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Friday, April 29, 2005 | the city of San Diego’s elected officials don’t relinquish personal pension benefits that are helping to fuel the pension system’s billion-dollar deficits they should resign, City Attorney Mike Aguirre said Friday.
In the same press conference, Aguirre laid out the legal framework for choosing a successor for Mayor Dick Murphy – who announced his resignation Monday – through either a special election or council appointment. He both applauded Murphy’s decision as a selfless act and then accused the mayor of trying to manipulate the date of the election by waiting until July 15 to step down.
A special hearing has been scheduled at 11 a.m. on Monday to discuss which path the council should choose. A majority of council members and the mayor have signaled their support for a special election, although supporters of an appointment continued to push their cause this week.
But in the middle of the post-resignation hoopla and the anticipated unveiling this Monday of what is to be a brutal fiscal year 2006 budget, Aguirre drew focus back to years of service pension benefits that have been purchased by six council members and the mayor.
The elected officials are just a handful of the 2,900 employees that have purchased the credits at what has been determined as a significant cost to the debt-laden pension system.
Employees’ pension checks are formulated using three factors, one of which is years of service. Buying years of service at discounted rates, as was allowed between 1997 and 2003, can greatly increase an employee’s pension check for life. Aguirre estimates the benefit has put a $120-million strain on the pension system, which carries a $1.37-billion deficit. (Read Voice’s in-depth look at the benefit and each official’s financial interests.)
A credit debt
He plans to send a letter to all city employees who purchased the years of service asking them to voluntarily refinance their pensions because the benefits are subsidized by the city by as much as 70 percent of their value. Aguirre wants the elected officials to set an example for all city employees.
Councilwoman Toni Atkins said she will sit down and evaluate her plan and make adjustments if necessary.
Frye has said she plans to rework the 1.83 years of service she purchased so that she doesn’t burden the system with benefits for which she hasn’t paid. The remaining officials who had purchased credits, Murphy and Councilmen Michael Zucchet, Brian Maienschein, Jim Madaffer and Ralph Inzunza either didn’t return calls or weren’t available for comment.
Legal and financial woes stemming from San Diego City Employees’ Retirement System have left the city with a suspended credit rating, federal and local investigations and severe budget problems for years to come.
“I think a lot of these things are taken out of the context of what were negotiated,” said Rick Rowe, a marine biologist who has purchased five years of credit.
He first heard of Aguirre’s proposal through a reporter and couldn’t comment on what he would do if he received Aguirre’s letter or saw council members forgo benefits. But he said that many benefits such as the years of service credit were negotiated in place of annual raises in the late 1990s.
“We are paid 30 percent less in my profession than they are at the other agencies in California,” Rowe said.
Aguirre suggested raising taxes and fees to cover the cost of other benefits. He also released a report this week calling for the rescinding of a law passed by the City Council in 2002 that allows city workers to become vested in the pension system if they work five years and buy five years of credit. Prior to the ordinance, an employee had to work 10 years to be vested. The ordinance didn’t affect elected officials, who vest after four years.
Election and appointment clarification
He determined that:
– The council members must consider whether to hold an election or appoint a successor as soon as a letter of resignation is received, however they don’t have to make a decision immediately. An appointment process couldn’t begin until Murphy steps down July 15; the council would have 30 days to fill the spot. The council may hold one or two hearings to evaluate candidates.
– The decision to call an election can be made at any time, though an election must be held within 90 days of the decision. It can also be called within 180 days of a statewide election in order to consolidate costs. (Gov. Arnold Schwarzenegger has signaled plans to hold a special election on initiatives for Nov. 8.)
– It appears the council may consolidate a primary election if a Nov. 8 special election is held. The feasibility of a general election being held on that date depends on the date of a special primary election and the time necessary for the Registrar of Voters to determine the results of the primary.
– Write-in candidates can be allowed in the primary, but not general election.
– Murphy can, as a current member of the council, vote on whether or not to hold a special election. The same holds true for Frye, whose supporters are still challenging Murphy’s November victory in which more than 5,000 votes were thrown out because voters failed to fill in the oval after writing-in Frye’s name. Had the votes been counted, Frye would’ve won.
– The deputy mayor – in this case Zucchet – assumes the powers of the mayor in the interim between Murphy’s resignation and the election.
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