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I have gotten an incredible number of responses to my suggestion Monday that a taxpayer would have done a much better job arguing City Attorney Mike Aguirre’s Great Pension Case than Aguirre. Or, said differently, Aguirre could better argue the case that the city illegally went into debt by giving away pension enhancements in 1996 and 2002 if he were representing just a taxpayer or taxpayer group rather than the city.
Thursday, the news team took a look at the debt-limit law I referenced.
From the sources in that report, it appears I’m not too crazy.
But, like I said, the response has been overwhelming. I usually try to get a note back to all the readers who write in but this is a little too much.
There is one common thread that readers keep bringing up, however, so I wanted to address it.
A bit of review: I think Aguirre’s on to something when he argues that the California Constitution and the City Charter prohibit the city from going into debt without a vote of the people and therefore the city broke the law by giving out pension benefits. Why? Because like salaries, pension benefits are forms of compensation. If you give them out, you go into debt. Just because you don’t have to pay the debt until the employee retires it’s still a debt.
“The city shall not incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year unless the qualified electors of the city, voting at an election to be held for that purpose, have indicated their assent as then required by the Constitution of the State of California…”
And just because officials have only disclosed how much those pension benefits were worth in recent years, doesn’t mean they couldn’t have done the math when they promised them and realized just how much debt they’re putting onto the backs of taxpayers without approval.
Finally, my point was that it is simply very awkward for Aguirre – as the city’s representative – to argue this. After all, if the city believes this, it can remedy the situation. Just because he doesn’t have support of the mayor and City Council to do this, doesn’t mean he can blame another entity and somehow leverage the judge into forcing the city to remedy itself.
I argued that a taxpayer should do it.
Readers flooded in with responses like this one from attorney RD.
[Pension benefits] are not a debt that has ever required voter approval and it is highly unlikely that a court would make that determination on a prospective basis, let alone a retroactive basis.
…the pension enhancements and funding agreement in 1996 were never intended to cause “massive debt.”
Who cares about intent?
If they caused a debt, they caused a debt. And this is assuming they didn’t mean to cause a debt. And the people who engineered this weren’t stupid, they knew they were lumping massive liabilities onto the retirement system and therefore the city. If they didn’t we’d never be having this conversation, they were either incredibly short-sighted or way too confident in the Goldilocks Economy to make the stock market boom last forever.
RD addresses the point:
I think, at best, you can look back at the Council, Manager and Union activities in approving MP1 and say it was “bad judgment,” “stupid,” “risky business” etc., but in the end, it will not turn out to be “illegal” as a whole and the taxpayers will not have a remedy to demand recompensation. Government is run by human beings and as long as that is the case, government will screw up in a big way in making some decisions.
Again, as I said Monday, I’m no attorney. But is an illegal act still illegal if it was done by somebody who was stupid?