SAN DIEGO – After listening to about six hours of oral
arguments on motions to dismiss lawsuits on San Diego's debt-ridden
pension fund, a judge said Monday he will take time to review complex
legal issues.
Both sides in the dispute between City Attorney Michael Aguirre and the
board of the San Diego City Employees Retirement System sought to have
their opponents' lawsuits thrown out.
Superior Court Judge Jeffrey B. Barton affirmed his tentative ruling to
deny the retirement system's motion.
Barton took the other issues under submission.
“I wouldn't expect a decision quickly,” Barton said, citing the
difficult legal arguments involved.
Aguirre asked Barton to declare pension benefits won by employees in
1996 and 2002 to be declared illegal, to appoint a special master to
determine which benefits would be affected, and to allow him a chance to
submit more written documents supporting his positions.
The retirement system and the city, represented by Aguirre, sued each
other last year, seeking a court ruling on whether benefits hammered out
in the two agreements are legal.
In all, more than a dozen lawsuits have been filed in connection with
the pension agreements and subsequent underfunding of the pension
system.
Aguirre claims the pension benefits are illegal and should be rolled
back because pension board members had a conflict of interest when they
agreed to increase benefits for city employees, including themselves.
“When you intentionally create an unfunded liability as large as is
here, that is prohibited debt,” Aguirre said. “SDCERS played a critical
role in agreeing to this contract. The action of the SDCERS board was
decisive.”
The board agreed to the new package of benefits, which allowed city
officials to underfund the pension plan – but didn't have to, Aguirre
said.
The retirement system board claims the agreements are legal, and the
city is violating them by underfunding the pension system.
Michael Leone, representing the retirement system, said that with
Aguirre's lawsuit, the city is essentially suing itself, and has no
standing because it doesn't represent employees affected by problems with
the pension fund.
Aguirre based much of his argument on the state's conflict of interest
law.
Joel Klevin, who represents the firefighters union, said there are
exceptions to the rule – if the benefits don't directly benefit your
department and there's an urgent necessity for an item to be
considered.
The City Council requested the retirement system board to consider the
new funding formula, Klevin said.
The city of San Diego charter called for nine of 13 members of the
board to be city employees, so conflicts are unavoidable, the lawyer
said.
However, the affected board members could have abstained or voted “no,”
Aguirre said.
There was also no necessity for the board to increase benefits and
lower funding, Aguirre said.
The state conflict of interest law was “well-established” and “trumps
all other laws,” Aguirre said.