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Separate allegations from an assemblyman, and his assembly attorney, left strong legal questions surrounding many city union contracts Wednesday.
The questions seemed to overshadow what was suppose to be Anchorage Mayor Dan Sullivan's first weekly budget briefing.
After initial budget cuts the city's deficit remained about $2.6 million until Wednesday. Sullivan says a combination of fine-tuning previous cuts, and additional revenue meant 2009's budget year is finally balanced.
It is a different story next year and beyond, Sullivan says, blaming five-year union contracts assembly members adopted under the Begich administration late last year.
"Through 2013 alone you've got contracts that add approximately $110
Just moments before the mayor's statement Assembly Attorney Joseph Levesque released an opinion concluding IBEW electrical workers and police union contracts the assembly passed last year were invalid.
"There are now significant legal questions about some of the contracts that have to be answered," says Assembly Chair Debbie Ossiander.
Ossiander sought the legal opinion after the assembly passed the contracts. Levesque says electrical and police union members contracts are not valid because former Chief Financial Officer Sharon Weddleton did not certify contract funds.
Ossiander says, "I think it's absolutely right on that now the municipal attorney weighs in. I'm also
Those questions come as Eagle River Assemblymember Bill Starr released an email also questioning the union contracts. Starr is seeking subpoena power, working toward completely rescinding fire and police union contracts.
Starr says he believes then-Mayor Mark Begich intentionally lied about the city's financial situation so the assembly would pass the contracts. Starr goes as far as implying there was a conspiracy in the administration. A memo Starr attached to the email shows Weddleton warning Begich of horrible market conditions.
Firing back tough a statement Begich calls Starr's accusations, "outrageous, untrue and entirely unsupported by the facts." Begich writes, "My municipal administration worked closely with the Assembly to put Anchorage on firm financial footing."
In separate statements Begich along with police union representatives also reject the assembly attorney's conclusion.
CBS 11 News phone calls to Weddleton have not been returned.
To contact the Newsroom, call 907-274-1111.
ON-LINE EXTRAS
Starr E-mail
Attached is an AIM to be distributed as public documents at our next assembly meeting. I obtained these attachments as a public information request. These indicate communications from the former CFO (Sharon Weddleton) to former Mayor (Mark Begich) advising of revenue shortfalls and over budget indications in December 2008. This was just before the labor contracts of APDEA and IAFF were approved. A very specific email was sent on December 9th with back-up spreadsheet outlining a shortfall or projected shortfall of from 10 million to 31 million with warnings of 100 million possible. I do not have Mayor Begich's responses to these written concerns.
Under municipal code (AMC) the Mayor has the requirement to disclose revenue shortfalls to the assembly upon knowledge. When this memo was received by Mayor Begich he purportedly "sent" Ms. Weddleton home without pay. These communications confirm the assembly was not notified as required. Needless to point out, we, as a body, approved the subsequent labor contracts under limited fiscal information. In some cases there was retroactive pay and benefits further impacting the 2008 budgets. I have additional emails from Ms.Weddleton in which she will not certify funds availability for the labor contracts costing. As you are aware we are in significant fiscal straights and our Municipality fund balances (savings) are depleted at year end 2008 and going forward into 2009. We may not recover from our obligation to restore these savings accounts (fund balances) in the 2010 budget plan.
I plan to consider rescission actions for these AFD and APD contracts and others, and request subpoena powers from the Chairman of the Assembly for further inquiry. I believe now that the assembly was intentionally misled on the fiscal condition of the City. It will be interesting to see if there was widespread knowledge of the financial position of the City, and a conspiracy to deceive the assembly amongst the leadership of the Begich administration. I do not believe the assembly would have approved the widesweeping contracts under consideration on December 15th 2008 if this information was shared by the executive branch, as required, with the legislative branch (assembly) of government.
Bill Starr, Member Anchorage Assembly
U.S. Senator Mark Begich issued the following statement today in response to allegations of a "conspiracy" claimed by Anchorage Assemblyman Bill Starr about the city budget:
"It's unfortunate and unproductive that some are trying to use Anchorage's budget challenges for political advantage or political assault. Assemblyman Starr's allegation that I 'conspired to deceive the Assembly' as mayor is outrageous, untrue and entirely unsupported by the facts.
"My municipal administration worked closely with the Assembly to put Anchorage on firm financial footing. We ended the practice of paying on-going expenses with one-time windfalls. We reorganized city government for greater efficiency. We cut government and won wage freezes from employee unions. We collected millions of dollars in unpaid fines to help balance the budget. As a result of these numerous actions, Anchorage's bond ratings were upgraded.
"In the fall of 2008 when the international recession was starting to take a toll on other cities and states around the country, Anchorage was in solid financial shape. As a Sept. 26, 2008 public memo from then Municipal Chief Financial Officer Sharon Weddleton shows, my administration took numerous steps to ready our city for the potential impact of the recession, including strengthening financing for expansion of the Port of Anchorage and adding financial advisors.
"All this information was shared with the Assembly and public. Two national publications, The Wall Street Journal and Business Week, singled out Anchorage as a rare oasis of financial stability. As a result of these assurances, the Assembly approved new public employee contracts, many of them by 10-1 votes.
"Starr is touting an internal worksheet that I requested of the city's chief financial officer to determine the full range of fiscal challenges the city could face. In fact, many of the 'risk factors' identified never came to pass or turned out for the better. For example, the sheet says the city could be liable for $7 million if it lost an Anchorage Water and Wastewater Utility lawsuit. In fact, the city won, saving taxpayers at least $7 million. The sheet says revenue sharing from the State could be reduced. In fact, Anchorage received an increase, which primarily went to property taxpayers as tax relief. The sheet estimated a 'high estimate' cost to the city of $1.5 million from the Cooperative Services Authority. In fact, Starr himself made the Assembly motion, with our cooperation, to eliminate this cost. The sheet says the city could be liable for $20 million in a police and fire medical trust lawsuit. In fact, the city won the lawsuit.
"I left the mayor's office on January 3, 2009 to fill the United States Senate seat Alaskans voted me in to. At that time, I warned the Assembly and the acting mayor that the international fiscal crisis would require additional action. My transition report to the acting mayor and Assembly said: 'Due to the impact of the financial crisis upon the MOA's investment portfolio, it is possible that during 1st quarter budget revisions, an S version reducing budget appropriations will be required.'
"I am proud of my service as Anchorage's mayor and am especially proud of the professionals who worked with me to leave Anchorage a far better place. I am pleased to help answer questions city officials may have about budget actions under my tenure as mayor, within the constraints of my duties as a United States Senator. But I will not tolerate a character assault on me or members of my administration who worked so hard for the people of Anchorage."
Sen. Mark Begich released the following statement today after a lawyer hired by Assembly Chair Debbie Ossiander issued an opinion that two labor contracts are invalid:
"Every labor contract that my administration submitted to the Assembly for approval was done so with complete information and fully in compliance with the law, according to the city's Legal and Labor Relations departments. Municipal code calls for the city's internal auditor to verify the cost of union contracts and he did so in this case and with all labor contracts under my administration.
"I haven't had time to fully digest this opinion by a law firm hired by the Assembly chair and which acknowledges it is no expert in employment or labor union law. It appears to be a case of battling legal opinions, with these lawyers finding technical issues with two contracts. These contracts were fully examined and approved by a majority of the Assembly. As provided by city law, it's now up to the Assembly to decide whether to take further action on these contracts."
Police Union Statement
The Anchorage Police Department Employees Association today shot down the notion that its contract with the Municipality of Anchorage is invalid.
Derek Hsieh, president of the union, said he was baffled by the legal opinion commissioned by the Anchorage Assembly, which in part finds that union contracts are invalid because, it says, the city's chief financial officer was not authorized to commit the city to the cost of the contract over its five-year term.
"In short, we disagree," said APDEA President Derek Hsieh. "Our union reached an agreement with the Assembly and the Municipality of Anchorage in good faith, and we've been providing the services described in that contract and holding up our end of the deal."
APDEA's current contract was signed in December 2008. A number of factors in the contract save the city money, including the fact that APDEA members joined the city's health plan, which is less expensive than union members' previous plan, and offered volume savings to the city by placing hundreds more people on its existing plan. There were also changes to overtime provisions and work rules that saved the city money.
In mid-May, the union voluntarily gave up a negotiated 3 percent wage increase in 2009 worth $872,773. This action was taken in response to the fiscal-year 2009 budget shortfall discovered by then-acting mayor Matt Claman. The concession made in May saves the city money every year until 2013, including nearly $1.8 million in 2010 for a total of $6.7 million over the life of the contract.
"While all this is going on with the Assembly, the city and the media, our officers are out on the street doing their jobs," Hsieh said. "It is my sincere hope that we'll be able to put all of this behind us soon so we can keep the focus where it should be - maintaining Anchorage's safety and quality of life."
The Anchorage Police Department Employees Association represents more than 560 employees at the Anchorage Police Department, which is the largest law enforcement agency in Alaska. APDEA is the city's second-largest bargaining unit and a major supporter of youth activities and victim advocacy charities in Anchorage.
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