Tuesday, February 18, 2014

UPDATE: PERA lawsuit? Don't blame me, mayor says

Posted By on Tue, Feb 18, 2014 at 1:17 PM

Bach: Washing his hands of PERA debacle.
  • Bach: Washing his hands of PERA debacle.
UPDATE: City Councilor Jan Martin, who served on Council in 2012 when the decision to litigate the PERA matter was made, says this:

"Council was advised by the City Attorney that we had a 'strong case' and should 'pursue' the PERA lawsuit. We had the foresight to set aside the Memorial funds until a decision was reached. The Mayor was aware of the lawsuit and did not express any hesitation or reservations in the City moving forward with the suit. Ultimately though, the decision to pursue the lawsuit rested with Council and we moved forward based on advice from our legal counsel."

———UPDATE POSTED FEB. 18, 2014, 1:17 P.M.———

UPDATE: Council President Keith King says Council proceeded with the lawsuit on then-City Attorney Chris Melcher's recommendation in 2012, before King and five others were elected to the current Council.

"Council voted on this based on a recommendation that Melcher gave them with a very, very strong recommendation they had a good chance of winning this lawsuit," King says.

"This is Bach's own city attorney. They took the advice of Melcher. So this lies on the city attorneys office, and the city attorney's office obviously didn't understand the consequences of this, which was wasting $50,000 a day in interest. The responsibility rests with the mayor's lawyer. He [Bach] is culpable, too, because it's his lawyer who gave advice to Council. If the mayor had reservations about this, why hasn't he said anything the whole time we've been on Council? He hasn't said a word."

As for the footnoted item below, King notes the Interim City Attorney Wynetta Massey told him today the legal opinions at issue in the City for Champions will be delivered to Council later today.

"I hope we have an opportunity to have a full discussion with Bach on this, and that we have some kind of a balance situation of some type on what Council's role is," he says.

———ORIGINAL POST FEB. 18, 12:54 P.M.———

Mayor Steve Bach announced at a news briefing today that a judge's ruling against the city on a dispute over retirement benefits for Memorial Health System workers is City Council's business, not his.

"That's a City Council matter," he says. "City Council controls [Colorado Springs] Utilities and Memorial, or has oversight, I should say."

"With respect to this lawsuit between the city and the Public Employees Retirement Association, please take your questions to [Council President] Keith King and Council."

Bach's comments pertained to a judge's ruling last week that said the city is wrong in its claim Memorial owes nothing for its 4,000 employees' current and future retirement benefits through PERA. Rather, retired Judge Harlan Bockman ruled, the city must go through the statutory process to depart the PERA system, which includes a vote of workers and approval from the PERA board.

The lawsuit arose after the city leased Memorial under a 40-year deal to the University of Colorado Health, and received $185 million from UCHealth specifically for the PERA obligation and then refused to pay PERA, triggering the lawsuit.

Councilor Andy Pico, who was in the audience and heard Bach's remarks, also said later the decision to litigate the issue was made prior to his election in April 2013. That's the same election that seated King on Council.

However, Pico added, "I was surprised to hear that [what the mayor said]. It's not like the [city] lawyers working for him (Bach) had nothing to do with it. I think what he's doing is washing his hands."

Bach hired Chris Melcher as city attorney in fall 2011, a few months after he took office in June 2011. Melcher resigned, effective Jan. 31, two weeks before Bockman ruled. Melcher has a history of doing the bidding of the mayor at the expense of Council, although Melcher contended he represented both, and every other city board, commission, employee and agency as well.

Here's an excerpt from our past reporting, which ran in a March 2013 issue, on Melcher's dealings with Council:
But in the time since voters approved the deal in August, Memorial has been the subject of another Melcher-Council dustup. Though a lawsuit against the city for Melcher's early redemption of Memorial Hospital bonds was listed in his quarterly legal report, he didn't formally tell Council about it until the Feb. 11 Council meeting, 3½ months after it was filed.

"I would add it to a laundry list of things that don't come from our attorney," Councilor Brandy Williams says. "We're way past 'bothersome' at this point."

Williams also says Melcher routinely withholds information until the start of Council meetings.
The city is being represented in the PERA lawsuit by Hogan Lovells, an international law firm who's local office represented Bach in campaign legal matters when he ran for mayor in 2011. The firm did little if any legal work for the city prior to Bach's election, but since has cashed in, being paid $167,500 in the first year.

In researching the story about Melcher last year, I sifted through more than 1,000 pages of retention agreements between the city and outside lawyers in 2011, 2012 and part of 2013, obtained through a Colorado Open Records Act request. Not a single agreement was signed by a Council member. All the deals were executed by Bach and Melcher. The PERA lawsuit began in September 2012.

As a footnote, Bach also announced today that the city attorney's office has notified him that he has full authority to appoint the Regional Tourism Advisory Board to oversee the City for Champions tourism projects, and that he has full authority to sign the resolution with the state, which has agreed to provide $120.5 million in state sales tax rebates over the next 30 years. He said attorneys told him Council's permission is not required, though he hopes he and Council will act in "on a consensus basis."

We asked Pico and Councilor Val Snider, who also attended the news briefing, if they'd heard from Interim City Attorney Wynetta Massey on those issues yet. After all, it was Council who requested those legal opinions a week or two ago. Neither has heard a peep so far. 

Tags: , , , , , , ,


Comments (11)

Showing 1-11 of 11

Add a comment

Subscribe to this thread:
Showing 1-11 of 11

Add a comment

Latest in IndyBlog

All content © Copyright 2020, The Colorado Springs Independent

Website powered by Foundation