The Morning Report
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City Attorney Mike Aguirre today accused Mayor Jerry Sanders of exaggerating the cost of a pension benefit that was supposed to be cancelled, but wasn’t because of a paperwork lag by the City Attorney’s Office.

Employees who were hired after July 1, 2005 are not supposed to be allowed to purchase service credits, which add years to a worker’s pension calculations, but the retirement system’s attorney said workers who were hired up until Feb. 16, 2007 can join because of the delay. Seven employees have taken advantage of the loophole, according to the retirement system.

Sanders said last week that 20-month delay in cutting off the service credit program could cost the city “in the high tens of millions of dollars,” blaming the added expense on Aguirre. The city attorney held off on drawing up an ordinance to formally halt the program, which was agreed upon by employee groups in 2005. The mayor contended said the figure could even be as high as $100 million.

Aguirre said the mayor inflated the estimate to make the city attorney look bad politically. He cited a report by the retirement system’s actuary that shows current prices for service credits do not add to city’s pension deficit, despite the $146 million shortfall resulting from the lower prices of previous years.

“It’s not tens of millions, it’s not $100 million, it’s zero,” Aguirre said.

Aguirre used actuary Gene Kalwarksi’s estimate despite his frequent accusations that the number cruncher downplays the city’s deficits in order to paint a rosier picture of the pension fund’s health.

The reiterated his disagreement that the loophole exists. He said he sent a letter to those employees, including public works chief Richard Haas, telling them they were not entitled to the program.

For the third consecutive weekday, the service credit program dispute played out in dueling press conferences. The dueling press conferences have lent the schism the feeling of the old daily battles waged by Aguirre and former Mayor Dick Murphy.

Jay Goldstone, the mayor’s chief operating officer, followed Aguirre’s press conference by defending Sanders’ comments. He said the loophole was not about providing the employees with a discounted price. Instead, it allows those employees to participate to buy enough credits to reach 10 years, which would qualify them for a pension and lifetime health care.

EVAN McLAUGHLIN

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