The Morning Report
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Wednesday, December 14, 2005 | Mayor Jerry Sanders continued Tuesday the roll-out of the management team he expects to salvage the city’s finances, naming the city of Pasadena’s finance director as his chief financial officer.
Jay Goldstone, who takes his post Jan. 23, will manage the finances, debt and annual budget of a city struggling with a suspended credit rating and a pension deficit that threatens to dominate city finances for years to come.
“There may be some tough times in the short term, but number one is to figure out what happened with the pension system, how do we get that system back on its feet and still try to preserve as many services as we can,” said Goldstone, who said he has been following the city’s saga for more than a year.
The new hire will also oversee the city’s auditor – a fact unknown to even city Auditor John Torell until Tuesday.
“I wasn’t aware until you just told me this instant that he was going to oversee the auditor’s office,” Torell said in an interview.
Although Torell’s job may not be threatened (he can appeal to the City Council if Sanders’ staff attempts to fire him), he said it is imperative that his office maintains a certain degree of independence.
“We don’t necessarily want everybody on the same page here if we’re going to run this government efficiently and in the interest of the people,” Torell said. “We definitely want different point of views expressed and we don’t want to put a chilling effect on that.”
Goldstone will be the city’s first chief financial officer. Voters approved the switch to a strong-mayor form of government in November 2004. On Jan. 3, the transition becomes official, and the mayor will be removed as a voting member of the City Council. He will assume the responsibilities of the city manager, overseeing the city’s day-to-day operations.
Goldstone’s current boss, Pasadena City Manager Cynthia Kurtz, said she was excited – for San Diego. She said that upon informing Pasadena’s council members of Goldstone’s transitions, “all of them are talking about how difficult it will be to lose Jay.”
In a campaign that was focused almost singularly on the city’s financial recovery, Sanders promised to reform city government through streamlining and budget cuts.
During a press conference yesterday, Sanders expressed his confidence that Goldstone will aid in the reform.
“Ronne (Froman) and I are very pleased to have people of this caliber to join our administration,” he said. “Our city is at a critical time in its history. We need talented people that our willing to dedicate 150 percent of their efforts to helping solve our many problems.”
Froman is currently acting city manager and will become Sanders’ hand-picked chief operating officer when the transition is complete.
Sanders’ financial team will have to find a way to meet the city’s burdensome obligations to its pension fund. The city’s annual contribution to its pension system has grown dramatically in recent years, forcing officials to curtail basic city services.
The auditor’s office is increasingly important in San Diego government. The 2003 audit of the city’s books remains on hold over questions surrounding the veracity of the numbers in the city’s financial statements. Because of the audit problems, the city’s credit rating remains suspended. So does its access to public finance markets to raise money for vital infrastructure projects.
“The public needs to know that there will be bad news coming out of City Hall for quite some time,” Froman said. “Most of the problems around here weren’t created overnight, so it will take a while to come up with solutions.”
Sanders also appointed Richard Haas as deputy chief for public works. Hass is currently the county’s assistant director of the department of environmental health.
Haas retired from the U.S. Navy in 1998 as a captain in the Civil Engineer Corps after 26 years of service.
“As part of our reorganization, Rich will eventually become responsible for core public works functions that include city’s water, wastewater engineering and capital projects office,” Sanders said.
Froman said that while more announcements about the management team should come next week, the transition to a strong mayor system is a difficult one.
“When the voters passed Prop. F, they envisioned city government having 13 months to make the transition to strong mayor,” she said. “We have less than 30 days to make this happen.”
Sanders was elected Nov. 8 and officially took office last week. He still plans to name a director of neighborhood services and a director land use and economic development. Last week, he named a director of community services and created the new position of ethics and integrity director.
Goldstone will make $194,500 a year and Hass will earn $168,000.
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