Saturday, November 19, 2005 | This is part two in a two-part series. Read part one.

The consequences of a bundle of actions taken by the city of San Diego officials on Nov. 18, 2002 have been memorialized in print and broadcast time and again as the region and nation fixate on the city’s woes.

Three years and one major crisis later, the city is a changed place. But just how changed is a matter of debate.

“There’s only so much burden a single day can carry,” City Attorney Mike Aguirre said. “What’s important is whether we can say that on that date, did we learn our lesson? I think that’s still very much in doubt.”

One day three years ago foreshadowed so many of the problems that have drawn so much attention to San Diego. Its pension whistleblower, Diann Shipione, surfaced for the first time publicly to raise concerns about a pension deal that would later draw local and federal investigators to City Hall and highlight its fiscal crisis.

The City Council awarded a contract for a firm that would fail to catch significant errors and omissions in the city’s financial disclosures to Wall Street – an action that has left the city without a credit rating and unable to issue bonds for much-needed road and sewer improvements

Also unfinished are the plans to fund the construction and everyday staffing of the downtown library project that was initially approved on that date. And the facts about the city’s wastewater rates that were kept from a councilwoman that day are now the focus of federal investigations and the cause of a lawsuit that could force the city to issue $200 million in refunds to San Diego’s residents.

“In hindsight, the library was the least of our worries,” said Lisa Briggs, a former executive director of the San Diego County Taxpayers Association, who expressed concerns that day about the library’s financing.

The significance of Nov. 18, 2002, on the seaside city today is obvious. The consequences of the city’s actions that day threaten to ultimately sink the city’s finances for years to come.

As the fiscal, legal and political setbacks resulting from that day may linger in the future, some say the city is well on its way to mend the ways projects and policies are planned, studied and presented to the public while others say officials and staffers are balking at reform.

Observers of City Hall look at the happenings of that day and see the trademarks of what when awry. The city’s actions failed to be transparent, stifled public participation and placed politics over policy, they said.

Those deficiencies, they say, are not reserved just for that November day three years ago.

Although Aguirre concedes that voters and city leaders have steered the city on a path less destructive than it was three years ago, he is among the sizable group of San Diegans who believe more steps need to be taken to correct the problem.

That day City Councilwoman Donna Frye was rejected in her requests that a study on the way in which the city charged users of its sewer system be discussed in public.

Today, the circumstances of the city’s closed door meetings on the issue are of interest to investigators from the Securities and Exchange Commission and the U.S. Attorney’s Office.

And the ideal of open and honest government, once a fringe rallying cry, is a regular virtue peddled by would-be politicians of all stripes on the campaign trail in San Diego. Frye and Councilwoman Toni Atkins boycotted closed session in weeks subsequent to that contest, effectively forcing decisions that had previously been carried out behind closed doors to take place at the council’s public meetings.

After the city government’s troubles became more apparent in 2004, voters’ appetite for transparency at City Hall piqued when they nearly elected Frye mayor twice, after flexing her “honest and open government” credentials in both contests. Frye and others successfully pushed a ballot initiative last November that made it easier for the public to request government documents and she urged the creation of a Government Efficiency and Openness Committee, which sets out to examine the wonkish inner-workings of the city’s government.

Mayor-elect Jerry Sanders, who defeated Frye in the recent mayoral election, seized on the open-government mania during this year’s campaign. Now, he credits the councilwoman for prodding the city to change the way it does business.

“Donna Frye made it more difficult to go into closed session, which made it much more difficult for decisions to be made without scrutiny,” he said.

Aguirre has stated that the press conferences and reports his office releases are attempts to include the public in the city’s affairs, something that did not happen when his predecessor Casey Gwinn held the office.

Many council members have since blamed staff for failing to provide them with honest, reliable information during crucial periods years ago.

Councilman Scott Peters said transparency doesn’t serve its purpose unless the data being released is honest.

“There’s a great consciousness about the public’s desire for openness,” Peters said. “I believe the city is more responsive to that concern than in the past.”

“The whole council has been concerned with the credibility of the information they’ve been getting. They’re not necessarily disbelieving it, but they’re thinking more critically about it,” said Peters, who is expected to be selected the city’s first council president next week.

If selected by his colleagues, he will preside over the council as president when the city switches to a strong-mayor form of governance Jan. 3. Many observers said the new structure was approved by voters last year because it increased the accountability of city staff by giving an elected official the authority to make hiring and firing decisions.

In the case of Nov. 18, 2002, several observers said city staff was not providing accurate financial information about the pension system or the library. Former City Manager Michael Uberuaga had responsibility to hire and fire non-classified city workers during that era.

City Manager Lamont Ewell, who will resign at the end of the calendar year, did not return phone calls as of press time seeking comment for this story.

Sanders, who will take office Dec. 5, said he believes the strong-mayor structure will make him accountable when the responsibility for past mistakes has always been pinned on the system and not an individual.

“If you look in the past, nobody’s been held accountable. Nobody’s been willing to stand up and take the heat,” Sanders said. “The strong mayor provides a focal point.”

Republican lobbyist John Dadian supports Sanders but disagrees with the mayor-elect’s analysis that the strong-mayor form of governance will improve the situation.

“You don’t need a strong-mayor structure, you just need a strong mayor,” he said. “Pete Wilson was a strong mayor, and Dick Murphy was a weak mayor.”

Murphy was mayor on Nov. 18, 2002. He resigned this July amid the turmoil resulting from many of the decisions made that day.

Dadian agrees that some improvements have been made since crisis erupted at City Hall, but believes that the laws governing the structure of the council breeds an environment where politics overrides policy. District elections and term limits, he said, need to be overhauled before council members will truly make decisions in the best interest of the city as a whole.

“The city turned into Afghanistan, with eight little fiefdoms,” said Dadian about the city being divvied up into eight representative districts. “People are there to protect their own turf.”

Regarding term limits, which are set at two four-year stints for city officials, Dadian said that, “Council members are already thinking about their next step before even taking office.”

The voter-approved adjustments to the retirement board’s composition to include more citizen representation took some of the politics out of the city’s pension decisions by allowing public representatives to control a majority of the board rather than employees who have an interest in the pension system.

Peters also notes that the city hired an outside lawyer to conduct labor negotiations for the same reason. Sanders wants to take all future retirement benefit enhancements directly to the voters for approval.

Frye emphasized during the campaign the public has a stake in the city’s dealings, and should therefore be a part of it. Nov. 18, 2002, showed that some city officials were not receptive to public participation, she said.

At that council meeting, then-pension trustee Shipione warned the city that the pension agreement approved that day would be disastrous. April Boling, then chairwoman of the taxpayers association, attended the meeting to raise concerns about how the library would be funded.

“I guess I naively believed that, by coming down to the meeting because I believed the city was not providing the necessary information … that they might continue it,” Boling said.

The council moved ahead with both plans, with Frye casting the only no votes on the items Shipione and Boling showed concern about. The councilwoman said the experience flashed a chilly signal for citizens who want to get involved.

“That speaks about how difficult it is for an individual member of the public to get people to listen to them,” Frye said. “Not only listening to them, but to not shoot the messenger. There are still a lot of messengers being shot.”

Boling said that, while Shipione’s warnings didn’t seem to have an immediate impact on the sitting council, the pension whistleblower’s cautionary words made her ears spring up.

Boling would later head the Pension Reform Committee. Voters and politicians have implemented a number of the committee’s recommendations. A number of its recommendations remain untouched. The committee laid out a blueprint that, if followed, Boling said will eventually cure the pension problems.

Observers are split on whether those changes will make a significant change, just as they are on whether the city is traveling down a path that will shake it from national headlines of woe. Regardless, they acknowledge the importance of The Day That Made San Diego Famous.

“You might be able to write a story year-after-year about how we failed to address the underlying problems,” Aguirre said.

Please contact Evan McLaughlin directly at

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