Aguirre: Undo or be Sued

Thursday, January 05, 2006 | City Attorney Mike Aguirre was told by a judge last month that he cannot sue three former lawmakers for their role in fattening elected officials’ retirement checks, so he said Wednesday that he will file a lawsuit against the current City Council unless they agree to undo the benefits themselves.

His proposal enjoyed the usual support by Councilwoman Donna Frye and the expected criticism by Council President Scott Peters. But the issue also won him the backing of his newest partner at City Hall – Mayor Jerry Sanders.

Sanders, through a spokesman Wednesday, said he wanted to rein in elected officials’ pensions, bringing them more in line with the city’s rank-and-file workers.

“The mayor does not believe that elected officials, by virtue of being elected officials, should receive benefits that are higher than other city workers,” said Sanders spokesman Fred Sainz.

Aguirre’s announcement offers one of the first public tests of the new mayor’s allegiances, and Sanders’ choice to side with Aguirre rather than the council provides an early signal to the direction the new administration might be headed. Previously, Aguirre has found support only from Frye on most of his proposals related to the city’s fiscal crisis.

The city attorney said he will drop his lawsuit against former Mayor Dick Murphy and resigned Councilmen Ralph Inzunza and Michael Zucchet after the Superior Court judge presiding over the case said that three lawmakers couldn’t have passed the allegedly illegal benefits without the support of other council colleagues.

Aguirre said he needs to name the current City Council as defendants if he wants to continue waging a courtroom battle to bring elected officeholders’ pensions back to what they were before a series of enhancements in 2000. But the council members can save the trouble by agreeing to roll back the benefits he’s seeking at an upcoming council meeting, he said.

The civil complaint is one of several Aguirre has filed that attempts to save the city an estimated $700 million by returning retirement benefits to pre-1996 levels. Currently, the city’s pension system has a shortfall of at least $1.37 billion and is the focus of federal and local investigations. The city attorney says the lawsuit targeting elected officials’ pension would result in savings in the millions of dollars at most.

Many council members are in the same boat as Murphy and Zucchet, as they would not qualify for a pension under the previous standards Aguirre wants reinstated – that council pensioners may not retire before age 62 and must work for at least 10 years. They would essentially lose out on any amount of retirement pay from the city if they agreed to the city attorney’s proposal.

Similar to Inzunza, two council members worked as council aides prior to being elected for enough years to qualify under Aguirre’s desired standards, a Voice analysis shows. Only Councilman Jim Madaffer and Councilwoman Toni Atkins would still qualify for a pension, assuming all of the council members finished out their terms, but their retirement checks would be slashed by a few thousand dollars annually.

Aguirre filed the lawsuit in September after the three former officials began collecting pension benefits, thereby reaping the benefits of a contract they helped create, he argued. Murphy resigned under the duress of the city’s financial and legal troubles in July, days before Zucchet and Inzunza stepped down after being convicted on federal corruption charges. Zucchet has since been acquitted by a judge of most charges and will stand retrial on others.

Currently, council members and the city attorney can qualify after working four years and other employees can purchase up to five years of service credits to use toward the ten-year threshold. Aguirre’s lawsuit seeks to strike down both privileges.

Aguirre is also attacking the “multiplier” for elected officials. Retirement checks in defined-contribution plans such as San Diego’s are calculated using a formula that multiplies an employees’ highest annual salary, years worked and the multiplier. Officeholders currently have a multiplier that is higher than all other city employees.

Peters, who sets the city’s legislative agenda, said he didn’t think it was worth taking up council meeting time in the hopes of saving tens of thousands of dollars a year when a more severe financial picture looms for the city of San Diego.

“I’d say there’s more money tied up in attorney fees than what we could save, and there will only be more litigation” if the council approved Aguirre’s proposal, he said. “This lawsuit was a mistake, and we ought to not compound it.”

Peters added that none of the current council members were in office when the elected officials’ plan was upgraded.

“These are the exact benefits we had when taking office,” he said.

Aguirre is also attacking the council’s decision in 2002 to allow ex-council members and the city attorney to receive the enhanced pension checks. Aguirre decided to not join the pension system when taking office.

Candidates vying for the City Council seats that Zucchet and Inzunza vacated would be sworn into office by the time he took his proposal to the council, Aguirre said.

District 8 candidate and organizational consultant Ben Hueso said he supported rolling back the benefits for future council members but not those who have already retired.

“It’s a good gesture,” he said. “We can’t just make decisions that affect other people, but we also need to be part of the pain that it takes to balance the budget.”

School board president Luis Acle, Hueso’s opponent for the seat vacated by Inzunza, said it was premature for him to make a decision.

Environmental attorney Lorena Gonzalez, who is vying for the District 2 seat formerly held by Zucchet, said she would not vote on Aguirre’s plan until she studied it, but supported the concept.

“To me, this is a no-brainer as an idea,” Gonzalez said. “Pension benefits are for people who have long careers with a business or organization.”

Public relations executive Kevin Faulconer, who is also running in District 2, did not return phone calls seeking comment.

Judge Richard Montes raised several doubts about the suit Dec. 16 when he granted the City Attorney’s Office one month to revise its complaint. Among his concerns were whether Murphy, Zucchet and Inzunza were capable of boosting their own pensions since they served on council after vesting requirements were eased and pension formulas were made more profitable. The City Attorney’s Office argued that the three former lawmakers were named because they were collecting benefits under an agreement they had control over.

Montes also said he was concerned whether the former mayor and councilmen could be sued for raising their own pension benefits because of a salary exemption in state law, whether the ordinance enacting the benefits was a contract at all, and why the complaint doesn’t also reach as far back as 1971 – when the council created their own retirement plan.

Deputies from the City Attorney’s Office said they would return with answers.

Aguirre said that he tried to be “oblique” when attacking the pensions of elected officials, but will be more direct if it means succeeding.

“We tried something that we were hoping would not have a direct confrontation with the council,” he said.

He has acknowledged that the legal arguments he is using to recover allegedly ill-gotten enhancements are risky, but has maintained for nearly a year that pension increases were illegal.

“The eye of the needle that we’re going to have to pull the elephant-sized pension deficit through is this big,” Aguirre said, referring to the millimeter-long space between his index finger and thumb.

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