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Tuesday, Oct. 31, 2006 | City employees led off the trial over their disputed pension benefits Monday, as their lawyers used their opening statements and remaining motions to try to deconstruct City Attorney Mike Aguirre’s legal attack and limit the boundaries of the sprawling case.
Whereas Aguirre has publicly tried to paint a single picture of officials from the city, its retirement system and the employee unions working in concert to strike corrupt pension deals that lined their own pockets, his union opponents used Monday’s hearing to try to pick apart the fluid image of the controversial agreements. Instead, they argued, the issues at hand were a number of actions that were not contingent on one another.
The hearing kicked off an expected two-to-three months worth of trial proceedings that could reshape the value of the city of San Diego’s looming pension deficit, which currently stands at $1.4 billion.
Aguirre claims the case could save the city as much as $500 million at a time when the government’s budget is considerably strained by payroll costs, such as the pension plan and retiree health care. The lawsuit has been his primary undertaking since taking office in 2004, and has drawn deep divisions at City Hall between Aguirre and officials who say the lawsuit is a long shot and has only succeeded in generating ill will toward employees.
While the retirement system and the employees have filed pretrial motions over the past two years in hopes of halting Aguirre’s case or whittling down its scope, his lawsuit remains largely intact.
On Monday, the unions continued their attempt to break apart Aguirre’s case, which alleges that the pension enhancements given to city employees in 1996 and 2002 were part of illegal deals. Aguirre is scheduled to present his opening arguments to Superior Court Judge Jeffrey Barton on Tuesday morning.
Central to the unions’ arguments are past pension-related court settlements in which the city of San Diego either agreed or remained mute to the terms that Aguirre now wants to unravel.
If the city objected to the benefit increases that it gave employees over the past decade, city officials “certainly could have put their two cents in” before this case was filed, said Ann Smith, the attorney for the Municipal Employees Association.
Smith, whose client represents the city government’s white-collar workers, pointed to two legal settlements she said were crucial to preventing Aguirre’s case.
In 2000, the city agreed to end a lawsuit – known as Corbett – by agreeing to raise employees’ future retirement pay. Smith said that the case solidified benefit increases that were provided to employees as part of the 1996 pension deal that Aguirre is attacking.
“The results of 2000 resolved anything that happened in 1996,” Smith said.
In pretrial motions, the unions asked the judge to make an expedited ruling on the Corbett issue, which they said could trim the stakes of Aguirre’s suit from $500 million down to $40 million, but Barton said he could not resolve the conflict because the facts surrounding the controversy remained in dispute.
Smith also argued that the city’s attempt to nullify the benefits from the 1996 and 2002 pension deals is too late, contending that the city had a chance to seek a rollback of the benefits that employees won in 2004, when a retiree settled his lawsuit against the city and the San Diego City Employees’ Retirement System.
The 2004 settlement – known as Gleason – dealt with allegations that the city pension pacts violated the same conflict-of-interest law that Aguirre is using to prop up his lawsuit now, Smith said.
The city or any taxpayer had the opportunity to seek to set aside the benefits then, she said. Smith noted that Aguirre, as a private attorney, threatened the city and retirement board with a lawsuit in 2002, but did not intervene.
“Mr. Gleason already did that and it doesn’t matter that Mr. Aguirre didn’t like the remedy that was brought,” Smith said.
The notion that the city missed its chance to challenge the deal highlights a possible sore spot for Aguirre, who has bucked the decisions his client, the city, made in the past and that his predecessors in the City Attorney’s Office blessed legally. Senior members of the City Council maintain that the pension deals are legal and have tried to steer the litigation away from Aguirre’s control.
Skeptics of the lawsuit criticize Aguirre’s notion that he can sue on behalf of the city to reverse decisions that the city government made.
Aguirre did not start his arguments Monday, as the judge set aside several hours for hashing out some remaining pretrial issues. The city attorney did promise Barton that his presentations throughout the trial would provide the judge with the “absolute moral conviction” he needed to roll back the benefit increases he is challenging.
Following Aguirre’s statement on Tuesday, the unions are expected to begin calling witnesses to testify, including the SDCERS operations manager David Arce, police union attorney Richard Castle and city Personnel Director Rich Snapper.
The unions also said that, if time permits, they may also call Assistant City Attorney Chris Morris and Labor Relations Manager Scott Chadwick on Tuesday.