Council Hopes To Settle Pension Dispute With Outside Counsel

SAN DIEGO -- The City Council agreed Tuesday to hire outside legal counsel to ask a judge to resolve a dispute between the city attorney and San Diego's pension system over retirement benefits.

Mayor Jerry Sanders last month called on the council to bypass City Attorney Michael Aguirre and seek declaratory relief in San Diego Superior Court so that a judge can resolve the disagreement.

In a 7-0 vote, the council complied.

Councilwoman Donna Frye recused herself after Aguirre said five members of the panel had a conflict-of-interest and should abstain. The other four disregarded his legal advice.

Sanders has argued that Aguirre's delay in codifying pension benefits eliminated more than two years ago for new employees could cost San Diego tens of millions of dollars.

Amid a mounting pension fund shortfall, the city negotiated retirement and health benefit cuts for new employees in July 2005, but the deals were not formalized in ordinances until earlier this year.

"What is at issue here is the city attorney did not, despite my requests on behalf of the council, despite the mayor's requests, prepare the documentation to put that in the municipal code, and that has put much of the benefit of those negotiations at risk," Council President Scott Peters said.

An attorney for the San Diego City Employees' Retirement System recently opined that the benefits should still apply to the about 700 city workers hired between 2005 and February of this year.

Lawyers retained by the city attorney's office disagreed and have said the benefits in question were nullified more than two years ago.

The city attorney told the council that the SDCERS attorney's "opinion is not worth the paper it is written on."

"You are jumping the gun on the litigation when we don't even know if there is a dispute," Aguirre said.

The city attorney said the move to hire an outside lawyer to seek declaratory relief was simply an attempt to "embarrass" him, describing it as a "cheap political shot."

"You do not supplant the city attorney by getting outside counsel at your whim," said Aguirre.

Jay Goldstone, the city's chief operating officer, said the declaratory relief action was needed to resolve the difference of opinion between SDCERS and the city attorney over the benefits.

"The issue raises significant potential liabilities for the city," Goldstone said, adding that the city attorney has a conflict of interest and should not be involved as the legal counsel.

An exact dollar figure has not been put on the disputed benefits.

Guaranteed health care after retirement was eliminated in 2005 for new employees. Also cut was a program that let workers buy years of credit toward retirement and a plan, called DROP, that allowed employees to defer retirement while accruing payments in an interest-bearing account.