By EVAN McLAUGHLIN
Tuesday, May 31, 2005 | A continued dispute over the city’s labor contracts has forced a special meeting Tuesday where the San Diego City Council will decide whether the labor agreements hammered out this month should be ratified or revised with additional language suggested by the city attorney.
The council tentatively approved contracts with four of the city’s five unions on May 17 after rejecting City Attorney Mike Aguirre’s alternative plan to include language to void benefits if they are found to be illegal, a move he says will protect the legality of the contract.
Aguirre believes that retirement benefits dating back to 1996 have been granted illegally. He wants either the courts or the City Council to declare them void, an action he estimates would knock off as much as half of the estimated $1.37 billion to $2 billion pension deficit.
If the council ratifies new labor contracts, it could make legal these benefits and kill his efforts to roll them back. He’s asking the council to include a provision in the new contracts that would allow the post-1996 benefits to be undone if they are determined to be illegal.
“What I’m proposing doesn’t require you to acknowledge or accept my point of view. What it does is it preserves that decision to be made on a later day,” Aguirre said.
At issue is the risk that the employee benefits dispersed under the new contracts could be deemed illegal and void under a conflict-of-interest law, as stated in an independent analysis by law firm Luce Forward Hamilton & Scripps. Aguirre pointed Friday to the Luce Forward report, which was made public Wednesday, and District Attorney Bonnie Dumanis’ case against former and current trustees of the SDCERS as causes of concern the council should be paying attention to when ratifying the labor agreements.
“This is something that you want to deal with today and not 25 years or 20 years from now when you’re in a retirement position,” Aguirre told city workers that attended the May 17 meeting. “What people have not told you is that when these benefits of hundreds of millions of dollars were granted, that not one penny was set aside to pay these benefits.”
Dumanis charged six pension board members who are also pension beneficiaries for agreeing to Manager’s Proposal 2 in 2002. Manager’s Proposal 2 was a pact between the City Council and the pension board that allowed the city to continue its pattern of underfunding the pension system while granting more benefits to union members.
A civil lawsuit was settled between former pension trustee Jim Gleason and the city to end the deal last year.
The council tentatively approved the contracts by a vote of 6-to-2. Only Council members Donna Frye and Brian Maienschein voted against the ordinance, and Councilman Ralph Inzuzna was absent from the vote.
Aguirre said that he will refuse to sign the contract if it is left as is because it does not include provisions that will void benefits granted to employees in the agreements if those benefits are found to be illegal. He said that his version will allow the savings from employees’ concessions made in negotiations to be used only for “legally created” benefits.
“I cannot sign off on and will not sign off on an ordinance that says that money that is going to be generated from your sacrifices will go to pay illegal benefits,” Aguirre said.
Council members, labor leaders and the city’s hired negotiator all shot down Aguirre’s suggestion, arguing that the benefits included in the package are legal until proven otherwise in a court of law, not when the city attorney says so.
“We are operating that they are law until a court of the proper jurisdiction tells us otherwise,” Councilman Michael Zucchet said. “I don’t think any of us have somehow weighed in on the fact whether these benefits are legal or illegal or otherwise.”
The city attorney’s proposed amendment to the salary ordinance won’t have a significant impact on the benefits, even if they are declared illegal, Zucchet said.
“If these benefits are found in court to be illegal by a court in the future … (Aguirre’s proposed language) seems to be redundant,” Zucchet said. “It’s an obvious case that, if a court invalidates these things, what flows from the invalidation flows and there’s nothing we can do about that whether we put in the language or not.”
Labor officials also raised objections over the new language, asserting that Aguirre will jump on the chance to litigate the issue, a process they warn will be costly and lengthy for the city.
“I say no because it’s not necessary; two, because it wasn’t the deal; and three, because it will be used by Mr. Aguirre in a way that will be more destructive to the city of San Diego, guaranteed,” said Ann Smith, an attorney for the Municipal Employees Association.
The council will consider finalizing the agreement Tuesday at 10 a.m. in the council chambers located at 202 C St.
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