The Morning Report
Get the news and information you need to take on the day.
There were some items worth reading in the press this past week. Among them, the Matt Hall piece on Aug. 14 regarding the delay of the Blue Ribbon Committee’s Report until after the floating of the Ballpark bonds.
I know I keep coming back to that, but it was a good piece, with real important stuff. It shows in retrospect with some good investigation, how events that looked coincidental were actually highly choreographed to give the appearance of innocent happenstance when they were not. Lots of people work hard on these scrams just to make them look ordinary.
Ruben Navarette wrote a remarkable piece for the U-T editorial page in that it didn’t boil City Attorney Mike Aguirre in oil, or blame him for the loss of the Lindbergh baby. I like the Krolls as much as anybody here, but Navarette’s right that there are still questions that are not intemperate to ask, even when Aguirre is the only one asking.
And, there was some other good info in the news this week.
Here’s a drive-by on some of these issues and my thoughts:
- The Airport Commission spent $17 million bucks “locating” our new international airport to Miramar – inconveniently owned by the Marines who told us to not do that. But, we know better, so we now have an initiative on the November ballot saying we’ll be taking over Miramar because you Marine guys will be outta there soon.
Ta-da! The marines announce that 2,443 of the new F-35 Lightning II Joint Strike Fighters will be home based at (drum roll) MIRAMAR! Whad’ja think they’d do? These are Marines. Very hard to push around, those Marines. I’m surprised they also didn’t relocate the Hindenburg, space shuttles, and the UFO’s from Roswell just to see if they can GET A MESSAGE TO SAN DIEGO: leave my stuff alone!
Got a bunch of thoughts on the Kroll’s and the mayor’s response to the U-T editorial board (Sunday).
- Arthur Levitt is quoted as saying that initially he thought Mike Aguirre was “one of the most charming … people [he’d] ever encountered.”
Early red flag. Mike’s a lot of things. But “charming”?
- Sanders says that the day of the Kroll report was “a tough day for everybody, the entire City. I just don’t think it was a great day for anyone.”
Wrong. It was a great day for everybody in San Diego committed to reform government. Granted, we are not all there yet. So for some, it was not so good because a bunch of smart folks from the outside told us we rank fairly deep into the system. But, for the rest of us – it was a pretty good day.
- Sanders: “the reason the Kroll report was commissioned in the first place was to give KPMG the comfort level that they could sign the 2003 audit.”
It was because KPMG did not trust the executives and influential persons in San Diego government to produce honest numbers and other information. They were right. The city still hasn’t bothered to give KPMG more than two-dozen items requested months ago. When pressed by Aguirre on Aug. 8 about when the 2003 audit would actually be done, the guy from KPMG looked at him like he was from another planet and said something like, “you’re not getting your audit until you actually give us the stuff we asked for a bunch of times which will allow us to track your 2003 cash positions.” I mean, c’mon. How’re we going to get an audit if we won’t give the auditors our bank records?
- Sanders – responding on the wrongness of pushing massive debt to future generations [by the way, good question U-T]: “I can’t wave a magic wand and say we’re out of this. No matter what we do, it’s going to be a combination of bonding and paying more by cutting wherever we’re at right now. So, you either tax people or cut services.”
- And, Sanders re bonding: “…all along I have said that if we could get back into the market we would look at the spread…and see if it made sense …We had about a 16-year borrowing plan on this. There were no variable interest rates. There was no balloon payment at the end.”
Arthur Levitt said in clear terms that trying to bond our way out of this mess was just wrong. Levitt says you have to raise revenues [taxes] because the answer is not in finding just millions. It’s way, WAY more than that. He’s right. The ‘plan’ to cut 500 jobs won’t even begin to do it. The Kroll’s said it isn’t right to dump the debt onto future generations.
Note that the 16-year plan the mayor was discussing with the U-T was not a plan to fix the pension deficit problem. It was only on the proposed “pension bond” element of his plan, which is only for a couple of hundred million dollars. It is not a plan to pay off the billion dollars deficit.
If you are talking about paying off of the deficit, the numbers get a bit more exciting. To pay off the deficit in 15 years, the projections show that the City’s contributions would be over $1,000,000,000 per year in each of the last three years.
This is why every single projection provided to the public, the council, the capital markets, the credit rating agencies have never shown these numbers – have never showed the deficit being paid off.
It is why the former sdCERS actuary said that these amounts become “astronomical at the end of the amortization period.” [Ditto on a 30-year fixed where the deficit continues to grow for the first 17 years, so it balloons to $5,000,000,000 dollars with a City contribution of more than $600,000,000 in 2021 alone!]
These numbers have been known by everyone in the City for the last 3 years – but they are hidden from all the rest of us.
[And, word to the Council n if we do not now start producing these financial projections which show the numbers for the pay off of the deficit in a fixed term, we should expect to find ourselves once again in the sites of the SEC. And, we’ll deserve to be there.]
- The mayor’s right about one thing. San Diegans will not vote for any tax increase until confidence in government is restored, and we are a very far distance from that.
- I’d go one step further. I don’t think there will be any more voter-approved tax increases until someone can show the people of San Diego that their “plan” actually fixes the financial mess – not postpones, delays, or denies its existence.
– PAT SHEA