Let the Games Begin: So the “how-financially-dead-are-we?” trial began with opening remarks Monday. One of City Attorney Mike Aguirre’s legal arguments is that vendors (like labor unions) can’t do deals that load up future debt on the city unless the source for repayment for that debt is identified at the time the debt is incurred. Why is that the law? Because otherwise, when the public wasn’t paying attention, politicians and union folks would back-load billions of “floating debt” into the future, which is exactly what occurred here. My favorite quote from the opening remarks comes from the lawyer for Local 127 who concluded, “Employees do not owe employers any duty to safeguard the interests of the employer.”
In this case, that “employer” would be you (taxpayers). But what she doesn’t get is, in public contracts, it’s the union’s (vendor’s) duty to ensure the employer (city) is not illegally backloading debt, because the consequence of violating the debt-limitations laws falls on the vendor, not the taxpayer. We’ll see what happens.
“A” Difficult Proposition?: Tomorrow we will know the result of Proposition A, the “take/share/talk about” the Marines air station at Miramar. Or, will we? When Steve Peace years ago hatched the idea of the airport authority to do the “study” and have the “election,” his intent was to get “the answer” to the move-the-airport question. “Deal” or “no dea?” The vote was going to be “up or down.” We would then know what the community wanted. Well, the “process” wound up looking a little off balanced, the proposition itself (slicing off a piece of the airport) turned out technically unworkable, and the vote is now touted as “sort-of” advisory.
Anyway, I’m watching a KPBS “Full Focus” debate (for want of another word) between Dennis Burks, Head of ASAP 21, the move to Miramar rah-rah group, and Bruce Boland, a retired-admiral helping the opposition. Burks says the taking thing isn’t that bad because we’re “not talking about tomorrow.” It just could happen sometime in the future if the military decided to bail. Then, isn’t that what should have been on the ballot? I think we’d all like a chance to vote on the following: “If at anytime in the future, the military leaves Miramar, would you then want to move the city’s airport to that location.” Not certain how that vote would go, but at least then we’d really know for sure.
One More Flying Thought: In 2001, when we were trying to do something rational with Brown Field, the “organized opposition” was thought to have been financially supported by three prominent parties that had developed projects under the glide path or near the runways: Pardee Homes, McMillan Development and the Catholic Dioceses (new schools servicing the new housing developments). Powerful, moneyed interests. We know how that turned out. There’s a guy named Pat Flannery that puts out a private blog (you can find it here). So, I’m reading his blog of Oct. 24, and he’s got some pretty maps of the area around MCAS Miramar showing the powerful, moneyed interests that are building projects under the glide paths and near the runways of Miramar: Pardee Homes, McMillan Development and the Catholic Diocese.
The IBA Reports We Aren’t Doing Anything: There was another “Andrea Tevlin” sighting this week. She published two reports on pretty well-trod ground showing the city is still using the same song and dance it has for the past decade or so: delay, deceive and deny.
Tevlin says she has seen “little to no progress” on the financial reforms needed to deal with the money messes, and she is “alarmed by this apparent lack of action.” Nice to know someone is “alarmed.”
She then, unfortunately, includes the always required celebration of all the spin stuff we’ve witnessed that won’t make any financial difference suggesting the ’07 budget was “balanced,” which she knows was not because of the use of the phony Gleason $162 million pension contribution. (Even the Krolls spiked the Gleason settlement because it continues the underfunding and “allowed the City to continue to avoid making full Annual Required Contributions” – the real ARC noting that the assumptions in Gleason were “frozen in place since 2003”.) C’mon Andrea.
Tevlin calls out the city’s continued use of the flawed “waterfall” process that strips assets out of the pension system to be used elsewhere, even though it’s a stupid thing to do and has been condemned by V&E, the Knolls, the actuaries, and a litany of other reviewers. We also apparently still sell the “purchase-of-service credits” at a discount, even though that program is about as well regarded as the “waterfall.”
She notes that the practice of the city (so far) has been to securitize any revenue streams it can find to get relatively small slugs of capital (like the tobacco funds) to throw into the gigantic pension deficit “black hole.” But, she warns that when the council does this it means less money for basic services, which she expects will be badly mauled by the practice. She also warns that the city might be losing some of the bigger revenue streams, like franchise fee collections.
On selling all the city’s land to pay off the pension deficit, the report states that, dripping wet, the city only has, maybe, $100 million of land available to throw into the pension fire – unless it decides to ignore the legal restrictions on the use of city property sales proceeds found in the City Charter – an option not to be cavalierly discarded in this city.
She warns against Pension Obligation Bonds (POB’s) to “borrow” our way out of the mess, which was also one of the Kroll’s biggest no-no’s (but for some reason did not make the list of “all” the Kroll recommendations we would implement). Probably not a real threat anymore since we are light years from getting back in to the market, especially for this type of product.
In the “City’s Financial Forecast” section (pg.12) she has a three-alarm reaction to what she sees as the “City’s plan to eliminate the UAAL” through “amortization” which crushes the city in a few years. Says there is a “structural budget deficit.” Remember that the next time you hear we have a structurally balanced budget. She says – get this – “to relieve the structural budget deficit in the General Fund, the city must increase revenues (“taaaaxxxes?”), cut costs, or reduce the obligation to the Retirement System.” Hah! Donna Frye lost her mayor’s race mouthing such nonsense. Aguirre is still seen as crazy for his belief in that type of thinking.
I’m sending Tevlin a draft of my new book, “San Diego Is Just a Big Happy Beach Party” so she can get what political reality is around here. We don’t do any of the hard work.
She actually outlines the “imposition” of a “Pension Tax” by the City Council. (Nah! – the council wouldn’t vote for it, Richard Rider and crew would referend it, and the political consultants would make a fortune on all the “recall” elections.) She mentions that when governments do this, they actually wind up taking “contribution holidays” due to the new revenue. So, it just makes matters worse – which seems impossible here.
There was a bunch of other stuff. Basically, she says we’re broke and she doesn’t see us doing (or even thinking about) what needs to be done to fix it. But, I guess it can’t hurt to get yet another report confirming that.
More Good News: The U-T reports on Oct. 30, that we are only spending $4,000 per day for the council’s legal expenses. I think that’s down from before.
More Good Chargers News: The mayor is meeting with the Bolts’ guys privately, but there doesn’t seem to be a real need for San Diego “cheese” any more. The mating dance is in full swing with Chula , a solvent city, with a budget surplus, and private land and financing clearly interested in the deal. Maybe the baloney is over on this thing and the serious guys are going to pull it off. That’d be cool.
E-mail Pat Shea at pshea@san.rr.com. Or send a letter to the editor.