Costa Mesa’s ongoing efforts to outsource numerous public services has been dealt another speed bump by the Fourth District Court of Appeals, even as it was shown the way forward in the same court opinion.

In an opinion issued on Friday, August 17, the judges on the Fourth Court of Appeals sided with a lower court’s decision to place a preliminary injunction on the city’s plan to shift as many as 18 municipal services to contractors – be they other public agencies or private corporations. The injunction was granted after the city sent layoff notices to more than 100 employees.

While those layoff notices were not final – and included language that said that the layoffs were contingent upon outsourcing and could be later rescinded – the court found that the potential for harm to the employees was sufficient to block the layoffs from preceding until larger contractual and constitutional questions could be answered.

The Fourth DCA’s opinion went on, however, to say that the preliminary injunction did not prevent the city from issuing RFP’s, receiving bids, or “assessing whether outsourcing is a prudent course of action” for city services.

“This would lay the groundwork for the City’s outsourcing plan, even though the trial court’s injunction presently prohibits the City from consummating any outsourcing contracts[.]”

“The ruling was very good for the city,” said Costa Mesa Mayor Pro Tem Jim Righeimer in an email on Tuesday.

According to Righeimer, the opinion essentially gave the city a road map on how to outsource services, should the City receive bids for services that result in cost savings.

The opinion was not entirely good news for the city. Part of the opinion found that there is a reasonable chance that the lawsuit by the Costa Mesa City Employee Association, which prompted the preliminary injunction, would prevail in court.

Their case involves two separate challenges to the City’s actions: both a contractual issue relating to a standing MOU, and a constitutional issue.

In the former, the Court found that, “[T]here is no evidence the City included CMCEA in the decision-making process that led to the City’s outsourcing plan, the MOU provides a basis for CMCEA’s lawsuit and indicates “some possibility” of success on its contract claim.”

The latter, in the constitutional issue, a ‘special services’ statute in the State Code requires that general law cities only have the authority to outsource special services to other public agencies, not private organizations.

“Hopefully the City Council majority sees this as yet another signal that they should stop making taxpayers foot the bill to advance their politically motivated agenda,” said Jennifer Muir, Assistant General Manager for the Orange County Employees Association, which represents CMCEA employees. “This is a big win for Costa Mesa taxpayers. The justice system has repeatedly exposed the Council majority’s misguided agenda during the past two years and did it again today with this decision.”