Council Poised to Derail DeMaio’s Appointment

Tuesday, July 31, 2007 | The appointment of City Council candidate Carl DeMaio and others to an oversight committee appears to be in jeopardy as several council members said Mayor Jerry Sanders’ selections will politicize the panel and exclude crucial communities.

Sanders chose DeMaio, a candidate in next year’s District 5 election, to serve as chairman of the Independent Rates Oversight Committee. The 11-member board was created — in part at DeMaio’s urging — to better verify that recent increases in water and sewer bills will be spent correctly.

But his appointment is expected to draw opposition at Tuesday’s confirmation hearing, as current council officials who must confirm the nominees expressed concern that DeMaio is being provided a forum to promote his political viewpoints on an official, city-sanctioned stage. Nominees generally pass through council with little dissent.

“To have someone on an oversight board and involved in politics, particularly in the middle of a campaign, isn’t in the city’s best interest,” Council President Scott Peters said.

Councilwoman Donna Frye said she saw the nomination as a “tacit endorsement” by Sanders, one that would give DeMaio an advantage over his rivals in the race, school board member Mitz Lee and attorney Bob Ilko.

Council members Toni Atkins, Tony Young, Jim Madaffer and Ben Hueso also said they opposed DeMaio’s appointment. If these council members maintain their positions, DeMaio would fall short of the five votes needed for confirmation.

The dispute pits the council members against one of their loudest critics during the city’s financial and legal troubles.

DeMaio chalks up the opposition to political retribution. Council members have born DeMaio’s brash public campaigns in recent years, when the Republican pinned blame for the billion-dollar debts in pension and retiree health care on council decisions.

DeMaio, chief executive officer of the tax-adverse Performance Institute, has pushed the city to slash payroll costs and explore privatizing government functions to save money. He has since chastised several council members for their reluctance to embrace his brand of limited government.

“Me being a candidate provides a nice excuse and cover story for their motivation, which is payback and continued resistance to reform,” DeMaio said. “Our main opponent to bringing oversight to water and sewer fees has always been the City Council.”

Council members denied DeMaio’s claim. “Heavens no, this has nothing to do with Mr. DeMaio,” Madaffer said. “This isn’t personal.”

Caught in the middle of the feud is Sanders, who has sought the advice and championed many of the ideas of DeMaio since taking office in 2005. DeMaio was visible in Sanders’ 2006 campaign to open up city services to privatization. He has also consulted with the mayor on “business process reengineering,” a streamlining measure that has resulted in worker layoffs.

Sanders spokesman Fred Sainz said the mayor nominated DeMaio because of his experience studying water and sewer agencies. The mayor knew that some council members opposed DeMaio before he made it official, Sainz said.

“We knew about these concerns before the memo went out,” Sainz said. “But we think Carl has been a consistent voice for reform, not always in a diplomatic fashion, but he has some great ideas and he should be part of the process.”

Even if the council keeps DeMaio off the committee, he could gain politically from the decision. Political consultant Christopher Crotty said DeMaio will try to brand himself an outsider that has fought with the council. The more DeMaio can criticize the current council, the better, he said.

“They’re just playing into Carl’s hands, and I’m sure he and Jerry (Sanders) have thought abut this,” Crotty said.

In addition to DeMaio’s nomination, Sanders could also face challenges to his other selections for the board, as some council members are complaining that none of the mayor’s 11 nominees hail from their districts. Atkins and Frye said their districts in central areas of the city, and two that are in southern San Diego, need representation because their infrastructure has been neglected historically.

“These are the older communities that need attention,” Atkins said.

Sanders chose to allocate seats on the board based on the customer type or expertise of the members. For instance, a single-family residential user, an industrial user and a construction user were nominated. Additionally, members were appointed based on their professional expertise in accounting or law. As a result, nominees are not spread throughout the districts, and some reside outside the city limits in nearby Escondido, Carlsbad and Rancho Santa Fe.

DeMaio was designated by the mayor as the committee’s municipal finance expert. Since 2003, his company has critiqued city budgets and delved into the management of the city’s water and sewer departments. He advocated against the city’s use of so-called “service-level agreements” between the Water Department and tax-funded agencies, in which water fees were found to be inappropriately buoying the city’s coffers.

Before the council voted in February to approve a 35 percent increase to sewer fees and 29 percent increase in water bills over the next four years, DeMaio led the charge against the rate hikes. He vowed to hold a voter referendum against the fees if Sanders and the council didn’t include certain safeguards, such as streamlining the utilities to eliminate waste before raising fees.

DeMaio ultimately opposed the fee increases, but backed off his pledge for a referendum after the mayor pledged to store away any savings resulting from streamlining in a reserve account that would offset any future rate hikes.

Council members who opposed DeMaio stressed that they thought he was very qualified for the position, but that they thought he would be conflicted between his aspirations to represent the northeastern suburbs on the council and the duty of the committee, which is to objectively monitor that water and sewer fees are being spent appropriately.

“I want the process to be looked at by the public and by everyone as fair and open,” Councilman Tony Young said. “I don’t think he’s a bad candidate for the job.

Peters said he felt strongly enough about his concern that he also asked Todd Gloria, a candidate for District 3, to consider resigning from his position on the San Diego Housing Commission. Gloria said he wants to hear from other council members before making a decision.

“If the council as whole thinks it’s appropriate, I will consider it,” he said.

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