Tuesday, August 09, 2005 | The New Kid on the Books. The man recently hired to ensure that the city doesn’t knowingly or unknowingly make mistakes on its financial statements laid out his vision Monday for the office that has been targeted in several ongoing probes related to the city’s financial dealings.
John Torell, who was hired to take over the City Auditor’s Office in February, said he wants to clean up the city’s “broken” financial system by including more automation, reshuffling staff to better meet the office’s needs, and firming up internal controls.
The new auditor, who was recruited from the county of Santa Barbara, said he hopes to better organize the city’s books within six months, so that managers and council members can get answers to their financial question in 15 seconds and not two days, a project he estimates will take $50,000 and a few months to complete. He will also make monthly budget updates at council meetings to give the public a better picture of how the city’s books shape up.
The auditor’s office also needs a change of culture, Torell said.
“I’ve got a hundred good people and they’re in a sinking ship, and they’ve got buckets in their hands and they’re bailing as fast as they can. They’re doing a good job at bailing, but the ship is still going down,” he said. “Let’s take the boat out of the water and stop the bailing and get down to what we’re supposed to be doing.”
Torell takes over a department marred with problems that have contributed to the city’s current legal problems. Former city auditor Ed Ryan resigned from the post in January 2004 and former assistant auditor Terri Webster, who replaced Ryan on an interim basis, resigned in May – a day before her and five other former and current pension trustees were handed felony conflict-of-interest charges by District Attorney Bonnie Dumanis. A draft report by Vinson & Elkins, a Washington-based law firm hired to investigate the city’s financial practices, said that the former auditor and his then-assistant knew that the underfunding of the retirement system was risky, yet they continued to offer false guarantees as to the accuracy of the city’s annual financial statements.
Members of the council applauded Torell’s vision for the office.
“This department is in need of serious changes,” Councilman Brian Maienschein said. “I’ve been, since your interview, impressed with your aggressive nature toward fundamental change.”
The Securities and Exchange Commission, U.S. Attorney’s Office and FBI are all conducting investigations into the city’s pension dealings and disclosure practices. Errors and ommission that were discovered in past financial statements have the release of KPMG’s audits for fiscal year 2003, which in turn have delayed Macias, Gini & Co.’s audits for 2004 and will likely push back the certification of San Diego’s 2005 reports, which will also be performed by Macias after the council hired the firm Monday.
Some also bristled at hearing about some of the current practices, such as how some employees keep track of their hours on a computer spreadsheet, only to copy the figures onto a paper sheet, which is then turned over to financial officers, who recopy the hours into a computer.
“I still cannot believe to this day that the city is doing its timecards on paper,” Councilman Jim Madaffer said. “If we were to start over today, does ‘what we have’ replace ‘what could we create?’ I think in the case of the auditor’s office, a resounding ‘no.’”
City Attorney Mike Aguirre used the occasion to lob criticism at outside firms who contract with the city and City Manager Lamont Ewell, who administers those contracts. Aguirre has complained that Vinson & Elkins and the two audit committee firms – Kroll Inc. and Willkie, Farr & Gallagher – are not specific when submitting bills for their work with the city. Aguirre asked Torell to comment on three bills, which varied in the detail of work itemized, that have been submitted by firms hired to aid the city throughout its financial dilemmas.
“The more detail, the better,” Torell said.
Congrats! Now, do it again. After winning probable runoff elections in December or January, the candidates elected to the City Council Districts 2 and 8 seats will serve for a month or so before they have to take out nominating papers if they want to run for the 2006-2010 term.
The run-offs – which will be held if no candidate garners a majority of the votes cast in either of the crowded Districts 2 and 8 races – will most likely be held in December or January, depending on the date’s compliance with state and local law. The primary election for the next full four-year term for Districts 2, 4, 6 and 8 is on June 6, and the nominating period begins Feb. 8.
City Clerk Liz Maland said that her office, along with the city attorney and county registrar of voters, have not yet determined when the likely second leg of the council elections will be held.
Ian Trowbridge, a candidate for the District 2 seat, said that the few months between the elections to replace former Councilmen Michael Zucchet and Ralph Inzunza and the June primary was not enough time. He pledged that he would not run for the ’06-’10 term if he were to lose the upcoming election, and called on his opponents to follow suit.
Trowbridge offered the pledge at a press conference he held Monday morning and the score of potential candidates was not contacted for comment.
As of Monday, 21 individuals have taken out candidacy papers to run in the District 2 council election and 12 have pulled papers for District 8. The two primary elections will be held Nov. 8 along with the mayoral run-off between Councilwoman Frye and former police chief Jerry Sanders and several statewide ballot initiatives.
Zucchet and Inzunza resigned from council posts where they represented Districts 2 and 8, respectively, after being convicted last month on federal corruption charges.
Candidates must file papers by 5 p.m. Friday 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.
Here are the names of District 2 residents, and their listed professions, who have taken out candidacy papers: businessman Richard Agee; sailor Dave Baldwin; graphic designer Kathy Blavatt; planning commissioner Carolyn Chase; advocate David Diehl; student Anthony Di Leva; teacher Tom Eaton; public affairs consultant Kevin Faulconer, who was runner-up to Zucchet in 2002; retiree Greg Finley; environmental attorney Lorena Gonzalez; teacher and community college district trustee Rich Grosch; 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 Ian Trowbridge; and state deputy attorney general Pat Zaharopoulos.
In District 8: San Diego City Schools education board president Luis Acle; educator Remigia Bermdez; pollster Richard Babcock; attorney Dan Coffey; businessman Dan Gomez; notary public Tim Gomez; school board election runner-up and program manager Ben Hueso; attorney Douglas Holbrook; communications analyst Matthew Moncayo; Web master and writer Lincoln Pickard; chef John Quesnel; and environmental engineer Kathy Vandenheuvel.
The In-between Team. Mayoral candidate Sanders on Monday put forward a team of various community leaders and experts to advise the ex-police chief on developing goals and strategies that he will take with him into office if elected.
Sanders said he wants the 15-plus volunteers to help him with a number of tasks he will have to undertake immediately if elected, such as the structure of City Hall under the strong-mayor form of governance, a review of management functions within the city’s administration and budget practices to help the city save money, identifying and recruiting individuals to serve in key administrative positions, and specific goals he should hope to accomplish throughout his administration.
“This group will bring together diverse skills and extensive experience that reflect my personal commitment to bringing together the best and brightest minds from throughout our city,” he said. “Not every one of these people have endorsed my candidacy, but all are committed to helping rescue our city from its historic crisis.”
Among the volunteers approached by the Sanders camp: Ronne Froman, a retired rear admiral in the Navy and chief executive of the local Red Cross, who will chair the transition committee; Pension Reform Committee chairwoman April Boling; banking executive Peter Q. Davis, a former chairman of the Unified Port of San Diego and the city’s downtown redevelopment agency; Benjamin Dillingham, chief of staff to former Mayor Maureen O’Connor; county of San Diego chief administrative officer Walt Ekard; and former San Diego State University professor Glen Sparrow, who aided the passage of the strong-mayor initiative last November.
Sanders asked his opponent, Councilwoman Frye, to follow suit for the sake of “making city government more transparent.”
“Over the course of the campaign, I encourage my opponent, Donna Frye, to join me in telling San Diego voters exactly who will be helping her undertake whatever changes she proposes at City Hall,” he said.
Frye said she is already doing her part to change City Hall.
The councilwoman did offer two names of advisors she said she is already working with – past mayoral candidate Pat Shea, an attorney who represented over 200 agencies in the 1994 Orange County bankruptcy case, and his wife, Diann Shipione.
Shipione, who will be nominated by Deputy Mayor Toni Atkins Tuesday to return to the retirement board as a trustee, alerted city officials and the public of problems with the pension system fund, which currently has a shortfall of at least $1.37 billion.
The council will vote whether to approve the appointments of Shipione, past mayoral candidate and taxpayer activist Richard Rider, attorney Ezekiel Cortez and accountant Thomas Hebrank to the SDCERS board after four trustees resigned last month.
Tidbits. Councilman Tony Young was named by a unanimous vote of the council to be the city’s representative to the San Diego County Regional Airport Authority. The panel governs the agency that operates Lindbergh Field and is currently studying future airport sites to make a recommendation that voters will decide on in November 2006. Former Councilman Inzunza, who resigned after being convicted of taking bribes from a strip club owner with hopes of repealing a citywide law, was the city of San Diego’s delegate to the authority’s board before stepping down last month … The City Council tenatively approved reconciling the San Diego municipal code to comply with a city charter provision that prohibits write-in candidates from running in elections. Councilwoman Frye, who ran for successfuly last November as a write-in before her margin of victory was discounted when some voters didn’t fill in a corresponding bubble, said she didn’t like the ban, but preferred it to an inconsistency in San Diego law. The proposal requires another council vote before the change is made.
– By EVAN McLAUGHLIN, Voice Staff Writer
Please contact Evan McLaughlin directly at