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With a 40-year-old wastewater pump station as a backdrop, Mayor Jerry Sanders said his office’s release of a draft audit for 2003 this week puts the city on track to begin borrowing to make upgrades to its antiquated wastewater system and other infrastructure by June.

The city has been barred from the public bond markets since 2004 when errors and omissions were found on financial disclosure documents. Since then, the city has been forced to commission a number of outside probes into its books, most recently by Kroll Inc., before being able to proceed with the certification of its 2003 audit.

Sanders expects auditor KPMG to bless the 2003 financial statements by Oct. 27 and said the 2004 and 2005 audits will be complete by Feb. 16. Sanders said the major credit rating agencies, with those audits in hand, will likely to restore San Diego’s standing on Wall Street by February’s end. After bond disclosures pass muster with the courts, the city would begin borrowing on the markets by June, he said.

“The significance of today is that we’re on track,” Sanders said.

Scott Tulloch, the director for the Metropolitan Wastewater Department, said the city badly needs to access the public markets in order to borrow the cash make electrical upgrades at Pump Station No. 2 in Point Loma, where sewage if collected from more than 15 cities before it is sent to a treatment plant and discharged offshore.

Per a pending legal settlement, the city also needs to borrow from Wall Street in order to accelerate the replacement of 15 miles of sewer line annually, Tulloch said. Changing out the wastewater system’s 3,000-plus miles of pipeline would take 200 years, he said.

“The Roman aqueducts – that might have lasted that long – but we can’t count on that,” he said.


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