Attorneys haggled yesterday over the impact of legal precedents on San Diego's battle over disputed employee pension benefits as a trial looms next month.
The lawsuit, filed by the pension system against the city last year, stems from contested benefits granted to employees in 1996 and 2002.
Judge Jeffrey Barton heard from City Attorney Michael Aguirre, and lawyers for the city's pension system and three labor unions, as they argued over the effect of a 2000 court settlement and the state's conflict-of-interest law on the case.
Barton issued a tentative ruling a week ago rejecting requests to avoid a trial and rule in favor of the unions – which want the benefits preserved – and the pension system.
In July, the judge denied a similar attempt by Aguirre to have the benefits declared illegal.
Barton will consider the attorneys' statements before releasing a final ruling. A trial is set for Oct. 18.
Aguirre maintains that city officials used the increases as a lure to persuade then-members of the pension board who were also employees to agree to plans to underfund the retirement system.
Their decisions to support the city, Aguirre contends, violated state codes that bar public officials from profiting from their votes.
The underfunding plans, which allowed the city to put off making its full annual contributions to the pension fund for nearly a decade, helped create a $1.4 billion pension deficit, one of several obligations that San Diego is struggling to meet.
Barton, in his preliminary ruling, found that numerous “triable issues of fact” remain in the case, including whether related City Council and pension board decisions laying out the underfunding plans and setting new benefits can be considered as part of one pact.
Union attorneys have argued that several agreements and council acts set the policies and that no one contract laid out a direct link between shortchanging the pension and boosting benefits.
They also said yesterday that a 2000 legal decision, known as the Corbett settlement, which granted benefit increases of up to 10 percent to city workers, supplants the 1996 pension deal.
Barton, in the ruling, said he can't set aside the benefits from the settlement because doing so would “invalidate the Corbett judgment.”
Aguirre has said that eliminating all the targeted benefits could wipe out up to $700 million of the pension debt.
If the Corbett settlement supersedes the earlier deal, City Council President Scott Peters said yesterday, the savings from a judgment in favor of the city plummet to about $50 million.
The judge also noted the lack of a specific case to guide him in deciding which statute should take precedence in a dispute over public employee pension benefits granted as part of questionable contracts.
Benefits are protected under the state constitution, while the conflict-of-interest law, known as 1090, addresses tainted deals.
Jennifer Vigil: (619) 718-5069; jennifer.vigil@uniontrib.com
