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Thursday, Dec. 28, 2006 | Here are two end-of-the-year reflections. My New Year’s resolution is to extricate myself from the constant bit-by-bit unraveling of the city of San Diego’s government and explore some interesting stories around the county.

That may be the biggest challenge I’ve ever given myself around this time of the year.

But before I go after my goal, here are a couple of political nuggets to close out 2006 and head into 2007.

  • If this is true, I can’t help but wonder what it means for the city in 2007.

The U-T ed board is saying that San Diego City Council President Scott Peters has decided to hold up the implementation of the ban on Wal-Mart Supercenters. This is not because he’s having second thoughts. The U-T alleges that he wants to delay the ordinance long enough to ensure that Wal-Mart won’t be able to put anything on a ballot in Nov. 2007 to rescind it.

The editorial board’s Chris Reed has his own theory as to why here. He says Peters wants to avoid the possibility that someone would put a recall of Peters and others on the same ballot.

But I’d say it may be a bit different of a reason than that. I’m pretty sure that the movement toward a recall that many were murmuring about has essentially died out. It makes no sense to have a costly and chaotic recall just one year before most of the old council members lose their job anyway.

But Reed is on the right track speculating that there’s more reason to avoid a special election, I think. If Wal-Mart does force the city to hold an election in Nov. 2007, there will be more measures on it than just the referendum on the Supercenter ban.

I have heard that healthcare magnate and political aspirer Steve Francis is waiting to see what Wal-Mart does. If the retail giant does force a special election, Francis might load the ballot with other initiatives – including one that might force the city to give all of its new employees a 401k-style defined contribution pension plan as opposed to the more secure and more costly-to-taxpayers defined benefit plan it provides now.

Asked to comment, Francis handed over this somewhat vague statement, referencing his new think tank:

In addition to my founding of the San Diego Institute for Policy Research, I foresee myself, separate from the Institute, either supporting and/or sponsoring initiatives to provide the mayor additional tools to solve San Diego’s fiscal crisis.

So, there’s that.

  • Next item: Last Friday, I talked to Dick Vortmann, the former president of the National Steel and Shipbuilding Co., who has been running the Chamber of Commerce for a couple of months while that organization sought out a new permanent president.

Vortmann, of course, has, for years, been a pretty articulate critic of the city’s financial problems. First, his struggles with city staff and his warnings to the mayor as a member of the Blue Ribbon Committee have been dramatized in every official report about the city’s unraveling. Later, he and several others gave months of their lives to the Pension Reform Committee. His minority report put the city’s desperate financial condition into some pretty stark terms.

I wondered what he thought about where the city had gotten. I was especially interested in what his reaction was to the latest news that the most crucial piece to the city’s recovery – the long awaited audit – had been delayed yet again.

The firm KPMG has made the city jump through hoop after hoop and incur tens of millions of dollars in consulting and attorney fees to produce the thing. Without the audit, the city can’t go forward with bond measures. A long-awaited refinancing of the bonds that paid for Petco Park, for example, has been delayed for years, costing the city a fortune in interest payments. It’s hard to imagine how city officials could have justified getting those bonds past the public’s scrutiny if they didn’t assure voters they would refinance them for lower rates in the future.

And it was by muzzling Vortmann’s warnings about the city’s finances that city officials ever actually succeeded in getting the bonds out to investors at all.

So, what’s taking KPMG so long? Did Vortmann have any thoughts?

“I think they’re just paralyzed out of fear that they would be faulted for any incorrect information they may present no matter what they do to protect themselves,” Vortmann said.

There are three theories to what’s happening and why KPMG is delaying this thing so long.

One: The firm has not gotten the information it needs from the city.

Two: KPMG wants to bilk the city for more money knowing.

Three: Vortmann’s view that they are “paralyzed” out of fear of publishing anything.

The first hypothesis would be the one to believe if you’re skeptical of Mayor Jerry Sanders’ desire to really be upfront about the city’s problems. Perhaps he knows something – or his staff knows something – that would put the city in even worse shape than it is and he can’t let it out.

But I just don’t buy this. As Vortmann points out, Sanders is still in a position to be able to justifiably blame his predecessors for any of the city’s problems. It is simply not in his interest now to hide something else.

“It would be absolutely unbelievable for the city to withhold something at this point in the game,” Vortmann said.

As for No. 2. This one makes a bit more sense to me, if I tap into my deep skepticism of consultants who have hammered this city so hard over the past couple of years. But it seems like it KPMG would want to get out of San Diego as fast as it could.

“I cannot fathom they are just prolonging this to feed their meter. Something is paralyzing them,” Vortmann said.

OK, so let’s go with that: No. 3.

What could it be? KPMG has had problems and it could be skittish as hell about the future. But they really owe us a clear explanation. Help us understand what’s going on and we’ll be patient. If the city isn’t providing enough info, the firm should let us help it put pressure on officials.

But as long as the firm is paralyzed, we can’t help but worry about how much worse San Diego is going to get before it gets better.

Finally, I asked Vortmann what he thought about the way the city and the mayor are handling all the looming liabilities the city faces.

Vortmann said he wouldn’t presume to be critical of their efforts and ideas when they spend all day every day working on the problem.

But he said the mayor has only addressed the “first half” of the challenge – understanding the extent of the problem and listing the tasks ahead. But the mayor must find ways to pay for the growing annual pension burdens, retiree health care liabilities, its deferred maintenance backlog and a list of other looming costs.

“The mayor admits he has only taken on the first issues. Relatively speaking, the first half of solving the problems is the easy one,” Vortmann said. “It’s the next half that concerns me. The problems are still overwhelming.”

Please contact Scott Lewis directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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