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Uh, Are We Missing Some Stuff From KPMG?: It’s a curse. In my post of Aug. 27, I noted the mayor’s “roll out” of his financial “recovery plan,” (the one a bit short on the “financial” stuff, but including all the Kroll stuff, buying computers, etc.), included his “time line” for the release of the audits, including the KPMG audit due last Friday, Oct. 27. I closed that Aug. item as follows: “I’m betting those dates slip.”

On Oct. 17, 2006, reported that the mayor was still rock solid on the “release” of the KPMG audit last Friday, Oct. 27, notwithstanding the drama with the council on the draft 2003 CAFR.

After An Exhausting Search…: Last Thursday the City Council unanimously voted to appoint an existing employee of the current City Treasurer’s office, Gail Granewich, as the new City Treasurer. I don’t know this person – she might be the second coming. But, c’mon. If Enron had survived its catastrophic financial meltdown, would a new board have appointed the new financial leadership from the people in the existing treasurer’s office? Remember when City Manager Uberaga resigned? In a real hurry, the city appointed Assistant City Manager Lamont Ewell as successor. Did that make any sense to anybody? Did it help anything? Remember, how he was going to be able to ‘stabilize’ the situation but preserve the “institutional memory” of the office? How’d that all work out? Do you know how many thousands of city treasurer types across the nation would have loved to have a shot at the job of turning around San Diego’s goofy numbers, and not be burdened with baggage from earlier issues? What’s the matter with us?

I’m Predicting Sewer and Water Fee Increases: Call me clairvoyant.

The Mayor’s Office submitted requests to the council this week for a “cost of service study” for sewer and water rates. Thanks to Prop 218, passed in the late 90’s, ratepayers have some protection against municipalities just increasing these rates as they like. Instead, it has to be based real costs to the ratepayers. So, you have to do a “study” first. But, this request was a bit odd in that it also requested approval to move forward to actually increase these rates (sort of a “combo” request – government efficiency at its finest). That’s even before the study is completed determining that rates can be adjusted in the first place. Donna Frye suggested they might just be getting a bit ahead of themselves. Result is, the study is going forward, but the authority to go forward with the water and sewer increases will have to wait until we see the results of the study.

The Big Dance in the Gym: Well, you knew we had to get there sometime. The “trial” started Wednesday with house keeping matters before State Superior Court Judge Jeffrey Barton. This will determine if we have just a few large bullets holes or are riddled with bullets in our financial condition – you know who I’m cheering for. The judge had a couple of basic questions, like: Can the otherwise corrupt financial scrams be given a “holy water” treatment through later “legal settlements” between the same parties that pulled off the scrams in the first place? Can the Superior Court in San Diego rule in a comprehensive manner since some of the effected parties no longer live here – no universal jurisdiction as would be the case in a federal court (forget I said that)? And, can the court actually give a remedy that addresses the problem, given California law protections for pension benefits which don’t specifically address how you deal with situations where they are initially obtained illegally? I’m not going to say any more than that for now.

Squeeking About Strong Mayor: The city’s Independent Budget Analyst (“IBA”) Andrea Tevlin, threw a penalty flag last“target=”_blank”>Thursday the mayor’s self effectuating decision to make unilateral budget cuts that changed the Council’s budget allocations of last June. I had a few things to say about these trends in my second post last Monday, “Sanders Runs The Table.” Two things, Andrea. First, this is another place you do not belong. It’s a council fight, or not. If they choose to fold on the issue and let the mayor move money around – and they may very well do so – that’s their job. Second, you need to get your subjective opinions out of the policy decisions made in city government if you are to be effective (and survive). You have no role “recommending” the proposed City Treasurer or showing your personal “satisfaction” with her or his “passion.” Give the council analyses of numbers – be candid. Let them take it the rest of the way. Give the council your objective “vetting” of financial persons, if asked; “she has x degrees, worked in these positions, and completed these projects.” That’s it. Give cold, dispassionate numbers and facts. We are “full up” with the ranks of the cheerleaders. If you choose a more insider roll, it will come to no good end.

Lost Our Edge: I’m not sure about this one. The county has a project called“target=”_blank”>Edgemoor hospital , which is a nursing facility for poor and chronically ill patients. I’m totally for this type of stuff. Years ago, when the county shut down its mental health facility and turned those troubled folks loose into the general population, one came very close to killing my father. I’m not kidding. This is the stuff that governments have to do well. Anyway, last Wednesday, the U-T reports that the rehab of this facility had doubled in cost from $57 million to over $119 million, not including internal fixtures. Well, there’s only 192 beds, so if FF&E is about $70 million (which is likely) we are talking over $1 million per bed. I don’t know.

“Good News” For The County Pension Fund?: The U-T reported the “good news.” This is a puzzle. The system announced a bunch of odd numbers and reported that its pension deficit had shrunk since 2004 – which is good. But, of course, the county contributes about $250 million each year, and has issued about a Billion dollars of Pension Obligation Bonds (POB’s) in the last few years – all of which is taxpayer money or debt. So if its recognized “pension deficit” is now $2.2 billion, as reported, don’t you also have to add to that the other billion of POB debt, to really get an understanding of how much “debt” its carrying? Granted underfunding is illegal, while POB’s are legal; but, from a financial standpoint, debt is debt if it has to be paid back. And, this is a lot of dough. They also report they “shaved” $146 million from their deficit last year. But they know they recently lost over $105 million on the Amaranth bomb, the loss of which isn’t included in these numbers. They won’t recognize that loss until next year. Good news.


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