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Tuesday, February 06, 2007 | Mr. P’s Missive

Voice of San Diego obtained a letter from city Pension Board President Peter Preovolos to his colleagues in which he claims that the city’s audit committee was not authorized to release thousands of documents to the public that led to a frenzy of news stories about the actions of the past board.

The documents led Deputy Mayor Toni Atkins to call for the immediate resignation of San Diego City Employees’ Retirement System Administrator Larry Grissom, Preovolos and General Counsel Lori Chapin. Grissom had already announced his retirement effective before the end of the year.

In his letter, sent Oct. 13 to his fellow board members, Preovolos also says the board faced an “onslaught of unwarranted criticism” based on release of the privileged documents.

“Most important, we are taking the steps necessary to satisfy ourselves that staff has acted appropriately in the past. If we learn otherwise, it will then be our responsibility as the independent administrator of SDCERS, to take whatever corrective action is needed to rectify the situation,” Preovolos writes.

Preovolos wrote that the system had been wrongly accused, in the press, of withholding the documents to “conceal damaging information” about a now notorious pension arrangement in 2002 known as Manager’s Proposal 2.

“These assertions are made despite the verifiable fact that to have followed the ‘initial’ recommendations would have exposed the plan and its members to grievous harm,” Preovolos wrote.

SCOTT LEWIS

Accounting for the Accountants

City Attorney Mike Aguirre will hold a press conference today at noon to ask the City Council to withhold a $3 million payment from the audit committee until the group of accountants and lawyers investigating San Diego’s finances presents a detailed breakdown of its activities.

The city attorney has repeatedly expressed concerns regarding the billing statements turned in by the audit committee, which is headed by former Securities and Exchange Commission Chairman Arthur Levitt.

The audit committee is scheduled to ask for an additional $3 million from the City Council on Tuesday. The increase would bring their total bills to more than $9 million since being hired in February.

The city is awaiting the completion of the audit committee’s investigation in order to finish three years of backlogged audits and regain its credit rating. The audit committee revealed this week that a number of technical glitches in the document collection process would delay the completion of its investigation, originally scheduled for December, by several months.

Check back for more details following Aguirre’s press conference.

— ANDREW DONOHUE

Sanders’ Wallops Frye in Fundraising

Former police Chief Jerry Sanders raised more money for his mayoral campaign in less than a month than City Councilwoman Donna Frye has collected since the beginning of the year.

The candidates released their financial disclosure forms Thursday, which cover the period from Sept. 25 to Oct. 22.

During that period, Sanders raised $481,000 compared to Frye’s $132,000. Sanders has raised more than $1.2 million over the whole year and he has not received any loans. Frye has collected $478,000 over the year.

With 11 days until the election, Sanders has only $18,000 remaining in cash whereas Frye has $124,000.

—SCOTT LEWIS

BRAC ‘All But Final,’ Time to Exhale

Thursday, Oct. 27, 2005 — 4:19 p.m.

A city official monitoring the federal government’s closure of military bases nationwide said the selection process is “all but final,” overwhelmingly sparing the region’s defense facilities from being shuttered.

Andrew Poat, the city’s director of governmental relations, said that a failed attempt in the House on Thursday to squelch the Base Realignment and Closure commission’s selection of base closures has all but guaranteed that BRAC process will be wrapped up by Nov. 7.

“… It is safe to say that the BRAC decisions appear to be final,” Poat said in an e-mail Thursday afternoon.

In addition to the Pentagon’s initial recommendations, which shifted personnel on local bases but did not include any closures in San Diego County, the BRAC panel decided to make a conditional closure of the Navy Broadway Complex. If the Navy does not carry out a prior agreement to redevelop the waterfront property by January 2007, the Broadway Complex will be shuttered along the same lines as a BRAC closure.

EVAN McLAUGHLIN

Lobbying Against Lobbying

Two weeks ago, City Attorney Mike Aguirre sent out letters to a number of City Hall regulars saying that they needed to register as lobbyists if they were going to meet with the city’s elected officials. One of those letters went to one of Aguirre’s most prominent public foes, union president Judie Italiano.

Today, an attorney for the Municipal Employees Association fired back with a memo telling him, essentially, that he’s wrong and actually quite dumb.

— ANDREW DONOHUE

Mayor Frye Would Make Developers Build Cheaper Units on Site

At a debate Thursday mayoral candidate Donna Frye, a member of the City Council, said that if elected she would eliminate the in-lieu fee option developers can utilize in place of including affordable housing in their projects.

Under Frye’s plan, new housing developments would have to include affordable housing.

Currently, developers with projects in the city of San Diego must either set aside 10 percent of their units to be sold or rented at what the city considers city defined affordable levels. Developers can choose not to and pay an in-lieu fee that in 2006 will amount to $2.50 per square foot of the new homes being constructed.

“I would like to see that in-lieu fee eliminated and instead replaced with incentives to help the developers have additional money so that they could actually build the housing on site,” Frye said.

Her rival in the race for the mayor’s office, former police Chief Jerry Sanders, said he would keep the in-lieu option for developers.

“I also favor affordable housing on site — if it’s practical,” Sanders said.

SCOTT LEWIS

Time Magazine Does San Diego

The last time Time magazine came to town it labeled former Mayor Dick Murphy one of the three worst mayors in the country. Soon after, he resigned.

Now, Time has featured San Diego as one of the cities “Where Pensions Are Golden.”

SCOTT LEWIS

Former Florida Mayor to Head CCDC

The city’s downtown planning outfit announced Wednesday that Nancy Graham of West Palm Beach, Fla., will begin heading the agency in December.

Graham, who served as West Palm Beach’s mayor from 1991 to 1999, will replace Peter Hall as the Centre City Development Corp. president and chief operating officer. She was among the approximately 360 individuals who were vying to be the next downtown planning czar.

Hall announced in January that he will retire once his replacement was found. During Hall’s tenure, which began in 1995, downtown experience about $3.8 billion in new private investment. Petco Park and the San Diego Convention Center’s expansion occurred during his stint as CCDC president.

As CCDC president, Graham will oversee the daily operations of the agency, which was formed 30 years ago to plan the redevelopment of downtown’s 1,500 acres. There are currently 100 planned development projects in the redevelopment area. Additionally, CCDC plans to spend more than $700 million on infrastructure improvements to accompany the expansion of residential developments downtown.

Graham is a former land-use and environmental attorney and, along with her husband, is currently a partner in N-K Ventures, a urban development company that she says will not participate in San Diego’s downtown redevelopment. As mayor of West Palm Beach, she helped create two urban redevelopment projects, which CCDC board chairman Hal Sadler called a “remarkable renaissance.”

Graham said she  wants to help the CCDC board of directors advance their efforts to widen affordable housing throughout the downtown project area.

“I envision a downtown for everybody,” she said.

EVAN McLAUGHLIN

Downtown Planning Czar to be Named Today

Wednesday, Oct. 26, 2005 — 12:35 p.m.

The agency responsible for overseeing the redevelopment of downtown San Diego will name a new president Wednesday afternoon.

A replacement for City Centre Development Corp. President Peter Hall, who announced his retirement in January. Hall has served as CCDC president since 1995.

Stay tuned for the announcement later today.

— EVAN McLAUGHLIN

Audit Seems as Far Away as Ever

The group putting together the independent investigation central to restoring San Diego’s fiscal credibility has pushed their completion date back from December to March.

The investigation into the city’s disclosure practices and finances began in February 2004 and has been beset by a number of delays. The firm first hired to complete the investigation released two investigative reports that were dismissed by the city’s auditors and the Securities and Exchange Commission for not being independent of city officials.

To reconcile that problem, the city brought in an audit committee staffed by risk management firm Kroll, Inc. Kroll has been conducting its investigation since February of this year and has been charging the city about $800,000 a month. Those monthly costs are expected to rise as the committee’s investigation moves forward.

The committee claims their investigation has been hampered by a number of technical glitches. First, they found their investigatory predecessors, law firm Vinson & Elkins, failed to review 57,000 of the 160,000 documents pertinent to their report.

The 60,000 pages of documents turned over last month by the pension board were found to be lacking vital attachments. Now, the committee says the software used city’s data processing arm isn’t capturing e-mails important to the investigation – including e-mails of current and former elected officials.

Without the investigation, the city’s long-delayed 2003 audit can’t be produced. Without the audit, the city can’t regain its credit rating. Without its credit rating, the city can’t access public finance markets to complete basic city projects.

— ANDREW DONOHUE

Region’s Bones Getting Stronger, Slightly

The local chapter of the American Society of Civil Engineers has slightly raised its rating of the region’s infrastructure from last year, according to a report card the group released Tuesday afternoon.

The San Diego region’s public works systems — such as infrastructure relating to water supply, surface transportation and wastewater — remain higher than the national average, but are being hindered by a lack of local funding, the report card said.

The city of San Diego, the region’s largest municipality, has not been able to issue bonds on the public markets for more than a year, hindering its ability to make capital improvements related to roads and sewer pipes.

San Diego’s grades for 2005 remained the same as last year in all infrastructure areas, except a change from D+ to C- in storm water collection and treatment. Also, “school facilities” was a category added to this year’s report card.

Mayoral candidate and former police chief Jerry Sanders, who was on hand for the report card’s unveiling, told the group that the region’s elected officials do not lobby hard enough for state and federal dollars to help pay for infrastructure.

“I’d be very upset if my daughters came home with grades like this,” Sanders said.

— EVAN McLAUGHLIN

No Audit Without Signatures

Members of the city’s pension board were notified Friday that a “highly unusual” requirement by their outside auditor will obligate them to individually sign off on the retirement system’s long-delayed Comprehensive Annual Financial Report, or CAFR.

Outgoing San Diego City Employees’ Retirement System Administrator Larry Grissom told the members of the board Friday that the Bakersfield-based auditing firm Brown Armstrong would not issue an “unqualified” 2004 CAFR without forcing board members to sign the document themselves.

A Brown Armstrong partner told Grissom that in 30 years of practice as an auditor he had only seen this requirement come up once before.

The retirement system’s 2004 CAFR is more than 10 months behind schedule. Peter Preovolos, the president of the pension board, said that the report may not come out until after an independent investigation into past board actions is completed. But that investigation is still in its early stages.

In a February memo, the auditor cited a laundry list of concerns surrounding the pension system’s bookkeeping.

Problems with the city’s CAFR, including the integrity of its pension numbers, has left the city without three years of audits and without access to public finance markets.

— SCOTT LEWIS

Of Charged Environments and Impacts

City Attorney Mike Aguirre was perhaps the most vocal opponent of Chargers stadium deals before he was elected last year. Now, with the Chargers recharging their public push for a stadium ahead of the November 2006 election, Aguirre and Chargers officials are back at it.

In recent days, the Chargers have fired off two documents entitled “In the Continuing Case of Accuracy v. Aguirre” attempting to debunk some of the fire-bellied attorney’s public statements.

But from within the public clashes is emerging what could be a key struggle to get a stadium proposal on the ballot in time for the 2006 general election.

The Chargers say there is no way the council could vote to put the proposal on the ballot. Therefore, they say, they must have a development partner secured within the next two months in order to meet a February deadline for filing a ballot statement.

However, city officials, including Aguirre, believe the City Council may be able to vote directly to put the item on the ballot. That would move the deadline back to August.

The Chargers say that’s impossible, citing case law that says that a full environmental impact analysis must be completed prior to a City Council placing a development proposal on the ballot. Officials say it’s impossible to complete such an analysis in time for the 2006 election.

Aguirre and Councilman Scott Peters appeared skeptical of this interpretation during a Wednesday hearing — signaling that they believe the environmental impact report might not be necessary for the council to put the proposal on the ballot.

Under the Chargers’ scenario, they would need to secure a development partner by January; under the city’s, they would have until June.

— ANDREW DONOHUE

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