Judge voids key reform on pensions Gary-backed effort would have sliced ex-officials' benefits

Fight 'very far from over'

Decision says action by council violates U.S. Constitution

June 05, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

A federal judge has struck down the core of County Executive John G. Gary's pension-reform legislation as unconstitutional, allowing former top Anne Arundel officials to keep retirement benefits described in court documents as among the state's most generous.

Gary, who has made reducing the county's pension costs a top priority, promised to appeal the ruling all the way to the U.S. Supreme Court if necessary. "This is very, very far from over," he said.

U.S. District Judge Andre M. Davis ruled last week that a bill that was the heart of a pension-reform package passed by the County Council in 1995 violated the contract clause of the U.S. JTC Constitution. The bill would have dramatically reduced pension benefits that the council approved six years earlier.

Davis ruled that the financial burden posed by the "appointed and elected officials" pension plan did not justify the administration's aggressive reform measures. County figures show that the pension plan, one of five covering Anne Arundel's 3,500 employees, is $6.9 million under-funded.

"The county has failed to make a sufficient showing that the means which it has adopted to address its 'problem' is the least drastic available," Davis wrote in his May 31 ruling.

Lawyers for the county and the 13 plaintiffs, who filed suit in December challenging the legislation, received the judge's decision late Mon-day.

"It's an expected victory," said Glenn M. Cooper, a Bethesda attorney representing the plaintiffs, who in the late 1980s composed the upper echelon of county government. "It's not a surprise to us, and it shouldn't be a surprise to the county."

Gary's vow to appeal the ruling, potentially prolonging the court battle, underscores the importance the Republican county executive has placed on overhauling Anne Arundel's personnel system. County lawyers could challenge Davis' ruling in the 4th U.S. Circuit Court of Appeals.

"He's just a judge," Gary said. "It defies our form of government to say that if a mistake is made it can't be corrected by future legislation."

In a small victory for the county, Davis did not require Anne Arundel to pay the plaintiffs' attorney fees, which would have run into the tens of thousands of dollars. He also left the door open for Anne Arundel lawyers to pursue several aspects of the pension-reform case in state court, but no aspect as important to the administration as the constitutionality of the bill struck down last week.

"Obviously, the county is disappointed with the ruling," said David A. Plymyer, deputy county attorney. "We'll evaluate what we do from here. This is not the final bite at the apple."

In Anne Arundel, the pension system has become as much an issue of politics as pay.

Gary has cast the pension system, which covers 93 former appointed and elected officials, as a symbol of Democratic profligacy.

From 1983 to 1989, during the tenure of Democratic County Executive O. James Lighthizer, the County Council approved six bills that enhanced the retirement plan for Anne Arundel's highest-paid officials.

In court papers, county lawyers argued that several of those officials misled the council with financial data underestimating the cost of the pension legislation.

The Gary administration singled out three plaintiffs as the core of what he called a "flagrant breach of public trust": Richard F. Mayer, former personnel officer; Adrian G. Teel, former administrative officer; and Joseph H. Novotny, farmer county auditor.

After campaigning on pension reform, Gary introduced legislation last year that would have repealed three parts of a 1989 bill, which county attorneys described as "the coup de grace" to the pension fund. The bill, approved by a unanimous council, would have:

Raised the retirement age -- lowered in 1989 -- from 50 to 60, saving the county an estimated $950,000 a year.

Reduced the county's contribution to the "appointed and elected" pension plan by 20 percent, saving an estimated $3.1 million a year.

Lowered the minimum annual retirement benefit from $4,800 to $1,200.

The savings would have totaled more than $4.2 million annually.

But the legislation, blocked in December by the plaintiffs' lawsuit, never took effect. If the plaintiffs had lost the suit, they could have been liable for hundreds of thousands of dollars in back benefits and attorney fees.

Gary said a county appeal would ask the court to focus less on the contract issue of the case and more on how the 1980s pension legislation was passed.

"It's incumbent on us to prove that a mistake was made, but I don't think the judge even took that into consideration," he said. "We think an appellate court might very well hold that if these folks withheld information that could have affected the outcome of a decision, then that decision is void."

Pub Date: 6/05/96

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