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Tuesday, Oct. 2, 2007 | City Attorney Mike Aguirre hiked the salaries of several of his deputy lawyers this year, despite claiming it was illegal for city officials to hand out pay raises because it would add to the city’s pension debt.
A Bump Up
Four percent increases were the norm for most attorneys, while others received raises as high as 12 percent, according to accounting records obtained through Public Records Act requests. More than 100 staff members benefited from the city attorney’s discretion.
By leaving about 18 of his office’s roster slots unfilled, Aguirre was able to locate $403,000 in this year’s budget to grant the raises with money that would have gone toward paying those attorneys.
But the city attorney did not study the impact those raises would have on the employee retirement fund. When Mayor Jerry Sanders and the City Council granted salary increases for police officers, he said it was illegal for them to do so without finding the money for the $29 million hit he said the pension fund would immediately take on.
Aguirre claimed city officials broke state law by not finding money to supplant the new hole that was dug into the pension fund by raising an employee’s salary, which is a key component in figuring a worker’s pension. He’s also used that interpretation of the liability limit law, which states that the municipality can’t take on debt without a citywide vote, to bolster his legal crusade against $900 million in pension benefits that he wants to eliminate from the city’s $1 billion pension debt.
But in practice, Aguirre has not heeded that advice, albeit in less drastic fashion than the newest police union contract and the past pension benefit deals. The millions of dollars added to the city’s rolls dwarfs the hundreds of thousands Aguirre disbursed to his own attorney.
“Once again, Mike wants to live by his own set of rules,” Council President Scott Peters said. “I wouldn’t argue with his authority to give raises. He’s an elected official, it’s his budget, and if there’s money in his budget because of the attrition he’s suffering, he can do that. But it’s a credibility issue.”
Payroll records show that 101 attorneys, ranging from his closest advisors to cub lawyers, received bumps in their salary that were not a result of cost-of-living increases or a new contract between the deputy lawyers’ union and the City Council. After negotiating throughout the spring, the city and the Deputy City Attorneys Association failed to reach an agreement, resulting in an impasse.
The terms of that impasse put into effect a provision that was carried over from the union’s contract, which spells out the process by which Aguirre can award discretionary “merit increases” to his lawyers. Under the rules, deputies have their salaries reviewed either once or twice a year — depending on their place in the office’s hierarchy — and the final decision rests with Aguirre.
Among the employees receiving raises are Executive City Attorney Don McGrath, Aguirre’s top lieutenant, who received a 4 percent merit increase. Kathryn Burton, one of the office’s top administrators, received a 12 percent pay hike. Assistant City Attorney Chris Morris, who leads the office’s Criminal Division, also received a 4 percent increase.
Aguirre paid for the increases by leaving 18 of his office’s 338 positions vacant. Earlier this year, Aguirre blamed Sanders and the City Council for cutting his budget, saying it was retaliation for his criticism of the mayor’s handling of the Sunroad controversy. At the time, Aguirre said the mayor’s cuts would force him to axe 14 community prosecutors from his budget.
The city attorney said he leaves the pay reviews to the managers in his office and that he has limited involvement in granting the pay raises. Burton said about 70 percent of the lawyers received increases during the last round of reviews, and noted that the raises were needed in order to provide a competitive salary to attorneys who would likely earn more in the private sector.
That’s a similar argument other city leaders made during the latest round of negotiations with the police officers and firefighters. In April, the mayor and council agreed to provide a 9 percent raise to most cops — 8 percent to others — in order to stem the rapid flight of officers to nearby law enforcement agencies that were paying substantially more than the San Diego Police Department.
Some council members also pushed to give firefighters a 2 percent increase, though the proposal failed.
Looming over both debates was Aguirre’s claim that the city would be violating the California Constitution’s liability law by granting the increase and not setting aside funding to pay for the retroactive costs that were associated with the increase.
“He didn’t say it was ill advised, he didn’t say that given the city’s financial situation we shouldn’t do it — he said it was illegal,” said Councilman Ben Hueso, who supported raises for both police and firefighters. “Now we know he’s handing out raises to his own staff.”
Aguirre noted that a salary increase would hike a key part of a worker’s future pension check. Along with the employee’s highest one-year salary, a pension is calculated with the years of service logged by the worker and a percentage called a multiplier. For a worker who had a 20-year stint with the city at a $100,000 salary and a 2.5 percent multiplier, the annual pension check would equal $50,000.
By increasing a salary instantly, to $110,000, for example, Aguirre argued that with all other factors being equal, the worker would immediately receive a $5,000 annual bump in future retirement income that wasn’t accounted for or paid for by the city when the increase was given. Because the city didn’t have a way to pay for that immediate $5,000 bump, preferring to spread it out over a 20-year schedule, the city was taking on an illegal debt, Aguirre claimed.
When the council considered the police raise in April, Aguirre told the council the move was illegal because it immediately added $29 million to the city’s pension debt.
Councilwoman Donna Frye voted against giving pay increases this year, citing Aguirre’s concerns. She said doling pay hikes without addressing the new pension expenses
“doesn’t seem any different to me than what happened in the past” during the council hearing for firefighter raises. She was referring to the estimated $900 million worth of pension benefits that were dispensed to city employees in deals involving the city, its employees and the retirement board in 1996 and 2002. Frye was unavailable for comment Monday, a spokesman said.
Aguirre is using the liability limit law in his hallmark pension case, claiming the passage of the 1996 and 2002 benefit packages illegally shouldered future generations of taxpayers with the debt. That argument has so far struggled to gain traction in the courts.