San Diego City Attorney Jan Goldsmith brought the noise on pension reform at City Council on Monday afternoon, publicly stating his belief that city employees could be responsible for part of the city’s $2.1 billion unfunded pension liability.

His opinion came after a presentation by the San Diego City Employees’ Retirement System. The retirement system’s attorney, Elaine Reagan, said the city could not make employees help pay down that debt.

Goldsmith disagreed and gave his own presentation supporting his position that they could. Changes in employee contribution rates, he said, are not guaranteed, meaning they could be modified through labor negotiations.

“The minute you interpret our charter as requiring that the city pick up all costs, you are stating that they are vested rights,” Goldsmith said. “I do not agree with that. I do not believe that interpretation is in good faith. I think it is flawed.”

As the council discussed the issue, Goldsmith made sure to leave room to change his mind on the retirement system’s opinion. He gave no formal opinion in writing beyond his presentation, and said he wanted to study the issue more.

But Goldsmith did not back down from his contention that the city, not the retirement system, interprets the City Charter section.

“This is not the SDCERS-form of government,” Goldsmith said.

As I noted in a blog post yesterday, it is hard to grasp how much the city and its employees’ situation might change if Goldsmith’s opinion wins the day. Employees would not be responsible for half the city’s pension deficit because the city has unquestionably guaranteed at least some of that debt because of previous underfunding. Still, employees could be responsible for much more than they are now.

Council reaction to Goldsmith’s opinion ranged from giddy in the form of pension hawk Councilman Carl DeMaio to those that were more wary. Councilmen Kevin Faulconer and Todd Gloria warned of legal bills should the city have another courtroom dispute with the retirement system because the city ultimately pays all those costs. Councilman Tony Young was concerned about the city attracting qualified employees should city officials decimate the retirement package.

The next step, city and retirement system officials determined, was for Goldsmith and Reagan to meet to discuss the issue.

It’s unclear how talking would help. Goldsmith and Reagan have fundamentally different opinions on who interprets the City Charter’s section that’s at issue.

Asked after the meeting about that difference of opinion, Reagan replied: “I hope to convince him with language from the California Constitution that it’s within our power to interpret the City Charter when it comes to retirement.”


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