On August 15, 2003, the SDCERS Board, which included the City Auditor, Treasurer and other City officials, adopted new, higher rates for purchasing service credit (PSCs). The new rates were consistent with the Municipal Code requirement that an employee's cost to purchase service credit must be the amount the Board determines to be both the employee and the employer cost for that service. To give City Members sufficient notice of the changing prices, the Board delayed implementation of the new rates and allowed active City Members to purchase service credit at the old rates during a window period - from August 15, 2003 through November 1, 2003.
On November 20, 2007, the City filed suit against SDCERS, seeking to prevent the Board from continuing to recover the underfunding of these underpriced contracts through the City's annual contribution. On June 7, 2010, the Fourth Disctrict Court of Appeal ruled in favor of the City.