San Diego City Attorney Michael Aguirre on Aug. 16 filed a malpractice complaint against Gabriel Roeder Smith & Co. and Callan Associates, Inc., alleging “professional negligence in providing advice to the San Diego City Employees’ Retirement System.”
The lawsuit alleges their failure to meet a standard of care in advising the SDCERS Board, resulting in economic damages to the city of San Diego citing the $1.7 billion underfunded pension plan.
“This is only the first salvo,” said Aguirre. “You may be sure that to protect San Diego taxpayers, more lawsuits will be filed in the coming months.”
A representative from SDCERS declined comment, pending a review of the complaint.
On the same day, Aguirre released a sweeping plan to “resolve the city’s legal, accounting and financial crisis.”
Among his proposals: Stop recognizing illegal pension benefits accumulated by city employees, who have not retired as of Aug. 1, 2005; seek a settlement with city employees who hold illegal benefits claims and who retired after July 1, 1997, and before Aug. 1, 2005; place on the June 2006 primary election ballot a charter amendment to change the pension board’s composition, after which the City Council would remove the current board members and appoint seven new independent members, and restore the city attorney as counsel for the board.
Aguirre also wants the City Council to consider replacement benefits for city retirees and current city employees, subject to a plan that the City Council also would prepare for the 2006 ballot that would raise money to pay for all “legal and replacement pension benefits.”