Tuesday, June 2, 2009

DROP Opinion June 1, 2009

I'm not sure if I like Twitter or hate it at this point. This morning, around 11:14, I am sitting at my desk trying to wade through telephone messages, e-mails and the "stuff" in my mail slot, when my telephone announces a new Twitter message. I pick up my telephone and ring up the message; "AndrewDonohue: City attorney: Remember that bombshell I dropped on the mayor last week? Well, forget about it: http://bit.ly/liTOG" Being the inquisitive dolt that I am I clicked on the link and up popped the Voice of San Diego and an article titled: "Goldsmith: Bombshell Averted". I began to read the article and if anyone was looking at me I am sure they would have thought I was completely confused and deep in thought or maybe even having a seizure.

I clicked open the link for the "Opinion" the City Attorney was providing and began to read. I first noted the document was 116 pages in length and titled, "Memorandum of Law" dated June 1, 2009. The memorandum was addressed to the mayor and City Council and the subject stated, "DROP and Charter Section 143.1." I started skimming the words and as they filled the screen of my Blackberry. The City Attorney was now providing an opinion that in short said; the vote of members that occurred in 1997 to accept DROP did not meet the requirements of Charter Section 143.1; and DROP was an illegal benefit; the Municipal Code providing for this benefit was in error; and thus DROP could be eliminated without a vote of the membership.

I read this rather quickly as I had a meeting to get to and work to do. I slipped the phone in its holder and headed out to get some work done. As I drove the freeway heading north I thought to myself; last week the mayor and City Attorney are pointing fingers at each other, blaming one another for political posturing or incompetence; the mayor saying the City Attorney dropped a bombshell when one of his employees agreed with SDCERS that a vote was needed to make any changes; the City Attorney indicating to the contrary; then the mayor's minion changes his story and says the outside attorneys hired for labor negotiations talked to SDCERS who told them no vote was required; when David Wesco contradicts this statement saying SDCERS never talked to the outside firm nor discussed this issue. ALL of this is going through my head as I process the quick read of the City Attorney's "Memorandum of Law." Quick thought; when was this researched and written?

I start getting text messages, e-mails and my phone rings five times in the next 40 minutes as I get to my meeting. Five messages left in voice mail; all of them almost yelling into the phone; "Have you seen the opinion of the City Attorney? You need to read it."

Remember, I am not an attorney and like most of you rely on the words written by the attorney's to try and make head or tails out of their convoluted thoughts and ramblings. This particular document is no different. I make it home, flip on the stereo and sit down to re-read the City Attorney's opinion. The actual writings of; Jan Goldsmith, Walter Chung and M. Travis Phelps, is fourteen (14) pages. The remaining 112 pagers are attachments used to support their "legal theory" or "opinion" as you will. Now, keep in mind we all have an "opinion" and we all know what opinions are and what they smell like. Now "legal theory" is a little different but as Wikipedia defines the word THEORY; "The term is often used colloquially to refer to any explanatory thought, even fanciful or speculative ones, but in scholarly use it is reserved for ideas which meet baseline requirements about the kinds of observations made, the methods of classification used, and the consistency of the theory in its application among members of that class. I especially like "fanciful or speculative" after reading the City Attorney's work.

I read the document once; twice; then a third time. I move back and forth from the various attachments to the memorandum and I am struck first by the timing of the memorandum and then the content. The basis of the opinion is there were only 3,269 votes tallied from an eligible membership of 9,206. Of the 3,269 votes tallied; 88 voted "no" with the remaining voting "yes." The opinion put forth is the 3,171 "yes" votes comprised 35.51% of "eligible members" and did not meet the requirements of Charter Section 143.1.

Let's read further and review the attachments used to support this opinion. In Exhibit F; an October 2, 2002 Memorandum addresses Charter Section 143.1. On page 3, the last sentence; "In any event, there is no legislative history on the meaning of the phrase "approval of a majority vote of the members of said system," so we are left with the language of the statute."

In Exhibit H; an August 27, 1993 Memorandum from the City Attorney to Larry Grissom, SDCERS Retirement Administrator, addresses "Benefits Elections." The City Attorney writes; "In my quest to discover the true purpose and meaning of Charter Section 143.1, I could find no case law or attorney opinions shedding light on the subject. However, in the dusty archives, I did find three Special Benefit Election Reports (Reports) issued by the Board of Administration (Board) between the years of 1965 and 1970. Each of these reports was issued at a time when major benefit changes were proposed."

Let's now look at the "Reports" to which the City Attorney refers. The first; dated April 15, 1965, titled, "CHANGES IN RETIREMENT BENEFITS A SPECIAL REPORT from The Retirement Board of Administration, the fifth paragraph addresses Charter Section 143.1; "In summary, a yes vote by the majority of all the members of the System will mean improved benefits and the employer and employees will contribute a greater amount. A lack of a majority of yes votes will result in no improvement in benefits and a small reduction in present employee contributions to the Retirement System. It is therefore important that every member votes."

The next report is dated March 17, 1967, and bears the same title and the third paragraph addresses Charter Section 143.1; "In summary, a majority of yes votes on these proposed changes will mean higher future pension benefits and a slight increase in contribution requirements. Less than a majority of yes votes will mean no change in pension benefits and a slight reduction in contribution requirements."

The final report presented is dated February 27, 1970, and again bears the same title and in the "Summary" addresses Charter Section 143.1; "A majority of yes votes by the employees will permit the council to adopt an ordinance to accomplish six changes described on the following pages, which will result in higher future pension benefits and an average increase of approximately 30% in the employee contributions. Less than a majority of yes votes will mean no change in pension benefits, an average reduction of about 16% in employee contributions and no obligation for the City to pay for improved benefits."

My un-educated reading of the three reports used to support the opinion of the City Attorney's legal theory; in 1965 SDCERS used the exact language of the charter section. The next two reports talk only of a "majority of yes votes" to pass the changes being proposed. What is curiously missing in all three is the actual votes cast versus members and the percentage of yes votes. Want to venture a guess why this part of the equation is missing?

Go back to Exhibit F and the comment, "In any event, there is no legislative history on the meaning of the phrase "approval of a majority vote of the members of said system," so we are left with the language of the statute." The courts will obviously decide this issue. I do though find it curious two of the three examples appear to suggest a majority "yes" vote met the requirements of Charter Section 143.1 in those years. It would also appear the vote in 1997 was also interpreted to have met the requirements as the City Attorney at the time and City Council, as well as SDCERS, all relied on this vote to make the changes to enact DROP.

I recently read an article where Jan Goldsmith said the problems in San Diego with Labor and the relationship with the City was one of repeated litigation and his desire to move away from litigation between the two parties. Taking from Jan's own words; "Estoppel is an equitable principle that may apply where a party relies upon a promise." So the promises made and the belief for the past 12 years that DROP was approved, mean nothing? He is pouring jet fuel on a smoldering fire and like the mayor more eager to cross swords and go to war than work on fixing the problems of past; discovered today. What does this say about the state of Government in San Diego? Maybe it's the sun? Too much in the way of ultra violet rays; hair pieces that do not fit properly, thinning hair on a large head and a propensity to place blame rather than correct a mistake? When will intelligent; honest; professional people step forward; leave their egos at home and do what is right? When will politics take a back seat to honesty, fairness and doing what is right? It appears that time is not in the very near future based on the actions of the City Attorney and mayor of San Diego.


Anonymous said...

As you noted section 143.1 has had multiple interpretations over the years. It's clear there is no agreement even if the City Attorney wants one to fit his newest needs.

It seems to me DROP has been litigated repeatedly. Whether it was the CORBETT decision, or rulings against Aguirre's 1st, 2nd, 3rd, 4th, 5th or 6th amended complaints, the Courts and City have found the DROP to be a retirement benefit. Heck, the City has even told the IRS under penalty of perjury that DROP is a lawful part of its pension plan.

It really comes down to this: for the last 25-30 years the City has been grossly mismanaged. The taxpayer's treasury has been squanders by city leaders, sometimes to mainly benefit themselves and those holding power.

Now, the bills are coming due and the City doesn't want to pay.

Michael Conger recently quoted the Cal. Supreme Court who may have said it best, "What integrity would be left in Government if Government itself could attack the integrity of it own agreements?"

Mayor Sanders and Mr. Goldsmith are grasping at straws and make a technical argument. But as you carefully pointed out, facts were left out. Why?

In our democracy Presidents have been elected with less than 50% of the eligible electorate voting. But if we apply Mr. Goldsmith's logic, withholding your vote is a vote against the proposal rather than simply abstaining.

The spirit of Charter Section 143.1 is to protect employee rights and benefits from arbitrary changes.

How does one twist or interpret this to mean you can use this section to deny rights or benefits?

Secretsalmon said...

Excellent post Sparky. Who's Steve? The response from the first Anonymous is very enlightening too. During the 37 years I was employed by the City of San Diego I never dreamed that the City would try and renege on an agreement, written contract or verbal. I gave honest labor in the belief they'd honor their agreements on retirementand and insurance benefits. Unfortunately myself, and apparently the rest of the city employees, were the only ones with honor and integrity. The Supreme Court quote given in "first anonymous" says it all. As I've expressed in the past the City (mayor and council-morons) view honor, honesty, principles and integrity as being only applicable for the employees, not them. It's the same mentality Congress used when it exempted themselves from EEO laws.

Anonymous said...

Here another interesting thought:

“Our search is for the law and we want to get it right. Our city does best when we follow what the law says and not what we want it to say.” Jan Goldsmith wrote this earlier this year. He also said, “Lawyers do not make the law. Lawyers research and communicate what they believe the law to be. The first thing we do is read the statue. If it is clear, we apply the statue’s plain meaning.” “This plain meaning rule is the key rule in statutory construction.”

It's obvious from Mr. Goldsmiths 14 page opinion the plain meaning rule DID NOT APPLY. His interpretation of the statutory construction of the Charter Section 143.1, is inconsistent with the plain meaning and its spirit.

Hates Sanders said...

Seems Retired City Attorney John Witt and SDCERS believe Jan Goldsmith is way off in his legal theory. Steve, it appears you called it correctly (again) in the way votes have occurred through the years. Makes me also wonder why Goldsmith did not put the vote outcomes of the three prior votes cited to back up his theory. I would love to know what role Sanders played in all this. How was Bill Kaye involved? Collusion? More underhanded, backdoor, illegal activity?

Anonymous said...

Well ....after reading David Wescoe's letter to Mr. Goldsmith et. al. it's clear once again their is an issue with the competency of our new City Attorney and, of course, whomever did the legal research for his opinion.

WHAT A SURPRISE! Just another indicator that our city is under the control of people who claim professionalism but turn out to be much less. WHEN WILL THIS NIGHTMARE END?

With Monday, June 8th, approaching rapidly it will be very interesting to watch the gyration from the Mayor, City Attorney and of course the outside counsel the Mayor is paying with thousands upon thousands of precious tax dollars.

Anonymous said...

MORE DISTURBING is Mr. Goldsmith's response when Mr. Wescoe points out a critical, if not intentional, omission.

Tantamount to being caught in a lie, Mr. Goldsmith's response is political, 'it's not important', rather than legal explanation as to why the omission occurred.

I wonder if the UT's editorial board will have the professional fortitude to editorialize on Wescoe's response? Or if they'll just run and hide using what we come to expect, as part of the new "drive by" media.