The Morning Report
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Saturday, May 27, 2006 | Fresh off two tough legal losses this week, City Attorney Mike Aguirre could be removed from two high-stakes court cases Tuesday if the City Council approves proposals by Council President Scott Peters.
Peters will ask the City Council to hire outside law firms to represent the city in challenges to the city’s pension funding and its affordable housing law n the defenses of which the council president says were mishandled.
The requests amount to apparent votes of no confidence on Aguirre, a political foe of his who has browbeat a number of council members for their roles in the city’s financial and legal troubles. More recently, Aguirre’s stumbles in two visible lawsuits this week have raised the eyebrows of some at City Hall who say the city’s legal department is incapable of fulfilling its basic duties.
On Wednesday, the city lost a battle over its affordable housing law, a lawsuit the city attorney had advised the council was winnable. The case, which was close to settlement weeks ago, leaves the city potentially liable to pay back millions of dollars in fees it had collected from developers for three years.
A different judge told Aguirre on Friday that his handling of a pension-related lawsuit “verges on carelessness” and that the city may have to forfeit the case if the city attorney didn’t get his act together. That lawsuit seeks a payment from the city of more than $175 million into its beleaguered pension fund.
A spokeswoman for Peters said that the council president’s request shouldn’t be characterized as a vote of no confidence, but acknowledged that Peters felt that Aguirre might not be equipped to handle those pieces of litigation.
“With no disrespect to the city attorney, there are experts in the private sector in these areas that can help city resolve these cases,” spokeswoman Pam Hardy said. “The city should do what’s in the best interest of taxpayers of this city and make sure city doesn’t end up in major financial liability. There are other folks who might be able to pick up ball from here.”
Peters contends the City Charter allows the council to hire an attorney “when circumstances warrant.”
However, Aguirre has consistently insisted that his office must have the final say on all legal matters of the city.
“Scott Peters has no authority to hire outside counsel,” said Maria Velasquez, Aguirre’s spokeswoman. “That can only happen if city attorney approves, and you know that won’t be happening.”
Tuesday’s debate will contribute to a larger conflict Peters and some other council members have had with Aguirre since the city attorney took office in late 2004. Aguirre has filed and amended numerous lawsuits without consulting the City Council; he maintains such a right is prescribed to him, as the independently elected city attorney, in the City Charter. Peters argues that the City Council decides the legal course the city should take after receiving advice from Aguirre.
Aguirre was unavailable for comment Friday.
In the affordable housing case, the Building Industry Association of San Diego County successfully won its challenge to the city’s “inclusionary zoning ordinance.” The law required homebuilders to ensure that 10 percent of the units they develop on a residential project were affordably priced or to pay in-lieu fees that would be stockpiled to pay for affordable housing projects elsewhere.
After the City Council voted to settle with the BIA in April, Aguirre scoffed at the compromise that would have potentially cost the city between $9 million and $43 million in affordable housing funds. The council decided to let him litigate the case after the BIA asked for more concessions. A Superior Court judge sided with the building industry Wednesday, saying the law was unconstitutional.
Aguirre said he will propose amendments to the law that he said will make it kosher with the court, but Peters is proposing that the council hire attorney Charles Christensen to take on the case.
“Mr. Aguirre is not a land use attorney and there are land use attorneys, good ones, in San Diego that may be able to help the city preserve its affordable housing ordinance in some way,” Hardy said.
The Web site for Christensen’s firm, Christensen Schwerdtfeger & Spath, states that he specializes in “housing/affordable housing law.”
In a Friday ruling, Superior Court Judge Richard Strauss fined the city for Aguirre’s handling of the pension lawsuit and orders the city attorney to either admit or deny several statements made in his investigative reports.
Former city worker William McGuigan is suing the city over the underfunding of its pension system from 1996 to 2005, a claim similar to those Aguirre has made in three reports and in various lawsuits he has filed. McGuigan’s lawyer, Michael Conger, asked that Aguirre admit or deny 34 statements that he found in the city attorney’s reports that buoy his case, but Aguirre has not yet complied with the judge’s order to answer Conger’s requests.
Conger asks that Aguirre admit that a number of pension deals violated the City Charter and municipal code, were economically unsound, were concealed by officials who handled the city of San Diego’s financial reporting, and were struck by pension and city officials who had a conflict of interest in the agreements because they profited off of benefits enhancements that were linked.
“If you can’t admit it, deny it,” the judge said. “Do one or the other.”
Aguirre said during a court hearing Friday that he took responsibility for the misstep, but said he was unaware of what the court had asked for. During a review of his office’s budget this month, Aguirre assured the City Council that he personally oversaw ever piece of litigation that was being handled by the office.
As a consequence, Aguirre must provide answers to the court’s liking by next Friday or the case will be forfeited. If that happens, the city may be on the hook for $175 million, which is how much the city’s pension payments fell short over the time period in question, McGuigan alleges.
Aguirre tried explaining to the judge that clear “yes or no” answers could not provided in some cases. For example, Aguirre said he wanted to separate the city as an entity from the officials who made decisions on the government’s behalf. The city, he said, should not be penalized for the acts of the officials. Any statements in his reports that refer to the city’s violation of a law should pertain to the officials whose decision resulted in that violation, he said.
“It was the individuals who breach their duty to the city,” Aguirre told the court.
Conger said the argument was ridiculous.
“I’m not suing the officials, I’m suing the city,” Conger said.
Peters said Aguirre has a conflict that made it impossible to defend the interests of the city as Peters saw it – to deny the claims – while affirming those claims in other lawsuits that he filed against the pension system, its former officials and its former actuary.
“He should consult with his client before he purports to make admissions on behalf of the city,” Peters said.
The city must also pay more than $20,000 in fines to Conger, who convinced the court that Aguirre’s delays have unfairly cost him that much. Conger asked for another $10,000 in fines from the city, but the judge did not rule on that.
Aguirre asked the judge if he could pay for the fines himself because he took responsibility for the mistake. The judge said it was the city’s decision to reimburse Aguirre.