City Attorney Mike Aguirre today proposed a settlement to his pension case with employee groups, offering to scale back the employee benefits in exchange for placing tax increases on the ballot for voter approval.
Aguirre’s lawsuit seeks to repeal entirely a number of pension benefits bestowed upon workers. It hit a major snag in December when a Superior Court judge ruled that the pension deals challenged by Aguirre couldn’t be touched because of subsequent legal settlements and labor deals.
However, the case could still impact the benefits of employees.
Aguirre’s proposed settlement would:
- Ratchet down the DROP and purchase of service credit programs to make them cost-neutral, meaning that the programs would remain in place, but offer employees lower benefits. The original suit seeks eliminating them altogether.
- Eliminate a retroactive pension benefit given to employees in 1996 and 2002. Aguirre’s suit seeks to eliminate the entire benefit (an increase to the multiplier in an employee’s pension calculation) given in those years; the settlement would give employees the benefit going forward, but not backwards.
- Be conditioned on the passage of tax increases by voters.
Aguirre said the tax increase would be necessary to pay for the remaining benefits, and would mean that the deal would be painful for both the employees and the residents. However, he said he thought residents would consider a tax increase if they knew it would end the pension crisis.
“I think we have come to an important turning point in the history of the pension cases,” Aguirre said.
The city attorney said he will recommend the settlement to Mayor Jerry Sanders and the City Council, but that it hasn’t formally been presented to employee groups.