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Saturday, August 06, 2005 | Installing a board. The City Council will decide Tuesday whether to fill four vacant seats on the retirement board that have been vacated by trustee resignations, although they may need to fill one more slot if a proposal to oust board president Peter Preovolos is approved that same day.

Former pension trustee and financial advisor Diann Shipione; taxpayer activist and past mayoral candidate Richard Rider; attorney Ezekiel Cortez; and accountant Thomas Hebrank were nominated to serve on the board overseeing the embattled city employee pension fund, which currently has a shortfall of at least $1.37 billion.

The four nominees were put forward by various council members and City Attorney Mike Aguirre to replace four members of the San Diego City Employees’ Retirement Board after resigning amidst a litigious climate last month. Thomas King, Susan Snow, Thomas Page and Robert Wallace stepped down after Aguirre filed a lawsuit that attempts to transfer management of SDCERS to a court-appointed receiver, a procedure called receivership. The suit named pension trustees individually, causing many to complain about their exposure to personal liability that Aguirre’s case has caused.

The board has not waived the attorney-client privilege that is protecting the confidentiality of several documents sought by federal investigators and KPMG, the firm hired to audit San Diego’s 2003 financial statements. Aguirre, investigators and the city’s high-priced audit committee, which is headed by former Securities and Exchange Commission chief Arthur Levitt, have convinced council members that a waiver of the privilege is necessary for the audits to be released.

The city cannot issue bonds to improve infrastructure until the audits are released.

Council members will also decide Tuesday whether to remove Preovolos from the SDCERS board after Councilwoman Donna Frye urged Deputy Mayor Toni Atkins to docket the proposal. Frye said Preovolos has failed to take the attorney-client issue seriously by not scheduling the much-called-for proposal, possibly violated the state’s open meeting laws, and refused to include results of an illegal acts investigation into the fund’s financial statements for the last two years, despite repeated requests.

“Mr. Preovolos has breached his fiduciary responsibility,” Frye said. “This investigation was critical for ensuring that the audited financial reports for the retirement system are accurate and properly reflect the accurate financial condition of the retirement system.”

Calls placed to Preovolos’ office at Alpha Omega were not returned by press time.

The City Attorney’s Office has drafted a resolution that, if approved, would remove Preovolos from office after being named to the board earlier this year by former Mayor Dick Murphy.

Councilmen Scott Peters and Jim Madaffer said they wanted to speak with Preovolos before determining whether they will vote for the resolution. Peters said he plans to talk with him this weekend.

Pay Kroll before crossing. Councilmen Peters and Madaffer urged the shorthanded council to continue employing the three-member audit committee and their two attorneys in order to make progress toward getting audit financial statements for the city released.

The six-member council, which needs five votes in order to approve legislation, should agree to keep Kroll Inc. involved in the city’s dealings with auditor KPMG, who have not released the city’s audits for the 2003 fiscal year, the councilmen said. City Attorney Aguirre has questioned the panel’s independence from the City Manager’s Office and from Vinson & Elkins, the law firm conducting an investigation of the city’s books and disclosure practices.

Aguirre said he will meet with Arthur Levitt, the audit committee’s director, before advising the City Council to approve more funding for the panel.

Bills for Kroll and the Willkie, Farr & Gallagher attorneys are about $800,000 per month.

Pulling papers. Twenty-one residents of Council District 2 and 12 from Council District 8 have taken out nominating papers for November’s election to replace two resigned councilmen who stepped down after being convicted on federal corruption charges.

Consultants point to the early campaign organization and name recognition of planning commissioner Carolyn Chase, 2002 election runner-up Kevin Faulconer, environmental attorney Lorena Gonzalez and community college district trustee Rich Grosch as indicators that they will be serious candidates for District 2, which stretches from Pacific Beach to downtown.

Experts said the same advantages pertain to school board president Luis Acle, pollster Richard Babcock and school board runner-up Ben Hueso in District 8, which includes portions of the city between Golden Hill and San Ysidro.

Here are the names and listed professions of others who have taken out nominating papers from the City Clerk’s Office, as of Friday afternoon, in District 2: businessman Richard Agee; sailor Dave Baldwin; graphic designer Kathy Blavatt; advocate David Diehl; student Anthony Di Leva; teacher Tom Eaton; retiree Greg Finley; law clerk Matthew Huchmala; security professional and Web designer Robert E. Lee; real estate salesman Phil Meinhardt; apartment manager James Joaquin Morrison; attorney George Richard Najjar; business executive Bill O’Connor; attorney Tim Rutherford; retiree Arthur Salzberg; retired Salk Institute professor and civic activist Ian Trowbridge; and state deputy attorney general Pat Zaharopoulos.

Others who have pulled papers in District 8: educator Remigia Bermdez; attorney Dan Coffey; businessman Dan Gomez; notary public Tim Gomez; attorney Douglas Holbrook; communications analyst Matthew Moncayo; Web master and writer Lincoln Pickard; chef John Quesnel; and environmental engineer Kathy Vandenheuvel.

Read more about these two council elections.

Candidates must file papers by Aug. 12 to qualify for the Nov. 8 primary. Applications must include a $200 fee and the signatures of 100 voters registered in the council district being sought.

– By EVAN McLAUGHLIN, Voice Staff Writer

Please contact Evan McLaughlin directly at

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