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San Francisco Superior Court Judge Harold E. Kahn, pictured at a civics training institute for teachers

A San Francisco Superior Court judge mulling public-employee unions’ plea to have Proposition B thrown off the November ballot said on Friday that he may be forced to do a perhaps unprecedented and “extraordinary thing.”  

When he issues his ruling on Monday morning, Superior Court Judge Harold E. Kahn appears poised to throw out one section of Prop. B while allowing the rest of the measure to go to a popular vote in November. Prop. B, which would require greatly increased pension and health care contributions from city employees, was authored by city Public Defender Jeff Adachi.

The section at issue has been dubbed a “poison pill” by the unions, since it would prevent the city from granting wage increases for five years if Prop. B — assuming it passes — is challenged in court. In that scenario, any wage increases would have to be put to a popular vote, which would be a nightmarish process.

Judge Kahn said Friday that the threat of the “poison pill” was “one of the most draconian pieces of legal writing I have ever seen.”

“This is a pretty big sledgehammer,” he said. “Wages would be frozen for the next five years.”

Ripping the “poison pill” out of Prop. B is clearly not an action Kahn takes lightly. City Elections Director John Arntz is not aware of such a thing being done before in San Francsico or elsewhere in the state. The city attorney’s office declined to take a position on the matter.

“It is a First Amendment issue” for public employees to be able to challenge Prop. B in court without fear of a wage freeze, Judge Kahn said. “I recognize what I am inclined to do here is an extraordinary thing. It just seems to me that if ever there was a time to do it, this is it.”

“It is that draconically written, and I don’t think we should” even allow voters to pass it and leave it to a court challenge to settle the matter later, Judge Kahn said. The fear of a wage freeze would almost certainly intimidate city workers from challenging a successful Prop. B after the election. “This violates the First Amendment, the right of access to the courthouse, [about] which I know, Mr. Adachi, you care very deeply.”

Judge Kahn gave Adachi and the Prop. B attorneys until midnight Friday night to e-mail him a brief on the severing of the "poison pill," which is technically Section I of the measure. He said he will issue a ruling on Monday morning. The ruling must be issued by Sept. 1 if the election is to proceed on schedule.

Kahn’s possible amputation of a key provision from a measure already approved for the ballot may be the first time such a thing has been done in San Francisco. Typically, measures with enough signatures to qualify for the ballot are allowed to go to a popular vote, and any legal challenges are handled by the courts post-election. More rarely — and what the unions had hoped to achieve in this case — a judge can prevent the entire measure from appearing on the ballot for a variety of reasons. “The voters of San Francisco should not … be asked to spend time and attention on the initiative,” the unions argued in a court filing that listed what they argue are disqualifying flaws.

Judge Kahn had little patience for the unions’ complaint that Adachi had improperly obscured the fact that a San Francisco accountant named Craig Weber is a proponent of the measure. Weber was a key member of the civil grand jury that in June issued a report warning that pension and benefits costs may eventually bankrupt the city. The unions have treated Weber’s dual role as a major scandal. Weber had cleared his participation with Adachi’s effort beforehand, and offered to resign after City Attorney Dennis Herrera wrote a letter in April to the judge presiding over the civil grand jury to call attention to what Herrera warned could be interpreted as a conflict of interest.

Judge Kahn was not impressed. He said, tactfully, that Weber was not a big enough “name” to have swayed a voter to sign the petition in the spring, and he faulted the unions for not producing a single voter who would not have supported Prop. B had he or she known of Weber’s role on the civil grand jury. “I don’t think there was any intent to mislead” by Adachi, the judge said.

During the court proceeding on Friday, Adachi asked to speak about the intent of Section I after his attorney had trouble articulating an argument to sway the judge. Judge Kahn initially seemed resistant to allow Adachi to address the subject. “What would the intent matter?” he asked. “It’s the effect!”

“The intent is important because Proposition B is about saving our city’s government from a fiscal train wreck,” Adachi said, "with cost savings of between $120 million and $170 million a year." With union attorneys expected on the steps of the courthouse filing a legal challenge to Prop. B, if it passes, at “12:01 a.m. on Nov. 3,” Adachi said, Section I would serve as a mechanism to give the city savings in wages if a legal challenge invalidates the measure's increases in employee contributions for pensions and health care. “What Section I does,” Adachi said, is to “provide a fallback alternative position for the voter to achieve cost savings.”

If Prop. B were to pass with Section I intact, and if the unions subsequently challenged its provisions in court, any public-employee wage increases would then need to be approved by the voters, Adachi told Judge Kahn. In the past, he maintained, the city has quietly handed out raises when public employees have been forced to make other concessions. “Typically, elected officials turn around and give raises,” Adachi said. Section I “prevents elected officials from going behind voters’ backs and not enforcing Prop. B.” Adachi said that is what happened with 2002’s Proposition H, which greatly increased pension benefits for fire and police employees. Voters were told at the time that the fattened pensions wouldn’t cost taxpayers a dime, since the city’s pension fund was then running a large surplus. If the pension fund began running at a defecit — as it has every year since 2004 — Prop. H appeared to promise that the unions would be required to meet every year with city officials to make up all or part of the increased costs of Prop. H.

Prop. H compliance has become a hotly debated issue. Adachi says that the city has not enforced it. In their responses to the June civil grand jury report on pensions, city officials uniformly maintained that Prop. H had been honored in the normal ebb and flow of labor negotiations over the years. City Attorney Dennis Herrera, who announced Friday he is running for mayor, did write in his response to the report that the city should do a better job going forward of meeting with police and fire unions annually to address Prop. H pension costs, and that the process should be more transparent to the public.

Adachi’s assertion that the city, without the check rein of Section I, would eradicate much of the promised cost-savings of Prop. B with sweetened wages actually seems to be the least controversial element of the whole debate.

Union attorney Robin B. Johansen on Friday told Kahn that severing Section I would all but ensure that the city would not save nearly as much as Adachi has promised under Prop. B. It would be “a complete fraud on voters if they are told they will save [$120 million] when they cannot,” she said.

Mayor Gavin Newsom essentially foretold such a dynamic when he spoke at length about Prop. B and pension and benefit issues during a visit to The Bay Citizen's editorial offices on Wednesday. With city human resources chief Micki Callahan at his side, he explained that the city would be forced to offer employees larger salaries going forward to make up for the hits the employees would take if they were forced to contribute more toward pension and health-insurance costs. Increased wages would be necessary for the city to maintain competitive compensation packages and retain talent, he and Callahan indicated.

Adachi notes that unemployment is at nearly double-digit levels in the Bay Area, and says he sees little pressure to increase compensation costs in this environment. If Prop. B passes and as labor contract negotiations come up, the city should be in a strong negotiating position with employees. "Or what... they are going to leave?" he asks. "Good luck with that argument. It's not going to happen. There would be plenty of people [willing] to take those [city] jobs."

Prop. B, Newsom said Wednesday, is “a terrible proposal. [Adachi] never had the decency to talk to the people [Prop. B] is impacting” when he drafted the measure. Now, Newsom said, “Labor will spend a couple of million in dues to stop this” and be unwilling to negotiate constructively with the city going forward. (Asked on Friday, union leader Bob Muscat said that the unions will spend only a fraction of that amount fighting Prop. B.)

“It’s a great political issue for” Adachi, who is thought to be mulling a mayoral run, said Newsom, but “what he did was wrong.”

“We are hoping to defeat this,” Newsom continued. “I don’t like it. I cannot stand it, seriously.”