Opinion ID: 1224847
Heading Depth: 2
Heading Rank: 6

Heading: The Present Order

Text: In September 1993, after the Legislature passed Chapter 433 amending and adding to section 14130 et seq., Caltrans took the position that these changes undermined the trial court's injunction and related orders and justified their dissolution. Accordingly, as the trial court found in its April 19, 1994, order, Caltrans altered its contract projections for fiscal year 1993-1994 and issued new guidelines revising its earlier plan to minimize its private contracting. Caltrans identified substantial amounts of seismic retrofitting work and reimbursed work for local agencies as eligible for private contracting in fiscal year 1993-1994. Caltrans froze the hiring of new employees, began to terminate limited term appointments, and called for a 50 percent reduction in temporary help to eliminate an assumed overstaffed condition. Plaintiffs, contending that Chapter 433 did not authorize Caltrans's scheduled contracting, sought an order holding Caltrans in contempt for violating the 1990 injunction. Caltrans, relying on the new provisions, asked the court to dissolve the injunction. Following briefing and argument, on April 19, 1994, the court issued its decision declining to modify or dissolve the injunction, which remains in full force. After summarizing the prior proceedings and relevant events, the court found that Caltrans's existing and planned contracts for fiscal year 1993-1994 violated the 1990 injunction in three ways. First, Caltrans failed to justify these contracts by making a factual showing based on the criteria in former section 14130 et seq., as the injunction required. Instead, Caltrans relied solely on the new legislative findings characterizing seismic retrofitting as short-term work subject to private contracting (see new งง 14130, subd. (a)(3), 14130.1, subd. (b)), on legislative directions that Caltrans not consider locally funded work in determining staffing needs (ง 14130.2, subd. (a)(2)), and on legislative encouragement of timely private contracting for state highway projects to generate maximum employment and business opportunities (ง 14130, subd. (a)(1)). Second, the court found that, in any event, the type and amount of project development work Caltrans contracted for 1993-1994 did not correspond to that which the new provisions authorized because it fell outside the seismic retrofitting and locally funded project categories. The court also found that Caltrans made no attempt to show these contracts satisfied the criteria for private contracting listed in section 14130. Third, the court found that Caltrans's revised plan for contracting activity during 1993-1994 was contributing to the displacement of permanent, temporary, and part-time civil service staff. Caltrans claimed this staff reduction was needed to avoid a budget shortfall, but it was really attributable to Caltrans's preference for private contracting. In summary, the court found that Caltrans was violating the 1990 injunction by contracting with private entities without factually demonstrating that it had met the statutory criteria for doing so. According to the court, Caltrans was displacing civil service staff from project development work that staff had historically performed and was maintaining staff at an inadequate level to create an artificial need for private contracting. The court next considered whether anything in Chapter 433 justified Caltrans's breach of the 1990 injunction. After reviewing the new provisions at length, the court made the following findings and determinations: (1) Contrary to new section 14130, subdivision (a)(5), project development service is not a new state function exempt from the constitutional restriction on private contracting, and using private contractors for project development duplicates existing state agency functions. (See Professional Engineers, supra, 13 Cal. App.4th at pp. 592-593; Williams, supra, 7 Cal. App.3d at pp. 397-399.) State civil service staff has long performed these functions. (2) Contrary to new section 14130, subdivision (a)(4), Caltrans has not demonstrated that, because it must use private contracting to perform project delivery adequately and competently, its actions fall within another exception to the civil service mandate. (See Burum v. State Compensation Ins. Fund, supra, 30 Cal.2d at pp. 579-582; Riley, supra, 9 Cal.2d at p. 135.) Any inability of civil service staff to deliver project workload on time is attributable to Caltrans's policy of inadequate staffing and reliance on private contracting. (3) Contrary to Caltrans's contention, new section 14130.1, characterizing seismic retrofitting services as a short-term workload demand, fails to constitute adequate justification for private contracting because it fails to consider the civil service staff available and obtainable to perform the work. The retrofit program's length is comparable to or longer than many of the highway projects in Caltrans's workload and is similarly subject to unavoidable delays and unanticipated expansion in scope. Thus, merely characterizing work as short-term does not justify using private contractors to perform it. (4) Contrary to Caltrans's contention, new section 14137, directing Caltrans to continue any contracts presently in force or awarded on or before July 1, 1993, is ineffective to override the court's earlier finding that certain contracts with private consultants for work during 1992-1993 did not meet the statutory criteria then in effect (former ง 14130 et seq.). The new section states no facts to establish those contracts were exempt from the constitutional restriction on private contracting. (5) New sections 14130, subdivisions (a)(1) and (d), 14130.2, subdivision (a)(2), and 14130.3, establishing various state policies favoring private contracting, are contrary to the constitutional civil service mandate because they purport to authorize Caltrans to contract privately without regard to whether available civil service staff can timely perform the services. As the court observed, Pursuant to the [new] provisions, [Caltrans] may calculate [its] civil service staffing needs without considering the full workload to be performed, may limit [its] procurement of civil service staff regardless of actual staffing needs or ability to productively use new staff, and [is] required to reinstate contracts for the purpose of fostering employment and business opportunities without regard to the constitutional civil service mandate. As a result, [Caltrans] purposely create[s] a need for `a stable contracting out program' to timely deliver transportation projects, institutionalize the use of contracting in project delivery, and displace civil service employees from the function they have historically performed, in violation of article VII. Thus, the court concluded that Chapter 433's legislative findings and directives are obviously erroneous, unreasonable and inconsistent with the constitutional civil service mandate, and for that reason the provisions are unconstitutional to the extent they purport to authorize Caltrans to contract privately without a factual showing that the contract is permissible under applicable constitutional principles. In its April 19, 1994, order, the court accordingly affirmed its prior 1990 injunction, stating that [t]o the extent that [Caltrans] justif[ies its] contracts with private consultants on the basis of the provisions of Chapter 433 ... instead of a factually supported determination pursuant to ... sections 14131 and 14134, the contracts are invalid and [Caltrans is] in violation of the injunction. (Fn. omitted.)