Mayor urges city attorney to drop pension lawsuit - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Mayor urges city attorney to drop pension lawsuit

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SAN DIEGO (CNS) - Mayor Bob Filner urged City Attorney Jan Goldsmith and the City Council Friday to drop a lawsuit against the San Diego City Employees Retirement System over differing interpretations of required pension contributions.

Filner said that since the city supplies legal defense for SDCERS, the city essentially was suing itself. He said the pension system's legal expenses have hit $3.2 million over three years.

"I think that's ridiculous, on its face," Filner said. He called the case "a loser" based on comments by judges in previous court hearings.

A section of the City Charter requires that the city and its workers pay a substantially equal contribution to the retirement system.

City officials, labor union heads and pension system administrators have their own interpretations on what the term "substantially equal" really means, and Goldsmith filed suit in June 2010 in order to get a judicial finding on the issue.

Filner said Goldsmith is trying to reinterpret a section of the City Charter that has been read one way for 70 years.

The City Attorney's Office contends that SDCERS has overcharged the city for its pension contributions by tens of millions of dollars annually for years.

Goldsmith said trial in the case is scheduled for next month.

"Labor unions and (the) pension board have been lobbying the city to drop the case," Goldsmith said.

He said litigation was approved unanimously by the City Council in 2010, and council members decide in closed session whether to file or drop a court action. The city attorney said he'd be willing to discuss a settlement, but simply dropping the case would leave the original question unanswered.

Herb Morgan, president of the SDCERS Board of Administration, said the city's contentions in the case are "fundamentally inconsistent" with the principles of operating pension systems.

"They're inconsistent with the City Charter, they're inconsistent with the municipal code and, more importantly to me, it's an abuse of taxpayer resources," Morgan said.

He called the litigation a "hollow mockery."

The city's pension deficit as of last June 30 was estimated at almost $2.3 billion.

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