based Corrections Corporation of America, which has contracts with California and has played in the state's politics, runs the Idaho Correctional Center. Accusations have surfaced that staff "uses inmate-on-inmate violence to force prisoners to snitch on their cellmates or risk being moved to extremely violent units."

The AP story by Rebecca Boone and published here by The Bee, includes video footage from overhead cameras that shows one prisoner beating another while correctional officers look on. No one intervenes, even after the attacker takes a break before resuming the beating after the the victim lapsed into unconsciousness.

The State Worker has written a bit about CCA, including this report about California's recent private prison agreements and this detailed look at the company's political spending.

A new report blasts the "questionable wisdom" of giving guns and cars to lawyers and auditors at the Office of Inspector General and classifying them as peace officers.

We touched on the policy in last week's State Worker column, noting that the OIG has started relieving some employees of their firearms and going from take-home cars to a motor pool system. But the office isn't changing anyone's peace officer status.

Today's highly critical 53-page report, published by the Senate Office of Oversight and Outcomes, goes into more detail and recommends that the state re-examine whether lawyers and inspectors should get the guns, cars and pensions that police and firefighters receive.

We found that the peace-officer designation stems from the unsupported premise that OIG staff must be prepared to stave off violence and wield weaponry. In reality, such actions seldom if ever arise in these job categories. We also found that OIG uses peace officer perquisites - generous pensions and take-home state cars - to attract and retain its professional team of lawyers and auditors.

Among the report's findings:

More than three-quarters of SEIU Local 1000 employees who voted have ratified a labor agreement worked out with Gov. Arnold Schwarzenegger, union officials said this afternoon.

Seventy-six percent of full dues-paying members who cast ballots supported the deal , the union said in a press release issued this afternoon. It did not release raw ballot numbers.

"I've always said, 'Trust the members,'" SEIU Local 1000 President Yvonne Walker said in a telephone interview moments ago.

While some unions have refused to accept contracts with the kind of concessions in the SEIU pact, Walker said the contract was the best deal to be had, especially given the state's continued financial problems. Holding out, she said, would only weaken the SEIU's bargaining position as the state continued to bleed red ink.

"This gives our members stability and security," Walker said, "especially after 20 months of furloughs."

Still, the the deal angered some state workers. It accepts 12 unpaid days off over the next 12 months on top of the nine furlough days imposed on employees from August through October of this year. The contract also increases the percentage of wages that employees contribute to their retirement and sets lower pension benefit formulas for new hires.

Six other unions have accepted contracts with similar pension changes. Six unions representing more than 60,000 workers are still without new contracts that make concessions. Those employees are being furloughed three days per month by Schwarzenegger with the Legislature's approval.

On the upside for the 95,000 employees it covers, the SEIU contract avoids furloughs for at least one year, shields employees from minimum wage in the event of a state budget impasse and eventually gives a raise employees on the top step. The agreement adds two floating "professional development days," to be used at the employee's discretion, in return for eliminating Lincoln's Birthday and Columbus Day and paid holidays.

The Legislature passed the contract last month and the governor signed it as a "trailer bill" to the 2010-11 budget bill enacted last month, so the pact takes effect immediately. It expires July 1, 2013. The agreement saves the state more than $386 million annually, according to state estimates.

The California Correctional Peace Officers Association has lost its appeal of a lower court ruling that found the state wasn't forcing correctional officers to work overtime without pay. Here's a bit of background from the 1st District Court of Appeal's decision:

In 2009, Kurt Stoetzl, a CCPOA member, and the CCPOA filed a first amended complaint seeking injunctive relief and backpay. In their first amended complaint, plaintiffs alleged that Unit Six employees routinely worked eight hours and 12 minutes per day, or a 41-hour workweek. Plaintiffs further alleged that defendants had a statutory obligation, under section 19851, to compensate Unit Six employees for time worked in excess of eight hours per day or 40 hours per week at an overtime rate, and failed to do so.

Presiding Justice Barbara Jones and associates Terence Bruniers and Henry Needham upheld the lower court's ruling. Here's one reason:

A fundamental flaw of plaintiffs' arguments is that they presume that there must be a trigger for overtime compensation under state law that is more protective of public employees than what is provided by the (Fair Labor Standards Act). However, plaintiffs provide no authority for this underlying premise and we know of none. Plaintiffs seem to rely on a general assumption that any work in excess of eight hours per day or 40 hours per week constitutes "overtime," automatically triggering a requirement for additional compensation. With respect to private sector employees, overtime compensation is regulated by various Industrial Wage Commission wage and hour orders and Labor Code section 510. Labor Code section 510, subdivision (a), provides in relevant part: "Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee." However, state and local government employees are exempted from the overtime rules applicable to private sector employees.

Click here to download the court's 17-page ruling. The decision comes one week after a federal jury rendered a $12 million defamation verdict against CCPOA. The union says it will appeal that decision.

IMAGE: www.yolocourts.ca.gov

California's chief information officer, Teri Takai, has resigned from state government's top tech job effective Nov. 5. Chief Deputy Director Christy Quinlan will taking over as acting CIO.

In an e-mail to department staff sent this afternoon, Takai confirmed that she is leaving to take a job in President Barack Obama's administration. The job had been on hold for several months, as we reported here.

Takai's resignation comes a week after her deputy CIO, Mike Locatis, took the top CIO post with the federal Department of Energy.

Here's Takai's e-mail:

Constitutional-department workers whose unions are without a contract will begin furloughs on Nov. 2, under the terms of a memo just released by the Department of Personnel Administration.

The furloughs will continue, according to the memo, until

Legislative approval of a new Memorandum of Understanding with these bargaining units that addresses the subject of furloughs; or

Certification by the Director of the Department of Finance that there is sufficient cash to allow the State to meet its obligations to pay for critical and essential services to protect public health and safety and to meet its payment obligations protected by the California Constitution and federal law.

It's not clear whether the constitutional officers who opposed previous furlough orders will comply with this new order. Gov. Arnold Schwarzenegger sued those officials, including Attorney General Jerry Brown, Controller John Chiang and Treasurer Bill Lockyer, to submit to the order. The constitutionals lost and appealed the ruling. The case is still active in Sacramento's 3rd District Court and may have some bearing on how the constitutionals respond to this afternoon's furlough memo. The State Worker couldn't reach officials this evening for more details about the policy or the status of the constitutionals' appeal.

The policy is one of many explained in three Personnel Management Liaison memos that detail changes to retirement contributions and pension formulas, furloughs, the new personal leave program, step raises and more.

One stage of the 2-year-old court battle between Gov. Arnold Schwarzenegger and Controller John Chiang ended this morning with a simple two-word post on the 3rd District Court of Appeal's website: "Case complete."

The state will soon issue layoff warnings to about 1,000 state custodians with the goal of eliminating about 450 jobs by the end of February, The State Worker has learned.

The layoffs have been prompted by the pending sale of 11 state buildings to California First LLC, a partnership that includes Texas-based Hines Interests and Antarctica Capital of New York.

Department of General Services spokesman Eric Lamoureux confirmed the plan to issue surplus notices by Nov. 1. The department will begin meeting with affected employees next week.

The new owner has "given indication they want to hire as many of our employees as possible," Lamoureux said. DGS will also help workers move to other government jobs. The affected employees are in Bargaining Unit 15 and are represented by SEIU Local 1000.

State layoff rules allow displaced employees who are more senior to "bump" those with less service time. So even though the state is eliminating the 450 positions and another 50 vacancies, it will issue double that many layoff notices to include workers who might be bumped.

The $2.3 billion sale hasn't closed yet, he said, but it probably will within the next few months, perhaps before the end of the four-month layoff notice period. Regardless, "no one will lose their job before the end of the 120-day notice period," Lamoureaux said.

The Bee learned of the layoff plan today, just eight days after Local 1000 and Gov. Arnold Schwarzenegger agreed to a new three-year labor contract. The deal, which doesn't provide layoff protections, has been approved by the Legislature. Union members begin voting on Monday with a deadline of Nov. 8 to cast ballots.

Our sister blog, Capitol Alert, is reporting that Jon Coupal of the Howard Jarvis Taxpayers Association is mostly in favor of a plan favored by GOP gubernatorial candidate Meg Whitman to put new state hires into a 401(k)-style program.

His criticism: The plan doesn't go far enough.

Click here for Bee Capitol Bureau colleague David Sider's blog post.

Gov. Arnold Schwarzenegger has ordered compensation cuts for state managers and supervisors that mirror those in the tentative labor contracts reached with SEIU Local 1000 and six other unions.

From the administration's press release:

Governor Arnold Schwarzenegger today issued Executive Order (EO) S-15-10 directing the Department of Personnel Administration to adopt a comprehensive plan to reduce employee compensation for non-represented state employees, including supervisors and managers; non-statutory exempt state employees; and statutory exempt employees. The plan shall be similar to the recently negotiated contract agreements with seven unions including increasing employees' monthly pension contribution and a 12-month personal leave program where salaries will be reduced equal to one day of pay per month. It will also roll back retirement formulas used to calculate pension payments for new employees to pre-1999 levels.

The administration says that the order affects 35,000 employees. All told, 167,000 union and exempt workers are now under new working terms (or will be, assuming all ratify their tentative agreements). Unions representing another 63,000 state workers haven't accepted contracts with concessions.

We've asked the administration how many employees the order will impact. We'll update this post when we find out.

Click here to read Executive Order S-15-10.

With some help, we've waded through the 800-page budget bill and found the language that lays out the $1.5 billion in employee compensation cuts that GOP and Democratic leaders in the Legislature are putting up for a vote. (Click here for one version of the measure, Assembly Bill 1630.)

Here's the key language. Note that lawmakers changes are in strike through and italics.

The Department of Personnel Administration has provided The State Worker with the following outline of provisions in the tentative agreement with SEIU Local 1000:

• Reduced pension formulas for new employees:

Misc.: 2% at age 60 for (from current 2% at age 55)

Safety: 2% at age 55 (from current 2.5% at age 55)

• Increased pension contribution for current employees:

Misc.: 8% of salary over $513/mo. (from current 5% over $513/mo.)

Safety: 9% of salary over $317/mo. (from current 6% over $317/mo.)

• Personal Leave Program: One unpaid leave day per month for 12 months, which reduces pay by roughly 5 percent. This leave cannot be cashed out.

• Furloughs: Nine furlough days (covering Aug. through Oct. 2010 -- do not count toward PLP days)

• Health premiums: State increases its share of health premiums to 2010 rates for bargaining unit 3 only (from 2008 rates); this share will be adjusted each January during the contract period to reflect annual changes in health premiums.

• Pay scales: Effective July 1, 2013, increases top step by 3%; only affects employees who reach top step.

• Holidays: Columbus Day and Lincoln's Birthday eliminated as paid holidays; employees will receive premium pay if required to work any of six major holidays: New Year's Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving, and Christmas.

• Employees entitled to two professional development days per year.

• Continuously appropriates payroll during term of this contract, which protects employees from minimum wage payments in the event of budget delays.

• Employees will not be furloughed during 12 months that Personal Leave Program is in effect. No furlough protections thereafter.

An earlier version of this post erroneously linked to an site with outdated tentative agreement documents on the Department of Personnel Administration's website. We regret the error and will publish current contract details as they become available.

This post now reflects tentative agreement details confirmed with either the union or DPA.

The Department of Personnel Administration and SEIU Local 1000 have put out more details this morning about the tentative agreement announced late last night. . Here's a quick scan of the deal:

Service Employees International Union Local 1000 has reached a new three-year labor agreement with the Schwarzenegger administration. The union and the Department of Personnel Administration issued simultaneous announcements of the tentative deal shortly before midnight. It runs from July 1 of this year to July 1, 2013

The agreement includes higher pension contributions for current employees, lowered retirement benefits for newly hired workers and unpaid leave days. In exchange, covered workers receive protections from furloughs and minimum wage during budget impasses. DPA has said it will publish more details on its website in the morning.

We've written a brief story with the details released by the union and the administration. Click here to read it. We'll be writing more in the morning.

The Bee's Kevin Yamamura is reporting that lawmakers have a "handshake deal" on a budget. Click here for the breaking news.

This just in from our Bee Capitol Bureau colleague, Kevin Yamamura:

Gov. Arnold Schwarzenegger left little doubt today that cutting state employee pensions remains one of his top priorities in budget negotiations. He is demanding that lawmakers roll back pension guarantees for future state hires as a condition to signing the budget.

The state is scheduled to pay $2.1 billion in general fund dollars (and $3.8 billion overall) for state pensions in 2010-11, while the general fund deficit is $19 billion. Any pension reductions would have minimal impact on the current budget deficit, since most savings would come in future years. But it has become a signature issue for Schwarzenegger, who believes pension costs will crowd out other state expenditures in the future.

"The question we have to ask ourselves is, is it pensions or is it parks?" he said today in a budget press conference. "Is it pensions or higher education? Is it pensions or child care? And the list goes on and on, because that's where the money comes from. Those are the areas where we are taking this money because of the pensions."

Click here to read the rest of Kevin's report on our sister blog, Capitol Alert.

PHOTO CREDIT: Gov. Arnold Schwarzenegger talks about the state budget at City Summit 2010 on Tuesday in San Francisco. (Photo by Justin Sullivan/ Getty Images)

CalPERS has announced that Kurato Shimada has resigned from the fund's board, effective immediately.

According to this release, Shimada has left "to focus on personal matters."

Shimada was first elected to the board in 1987. He won reelection three times before leaving in 1999 when he retired from his career as Supervisor of Operations for the Oak Grove School District, in San Jose, California.

He rejoined CalPERS in 2002 for a fourth term after winning a seat open to all CalPERS members. He was re-elected to that seat in 2006 and again in 2009.

Colleague Dale Kasler has more on Shimada's resignation here on Sacbee.com.

PHOTO: Kurato Shimada / CalPERS file

The Senate just passed AB 151, the BOE headquarters bill.

The measure goes now back to the Assembly for a vote on amendments made to it in the Senate. If approved there, which is likely, the bill goes on to Gov. Arnold Schwarzenegger.

Click here for our last post on AB 151. The bill:

... requires the Director of the Department of General Services to conduct a study to determine whether it is in the best interest of the state to sell or lease specified real property in the City of Sacramento owned by the state, and to report its findings to the Legislature no later than April 1, 2011.

The bill authorized the Director, after making a determination, to sell, exchange, lease, or any combination thereof, all or a portion of the property.

This bill also requires the Director to use the revenues resulting from any sale, exchange, or lease of the property to pay off the total outstanding loan on the property, including any obligations associated with it, as specified.

PHOTO: The 24-story Board of Equalization headquarters at 450 N St. in Sacramento. / Jay Mather, Sacramento Bee file photo

Over at our sister blog, Capitol Alert, Bee Capitol Bureau colleague Keven Yamamura has a report on Gov. Arnold Schwarzenegger's comments about public employee unions at an event in Goleta.

Here's the top of Kevin's report:

The closer Gov. Arnold Schwarzenegger gets to leaving office and the longer the budget stalemate drags out, the more frank he seems to become.

Speaking today at the Goleta Valley Chamber of Commerce, the Republican governor had no qualms about attacking public employee unions, whom he blamed for high costs everywhere in government.

In a perfect Schwarzenegger world, courtroom cameras would replace court reporters, courthouses would use private security guards and schools would hire local gardeners rather than union employees to mow the lawn.

Click here to read the rest of, "Schwarzenegger shoots from the hip with business leaders."

PHOTO CREDIT: Gov. Arnold Schwarzenegger speaks Aug. 6 in Santa Clara in front of a chart showing the difference between public and private sector job losses during a two-year period. (Photo by Justin Sullivan/ Getty Images)

Gov. Arnold Schwarzenegger has signed two measures that make binding the labor agreements that his administration negotiated with six unions, Senate Bill 846 seals the deals with California Association of Highway Patrolmen (Bargaining Unit 5), the Operating Engineers Union for craft and maintenance workers (Unit 12) and the California Association of Psychiatric Technicians (Unit 18).

Assembly Bill 1592 covers state firefighters (Unit 8), physicians, dentists and podiatrists (Unit 16) and health and service professionals (Unit 19).

Click here for more about the contracts. All take effect upon the governor's signature except the California Department of Forestry Firefighters' pact, which must be ratified by the union's members.

Union spokesman Terry McHale said that ballots will go out next Monday. After that, members have 60 days to return their ballots, during which each of the union's 21 chapters around the state must hold two informational meetings.

Three days after the voting deadline, the ballots are counted.

"We anticipate (the contract) will be ratified by a large margin," McHale said.

UPATE, 4:45 p.m.: Read the Schwarzenegger administration's press release by clicking here.

The state Assembly just approved Assembly Bill 1592, which ratifies memoranda of understanding between the Administration and three state bargaining units: CDF Firefighters (Bargaining Unit 8); Physicians, Dentists, and Podiatrists (Bargaining Unit 16); and Health and Service Professionals (Bargaining Unit 19).

The vote, which approved changes to the bill made in the Senate, was 66-4. The measure now goes to Gov. Arnold Schwarzenegger and becomes effective immediately after he signs it.

7:11 p.m. editor's note: An earlier version of this post contained contact information that has since been removed.

The Department of Personnel Administration has just issued this furlough policy memo:

From: Elaine Smith On Behalf Of Debbie Endsley
Sent: Wednesday, August 18, 2010 3:57 PM
To: LIST-AgencySec-Cabinet; LIST-UnderSecretaries; LIST-ConstitutionalOfficers; LIST-Directors
Subject: Furlough Update

In light of today's California Supreme Court ruling, furloughs will continue.

For all State agencies and departments subject to the furlough and closure, furloughs will continue as planned Friday the 20th and 27th. One additional floating furlough will be self-directed and must be used within the August pay period.

For departments that are not closed, all necessary steps must be made to ensure that employees take their three furlough days off within the pay period.

The provisions of the new furlough program outlined in PML 2010-015 still apply.

As we reported earlier, the state Supreme Court has stayed a temporary restraining order that kept Gov. Arnold Schwarzenegger from furloughing state workers last week as he had planned. Here's a statement from his spokesman, Aaron McLear that lays out the state's furlough plans:

The result of the CA Supreme Court ruling today means that the furloughs will continue until the court says otherwise. The court has on its own motion taken up the three original furlough cases from the court of appeal to decide this issue more expeditiously. They are set to hear oral arguments September 8 on the question of whether or not a Governor has the authority to implement furloughs. In the meantime, furloughs will continue as planned Friday the 20th, the 27th, and one additional floating furlough between now and the end of the month.

Furloughs for state workers are back on for Friday. The state Supreme Court has just said that it will review a lower court ruling that kept Gov. Arnold Schwarzenegger from furloughing roughly 144,000 employees last week as he had planned.

Schwarzenegger had asked for the review after losing decisions in both Alameda County Superior Court and San Francisco's 1st District Court of Appeal.

Here's what the court's website says:

The petition for review is GRANTED. Because the issue whether the Governor has the authority to direct the unpaid furlough of state employees is pending before this court and is scheduled for oral argument on Wednesday, September 8, 2010, in the related case of Professional Engineers in California Government et al. v. Arnold Schwarzenegger et. al., S183411, and without expressing any view on the merits of that issue, we conclude that it is appropriate to grant review in this matter and defer further action pending our resolution of the currently pending proceeding. Pending further order of this court, further proceedings in the Alameda County Superior Court in case number RG10494800 (and in consolidated cases numbered RG10507922, RG10507081, RGI0503805, RGI0501997, RGI0516259, RGI0514694, and RG10528855), as well as the temporary restraining order of the Alameda County Superior Court issued on August 9, 2010, are stayed. Votes: George, C.J., Kennard, Baxter, Chin, Moreno, and Corrigan, JJ.

Now we wait.

Attorneys representing Gov. Arnold Schwarzenegger met a 9 a.m. deadline today to file the final brief in litigation that could determine whether furloughs resume this week for roughly 144,000 state employees.

The governor's side filed this response to yesterday's arguments by state employee unions that lower court decisions that have stalled Schwarzenegger's July 28 furlough mandate shouldn't be reviewed by the High Court.

Schwarzenegger is arguing that the Supremes should consider the matter because, he contends, Alameda Superior Court Judge Steven A. Brick erred by granting a temporary restraining order that kept Schwarzenegger from resuming furloughs last Friday. The governor says that the First District Court of Appeal compounded that error by denying his appeal to lift the restraining order while the lower court case moves forward.

With this morning's filing, the Supreme Court has all the documentation that it requested. If it renders a quick decision in the governor's favor, "Furlough Fridays" could return this week. A ruling against the governor would stop furloughs until at least next month when more court action is scheduled. A new budget deal or tentative agreements with individual unions between now and then also could affect state employees' work schedules.

Attorneys for eight state employee organizations have filed a response to Gov. Arnold Schwarzenegger's request that the state Supreme Court allow him to furlough state workers while it reviews an appellate court decision that kept him from restarting the policy last Friday.

The employee groups' answer, a 26-page letter hand-delivered to the court's San Francisco offices, argues a review isn't warranted.

Schwarzenegger's attorneys last week asked the First District Court of Appeal for permission to restart furloughs, despite a trial court decision that stopped the policy pending a full hearing on Sept. 13. The appellate court denied the request.

The governor took up the matter with the state Supreme Court last week, calling the policy "one of the aggressive cash management measures" needed to "preserve vital cash assets." The appellate court got it wrong, his lawyers contended, and they also attacked the trial court's ruling:

Furlough time that state workers have on the books can now stay in the bank indefinitely, according to a memo issued Thursday by the Department of Personnel Administration.

PML 2010-015 outlines the well-known details of Gov. Arnold Schwarzenegger's latest furlough order: The policy reduces state workers' pay by an amount equal to three days per month with most employees taking off commensurate time off the second, third and fourth Fridays. Several departments, union bargaining units and a few employee classifications also are exempt.

Then, at the bottom of the second page, this two-line paragraph:

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment has filed a complaint in Alameda Superior Court seeking a temporary restraining order to stop Gov. Arnold Schwarzenegger's new furlough order from being implemented.

The complaint says that the new furloughs illegally reduce Bargaining Unit 2 members' pay and that the policy oversteps the governor's authority. The case is set for a hearing on Monday.

Click here to read the verified complaint for declaratory and injunctive relief. This link opens the union's ex parte application for order to show cause. Here's CASE's memorandum of points and authorities.

On another front, CASE has filed an unfair labor practice complaint with the Public Employment Relations Board.

The complaint alleges that Schwarzenegger has engaged in reprisals and bad-faith bargaining "by ordering that they suffer furloughs and a 14% salary reduction simply because CASE has refused to agree to the Governor's and DPA's proposals in bargaining."

Click here to download the charges filed Monday. You can open the request for injunctive relief by clicking here.

DPA has until Wednesday at 5 p.m. to respond, according to this letter from PERB.

The state's multifaceted furlough civil war took a new twist today as CalPERS CEO Anne Stausboll sent a letter to Controller John Chiang asking that he "continue to transfer funds from our accounts sufficient to fully compensate our employees, notwithstanding the governor's illegal furlough order."

The letter which you can read here, says that furloughing CalPERS employees doesn't help the general fund, that an Alameda judge ruled that furloughs are "capricious and unlawful," and that Chiang has the authority to "exercise your independent judgment on the matter."

Stausboll also says that the "new furlough will continue to interfere with our ability to carry out our constitutional duties of prudently administering the retirement system and delivering the promised benefits to our members and their beneficiaries."

Worth noting: The Stausboll letter doesn't mention that CalPERS sued Schwarzenegger over his furlough order and lost. You can read more about that case here.

We've left a message with Chiang's office seeking comment about the letter. Schwarzenegger spokeswoman Rachel Arrezola sent this e-mail comment in response to the letter:

"The state controller has said he will have to begin issuing IOUs without a budget in place, so the governor was forced to implement this short-term furlough program to preserve cash. The furlough program must be applied with only the very narrow exemptions to achieve maximum savings, feasibility and equity. The governor's authority to furlough state workers is clear and has been upheld in the courts, including the San Francisco Superior Court decision upholding CalPERS furloughs."

Gov. Arnold Schwarzenegger spoke this morning to the Central California Hispanic Chamber of Commerce in Fresno. During a question-and-answer period, he was asked, "Why did the state workers have to bear the brunt of fiscal mismanagement? When do we get our money back? When will the furloughs end?"

Our Bee Capitol Bureau colleague, Kevin Yamamura, was listening to the event live and caught the governor's answer, perhaps his most lengthy public statement on his furlough policy to date.

You can download the audio file by clicking here. The furlough question starts at the 36-minute mark.

While you're waiting for the file to load, you can read Kevin's faithful transcription:

The state Supreme Court has set Sept. 8 to hear oral arguments in the furlough cases it recently decided to take up. The hearing, according to the court's website, will be held at 9 a.m. in San Francisco.

It's not clear how long after the hearing that the court will render a decision.

Click the following links for earlier State Worker coverage of the Supreme Court's decision to consider take up furloughs:

California Supreme Court takes case on state worker furloughs
Why the Supremes said 'no,' then 'yes' to furlough review
Did Schwarzenegger and chief justice talk about furlough litigation?
The State Worker: Sometimes the conspiracy dots don't connect
State Supreme Court snaps up more furlough lawsuits
Poll: Furlough arguments months away; budget before or after?

Voting members of the California Association of Highway Patrolmen have ratified the union's tentative agreement with the Schwarzenegger administration. The union said Tuesday evening that 99.6 percent of the ballots cast favored the deal.

The agreement now moves on to the Legislature for ratification. If approved there, it goes to Gov. Arnold Schwarzenegger's desk.

The CAHP vote means that four unions so far have ratified their tentative agreements. The other three: CAPT, UAPD and AFSCME.

Those yet to announce: IUOE (Bargaining Unit 12) and CDFF (BU 8).

Note: CDFF's contract goes through the Legislature first, and then on to union members for a ratification vote. BU 8's internal policy sets the order, union spokesman Terry McHale told The State Worker. The law says only that union members and the Legislature must ratify labor agreements, but it doesn't prescribe the order of the votes.

You can read the Bargaining Unit 5 tentative agreement by clicking here. DPA's summary is here. And this link opens a post about what the Legislative Analyst's Office had to say about the CAHP deal and those reached by five other unions.

IMAGE: www.cahp.org

As we've just reported, Gov. Arnold Schwarzenegger has issued a new executive order that requires state employees take three furlough days per month until lawmakers enact a 2010-11 budget.

The order exempts the following departments:

California Highway Patrol
California Department of Fire and Forestry Protection (CalFIRE)
Franchise Tax Board
Board of Equalization
Employment Development Department
State Compensation Insurance Fund
California Housing Finance Authority
California Earthquake Authority

It also excludes Bargaining Units 12, 16, 18 and 19, which along with unions representing CHP officers and state firefighters, recently reached tentative agreements with Schwarzenegger.

Click here to read the executive order.

VIDEO CREDIT: Dino Gomez, a California state worker with the Department of General Services, reacts to Gov. Arnold Schwarzenegger's order to start three days of furloughs a month starting Sunday. Video by Hector Amezcua/ hamezcua@sacee.com

Editor's note: This post has been changed to specify the departments excluded from the governor's furlough order. It also clarifies payroll cost savings from furloughs last year.

Less than one month after ending furloughs for about 200,000 state workers, Gov. Arnold Schwarzenegger this morning brought back a scaled-down version of the policy, effective Sunday.

The governor made the decision this week after Controller John Chiang said that unless lawmakers enacted a budget soon, the state's cash would go into the red by October. Chiang said he'll start issuing IOUs in August or September to conserve funds as long as possible.

"We have a fiscal crisis," Schwarzenegger spokesman Aaron McLear said this morning as he explained the new furlough order. "We're doing what we have to do to conserve cash."

Like the policy that ended June 30, the governor's new executive order requires employees take three unpaid days off per month. The administration figures the payroll savings will amount to $147.2 million per month, about $80 million of that from the general fund.

But unlike the earlier policy, this one has no termination date: Furloughs will end when lawmakers pass a 2010-11 budget. That could be weeks or months after the Legislature reconvenes on Monday.

And unlike earlier policies, the new order exempts employees who work several departments, specifically the Board of Equalization and the Franchise Tax Board, the Employment Development Department, State Compensation Insurance Fund, the California Housing Finance Authority and the California Earthquake Authority. All employees of the Highway Patrol and the Department of Fire and Forestry Protection are also exempt.

The order doesn't explain the criteria for deciding to exclude those departments.

The California Correctional Peace Officers' Association said a few minutes ago that the Schwarzenegger administration "virtually closed the door on more than $150 million in savings for taxpayers," causing contract negotiations between the union and the governor's representatives to end.

The Department of Personnel Administration, responding to the CCPOA announcement, said that talks with the union never reached the formal stage.

"Negotiations never even got under way," said DPA spokeswoman Lynelle Jolley.

CCPOA says it has been bargaining since July 13, according to this union press release.

"CCPOA negotiators were informed by DPA officials that their proposal was 'dead on arrival' and the governor has declined to entertain any further discussions with CCPOA," the union's release says.

Jolley said that the two parties had "private talks" and that the union was proposing a return to terms of its old contract. There was no way that was going to happen, she said.

"Still, we're always ready to return to the bargaining table," Jolley said.

Union spokesman JeVaughn Baker said that the union was "in fact at the table in off-the-record informal talks" during which its negotiators offered up savings proposals and pension reform.

"We made a sincere effort, an honest effort," Baker said. "We're stunned that he would walk away."

Still he welcomed the invitation back to the bargaining table: "We're excited to hear that DPA is ready to return to the table," he said. "We are, too."

The State Worker recently reported that CCPOA was taking a new direction in its bargaining strategy by sending in a new negotiating team without President Mike Jimenez or other union executives who were part of earlier discussions that went off the tracks.

CCPOA has been without a contract since July 2006 and has worked under terms imposed by Gov. Arnold Schwarzenegger since the talks reached impasse in September 2007.

The State Compensation Insurance Fund Board of Directors has named Thomas E. Rowe as the fund's new president and chief executive, effective Aug. 2.. He replaces Jan Frank, who left last October. State Fund's Chief Risk Officer, Doug Stewart, had served since then as interim president and CEO.

According an announcement released this morning, Rowe comes to State Fund from T. Rowe Strategies, which provides consulting for the commercial property and casualty industry. He has also held senior posts with Fireman's Fund Insurance Co., Arthur J. Gallagher & Co. and Trilogy Insurance Services.

Click here to read the State Fund release.

10:45 a.m. addition: Click here for Rowe's biography.

PHOTO: Thomas E. Rowe, courtesy State Compensation Insurance Fund

American Federation of State, County and Municipal Employees Local 2620 has announced that its members have ratified the tentative agreement reached last month with the Schwarzenegger administration.

According to the union's website, 92 percent of Bargaining Unit 19 members who voted supported the deal.

Members of the California Association of Psychiatric Technicians have voted to accept the contract negotiators hammered out last month with Gov. Arnold Schwarzenegger.

CAPT said in this press release that 96 percent of voting members approved the deal.

The union, which covers roughly 7,000 state workers in Bargaining Unit 18, didn't say how many members voted.

Click here to read the CAPT tentative agreement, which must be ratified by the Legislature and signed by Schwarzenegger to take effect.

UPDATE 5:00 p.m. Judge Patrick Marlette has been assigned to replace Judge Timothy Frawley in the minimum-wage case. Read the post here.

Lawyers for State Controller John Chiang today moved to disqualify Superior Court Judge Timothy Frawley from hearing the high-stakes case over whether state employees should receive minimum wage if no state budget is approved.

The motion is under consideration, but typically is granted in such cases.

In the motion, Chiang attorney Bryant Delgadillo declared that Frawley "is prejudiced against SCO (state controller's office) or its interests, such that I believe that SCO cannot have a fair or impartial trial before this judge."

Frawley was the judge who ruled against Chiang last year in the original minimum-wage fight that Schwarzenegger brought in 2008.

Chiang spokeswoman Hallye Jordan said the initial hearing in the current case, set for Wednesday, is likely to proceed, but with a new judge.

Because the state has entered the fiscal year without an approved budget, Gov. Arnold Schwarzenegger has told Chiang to pay about 200,000 state employees the federal minimum of $7.25 an hour, with back pay to come after the budget is enacted. Chiang has refused. The Republican governor is hoping for an order to force Democrat Chiang's hand in the matter.

Gov. Arnold Schwarzenegger's effort to reduce pay to minimum wage for some 200,000 state workers will be heard in Sacramento Superior Court next Wednesday.

Judge Timothy Frawley set the hearing for 9 a.m. Schwarzenegger is seeking a temporary restraining order to force Controller John Chiang to pay most workers minimum wage until state lawmakers approve a budget.

Chiang contends the governor's order is illegal and has said he will not comply unless ordered by a court. The Democrat has filed his own court action on the issue.

By Jim Sanders
jsanders@sacbee.com

State Controller John Chiang filed suit today in an attempt to block Gov. Arnold Schwarzenegger's order to reduce pay for most state workers to the federal minimum wage during the current budget impasse.

Chiang's suit, filed in Sacramento Superior Court, complains that he is being forced to choose between violating Schwarzenegger's order or violating various federal and state laws.

The controller's lawsuit follows a 3rd District Court of Appeal ruling last week that confirmed Schwarzenegger's authority to reduce pay to the federal minimum, currently $7.25 per hour.

Schwarzenegger has argued that under a 2003 California Supreme Court decision he is required, absent a state budget, to cut pay for most state workers to the minimum required under federal law.

Chiang has argued, among other things, that the state's antiquated payment system cannot reduce pay quickly and then restore it on a timely basis when a budget deal is struck.

Read a longer, more in-depth post about Chiang's cross complaint over at our sister blog, Capitol Alert.

And read the cross-complaint here.

PHOTO CREDIT: State Controller John Chiang testifies before the Senate Committee on Governmental Organization on Aug. 4, 2008, regarding the governor's executive order to lay off some state workers and also reduce their wages to minimum wage. Sacramento Bee file photo / Randy Pench

The Schwarzenegger administration filed a new legal action today asking the Sacramento Superior Court to force Controller John Chiang to pay state employees minimum wage for this month if no state budget is enacted.

Chiang has said he will not comply with the governor's order to pay minimum wage for the July pay period. Filed by the Department of Personnel Administration and DPA Director Debbie Endsley, the action seeks to force Chiang to comply. It noted that the cut-off date to begin processing the July payroll is July 22.

It says the order is "urgently needed" to stop Chiang from paying full salaries.

"Unless restrained, Respondents will continue to illegally issue full salaries to state employees for every pay period in which no state budget or other available appropriation exists," the suit says. "Respondents must be enjoined from violating the law as soon as possible and prior its occurrence."

With legislative deliberations far from resolved over how to close an estimated $19.1 billion budget gap, Gov. Arnold Schwarzenegger told Chiang last week to pay state employees the minimum until a budget is approved. Back pay would be made up later after the budget is approved.

As he did in 2008, Chiang has refused for several reasons, including concerns that the state's payroll technology and accounting methods make it impossible to comply without breaking federal labor law.

Sacramento Superior Court and the 3rd District Court of Appeal have both sided with Schwarzenegger in lawsuits that the governor brought in the 2008 budget impasse. Today's filing seeks to have the court enforce those decisions on Chiang.

Chiang last week said he would file his own action "to definitively resolve the issue of whether our current payroll system is capable of complying with the minimum-wage order in a way that protects taxpayers from billions of dollars in fines and penalties."

Read the Schwarzenegger administration's filing here.

Editor's note, July 3 at 8:20 a.m: The original July 2 version of this post did not include the link to the letter from the controller's office. We have republished the post here and included the pertinent link.

Collin Wong-Martinusen, chief of staff for Controller John Chiang, replied to the Department of Personnel's pay letter this afternoon. While courteous in tone, the message is clear: The SCO will not comply.

The grounds for refusing: Reducing state worker pay to minimum wage or zero isn't feasible techologically, procedurally or legally. In the letter to DPA Director Debbie Endsley, Wong-Martinusen references a 2008 list of reasons that SCO couldn't or wouldn't carry out the pay withholding.

Click here to read the entire letter.

The decision is in. The 3rd District Court of Appeal has upheld a lower court's ruling that Controller John Chiang doesn't have the authority to refuse pay instructions that withhold state workers' wages to the federal minimum when there's no money appropriated to cover payroll.

We'll be reporting and writing about this throughout the day. Click here to read the court's decision. Here's the link to the breaking news story.

Gov. Arnold Schwarzenegger's Department of Personnel Administration has sent pay instructions to Controller John Chiang, telling him to withhold state worker pay to the federal minimum allowed.

Click here to read the pay letter. (It's a draft that needs some information filled in by the SCO, but it starts the process toward minimum-wage checks rolling.)

We have a report about the order here. Watch tomorrow's Bee for more about this breaking story.

It's official. Furloughs are over.

The Department of Personnel Administration issued pay letters at the close of business on Wednesday instructing the State Controller's Office to eliminate Pay Differential 378. That's the February 2009 instruction that put furloughs in place.

This doesn't mean the governor can't issue another furlough executive order in the event of a "fiscal emergency." Nor does the pay letter have anything to do with a possible minimum wage instruction to the controller if budget talks drag on for long.

But as of this moment state workers are officially back on regular work schedules.

Click here to read the PL 10-14 cover letter with instructions. Here's the document noting that that Pay Differential 378 is abolished as of today.

An ocean of purple washed over the west side of the state Capitol today as thousands of SEIU Local 1000 members wearing the union's signature t-shirts rallied for a new contract and held signs that pushed a new message, "I am California."

Local 1000 President Yvonne Walker furthered that message, telling the cheering crowd that labor talks that started Monday must lead to a deal that "not only makes sense for state workers, but that makes sense for California."

10:28 a.m. clarification: International Union of Operating Engineers Bargaining Unit 12, which represents roughly 12,000 skilled craftsmen, maintenance and equipment operators, has reached a tentative agreement with Schwarzenegger. The union also represents about 1,000 building maintenance employees in Bargaining Unit 13, which has not reached a tentative agreement and continues to bargain with the administration.

Gov. Arnold Schwarzenegger's administration has come to tentative labor agreements with two unions, the Union of American Physicians and Dentists and the International Union of Operating Engineers. Both pacts include higher pension contributions for all members, lowered pension benefits for new hires and eventually employees paying to prefund retiree health benefits.

The deals, struck late last week, would run from July 1, 2010 to July 1, 2012 and cover a combined 14,000 employees who have been working under expired contracts for two years. If ratified, the changes will save the state $66 million in fiscal 2010-11, the administration estimates.

The UAPD and IUOE tentative agreements contain the same kind of pension changes that four other unions tentatively endorsed last week, including rolling back retirement formulas for new employees, in effect forcing them to work longer to receive full benefits. The new formulas: 2 percent at age 55 for safety workers; 2 percent at age 60 for miscellaneous employees.

Current and new workers would also contribute at least 5 percent more of their pre-tax pay toward retirement than the state currently requires.

Beginning July 2012, employees in both groups will pay 0.5 percent of salary toward pre-funding their retiree health benefits. New employees under the IUOE agreement would be required to work 25 years instead of the current 20 to be eligible for full retiree health benefits.

The UAPD and IUOE pacts add a sixth step raise for employees at the top of their job classifications.

Both tentative agreements maintain earlier contract provisions that calculate pension benefits based on the highest three years of wages. Now they will go to union members and the Legislature for ratification, a process that will likely take several weeks. The contracts would become binding upon signature by the governor.

Click here for the administration's press release.

Officer Justin McGrory, died today from injuries he sustained during a traffic stop in Barstow when a passing vehicle struck him, according to this report from the Associated Press. Rafael Garcia, 18, of Las Vegas, as been arrested on suspicion of vehicular manslaughter.

It was the third time a Highway Patrol officer has died in the line of duty in June and the fourth such department fatality in the last two months.

On June 11, Officer Tom Coleman suffered fatal injuries when his motorcycle collided with a big rig truck during a high-speed chase in Redlands.

Two days earlier, Officer Philip Ortiz was struck during a vehicle stop on the San Diego Freeway. He died last Tuesday from his injuries.

On May 7, Officer Danny Benavides died when his patrol airplane crashed in a remote part of Southern California.

We appreciate the sacrifice of these fallen officers and their families -- and the service of all the men and women who work for the state and under dangerous circumstances to keep our prisons, parks and streets secure.

California Association of Professional Scientists has rejected a contract proposal by the Schwarzenegger administration, calling the deal "inadequate on its face" and "a threat" in this e-mail to members.

The administration's offer made a few improvements on its Mar. 2 initial offering to the union. For example, the administration's latest proposal included 12 days of unpaid leave over one year instead of the straight up permanent 5 percent pay cut proposed in March.

But the administration's deal fell far short of the mixed bag of gains and concessions CAPS proposed earlier this month, which included unpaid leave for a year and then a series of raises to bring the underpaid scientist classification into pay parity. The union pulled back its offer over
the threat of minimum wage and public comments by the governor that, in the union's view, undermined bargaining.

A fact-finding hearing about public employee pensions this morning briefly devolved into jawboning between a Little Hoover Commission member and a public employee union lobbyist, touched off by the use of a single word: "only."

The heated exchange between Commissioner Marshall Geller and Dave Low, a lobbyist for the California School Employees Association, illustrated how politically and emotionally charged the topic of public employee pensions has become. It also echoed a confrontation between Low and David Crane, the Schwarzenegger administration's pension change point man, at a CalPERS' pension forum earlier this year. (Click here for more about that.)

Before the blowup, Low called for all sides of the public pension debate to find common ground, tone down their rhetoric, agree on facts and find common values. "I haven't seen a lot of that going on, on one side or the other," Low said.

Department of Personnel Administration Director Debbie Endsley has sent a memo to all California state agencies that lays out the Gov. Arnold Schwarzenegger's position on furloughs (they're over ... for now) and the possibility of employee pay being withheld to minimum wage (he'll do it if there's no budget).

The latter assumes, of course, that the 3rd District Court of Appeals doesn't overturn a lower court ruling that State Controller John Chiang overstepped his authority by refusing to implement a similar wage withholding order during the 2008-09 budget impasse.

Here's the memo, which at least some agencies are forwarding to their workers:

Here's an update on the furlough and minimum wage situations.

With respect to furloughs, the current program ends June 30, and the Administration expects the State to resume normal hours of operation in July. The Governor's budget proposal includes four proposals to reduce employee compensation costs: a wage cut, one day per month of unpaid leave, increased employee contributions to pensions, and the workforce cap. The Governor retains the right and authority to order furloughs if necessary to address a fiscal and cash crisis.

As for the prospect of state workers receiving minimum wage in lieu of full wages, it will depend on when the Legislature and the Governor reach a budget agreement. The California Supreme Court ruled in 2003 (White v. Davis) that absent an appropriation, which for most of the payroll comes through the annual state budget, the Controller is prohibited from paying state workers beyond what is required by the federal Fair Labor Standards Act (FLSA). Absent a state budget, we will send instructions to the Controller to pay wages in accordance with the FLSA for the July pay period.

The four unions that recently reached tentative agreements on new contracts (CHP officers, firefighters, psychiatric technicians, and some medical professionals) would not be subject to any new furlough program or minimum wage payments, assuming their contracts are ratified in a timely manner.

Debbie Endsley

A three-judge panel of appellate justices this morning grilled attorneys debating both sides of a lower court's decision that State Controller John Chiang didn't have the authority in 2008 to refuse a Department of Personnel Administration order to issue minimum wage paychecks to state workers.

Today's hearing reviewed the lower court's decision in Gilb v. Chiang that the controller didn't have authority to reject state worker pay reduction orders issued by the Schwarzenegger administration nearly two years ago. The law allows state worker pay withheld when no money is appropriated for state payroll, as is the case when lawmakers fail to pass a budget by the July 1 beginning of the fiscal year.

On Monday, Chiang attorney Steven Rosenthal argued that Superior Court Judge Timothy Frawley's 2009 decision didn't correctly interpret the controller's legal obligation to adhere to the Fair Labor Standards Act.

That law, which requires workers who work even one hour of overtime in a given pay period be paid full base wages in the same pay cycle, would be violated if the controller complied with the DPA order, Rosenthal said. The state uses a payroll system that assumes hours worked in a given period and issues paychecks based on those anticipated hours. Any additions or subtractions in pay are made a month later.

Rosenthal said that system makes it impossible to adhere to the federal law if the state assumed everyone's wage withheld to the minimum. "We issue the paycheck before we know the overtime has occurred," he said.

It's a problem that won't go away, even if the Controller's Office had the technology to swiftly alter payroll, which Chiang asserted it couldn't in 2008.

CAHP, CAPT, AFSCME and CDFF have agreed to contract proposals with Gov. Arnold Schwarzenegger. The deals, ranging from two years to three years, include pension concessions and protections against minimum wage in the event of a budget impasse.

Here's the governor's press release.

Our quick story about the deals is here.

We're continuing to cover events as they unfold this afternoon.

The 1st District Court of Appeal has ruled against Gov. Arnold Schwarzenegger's appeal of Judge Charlotte Woolard's judgment in SEIU Local 1000 v. Schwarzenegger. The union's lawsuit successfully argued that furloughing State Compensation Insurance Fund employees violated state insurance code.

Click here for the details of the appeal, which sought to overturn the ruling -- or to at least to return Woolard's blanket back pay decision to the lower court for more argument.

Aside from the back pay argument, the governor's appeal mirrored his recent bid to overturn CASE v. Schwarzenegger. The administration lost that appeal as well. The state Supreme Court, on its own authority, has taken up that case and three others.

We expect this one will go to the California high court as well.

Click here to read the appellate court's decision.

IMAGE: www.yolocourts.ca.gov

We just got off the phone with Gov. Arnold Schwarzenegger's spokesman, Aaron McLear, who called to comment on our last post, Report: Administration backs away from 5 percent pay cut

You'll recall that DPA spokeswoman Lynelle Jolley didn't comment on the Association of California State Supervisors conclusion that 5 percent state worker pay cuts are off the table.

McLear did.

"They're flat wrong," McLear said. "Nothing, including furloughs, pay cuts and PLPs are off the table until there's a deal."

Breaking news from New York via the Associated Press:

A federal judge on Friday halted attempts by New York's governor to impose furloughs on about 100,000 state workers and withhold their raises.

U.S. District Judge Lawrence Kahn had temporarily blocked the furloughs two weeks ago. His new preliminary injunction bars Gov. David Paterson and lawmakers from submitting or enacting short-term funding bills with those provisions.

The unions went to court, arguing the cost-saving moves changed the terms of their negotiated contracts in violation of the U.S. Constitution. One-day-a-week furloughs were part of one emergency spending bill approved by the Legislature, though the Senate also passed a resolution criticizing the plan. Raises have been withheld in several of the emergency bills, which are being used each week to keep the state running until a budget is finalized.

Click here for the full story.

CalPERS this morning postponed a decision on imposing a $600 million rate hike on the state, with an eye toward delaying the increase for a year. Bee colleague Dale Kasler reports the breaking news in this story.

Here's our State Worker column about the CalPERS staff recommendation to raise the employer rates. This link opens a post with the fund actuary's proposal. And click here to for the Legislative Analyst's assessment that CalPERS probably doesn't need to boost employer contributions by $600 million.

American Federation of State, County and Municipal Employees has issued the union's thoughts about Gov. Arnold Schwarzenegger's latest budget proposals and the budget process itself:

"... completely unacceptable."
"... a cynical attempt to revive a series of discredited proposals ... "
"... another sequel in Sacramento's ongoing saga of budget apocalypse ..."

AFSCME says that the state would realize nearly $40 billion in savings and increased revenues by ending private contracting, dumping tax breaks given to multinational companies and whacking the state's enterprise zone program.

Click here to read the union's press release.

Gov. Arnold Schwarzenegger's revised budget proposes a one-day-per-month of unpaid leave for state workers in 2010-11. The state would reduce employee pay 4.65 percent each month; employees would receive a credit to take the time off.

The credits would have no cash value, so employees couldn't get money for them upon retirement or separation from the state. However, employees would be told to use accumulated unpaid leave time before taking paid leave, a Schwarzenegger spokeswoman said.

Schwarzenegger still plans to end the current furlough program on June 30.

Read more in Kevin Yamamura's breaking news story about the budget by clicking here.

This just in from Nicholas Confessore of the New York Times :

A federal judge temporarily blocked on Wednesday a one-day furlough of state workers scheduled by Gov. David A. Paterson for next week, reversing a plan that Mr. Paterson has said is necessary to keep the state from running out of money at the end of the month.

Judge Lawrence E. Kahn of United States District Court issued a temporary restraining order against Mr. Paterson, after unions representing state employees and public university teachers filed a lawsuit alleging that the furloughs, approved by the Legislature on Monday, were illegal.

Judge Kahn's ruling also bars Mr. Paterson from seeking any further furloughs pending a hearing in his chambers, scheduled for May 26.

Click here to read the rest of the report.

Hat tip to the unidentified State Worker blog user who called to alert us to this breaking news.

The California Labor Federation is about to launch a worksite flier blitz aimed at cementing Meg Whitman's ties to the finance industry and exploiting the recent fraud charges leveled at bank holding company Goldman Sachs.

As we point out in today's story about the Whitman/Goldman connection, she left the firm's board five years before the 2007 events at the center of SEC fraud charges highlighted by yesterday's Senate hearing.

Still, the spotlight on Goldman has resurrected Whitman opponents' efforts to frame her as a greedy financial markets insider who is out of touch with working class America. The alliterative tag the union umbrella organization is rolling out in its campaign against the GOP gubernatorial front runner: "Wall Street Whitman."

In an e-mail to The Bee this morning, federation spokesman Steve Smith said, "More than 150,000 fliers on Whitman's Wall St. ties and her positions on the issues workers care about will be distributed in the coming weeks at work sites across the state to both public and private sector workers. The Labor Federation will deploy more than 25,000 volunteers throughout the campaign to expose Whitman's real agenda for California."

Click here to see a full-sized version of the flier. This link opens a related website, wallstreetwhitman.com. For more about the California Labor Federation, click here.

The furlough showdown in Sacramento's 3rd District Court of Appeals is getting closer.

Professional Engineers in California Government and California Association of Professional Scientists today filed a supplemental reply letter brief to the 3rd District Court of Appeals in Sacramento. California Attorneys, Administrative Law Judges and Hearing Officers in State Employment filed its papers, too. We expect SEIU Local 1000 will soon do the same.

The court will then set a date for oral arguments and then rule on the cases. Exactly when will all that happen? No one knows yet.

Regardless, expect the losing side to appeal to the state Supreme Court, which earlier today declined Schwarzenegger's request that it immediately take over the Sacramento appellate cases and three others in San Francisco's 1st District Court.

Click here to read the brief that PECG and CAPS filed today. We're working on getting the CASE papers to post.

IMAGE: www.yolocourts.ca.gov

Gov. Arnold Schwarzenegger has lost his bid to move seven key furlough lawsuits to the Supreme Court and freeze the remaining lawsuits pending a high court decision.

Here's the online story with a bit more context. Click here to open the court's website. Scroll to the bottom to read the decision.

It's official. Furlough Fridays will continue.

San Francisco's 1st District Court of Appeal has issued a ruling on Gov. Arnold Schwarzenegger's third petition for writ of supercedeas. Like the previous decisions (which you can read about here and here), the court has decided to keep furloughs in place for state workers in "special fund" departments named in CASE v. Schwarzenegger while the matter is appealed:

The petition for writ of supersedeas is granted as follows: Pending consideration of the appeal on file herein, and subject to further order of this Court, the "Order Granting in Part Motion for Relief From Automatic Stay," filed March 23, 2010 in Alameda County Superior Court Number RG- 09-453982 is stayed.

The decision keeps furloughs in place for those employees throughout the appeals process, despite Alameda Superior Court Judge Frank Roesch's order last month that the governor end the policy for state workers in one of the so-called "special fund" departments named in lawsuits brought by CASE, SEIU Local 1000 and Union of American Physicians & Dentists.

Schwarzenegger asked the 1st District Court to keep furloughs in place during the appellate process. He won temporary stays in all three cases on Mar. 30. Today's decision, like the two that preceded it, is specifically about extending the stay on Roesch's order, not the legal underpinnings of his ruling that employees in special-fund departments have been illegally furloughed.

Click here to open the court's Web site. Scroll to the bottom to read today's ruling.

San Francisco's 1st District Court of Appeal has again sided with Gov. Arnold Schwarzenegger by deciding to keep furloughs in place for state workers in "special fund" departments named in SEIU Local 1000 v. Schwarzenegger while the case is appealed.

The governor is fighting a lower court ruling in this case and two others. Alameda Superior Court Judge Frank Roesch last month ordered workers restored to full hours and pay if they worked in one of the departments named in lawsuits brought by Local 1000, CASE and Union of American Physicians & Dentists.

Schwarzenegger then asked the 1st District Court to keep furloughs in place, winning temporary stays in all three cases on Mar. 30. This latest decision makes the temporary stay permanent while the court considers Schwarzenegger's appeal.

Here's the wording of the ruling, which you can find on the court's Web site:

The petition for writ of supersedeas is granted as follows: Pending resolution of the appeal herein, the "Order Granting in Part Motion for Relief from Automatic Stay," filed March 23, 2010, in Service Employees International Union Local 1000, and Yvonne Walker v. Schwarzenegger et al., Alameda County Superior Court Number RG-09-456750, is stayed. The stay will remain in effect until issuance of the remittitur or upon further order of this court.

The appellate court on Monday issued a similar decision in the UAPD case, as we reported here. The court hasn't yet issued a ruling on the governor's third stay request in the CASE matter.

Our sister blog, Capitol Alert, has info on a report released by Public Interest Research Group, which gives California state government a "D" for spending transparency. Click here to read Torey Van Oot's post and link to the full report.

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment has filed its opposition to petition for writ of supercedeas in San Francisco's 1st District Court of Appeal. The writ is the union's response to Schwarzenegger's request that the appellate court stay Alameda Judge Frank Roesch's order to return employees in "special fund" departments to full time work and pay during the appeals process.

Schwarzenegger won a temporary stay last week, as noted in this report.

Click here to download the 32-page CASE filing.

IMAGE: www.yolocourts.ca.gov

Our sister blog, Capitol Alert, sums up the findings of a new report from The Stanford Institute for Economic Policy and Research, which bills itself as "an independent, non-partisan research institute at Stanford University."

The bottom line: CalPERS, CalSTRS and the University of California Retirement System are underfunded by a combined $500 billion.

Worth noting, according to this press advisory: "The client for this project was the Office of Governor Arnold Schwarzenegger."

Click here for the Capitol Alert post with a link to today's report brief. A Stanford spokeswoman said that the full report will be released later this week.

The 1st District Court of Appeal has issued a temporary stay in the SEIU case, the last of the three petition for writ of supercedeas cases that we've been following throughout the day. The language of the order isn't yet posted to the court's Web site, but we have the document image.

Click here to view it. The two-page PDF includes the court's earlier UAPD order.

The 1st District Court of Appeal has just issued a temporary stay in the second of the three furlough cases that Gov. Arnold Schwarzenegger appealed on Monday. This one blocks Alameda Judge Frank Roesch's Wednesday order in Union of American Physicians & Dentists v. Schwarzenegger. It mirrors the the CASE v. Schwarzenegger temporary stay that we reported this morning.

Here's the language of the temporary stay:

Pending consideration of the writ of supersedeas on file herein, and subject to further order of this court, the "Order Granting in Part Motion for Relief From Automatic Stay," filed March 23, 2010, in Union of American Physicians and Dentists v. Schwarzenegger, et al., Alameda County Superior Court Number RG-09-456684, is temporarily stayed. On or before 10:00 a.m., Wednesday, April 7, 2010, respondents shall serve and file opposition, if any, to the petition for writ of supersedeas. The Clerk of Court shall provide telephone notice of this order to all parties in addition to service by mail.

The appellate court hasn't yet issued a ruling on the governor's petition to block Roesch's SEIU decision. That's the last of the three petitions that Schwarzenegger filed Monday.

Click here to open the court's Web site to the UAPD case docket.

IMAGE: www.yolocourts.ca.gov

Service Employees International Union California this morning endorsed Attorney Gen. Jerry Brown for governor. The statewide organization counts the 95,000 California government workers of SEIU Local 1000 among the 700,000 workers it represents statewide.

"Jerry Brown is uniquely qualified and unquestionably committed to be the governor who will lead California's recovery, and that's why 700,000 SEIU California members will make electing him our first priority as we lead the fight to rebuild California," Bill A. Lloyd, president of SEIU California, said in this press release.

Judge Frank Roesch's ruling to lift a stay on ending furloughs for nearly 70 "special fund" departments has had an impact on another furlough case.

That lawsuit, International Union of Operating Engineers v. Schwarzenegger, is in Los Angeles Superior Court and makes the same "special fund" argument that won over Roesch.

(One difference, according to IUOE attorney Adam Stern: The union's suit includes three entities not named in the Alameda cases: the Military Department, CalEPA and the Department of Food and Ag's Fairs and Expositions Division.)

Because the Los Angeles case so closely mirrors the Alameda lawsuits, the court there stayed the IUOE matter for 60 days to see how the other three cases play out, Stern said.

"But I don't expect the (San Francisco 1st District Court of Appeal) to rule that soon, so we may have to put our case on ice some more," Stern told The State Worker.

California Medical Association v. Schwarzenegger, which was scheduled for hearing on Friday in San Francisco Superior Court, has been postponed until Feb. 24. You can read about the case and view CMA's court brief by clicking this link. To view the court calendar with the announcement, click here.

And we've updated the unofficial scoreboard of state furlough litigation, our Furlough Fights spreadsheet, which you can view here.

IMAGE: www.yolocourts.ca.gov

You'll find these state worker stories under our "Recommended Links" this morning:

Bee business reporter and Home Front blogger Dale Kasler says this morning that CalPERS is walking away from a $500 million New York real estate investment that has been in trouble for some time ... The San Francisco Chronicle's Carla Marinucci reviews Meg Whitman's new book, "The Power of Many: Values for Success in Business and in Life," set for release in bookstores on Tuesday ... New York Gov. David Paterson wants state employees to forgo raises that are scheduled for this year ...

The 1st District Court of Appeal has sided with the governor. For now, Judge Frank Roesch's order to restore full pay to correctional officers for time worked is stayed pending more arguments.

From the court's Web site:

Appellant, the Governor of the State of California, has a filed a petition for writ of supersedeas and request for a temporary stay seeking the stay of a writ of mandate addressing his furlough of certain correctional officers. Appellant argues that there is an automatic stay because of his filing of a notice of appeal and asks for a temporary stay pending resolution of that issue. Respondent and the Controller of the State of California oppose the request and argue that the appeal is premature. To that end, Respondent has also filed a motion to dismiss the appeal. Pending determination of the motion to dismiss, or upon further order of this court, the writ of mandate issued by the trial court on December 30, 2009, is temporarily stayed. Furthermore, Respondent is to file any opposition to the petition for writ of supersedeas by 4:30 p.m., Thursday January 21, 2010. (See rule 8.112(b)(1).)

Click here for background on this case.

In his state of the state address today, Gov. Arnold Schwarzenegger renewed his call to legislators to negotiate a deal to reduce retirement pension for future state workers.

If the Schwarzenegger/Shriver household's pet pig and pony can work together to wedge a canister of food up against a wall, pry its lid off and get the food inside, Democrats and Republicans can negotiate a newer, lower cost pension system, the governor said.

Otherwise, the state will soon be in worse financial trouble than it is in now, he warned, equating the crisis to the moment a person realizes they're about to be run over by a locomotive.

Here's the part of the governor's speech that dealt with pensions:

"The cost for state employee pensions is up 2,000 percent in the last ten years, while revenues have only increased by 24 percent.

The pension fund will not have enough money to cover this amount, so the state -- that means the taxpayer -- has to come up with the money.

This is money that is taken away from important government services.

This is money that cannot go to our universities, our parks and other government functions.

Now, for current employees these pensions cannot be changed -- either legally or morally.

We cannot break the promises we already made. It is a done deal.

But we are about to get run over by a locomotive. We can see the light coming at us.

I ask the Legislature to join me in finding the equivalent of a water deal on pensions, so that we can meet current promises and yet reduce the burden going forward."

Schwarzenegger aides say his pension proposal would save $74 billion in reduced pension payouts and $19 billion in in reduced retiree health benefit bills through 2040.

Three state worker unions won big today in the first round of what promises to be a long and difficult legal war to stop and eliminate furloughs.

The governor said he will immediately appeal.

Here are the three rulings by Alameda Superior Court Judge Frank Roesch.

The SEIU Local 1000 case ruling can be read by clicking here.

The CASE judgment can be read by clicking here.

The UAPD ruling can be read by clicking here.

Sources familar with Gov. Arnold Schwarzenegger's 2010-11 budget plan have told The Bee that the governor plans to continue furloughs past the June 30, 2010 expiration date he set when he put the policy in motion a year ago. Click here to read Capitol Bureau reporter Kevin Yamamura's breaking news story.

Furloughs are delaying federally-funded programs for disabled and unemployed Californians, according to a report released this afternoon by the Senate Office of Oversight and Outcomes.

The report looks at the impact of furloughs on the Disability Determination Service Division of the Department of Social Services, the Unemployment Insurance Branch of the Employment Development Department and the state Unemployment Insurance Appeals Board.

The authors conclude that furloughs are slowing down backlogged programs already struggling under the weight of increased demand for services.

From the executive summary:

Furthermore, the three-day-per-month furloughs imposed by Gov. Arnold Schwarzenegger this year saved no money for the state budget when applied to these federally funded long-term disability and unemployment programs.

The furloughs have, however, significantly reduced how much time the average state
worker spends on the job helping to distribute these federal benefits - at a time when
demand for the cash assistance has soared.

The Senate Office of Oversight and Outcomes was established by Sen. Darrell Steinberg , who has objected to furloughs. The office says it produces information independent of partisan political influence.

In November the Oversight Office produced a report on furloughs' impact on the DMV. That followed an October analysis of how furloughs have affected 24/7 facilities.

You can read today's 25-page report by clicking here.

IMAGE: www3.senate.ca.gov

The Secretary of State's office has approved two ballot measures for circulation that are of keen interest to state workers, especially if they remember Gov. Arnold Schwarzenegger's special election of 2005.

Here's the official title and summary of the first one:

MAKES ILLEGAL THE USE OF PUBLIC EMPLOYEE WAGE DEDUCTIONS FOR POLITICAL ACTIVITIES. INITIATIVE CONSTITUTIONAL AMENDMENT. Amends the California Constitution to make it illegal to deduct from wages or earnings of a public employee any amount that will be used for political activities as defined. Prohibits any membership organization that receives public employee wage deductions from using those funds for any political activities, but does not apply to deductions for charitable organizations, health, life or disability insurance, or other purposes directly benefitting the public employee. Authorizes the Legislature and Fair Political Practices Commission to adopt related laws and regulations. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Probably minor state and local government implementation costs, potentially offset in part by revenues from fines and/or fees.

The Bureau of State Audits has released the results of an investigation that found an unnamed official in CSU Chancellor Charles Reed's office claimed and collected $152,441 in improper expense reimbursements. The money went for things like, "... commuter expenses between his home in Northern California and the university's headquarters in Long Beach, living allowances, home office expenses, duplicate payments, and overpayments of claims," the investigation's fact sheet says.

The report comes the same day that students and faculty at Sacramento State are protesting class cuts, escalating tuitions and what they perceive as an erosion of CSU academics. The Calfornia Faculty Association quickly responded to the investigation with this statement, calling the payments "beyond reprehensible."

(CFA on Tuesday issued a white paper that criticized "restructuring" by the university system. Click here for our blog post about it.)

Click the following link to read more.

Bee Capitol Bureau reporter Andrew McIntosh reports that CalPERS board member Charles Valdes has admitted he violated state campaign finance laws by accepting contributions that exceeded legal limits. He'll be fined $12,500 under terms of a deal with the California Fair Political Practices Commission.

Click here for Andrew's report on our sister blog, Capitol Alert.

Gov. Arnold Schwarzenegger has signed AB 376, the bipartisan legislation aimed at clarifying that the Unruh Civil Rights Act doesn't apply to businesses offering discounts to furloughed workers.

Just a few weeks ago, it looked like the measure was stalled, the victim of partisan wrangling that hindered nearly two dozen so-called "urgency" measures that required a two-thirds vote in the Senate to reach the governor.

But as we reported in this post, the Senate unanimously supported the bill (the Assembly had done the same earlier), so it wound up going to the governor. It's now law.

Employment Development Department Director Patrick Henning is leaving his post at the end of this year, according to a memo he issued to staff this morning.

Leadership can be replaced, and so it should, and must be. That's good. It's a time for change in my own career. With a tear in my eye, after 41 years of full-time engagement in labor and employment issues affecting California's working women and men, I have decided to retire at the end of this year. I will miss all of you.

Click here to read Henning's e-mail. He references the department's "tumultuous year." which has been "a challenging period for our nation, our state, working families, and, also for EDD employees."

And he compliments and challenges the department:

I have seen greatness in our dedicated staff. Management should go further in encouraging more incumbent worker training, testing, and implementing alternative approaches to work, upgrading classifications, refreshing career ladders, advocating diversity in our ranks, and recruiting more persons with disabilities into our EDD family. We must develop a good workforce development plan. We help private industry do it. Why not us, for the future? We must change, and change must be NOW!

Today's announcement will no doubt spark rumors about what's behind it. EDD has been overwhelmed with smothering workloads during a record-setting recession. It's had trouble in its call centers and with processing claims.

And the federal government has raised questions about whether furloughs are hampering EDD's ability to meet minimum standards for processing claims. Click here to see how Henning responded to those concerns.

Superior Court Judge Timothy Frawley has tentatively ruled against Gov. Arnold Schwarzenegger's motion to transfer and coordinate furlough lawsuits in San Francisco and Alameda courts to Sacramento. Here's a significant passage from the six-page ruling:

Taking all of the section 404.1 factors into account, the Court concludes that coordination of the Included Actions in Sacramento would not promote the ends of justice.

As to the Special Fund cases, there are virtually no factors supporting coordination of those cases with the Psychiatric Technicians case.

As to the CCPOA case, while there may be some benefit to coordinating the actions to reduce the risk of inconsistent adjudications, because the predominating questions of fact and law in the actions are unique and different, and because the CCPOA case has been significantly litigated and has an imminent date set for hearing on the merits, the Court concludes that coordination would not promote the ends of justice.

The motion to coordinate is therefore DENIED.

Frawley could change his mind after tomorrow's 1:30 p.m. hearing, but judges rarely retreat from their tentative decisions. Click here to read today's ruling. For background on the governor's motion and tomorrow's hearing, click here.

Former Department of Personnel Administration Dave Gilb had the law on his side when he stopped a plan to give a $250 award to each of State Compensation Insurance Fund's 7,900 employees, the department told The State Worker today.

DPA spokeswoman Lynelle Jolley's sent this e-mail today after we called seeking the administration's comment on State Fund President Jan Frank's announcement that the fund wouldn't go through with the award.

From: Lynelle Jolley
Sent: Friday, October 23, 2009 12:03 PM
To: Ortiz, Jon - Sacramento
Subject: FW: SCIF bonuses

Jon, here's an email DPA's then-director Dave Gilb sent the SCIF president in July saying the proposed "Encore Awards" appear to conflict with the law governing awards for state employees. SCIF management never responded to his email or provided any explanation of the legal authority they relied on to support going forward with the award. Unfortunately, the law simply doesn't authorize a department to recognize each of its employees with a monetary award.

From: Dave Gilb
Sent: Thursday, July 16, 2009 5:07 PM
To: 'JDFrank@scif.com'
Cc: Andreas Acker Debbie Endsley
Subject: FW: SCIF bonuses

Hello Jan:

My staff has informed me after discussions with yours that SCIF intends to hand out a $250 bonus to all employees in the Department under what has been characterized as an "Encore Award" program. SCIF apparently relies on Government Code 19823 as authority for these bonuses.

SCIF has no authority under GC 19823 to issue bonuses to every employee in the department. That code is DPA's statutory authority which authorizes DPA- not individual state agencies - to establish a merit award program. We have established the sustained superior accomplishment program under this statutory authority which, among other criteria, limits awards to a maximum of one award per 100 individuals. There is no legal authority for SCIF to use DPA's statutory authority to issue bonuses of $250 to every person in the Department.

I have looked at your handbook and I do not see where your handbook allows for such blanket awards either, and certainly not under DPA's statutes. If there is any additional authority that SCIF believes exists to issue bonuses to everyone, please let me know.

As we reported earlier today, State Fund President and CEO Jan Frank has told the fund's employees that they'll not be receiving the extra $250 she had promised to them in July because the Department of Personnel Administration had "objected strenously" to her plan.

"Over the past several months we have tried very hard to resolve this issue with DPA, but it is clear that if State Fund proceeds with a monetary award then we could be subject to a legal challenge including an action to seek reimbursement from individual employees," Frank told fund staff.

State Compensation Insurance Fund employees won't get the $250 bonus promised to them in July by their boss, fund President and CEO Jan Frank.

"As you know the Department of Personnel Administration (DPA) objected strenuously to my decision to recognize each employee with a monetary award. Over the past several months we have tried very hard to resolve this issue with DPA, but it is clear that if State Fund proceeds with a monetary award then we could be subject to a legal challenge including an action to seek reimbursement from individual employees," Frank said in this e-mail.

We broke the news of Frank's intention to give all her employees an Encore Award in this July post. It would have cost the State Fund about $2 million. (The money wouldn't have come from the state's general fund, since State Fund operates with premiums collected from its clients.)

A couple weeks later, we caught wind that State Fund and the DPA had gotten sideways with each other about Frank's plan. We reported their disagreement in this Aug. 6 post.

Then Frank announced she would be leaving State Fund at the end of this month and we told you last week that her departure lent urgency to resolving the award issue.

Fund spokeswoman Jennifer Vargen declined to add any comment to this morning's e-mail. We've asked DPA spokeswoman Lynelle Jolley if the administration has anything to chip in. She's checking.

IMAGE: Jan Frank / State Compensation Insurance Fund

Organizers have postponed a clothing swap meet for state workers that had been planned for this Saturday. The State Worker has promoted the event twice, including this post.

Karen Lynn Smith, one of the state worker organizers at Corrections, said that there was a problem with the site selected for the event, 10000 Goethe Road in Sacramento. The swap meet wasn't sanctioned by CDCR.

"I can't really say more," Smith said of the reason for the postponement. "We feel awful about this."

Organizers plan to find another location and hold the event next month. "We're trying to be positive," Smith said. "This just gives us the chance to gather more stuff."

This blog will post details of the new time and place for the swap meet as soon as the details are worked out.

State Compensation Insurance Fund has announced that the fund's board has named Chief Risk Officer Doug Stewart as interim President and CEO.

Stewart replaces Jan Frank, who leaves at the end of this month.

Employees heard first about the decision from Jeanne Cain, fund board chairwoman. You can read that memo by clicking here. State Fund also released a statement, which you can read by clicking this link.

IMAGE: Doug Stewart / State Compensation Insurance Fund

The constitutional officers, led by State Controller John Chiang and represented by Attorney General Jerry Brown, filed their opening brief in the 3rd District Court of Appeal. As you'll recall, the constitutionals want to keep their employees furlough-free. They're arguing that their constitutional independence means that they can run their shops -- including the schedules of the combined 15,000 or so state workers in their agencies and departments -- as they see fit.

(Quick primer for new blog users: The constitutional officers include Chiang, Brown, Lt. Gov. John Garamendi, Secretary of State Debra Bowen, Treasurer Bill Lockyer, Superintendent of Public Instruction Jack O'Connell, Insurance Commissioner Steve Poizner and the Board of Equalization.)

Click here to read the constitutional's opening salvo in this new chapter of the furlough fight. This link will hook you up with a June blog backgrounder on the case/

The Bureau of State Audits has released a report that employees at five entities -- not including the Department of Corrections and Rehabilitation -- accounted for at least $1.3 billion of the more than $2.1 billion in overtime pay from 2003-04 to 2007-08.

And of those, the auditors found, a good chunk of that OT went to relatively few workers in a couple of job classes at the departments of Mental Health and Developmental Services. From the report:

For instance, in fiscal year 2007-08, at Mental Health's Napa State Hospital (Napa), 19, or 4 percent, of the 489 nurses in the registered nurse- safety classification averaged $78,000 in regular pay and $99,000 in overtime compensation.

Staffing demands accounted for the reason for the extreme overtime at Napa State Hospital and Sonoma Developmental Center, two facilities auditors examined, and raise concerns that employees working so many hours in safety and public health positions might pose a danger to their own or to their patients' well-being.

The other departments that logged heavy OT: the Highway Patrol, Forestry and Fire Protection and Veterans Affairs.

The report contains this caveat:

State law was changed in February 2009 to no longer allow leave to be counted in computing overtime for the two job classifications we tested. However, this same state law indicates that it may be superceded by agreements ratified subsequent to the law's effective date that once again could contain provisions that allow employees' leave time to be counted as time worked in computing overtime.

Click here to read a summary of the audit. Clicking here will download the full report. And this link opens an audit fact sheet.

California Attorney General Jerry Brown is suing State Street Bank and Trust for committing what he called "unconscionable fraud" against CalPERS and CalSTRS.

The lawsuit contends that the Boston-based firm billed illegal overcharges and penalties for foreign currency exchange costs since 2001. Brown is seeking to recover more than $200 million.
Click here for Brown's press release. We're working on linking to the court records and we'll update this post when we find them.

This just in from the California Association of Psychiatric Technicians:

State-employed Psychiatric Technicians filed a lawsuit today against Governor Arnold Schwarzenegger, claiming his elimination of holidays and holiday pay not only specifically hurts those working in California's round-the-clock facilities, but also breaks a major labor law.

The California Association of Psychiatric Technicians' lawsuit argues Governor Schwarzenegger broke the so-called "Evergreen Law" when he eliminated two state holidays - Lincoln's Birthday and Columbus Day - as well as time-and-a-half pay for other holidays as part of a state budget bill earlier this year.

According to the Evergreen Law (California Government Code Section 3517.8), expired state-employee union contracts remain in effect until either a new contract is agreed upon or the union and state reach impasse. As neither an impasse has been reached nor has a new contract been agreed upon, CAPT argues the governor violated the Evergreen Law as well as its 2006-2008 contract, which includes the two holidays as well as time-and-a-half pay for holiday work.

Read the lawsuit, filed in Sacramento Superior Court, by clicking here. Read the CAPT press release by clicking this link.

IMAGE: yolocourts.ca.gov

The UC Berkeley Center for Labor Research and Education today released, "The High Cost of Furloughs," a study that concludes that one furlough day per month would yield almost as much savings to the state as the current three "Furlough Fridays."

Here's a chart that lays out the argument:

Click the link below to get the entire report and the response from Gov. Arnold Schwarzenegger's office.

California Highway Patrol officers and members of other police departments statewide won't be getting any mandatory training on how to interact with citizens who wear the kirpan, the ceremonial dagger carried by people of the Sikh faith.

AB 504 from Assemblyman Warren T. Furutani's, D-South Los Angeles, proposed training for police officers on how to properly recognize and interact with Sikhs carrying kirpans.  

Though the bill enjoyed bipartisan support, Gov. Arnold Schwarznneger vetoed the measure on the weekend. Furutani said in a statement he was disappointed.

"The Sikh community should not live in fear of arrest for carrying the kirpan, which is well recognized and integral part of their religious faith," he said. 

The governor said the measure was "unnecessary" and aimed to force the state's Commission on Peace Officer Standards and Training to create content on the Kirpan.

"It is the policy and practice of the Commission to periodically review and update existing course curricula," Schwarzenegger said in his veto message. "If the Commission determines that training on the kirpan is warranted, it can create a program without this measure."

 Read his entire veto message by clicking here.

So, what's going on where you work? Or if you didn't go to work, what's your next move?

SEIU Local 1000 has told employees it represents that they're within their legal and contractual rights to treat today like Columbus Days past -- as a paid holiday. Local President Yvonne Walker has said she hopes folks will stay home.

The controversy escalated last week when the two sides fired off dueling e-mails. DPA said the union was encouraging an illegal job action. The union accused DPA of using intimidation tactics to scare workers into working what is still a paid day off under the evergreen provisions of Local 1000's expired contract and the Dill's Act.

(Other unions have said have told their members to work and then file grievances. SEIU has said it will also help file grievances for the folks it represents who work today.)

The state, specifically the governor's Department of Personnel Administration, has said that legislation passed earlier this year changed the state's holiday calendar, including the elimination of Columbus Day as a paid day off for state workers. Take the day off without calling in or arranging leave, the administration has said, and face the consequences of being AWOL.

We asked DPA and several departments whether we could get some statistical sense of no-shows for today. All said the same thing: The numbers won't be known until timesheet adjustments go in to the Controller's Office in about 10 days.

Local 1000 told The State Worker it is monitoring events today but it's not taking any sort of formal count.

So that leaves us with anecdotes from around the state. We're eager to hear your reports.

The votes for the two at-large seats on CalPERS Board of Administration have been tabulated. The results:

Seat A
J.J. Jelincic - 71,197 (36.8 percent)
Cathy Hackett - 54,934 (28.4 percent)
Dan Villella - 34,628 (17.9 percent)
Dennis Yates - 25,203 (13.0 percent)
Muriel Strand - 7,651 (3.9 percent)
Total votes - 193,613

Seat B
Kurato Shimada - 155,170 (83.3 percent)
Inderjit Singh Kallirai - 31,080 (16.7 percent)
Total votes - 182,250

Since no one running for Seat A won a majority of votes, Jelincic and Hackett face a runoff. The ballots will go out Nov. 9 with a Dec. 4 deadline.

Reporters asked Senate President Darrell Steinberg today about the standoff between SEIU Local 1000 and Gov. Arnold Schwarzenegger over Columbus Day.

Here's what the Sacramento Democrat said before going into a "Big Five" meeting with other leaders in the Legislature and the governor.

"I think what that reflects is the SEIU's understandable frustration about the fact that they negotiated in good faith and came in an agreement with the administration and voluntarily agreed to a furlough day. And now they've had two additional furlough days imposed upon them through an executive order, and so I think the Columbus Day issue is a reflection of that frustration. When you sit and you negotiate there in good faith, you expect that that agreement will be fulfilled, and it hasn't been."

He was then asked whether state workers should show up for work on Monday.

"That's their decision, but I certainly have sympathy with their underlying frustration," he said.

Reporting by Torey Van Oot

Here's another shot in the Columbus Day feud, this time from SEIU Local 1000 President Yvonne Walker.

In a sharply worded letter to DPA's Chief Deputy Director of Policy Julie Chapman, Walker restated Local 1000's position that next Monday remains a paid day off for state workers. "There is no question that Columbus Day is a holiday for state workers under the law," she wrote.

Walker was responding to a letter Chapman sent to the union this morning that called for union leaders to stop encouraging members to stay off work Monday.

DPA also wants Local 1000 and to retract its statements that the day remains a holiday, despite legislation the administration says erased Columbus Day and Lincoln's Birthday as paid days off for state workers.

You can read Chapman's letter via this blog post.

More from Walker's response:

Rather than threatening honest, hard working state workers with further pay loss and discipline for exercising their statutory and contractual rights by observing a recognized holiday, the governor and DPA should focus on consulting their legal advisors concerning compliance with California's labor laws. ...

Contrary to DPA's claims, nothing in the law or contract requires state workers to obtain advance approval to observe a state holiday. ...

Click here to read the rest of the letter to DPA.

Walker also sent a letter to the 95,000 employees that Local 1000 represents. Here's a key paragraph:

I realize that the Department of Personnel Administration and your department are trying to intimidate employees into coming to work on Columbus Day. We have been threatened with adverse actions, AWOLs and everything else they can think of to scare us into working on a day that is legally and rightfully our paid holiday. If we do not stand strong now, where does it end?

Click here to read the entire letter to state workers.

IMAGE: Yvonne Walker / Sacramento Bee, 2008

The Department of Personnel Administration has fired off a letter to SEIU Local 1000 this morning, demanding the union to stop telling the 95,000 state workers it represents to not show up for work on Columbus Day.

Here's the opening paragraph from DPA Chief Deputy Director of Policy Julie Chapman to Local 1000 Chief of Staff Michael Baratz:

It has come to our attention that Service Employees International Union Local 1000 (SEIU) is making several statements urging its members not to report to work on Columbus Day, October 12, 2009, a regular work day. These statements are contrary to the law and must stop immediately. Further, SEIU must take immediate and effective steps to retract and correct its communications to accurately reflect the current state of the law.

A little further down, Chapman says this:

While we understand your organization's desire to communicate with your members, SEIU's efforts on this issue can no longer be considered fair communication about your members' rights and have become communication actively encouraging an illegal work stoppage. SEIU is advocating an illegal job action which may result in employees being subject to possible disciplinary action.

Click here to read the letter.

The letter also mentions what we reported in this Sunday story : Other unions are telling their members to work the day and let the legal system or administrative grievance process settle the matter.

We contacted SEIU for a response and expect to hear from the union later today.

Former state Assemblyman Jerome Horton will become a member of the Board of Equalization today during a ceremony in Southern California.

Horton will represent the board's 4th District, representing 8.5 million residents in Los Angeles County. He'll be the first African American to serve on the BOE since its inception in 1879 and the third African American constitutional officer in state history.

Gov. Arnold Schwarzenegger will administer the oath during the swearing in ceremony planned for 5:30 p.m. at the California African American Museum in Los Angeles.

Click here for the BOE press release that has more details about Horton.

Public safety concerns may trump government financial woes when it comes to laying off state and other local government workers, an Illinois county judge ruled today.

The ruling follows a lawsuit launched by the American Federation of State, County and Municipal Employees, the largest state workers union in Illinois.

The decision has reportedly forced Illinois Gov. Pat Quinn's to put on hold his plan to lay off 2,500 or more state workers, including 419 state prison employees, according to a breaking news report posted today by The Chicago Tribune.

The layoffs had been set to start Wednesday.

Gov. Quinn says his administration is appealing.

The group that represents state attorneys, hearing officers and administrative law judges is turning to the courts with a lawsuit against the Schwarzenegger administration over a law passed in February, claiming that eliminating two paid state holidays is illegal and violates their union contract.

The holidays at issue are Lincoln's Birthday (Feb.12)  and Columbus Day, which this year falls on Oct. 12.

The union, CASE -- the California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment -- first filed a grievance in August with the Department of Personnel Administration.

In a statement on its Web site, the CASE board of directors says DPA failed to respond and completely ignored the grievance. So late on Thursday, CASE filed a civil complaint in San Francisco Superior Court asking for an injunction to stop the elimination of the paid days off.

CASE said the two holidays are "material, bargained-for contractual rights," and it's vowing to do whatever it must to protect them.

DPA spokeswoman Lynelle Jolley wasn't immediately available to comment -- it's furlough Friday -- but we'll update if she gets back to us.

To read the court case records, click here.

The minds have met.

State Compensation Insurance Fund employees will receive full pay for September, according to this brief announcement by SEIU Local 1000 President Yvonne Walker.

We confirmed with the controller's office moments ago, and we left a message with State Fund spokeswoman Jennifer Vargen. Yesterday, we reported in this post that the fund told employees that they might not get full September pay on their October checks.

This development springs from Local 1000's recent furlough lawsuit win in San Francisco Superior Court. Click here if you need to get up to speed on the ruling.

Now, what about back pay?

And while we're at it, there's still the question about how to equitably compensate workers for time worked under self-directed furloughs while some co-workers took time off. It was a thorny issue when we laid it out in this blog post for just 500 State Fund legal staff. The question remains unresolved, Vargen told us earlier this week, and now it's about 16 times bigger since all 7,900 fund workers are off unpaid furloughs.

It took months before. Will it take months again?

Employees at State Compensation Insurance Fund got a bit of bad news today. It looks like they may not get full paychecks for the month of September, even though a San Francisco Superior Court judge ruled that they were illegally furloughed. (Click here to get up to speed on the decision by Judge Charlotte Woolard.)

Click the link below to read the e-mail to State Fund workers that lays out the details of the possible pay delay.

We've received a copy of San Francisco Superior Court Judge Charlotte Woolard's ruling that State Compensation Insurance Fund employees are exempt from furloughs. Click here to read it.

The order, which relies on state insurance code specific to State Fund employees, is silent on back pay. SEIU Local 1000, which filed the suit, said in a statement today that it will "vigorously pursue retroactive back pay with interest for its members."

The governor's office has said the administration will appeal, but fund employees will be off furlough while that plays out.

"We have shared the order with the State Controller's Office," State Fund spokeswoman Jennifer Vargen said. "They are reviewing it, and we will work with them on implementing it."

We're waiting to hear from the local for a comment on its win.

For earlier posts about furlough lawsuits and State Fund, click here.

IMAGE: www.yolocourts.ca.gov

State Fund employees are off furlough. Immediately.

A decision signed this morning by San Francisco Superior Court Judge Charlotte Woolard ends unpaid days off for all 7,900 or so State Compensation Insurance Fund employees throughout California, according to an announcement by SEIU Local 1000, which represents about 6,000 fund employees.

Woolard had ruled in favor of the union earlier this month. Today's hearing formalized that decision, which mirrored an earlier judgment in favor of about 500 fund legal staff.

According to a Local 1000 release, "The order also prohibits the Governor and DPA from arguing the order should be stayed pending appeal. This allows the State Controller's Office to reprogram the payroll system to full pay for SCIF workers immediately."

The local said that Gov. Arnold Schwarzenegger's attorneys tried to keep the union from seeking back pay: "After hearing arguments the judge rejected the governor's attempt and entered an order ending the furloughs."

The union is going to "vigorously pursue retroactive back pay with interest for its members."

Fund President Jan Frank filed a successful complaint on behalf of employees not represented by SEIU to include them in the decision.

We'll post the court order later today.

On a related furolough lawsuit note, Local 1000 has filed its furlough appeal with the Third District Court in Sacramento. The local, along with Professional Engineers in California Government, California Association of Professional Scientists and California Attorneys, Administrative Law Judges and Hearing Officers in State Employment have all filed briefs seeking to overturn the Jan. 29 decision by Sacramento Superior Court Judge Patrick Marlette that supported Schwarzenegger's furlough order. Click here to see the court's register of actions in the case.

The document is so massive, we're told, that the union hasn't had time to scan it and send it to TSW so that we can post it. (The court's Web site doesn't provide document viewing.) Union spokesman Jim Zamora said that we'll get it soon. We'll post the brief immediately after it lands in our e-mail inbox.

There's been no court date set and there won't be for quite some time

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment has filed its opening brief to appeal the Sacramento Superior Court ruling that upheld Gov. Arnold Schwarzenegger's furloughs.

Here's the union's introduction to its argument to the Third District Court of Appeal:

In the history of the State of California, no Governor has sought to unilaterally impose furloughs on state employees. Nothing in the statutory framework governing State employer-employee relations authorizes the unilateral implementation of furloughs. Nothing in the MOU between the State and CASE authorizes the unilateral implementation of furloughs. Governor Schwarzenegger, like his predecessors before him, has acknowledged that the Governor lacks the power to unilaterally implement furloughs. Notwithstanding the dearth of authority and the admitted lack of same, Respondent unilaterally implemented furloughs on CASE members. The Executive Order imposing the furloughs cited only a single, inapplicable statute as the basis for the order. The trial court offered alternative bases purporting to authorize furloughs, none of which withstand scrutiny. The ruling of the trial court, if allowed to stand, will allow all future Governors to create "emergencies" justifying an extraordinary power never before thought to exist, which is not contemplated in any statute, regulation, or contract, and which would fundamentally alter the nature of labor relations, and would render collective bargaining and any resulting MOUs meaningless and subject to unilateral rescission at the whim of the Governor. Accordingly, the trial court's ruling must be reversed.

Click here to download the entire 34-page PDF file.

The CASE brief follows one filed Monday by California Association of Professional Scientists and Professional Engineers in California Government seeking to overturn the controversial decision by Judge Patrick Marlette. You can click here to read the previous post on that filing.

Thanks to several readers for alerting us to this latest development in the case.

UPDATED at 5:25 p.m.: San Francisco Superior Court Judge Charlotte Woolard has tentatively ruled in favor of SEIU Local 1000, finding that state insurance code "exempts State Compensation Insurance Fund employees from the furlough."

Click here to read the tentative ruling.

The case mirrors an earlier lawsuit successfully pressed by California Attorneys, Administrative Law Judges and Hearing Officers in State Employment. About 500 State Fund legal staff have been back to full time hours and wages since July 9 as a result of the ruling by Judge Peter Busch. Those employees also received backpay for wages lost to furlough.

Schwarzenegger has appealed the Busch decision, which was the first furlough lawsuit that he lost. We assume the administration will appeal this decision as well.

In the current case, Woolard also ruled in favor of State Fund President Jan Frank, who had filed a cross complaint aimed at exempting all of State Fund's 7,900 employees from furlough, not just the 6,000 covered by SEIU Local 1000. Click here to read the Frank complaint.

As expected, Schwarzenegger's attorneys had argued that the case should be heard in Sacramento Superior Court, since that's where Judge Patrick Marlette had issued the first furlough lawsuit decision. (Click here for a refresher on Marlette's Jan. 29 decision.)

Woolard disagreed: "The doctrine of exclusive concurrent jurisdiction does not apply to this matter because the issue in this case was not adjudicated in the Sacramento case."

Attorneys will make oral arguments tomorrow in Woolard's court room at 9:30 a.m. It is possible that the judge could reverse her tentative ruling, but that rarely happens. Still, fund spokeswoman Jennifer Vargen sounded a cautionary note.

"We're pleased with the tentative ruling and we look forward to the hearing tomorrow and having this resolved," Vargen said in a phone conversation with The State Worker this afternoon. "But we would caution that we don't have a final ruling yet."

And nothing will change until the Woolard issues one. For example, Busch ruled in favor of CASE lawsuit on April 15 but didn't issue the final decision until three months later. The State Controller's Office wouldn't adjust payrolll without a final order, so State Fund legal staff remained on a furlough schedule the entire time.

We couldn't connect with the Department of Personnel Administration, which handles furlough litigation for the governor. When we get an administration comment, we'll report it here.

"This is another crack in the governor's illegal furlough scheme," Local 1000 President Yvonne Walker said in a press statement. "We will continue our litigation in all possible venues."

Service Employees International Union Local 1000 has filed its fifth furlough lawsuit, this one in San Francisco Superior Court.

The complaint, which you can read by clicking here, argues from several angles that Gov. Arnold Schwarzenegger's furlough order is illegal.

We were struck by how some of the points raised in the lawsuit have been raised by users of this blog. Among the union's arguments:

• Schwarzenegger misused his emergency declaration authority to order the furloughs: "Those powers are used arbitrarily and capricously when they undermine Legislative decision-making about political solutions to budget problems."
• The budget impasse that prompted the emergency order is over, but the furlough order remains in effect.
• The order violates the separation of powers laid out in the state constitution.
• The furlough order violates employment agreements, breaking federal and state constitution provisions "that prohibit the impairment of contracts."
• Furloughs are "wasteful mismanagement of state resources" that "achieve no substantial benefit to the general fund ..."

Local 1000 is seeking coverage of its litigation costs and "such other and further relief as the Court deems appropriate." A hearing date hasn't yet been set.

IMAGE: www.yolocourts.ca.gov

The union representing California Highway Patrol officers has reached a deal to amend its contract with the state, trimming officers' wages for the next two years, Gov. Arnold Schwarzenegger said today.

The California Association of Highway Patrolmen (CAHP) agreed to amend its current negotiated contract deal with the Department of Personnel Administration and forgo a raise of 0.5 percent its members were supposed to get July 1.

But the raise money will be redirected to help pre-pay officers' retiree health benefits, the Governor's Office said.

Under the amended contract, which must still be ratified by CAHP members, officers will get no pay raises this year or next.

CAHP members also agreed to contribute pay raises their contract would have provided to help pre-fund their retiree health benefits.

The revised contract makes CAHP the first California union to start pre-funding its retiree health benefits, the governor said.

"California's Highway Patrol officers have one of the toughest jobs in this state, and I couldn't be more proud of their leadership today," Gov. Schwarzenegger said in a statement.

"In agreeing to this amended contract these officers are not only showing their responsibility in preparing for their health care future, but also proving their deep understanding of our state budget situation," the governor added.

"I hope that the great action by these men and women who put their lives on the line every time they put on their uniform will serve as an inspiration to others," he added.

CAHP spokesman John Hamm did not return a telephone call seeking the union's comment on the agreement.

The original contract would have given CHP officers a 0.5 percent raise effective July 1, based on an average of the salary raises received by five other major city and county police forces across the state - a tough sell when other state workers faced furloughs that left them with a 14 percent pay cut.

Instead, the raise - plus another 0.5 percent deducted from their paycheck - will go toward retiree health care costs once the agreement is ratified.

The union also agreed to dedicate its raise in 2010 - no more than 2 percent - to help pre-fund retiree health benefits. The cash-strapped state will match the 2009 and 2010 contribution rate, but won't make that payment until until July 1, 2012.

Schwarzenegger, who clearly is hoping other unions follow suit, said California has made billions of dollars of unfunded retirement health-care promises to its employees. He noted he's pushed for employee contributions like those the CHP union agreed to since his Public Employee Post-Employment Benefits Commission called for them.

State spending cuts have hit UC Berkeley today -- and it wasn't pretty.

The university announced that it is laying off roughly 300 employees and cutting about 8 percent of its courses to address a steep drop in state funding, the Associated Press reports from the Bay area.

Cal Fire Chief Del Walters was arrested in Plumas County last Friday night and charged with driving under the influence of alcohol after he was stopped for speeding.

He was off duty and driving his own personal car at the time of his arrest, Cal Fire spokesman Daniel Berlant said.

The California Department of Corrections and Rehabilitation said Monday it will issue 1,300 new layoff notices in Sacramento, Amador, Fresno and elsewhere after the assumed $1.2 billion cut to the department's budget.

Department chief of staff Brett H. Morgan announced details of the layoff plan in a letter to staff this afternoon.

"These truly are difficult times, and your concern and frustration are shared," Morgan told CDCR workers in a two-page letter that explained that layoff notices will go out this week.

Click this link to read it: CDCR Layoff notice 8.23.2009.pdf   The latest layoff notices are in addition to the 3,665 others that the department issued to workers on May 15, said Mary Hernandez, CDCR undersecretary for administration.

The division of juvenile justice will be the hardest hit. It will see 1,200 layoff notices issued to staffers with the least experience in Sacramento, Amadaor, Fresno, Los Angeles, San Bernardino San Joaquin and Ventura counties.

Only 100 layoff notices will be issued in the adult division, Fernandez said. The 1,300 includes twenty-five people to be put on layoff notice from CDCR headquarters here in Sacramento, she added.

The notices don't mean people will actually be laid off.

The employees affected will be put on a state restriction of appointment (SROA) list, giving them first shot at other CDCR jobs - either in their county or outside their county - as they come up during the period before they are truly laid off.

Fernandez was unable to say how many of the 3,665 who recieved such notices in May ended up without a state job at the end of the 120 day period.

The State Worker is trying to get that information for a post tomorrow. If you were among that first wave of layoff notice recipients, let us know how you fared.

From colleague Andrew McIntosh's report in today's Bee on CalPERS' board member Charles Valdes:

... his campaign account is being scrutinized by the Fair Political Practices Commission's enforcement arm after a state auditor raised issues during a mandatory review, FPPC Executive Director Roman Porter said.

The campaign account "is now under investigation. I anticipate it being concluded soon," Porter told The Bee, refusing to say anything more.

Valdes did not return repeated calls for comment.

Click here to read the story. We've also added it to our "Recommended Links" list on the right side of this page.

IMAGE: Charles Valdes, 2005 / Sacramento Bee, John Decker

UPDATE at 6:20 p.m.: Bee colleague Dale Kasler filed a quick CalPERS post on his Home Front blog a while ago. Click here to read it.

UPDATE at 5:20 p.m.: Click here to see CalPERS CEO Anne Stausboll's e-mail to fund staff. Unlike the press release, Stausboll calls the court action a "lawsuit," and that, "CalPERS is seeking relief from the furloughs and salary reductions for CalPERS employees."

This won't come as a surprise to TSW users who have been following our coverage of CalPERS and its shifting position on furloughs over the last month:

Title: CalPERS Takes Legal Action on Furloughs
Date: 8/19/2009 4:07:02 PM

PRESS STATEMENT

CalPERS Takes Legal Action on Furloughs
SACRAMENTO, CA - The California Public Employees' Retirement System (CalPERS) today filed legal action in Superior Court in San Francisco seeking judicial review of the applicability of the state's furlough program to the pension fund. CalPERS Board President Rob Feckner, noting that the savings created from the CalPERS furloughs do not accrue to the General Fund of the state of California, issued the following statement in connection with the lawsuit:

"State law does not permit general fund budget problems to jeopardize the financial soundness of CalPERS or the benefits that we are obligated to pay retirees. Further, the furlough is inhibiting our ability to provide services to our members and to meet our contractual responsibilities to local employers."

Click here to read the rest of the CalPERS release. Colleague Dale Kasler is writing a story for tomorrow's fiber and cyber Bee. Watch for it.

The Board of Equalization has put out the call for volunteers willing to take some unpaid days off to help with up to $55 million in budget cuts. The board has already told students, retired annuitants and permanent intermittent employees that they'll be let go by the end of this month.

And now, according an e-mail sent today to all BOE staff by Executive Director Ramon J. Hirsig, layoffs could be next:

We are doing everything possible to make reductions so that employees will not be personally impacted any more than necessary. But because the State's fiscal challenges will not be corrected any time soon, and because the reductions will likely continue into the foreseeable future, it is likely to be necessary for the BOE to issue SROA notices to possibly hundreds of BOE employees following Board discussion on the subject at the August 31 meeting.

The BOE, along with other constitutional officers, hasn't furloughed its workers, despite a Sacramento Superior Court ruling that they're subject to Gov. Arnold Schwarzenegger's executive order. The constitutionals have appealed that decision to Sacramento's Third District Court.

Click here to read the e-mail that went to all BOE staff today and was confirmed by board spokeswoman Anita Gore.

The Association of California State Supervisors , which advocates on behalf of exempt employees, is reporting on its blog that State Compensation Insurance Fund wants to get a court to exempt all of its workers from furloughs.

Click here to read the ACSS report.

If Wednesday's letter from the governor wasn't enough, the director of the Department of Personnel Administration sent a note Thursday to remind the Unemployment Insurance Appeals Board to clear a backlog of more than 80,000 cases.

Read the DPA letter by clicking here.

It details how a self-directed furlough plan should be used.

For some background, read the blog entry or story in the paper. Basically, more than 200 administrative law judges hear and give opinions on about 25 cases a week. As pressure mounts to clear the backlog, judges worry about the compromise between being more efficient and not giving a case the full attention it deserves.

The Los Angeles Times reported this week that the Unemployment Insurance Board is dealing with a backlog of more than 82,500 cases of Californians who have appeals pending on their eligibility for checks.

Gov. Arnold Schwarzenegger's office sent us a letter he sent to the board late last night, urging them to be more efficient:

The Board's current backlog and resulting delay in resolving claims make it abundantly clear that these practices have not functioned in a manner that promotes the public's interests.  Allowing administrative law judges to work from their homes unreasonably restricts the type of work they are able to perform and renders them unavailable to respond to unemployed workers trying to resolve their claims.  Similarly, the artificial limitation on the number of cases which the administrative law judges may be assigned during a week deprives the Board of its ability to hear and resolve appeals or explore alternative scheduling processes that may yield greater efficiencies. 

He's asking them to eliminate the cap on their number of cases per work week and to stop working from home.

Read the press release and the letter by clicking here.

Gov. Arnold Schwarzenegger won't use add a furlough day to partly make up for $1.1 billion in revenues rejected last week by the Assembly. Click here for Bee Capitol Bureau colleague Kevin Yamamura's report.

The California Association of Professional Scientists has filed a lawsuit seeking a furlough exemption for its members who are "paid entirely or partly through Special Funds and/or other non-General Fund monies."

Click here to read the CAPS brief, which was filed this afternoon in San Francisco Superior Court, where a judge recently handed Gov. Arnold Schwarzenegger his first furlough court loss. SEIU Local 1000 has another furlough lawsuit pending in the same court.

We wouldn't be surprised if the Schwarzenegger administration argues that the case should be moved to Sacramento Superior Court, where a judge's January 29 ruling cleared the way for the governor to furlough state workers.

The California Faculty Association is reporting that its members have voted to take a 2-day-per-month furlough for the 2009-10 academic year. Of the 8,800 CFA members voting, 54 percent voted "yes" and 46 percent voted "no."

The affirmative vote is a win for CSU Chancellor Charles Reed, who wanted furloughs but faced early faculty opposition to the idea.

Click here to read the CFA bulletin with more details.

IMAGE: Charles Reed / www.csu.edu

Professional Engineers in California Government has filed a grievance with the Department of Personnel Administration over PML 2009-029, which called for most state workers to take three unpaid days off each month. The union claims that the furlough violates its Memorandum of Understanding.

You can click this link to view PECG Executive Director Bruce Blanning's letter to DPA Labor Relations Officer Jacquelyn Sanders, asking for an expedited response to the grievance. The PDF file also includes the contract grievance filing and the union's grievance statement.

Gov. Arnold Schwarzenegger is prepared to cut another 2,000 jobs from the general fund, state officials told state employee union and exempt employee association leaders in a conference call this morning. The cuts could be part of a deal that must close the state's $26.3 billion fiscal gap, which widens by $25 million each day lawmakers fail to enact a budget.

"The budget reforms and program savings being discussed in the budget require us to be prepared to implement in order to realize those savings," said Lynelle Jolley, spokeswoman for the Department of Personnel Administration.

DPA informed the employee groups of the possible layoff order this morning during a 9 a.m. conference call, Jolley said. Departments have until July 20 to report their how many vacant positions they'll permanantly eliminate toward reduction targets that the administration will set. Officials will then decide how many filled positions need to be cut.

This would be the third round of layoff warning notices issued by the administration, each time with the intent of eliminating jobs in the state's strapped general fund. In February, Schwarzenegger ordered 28,000 sent out to the least senior 10 percent of the state's employees. He ordered another 5,000 notices sent out in May.

It's not clear that any government workers have lost their jobs, however, because the state allows employees given a layoff warning to seek jobs elsewhere in the bureaucracy. About 6,500 of the 28,000 state workers who were given a warning in February moved into non-general fund jobs, according to the administration. It doesn't have similar figures for impact of the May layoff warnings, nor projections for the 2,000 warnings that might be issued.

Approximately 100,000 state workers are employed in general fund departments, the vast majority of them in the state's prison and parole department and in public health. Employee compensation makes up about 10 percent of the $85.8 billion general fund, an amount equal to roughly one-third of the current budget deficit.

The State Worker has received a copy of a letter to Gov. Arnold Schwarzenegger from Yvonne Walker, president of Service Employees International Union Local 1000.

These two paragraphs capture the essence of the letter:

Governor, we've sacrificed. And we've now reached our limit. We cannot and will not allow you to use us as pawns in your political power game.

When we negotiated one furlough day monthly, a wage freeze, and other cost saving changes, we were standing up for state services. While we will continue to battle for quality public services, we are now standing up for ourselves as well. We will fight for a common sense budget that combines cuts and revenues to maintain our quality of life, both now and for generations to come.

Click here to read the letter.

Walker doesn't spell out what "fight" means, but the letter is consistent with her Thursday online address to members, which we reported in this blog post.

But that address, like the letter, stopped short of announcing a formal strike polling of members. That could come as early as Monday, union sources now tell us, if Local 1000 leaders in the field signal that they believe that the rank-and-file is angry enough to vote for a walkout.

You can view the text of the speech by clicking here.

Local 1000 spokesman Jim Zamora provided that text after he confirmed the authenticity of Walker's letter to Schwarzenegger.

In an address to members on the union's Web site, SEIU Local 1000 President Yvonne Walker says that the local's leadership " voted to authorize concerted actions, up to and including a strike, if necessary."

So what's next? Walker says that union officials "will be going out to all areas throughout the state so that you the members can affirm what the Local 1000 council has authorized."

Walker's anger is palpable but restrained on the video as she lays out the union's list of grievances with Gov. Arnold Schwarzenegger. Among them: The union's contract deal -- which includes some concessions -- now stalled by Republicans in the Legislature, furlough orders that the union is fighting in court, private vendor contract policies that Walker says are wasteful and the governor's "relentless assault" on state workers.

"Every day I get calls from people who can't pay their bills and have to decide between buying groceries and paying for their medication," Walker says. "People are in tears saying they can't afford their mortgages or their rent."

View the video on the union's Channel 1000 Web site by clicking here. Walkers remarks about the union leadership's decision start at around the 5 minute 20 second mark.

Several readers have forwarded copies of an e-mail -- see below --  that is making the rounds of state offices like a lightning strike this afternoon.

Readers are asking The State Worker if it's true that they can get unemployment insurance when the third furlough day kicks in later this month. 

The answer is: We're not sure.  And as with all things UI related, it's complicated.

Loree Levy, spokeswoman for the Employment Development Department, said her people are aware of the e-mail circulating among state departments, agencies and commissions.

"We are working up a response now.  The additional furlough day is a new development, and we're trying to quickly assess what it might mean in terms of the UI program," Levy told us in a speedy e-mail reply.

"I hope to be able to get you something a little later in the afternoon, in about an hour or so," Levy added, saying the e-mail wasn't written by EDD officials but the link to the form is genuine.

Check back later and we'll tell you what we find out. 

Here's the e-mail that's making the rounds. 

Subject: Can State Employees Really Apply for Unemployment Because of Furloughs?

Dear State Employee:  If a person works permanent full-time, the law states that he or she can apply for unemployment benefits if his or her working hours are cut by more than 10%. The way to do this is to fill out the form on the site below, and forward it to your personnel department. From personnel, it will go to EDD and then to the feds. Fill out your name and SSN at the top of the page and answer the questions at the bottom. Question A should be the only one for most of you, to which you should answer "yes due to furlough cuts". Please send this to others who may be interested as well.

http://www.edd.ca.gov/pdf_pub_ctr/de2063.pdf

The Professional Engineers in California Government say they're preparing a legal challenge to stop the Schwarzenegger administration from imposing a third furlough day a month on its members during the budget crisis.

PECG spokeswoman Lisa-Marie Burcar said union officials aren't yet sure what form the legal challenge will take - lawsuit, grievance or some kind of arbitration.

But the union representing engineers said a third furlough day will stall government  infrastructure projects needed to create jobs and bolster California's economy.

"Telling people to stay home a third day a month slows economic recovery," PECG president Mark Sheahan said in a statement announcing the lawsuit.

Sheahan expressed concern that with state engineers furloughed three days a month, work may have to be outsourced to private companies "at more than twice the cost."

 "This executive order mandates the waste that the governor says he wants to eliminate,"  Sheahan added.

Sheahan noted that 95 percent of PECG's members are paid through special funds, such as the gas tax, federal funds, and other sources - not the general fund.

"Cutting our pay won't help the general fund, but it will cost the taxpayers more than twice as much (if the state has to outsource)," Sheahan added.

PECG's prior lawsuit and grievance to stop the Schwarzenegger administration's initial two-day furloughs are working their way through the courts and administrative process.

Prior posts about the ongoing legal dispute can be read by clicking here  and  here.

Meg Whitman, the Republican gubernatorial candidate, is on a swing through the Bakersfield area, fundraising and giving interviews to at least some newspapers.

On Wednesday, the former chief executive officer of eBay Inc. chatted with reporters and editors from The Bakersfield Californian.

You will recall that Whitman has told separate crowds in Orange County and Roseville that she would cut 30,000 state jobs, but offered little detail.

Now, she's elaborated on her plan - even as thousands of Service Employee International Union workers descend on the Capitol today for a lunchtime rally to protest budget and service cuts the state must make to cut its deficit.

Whitman's target? Middle-management, judging by her remarks.

"I would streamline the number of bureaucrats who work in the government. There's at least 17,000 mid-level bureaucrats that, I think, need to go because we have a government we cannot afford," Whitman told The Californian.

To see Whitman's more detailed Q & A with the newspaper, conducted at the Grimmway Farms carrot processing facility in Arvin, southeast of Bakersfield, click right here.

So folks, what do you think? Our bet is that state service would be badly damaged by reductions of that magnitude.  But we'd like to hear your views. 

What would you tell Whitman about her plan?

California State University Chancellor Charles B. Reed is publicly pressing leaders of the California Faculty Association to let members of their union vote on a proposal to take two furlough days a month as part of $584 million in budget cuts.

In a statement posted on CSU's web site, Reed said his officials have met with the faculty union three times to discuss furloughs.

But CFA has yet to schedule anything so members can vote on the proposal. 

Reed appears to be getting impatient with CFA, judging by a message he posted on CSU's Web site, which you can read in its entirety by clicking here.

"We have provided answers to the questions posed by the CFA during our last meeting, and are urging them to present the furlough option to their members for a vote. We need to move forward to address the massive budget cuts that the system is facing before the impacts are magnified," Reed said.

"The CSU is facing an unprecedented crisis and it will take cooperation and shared sacrifice from all of us to get through this next fiscal year and beyond," Reed added.

There are about 23,000 faculty members in the CSU.

CSU said it proposed furloughs to all of its labor unions as a way to address an anticipated $584 million cut, or 13 percent reduction, to CSU's 2009-10 budget.

If adopted by all the unions, furloughs could cut CSU's salary expenditures by about $275 million. CSU said it's eying other spending cuts to cover the rest of the budget gap.

Collective bargaining agreements between the CSU and its employee unions include provisions covering mandated non-retention and layoffs, but not furloughs. Each bargaining unit, therefore, must agree to negotiate furloughs, Reed said.

So far, only two --the California State University Employees Union (CSUEU) representing 16,000 non-academic employees and the Academic Professionals of California (APC) representing 2,400 student service employees-- have agreed to talk furloughs.

Reed's putting his money where his mouth is: on June 5, he already introduced a series of changes to CSU regulations that could pave the way for furloughs and salary reductions among CSU management and executive personnel.

To see the proposed regulations for executive furloughs, click here. 

IMAGE: Chancellor Charles B. Reed, California State University Photo

It's the annual memo that can be a budget maker or a breaker for some state managers.

We're talking about the Department of General Services missive in which officials reveal what each department and agency will pay for their car and truck insurance in the next year.

The state self-insures all its vehicles, ranging from California Highway Patrol cruisers and sports utility vehicles to CalTrans trucks to the state university system's cars.

Last year, premium assessments dropped, due to fewer crashes and more driver safety education classing delivering dividends.

This year, assessments are up 13 percent to a total of $16.97 million from $15 million.

"It was necessary for DGS to raise the 2009/2010 assessment due to increased claim costs," reads the memo from General Services director Will Bush.

If you want to read which department or agency is paying what next fiscal year, and how that compares to what they paid last year, click here:  DGS Insurance Memo.pdf

If you've been toiling away in the aging and decrepit California Lottery Commission headquarters for years, The State Worker has some good news for you.

The California Lottery Commission today approved plans to award a contract not to exceed $53.7 million to Otto Construction.  It will build a new six-story 155,500 square foot home for the commission on Richards Boulevard in Sacramento.

 Commissioners also set aside an extra $9.1 million for unexpected contingencies and another $1 million for potential cost escalation during the life of the project.

 To see a lottery commission report about the headquarters project,  click here.

 Building the new headquarters may create as many as 900 construction jobs, offering some badly needed good news for the capital's battered economy.

 Yet some may wonder how the commission secured a new headquarters when most other state agencies and departments are laying off workers and slashing budgets?

 Lottery commission spokesman Bill Ainsworth has the answer. 

 The commission was created by a voter-approved state law in 1984. It operates like a business - and its money is kept separate from the state's general fund revenue.

 The law requires that at least 34% percent of the lottery's revenue go to public education.

Because it is costing more and more to maintain the old building, lottery officials decided they'd save money - and have more to return to education over the long term - by building a new headquarters that is far more energy efficient, Ainsworth added.

Officials explored renovating the old building, but its foundation is literally sinking.

"After careful analysis, we decided we just couldn't do nothing," Ainsworth said. "If you're running a business like we do, you look at investing over the long-term. Over the long term, we'll have more money to return to public education by lowering costs."

 "It's also a good time to be building. You can negotiate better deals with builders because there's not a lot of work going on out there right now," Ainsworth added.

If the commission and Otto Construction cannot reach a deal on a final contract, the commission also approved a back-up list of three other builders.

Think things are grim for state workers here in California?

There's fear and anxiety across the country, my state worker friends.

Consider this week's events in Michigan, Wisconsin, Florida and Nevada.

In Michigan, about 300 state employees face layoffs - including 100 State Police troopers - and most state workers will take six unpaid days off before October under a $300 million budget-cutting plan approved by lawmakers, The Detroit Free Press reports.

In Florida, that state's budget is calling for another year of wage freezes. For some state workers, it will actually mean 2 percent pay cuts.

Tensions are growing as workers watched food and utility bills and the price of their commutes all go up, The Orlando Sentinel reports.

In Wisconsin, it's even a little worse.

Up to 1,100 state workers could be laid off and most state workers would be forced to take 16 days of unpaid leave under a budget-balancing plan outlined Thursday by Gov. Jim Doyle, The Associated Press reports in The Chippewa Herald.

Local TV is already soaking up the anger. Click here to watch a local TV report.

In Nevada, state workers will get one furlough day a month. That's equal to a 4 percent pay cut, The Las Vegas Sun reports.  Read that story by clicking here.

Lynn Vilain, a ranking SEIU district official, took aim at Assemblyman Roger Niello, R-Fair Oaks, in an email she fired off this week.

She wrote the missive after Niello led efforts to delay passing a bill needed to enshrine the SEIU' s new collective agreement with the Schwarzenegger administration.

In a post this week, we told you how Niello urged fellow Assembly members to defeat or abstain from voting on the bill, AB 964, until after the special election.

Niello said he wanted to see whether voters would pass or defeat the six special election measures later this month that aim to cut the state' budget gap, adding that legislators would have a better grasp of the state's finances by then.

Vilain is an SEIU Local 1000 district official and was one of the folks on the ground charged with selling the contract to state workers.

Here's her email, unedited:

Jim Zamora, SEIU, Local 1000 spokesman, just released the union's take on today's Republican refusal to vote for AB-964 in the Assembly.

 That's the bill that would put the recently reached collective agreement with the Schwarzenegger administration into law.

It's a prepared statement from Yvonne Walker, Local 1000 President, who said:

"How could 29 Republican legislators refuse to support a bill that saves the state so much money? This bill will save the state $340 million and could lead to nearly $1 billion in savings if applied to all state workers," Walker wrote.

 "We negotiated this contract with the governor in good faith to help close the budget shortfall. More than 90 percent of our members voted to ratify this agreement. Once again, Republicans failed to do their jobs."

SEIU, Local 1000, the largest state worker union, says it is now is asking thousands of state workers in nine Republican districts, including residents of Assemblyman Roger Niello's Fair Oaks district, to push their elected representatives to support the bill.

Assembly Speaker Karen Bass issued her own statement:

Former state finance director Jesse Huff has been named chief deputy insurance commissioner effective June 1, state Insurance czar Steve Poizner said Monday.

Huff will replace outgoing chief deputy Jim Richardson, who is leaving the state bureaucracy  to take a job as president of The Dentists' Insurance Company.

 

Huff has worked as a deputy commissioner for Poizner since January 2007 and was a director of  the Department of Finance for Governor Deukmejian.  He's also has had various jobs serving the California Legislature.

Republican Assemblyman Roger Niello urged his peers in the state Assembly today to either abstain or vote against a bill that would ratify the Schwarzenegger administration's contract agreement with the Service Employees Union, Local 1000.

Prior to a late morning vote, Niello, R-Fair Oaks, told the Assembly he felt it was "awfully inappropriate" for legislators to approve the SEIU contract before California voters themselves actually  vote on six different ballot propositions to close the state's budget deficit in the May 19 special election.

"It can wait until June or after," Niello told the Assembly.  "We should not preempt the voters by dealing with this issue today."

Members of the Assembly then voted 50 to 14 to support passage of the bill, a result that left it four votes short to earn the required two-thirds majority. 

But the vote remains open so SEIU and its supporters can still muster extra votes. 

Assemblyman Ed. Hernandez, D-West Covina, said he understood the arguments advanced by Niello, but he added that the state made a deal with SEIU members which it must now honor by passing AB-964 in the legislature. 

Hernandez said union members agreed to numerous concessions for the next 17 months, including furloughs, to save taxpayers more than $900,000.  Legislators  have a duty to pass legislation that paves the way for those measures, the Democrat said.

Members of the Assembly then voted 50 to 14 to support passage of the bill, a result that left it four votes short to earn the required two thirds majority. 

But the vote remains open so SEIU and its supporters can still muster extra votes. 

Stay tuned.  We'll update you as soon as we get the final vote.

The Department of General Services has told state departments and agencies that its procurement managers now have contracts in place to obtain supplies that may be needed to help manage the recent outbreak of the swine flu virus.

Agencies can acquire items like N-95 respirators, antiviral drugs, blankets, cots, and disinfectants under several different state commodity contracts now in place.

The contracts aim to help agencies prepare for or treat patients infected with H1N1, Gregory Doe, a DGS pharmaceutical program consultant., said in an email this week.

1.      Antiviral Drug Supply Contracts - Purchases through these contracts are restricted to pandemic influenza bulk pharmaceuticals and are to be dispensed should a Pandemic Alert Period or Pandemic Period be declared by federal or State pandemic influenza-specific public health emergency declarations.

·  Tamiflu® - State Contract No. 1-08-65-60

·  Relenza® - State Contract  No. 1-08-65-61

       The Bulk Pharmaceutical Distribution Agreement is with AmerisourceBergen Drug Company - Agreement No. 1S-05-65-50.

2.    Medical Supplies, Services and Equipment The state's agreement is with McKesson Medical Surgical - Agreement No. 1-08-65-65-01.

3.    Gloves, N95 respirators and disinfectant products - Agreement No. 1S-06-84-01 (Empire Safety & Supply has stock in Roseville.)

4.   Janitorial supply/disinfection products - Agreement No. 1S-06-79-55

To read copies of DGS e-mails on swine flu contracts, click here and click here.

The California Foundation for Fiscal Responsibility (CFFR) today put on the Web a list of nearly 5,000 retired state and municipal workers who are collecting $100,000 a year or more in pension money from the California Public Employees Retirement System.

The CFFR database of 4,818 names is available in a searchable format here.

Dubbed "The CalPERS $100,000 Pension Club," its home page features a list of the top 10 pensioners getting the most from CalPERS.

Bruce Malkenhorst, a municipal government retiree from Vernon in Southern California,heads the list with an annual pension of $499,674. For more on him, see this 2007 report in Forbes Magazine.

Donald Gerth, the former president of California State University, Sacramento, ranks third in the list with a cool $278,054 annual pension. ( Yes, that's his pension.)

"We feel it's time for transparency on this issue," said CFFR vice-president Marcia Fritz.
"In the current economic climate, it's important that taxpayers know what kind of pensions our public employees are receiving and what the budget implications will be."

CFFR was founded in 2007 by Keith Richman, a former LA County Republican assemblyman.

Richman says the foundation's sole purpose is to highlight  the skyrocketing costs of public employee retirements.

"If we don't do something soon there may be several government entities that go bankrupt, and those that don't are going to die from a thousand cuts in services,"  Richman said in his group's news release.  

CFFR says it obtained its list from CalPERS under the state's Public Records Act.

CFFR, a non-profit political organization, says it's committed to educating the public and key decision makers about California public employee retirement benefit issues. The group believes that managing pension and retiree health care benefits promised to public employees is "the most critical public finance issue of this decade."

Many state workers were upset when The Bee  first published a list of state worker salaries. Others celebrated the transparency effort.  It will be very interesting to see what kind of reaction CFFR gets with this effort.

Never again, says Department of General Services Director Will Bush.

Bush has released a response to State Auditor Elaine Howle's report on a leasing deal - signed long before he joined the department - that saw DGS and the Department Corrections and Rehabilitation squander $580,000 on rented office space in San Diego that stayed vacant for four years.

"This is not the kind of efficiency in state government that everyone has a right to expect," Bush said in his statement, which is posted on the DGS Web site. 

"I am committed to improving our leasing program so that this never occurs again."

"I have directed our internal auditor to independently review the DGS leasing portfolio, our processes and procedures for inefficiencies and to recommend improvements to our systems to prevent taxpayer money from being wasted," Bush added.

Bush says that over the past few years, DGS has taken a number of what he described as "tangible steps" to improve the department's leasing programs:

• Hired 15 new space planners to reduce leasing workload backlog.
• Converted the older manual paper process for tracking leasing activities to an online system.
• Implemented a single intake office for all real estate move and change requests.
• Developed clear policies and procedures for disagreements with landlords including specific time periods for dispute escalation to management.
• Expanded the authority for the director of DGS to direct state agencies to use state-owned space, rather than leased space from the private sector.
  

The Schwarzenegger administration has fired up a new Web site, www.reportingtransparency.ca.gov, that links to economic interest statements and travel expense forms filled out by officials in the governor's office, all agency secretaries and undersecretaries and all department directors.

Schwarzenegger ordered the the forms posted online starting this month after reports surfaced that top administration officials may have abused their expense accounts and, in one instance, took tens of thousands of dollars in speaking fees in defiance of administration policy and possibly state law.

You can read the governor's press release about the new Web site by clicking here.

Between 250 and 300 employees at the state Board of Equalization have been put on paid administrative leave for at least a week - and possibly longer - after yet another burst water pipe at the tax collection agency's downtown headquarters.

The latest trouble at the 450 N St. office tower began Sunday.

A hot water pipe failed while General Services officials were working on it and it gushed water onto several floors below, BOE spokeswoman Anita Gore said.

When Department of General Services staff started to repair the damage caused by what the BOE's director described as a "water event," they discovered mold on the first floor near the BOE's history room. That museum-like area is open to the public.

More mold was found on floors 2, 3, 6 and 7 at water damaged areas on the hallway side of the northwest stairwell in the building.

The BOE headquarters has been plagued by water seepage and mold trouble and litigation involving employees who claim they've been made sick by the mold.

A water hose failed on the building's 11th floor about a year ago and that floor has been closed ever since, Gore said.

The building's 22nd, 23rd, and 24th floors also have been closed for almost two years because of mold removal and remediation work, Gore said.

The new moldy areas have been taped over, closed and contained by DGS until more mold busting work and remediation steps can be taken to address trouble spots.

 BOE consultant, Hygiene Tech, along with DGS consultants will continue testing at suspect locations and air quality throughout the building, the BOE told staff in a memo.

Gore said an estimated 60 BOE workers have resumed working today after taking Monday and Tuesday off, thanks to telecommuting arrangements and supplying them alternative work stations so they can perform their duties.

"We bring in more than $53 billion in revenue a year and that work has to continue, especially in these hard times," Gore said.

Three tax units affected have taken steps to ensure their public services are not interrupted, Gore said, and BOE is in the market for at least some new office space.

In the aftermath of the the worst wildfire season in California in decades, the California Department of Forestry and Fire has been forced to pull the plug on a popular annual event for its statewide aviation firefighting team.

The 2009 aviation safety conference - held each spring before things heat up on the wildfire fighting front - has been canceled because there's no budget to pay for it, according to Tom Humann, the chief aviation safety officer at Cal-Fire.

Humann announced the news in a private e-mail he sent to air base battalion chiefs and staff at the department's airplane and helicopter operations statewide in late January.

"Despite the efforts of our chief officers to make this important event possible, there is simply no funding available," Humann wrote in the email, which was obtained by The State Worker under the Public Records Act.

"I am fully aware there is no substitute for the group dynamic of our conference," Humann added.  "Further it means  the loss of valuable presentations from subject matter experts from outside CAL-FIRE."

Humann promised he would work with chiefs in the field to develop "alternate means of getting the information out and soliciting feedback on safety issues."

Janet Upton, a CAL-FIRE spokeswoman, confirmed the air safety conference has been axed due to the state budget deficit. Other conferences have been nixed, too, she said.
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Upton said Humann has continued to gather safety information while attending safety gatherings. He's disseminating the information he picks up to others in the aviation team.

"So, instead of having 70 people travel, he's hitting the road," Upton explained Tuesday, noting that Humann is making site visits and doing smaller group discussions to ensure that safety remains a top priority.

From The Bee's Kevin Yamamura:

Democratic State Controller John Chiang said Wednesday he will refuse to reduce state worker pay as demanded by Gov. Arnold Schwarzenegger, possibly sparing more than 200,000 public employees from furloughs and pay cuts.

The move by Chiang, who is responsible for issuing state payroll, could require the Republican governor to obtain a court order to implement his twice monthly furlough plan.

Chiang filed documents Tuesday afternoon in Sacramento Superior Court arguing that the governor's plan is illegal.

"California law is clear that only the Legislature has ultimate authority over setting state employee salaries," Chiang said. "While I agree with the Governor that State employees - like all Californians - must tighten their belts, it must be done so in a manner that is consistent with the rule of law."

You can read Chiang's court filing here and the SCO's press release by clicking here.

Check back here for more from The Bee on this developing story.

The powerful union representing 30,000 correctional peace officers statewide has joined the  battle to torpedo Gov. Arnold Schwarzenegger's furlough and 10 percent pay cut plan.

Three San Francisco lawyers for the California Correctional Peace Officers Association have filed their own case against the state, the governor and the Department of Personnel Administration in Sacramento County Superior Court.

Lawyers Gregg Adam, Jonathan Yank and Jennifer Stoughton say in court documents filed earlier this week that the furlough and pay cut moves are illegal, unconstitutional and must be stopped by the court.

The union says its members pay cannot be cut without prior approval of the legislature and that has not occurred.

The union's complaint likely will be steered to the desk of Judge Patrick Marlette.

Marlette is already hearing similar cases filed by the state engineers and scientists and the Service Employees International Union, Local 1000, later this month.

Read the California Correctional Peace Officers' Association legal complaint here.

Everyone is hoping they'll never actually be needed.

But in case state Controller John Chiang really does run out of cash and the state is forced to issue IOUs - it calls them  "registered warrants" -  to pay state workers and vendors, his office has created a special working group to get ready.

Chiang warned of a looming state cash shortage in December, telling state departments to prepare for the worst.  He's doing exactly that himself.

The controller has joined several financial industry groups representing credit unions and major and independent banks. Together, they're working to identify and work out any issues or problems that might be anticipated with floating IOUs  before they start circulating, Chiang spokesman Jacob Roper told The State Worker.

"That includes a very serious look at security measures," Roper added.

Beth Mills, a spokeswoman for the California Bankers Association, told The State Worker individual banks haven't decided yet whether they will accept the state IOU's or not.

Mills said the working group met privately with Chiang's staff last week and the bankers had many questions that required "technical clarifications."

"It's not as easy as the state issuing a warrant and a person takes it into a bank and cashing it," Mills said. "We need to know more about how many warrants we're talking about, the volume, and how much money is involved."

Mills said CBA is hoping for answers this week.  Roper said conversations are ongoing.
 

An employee of the Department of Insurance who opened a package on Capitol Mall this morning came into contact with an unknown substance and became sick.

The unidentified woman was taken to a local hospital by her supervisor, Sacramento City Fire Department spokesman Mike Doucette said.

The room where she opened the package was closed and the surrounding area was evacuated.

Sacramento Fire Hazardous Materials personnel subsequently entered the room and removed the package for testing.

Tests failed to identify a toxic or hazardous substance, Doucette said, but two California Highway Patrol Officers who touched the package were also taken to hospital as a precaution.

Just in:

Gov. Arnold Schwarzenegger's administration is telling labor unions that it will order two-day-a-month unpaid furloughs for state employees beginning in February to help the state save cash amid its budget crisis.

Bruce Blanning, executive director of the Professional Engineers in California Government, said he received a call this morning from Department of Personnel Administration officials informing the union of the impending executive order.

Read the story

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