Concern about the San Diego City Employees Retirement System’s blanket authority to settle lawsuits without council input has caused the city’s officials to approve an ordinance that takes away the retirement board’s ability to settle lawsuits unilaterally. The change in policy stemmed from the retirement system’s recent approval of a $700,000 settlement with the former president of the Municipal Employees Association, as the City Council was not consulted about the matter. Furthermore, a judge had ruled that the ex-MEA boss Judie Italiano was not entitled to receive more than a $5,700-a-year pension; however, SDCERS opted for a $700,000 lawsuit to apparently avoid further litigation. Councilman Carl DeMaio commented that “The settlement offended me, and this City Council had no opportunity to be briefed, to weigh in, to examine the options and decide if this large settlement was in the best interest of the taxpayers.” The Union Tribune reports:
“City Attorney Jan Goldsmith tried to challenge the deal in court. It was upheld because an obscure provision in a broader agreement approved by the council in 2008 gave pension officials the ability to settle cases without city permission. The council voted unanimously Tuesday to adopt Goldsmith’s request to change that agreement so that the city would have final say on any future proposed settlements, as a safeguard for taxpayer money in the pension fund.”
The ordinance will undergo a second reading before it is completely finalized. San Diego’s City Charter grants the retirement system independence, but not when it comes to handling litigation.