Mayor Jerry Sanders will announce tomorrow his proposal for remedying the city’s borrowing problems, a plan that he believes will allow the city to begin financing much-needed water and sewer projects by June, the Mayor’s Office said today.

Sanders’ proposal for regaining the city’s financial standing is expected to closely mirror the list of suggestions that Kroll Inc. laid out in its report earlier this month. Among Kroll’s recommendations: the creation of a permanent audit committee to oversee the city’s financial reporting process, the reconfiguration of the City Auditor’s Office to bolster its independence from the mayor, and the hiring a professional monitor to oversee the city’s recovery efforts.

A spokesman said the Mayor’s Office has spent the past two weeks “working around the clock” to draft the plan and consult with the various agencies within the city to ensure that the accuracy of timelines that will be released tomorrow.

Other specifics about the proposal – including the cost of the proposed remedies and amount time it will take to complete – are being withheld until a Thursday morning news conference. Later on at 6 p.m., Sanders will present his plan at a town hall meeting at the Balboa Park Club.

The release of the Kroll report was billed as a milestone in the city’s efforts to regain its credit rating and return to the public credit markets so that it can borrow money. The mayor is hoping that his proposal will convince KPMG to bless the long-delayed 2003 financial statements, as well as Macias Gini & Co., the auditors for 2004 and 2005.

With those audits complete, the mayor is expecting the city to regain adequate financial ratings by late February and have the borrowed money in hand to construct long-delayed infrastructure projects, said Fred Sainz, the mayor’s spokesman.

The mayor also has plans to borrow at least $574 million to inject into the troubled pension fund.

The city’s rating was suspended in 2004, and KPMG has withheld its audit pending the completion of an investigation into allegations of wrongdoing and the implementation of a remediation plan.

KPMG, the auditing house that is withholding its blessing of the city’s financial records for 2003, has been consulted on the mayor’s plan, but the firm has not seen the final 38-page, 121-step proposal, Sainz said.

He said City Council members had not seen the proposal. The council, its independent budget analyst, the Justice Department, Securities and Exchange Commission, the auditors and the major credit-rating agencies will also be delivered the report tomorrow, Sainz said.


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