Monday, October 31, 2005 | Voice Special Report

Editor’s note: Each week leading up to the Nov. 8 election, the Voice of San Diego will explore a specific aspect of the mayoral candidates’ plans for San Diego’s fiscal recovery. This is part five in a five-part series. Read parts one, two, three and four.

Although the next mayor of San Diego will become the city’s first strong mayor in modern times, one of the checks to that newfound centralization of power is that he or she won’t be able to cleanly dismiss the police chief, fire chief or auditor.

The mayor can hand those three their walking papers but they have the right to appeal to the City Council. And with five votes, the City Council can keep those senior administrators around.

It injects a bit of independence into the position of the auditor/comptroller.

In fact, it makes the auditor just independent enough to suit the taste of former police Chief Jerry Sanders but yet not sufficiently independent in Councilwoman Donna Frye’s mind.

Frye wants to make the city auditor an elected official – allowing the voters to oversee the fiscal overseer. It’s one of the ways the two candidates for mayor differ when they envision the future of a City Hall largely under their command.

Remarkably though, they do share some similar goals. Like the one that would prevent the city from ever granting another pension benefit enhancement for its employees without first sending it to voters.

A similar requirement is in place in the city and county of San Francisco, whose joint pension system actually has a surplus in the amount of funds it needs to meet all the obligations it has promised to the city’s employees.

The city of San Diego’s pension system is facing a shortfall of at least $1.37 billion.

How it got there has been the main story line of now countless media reports and investigations but many agree that former City Auditor Ed Ryan – in concert with his boss, the city manager – initiated the efforts, almost exactly 10 years ago, to use the city’s pension system to supplement the city’s overstrained general fund. When the city in 2002 found itself obligated to make up for lost ground, it balked and arranged another plan to short the pension system its due.

And it was the city auditor who failed to disclose any part of that deal, according to the city’s independent investigators.

All of it eventually led to the city’s financial crisis.

The city now has a new auditor.

But the new system of government that allows the auditor a bit of independence from his or her boss is not good enough for Frye.

“I don’t like the idea of having the city auditor comptroller only under the control of one elected official. I think it would be a much better idea to have someone who is accountable to the public and not just one elected official,” she said in a recent interview.

“I feel much safer with that model particularly considering the past city auditor and comptroller,” Frye said.

Sanders disagrees. He said he would not support making the city auditor an elected position.

“I’m not sure that the answer is to have more elected officials in addition to the officials who do their job well and who are closely scrutinized by outside auditors,” Sanders said.

A couple of prominent local conservatives disagree. San Diego County Treasurer Tax Collector Dan McAllister – himself an elected official – said he’s watched as the idea to make the city’s auditor an elected position came up repeatedly.

He says it’s a good one.

“Time and time again voters across the state have shown that they want an extra set of eyes looking over a municipality’s finances,” McAllister said. “The current state of financial affairs in the city is probably the best case study you can have of what can go wrong if you don’t have a sufficiently independent auditor.”

Carl DeMaio, whose consulting firm The Performance Institute endorsed Sanders’ overall plan, said that at least in this area and a few others, he couldn’t agree with Frye more.

An elected auditor is needed, he said, because at times he or she will need to challenge and stand up to the people at higher levels of city government.

“It’s very easy for a career comptroller to be pressured to produce financials that may not tell the full and accurate picture of the city’s fiscal health and if you look back at the current crisis it is clear the auditor’s office stretched the books,” DeMaio said.

The city’s charter would have to be changed to make the auditor comptroller an elected position and that would require a public vote itself.

Frye and Sanders disagree about more than just the future of the auditor’s office, however.

Sanders has rested much of his confidence that the city can recover from its current financial crisis on his vision of what the city’s government will look like in the future. And he proposes – though he has not entirely committed himself to – implementing a vastly different pension benefit for future employees than the one current employees enjoy. Quite different, in fact, than the one he receives as a former police chief with 26 years of city service under his belt.

Under Sanders’ plan, future employees would have to assume some of the risk that comes with using the investment market to support their pensions. Right now, employees can calculate what their pensions are going to be by adding up the number of years they plan to work and using a formula to combine it to their salary.

Sanders says employees should still be able to count on a benefit like that – but a much smaller one. A hybrid plan Sanders has proposed would still force the city to invest on behalf of its employees retirement but if those investments lost money or didn’t perform to expectations, it would be the employee who loses.

Right now, the city – and consequently the taxpayer – pick up the tab for any missed expectations in the investment market.

“We can’t afford the current pension system; it’s simply not affordable,” Sanders said.

Frye has blasted Sanders’ hybrid plan, saying it’s “ridiculous” to set up future employees in a pension that is vastly different than the ones current employees expect. After all, two employees with very different pensions may end up working next to each other.

Sanders said that concern is not a big one.

An employee can only expect the pension he or she was promised when they began working – regardless of what others expect.

“If they decide that’s not a pension system they want, you know, that’s a decision they make,” he said.

Frye said she would prefer one system that’s “understandable.”

“It’s bad for morale to have employees earning different pension benefits,” Frye said.

Frye and Sanders do agree, however, that if the city ever does increase the pension benefits of its employees, it should ask the voters first.

“If benefits are increased I believe voting on them before they occur allows public hearing, allows good scrutiny by media and informed consent, which we haven’t had before,” Frye said.

And Sanders agrees.

“This whole mess has gotten thrown in everybody’s lap. I think the taxpayers should have a say in whether they want to raise benefits in the future,” he said.

Please contact Scott Lewis directly at

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