SD Council Declines Pension Chief Firing

September 7, 2005 ( - The San Diego City Council has declined to unseat the head of its pension board, but opted instead to fill one of four panel vacancies.

Local lawmakers voted not to oust Peter Preovolos, president of the board of the debt-ridden and scandal-plagued San Diego City Employees’ Retirement System (SDCERS) from the post he has held since April, the San Diego Union Tribune reported.

Preovolos and the retirement system board have drawn criticism for their continued refusal to waive attorney-client privilege for documents sought by investigators. Without the waiver, the accounting firm KPMG has been unable to finish an audit of the city’s 2003 finances, and federal investigations into the cause of the retirement system’s $1.4-billion shortfall have slowed.

Councilman Scott Peters said there wasn’t enough reason to warrant Preovolos’ removal. “I don’t think it’s appropriate to take that dramatic step to remove him from office,” Peters said, according to the news reports.

The City Council also voted to appoint accountant Thomas Hebrank to the board to fill one of four vacancies on the panel. Hebrank, a certified public accountant, is managing director of Douglas Wilson Companies, a San Diego-based real estate investment group.

Three other nominees withdrew their consideration.

Last week, the fund agreed to release the documents to the SEC, US and District attorneys, and the city’s audit committee, but Preovolos said the trustees still maintained their attorney-client privilege (See  San Diego Pension Board Agrees To Turn Over Documents ).