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Wednesday, June 01, 2005 | City Attorney Mike Aguirre said he will not sign off on the labor agreements the City Council passed Tuesday, a move that would nix next year’s deals with workers and force the city to pay employee salaries using this year’s contracts.
Aguirre said the council’s enactment of the contracts will prevent the city from rolling back employee benefits if a court were to find them illegal. He claims that undoing benefits he thinks are illegal could halve the San Diego City Employees’ Retirement System’s shortfall, which is currently between $1.37 billion and $2 billion, estimates show.
Meanwhile, labor leaders, Mayor Dick Murphy and some council members praised city workers for agreeing to the new labor deals, which call for salary and benefit freezes and increased employee contributions into the pension system. Officials applauded employees’ sacrifices in attempting to pay down the pension deficit.
If Aguirre holds out past July 1, the beginning of the 2006 fiscal year, the labor contracts that go into effect next year and were finalized by the council on Tuesday will be scrapped and the city will pay employees using its former contracts.
“In sum, the city may continue to operate and expend funds for the provisions of salaries, wages, maintenance and support expenses for the various city offices and departments,” Aguirre stated in a memo Tuesday released after the council hearing, “but that such expenditures are limited to the prior year’s appropriations.”
Aguirre offered additional language for the ordinance that he said would protect the city from paying for benefits that he believes have been granted over the last decade in violation of local and state laws. Labor officials, the city’s negotiator and the majority of the City Council rejected his proposal, saying that the new deals don’t protect benefits if they are later determined to be illegal.
The council met in a special meeting Tuesday to ratify contracts between the city and four of the five municipal employee unions in San Diego. Only Council members Donna Frye and Brian Maienschein voted against the audience, and members Toni Atkins and Jim Madaffer were absent from the meeting.
Several city workers were on hand, providing loud applauses and a few standing ovations for their leaders when they addressed the council, while deeply sighing or heckling Aguirre when he had the floor.
Aguirre objected to the city’s plan to spend the savings generated through the unions’ concessions on benefits he believes are illegal. Union and City Council members said the distinction is for the courts to draw, not Aguirre.
In a letter sent to city employees last week, City Manager Lamont Ewell said he doesn’t approve of a city attorney’s “veto power” over the council by not signing the ordinance, and thinks the city could take up the dispute in court.
“I, along with others, hope it doesn’t come to that,” he stated. “The citizens of San Diego and the employees deserve better than that. We will be working to resolve the difference amicably.”
Ann Smith, an attorney for the 6,000-member Municipal Employees Association, argued that the city attorney’s proposal did not protect the city any further than what the city negotiators had produced, and added that she thought Aguirre’s real motive was to litigate the benefits he believes were created illegally.
“It is his purpose to get a hook into the salary ordinance that would essentially undermine the good-faith agreement that we have reached with the city,” she said. “It is not the intention of MEA representatives to make economic sacrifices … if you adopt this salary ordinance only to find themselves in court a month from now with this city attorney and this city arguing about pension benefits.”
Aguirre has also stated that enacting these contracts will effectively ratify the benefits he deems illegal, but Smith said it’s too late for the city to worry about that claim.
“If Mr. Aguirre’s concern is valid – that by adopting a salary ordinance you are in some way ratifying prior pension benefit improvements that were made in years past – you have already done that many times since 1996,” she said, referring to past councils’ adoptions of annual salary ordinances.
During and after the meeting, several council members and the mayor said they found Smith’s advice to be helpful. Mayor Dick Murphy even concluded the meeting by stating, “Thank god for Ann Smith.”
Bay Area attorney Bill Kay, who was hired by the city to lead the labor negotiations, predicted that unions would file unfair labor practices complaints if the council adopted Aguirre’s proposal.
Before discussing whether to finalize the pacts, the council waived their attorney-client privilege to discuss a report prepared by Luce, Forward, Hamilton & Scripps that advised them that voting to finalize the contracts did not violate conflict-of-interest laws. Luce Forward was commissioned to determine whether council members would be violating the Political Reform Act or Government Code 1090 because they are also pension beneficiaries.
Each council member present along with Murphy read statements disclosing their interest in SDCERS before voting on the ordinance.
Smith and several union officials told the council there were alternatives to Aguirre’s desire to roll back benefits to fund the system, such as levying a pension tax or by selling off “the jewels of real estate” owned by the city.
“If you sold them, even a fraction of them, you would not be mortgaging this city’s future but you could be infusing significant cash into the pension system to reduce [the deficit],” she said.
The council is slated to discuss possible new revenue streams by examining cost recovery fees at a budget hearing next Tuesday at 10 a.m.
Please contact Evan McLaughlin directly at