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Tuesday, March 08, 2005 | Write this 20 times on the City Council chalkboard after work. A curious letter sat among the normal public documents left outside council chambers Monday. Addressed as an open letter to the citizens of San Diego from the mayor, council, city attorney and city manager, it reads more like an apology from a group of poorly-behaved elementary school students than a government document:

“We agree with each other and pledge to you, our full cooperation and noninterference with the (federal) investigation and work of the audit committee until its final completion.”

Seems like a fairly simple request, one that might almost have been expected from the day the city learned in February 2004 of investigations of city finances by the Securities and Exchange Commission and the U.S. Attorney’s Office.

“We understand that this means that the appropriate means of making any accusation of illegal conduct relating to the city’s disclosure obligations, conduct of pension matters, or the city’s financial condition is through the audit committee, which will appropriately evaluate and promptly report such matters to the regulators.”

No more Aguirre interim investigative reports. No more press conferences?

“We recognize this process as one that is well understood by the financial markets, the auditing profession, the SEC and the Department of Justice. We also understand that, in order for this process to be effective, we must assure its complete independence and our non-inference, allowing it to run its course.”

People are watching you, very powerful people. And they’re not too fond of interference and outside influence.

“We understand the importance that our honoring of our commitment and pledge made to you in this letter has to the restoration of the city of San Diego’s well being, financial reputation, and position of ‘best in the class.’”

Now run along to recess and wipe that peanut butter off your lip.

The council was to vote to approve this letter and the creation of this audit committee Monday, but it was pushed late in the evening to Tuesday’s meeting.

The audit committee is to be comprised of three high-priced consultants, including two former big names at the SEC, Lynn Turner and Arthur Levitt. The city hired them last month, promising it was the last piece of the puzzle to complete the long-delayed fiscal year 2003 audit.

Essential to the city rejoining the financial markets and completing long and short-term public projects, the audit has been delayed by a number of issues, one of which is the lack of full city cooperation.

The letter is the second noted action taken by the city’s audit committee, which pending Tuesday’s vote technically hasn’t even been formed yet, since federal officials called a secret meeting with city leadership last week to express their qualms with the city’s cooperation and political climate.

And the other would be? Voice staff thought you’d never ask. It’s the postponing of the confirmation of Mayor Dick Murphy’s seven pension board nominees. That action took place Friday, and a source close to the discussions said Turner did it because he wasn’t too fond of all of the mayor’s selections, selections that will be run past the SEC for approval.

The mayor won the right to appoint a majority of the 13-member pension board by citizen vote last November, and he announced his new crew Feb. 25.

A new board is seen as a lynchpin in restoring the city’s fiscal health and putting a close to investigations and the outstanding audit. When the new board members were announced, City Attorney Mike Aguirre denounced them as another board of Murphy’s allies that would not offer the independence necessary for the job. The new board was also decried by many for excluding pension whistleblower and growing cult hero Diann Shipione.

Back to that elementary school theme. Amid the talks of budget cuts and investigations, a representative from the city’s white collar union, the Municipal Employees Association, passed around folded copies of a cartoon to council members and reporters.

The contents of the note: A cartoon depicting new MEA foe Aguirre standing upon a tower of boxes, the same kind he’s been seizing from employee offices as part of his investigation. Together, the boxes spell “Ego.” While Aguirre says, “Boxes, boxes, I need more boxes.” Some of the other boxes say things like “grandstanding,” “fear” and “power hungry.”

Public enemy #1. The council finalized Monday its plan to move the majority of its public comment to the end of its Tuesday meeting, meaning that everyone save the mayor’s handpicked five speakers will have to sit through the often lengthy Tuesday meetings to address their elected officials. The meetings can last until the evening hours.

Throughout the three council hearings on the subject, the council heard from a bevy of opponents to the change, but no supporters.

“If this council had listened to the council minority and the public, we wouldn’t be in the mess we’re in now,” said Jarvis Ross, who comments frequently at council meetings.

Champagne tastes on a beer budget. The council started its 2006 budget deliberations as well Monday, as the public and council members alike voiced their priorities to city staff for the upcoming budget hearings.

The initial numbers are in, and staff is predicting a $20 million to $30 million shortfall. That shortfall is after $18 million to $20 million in department cuts are already taken into account. Despite banking on $40 million to $50 million in extra revenue, city expenses will far outpace that growth because of rising costs in salaries and wages, contributions to its debt-ridden pension plan, retiree health coverage and other expenses.

“Something’s going to have to give, and it won’t be an especially pleasant process,” said Murphy.

The council heard from public members asking that pools, parks, roads, libraries, disabled services and its historical resources board be spared from cuts.

Look for the City Council to begin exploring ways to raise additional revenues as the budget process unfolds. Among the possibilities: parking meter fee increases, a parking tax, a property transfer tax and trash collection fees.

“This council, and I’ll include myself, and the public continue to have a champagne appetite on a beer budget,” said City Councilman Jim Madaffer.

Councilwoman Donna Frye suggested cutting the $26 million that could’ve been earned from the hotel room tax defeated by voters last year from the budgets of the tourism industry folks who worked to defeat it.

Isn’t that what a campaign contribution essentially is? In a morning hearing, attorneys for City Councilmen Ralph Inzunza and Michael Zucchet asked that federal judge stop prosecutors from using the term “cash bribes” in the case.

Inzunza and Zucchet have been charged with wire fraud, conspiracy and extortion for their part in an alleged scheme to undue the city’s “no-touch” ordinance on behalf of Cheetah’s strip club owner Michael Galardi in exchange for clandestine payments.

The two councilmen have claimed money received from Galardi or his associates was recorded legally in their campaign statements as contributions. The judge is expected to issue his ruling in a matter of days.

Also… The council also postponed until Tuesday a decision to extend the contract with its new financial disclosure counsel by an additional $500,000. Brought in to help the city with its financial disclosure practices after a September 2004 report detailed its broken process, Hawkins Delafield & Wood LLP have been authorized to date to receive $250,000.

– ANDREW DONOHUE, Voice Political Writer

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