Wednesday, June 20, 2007 | Already known as a workhorse at City Hall, there will be even more on the plate for Chief Financial Officer Jay Goldstone in the coming months.
The flight of two high-level officials prompted Mayor Jerry Sanders to delegate the duties of acting auditor and comptroller and acting chief operating officer — the uppermost executive under Sanders — to Goldstone in the interim.
The expansion of responsibility has prompted gentle ribbing by officials. One nickname given him, “Aucofo” (pronounced ah-kah-foo), shorthand for auditor-chief-operating-financial-officer, conjures up the hybrid nature of his job and has become a favorite among council members. Some are joking that Sanders is piling the work on Goldstone as part of the mayor’s famous streamlining efforts, pointing out that it’s cheaper to pay one official to perform three jobs.
But the temporary assignments have also caused officials to more sternly question the wisdom of the arrangement, arguing that the new duties place too much responsibility — and, for some, too much influence — into Goldstone’s hands.
“I think Jay’s an incredible asset to the mayor, but I think this is expecting too much of him,” said Councilwoman Toni Atkins, head of the council’s Budget and Finance Committee. “It’s a lot to put on one person.”
Sanders hired Goldstone away from the city of Pasadena a week after the 2005 mayoral inauguration to oversee all financial matters at the city, including the city’s budgets, investments and bookkeeping. In January, upon the resignation of Auditor & Comptroller John Torell, Goldstone took over the office tasked with inspecting his own accounting practices.
And with the resignation of Chief Operating Officer Ronne Froman last week, Goldstone was tapped to begin managing the 11,000-employee government and all of the city services it performs starting July 1.
“Not only is he a team player now, he’s become the whole team,” Councilwoman Donna Frye said.
Sanders’ decision to allow Goldstone to spearhead all of San Diego’s financial matters placed significant accountability in the hands of one administrator.
Consultants at Kroll Inc., which issued a scathing report of the city’s financial dealings last summer, applauded Sanders’ creation of the financial office because it held one department accountable for all aspects of the city’s finances.
But consolidation of the city’s financial responsibilities, along with the implementation of Sanders’ proposed financial reforms, has demanded long hours from Goldstone. He said a typical day at the office starts well before 7 a.m. and rarely ends before 6 p.m. Working on the weekends is typical, Goldstone said.
Goldstone said he is cognizant of the specter of even more work, but said he thinks he’s capable of shouldering the additional job.
“If this were a year ago, I would have thought it was impossible,” Goldstone said. “The fact that we’ve been building a solid organization will make it more manageable, depending on how long the assignment is.”
Sanders said he expects to fill the chief operating officer position, which Froman will vacate at the end of June, within a few months.
Goldstone has also been the auditor and comptroller since Torell left the city of San Diego in January. A deputy comptroller, Greg Levin, is overseeing the city’s financial reporting and Kyle Elser is serving as the interim auditor, but Goldstone said the chief financial officer will likely remain the official auditor and comptroller until the city’s bylaws are amended.
It is expected that a ballot measure separating the internal auditor position from city management will be forwarded to voters in 2008, but the watchdog official will report to Goldstone until a change is made at the ballot box.
The arrangement allows Goldstone to oversee the official who is in charge of inspecting his work as chief financial officer and chief operating officer for accuracy and veracity. The controversial dynamic has existed since San Diego’s transition to a strong-mayor form of government in 2006, but the further consolidation of these roles under Goldstone for the time being sits uncomfortably with many officials.
“It’s even worse now. Now he’s in charge of operating the city, auditing the city and handling the city’s finances,” Frye said. “I’m just waiting for him to become mayor.”
Stanley Keller, the independent oversight monitor the city hired as part of its settlement with the Securities and Exchange Commission, said he didn’t think Goldstone’s extended role would create a new conflict of interest beyond what the city will likely try to fix at the ballot box.
However, Keller noted that Goldstone’s multiple titles could stretch his priorities.
“I don’t see a conflict in the traditional concept, but a fair question is, are there adequate resources available?” he said.
Goldstone was relieved from the round-the-clock budget season that concluded this week, an endeavor that dominated Goldstone’s priorities for the past several months.
But the city estimates that it will receive its overdue 2005 audit later this summer, which Goldstone expects to reopen Wall Street’s doors to the city of San Diego. The municipality has been shut out from the public bond markets since 2004 after errors and misstatements were found on the city’s financial statements.
The city should be ready to start borrowing money again as soon as it regains access to the public markets, Keller said.
“There will be the process of going to market, which will require much focus and attention,” Keller said.
Sanders said he doesn’t want to exhaust Goldstone with the new workload, but said he thought the CFO was best suited for the role while the search for a permanent No. 2 proceeds. Froman also recommended Goldstone for the job permanently
“I think he’s got a broadest view of the organization,” Sanders said. “But we want to make sure that we don’t burn out Jay either.”
Goldstone and Sanders said they agreed last week, when the mayor approached Goldstone about the position upon Froman’s resignation, to hire assistance if the combination of jobs proves overwhelming.
“I’ve also talked to Jay to get somebody up there with him to do some of the day-to-day grunt work, so he can make decisions and others can implement them,” Sanders said.
Goldstone’s additional appointments were spurred by the departures of two city officials who never warmed to the political climate inside the Mayor’s Office. Torell left the city in January after complaining that the independence of the watchdog position was compromised by Sanders’ mandate that he report directly to the Goldstone, the official whose work Torell was employed to inspect objectively.
Froman will step down at the conclusion of the fiscal year, which ends this month. She said that she always planned to leave City Hall before Sanders left office, but she expressed frustration that the city’s management decisions were constantly sifted through a political filter.
Some officials are curious whether Goldstone will feel the pressure of politics after assuming Froman’s post.
But more council officials said they thought Goldstone struck a fine balance: He has promoted the mayor’s position effectively while also being a diligent with the more technical aspects of his job.
“I find him to be politically aware and I find him to be a very good communicator to council,” said Independent Budget Analyst Andrea Tevlin, who in her advocacy for the council on financial matters has often been at odds with Goldstone’s policies.
But Tevlin said she thought Goldstone was appointed to the second-in-command because “he is a very, very competent manager.”
Goldstone said he has experience juggling the jobs as an executive and financier from when he wore both hats at the city of Richmond, in Northern California, in 1994. But he said he understands that his new assignment will be much more demanding.
“We’ll have to wait and see,” he said.