Pacific Grove police filed a lawsuit against the city alleging unfair labor practices, breach of contract and violation of the city charter and state constitution because of council approval of a voter-generated cap on retirement benefits.

The suit, filed Nov. 4 in Monterey Superior Court, challenges the council's actions of July 21 and Aug. 18 in approving the Sustainable Retirement Benefit Reform Initiative as law rather than placing it on the Nov. 2 ballot.

Named as defendants, along with the city, are City Manager Thomas Frutchey, Mayor Carmelita Garcia, councilmen Bill Kampe, Alan Cohen, Robert Huitt, Ken Cuneo and Daniel Miller, and former Councilwoman Lisa Bennett. None would comment on the lawsuit, referring questions to City Attorney David Laredo.

All but Kampe voted in favor of enacting the proposed ballot measure as law in response to the initiative petition circulated early this year to curb pension payments, and certification by the county Registrar of Voters that enough signatures were gathered to put it on the Nov. 2 ballot. The council's choice was to enact the law or set an election.

Concurrent with enactment of the retirement-benefit initiative, the council voted to place Measure R, a city charter amendment, on the Nov. 2 ballot. The amendment to change the charter to avoid conflict between it and the pension ordinance was approved overwhelmingly by voters.

The pension cap act limits the city's future contribution to the state Public Employee Retirement System accounts of city employees to 10percent of the employee's salary. It states, "No officer or employee shall hold vested rights to continued city employment or to the future accrual of any employment benefit for time not yet served."

Sacramento attorney Christopher Miller, representing police, contends the City Council violated the state's Meyers-Milias-Brown Act, which requires cities to formally consult employee unions before making changes to employee benefits, including retirement.

He argues the city violated its charter by extending authority to determine employee benefits to voters, when the authority rests with the City Council.

The suit argues that under the labor contract approved by the council through Dec. 31, 2012, the city is required to pay any shortfall in its CalPERS account.

Police contribute 9percent of their salary to retirement pensions and the city pays the remainder required to fund them.

Police on retirement are entitled to receive 3 percent of their salary for each year worked by the age of 50, which means an employee retiring after 30 years could receive a lifetime benefit of 90percent of his or her salary.

Plaintiffs include Police Chief Darius Engels and two police commanders as members of the Pacific Grove Police Management Association, and 30 police officers and police technicians who are members of the Pacific Grove Police Officers Association.

The benefit was approved by the council when times were flush and the state retirement system was mostly funded by investment dividends. The stock market crash and the recession have thrown the burden of funding back on individual cities.

Laredo and San Francisco attorney Cepideh Roufougar, a labor law specialist retained by the city as special counsel in the case, said neither they nor the respondents have been served notice of the lawsuit.

A case management conference on the lawsuit has been scheduled in Department 14 of Superior Court for March 25.