In an attempt to box in Mayor Chuck Reed on his worst-case scenario of the city’s pension crisis, a complaint was filed with the SEC on Monday on behalf of three unions. The complaint claims Reed didn’t disclose pertinent information on the pension crisis in forms filed with the SEC and misled investors who helped the city issue $435 million in bonds last year.
The complaint, filed by Christopher Platten, an attorney for the firefighters union, points to the City Council’s issuance of $315 million in Series B/C Airport Revenue Bonds and $120 million in bonds to fund the Convention Center renovation.
“It appears that Mayor Reed told everyone about the $650 million dollar projection except those entities and/or individuals he was required to by law,” the complaint states.
“Over the past year and the last several weeks in particular, the Mayor has been insistent that the $650 million projection was reasonable and in some instances he’s stated that figure was likely to come true,” the firefighters, police and IFPTE Local 21 unions said in a joint statement. “Either the mayor can come clean with the SEC that he misled potential investors or he can come clean and admit he mislead the public. Either way, he must be held accountable.”
In an interview with the Mercury News, Reed called the filing “another bogus complaint full of misrepresentations’’ and “a political trick,” which he suggested unions are using as a means to distract voters from the dramatic increases in retirement costs in the last decade.
This comes on the heels of Platten filing a complaint against Reed with the city’s Elections Commission. Reed and the council are expected to approve language at next week’s session for a pension reform ballot measure in this June’s election.