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Monday, March 06, 2006 | This is a big month for the mayor, his new best friend the city attorney and pretty much everyone else who works at City Hall.
You may be so tired of hearing about the city’s pension crisis, your eyes roll into the back of your head every time somebody like me mentions it. But the pension crisis cares about you. And it’s going to show you just how much on St. Patrick’s Day.
You may never have felt such a nice little pinch as it has in store for you.
We here at Scott Lewis on Politics, or SLOP™, mentioned this last week but thought it deserved a little more attention. On March 17, the city’s pension system will be handing over a so-called “valuation” – a measurement of how much money it has, compared to how much money it will eventually have to pay out to make sure the city fulfills the promises it has made to its workers.
In that valuation will be a bill. Every year, city taxpayers have to send a bundle of money over to the pension system. For several years, the pension system didn’t send as big of a bill as it should have.
Now many of the people who led the pension system during that period face possible jail time.
That’s why this year is going to be a fun one. It’s as if the city took one of those balloon mortgages out on the future.
Make way for the balloon.
Now that they’ve watched some of their predecessors receive criminal indictments, you can bet members of the pension board will not try to do anything screwy to soften the blow of this year’s bill. At least, that’s what we hope.
Officials have estimated that the bill the pension system sends could be as high as $300 million – a far cry from the $165 million the city barely was able to pay last year. But even if the bill is as low as $200 million, it will be plenty painful.
City Attorney Mike Aguirre used to say that the mayor wasn’t up for the challenge.
“Jerry Sanders wants to return to the days of Dick Murphy,” Aguirre said when Mayor Sanders was only a candidate for the job. Just to be clear, calling Sanders an acolyte of former Mayor Dick Murphy’s style was a real insult in the campaign.
Now Aguirre and Sanders are like two peas in a pod. After leveling a challenge to the city’s labor unions to settle a contentious lawsuit, the duo has once again set itself up for a game it can either win or lose. But there’s no middle ground.
They are asking the unions to settle a lawsuit concerning whether the pension benefits employees secured in 1996 and 2002 were illegal or legal. If they’re legal, the city will have to make the big payment to its pension system that’s coming on St. Patrick’s Day. Aguirre and Sanders believe that if they can get the unions to admit, however, that the benefits were secured illegally, they can avoid paying the St. Paddy’s Day bill or maybe, at least, some of the big ones to come in future years.
In other words, they are asking the unions to settle a lawsuit that the unions show little signs of losing or winning because it’s relatively early. Why would the unions agree to settle a lawsuit that even most members of the City Council won’t expressly support?
And there’s one more point: Aguirre and Sanders are asking the unions to settle a lawsuit when the unions aren’t even the ones that can settle it.
The San Diego City Employees’ Retirement System is the city’s opponent in that lawsuit.
Yep. SDCERS sued the city shortly after Aguirre made the claim that the 1996 and 2002 benefit enhancements were illegal. The retirement system purportedly wanted to learn, for sure, whether those benefits were illegal or not so it would know whether it should keep paying them.
So Aguirre and Sanders will have to deal with the pension board – not something they’ve been very successful at lately.
As we here at SLOP™ noted a while back, when Sanders demanded in January that the taxpayer representatives on the pension board resign, they responded by giving him the proverbial finger.
And that’s another reason why this month will be a big one for Sanders: We’re still waiting to see how he responds to that insult.
Scott Lewis oversees Voice’s commentary section. Please contact him directly at