Mayor ‘Cranky’ With Bankruptcy

How did San Diego Mayor Jerry Sanders feel when asked last week about a draft report listing bankruptcy as an option to resolve the city’s budget woes?

“The mayor was being a bit cranky,” mayoral spokeswoman Rachel Laing said.

Sanders reacted sharply to the question. He said the mere mention of the word had drawn calls from Sacramento. He dismissed both bankruptcy and the group of business leaders who’d suggested it.

The draft was from a fiscal task force composed of a dozen businesspeople working as part of a larger group formed to promote Sanders’ agenda. And bankruptcy, even in the face of a current $200 million deficit and years of projected $100 million-plus deficits, is not on the mayor’s agenda.

Sanders distanced himself from the group at a press conference announcing his plan to close the city’s deficit. Any type of report — or any fiscal task force for that matter — was not his idea, he said.

“I want to be very clear about that,” Sanders said. “That’s a group of individuals who came to me and asked to help out on this. This is not something that I convened.”

Before the draft became public, Sanders took a kinder stance. He acknowledged meeting with the task force, and his spokeswoman said the mayor even had the final say over its work.

The group’s draft, likely an earlier version than what the mayor saw, offered a host of painful but permanent solutions. Slashing employee expenditures. Reducing and eliminating city services. Voter approval for drastic staff reductions. Tax increases. All of these focus on long-term answers to the city’s budget problems.

Contrast that with the plan Sanders unveiled last week to tackle the current deficit. More than half his solutions were one-time fixes, not permanent. His resolutions included proposals that the group had warned against, such as using reserve dollars and money from other funds.

Add bankruptcy to the mix and the difference between the mayor and his advisors is even starker. Their draft recommends bankruptcy if any of the group’s cost-cutting and revenue-raising options didn’t succeed. When he first ran for mayor, Sanders listed bankruptcy as a last resort, but has since dismissed it, ridiculing those like former City Attorney Mike Aguirre who have raised the issue.

So now the mayor’s task force wasn’t started by the mayor?

That’s right, Laing said.

Laing described the inception this way: Vince Mudd, the task force’s chairman and owner of an office interior firm, was putting together a group that wanted to examine the city’s finances. At the same time, the mayor was forming a Civic Leadership Team to promote his agenda. Sanders and Mudd decided to merge the two. The mayor had never wanted a report, but agreed to be a sounding board if the group was doing one.

In an interview two weeks ago, Mudd said the mayor had asked him to assemble a task force and he had. Laing said she believed his statement was consistent with the way the group formed.

Laing added she was “mistaken” in her previous comments that connected the task force’s report to the mayor’s civic agenda.

“I was unaware that (the report) was something already in motion,” she said.

Mudd could not be reached for comment on Monday, but it appears the task force is still doing its work and planning to issue a final report. Lani Lutar, president of the San Diego County Taxpayers Association, met with members of the group on Monday to offer her input on its findings.

She said she received no indication the task force planned to remove the discussion of bankruptcy. She added that, like her, she didn’t believe the task force was pleased with the budget solutions the mayor has presented.

“I got the sense from them that there was a similar sentiment of disappointment with the mayor’s budget last week,” Lutar said.

That should matter to Sanders. Regardless of how the task force came to be and what it says, Laing acknowledged that its conclusions will be tied to the mayor.

“Once it kind of rolled over to some extent you now own them,” she said.

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org and follow him on Twitter: twitter.com/dillonliam. And set the tone of the debate with a letter to the editor.