Dueling city labor contract opinions to be reviewed

The two legal opinions come from a private attorney hired by the Assembly, Joseph Levesque, and an attorney for the Anchorage firefighters union.

Levesque says he thinks two of the contracts are invalid. Charles Dunnagan, a longtime attorney for the firefighters' union, disagrees.

At the heart of Starr's allegations that Begich withheld financial information is a Dec. 9 e-mail in which the city's former chief financial officer told Begich that November investment returns were "horrible" and suggested the mayor impose a hiring freeze and halt discretionary spending.

In voting to accept Starr's report, the Assembly as a whole took no position on his complaints.

But Starr and Assemblyman Dan Coffey made it clear they believe it did.

Both members said they are not faulting former CFO Sharon Weddleton. Starr noted that Weddleton's projection of a potential $33 million 2009 shortfall was right on target.

Starr said he believes Begich withheld bad news about city revenues to head off more questions about the long-term "historic labor contracts" that were up for approval at the time.

Coffey said the city charter requires the mayor to inform the Assembly when it looks like city revenues won't be sufficient to cover expenses.

"Had this information been before us, it would have changed what we did," Coffey said.

"I believe our mayor knew that ... Why on earth didn't he tell us?"

Coffey went on to say that he thought Begich was helping out unions that had been political supporters of his, instead of fulfilling his responsibilities to the Assembly and the public.

Begich has denied withholding any information from the Assembly and says the body got all the information required about city finances. He, in turn, has accused Starr of using the e-mails as fodder for political attacks.

Begich told the Daily News this week that the Assembly was already discussing a hiring freeze in December 2009, and that the city always ratcheted down discretionary spending at the end of the budget year while he was mayor.

Assemblywoman Sheila Selkregg agreed that the Assembly didn't have a full picture of the city's finances in December -- as underscored by the discovery of a $17 million budget deficit a month later.

But she said the panel will better serve the public by focusing on reviewing and approving an upcoming budget proposal from Mayor Dan Sullivan's administration for next year, instead of "just pounding the ground" on what didn't happen in the past.

City Attorney Dennis Wheeler, who will review the two conflicting legal opinions about the process used to approve the labor deals, already takes issue with one central conclusion in an opinion written by Levesque. Levesque said two contracts approved in December are invalid because the city's chief financial officer didn't first certify that funds were available to pay for them.

But Wheeler said such fund certification is not necessary for approval of labor contracts. A search of such multi-year contracts approved over the last 20 years turned up no instance of fund certification ever being required, Wheeler told the Assembly.

However, Wheeler said in an interview later that he hasn't yet come to a conclusion about whether the contracts are valid. He said he has a lot of other information to consider first.

The Assembly asked Wheeler to report back on his review by mid-November.

The request of Wheeler was approved through a resolution authored by Assembly Chairwoman Debbie Ossiander. First, though, the body voted 6-5 to delete a section that cited the internal financial e-mails disclosed by Starr.

Assemblyman Matt Claman moved to delete a reference to the e-mail from Ossiander's resolution. He said later that Wheeler should focus on the legal opinions, and not get into "a much broader investigation than the Levesque report would suggest."

However, both Claman and Ossiander said the Assembly can't stop the city attorney, Wheeler, from taking his review of the labor contract approval process wherever he wants.