City labor contracts invalid, attorney says

Attorney Joseph Levesque was hired by the Assembly in March to review the information available to the Assembly at the time it approved contracts with the IBEW and the police union. His report was sent to Assembly members today.

One of the questions put to Levesque was whether Assembly actions approving the contracts were valid.

His answer: "No, the Resolutions are invalid because the mandatory provisions under Anchorage Municipal Code 6.30.050 were not followed."

That provision says the Assembly can't approve any contract "unless the chief fiscal officer shall first certify" that money is available to pay for it.

The opinion came out less than a day after Assemblyman Bill Starr announced he plans to ask the Assembly to rescind those contracts and others approved late last year in the last days of the administration of former Mayor Mark Begich. He asserts that the administration withheld important information from the Assembly.

Begich, who left office at the end of the year after his election to the U.S. Senate, issued a statement this afternoon calling Starr's allegations "outrageous, untrue and entirely unsupported by the facts."

Begich said his administration "worked closely with the Assembly to put Anchorage on firm financial footing" and told the body in September 2008 about "numerous steps (the administration was taking) to ready our city for the potential impact of the recession, including strengthening financing for expansion of the Port of Anchorage and adding financial advisers."

Two national publications "singled out Anchorage as a rare oasis of financial stability," Begich said in a written statement issued just before 1 p.m.

"All this information was shared with the Assembly and public. ... As a result of these assurances, the Assembly approved new public employee contracts. ..."

Assemblyman Dan Coffey, however, said the idea that the Assembly had been informed of the city's financial position when it was considering those contracts is "nonsense, nonsense, nonsense." He was referring specifically to such a claim made to KTUU-TV by the city's former chief fiscal officer, Sharon Weddleton.

If conservative members of the Assembly had had such information, "we would have been howling," Coffey said. "It's just ludicrous to say we were informed."

In a story first reported last night by KTUU-TV, Starr released e-mails he obtained through public records requests that show former city finance chief Sharon Weddleton informing Begich on Dec. 9, 2008, that "November investment returns were horrible" and that some city departments "have started blowing their budgets several weeks earlier in the year than normal."

Weddleton also asks Begich for permission to circulate a memo to department heads ordering "an immediate hiring freeze" and a stop to "all discretionary spending."

In an e-mail to news media, Starr said he doesn't think the Assembly would have approved the labor contracts if members had better information about city finances.

"I believe now that the Assembly was intentionally misled on the fiscal condition of the city," Starr says in the e-mail. "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."

Starr also says he plans to ask Assembly Chairwoman Debbie Ossiander for subpoena powers to continue his inquiry.

Ossiander said she and other members received Levesque's opinion Wednesday morning. She said she's not sure how the body will respond.

"At this point we've got some unanswered questions," Ossiander said.

"Certainly some response (is) merited from the administration, the Sullivan administration, since they're the entity (charged) with enforcing contracts. And they're faced with a situation where at least one attorney believes at least two of those contracts they're currently dealing with are invalid. I think that the municipal attorney should weigh in at the very least."

A footnote to Levesque's opinion for the Assembly saying in part that additional information "might exist showing that municipal officials may have failed to perform their duties pursuant to the Municipal Charter and Code. In this regard, some further investigation into potential malfeasance or misfeasance may be warranted."

This is a developing story. Check back for updates.