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Tuesday, February 06, 2007 | IBA Tobacco Report

Last evening’s final This Just In was a summary of the Independent Budget Analyst’s report on the mayor’s plan to issue $100 million in tobacco securitization bonds. We just received the final copy of the report and you can read it here.

— ANDREW DONOHUE

Source: Team Can Talk

A source close to the San Diego Chargers negotiations said that Jerry Sanders will today ask the City Council to allow the professional football team to negotiate with other cities in the county.

Sanders has called a press conference for 1 p.m. today, and the source said the mayor will support a proposed amendment to the team’s contract, something that would allow the Chargers to speak with cities such as Oceanside, Chula Vista and National City about a new stadium.

County supervisors have also shown interest in the team’s ongoing push for a new stadium.

Under the current contract, the team can speak with any city beginning Jan. 1, 2007.

The mayor is “basically going to say this is a bad time for the city of San Diego to be focusing on the stadium issue, we don’t have the resources, but we want to keep them here,” the source said.

Such an amendment would give other cities in San Diego County a head start to woo the team before cities such as Los Angeles, Anaheim and San Antonio come calling.

— ANDREW DONOHUE

Chargers Update

Mayor Jerry Sanders has scheduled a press conference for 1 p.m. today to announce a strategy for dealing with the Chargers’ desire for a new stadium and an approaching deadline that would allow the team to begin negotiating with other cities.

Members of the business community and City Councilman Jim Madaffer have suggested allowing the team to speak with other cities in San Diego County before Jan. 1, 2007, when the team can begin talking with any city, anywhere.

Right now, the team cannot speak with anyone except the city of San Diego.

Please check back regularly today for updates and see a complete version of the story in Saturday’s edition.

— ANDREW DONOHUE

IBA: Bonds Maybe OK

Yesterday City Attorney Mike Aguirre pooh-poohed $574 million of the $674 million in loans that Mayor Jerry Sanders wants to inject into the pension system. The remaining $100 million is another story. Independent Budget Analyst Andrea Tevlin issued a report late today blessing the mayor’s proposal to sell city’s share of its annual tobacco settlements in exchange for $100 million upfront — if the city attorney rules that the borrowing plan complies with labor contracts.

That’s a big if. The city attorney refused to sign the labor contracts last year. Aguirre said today on the Roger Hedgecock Show that he doesn’t believe the contracts are legally enforceable to begin with since he didn’t sign them. He didn’t sign them, he said, because they would tie the hands of the new mayor. (Former Mayor Dick Murphy had already announced his resignation and a campaign was underway when he reached the labor deals.)

In exchange for having to pay more into the pension system or for taking pay cuts, labor unions forced the city to agree to put $100 million in borrowed money into the pension system by the end of fiscal year 2006 and a total of $600 million by 2008. If they don’t, the pay and benefit savings go back to the employees, according to the contracts.

Tevlin blesses the mayor’s tobacco securitization proposal, saying it complies with the goals of the City Council and her office to increase the funding level of the struggling pension system. However, in her report she also notes that interest rates on the bonds have jumped from 6.87 percent to 7.17 percent just since March 29, the day the council was first slated to approve the deal.

The deal was supposed to save the city $11 million by reducing the city’s payments into the pension system, but because of the interest rate hike, that savings will be dropped to only $3.1 million, the report states.

That means the deal’s getting costlier by the day, and the report estimates it will cost the city $182.7 million over the next two decades in order to put $91.3 million into the system this year. (The full $100 million doesn’t go into the system because of associated borrowing costs.)

The deal could get costlier if tobacco revenues don’t come in at projected levels, a possibility given recent challenges to the tobacco settlement by the big tobacco outfits.

And though the city attorney is likely to raise legal objections to the plan, labor reps from the city’s firefighter and blue-collar unions have raised concerns that the deal doesn’t comply with labor contracts as well.

The City Council will be asked to approve the $100 million bonding plan Monday.

— ANDREW DONOHUE

Caporicci Conundrum

The lawyer for Caporicci & Larson thought we should make a simple clarification about our This Just In item Wednesday regarding the city risking the loss of TransNet dollars because it has not submitted a detailed record of how it has used the sales tax money for the past three years.

We’ll stipulate, as they say in the legal world.

The TransNet audits are being performed by the Caporicci firm, which we originally said had been auditing the city’s books since the 1990s. Well, the Caporicci group purchased portions of Calderon, Jaham & Osborn in 2003, but did not begin performing audits for the city of San Diego until that year. Calderon was responsible up until then.

“No one at Caporicci & Larson did any business dealings for the city prior to Jan. 1, 2003,” attorney Matthew Smith said.

The Caporicci outfit was replaced after it released the 2003 audits, which are now being performed by KPMG. That firm is just one end of the great consultant pretzel.

— EVAN McLAUGHLIN

Totally Uncool

The California Ocean Protection Council joined the slowly growing chorus of state agencies questioning power plants that use seawater to cool their systems. The council passed a resolution today that urges the State Water Resources Control Board to examine whether the plants’ impacts on marine life can be reduced.

The council, established in 2004 as part of the California Ocean Protection Act, serves as an umbrella organization to organize and advance policy for all state government offices working on ocean-related issues.

The council agreed today to fund a six-month study to analyze each plant — including the Encina Power Plant in Carlsbad — to see how they could convert to alternative cooling techniques.

Twenty-one plants along the coast draw in an estimated 17 billion gallons of water each day. (The State Lands Commission, which approved a similar measure Monday, says it’s 22 plants and 16 billion gallons.) Environmentalists decry the process, which kills fish, larvae and plankton by trapping them against intake screens or pulling them into the plant.

The resolutions aren’t expected to impact the proposed Carlsbad desalination plant.

ROB DAVIS

Madaffer Unimpressed

Thursday, April 20, 2006 — 5:16 p.m.

Today, in SLOP™, we wrote that Councilman Jim Madaffer must not have had a chance to peruse the Web site of the mayor’s new Office of Ethics and Integrity.

We were wrong. Madaffer had seen the new Web site. It’s just that, like many, he still couldn’t figure out what the office really does after looking over the flashy site.

“I found little if anything on their Web site other than a dream for duplicating something we already have (Ethics Commission) in a time we have little money to be spending on things twice.  I could find few accomplishments except for the commandeering of the employee complaint hotline, which had been previously established by City Auditor John Torrell,” Madaffer told us today.

Tomorrow you’ll have to drop by voiceofsandiego.org’s commentary section to read a column by a professor of philosophy and applied ethics who helped the mayor come up with the idea for an Office of Ethics and Integrity at City Hall.

FF Probe Announced

City Attorney Mike Aguirre announced today with a press conference that he has opened another investigation into City Hall, in response to an article in The San Diego Union-Tribune suggesting that four firefighters gamed the retirement system by moving in and out of high paying positions. Such activity would allow them to boost the salary their retirement calculation is based on, but fire officials said staffing and personal reasons led certain firefighters to accept top management positions but return shortly to lower-paid positions.

The second headline of the story says “Troubled system being gamed, critics contend.” However, the avid readers here in our office didn’t find such a contention by critics. The story does quote Diann Shipione saying it “wouldn’t surprise” her to see such gaming, however the crack staff at voiceofsandiego.org, and our wholly owned subsidiary SLOP™, were unable to locate any contention by critics in the story that the system was being gamed.

Readers, please notify us if you read otherwise.

— ANDREW DONOHUE

Mayor’s Response

We failed to include a PDF of Mayor Jerry Sanders’ written response to City Attorney Mike Aguirre’s opinion yesterday that the mayor couldn’t go ahead with his financial recovery plan without a public vote. Click here to read it.

— ANDREW DONOHUE

County’s POBs

Regular readers of our government reporting know that pension obligation bonds have dominated the news the past two weeks. Supporters of such borrowing often cite the county of San Diego as an example of how POBs, as they are called, can be used to shrink a pension deficit.

However, it isn’t that simple. Scott Lewis took an in-depth look at the county’s pension system last year with a four-part series. The second in the series examined the positives and negatives of POBs. Give them a read if you missed them, or a re-read if you care to be further enlightened.

The county borrowed more than a billion dollars in pension obligation bonds to invest in its pension system starting in 2002.

— ANDREW DONOHUE

Once-Through Cool

The State Lands Commission on Monday approved a resolution that encourages reductions in the number of state power plants that draw in seawater for cooling.

The commission, which oversees leases of 12 of the state’s 22 coastal power plants — including the Encina Power Plant in Carlsbad — said it won’t approve leases for new so-called “once-through” cooling plants and won’t extend existing plants’ leases unless they’re in full compliance with the federal Clean Water Act.

“It was a huge step,” said Bruce Reznik, executive director of San Diego Coastkeeper. “Even if it’s more symbolic than anything, it’s important. It’s the first agency of many that are considering similar resolutions.”

Many environmentalists reject the need for once-through cooling, a process that draws in billions of gallons of seawater each year, killing fish, larvae and plankton. The plants under the commission’s purview draw in about 16 billion gallons daily.

But the resolution isn’t expected to impact the desalination plant Poseidon Resources proposes at the Encina plant. Peter MacLaggan, a Poseidon senior vice president, said the Carlsbad plant and a similar one in Huntington Beach are designed with the idea that they’d outlive the nearby power plants where they’re proposed.

“The environmental community has been working for some time to get the state agencies to put the pressure on these power plants to discontinue the use of seawater for cooling purposes,” MacLaggan said. While environmentalists may have hoped the commission would take a stronger position, he said, “it’s difficult to suggest that a more strident approach was necessary.”

— ROB DAVIS

TransNet Trouble

The city of San Diego is at risk of losing millions of dollars for road projects until the city produces an audit of how its uses money generated by the TransNet tax.

The city is already late on a March 31 deadline to produce an inventory about how the money doled out by the San Diego Association of Governments is spent, a requirement that has already cost City Hall its April TransNet check for $2.6 million.

That money is partially funding 21 ongoing infrastructure projects in the city, including roads, traffic signals, storm drains and sidewalks.

On Friday, a SANDAG committee will consider whether it will grant two-month extension to the city and other local agencies that receive TransNet money but did not turn in an audit in time.

The requirement was instated last fall to better track how money created by the half-cent sales tax was spent by local agencies. Only the city of San Diego, CalTrans and the Metropolitan Transit System failed to meet the deadline, which was imposed on all the agencies that receive TransNet funding.

The middleman in this recent episode of economic morass for the city is Caporicci & Larson, the auditing outfit who was dismissed by the city in 2004 after reviewing and certifying the city’s annual statements since the mid-1990s.

Craig Thomas of SANDAG said the Caporicci firm said the city’s outstanding TransNet audits for the past three years could be wrapped up by the new deadline being proposed, May 31.

— EVAN McLAUGHLIN

Fewer Mortgages

I guess it’s not just Wells Fargo that is having trouble convincing people to take out mortgages.

The national Mortgage Bankers Association released its weekly mortgage applications survey today and the numbers don’t look too good.

Basically, 14.9 percent fewer mortgages were taken out last week than in the same week last year. That’s based on something called the Market Composite Index, which is a measure used by the industry to figure out how many loans are being taken out.

That index was also down 1.4 percent from last week and is showing no traditional “spring rebound.”

You can read more about this and view an interesting chart here. 

WILL CARLESS

Down in Flames

U.S. Rep. Bob Filner, D-Chula Vista, called us back this morning with criticism of the airport marketing study released yesterday evening.

The San Diego County Regional Airport Authority study says Marine Corps Air Station Miramar would be the strongest site from a marketing standpoint, because of its proximity to businesses, tourist destinations and the county’s population center. It says the four airport sites farthest from San Diego are impractical, predicting that they’d actually cause more problems than keeping the status quo. Filner has been a fervent supporter of one of those sites: Imperial County.

“Clearly the board doesn’t want to look at anything outside of San Diego County, so that’s what the consultants gave them,” Filner said. “They’re heading for disaster. All the millions and millions they spend is going to be for naught.”

Filner, whose 51st District includes all of Imperial County, has touted the desert site as the most practical solution to San Diego’s airport capacity crunch. Filner contends that a $15 billion to $25 billion magnetic levitation train could get passengers there in as little as 25 minutes. The study released yesterday says it would take an average of 82 minutes for travelers to get there, even if everyone rides the maglev — which isn’t expected.

Filner said the authority’s consultants aren’t “thinking dynamically” about options other than Miramar.

“They were focused on Miramar from day one,” Filner said. “They came up with the exact same answers [as previous studies] and they are going to go down in flames.”

— ROB DAVIS

Mayor Hits Snag

The lynchpin of Mayor Jerry Sanders’ financial recovery plan hit a major snag this morning, as the city attorney released an opinion stating that voters must first approve a planned $500 million in bonds before the massive borrowing plan can go forward.

The city attorney opined that San Diego does not qualify for a key exemption in state law that has allowed scores of municipalities across California issue pension obligation bonds without voter approval because of outstanding questions surrounding the legality of pension benefit increases granted to employees in 1996 and 2002.

Typically, municipalities can’t issue debt without a vote of the public. However, an exception in state law allows cities such as San Diego to do so if the proceeds from such bond sales go toward “obligations imposed by law.” To date, pension debts have been determined to be “obligations imposed by law” because municipal employers have been found to be bound by law to pay retirement benefits.

But City Attorney Mike Aguirre states in his opinion released today that the city does not qualify for this exemption because of two outstanding lawsuits he has filed seeking to void a host of employee benefits on the grounds they were created in illegal and corrupt deals.

Check back later for updates.

ANDREW DONOHUE

Bond Advice Follow Up

It is fairly common practice in the state of California for municipalities to use proceeds from pension obligation bonds to pay for some or all of their annual pension bill, an attorney with Orrick, Herrington and Sucliffe LLP said in an interview today.

Concerns have been raised as to whether pieces of the mayor’s $674 million pension borrowing plan are legal because the proposal envisions using part of the bond proceeds to cover about half of the city’s annual pension bill.

So, has that been done before in the state of California?

“Absolutely yes,” said Roger Davis, chairman of the firm’s public finance practice.

City Attorney Mike Aguirre has promised a legal and financial analysis of the mayor’s proposal tomorrow.

(Orrick, Herrington and Sucliffe LLP is well-known for its work on previous pension obligation bonds. It is also a defendant in a malpractice suit brought by the city related its stint as bond counsel at a time when the city released financial disclosures that misstated the city’s obligations.)

— ANDREW DONOHUE

Less Mortgages

San Francisco-based Wells Fargo Bank, one of the largest home mortgage lenders in the country, announced today that its mortgage business had dropped 43 percent from the first quarter of 2005.

While the company’s quarterly earnings report touts double-digit gains in every other business category, and the overall profit was up 9 percent from last year, the drop in mortgage revenue is very interesting.

The report comes amid talk that mortgage brokers are being laid off around town.

Local analysts have been saying for a while that the slowdown in home price appreciation was going to hit the refinancing industry hard. Looks like that’s already happening.

— WILL CARLESS

San Francisco Home Hunt

San Francisco is still one step ahead of San Diego when it comes to optimizing flashy online gadgets to sell people homes.

This site is basically a Google map of San Francisco, onto which a company posts markers showing where open houses will be happening. Anyone looking for a home can log onto the map and scroll through the possibilities.

It’s not quite as cool as Zillow.com, but probably equally as useful.

WILL CARLESS

Prices Up, Sales Down

The median price of a Southern California home passed $500,000 for the first time last month, according to DataQuick, a local real estate information service.

According to a DataQuick press release, the average price for a home sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $501,000 last month, up 4.4 percent from $480,000 in February and up 14.1 percent from $439,000 in March 2005.

“We still expect the annual increase in median to go down into the single digits sometime this summer. San Diego County is still the market furthest along in this cycle. Price increases there have been below 10 percent the last eleven months,” the press release quotes Marshall Prentice, DataQuick president, as saying.

From March 2005 to March 2006, home sales dropped a massive 17.4 percent in San Diego County. That’s more than every other market in Southern California except Orange County.

WILL CARLESS

Bonds Good to Go?

Concerns have been raised regarding the legality of pieces of Mayor Jerry Sanders’ $674 million pension borrowing plan, but a report on the Web site of bond counsel Orrick, Herrington & Sutcliffe LLP appears to show precedent for the mayor’s plan.

The contested part of the mayor’s proposal: his plan to use a portion of the borrowed money to pay about half of the city’s annual pension bill. (Previous plans offered by city leaders imagined putting the bond proceeds into the struggling system on top of the city’s full annual payment.)

In describing past pension obligation bond deals it had completed, the Orrick report says: “A number of these transactions financed the regular annual pension payment in addition to all or part of the UAAL.” UAAL stands for unfunded accrued actuarial liabilities and is essentially the deficit accrued by the pension system — a measure of its assets versus liabilities. 

Ironically, the city is suing Orrick for malpractice for work it did on as the city’s bond counsel.

City Attorney Mike Aguirre has promised a legal and financial analysis of the borrowing plan tomorrow.

ANDREW DONOHUE

Rope Deal Sealed

The City Council on Tuesday approved placing a rope barrier at La Jolla Children’s Pool during the birthing season for harbor seals in an effort to protect the seals from human contact.

A rope barrier will be set up in the Children’s Pool annually between Jan. 1 and May 1, which is the recognized pupping season for harbor seals.

Both supporters and opponents attended the council hearing. Proponents of the rope said it provided protection for the seals, which attract throngs of tourists to La Jolla. Opponents argued that protecting the seals there shut the public out from that beach while attracting great white sharks to nearby areas of the coast where people do swim.

Councilmembers Donna Frye, Kevin Faulconer, Ben Hueso, Toni Atkins, Jim Madaffer, Brian Maienschein and Tony Young voted for the rope. Council President Scott Peters, who represents La Jolla, voted no.

— EVAN McLAUGHLIN

Ten More Condos

Ten more condos came on the market in downtown San Diego last week, pushing the total number of condos for sale into previously uncharted waters.

As of last Wednesday, 491 condos were for sale in the 92101 ZIP code, according to Lew Breeze, a Little Italy Realtor. That’s up from 481 the week before.

The increasing amount of downtown inventory on the market mirrors the county’s real estate market. More than 18,800 homes are currently for sale in the county, which is very nearly a record for the market.

— WILL CARLESS

Legal-eased

A federal magistrate said two former retirement board members were entitled to court-appointed attorneys in the U.S. attorney’s case corruption case against five former pension officials for their alleged roles in a 2002 pension funding deal that raised defendants’ future retirement pay.

Former Human Resources Director Cathy Lexin and former Assistant Auditor Terri Webster were provided legal defense in the criminal case. Attorneys have said that a similar corruption case filed by the district attorney and other civil lawsuits have left the defendants unable to pay their legal bills.

Firefighters union President Ron Saathoff, former retirement Administrator Larry Grissom and former retirement general counsel Lori Chapin were also charged in the corruption case.

— VOICE STAFF and WIRE REPORTS

Ethics Orgy Part IV

I was surprised to see not only the massive advertisement for the mayor’s new budget proposal this weekend in The San Diego Union-Tribune but also some of the numbers in it.

One of the most surprising was the cut in the budget of the Ethics Commission of $138,000 at the same time all this bonanza of new money was found for everything else — including more than $1.17 million allocated for the mayor’s new Office of Ethics and Integrity. We’ve had trouble in the past identifying exactly what the big new bureaucracy would do.

We found out today that the Ethics Commission cut listed in the Union-Tribune super-advertisment was a mistake.

“I’ve been assured that it’s a mistake,” said Stacey Fulhorst, the executive director of the Ethics Commission. “The $138,000 will be restored.”

How could such a mistake have happened? Fulhorst said she didn’t know.

“The Ethics Commission wasn’t invited to participate in any aspect of the budget’s preparation,” she said.

— SCOTT LEWIS

Aguirre on Enterprise

Monday, April 17, 2006 — 1:35 p.m.

City Attorney Mike Aguirre said at a noontime press conference Monday that he is going to investigate if water, sewer and other enterprise funds are paying the City Attorney’s Office for legal services after the editorial page of a local Pulitzer-winning newspaper  called him out.

The investigation will also probe whether the enterprise funds also pay for the outside legal fees of several city employees and elected officials that relate to the various inquiries by the Justice Department, District Attorney’s Office and Securities and Exchange Commission.

An editorial in The San Diego Union-Tribune accused Aguirre on Saturday of “boosting his own budget at the expense of pipe repairs.”

Aguirre also said his legal opinion on Mayor Sanders’ plan to borrow money from Wall Street to pay down its estimated $1.4 billion pension deficit and part of its annual pension bill will be released Wednesday after initially saying the opinion would be due out in a few weeks. Aguirre said it’s unclear whether the city can borrow $374 million this year without a vote of the public or whether the city can use a loan to pay the part of its annual contribution that goes toward the interest on the debt and a portion of the deficit.

“Are we [borrowing] in order to shore up the budget or because issuing pension obligations bonds is a sound financial move in the interest of the people of San Diego?” Aguirre asked.

— EVAN McLAUGHLIN

The Mayor’s Ad

Those who read The San Diego Union-Tribune, a local newspaper, likely ran across a massive advertisement this weekend for Mayor Jerry Sanders’ budget.

Complete with an array of pie charts and cost breakdowns, the advertisement features a note from Sanders, the City Council and a few important dates in the budget process.

The ad was financed by a number of corporate sponsors and cost $20,478, according to the Mayor’s Office.

Spokesman Fred Sainz said the Mayor’s Office went to these corporate outfits and asked them to pay for the ad. He said corporations wrote checks directly to the local newspaper to cover the costs.

The corporate sponsors are Sempra Energy, Qualcomm, Inc., Westfield Incorporated, the San Diego County Chapter of the California Restaurant Association, Gen-Probe Incorporated, Downtown Residential Marketing Alliance and CDC Small Business Finance.

— ANDREW DONOHUE

Wowie Zillowie Part 2

The Web site that brought you scroll-through maps of the nation’s neighborhoods, complete with individual real estate prices and sales histories for most homes, has just stepped up its act.

Zillow.com, which offers Google Maps-style maps of local neighborhoods, has started to offer aerial photos of addresses in certain cities. The photos are taken at an angle so that prospective buyers (or just real estate peeping toms) can check out what each address looks like.

The service is only currently available for New York, San Francisco, Las Vegas, Los Angeles, Seattle and Boston.

It’s very cool, if a little creepy.

Choose an address in any of those cities and you can scroll along, through each neighborhood, checking out each home.

Enterprising  home seekers might even want to check out how nice the cars are in each neighborhood — that’s right, it’s clear from the photos which cars are parked in which driveways — thus giving some indication of how home prices are doing in the area.

Have fun.

— WILL CARLESS

A Call to Stop

The San Diego County Taxpayers Association called for a stop to what it dubbed the “publicly funded advocacy efforts for a new airport” in an opinion piece that ran in The San Diego Union-Tribune today.

Its author, Lani Lutar, president and CEO of the association, has been critical of the San Diego County Regional Airport Authority’s $3.8 million public outreach campaign, which is designed to educate the public about the need for a new airport and the process to find it.

Lutar called a Monday story in voiceofsandiego.org that detailed the behind-the-scenes work the “latest blow to taxpayers,” citing the $3,140 the authority paid GCS Public Relations to help craft an opinion piece written by Midge Costanza, founder of the Midge Costanza Institute, which ran in the Union-Tribune Dec. 23.

Costanza’s article struck a dire tone about what would happen if San Diego failed to build a new airport.

“Ordinary citizens understand that if we fail to address the airport issue this time,” she wrote, “we are playing Russian roulette with our future, as well as our children’s and our grandchildren’s.”

In an interview, Costanza said she solicited GCS’s help in writing the opinion piece — not the other way around — and was doing nothing unusual or seemly by having someone “help me form not the opinion but the words.”

— ROB DAVIS

Treasury Rates Up

The New York Times today declared that “the era of cheap money may finally be nearing its end” upon the news that the yield on the 10-year Treasury note rose above five percent for the first time since 2002.

That means borrowing just got more expensive. Why does this matter to those familiar with voiceofsandiego.org content? Well among our specific focuses are government and housing. And the news yesterday, The Times said, means that borrowers will be paying more on mortgages and home equity loans. It also will likely have an effect on the rates given to governments borrowing money. Mayor Jerry Sanders released a proposal just this week to borrow hundreds of millions of dollars of pension obligation bonds, a financing plan that is founded on the idea that the pension system can reap higher earnings on borrowed money than the city pays in interest to borrow it. 

— ANDREW DONOHUE

The Mayor and the Attorney

City Attorney Mike Aguirre today released the latest in his series of reports on city finances and related endeavors, concluding in Interim Report No. 8 that the high-priced consultants investigating city finances have breached their duty to the city of San Diego. The attorney recommended they be fired and sued.

Aguirre opined that consultants and attorneys from Kroll Inc. and Willkie, Farr & Gallagher LLP breached their duties to the city of San Diego by:

— Failing to follow the guidelines for audit committees as recommended by the Government Finance Officers Association, such as the recommendation that an audit committee release an annual report on its activities.

— Improperly interacting with city officials, the editorial board of a local newspaper and the firm conducting the city’s 2003 audit, KPMG. The city attorney alleges that the consultants, led by former SEC Chairman Arthur Levitt, compromised their independence by working too closely with city officials under investigation and by working outside of their authorized scope of work in meeting with the editorial board of a local newspaper and publicly supporting KPMG after it settled a massive fraud case of its own with the Justice Department.

— Breached the city’s internal controls by not submitting detailed billing. “The lack of accurate billing has rendered the City unable to properly monitor the engagements,” the report states.

“This financial crisis took a decade to create and it’s going to take a decade to get out of, and we need to start moving in the right direction and we’re not doing that going further down into the dark abyss with Kroll,” Aguirre said.

As of posting time, the audit committee had not returned a phone call seeking comment.

Also today, the mayor highlighted the neglected roofing, street and other infrastructure needs he would fund with the $20 million he plans to dedicate to the city’s estimated $372.5 million tally of deferred maintenance.

He also offered a long list of needs that will go unmet his budget, such as infrastructure to accommodate San Diego’s growth, emergency reserves and the Fire Department as a whole.

Please see voiceofsandiego.org‘s Friday edition for a complete version of this story, which will name the local newspaper with whom Kroll allegedly had improper interactions.

— ANDREW DONOHUE

Imperial Beach, Open

The county’s Department of Environmental Health sounded the all-clear today on surfing and other water access at Imperial Beach. The water has been tested and the post-rain bacteria levels are back to normal.

The water had been closed Tuesday after a trace rainfall Monday night. Access remains closed at Tijuana Slough National Wildlife Refuge, a popular surf break. That closure has been in effect since Feb. 21.

Check back Monday with voiceofsandiego.org for a story that examines just what’s in the water that causes these repeated closures.

— ROB DAVIS

SOFAR: Transit Plan Stinks

A local group sued the city of San Diego on Thursday, as well as its City Council, redevelopment agency and downtown planning arm, claiming that the recently approved blueprint outlining downtown San Diego’s growth over the next 25 years was inadequate under the state’s environmental laws.

Save Our Forest and Ranchlands, or SOFAR, is asking a Superior Court judge to require the City Council to reweigh the downtown plan update against an alternative version that would change the way transportation is managed within the 1,450-acre urban core.

In February, the City Council, which also sits as the Redevelopment Agency, approved a plan that would compensate nearly 90,000 residents in downtown by 2030, compared to the previous plan’s estimate that about 50,000 people would live downtown then.

SOFAR contends that the California Environmental Quality Act requires the city to evaluate alternatives for dealing with transportation issues than what was laid out in the document, which was prepared by the Centre City Development Corp. The council failed to consider transportation alternatives, SOFAR claims.

Lo and behold, SOFAR offered its own transportation alternative about a week before the council hearing.

In the SOFAR alternative, the city would study how to cut down the vehicle traffic within downtown and commit to it, increase public transit in and out and within the urban core, impose an alternative transportation impact fee, expand the Little Italy Presto! Shuttle, charge market price for parking, sell parking space separate from residential units, implement parking maximums, and improve downtown’s pedestrian and bicycles pathways.

— EVAN McLAUGHLIN

Aguirre No. 8 Coming

City Attorney Mike Aguirre is scheduled to release the latest installment in his “Interim Report” series today at 12:30 p.m. The report, “Interim Report No. 8,” will allege that Kroll Inc., the consultants conducting a private investigation into City Hall, has breached its duties to the city of San Diego.

Also, at 11 a.m. Mayor Jerry Sanders is slated to declare what city functions he deems important won’t be getting funded in the fiscal year 2007 budget. He’s released the tidbits of the budget this week and is scheduled to release the full budget tomorrow.

Please check back with voiceofsandiego.org for updates.

ANDREW DONOHUE

The Education of San Diego

The Wall Street Journal today on its front page tells the story of San Diego schools’ battle to accommodate immigrant and low-income students within its science curriculum while at the same time satisfying high-performing schools in areas such as La Jolla.

The paper requires a subscription to access its Web site, so you can click here to read it if you are a paying member.

If not, here’s the way the story was told. In 2001, the school district sought to overhaul its science curriculum to assist its immigrant, low-income and minority students. Parents and teachers across town in places such as La Jolla High School rejected such a plan, claiming that the new science being taught was watered-down and didn’t meet the standards of schools that normally win science prizes.

 “The skirmishes in the nation’s eighth-largest urban school district reflect a wider battle over how to make science classes accessible to a broader array of students while maintaining their rigor,” the article states.

The article follows the issue through its impacts in the 2004 school board elections and onto how teachers are dealing with it in the present day.

ANDREW DONOHUE

Park, Library Cuts Shelved

Mayor Jerry Sanders said Wednesday that he will keep the budgets for libraries, arts, park and recreation, and neighborhood services the same as last year after those departments have been cut for the past several years.

“This is not about restoring services, it’s about stabilizing these services that are important to the quality of life,” Sanders said.

The services that have been cut in recent years are library and recreation center hours, the library’s book-buying budget, tree-trimming, graffiti removal and park maintenance.

Sanders is expected to talk Thursday about the bad news: services that will not get funded next year. His complete budget proposal will be due out Friday.

EVAN McLAUGHLIN

Trash Fees Elsewhere

In Los Angeles, the mayor wants to raise the trash fee in order to pay for more police officers.

The L.A. Times article notes that the current charge of $11 month is among the lowest in Los Angeles County. It should be noted that L.A. County also includes posh Palos Verdes Peninsula, where residents pay $69 a month to have their garbage picked up twice a week from a designated spot on their property, so as to avoid any curbside eyesores.

The People’s Ordinance of 1919 and a 1986 ballot proposition prohibit the city from collecting a trash fee from residents of single-family homes city of San Diego, making it an oddity among the state’s largest cities. Only voters could ever reverse this city law, it is widely believed.

According to a study released by the Center on Policy Initiatives, the city could raise nearly $55 million annually by charging $9.85 a month for trash pick-up — the average rate among California’s 10 largest cities.

— EVAN McLAUGHLIN

Cancel That Suit

Plaintiffs’ attorney Michael Conger, who has two pending lawsuits against the city of San Diego that would force it to put hundreds of millions of dollars into its pension system, said this afternoon that Mayor Jerry Sanders’ plan to borrow $674 million for the struggling system would satisfy his lawsuits.

Conger has sued the city on behalf of retirees and a former city worker in attempts to force the city to make up for its historical tendency to underfund its pension system, a practice that has left the system with a deficit that’s estimated to be at least $1.4 billion.

The suits are two in a long list of pension-related lawsuits involving the city that are currently before the courts and a third-party mediator.

Conger said no formal agreement has been made with the mayor, but the attorney indicated that he would drop his suits if the mayor is able to enact his borrowing plan (and the plan does have a number of hurdles to clear).

— ANDREW DONOHUE

Now What in the 50th?

Things have been weird in the 50th congressional district. They could plausibly get weirder.

Democrat Francine Busby earned a spot in the June 6 runoff by garnering 44 percent of the vote Tuesday, and Republican Brian Bilbray appears to have edged fellow GOP contender Eric Roach to nab the second spot with 15 percent of the vote.

Bilbray leads Roach by 880 votes with approximately 10,000 absentee ballot left to be counted. The unofficial results of the 18-candidate House race are found on the county registrar’s Web site.

Because no candidate won 50 percent Tuesday, the top candidates from each party will advance to a June 6 runoff. The runoff will determine who will hold the House seat formerly occupied by imprisoned Rep. Duke Cunningham — Busby, Libertarian Paul King, independent candidate William Griffith and either Bilbray or Roach.

But the winner only gets the office for six months.

That same day, as voters choose who will serve out the rest of Duke’s term, they will also be asked to select their favorites from within their individual political parties in that district’s regularly scheduled primary election. The party winners in that primary will then go on to face each other in the regular November general election. The winner of the November contest will begin a full term in January.

That creates a scenario whereby a Republican such as Bilbray could win the special election in June but also lose the party-only vote in the primary. In that case, he would serve out the six-month term but not have the chance to compete as the Republican choice in the November regular election.

— EVAN McLAUGHLIN

Imperial Beach, Closed

Last night’s trace rainfall wasn’t enough to warrant warning signs along San Diego’s beaches.

Except in Imperial Beach.

Sewage-tainted runoff from Mexico forced the closure of water access in IB earlier today, even though the general advisories typically posted after rainfalls weren’t needed, according to a release from the county’s Department of Environmental Health.

Imperial Beach’s waters have been open off-and-on throughout the winter. Further south, at Tijuana Slough National Wildlife Refuge, water access has been off-limits since Feb. 21.

— ROB DAVIS

Trivia Time

There’s something curious about today’s congressional election in North County.

If you lived on the southern slope of Mount Soledad or in northern Pacific Beach, chances are that by June 2006 you will have cast ballots in more elections in one yearlong period than any other pool of voters anywhere in the country.

A voiceofsandiego.org t-shirt goes out to the first reader who can factually dispute that assertion. (High school class elections or similar contests don’t count). Please e-mail your response and the supporting information to evan.mclaughlin@voiceofsandiego.org and include your shirt size.

If you live in the Mount Soledad-area slice of California’s 50th Congressional District that includes the city of San Diego’s District 2, you will have been asked to vote 5 times from July 2005 to July 2006. These episodes include the special elections in July (mayoral primary and Mount Soledad Cross), November (mayoral runoff, council primary and governor’s ballot initiatives), January (council runoff), April (congressional primary) and regularly schedule June primary.

Normally, that 12-month span would include just the upcoming June primary.

Polls for Tuesday’s election close at 8 p.m. See two entries below to see how this election fits into the process of replacing imprisoned Rep. Duke Cunningham.

— EVAN McLAUGHLIN

Get Involved: Budget

Budget talk is in the air. Smells good, doesn’t it? Want to get a whiff up close?

Mayor Jerry Sanders is slated to unleash his first-ever budget on Friday, and the public will get its first crack at it on Wednesday, April 19 at a hearing in council chambers from 9 a.m. to noon.

The public will also get a number of other chances to air their views; click here for the complete budget schedule. And then click here for independent budget analyst’s report on the budget process.

This marks the first year in modern San Diego history that the mayor, not the city manager, will construct the budget and the first time the council will have an independent analysis of said budget. It’s also set to be a tight, intense budget season.

— ANDREW DONOHUE 

Vote Today

Polls will be open for Tuesday’s special election to replace resigned Rep. Duke Cunningham until 8 p.m.

Several northern neighborhoods in the city of San Diego as well as Del Mar, Solana Beach, Encinitas, Carlsbad, Cardiff, Escondido and San Marcos are included in the congressional district, California’s 50th.

Tuesday is the first leg of the first of two elections that will be held over the next year to fill the vacant House seat. If one of the 18 candidates running receives more than 50 percent of the vote today, he or she will be serve out the rest of the current term, which expires in January. If no candidate receives more than half, the top vote-getter from each party plus the independent candidate will advance to a June runoff to determine who carries out the remaining few months of the two-year term.

Meanwhile, the June election will also serve as a primary contest for the term that begins in 2007. The top vote-getters from each political party in June will advance to a runoff in November, and the winner of that election will be sworn in next January.

— EVAN McLAUGHLIN

Cop Commercials

The San Diego Police Officers Association announced Monday that it has produced a commercial that will air more than 60 times during the next two weeks to highlight what the union perceives to be a staff shortfall at the San Diego Police Department.

“It focuses and emphasizes the critical staffing levels facing police in the city and how the situation with the city is affecting officer, who are leaving the city for other departments that are paying better wages and benefits,” union president Bill Nemec said.

Nemec said it was unsafe for there to be 67 patrol officers on duty throughout the city between 2 a.m. and 7 a.m.

The union’s advertisement urges viewers, in both English and Spanish versions, to call Mayor Jerry Sanders to tell him to pay police officers more in order to keep experienced officers who might otherwise take a better-paying job elsewhere in the region.

In a press statement released by the Mayor’s Office said the union’s message was “unnecessarily misleading.”

“It’s a shame that the union has decided to mislead citizens by confusing pay issues with public safety issues,” the statement read.

The mayor’s statement said crime rates in San Diego are half as high today as they were in 1992, that city salary levels are comparable to other the law enforcement agencies in the region, and added that 130 officers patrol the streets nightly.

Nemec said that there are 130 officers until 2 a.m., but that the number drops to 67 after that.

The city and the police union are currently in labor negotiations.

— EVAN McLAUGHLIN

Taxes Kill Computer

Monday, April 10, 2006 — 6:40 p.m.

San Diego County Treasurer and Tax Collector Dan McAllister said that an unidentified technical problem made his Web site inaccessible to residents looking to make last-minute payments on their property taxes. The last installments of this year’s tax bills are due tonight.

“The law doesn’t allow me to extend the deadline without some kind of natural disaster or problem of similar magnitude,” McAllister said.

He said his office was advising property owners to stay off the computer and put their checks in the mail or drop by one of the branch offices where they can make the payment. All McAllister’s offices will be open until 9 p.m.

“We appreciate people’s patience,” McAllister said.

— SCOTT LEWIS

Kroll and Job Cuts

It appears the audit committee consultants will be on the city rolls for a little longer, while some city workers may be leaving City Hall sooner than later.

In addition to announcing his planned pension strategy, Mayor Jerry Sanders also stated that he thought the completion of the investigation by the Kroll audit committee would be delayed until June and that he anticipated that more than 500 vacant or filled positions would be dropped from the city’s payroll in the coming year.

Kroll and its attorneys at Willkie Farr Gallagher have been conducting an investigation into the city’s financial practices to satisfy the concerns of audit firms that have been withholding their certification of the city’s annual financial statements dating back to 2003. The audit committee said it will need $3 million more for their work, which was extended until mid-June because they said they need to review new e-mails that were found in the retirement system’s Navigant report, Sanders said.

The reduction of 500 jobs, some of which exist on paper but are not filled, will likely occur over the next year as the Mayor’s Office hopes to audit the efficiency of city departments, which Sanders calls “business process reengineering.” The mayor said he hopes to subject one-third of the city’s departments to business process reengineering within the first year of his term.

— EVAN McLAUGHLIN

Ghostwriters in the Sky

San Diego County Regional Airport Authority board member Mary Teresa Sessom called for an executive-level discussion about the authority’s future public outreach run by GCS Public Relations.

The authority’s executive committee should talk about GCS’s plan, Sessom said. The company signed a lucrative $3.8 million contract in Nov. 2004 to lead the authority’s public outreach.

Sessom requested invoices for GCS’s work to date in 2006 — and asked for future invoices to be delivered as part of authority board members’ informational packets.

Authority spokeswoman Diana Lucero said today’s story about the inner workings of the PR firm’s push inaccurately reported the source of funding for the outreach campaign. We said it came from federal funding. Lucero said the following: Airlines collect a $4.50 fee — called a passenger facility charge — from passengers. The money goes to the Federal Aviation Administration. The FAA then gives it to airports to build infrastructure. Lucero said the fee isn’t a tax, as Lani Lutar, president and CEO of the San Diego County Taxpayers Association asserted.

Lutar disagrees.

“The airport authority’s argument is that these are not taxpayer funds because they’re receiving the funds from the FAA trust fund,” Lutar said. “However, from our point of view, that trust fund and the FAA itself are supported by taxpayer funds.”

— ROB DAVIS

Aguirre: Probe the Probe

San Diego City Attorney Mike Aguirre has asked the county grand jury to investigate how water, sewer and golf enterprise funds are partially paying for the outside audit committee’s investigation into the city’s financial practices.

About 30 percent of the audit committee’s tab has been paid for by enterprise funds, Aguirre said.

Aguirre said the investigation focuses on the actions of employees who are paid by the city’s day-to-day budget, so that fund should be charged the costs of the investigation, not the enterprise funds.

“That would be like charging the victim of a crime with the costs of investigating the criminal who committed the crime,” Aguirre said. “That is not appropriate.”

The audit committee’s probe is designed to satisfy the concerns of auditors who are withholding their certification of the city’s books.

Aguirre also handed out the bills submitted by Kroll and Willkie Farr, the consultants and attorneys who make up the audit committee. The city attorney said the bills lacked the details necessary to determine whether there was a reason to bill the enterprise funds for the investigation.

— EVAN McLAUGHLIN

Aguirre Follow Up

City Attorney Mike Aguirre called back today to clarify the earlier statement found in the This Just In below.

He said, contrary to the suggestion that his office had blessed the mayor’s new bond proposal, he has not approved it as a policy or from a legal standpoint.

“We have not finished our review, we have not reached a conclusion if it’s legal, we have not reached a conclusion if it is fiscally sound,” Aguirre said.

— ANDREW DONOHUE

‘That’s Inaccurate’

This morning City Attorney Mike Aguirre rebuffed an assertion made in today’s story that his office has “blessed” a complex bond package to be proposed today by Mayor Jerry Sanders.

The Mayor’s Office told us that the City Attorney’s Office and bound counsel had said the deal was “legally sound.” We explained to readers that the office had then, indeed, “blessed” the proposal.

“That’s inaccurate,” Aguirre said.

That’s all he’d say. There is a difference, we suppose, between finding something legally sound and supporting it politically. Stay tuned as we iron out this wrinkle.

ANDREW DONOHUE

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