Monday, August 01, 2005 | Last year, when Councilwoman Donna Frye spontaneously threw her name into the race for mayor as a write-in candidate, her two opponents were clearly stunned.

Incumbent Mayor Dick Murphy later admitted he and his advisors had no idea how Frye would influence the race – let alone that she would come close to winning it. So while he and his challenger, County Supervisor Ron Roberts, were becoming experts at rhetorically blasting each other, neither knew how to respond to Frye.

But their campaign staffers did have a mutual complaint about Frye’s candidacy. They believed they didn’t have much time at all – barely five weeks – to put her under the kind of scrutiny other mayoral hopefuls had faced for nearly a year.

Murphy and Roberts had been blasting each other for a long time – their staffs each poring over the other’s public records with magnifying glasses and highlighters in hand. Frye, meanwhile, had been on the sidelines. And when she announced her candidacy, there was so much interest about the novelty of it, about the sheer courage of it and about the impact of it that she moved like a rock star through the courtyard outside City Hall.

She may still be a rock star to many people, but her opponent this time around is a bit less shocked by her candidacy. Former police chief Jerry Sanders and his campaign staffers have already rolled out a talking points memo.

They’re aiming right for the heart of one of Frye’s main claims to fame: Her seemingly prescient opposition to the now notorious pension deal in 2002 that most agree both perpetuated and expanded the ills of an already flailing city retirement system.

Sanders’ camp has now alleged that Donna supported the infamous arrangement, before she didn’t.

So let’s look at the facts.

By now it should be well-known that at the heart of the pension scandal and the financial crisis facing the city is a package of bad decisions city officials made starting in 1996. That year, city leaders set a fiscal time bomb that everyone knew was going to go off sometime in the future but nobody knew when.

In early 2002, city officials and administrators of the pension system began to realize that it was going to explode. The pension fund had reached a trigger point where the city was required to put in massive amounts of cash to get it up to a certain level of health. The retirement system, if it was going to do its job, was about to send the city a bill that would have given everyone in San Diego a bad case of sticker shock.

The city simply did not have the kind of cash needed to pay it.

Rather than announce this to the public, city officials concocted a plan to avoid the payment, with the retirement board’s blessing.

It’s important to remember, that to get the retirement board’s approval, the city offered employees a pension benefit enhancement at the same time. Because the retirement board was dominated by city employees, that proved to be a shrewd move.

But the arrangement also needed the City Council’s blessing.

It went through some preliminary rounds of approval, and Frye signed off on it each time along with every other member of the City Council. (Tony Young is the only member of the current council not in office at the time).

When it came back for final approval, it arrived in separate pieces. The entire agreement – in all its different parts – was included in what’s called the consent agenda, a list of items that the mayor believes do not require discussion. He later said that move was a decision of his staff and they did so without devious intentions.

This is when Pension Trustee Diann Shipione, later hailed as a whistleblower, burst onto the public scene. It was Nov. 18, 2002 and she showed up at council requesting that two of the items regarding the pension agreement be pulled for discussion.

She didn’t realize there were three – we’ll deal with that later.

Shipione spoke on the two items: One, the benefit enhancement for city employees; and the second, a legal maneuver that would pave the way for the city to avoid its big debt.

Shipione, pleaded with the council to reject these two issues and Frye was the only one to listen to her. That was Frye’s main accomplishment that day: she listened when Shipione cried foul. It was a reaction that later earned her enough political capital to run for mayor.

What Shipione and Frye both missed, however, was that the mayor and city manager had included the third piece of the pension puzzle much further down in the consent agenda.

It was a resolution. Whereas the earlier proposition had been about legally allowing underfunding of the pension plan, this spelled out how that would occur. And yes, Frye, along with the rest of the council approved it. The council declared in part that:

“The city and the board also recognize that under current fiscal circumstances, undue hardship would be imposed on the city if the board were to require that the city immediately increase its contributions to the full … rate.”

In other words, that means the city was planning to continue underfunding its pension system because it couldn’t afford not to.

Separating the resolution from the other parts of the agreement, Shipione said, was a trap.

“It was another game played by city manager and staff to trick those of us trying to prevent this underfunding scam,” she said.

Whatever it was, Frye’s record is stained by both her votes to preliminarily approve the notorious 2002 deal and that final vote in favor of the underfunding of the pension system. Sanders will undoubtedly paste examples of these on campaign mailers and in press releases meant to inject a bit of doubt into the minds of those who came to support Frye as a result of her fame for opposing what turned out to be a disastrous pension agreement in 2002.

We’ll see in November if it works.

Scott Lewis is a former reporter at The Daily Transcript. You can e-mail him at

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