Thursday, January 19, 2006 | Mayor Jerry Sanders’ attempt last week to personally reshape the pension system’s board of trustees appears to have been tripped up by his own announcement the following night supporting the city attorney’s push to become the troubled system’s lead attorney.
Last week, on the eve of his first State of the City address, the new mayor individually called the six mayor-nominated trustees of the system and asked them to step down so that he could initiate his voter-mandated reform plan. A number of trustees begrudgingly said they would step aside. They expressed their regret but said they understood that the mayor had a mandate for change and the desire to appoint his own people.
In his speech the following night, Sanders announced his support for City Attorney Mike Aguirre’s attempts to have his office reinstated as chief legal counsel for a pension system at the heart of the city’s legal and fiscal crisis.
The move might have muddled one of his first high-profile acts as mayor, as it didn’t sit well with a group of trustees who have been at battle with Aguirre for nearly a year.
“I thought that my stepping down might help,” said trustee Thomas Hebrank. “Upon further reflection, talking to people and finding out that part of the reason to ask us to step down was to confirm the city attorney as legal counsel for the pension system, I reconsidered my decision.”
Fellow trustee Bill Sheffler also originally agreed to comply with Sanders’ request, but swiftly changed course after learning of Sanders’ support for Aguirre. Pension board President Peter Preovolos said he thought only one of the six council appointees would step down. He said Jim Hearty, who was named to the board in October, would resign.
“Other than that, everyone else is holding the line,” Preovolos said.
The city attorney has been at battle with the new pension board since it was reconstituted last April under voter mandate. He is in court with the board on two separate lawsuits. The board sued Aguirre last year, claiming he had no right to assert that he was the pension board’s chief legal advisor. Aguirre had revoked a 1998 memorandum from his predecessor that had created an independent legal office for the pension system.
A judge’s decision on the matter was scheduled for a hearing the morning in between Sanders’ call for resignation and the State of the City address. Aguirre successfully argued to have the decision continued to a later date.
“I’m a strong supporter of the mayor and believe in his reform efforts, but I do not agree that this is a step in that direction,” Hebrank said.
Sanders’ spokesman said the two moves by the mayor were unrelated. The mayor has always expected that the decision on who is the pension board’s rightful attorney would be decided by the court, he said, and last week’s actions weren’t an attempt to have Aguirre installed as the pension attorney by Sanders appointees.
“It’s unfortunate that this has become an issue. We really view this as an institutional issue and not a personality issue,” spokesman Fred Sainz said.
Sanders’ support for Aguirre’s initiative came less than a week after the U.S. Attorney’s Office filed corruption charges against the pension system’s lead attorney and four other former pension officials.
“Clearly the experiment of the last 10 years has not worked,” Sainz said of the pension’s legal counsel.
The city attorney has also sued the system seeking to nullify a series of pension benefit enhancements given to employees and politicians in the last decade. He claims the benefits were created in illegal and corrupt deals.
Sainz said the new administration hopes “that these board members will do the right thing” and step down.
In November 2004, voters approved a reconstitution of the pension board over after the pension system’s deficit and dealings had become a prime public and law enforcement target. The proposition took majority power away from city management and union representatives and into the hands of seven volunteers nominated by the mayor and approved by the City Council.
The pension system faces a deficit that’s estimated to be approaching $2 billion and threatens to consume annual city budgets for years to come absent significant reform.
Trustees George Murray and Richard Kipperman weren’t available for comment.
Please contact Andrew Donohue at