Socialism for city workers - busted capitalism for the
rest of us.
by Pat Flannery
The above graph is like watching two
trains on a collision course. What will happen when, not
if, the two lines cross? The answer is: nothing. The
Unfunded Actuarial Liability (UAL) of the City's pension
fund will be greater than the Market Value of its
Assets, that's all. If the trend continues, will the
pension fund be bankrupt? No - the San Diego taxpayer is
on the hook for all city pensions, no matter how
outrageous the whole system may become.
It is the 2005 court settlement of a class action suit that
nullified the 2002 Manager's Proposal II (MP-2) which in
replaced the 1997 Manager's Proposal I (MP-I). The
Gleason "Settlement Class" was all San Diego City employees no
longer with the City at April 6, 2004 and entitled to
The 1996 and 2002 Manager Agreements, allowing the City
to pay less than the actuarially calculated
contribution, were nullified by court order in 2005. The
City henceforth agreed to pay an annual
"Contribution Amount" as determined by the pension
actuary, but by far, the most important "Gleason"
agreement was the removal of a previously-agreed lower
limit for the City's UAL of 82.2%. When reached, that
lower limit would "trigger" additional contributions
from the City. That safeguard was abandoned.
There is now no floor to the UAL. There is no limit to
the amount of Unfunded Actuarial Liability for which the
San Diego taxpayer may become liable. The pension fund
could end up owning the entire assets of the City.
But are we not amortizing this debt? Are we not paying
it off over 20 years? No. The Pension Board continues to find
more creative ways to avoid true amortization. I have
been trying to find ways to explain this to San Diegans.
Last week I wrote a blog explaining why we are kidding
ourselves if we believe we can amortize the UAL as it
grows. We are not even paying down the accumulated deficit
$1.2 billion on June 30, 2007. At the ballot box in 2006
we solemnly promised to pay off that deficit. We
promised to throw away our pension credit
card. The Pension Board has not done so.
Unless the Mayor can persuade the City's 10,575
employees that it is in their best interests to confront
this pension bubble, we may be heading for class warfare
in America's Finest city. San Diegans are being required
to pay for a bloated city workforce with bloated
benefits that require service cuts, asset sales and fee
increases. A backlash is inevitable. Why wait until it
happens? Has Mayor Sanders the leadership qualities to
The City already has an unpaid balance of $195 million
Net Pension Obligation (NPO) account, i.e. its
accumulated unpaid ARC, apart altogether from the
UAL. The interest on unpaid ARC alone is $15 million
per year. That Interest is
being added to the unpaid balance each year
without any upper limit. It would be over
$300 million right now but for the "Tobacco Settlement"
securitization proceeds. That money was not paid into the
Pension Fund, it was used to reduce the unpaid ARC.
Sooner or later San Diego's retirees and its taxpayers
will clash. Smoke-and-mirror accounting will eventually
fail to hide the truth. The outrage of the population
will be in direct proportion to the lies it has been
The Mayor and the city unions have a narrow window of
mere weeks to forge a new civic contract. It has to be
in place by June 30, 2009. Here is what I wrote on
June 21, 2005. It is as true today as it was back
then - our City employees have outrageously
of a civil population, anywhere, can expect to enjoy the
employment privileges currently in place for San Diego's
municipal workers. You can't have socialism for city
workers and a failed market system for the taxpayers. It
pits 10,575 city workers against 1,300,000 taxpayers. My
money is on the taxpayers, ultimately they hold the
San Diego really is a police state.
03/26/09 by Pat Flannery
I recently got dramatic proof of this
shortly after joining a team of young journalists at San
Diego News Network, SDNN, a new online news journal. I
was supposed to become its political analyst and
columnist. I was looking forward to probing the
underbelly of San Diego politics with young idealistic
journalists. Unfortunately it was not to be.
Unbelievably, the Mayor, through his Police Chief,
refused them press credentials until they "prove
themselves". He has put them on a six months probation!
After six months of reporting the news to his
satisfaction, he may extend press credentials to
them. SDNN acquiesced. I quietly withdrew.
In a way, I am not surprised. I was already aware of the
control the Mayor and the police have over the local
media. They are used to it. There has been only one real
training ground for print journalists in San Diego for
decades and that has been the Copley press. Many Mayoral
and City Council staff are ex-UT people, all nurtured in
the same symbiotic coziness. They tear up anybody, like
Mike Aguirre, who will not be cozy with them.
What surprised me was how quickly these young SDNN
people, barely out of journalism school, accepted it
all. How are San Diegans ever going to learn the truth
about their city government if the police department, directly under the
Mayor's control, licenses all who may ask
questions at city press conferences? Should a journalist
be foolish enough to displease somebody important at
City Hall (e.g. by asking "impertinent" questions) an editor will
quickly assign somebody else to kiss up to
the offended potentate.
New ownership at the U-T will not bring change and SDNN is
not about to challenge the established order. That became
painfully obvious this week. The faceless manipulators
at City Hall will still exert their enormous power.
As I said, this is not new. A good example of how journalists
become pawns of City Hall is what happened at South Eastern Development Corporation (SEDC)
last year. Will Carless,
a journalist with Voice of San Diego, in
question from Tom Fudge on the
KPBS radio program "These Days" in June 2008,
revealed how it works. Fudge
asked Carless why he started investigating certain bonus payments
paid to SEDC's President, Carolyn Smith. Carless
revealed that he had received an insider tip.
Voice of San Diego then put Carless on the story
full time for months. He doggedly pursued what were
undoubtedly unauthorized payments to Smith, who was
subsequently fired in disgrace. But was that the whole
story? I doubt it. I had uncovered a dubious land deal
involving SEDC's chairman, "Chip" Owen and Jim Waring,
the Mayor's land use Czar at the time.
For all the months the Voice of San Diego
doggedly pursued the Carolyn Smith story they just as
doggedly refused to pursue the Owen/Waring land deal
story, despite my urging them to do so. Read my July
2008 blog explaining
this dubious land deal. Surely it too
warranted investigation. But it was easier for the
Voice to look where it was told to look and claim
credit for having "discovered" a story. They have since
denied receiving a tip. Listen again to the full
KPBS tape - Carless clearly admits receiving a tip.
So, my 2008 predictions seem to be coming true in 2009:
Mayor recently announced (and the City Attorney reversed
himself in order to agree) that SEDC and CCDC should be
retained, with the Mayor having the power to hire and
fire the heads of both corporations. That's what the
Carolyn Smith investigation was all about. Somebody
wanted rid of her. Her position was too valuable and she
had become too independent of City Hall.
Wherever that Voice of San Diego tip came from,
it was well placed. The plan worked. Carolyn Smith is
gone. Media investigations into shady land deals by
insider developers do not happen and two very lucrative
city jobs are at the disposal of the Mayor - for
faithful services rendered.
When the police license the media, you have a police
Understanding the growing Pension Deficit.
03/20/09 by Pat Flannery
In view of the seriousness of the
pension problem the Mayor's office has begun issuing
Monthly Pension Updates. Here is the latest one for
March 2009. It purports to explain
"the impact changes in SDCERS plan
assets are having on the City's Pension Plan and the
potential budget implications". It estimates an
impact of between $27.4 million and $84 million to the
Normal Cost component of the Annual Required
Contribution (ARC). Unfortunately it does not deal with
the impact to the Amortization Component. Therefore I
will try to estimate that missing impact.
In May 2007 the SDCERS Board reset amortization
schedules for the various components of its unfunded
liability or deficit. It determined that its deficit as
of June 30, 2007 was $1,183,463,462. The Board
then decided to amortize that amount over a period of 20
years and to amortize any future year's losses over a
period of 15 years. That means that there will be a
separate amortization schedule for each year's addition
to the deficit.
The Mayor reports the pension unfunded liability at
February 28, 2009 as $2,254,000,000. That means
that it grew by $1,070,536,538 since June '07.
For simplicity we will treat the additional deficit as
if it all happened this year and set up one 15 year
amortization schedule starting July 1, 2010.
Now we have two amortization schedules going, one for
$1,183,463,462 over 20 years at 8% per annum and another
for $1,070,536,538 over 15 years at 7.75%; the assumed
rate of return was recently reduced to 7.75%.
Go to this free
online amortization calculator and enter the first
amount, $1,183,463,462 together with its interest rate
of 8% and a period of 20 years. You will get an annual
payment of $120,538,367 ($94,677,076 interest and
Now enter the second amount, $1,070,536,538 together
with its interest rate of 7.75% and a period of 15
years. You will get an annual payment of $123,167,633
($82,966,581 interest and $40,201,051 principal).
Add the two together and you get $243 million.That is an
estimate of the Amortization Component of the FY2011
ARC, payable July 1, 2010.
The Mayor estimates that the Normal Cost for FY2011,
payable July 1, 2010, will increase by between $27.4
million and $84 million over the $60.5 million payable
on July 1, 2009 for FY2010. That means that the FY2011
Normal Cost alone could be between $87.9 million and
Add the two components together, the Amortization
Component and the Normal Cost Component, and you get a
total required payment of between $330.9 million
and$387.5 million for FY2011, payable July 1, 2010.
Will the Mayor make that full payment? Probably not. He
is not doing so now! His total pension payment this July
1, 2009 will be $154 million. That means he is paying
only $93.5 million of the primary amortization schedule
of $120,538,367, not quite making its interest payment
The fact that the Mayor's latest "Pension Update" did
not even mention the Amortization Component does not
bode well for how he will handle the problem. He will
probably deny the full amortization requirement and roll
a large part of it
into the growing financial cancer that is the pension debt.
The Mayor diverts even more money to the Zoo. Why?
by Pat Flannery
may come as a shock to many San Diegans that in addition
to providing the Zoo with free rent in Balboa Park, the
City imposes a special levy of up to two cents on
every $100 of assessed property valuation in San Diego,
in order to provide the Zoo with a subsidy now
approaching $10 million per year.
Here is the
Mayor's 2009 Budget showing the subsidy he actually
set aside for 2009: $9,679,780. Here is the
City Charter Section 77a. It provides for"two cents ($0.02) on each
one hundred dollars ($100.00) of the assessed valuation
of their real and personal property .... exclusively for
the maintenance in Balboa Park of zoological exhibits".
It appears that the City is assessing one-half
cent per $100 rather than the charter-allowed two cents.
That is still almost $10 million per year. It means that
if you own a condo in Mission Valley worth $350,000 you
are currently paying $17.50 each year to the Zoo whether
you ever go there or not.
Now look at the latest
filing by the Zoo (2005) showing a surplus of
$20,137,165 for that year. You and I contributed
$7,202,404 of that "surplus". See the Zoo's
revenue statement, page
41 of its full 54 page
IRS return (I am surprised they have not filed an
IRS Form 990 since 2005).
Yesterday Sanders emailed Todd Gloria informing him that
he intends to divert monies appropriated by the City
Council to repair a controversial pergola in Marston
Heights near Balboa Park, to the repair of a storm drain
associated with the Zoo parking lot. Gloria wanted the
money diverted to a different Balboa Park non-profit -
to repair the roof of the Museum of Man.
Here is the
approved by the City Council, appropriating $350,000 for
the Myrtle Way Pergola reconstruction. Now it will go to
the already over-benefited Zoological Society. Why is
Sanders so protective of the Zoo's special privileges?
Is the budget preference he displayed in this case part
of a wider preference for more privatization in Balboa
The immediate question is: what does
"exclusively for the maintenance
in Balboa Park of zoological exhibits" mean? Does
this special Zoo tax not cover the maintenance of the
storm drain emanating from the Zoo's parking lot? Surely
the tax levy covers everything associated with hosting
the Zoo in Balboa Park. Is it not enough that it
occupies one of the most valuable pieces of real estate
in the city for ZERO rent (see its
expense statement), that we give it a $9.6 million
subsidy and it shows a profit of $20 million?
DeMaio is the lone wolf for City efficiency before fee
by Pat Flannery
Policy and presented it to the Budget and Finance
February 25, 2009,
who added the sentence:
"Revisions to the fees shall incorporate
savings from efficiency reforms. Departments shall
include these efficiency savings in their cost analysis
to determine fees."
The vote was Young-yea, Gloria-yea, DeMaio-yea,
Faulconer-not present, Emerald-not present.
User Fee Policy then came to the full Council on
March 10, 2009 for its approval. It was put on the
Consent Agenda but Todd Gloria pulled it for amendment.
Despite having voted for it as a member of the Budget
and Finance Committee, he now wanted to delete the part
that required the City to identify efficiencies that
might lower costs before increasing user fees.
This new User Fee Policy provides for full cost recovery,
including staff time, without any limitation on
how much staff time can be charged to any particular
service. Topping the list of the
current proposal (page 2) is "Increasing User Fees".
So it is obvious where Gloria is coming from. He is
leading the charge for the unions who want to
featherbed their city salaries with increased user
fees to the citizens.
DeMaio, on the other hand, wanted a clause in there that
might at least require the Mayor to offer something to
City Council showing whether or not he had looked for
any "efficiency savings". Mary Lewis his CFO made it
clear that the Mayor's office was comfortable with such
a requirement. But she did not exactly insist upon it.
Despite having been elected on a "Reform City Hall"
platform, Sanders has been dragging his feet on
outsourcing or any reform that might pit him against the
unions. Ms. Lewis was being very careful not to be seen
too supportive of DeMaio's efficiency crusade.
DeMaio described setting service
fees without a proper effort to achieve efficiency as an "inefficiency tax". He wants
to see real reform. He wants the Mayor to run a lean
City organization with fees set
accordingly. He said if we "set our fees based on
a bloated organization, inherently we are overcharging
San Diego taxpayers" - that is classic
watch Gloria's disingenuous attempt to infer that
indentifying efficiencies would somehow undermine the
Mayor's attempt to implement Managed Competition. Mary
Lewis disagreed, but only mildly.
Gloria remained "comfortable" with his motion. He
insisted that the offending sentence must be removed.
He urged his colleagues to support him - they knew he
was speaking for the unions
Before the vote
DeMaio eloquently repeated his case for efficiency
before setting fees. He reminded Gloria that he had
voted for an efficiency requirement at the Budget
Committee. But obviously Gloria had a visit
from the union godfathers and Todd is too canny (and too
ambitious a politician) to argue with union heavyweights
like Judie Italiano or Ron Saathoff.
Interestingly Donna Frye had little patience with
DeMaio's attempts to impose any efficiency requirement
before any fee increases. She felt quite
confident that city staff could be relied upon to do
everything possible to make sure that any fee increases
would include all the efficiencies that could be
reasonably expected of them. She abruptly called for the
Faulconer supported DeMaio, but only mildly. Perhaps he
and Ms. Lewis, being closer to the Mayor, know that
confronting the unions is not part of Sanders' real
agenda. They know that lip service is all that is
As the Russians used to joke under the communist system:
"the government pretends to pay us and we pretend to
work". So it is in San Diego: Sanders pretends to argue
with the unions and the unions pretend to argue back.
The maestro for this elaborate farce, as it was with
Dick Murphy in 2005, is the City's highly paid San
Francisco labor attorney,
San Diego City Council and the People's Business
by Pat Flannery
I have done an
in-depth analysis into all the votes cast by the current City
Council since it was sworn in on December 8, 2008 to March 3, 2009. I compiled a list
of action items and their corresponding votes and was surprised
by what it revealed (my list does not include the Consent Agenda or
items "proclaiming" something or other).
I discovered that
80% of the 136 action items that came
before the City Council during that period were disposed of by a
unanimous vote. Of the other 20% almost all the Nay votes came from
Sherri Lightner and Donna Frye and they were mainly on land use
issues. I will be publishing a breakdown of each Councilmember's
vote in the near future.
Here is a list of the 109 Council action items
approved unanimously between December 9, 2008 and March 3, 2009.
And here is a list of the 27
contested actions. A click on any one item will take you to the
full Agenda for that day, then scroll down to that particular item.
How did the City
Council form a consensus on such a large percentage of its Docketed
items? Did it all occur in the Council Chamber? Or was a consensus
formed before hearing public testimony and before Council discussion? How a legislative body reaches its decisions is a very
important public matter. In California it is governed by the
Brown Act, whose preamble states:
"Public commissions, boards, councils and other legislative bodies
of local government agencies exist to aid in the conduct of the
people’s business. The people do not yield their sovereignty to the
bodies that serve them. The people insist on remaining informed to
retain control over the legislative bodies they have created."
Are the people of San Diego "informed" and "in
control" of the legislative body they created called their City
Council? The rare citizen who gets invited into a Councilmember's
office on the 10th Floor of City Hall may leave with a question in
their mind about how
the "people's business" is conducted on that corridor of
power. They were far more likely to encounter a lobbyist than a fellow citizen within that high octane office space.
Try getting in there without an appointment, unless of course you
are a well known lobbyist or a union boss.
It is within the confines of that cloistered space that
decisions about the people's
business are reached, long before each item reaches the
Council Chamber on the 12th Floor. The entire
City Council membership and staff are crammed together into that
small space, where they can practically shout across the
corridor to each other through open doors, making a mockery of the Brown Act.
But apparently they like it that way.
In most cases Councilmember opinions are known, item by item, before
public discussion takes place at a Council Meeting. That is why in the past
three months only 27 items ended up registering even one Nay
vote and only one item actually failed: a proposed amendment to
the Permanent Rules of Council that would have reduced from four to
three the number of Council signatures required to overrule the
Council President and put an item on the Council Agenda.
The Council Presidency is currently held by
District 8's Ben Hueso. Ben ran in a 2005 primary resulting in a
2006 runoff to complete disgraced Ralph Inzunza's Council term. Hueso won the seat and got re-elected to a full term in
the same year 2006. His
average vote in those three elections
was 7,285; the highest being 7,994 in the 2006 runoff. With a mere
7,994 votes he is now essentially running the City. If such power is
to be given to one person, perhaps it should become a citywide
elected office. Right now a person whose highest popular vote was
7,994 has total control over the Council Agenda. That used to be the
prerogative of an elected Mayor.
These are urgent "good governance" issues that need to be addressed by
the citizens. So long as representatives of special interests like
unions, developers and contractors, many of whom are ex-city
employees, are the dominant influences in Councilmember's offices,
behind a cordon of security, in close proximity to each other,
the citizens do not have control over the legislative body they created.
These eight Council Offices need to be dispersed out into the Council Districts.
This love nest for lobbyists and Councilmembers needs to be
It is the role of the media to counteract such influences by
monitoring how the "People's Business" is done. I will continue to analyze how current arrangements
are working out. I will try to discern how Council decisions are made, on a
case by case basis. I will be particularly interested in the extent
to which special
interests are influencing our government.
Our Lady of Peace loses, but will sue for religious
by Pat Flannery
the City Council voted 5-3 to uphold a citizens' appeal
against the expansion of Our Lady of Peace (OLP)
OLP needed the City Council to deny the appeal and
approve an Environmental Impact Report (EIR) associated
with its development permit already approved by the
But without the Council's affirmative approval of the
EIR, allowing the demolition of three historic houses,
the development permit is no good.
Before the vote, knowing the likely outcome, Hueso
deliberately set the City up for a religious
discrimination lawsuit by Our Lady of Peace in Federal
Court. He carefully read into the record all the
stipulations OLP will need when writing their complaint.
He was obviously coached by
Alexandra Kelly, attorney for the Catholic Diocese
and spokesperson for OLP
(unless Ben is well versed in Federal Law, particularly
as it relates to religious institutions).
Before you watch the video of Hueso condemning his own
City under the
Religious Land Use and Institutionalized Persons Act
about this Act, passed by Congress on July 27, 2000. It
says in relevant part: "No government shall impose or implement a
land use regulation in a manner that imposes a
substantial burden on the religious exercise of a
person, including a religious assembly or institution,
unless the government can demonstrate that imposition of
the burden on that person, assembly or institution
(a) is in furtherance of a
compelling governmental interest; and
(b) is the least restrictive
means of furthering that compelling governmental
watch the video and you will understand why Hueso said
what he said for the record. He set it up so that the
nuns can claim that the City discriminated against them
by imposing a "substantial burden" not imposed on other
land use applicants, simply because they are a religious
institution. That is what the City did according to
Hueso and he described exactly how the City did it.
Count the number of times he used the word "burden" and
how many times he glanced at the notes in front of him,
no doubt written by the OLP lawyers.
It would appear that the nuns and the
Catholic Diocese knew all along that the City Council
would never grant their application to demolish these
three historic houses. Therefore they planned on RLUIPA
from the start and Hueso was in on it. That is why OLP
was so intransigent. Now it is the City of San Diego vs.
the Catholic Church in Federal Court. Nice one Ben. And
DeMaio did hand stands trying to support Hueso and his
Just to prove that
neither the people nor the City of San
Diego discriminate against anybody,
least of all religious institutions, the
City's Fire Chief, Tracy Jarman, should
personally verify that the lives of the
school's 750 female students and its 67
staff members are adequately safeguarded
by ensuring that all buildings on the
campus are in compliance with the City's
fire regulations. If we are headed to
court it is only the prudent thing to
And the City Attorney's code compliance
lawyers should investigate and ensure
that all Federal, State and City
regulations regarding school buildings
and occupancy laws are fully complied
with. If everything is in order, the
nuns should welcome the opportunity to
prove their dedication to the health and
safety of the 750 young ladies in their
charge. A clean bill of health from the
relevant City authorities can only help
OLP in court.
It will also demonstrate to any future
Federal Judge in the case that the City
of San Diego has nothing but the welfare
of its citizens at heart, particularly
its vulnerable student population. If
a judge finds that asking OLP to obey
the same laws as everybody else is an
"unfair burden", then so be it.
That Policy needs to be "harmonized" with
XV of the City Charter, which by a vote of the
people on November 2, 2004 changed the City's governance
from a City Manager form of government to a Strong Mayor
form of government. The key is: how do you "harmonize"
First, a little history: Council
enacted on October 10, 1971. It was amended several
times, the last on November 14, 2005 adding Section XI
that prevents management from negotiating any pension
benefit enhancements "until the
City Council has been appraised of, and had an
opportunity to discuss, the cost and impact that the
proposed benefit enhancements would have on any unfunded
accrued actuarial liability."
Then along comes
Proposition F and the Strong Mayor form of
XV to the City Charter on January 1, 2006. Does the
City Council really retain its right to "resolve"
any impasse between the unions and the new Strong Mayor?
What was the legislative intent of Prop F? As a ballot
measure its "intent" was the intent of the
people. Does the Mayor get to make the City's last best
and final offer or does the City Council?
According to Jan Goldsmith's
Memorandum of Law dated January 26, 2009, the City Council
still has the last word.
Council Policy trumps the City Charter. He says that is
the law! He simply ignores the will of the people.
Page 2 Goldsmith admits that
"Council Policy 300-06 ..... must be harmonized with
Article XV of the Charter". However he also says,
in the same breath, that these two are "not
inconsistent". It is a fundamental principle of logic
that two contradictory statements cannot be true at the
same time. One does not need to "harmonize" what is "not
Goldsmith seems to be
stretching logic in order to reach a legal
conclusion he was asked to reach. Council Policy 300-06
and Article XV of the City Charter are either
"consistent" or they are not. Somebody wanted him to
declare them "consistent", but Goldsmith knew they still
Anybody who knows anything about San
Diego politics knows that it was never the intent of the
voters, who approved the change to a Strong Mayor, to
relegate the Mayor to a mere messenger boy for the City
Council. Yet that is exactly what Jan Goldsmith's
"harmonizing" of Council Policy 300-06 with Article XV
of the City Charter would do. He would "harmonize" the
intent of Prop F right out of existence! And he says
that is the law!
He should have followed the general advise he gave in
press release "The important
advice is to follow what the law says and not what you
may want it to say". Unfortunately Goldsmith chose what he
wants it to say.
What puzzles me is why Sanders is not protesting this
from the rooftops. Was he part of the huddle that
concocted this plan? It is such a transparent union
play. Unless Sanders protests this usurpation of his
power, and does it soon, we will have no alternative but
to conclude that he was in on all of it.
In order to ensure compliance with the
Meyers-Milias-Brown Act (MMBA) which requires cities
to have an impasse procedure and to follow it, as
discussed in this August 22, 2008 unfair practices
judgment against San Diego, Sanders should negotiate a change to Council
Policy 300-06 with the unions. And he should do it in a
meet-and-confer separate from wage
negotiations. It should give him the final word, as
Prop F intended.
Then he needs to take it before the City
Council. If it goes to impasse with the unions, the Council can
"resolve" the issue according to its old powers.
If the Council agrees with Goldsmith and downgrades the
Strong Mayor's powers by formally retaining its right to
make the City's last best and final offer to the unions,
using the Mayor as its messenger boy, so be it. But the
Council will face the rage of the electorate, its true
boss, not the unions.
Sanders' alternative is to do nothing and roll over for
the unions, as a majority of the City Council and the
City Attorney are presently doing. It is therefore
ironic that the only thing standing between us and a
total takeover by the city unions is Jerry Sanders, a
long time city union member himself.
Nor is it very comforting to reflect on the fact that
the City unions heavily backed Jan Goldsmith for City
Attorney. These unions, through Goldsmith, are now seeking
to take advantage of the fact that Council Policy 300-06
was not changed post Prop F. But did it need to be? Does
Proposition F not trump any mere City Council Policy?
Council Policy 300-06 and Article XV of the City Charter
simply need to be read together. Such a reading
produces a clear impasse procedure that complies with
MMBA - the Mayor makes the last best and final offer
because he is the Prop F Strong Mayor.
For further history on this issue
my blog dated January 31, 2009
my blogdated December 1, 2008.
We are perilously close to total control by the city unions.
The present wage "negotiations" appear to be a farce.
Actuary warns: $100 million pension increase next
by Pat Flannery
The difference between City
Councilmembers who behave like "staffers" and those who
behave like "legislators" was clear on Monday when
David Wescoe presented his
update on the San Diego City Employees’ Retirement
System (SDCERS) to the City Council. Carl DeMaio asked
the tough questions on behalf of taxpayers while Todd
Gloria acted like Wescoe's lawyer. Click on each picture
to view the video.
thought that Wescoe characterizing the expected June
2009 valuation of the City's pension assets as
"challenging", was the understatement of the year. It is
on that valuation that the 2010 payment will be based.
This year we got away with a payment based on an asset
valuation dated June 30, 2008.
DeMaio then turned to the actuary, Gene Kalwarski of
Cheiron, who confirmed DeMaio's worst fears: yes, the
pension cost could go up by $100 million next year
unless, as DeMaio put it, we have a market miracle.
And that $100 million increase is based on last year's
market prices! Yet, none of this seemed to phase Mr.
Wescoe who apparently believes in miracles.
Mr. DeMaio pointed out that over one quarter of Wescoe's
staff earn more than $100,000. He requested that Wescoe
present a plan to the City to cut his admin costs by 10%
to 15%, as is being asked of all City departments.
Gloria then came to Wescoe's rescue. Each point
Mr. DeMaio had made, Gloria demolished. Is there a
little tension between these two? Or is Gloria just a
doctrinaire defender of public pensions no matter what?
His questioning of Wescoe was like an attorney
questioning his own client to make him look good. I was
very surprised at the blatancy of Gloria's deference to
then lectured the Council, telling them that they were
mere "politicians", against whom the California
Constitution protects all public pensions. It was
another example of what those in power think of those
who pay their salaries, the lowly taxpayer.
I think Wescoe may have gotten a little carried away at
this point (he is essentially a corporate PR guy). He
went on to misrepresent to Ms. Frye how his
administration costs are absorbed into the pension
actually told Ms. Frye: "when the
ARC is calculated, the administrative expenses are
apportioned between our three plan sponsors, the City,
the Port and the Airport, and a portion of an ARC
payment would include expenses for administrative
overhead and management of the trust fund assets".
That is a totally false statement. An Annual Required
Contribution (ARC) does NOT
"include expenses for administrative overhead and
The truth is that the $15.8 million for his
Administrative Expenses plus the $24 million for his
Investment Management Services, were funded out of the
UAAL, i.e. they were added to the unfunded liability. As
stated on page 76 of the
2008 CAFR, the
"administrative expenses are
deducted from plan assets". It is hard to believe
that Mr. Wescoe would make such a blatantly false
statement to the City Council, but he did. Watch the
Attorney Jan Goldsmith weighed in with another important
question: how much is SDCERS paying for outside
attorneys to sue the City, i.e. suing its own plan
sponsor? Wescoe answered that it was "more than $1
million". For one year? To sue the City?
Goldsmith then wanted to know if the possibility of
SDCERS winning a big monetary settlement against the
City, perhaps millions of dollars (regarding the City's
alleged past underfunding of the pension system) was
reflected anywhere in the actuarial estimates. Wescoe's
answer was that it was not.
The amazing thing is that not one line of this important
City Council meeting was reported in the U-T, or
anywhere else that I have been able to discover. We were
officially told by the actuary that we may have an
increase of $100 million in our pension costs next year,
surely that warranted at least a paragraph in the U-T.
We were also officially told by its Administrator/CEO
David Wescoe, that our City's pension system (SDCERS)
charged $40 million to administer a trust fund that
added approximately $1 billion to its unfunded
liability. We were then essentially told to shut up and
Watch that video again.
The City and Hillel lose their court battle with the
by Pat Flannery
The California Appellate Court today published its
regarding San Diego Superior Court Judge Linda
Quinn's trial court decision in the matter of a disputed
development permit for a Hillel Jewish student center in
a residential neighborhood of La Jolla near UCSD.
The Appellate Court not only upheld Judge Quinn's
finding, that the City needed to conduct (unspecified)
"further proceedings" pursuant to CEQA, it modified that
judgment with a new finding that went much further:
"there is also evidence creating a
fair argument that the Project may have significant
impacts on traffic and parking, biological resources and
aesthetics and community character. This evidence
requires the preparation of an EIR relating to such
impacts rather than a mere reconsideration of whether
additional mitigation measures are appropriate."
The Appellate Court comments confirm
what those who have followed this case know only
too well, that there was massive favoritism by
City officials for this particular applicant. It is
a totally inadequate location for a student center,
little more than a traffic island. It consists of a
15,341 square foot triangular segment of land that
remained after street construction.
Hillel wants to build a one-story 12,100 square foot
student center, with a 17,000 square foot underground
parking facility. The City is facilitating them by
vacating public rights-of-way over approximately 21,000
of adjacent land. That is a gift of public assets. It is
Beginning on page 24,
Judge McIntyre reveals that the City actually coached
Hillel on how to get around certain "Biological
Impacts". The City suppressed the first biological
impact report and suggested alternative contents that
would allow it to make a "no significant impact"
Hillel's biological consultant,
Inc., did rewrite its first report, eliminating most
of the City's concerns. But with one exception. It still
contained this: "the loss of an
active raptor nest by removal of a tree or the
abandonment of an active nest due to construction
activity would be considered a significant impact."
Undeterred, the City
hired an outside contractor to remove four eucalyptus
trees on the project site under the guise of widening La
Jolla Village Drive. It simply got rid of the trees!
Following the lower courts adverse decision, with the
approval of then City Attorney Mike Aguirre, the City
advised Hillel to submit a duplicate application, while
the City was appealing Judge Quinn's decision! That
sounded like contempt of the law to me. I protested it
to Aguirre at the time. He said he had no problem about
going ahead with a duplicate application and had given
DSD the all clear. They were ignoring Judge Quinn's
Hillel quickly got its duplicate application before the
City Council, sans the raptor problem. City staff
hurried to get it processed before the old Council
Up until his last day in office, Scott Peters aided by
Karen Huemann of Mike Aguirre's office, hustled to get it
through City Council.
They were tripped up by a simple publishing error.
Here's what happened:
I wrote: "Peters understands that
land use entitlements, like pension benefits, are
difficult to roll back once granted. Granting illegal
entitlements has been the hallmark of Peters' eight year
career on City Council. He hopes to pull off one last
giveaway on Friday." He called a Special Meeting
of City Council for his last day in office, just to pass
Heumann bent over backwards to accommodate him by
coaching DSD on how to amend the already posted notice
regarding the right-of-way vacation. DSD over-printed on
it the later Special Meeting of City Council called for
that Friday, December 5, 2008.
Watch her on video
On Friday, Aguirre seemed to have a last minute
heart. He overruled his deputy, Karen Heumann. The
Item was "sent back" to DSD. Heumann was
frantic to get the job done for Hillel before she
departed the City. She knew that Jan Goldsmith was not going to retain
Now it is up to the new City Council and the new City
Attorney. The City has removed the trees and can do a
new EIR without worrying about raptors. Or can it? Will
the new City Attorney, a former judge himself, take to
heart what two judges have said? And there is still the
traffic and parking issue. Read what the judge had to
say about that, starting on
page 15. The
Appellate Court concluded that
"there is a fair argument that the Project may have
significant impacts on traffic and parking."
Will the hard-headed proponents of this project now go
away and find a more appropriate site for their student
center? They have put the affected citizens through
enough. People should not have to go to court to force
their city government to obey the law. Thank goodness
some very fine La Jolla citizens did exactly that.
Council President Hueso should not defy the courts again
by re-docketing the illegal Item that was mercifully
December 5, 2008. Nor should City Attorney Jan
Goldsmith allow it.
What would be the City's position today had Karen
Heumann won her fight to get this flawed project
approved before she, Scott Peters and Mike Aguirre left
the City? It seems to me the City had a narrow escape on
that very last day of these three people's involvement
with City government.
Jan Goldsmith seems to be trying. Let's give him a
by Pat Flannery
It is nice to be able to report
something positive from City Hall for a change. Here is
the first edition of City Attorney Jan Goldsmith's
his introductory remarks Goldsmith says:
"Our purpose is to keep you
apprised of some of our work and discuss new laws".
That sounds like he understands his role as serving the
people while being the corporate lawyer of the City of
San Diego. After all, the people are the beneficial
owners of the municipal corporation known as the City of
San Diego. Therefore, by protecting the City's corporate
interests he is protecting the interests of its
web site, which is starting to take shape and give
an indication of his thinking, he starts off with a link
to the City Charter section dealing with the role of the
Section 40. He has organized his Office into three
divisions corresponding to his three Charter-defined
roles and added what he calls
"community-based legal work on behalf of the City of San
This fourth division will involve
"consumer protection enforcement, code enforcement and
neighborhood prosecution units". Dedicating more
City legal resources to neighborhood code enforcement
will be a very welcome development in San Diego. I
cannot think of anything more likely to build badly
needed neighborhood trust than a proactive City
The fact that Goldsmith hired an experienced consumer
fraud prosecutor from the District Attorney's office,
Tricia Pummill, to head up this important division
suggests he is serious about clamping down on consumer
fraud (e.g. unlicensed contractors) and doing
neighborhood code enforcement.
I was surprised to learn from his web site that he will
"prosecute criminal misdemeanors
and infractions committed within the City limits and
in Poway". I didn't know we did Poway. I hope
he has an adequate cost recovery arrangement with the
City of Poway. I would have thought Poway would have
turned to the District Attorney for that. Strange.
It is encouraging to see that he has a link to the City
Public Records Request page. He seems to be
encouraging citizens to ask questions of their city
government. I hope that when (not if) we have problems
getting public information out of sections of the City
government, we can appeal to our City Attorney
Jan Goldsmith. It would be a great opportunity for him
to show his good faith and his dedication to the law not
I supported Aguirre, but who knows, Goldsmith could turn
out OK yet.
P.S. Mr. Goldsmith emailed me this evening and
office has handled Poway misdemeanors for many years by
agreement with the DA’s office in exchange for the DA’s
office handling San Ysidro misdemeanors."
Church, state and land use - Our Lady of Peace Academy
by Pat Flannery
One of the most
contentious land use issues to come before the San Diego
City Council in recent years is the Academy of Our Lady
of Peace (OLP) extension in North Park. I attended a
"community forum" last night and just listened. It was a
well executed exercise in faux community
On the face of it, what
is at issue is the fate of three single family
homes OLP wants to tear down to make room for a 21,000
square foot expansion of its all-girls Catholic High
School. But it is perfectly clear that the school could
easily achieve its current expansion objectives without
destroying the three Spanish-style homes the neighbors
feel are an integral part of their neighborhood's
The real issue is: should an institution, such as this private school, be
allowed to encroach further and further into a
residential neighborhood, as the market for its product
grows? OLP is the only all-girls private high
school in the greater San Diego area. Many of its
students come from the South Bay and even from Mexico.
The school has already demolished
homes in order to grow to its present enrollment
of 727 girls and 67 staff. The fear among the local
community is that the school wants to go on expanding
into their quiet neighborhood. Future expansion is the
only plausible explanation for the demolition of homes
not necessary for the current expansion. The school
could easily double its enrollment if it had the
facilities. The demand is obviously there.
Representatives of the local community started last
night's conversation by restating their oft-repeated
objective: to obtain a promise not to destroy the three
homes. If such a promise was forthcoming, the
neighborhood leaders again assured the school, they
would do everything possible to achieve the school's
current expansion needs, including some new
construction. The school board declined to give such a
At one point the school's principal
spokesperson and Vice-Chair of its Board, Alexandra
Kelly (who also happens to be Bishop Brom's attorney and
represented the Diocese in the
priests' sex-abuse case)
actually said that they were in fact
planning the school's future for the next 100 years.
That statement got my attention. I wondered if the
neighbors knew what they are up against. The Bishop and
the Diocese obviously want this OLP expansion real bad.
officer for schools at the Diocese, Sister Breege
Boyle, is on the OLP Board and attended last night's
Attorney Kelly is no stranger to stonewalling. She
helped Bishop Brom shield his 23 priests accused of
sexually molesting children until finally forced to
cooperate by both the San Diego and Imperial Counties'
District Attorneys. She used the excuse of protecting
the accusers identities!
Normally at this point such a meeting would break up.
The neighbors had made this offer on several previous
occasions over the last three years and this was
supposed to be the last try. Miraculously the
neighborhood representatives kept their cool and
continued to probe. In fact they offered to keep trying
right up until the last possible moment on March 3rd.
The school agreed to look at any new suggestions, but
would promise nothing.
Like all major land use decisions it comes down to
counting votes on the City Council. On January 26, 2009,
just when the school was staring defeat in the face,
after a 4 1/2 hour emotional hearing, Carl DeMaio
proposed a continuance to March 3, 2009 to allow one
last effort at reconciliation.
Here is a video
of Carl DeMaio's City Council comments,
before he suggested the continuance. His vote will now
decide the issue on March 3rd. Five City Council votes
are required to uphold an appeal against the Planning
Commission's decision to allow the project. The North
Park Community Planning Group voted against it.
Four City Councilmembers are firmly opposed to the
project: Donna Frye, Sheri Lightner, Tony Young and Todd
Gloria in whose District it lies. Ben Hueso, Kevin
Faulconer and probably Marti Emerald are in favor of the
21,000 square foot expansion. DeMaio will have to answer
his own question of January 26th
"how do you carry out that mission and be consistent
with the integrity of a neighborhood and to be a good
neighbor". As Carl said, this is not about
three historic homes. It is about the power of Bishop
DeMaio, a Catholic himself (Jesuit educated and
Republican) must pass the "John F. Kennedy" test: should
a call from the Pope, or in the case of DeMaio, from the
Bishop, influence his decision? I think we learned the
answer as to Kennedy, we will learn it as to DeMaio on
Are we totally losing it here in San Diego? -
"Destination Lindberg"? 02/11/09
by Pat Flannery
In a city
full of characters that not even Hollywood could invent,
takes our zaniness to a whole new level. As a former
State Senator he is much in demand as a Sacramento
lobbyist. He was recently hired as "a
senior policy advisor" to
Hyatt Farber Schreck, a
large lobbying law firm. That is on top of being "a senior policy
advisor" to local developer John Moores and his
royal court. I
thought court-jesters existed only in merry old England, to
entertain kings like Henry VIII between wives.
Steve's latest "jest" for the San Diego court is the
launch of "Destination
Lindberg". This promises to be a knee-slapper to
rival his 1978
Attack of the Killer Tomatoes, in which he
co-starred and also co-wrote. He seems to have a
long-standing fetish about airplanes. In the film he was the
nutty tomato-fighting Wilbur Finletter who wore an open
At the launch of a 25-year-anniversary "Tomatoes" DVD,
State Senator Peace as he was at the time, was shown
walking into the California Senate with an open
parachute on his back. This guy definitely has a sense
of humor. But he needed more than a parachute to rid
himself of his title as "the father of deregulation".
The Electricity Deregulation Bill, which he wrote as
State Senator, did not turn out too well, as we all
know from the rolling blackouts of 2001. Maybe he should
stick to writing comedy scripts.
But this "Destination
Lindberg" thing is really a hoot. It is so crazy it
makes "Attack of the Killer Tomatoes" appear boring.
Casting director Jerry Sanders said he assembled the best and the
brightest to write it. Apart from Steve Peace and
Alan Bersin I think he also cast the San Diego Chicken.
Or maybe this is just another spin-off of "Tomatoes", like the animated
TV cartoon of 1990. In it,
San Diego became San Zucchini and the mayor was a klutzy
airhead named Mayor Earwax, who appointed Steve Peace's
old character, Wilbur Finletter, Sheriff in an episode
entitled "The Gang That Couldn't Squirt Straight".
Here, look at the characters. Isn't it
straight out of real life San Diego? Check out Dr.
Putrid T. Gangreen.
Here is a picture of what can only be called "Peace's
Folly". Can't you just imagine Steve running around his imaginary airport creation, goggles and open
parachute, shouting "tomatoes"? The trouble is our Mayor Earwax is taking him
seriously. Sanders long ago lost the ability to
distinguish between reality and make-believe. Yesterday,
shovel in hand, he got on an airplane to Washington DC
to cadge $4 billion dollars for his "shovel ready"
Mayor Earwax and his developer friends
are ready to bond and spend between $4 and $12 billion
on Steve Peace's "Destination
Nuthouse", but will not even entertain the idea
of building a secondary sewage treatment plant for the
approximately 200 million gallons of raw sewage we dump
in the Pacific Ocean every day.
No wonder Hollywood loves us. We are zanier than
anything they were ever able to come up with. Between
the image of a San Diego State Senator wandering around
the State Capitol with an open parachute strapped to his
back and the image of a San Diego Mayor wandering around
Washington DC with a shovel in one hand and a tin cup in
the other, we take the Oscar.
The 2009 Budget: you are not getting the whole story.
by Pat Flannery
Below is a series of graphs I prepared
from the Mayor's published 2009 Budget. All the Mayor
and City Council will
discuss with the public is the
General Fund, where most of the public services come
from. You even get to
pick which of your favorite essential services you
would like them to cut.
The General Fund is only 38% of what the City spends.
Therefore 62% of the City's spending is hidden from the
public. And that does not include the
Redevelopment Agency, which in turn includes CCDC and SEDC.
Redevelopment is a "city within a city" and CCDC and
SEDC are "cities within a city, within a city". Yet they
are not on the budget-cutting agenda.
Huge amounts of money sloshes backward and
forward between a myriad of "Funds", making it
impossible for the public to track or monitor
"cost-recovery", if any. We have no idea how each fund's
shortfall or surplus is dealt with. They all magically
balance. It was by manipulating these "Funds" that old
Jack McGrory was able to work his famous funding magic.
Sanders is a product of those good old days and likes it
the way it is. McGrory was able to fund the entire 1996
Republican Convention without ever opening an account
for it. Not one penny of its cost appeared on the City's
books. Sanders was the McGrory/Golding Police Chief,
managing the biggest single departmental budget in the
City. He knows the ropes.
Sanders still does not
publish anything remotely resembling a Revenue and Expense
Statement for each
would reveal too much. For example, it might reveal that
the $11.3 million CCDC "repayment" I wrote about on
January 21, 2009,
is being recycled back to Petco Park and the Convention
Center (which I know to be the truth of it) through the
$90.1 million Special Promotional Programs Fund (TOT
Please study the pie charts
below, then ask your Councilmember where the money comes
from and how it is spent for each of these "Funds". Most
of them don't know and don't care. Let them know that
Water, sewage and politics - 2010 elections already in
by Pat Flannery
I have received numerous emails from
concerned environmentalists as well as emails from representatives
of Coastkeeper and Surfrider. These two organizations deny
advocating Indirect Potable Reuse
(IPR) as the only solution to the sewage treatment
and ocean outfall problem.
Well, it sure seems that way to me from reading
Memorandum and from
watching Bruce Resnick's and Donny Frye's
comments at City Council on January 27, 2009. They are
no longer pushing for a secondary treatment sewage
plant. A Section 301(h) 5-year waiver is only breathing
space to get it done. And this is definitely the last
Florida on the other hand now
"requires that all facilities that discharge domestic
wastewater through ocean outfalls achieve, at a minimum,
60 percent reuse of the facility’s actual annual
flow by December 31, 2025, and prohibits
discharge through ocean outfalls beyond that date,
unless as a backup to the functioning reuse system".
And they have no waiver.
Florida wisely recognizes that reuse
will never fully eliminate the need for secondary
treatment plants and certainly not within five years, as
our local experts are suggesting. Gonzalez, Resnick and
Frye clearly think that IPR is the magic answer that
will eliminate secondary sewage treatment.
Saying we don't need to build a secondary sewage
treatment plant because we are going to reuse all
our water is like saying we don't need the Miramar
landfill because we are going to recycle all our
trash. We need to build a sewage treatment plant now
for the same reason we have a landfill now. We
don't need a feasibility study to tell us what we
San Diegans voted 67% for a questionable $2.1 billion
school bond but use the ocean as their toilet. I believe
they would vote an increase in their water rates to act
as a civilized community. As has been proven in other
environmental areas, adding cost results in more
conservation. Building a secondary treatment plant would
see a significant reduction in water use.
Gonzalez says on page 10 of his
upgrading the Point Loma secondary plant may at some
point "become entirely
moot". He goes on: "Surfrider,
Coastkeeper, and Sierra Club in San Diego believe the future of sewage treatment is
IPR". What could be
clearer than that?
Bruce Resnick of Coastkeeper,
said that "we should move
beyond the debate about secondary treatment". His
goal, he said, is that in five years
"we will all be standing together
with no waiver application and a long term
strategy to eliminate all discharge into our ocean".
Watch the video
Donna Frye agreed and noted that right now we
"treat sewage and dump it"
when instead we should "treat the
water and reuse it". This will
"potentially allow us to meet
secondary treatment standards" and is the "best
possible way to deal with our sewage" she said.
Watch the video
They all seem to be singing from the same hymn book. I
had not intended to drag Donna Frye into this fray as all the
other City Councilors, with the notable exception of
Carl DeMaio, voted for the $2 million Feasibility Study.
But having been challenged by Marco
Gonzalez and others, as to their true position, I
decided to let the videos speak for themselves.
It is clear to any interested observer that Frye,
Gonzalez and Resnick, who came to prominence in public
life as clean water advocates, have shifted their
long-held positions. Or perhaps surfers no longer get
sick from contaminated water. For some reason these
three have fallen in
love with Indirect Potable Reuse (IPR) as the cure-all
for both our water and sewage problems
i.e. they have merged water supply with sewage disposal.
I repeat here what I wrote to one of the email
correspondents: "The important point is
that the people are not misled into believing that they
don’t have to worry about a secondary treatment plant.
The solution is part IPR and part secondary ...... we
need both. Pretending that the need to dump in the ocean
will go away is environmentally irresponsible."
We will always need a secondary treatment plant just as
we will always need a landfill.
I strongly believe that an unholy coalition has been
forged between the one-time clean water advocates and
powerful City pension interests. The 900 lb secondary
sewage treatment gorilla is being made to magically
disappear to make room for the 2000 lb pension gorilla.
We cannot afford a sewage treatment plant and the
city pension. So the 2010 elections come into play. New
alliances are being formed. Water, sewage and politics
are in the mix.
Pension Obligation Bonds vs. Clean Water Bonds.
02/03/09 by Pat Flannery
Marco Gonzalez, attorney for
Memorandum to "Environmental Community Activists"
today. It is dated January 30, 2009, two days after the
City Council approved a: "Cooperative
Agreement with San Diego Coastkeeper and Surfrider
Foundation for the Study of Feasibility of Diverting
Wastewater from Point Loma Wastewater Treatment Plant
through Increased Wastewater Recycling", at its
January 27, 2009
This Resolution is city-speak for the unpleasant truth that Surfrider
and Coastkeeper have sold out the environmental community. In the
process they extracted $2 million from the cash-strapped City for a
phony study of a phony solution to a real problem: secondary treatment
of city wastewater.
Why the sellout? - to secure first place at the public bond window for
the city's pension deficit - Pension Obligation Bonds (POBs), the unions' Holy Grail. If San Diegans knew the truth, that building a
secondary sewage treatment plant is unavoidable and that the likelihood of
yet another waiver is nil, the idea of Pension Obligation Bonds would be
an impossible sell.
The convoluted and spurious argument for Indirect Potable Reuse (IPR), or
toilet-to-tap as its detractors prefer to call it, so painfully
attempted by Marco in his Memorandum, is bogus in the extreme. He
actually expects us to believe that "toilet-to-tap" will suddenly become
so accepted and so wildly successful that not even a trickle of sewage need
be dumped in the ocean by the time the next waiver
application comes around.
To add insult to injury the compliant City Council, with the exception
of Carl DeMaio, authorized $2 million of our much needed money to
"study" this insulting proposition. It suggests the unions have got
their POB deal.
Gonzalez lashes out: "The notion
that a decision made in furtherance of elimination of all sewage
discharges in the future somehow indicates a trend toward acceptance of
waivers is absurd and, frankly, doesn’t even deserve this response."
Who are we to question "the master"?
Michael Zucchet, the incoming President of the
Municipal Employees Association (MEA),
said at Tony Young's Budget Committee hearing last Friday January 30,
2009, that "the (pension)
debt is there, whether you like it or not".
Watch the video
They are trying to turn an actuarial debt, based upon actuarial
assumptions, into something very different, hard debt. The
connection between the City employees' push for bond securitization of
the pension debt and Gonzalez' sudden conversion from clean water, is
The truth is that we have a veritable Joint Regency in San Diego - theGonzalez Royal Family. Lorenais secretary-treasurer and CEO
of the San Diego and Imperial Counties Labor Council while her brother
Marcois attorney for the well financed Surfrider and Coastkeeper
organizations. Together, this brother and sister team, are the ringmasters
for much of the behind-the-scenes political deal-making in San Diego.
There is a "Cooperative Agreement" alright, but not
between the parties stated. It is between the City unions and the
Gonzalez Royal Family. City employees will get their Pension Obligation
Bonds, while the taxpayers will still have to pay for a sewage treatment
plant. Favors were exchanged and favors is what San Diego politics is
Now that the public bond slot has been left open by the clean water
people, there will be a steady drumbeat of POB sales talk from the
unions. For the next few months, during the 2009 wage negotiations, they
will loudly "forego" pay raises, in return the Mayor and City Council
agreeing to issue POBs. You will be subjected to slick sales talk about
how the City unions will save you money on the double: first by
foregoing a 2009 wage increase and second by "refinancing" a loan that
does not exist. It is all about them.
Is the Mayor complicit in this labor negotiation tactic?
by Pat Flannery
Thinking overnight about what happened at
the Budget Committee meeting yesterday, I may have figured out what is
going on. My only remaining question is whether the Mayor is in on it. If
so, we are in serious trouble.
Exactly a year ago I attended a
given by Mike Aguirre proposing new procedures in labor
negotiations. His proposals are summarized in this
Memorandum of Law. I
summarized the significance of the event in
this blog dated February 4, 2008. In essence Aguirre reminded
Sanders that the voters passed Proposition F, which requires him to be a
Strong Mayor not a tool of the unions and that he has responsibilities
to the people. Sanders either has forgotten this or is in league with
Aguirre warned of union "backdooring".
He reminded the public that
the unions have often boasted of "owning" a sufficient number of
City Council Members to get anything they wanted out of the Council. Now they
have the City Attorney's office as well. Do they also have the Mayor's
I believe that yesterday's budget committee open door to the union
leaders, masquerading as a "public" hearing, was a very well thought out
means of undermining the impasse procedures that will inevitably ensue.
These people have little else to do but figure out how to cheat the
citizens, while we have to stay awake at night trying to figure out what they are
Here are the Strong Mayor
provisions now included in the City's Charter. It was precisely to
end the autocratic style of Jack McGrory as City Manager that the voters passed
Proposition F. Sanders needs to be reminded of this. Ironically it was
Sanders' current spinmeister, Jerry Braun, who wrote this definitive
of McGrory in the U-T back on December 18, 2005. Braun forgot to
mention that before becoming City Manager McGrory had been the City's
labor manager for years. He was actually the MEA's choice for City
Manager, just as Hueso is their choice for Council President today.
Braun should have a talk with his boss, unless he wants some future
Jerry Braun Jnr. writing about Sanders in very unflattering terms (perhaps
"unsmooth operator"), exactly what Braun was hired to prevent. The
bottom line is that whether Sanders was in on it or not, yesterday's
union ploy worked. The 2009 labor negotiations procedure is now
It is all designed to make the union-controlled City Council the
final arbitrar of Sanders "negotiations" with the unions. The only
question is whether Sanders is in on the conspiracy. Like McGrory, he has
been around for a long time and knows how to "get things done",
McGrory's old mantra.
In other words, did the City unions manage to sneak their choice of City Manager, now called
the Mayor, by the voters? We already know
they own the City Council and the City Attorney's office, do they also
own the Mayor's office? If so, they truly own this City.
What a farce! Today's "public" budget hearings.....
01/30/09 by Pat Flannery
Tony Young and his City Council Budget Committee today demonstrated how
hopelessly lost our City Council is to the City unions.
This hearing called "San Diego Speaks: Public Input on the City
Budget" started at 2:00 PM.
At 4:20 PM the first public speaker got to the microphone. For 2-1/2
hours five of our elected City Councilors, Young, Faulconer, Gloria,
DeMaio and Emerald, had cowered in front of the City union bosses as
they jawboned why their members should remain a privileged class of
workers, all this without interruption and insultingly billed as "public input".
The only thing "public" about it was that it was hosted and paid for by
public money. Our publicly funded Chanel 24 gave the unions a free 2-1/2
a farce! It was like a judge giving 2-1/2 hours to the prosecution and 8
minutes to the defense! That is a kangaroo court. This was a kangaroo
committee. Not satisfied with 2-1/2 hours of publicly funded time he
invited them to meet him privately in his office any time. Shame on you
When Kathryn Rhodes, one of only four public speakers who stuck it
out from 2:00 PM to 4:20 PM, finally got to the podium, she was told by
Mr. Young that public comment would be limited to 2 minutes! Ms. Rhodes managed to scrounge 2 minutes from a Mr. McNamara who accordingly had to
give up his chance to speak - after waiting 2 1/2 hours!
When the second speaker, Joy Sunyata, got to the microphone, well just
watch what happened
You must watch the video, it is only 30 secs. Joy is a regular at
City Council and is the most polite person on the planet.
believe Young could be so insensitive to the public and so completely
subservient to the union bosses that he would do this in front of the
cameras. He seemed to realize it at the end of Ms. Sunyata's time -
after she apologized to him for God's sake! But for me it
was too late.
The employees are not only running the Corporation that is our
City, they are taking the cash register home with them, the City
Council is providing the getaway car and Tony Young is at the wheel.
Both sides have a lot at stake in the School District fight. Whichever
side wins will be in the drivers seat during the spending of all the
manna from Washington over the next few years. We are entering a new age
from which the private sector may never recover. America is in danger of
becoming one giant TVA (Tennessee
Valley Authority). Yes, that FDR-era government behemoth is still
there. It even has its own police force.
It reminds me of Ireland's Shannon
Development, formed 50 years ago to promote
Shannon Airport and still
there, the de facto government for one fifth of Ireland. It is
registered as a private company with minimal reporting duties, every
politician's dream slush fund. Former San Diego Mayor Dick Murphy
admired it so much he tried to form a "sister city" with it.
Oh, how these elected officials and union bosses love power. We can only
imagine the power lunches between Sheila Jackson, Richard Barrera and
John Lee Evans, the SDUSD "Union Three", with Lorena Gonzalez, Tom
Lemmon and Donald Cohen, the "Union Cardinals".
But what about the other side? There is another side. The unions only
represent approximately 15% of San Diego construction workers! Sheila
Jackson et al will not get reelected on union votes alone. There are
many pickup trucks parked in driveways all around the District waiting
for a call from a general contractor with a job contract. Not all jobs
are union jobs.
Eric Christen accuses the unions of buying the "Union Three", as he has
dubbed them, for $400,000. The payback being the exclusive right of the
"Union Cardinals" to decide who gets into Heaven - i.e. a piece of the
$2.1 billion bond action. This is hard-ball politics. This is a real
What is at stake is how public works, which looks like being the main
economic engine for some time, will be manned. We may be entering an era
that resembles the 1930's in more ways than one: we may need to revisit
its labor relations text books as well as its economic text books.
But right now it is purely political. It is being "duked" out in the
opinion pages of the local media. There is even talk of recalls in the
air. $2.1 billion is a prize worth fighting for. It is a "must win"
fight for Lemmon, Gonzalez and Cohen but the "Union Three" can hedge
their bets. They are already selling their "everyone is welcome to help
improve our schools" slogan.
Politicians always follow the votes, irrespective of who paid their
election tab. If the School District PLA runs into heavy weather, the
"Union Three" will run for cover. A good example is Todd Gloria who
abandoned the Our Lady of Peace (OLP) girls High School in its expansion
bid before the City Council last Monday. OLP heavily backed his election
Is SDG&E genuine about the Sunrise Power Link?
by Pat Flannery
If you missed "Nova" on KPBS
here is the part aboutrenewable
energy. Nova explained that 16% of California's electricity now comes
from coal and that Schwarzenegger hopes to "scrap all of it and
replace most of it with renewable energy" by the year 2010 and 33%
by the year 2020.
To do this, he wants to "put solar panels on 1 million roofs and on
1,500 acres of commercial buildings". But, according to "Nova", 1
million solar roofs will yield only 1% of the necessary emissions cuts.
Power-plant levels of solar generation will still be required. These are
called "solar thermal plants", of which there is currently only one in
Not so with wind energy. It is experiencing a boom right now. In
Tehachapi for example, one company has installed 1,500 new turbines,
equivalent to nine coal fired power plants! That is the future we all
want - if "certain problems" can be solved i.e. the transmission
As Awnold puts it "zis krazy stuff that you have environmental
regulations holding up environmental progress": this craziness puts
his "33% by 2020" dream "on the line" so to speak. Our own
Sunrise Power Link (SPL)
immediately comes to mind. Right now the SPL is making progress but is
not out of the woods yet. Both the California Public Utilities
Commission (PUC) and the federal Bureau of Land Management (BLM) have
given their approval, but one hurdle remains - the Cleveland National
The SPL is a 120 mile power line whose new "southern route" would
largely follow I-8, avoiding the Anza-Borrego Desert State Park as
previously proposed. That proposal was totally unacceptable to
environmentalists, but not their only issue. They are still suspicious
because SDG&E will not sign a written promise not to use SPL for
importing "dirty" energy from Mexico. SDG&E says that Federal and State
"open access" laws prevent it from committing to any exclusive use e.g.
it may have to provide access to a wind generating company at some
future date. So, who are we to believe?
Then along comes an Irish company named
NTR plc (public limited
company) that is not interested in "dirty" energy from Mexico or
anywhere else. NTR is seeking recycling-led waste management, solar
energy, wind energy and ethanol investment opportunities around the
world. The company made its fortune as Ireland's National Toll Roads
I am now more inclined to believe that SDG&E is
genuinely committed to using SPL exclusively for
solar. Why? Because it has already signed a 20 year
Purchase Power Agreement (PPA) with SES for 300
megawatts of power to be delivered on the
existing SDG&E power link running just north of
the Mexican border from Imperial Valley to San Diego
at its Miguel substation. That will require SES to
build an array of 12,000
When the SPL is built, if it gets passed any
environmentalist court challenge, SES is contracted
to add another 24,000 SunCatchers.
That means that SES will have a generating capacity
of up to 900 megawatts, sufficient to power 500,000
San Diego homes. That is already locked in a 20 year
contract. Somehow I don't see SDG&E messing with
"dirty" energy from Mexico after that. SDG&E knows
that California people are becoming ever more
environmentally skittish. A "Mexican" fight may not
be worth it.
Here are his three main recommendations (note "reorganization" is code
(1) insolvency reorganization for the troubled financial
(2) reinstatement of banking, insurance and securities regulatory
(3) reorganization of the banking and securities industry to
service the national public interest.
done a good job describing what went wrong in the credit markets. I am
not sure he has done as good a job telling how to put it right.
He accurately pinpoints "In 1999 the Congress repealed the 1933
Banking Act" as the genesis of the present banking crisis. He is
right that this misguided action led to the creation of so-called
riskless "credit derivatives" and "credit default swaps" that promised
to eliminate risk.
risk is the financial equivalent of the age-old dream of turning base
metal into gold - alchemy.
Even the great Isaac Newton wasted a considerable amount of his talents
on that futile pursuit.
Eliminating risk is code for suspending the pricing mechanism,
the very essence of a free market system. How did the investing world
fall for that one? No doubt because of the same human failing that made
Newton fall for the dream of alchemy - they all wanted something for
Moralizing about how the financial crises happened will not bring back
the money we lost. "Reorganizing" the banking institutions that brought
us this tsunami of worthless debt will be no more successful than the City of San
Diego suing itself for its past mistakes, which is essentially what
Aguirre's pension strategy was. We have to look beyond the courts for solutions.
The biggest obstacles to new thinking are three old Articles of Faith:
(1) government is the problem, not the solution;
(2) unfettered American markets will eventually right the ship of state;
(3) foreign ownership of anything American is bad.
Americans fell in love with Maggie Thatcher's "free markets" theory,
that everything about government is bad and everything about business is
good. Ronald Reagan put his Hollywood training to work in spreading
Thatcher's doctrine and got himself elected President of the United
States. But it was a simplistic theory and is the ultimate cause of this
financial meltdown. Thatcher/Reaganism ignored the destructive power of
greed. It only saw its dynamic power, because that was what it wanted to
I believe the answer is international banking. We would not even
have this crisis if the
world was not willing to buy the financial junk created by the out-of-control Wall Street
banks. Let's lose our xenophobia and give the international banks our investment
grade local Government securities.
What an opportunity to build America's next generation of
infrastructure, using the savings of those around the world eager to
invest directly in American assets. Let's go directly to
the Chinese with our municipal bonds. They will love the fact that they
are directly secured by real infrastructure projects. The global
markets were willing to accept our word on what are now totally
discredited mortgage-backed securities. We lied to them. We can regain
their trust by offering them our high-grade municipal securities.
the ultimate economic stimulus package could be the building of a
people-to-people international financial system that would change the world for
generations. It could be a global version of the 1946 film "It's
a Wonderful Life".
Instead of being snake oil salesmen to the "savers" of this world, we
could become the creators of a worldwide "Bedford Falls" - the classic
film's American town where one neighbor's savings provided the money to
build another neighbor's house, the origin of our great Savings & Loan
If too ready global acceptance of our badly securitized paper was the
architect of this global financial crisis, let's go around, not reorganize,
the dishonest Wall Street banker/brokers who destroyed the good name of
America. Let's deal directly with the Chinese, the "savings" side of a new
worldwide Savings & Loan system.
What we do next will determine whether America becomes a
a revitalized "Bedford Falls". Saving our banks with taxpayers' money is
economic nationalism in a time of economic internationalism. We now have
a global economy whether we like it or not. We should bank accordingly.
"San Diego Mayor Jerry Sanders has named 17 local community and
business leaders to his newly formed Citizens’ Task Force on the San
Diego Convention Center Project. The group is charged with engaging the
public to develop a set of recommendations to the mayor on matters
related to the proposed expansion of the Convention Center."
Well, here is a suggestion. If we really are a world-class city why not
build a world-class stadium in conjunction with a world-class convention
center? Remember Dick Murphy's slogan "More than a Ballpark"? Well let's
make our stadium "More than a Stadium" - really more than a stadium.
Let's make it equal to or better than the
National Stadium (the Bird's Nest); equal to or better than
in London. Can we do it? Yes we can.
Look at Wembley Stadium's
Special Events brochure. Can we not do that? Wembley says it is
"at the heart of London's special events and corporate entertaining".
Is that not right up our alley? We would have a bond paid off in no time
and bring tens of millions of tax revenue to the City every year.
we have to do is design it for "multi-use" like
(opposite). The San Diego developers are in love with "multi-use", they
should have no difficulty designing an all-steel stadium suitable for
both international soccer and American football. Why build a $1 billion
stadium for 8 to 10 NFL games a year?
In addition we could get 8 to 10 international soccer games, plus much
more in "special events". Think of the national and international
concerts we could host. The potential is limited only by the vision and
marketing expertise of our
Convention & Visitors
Bureau. San Diego could become the international Mecca for sports
Orare we also going to be outclassed by the
Bird's Nest (opposite)? How long will it be before they start
hosting world-class special events? And all we can think of is keeping
Chargers. Why not combine our desire to keep the Chargers with building
on our success as a convention destination? Wembley has demonstrated
that a sports stadium can double as a convention center very nicely.
Where would we put it? Probably on the present site of the
10th Avenue Marine Terminal. That would get the unions all stirred
up. But San Diegans as a whole will need to decide what is the highest
and best use for that site.
Redevelopment is the City's "slush fund".
01/22/09 by Pat Flannery
The City is asserting that an area designated to receive CDBG
funds, (funds provided by the Federal Government to provide low and
moderate income housing) need not be "coterminous" with the actual
recipient area. This is to get around a HUD requirement that CDBG funds
must be used in "primarily residential" areas. This is reminiscent of
the Grantville scam where the City will spend Grantville's tax increment
According to this unique San Diego doctrine the City can receive CDBG
funds from the Federal Government, give it to its developer-friendly
Redevelopment Agency or its sub-agents SEDC and CCDC, to spend as it
pleases. That flies in the face of the basic, traditional "census tract"
concept of Community Development Block Grants (CDBG). Uniquely, indeed
arrogantly, this City claims that as long as CDBG funds are spent within
the City's total area designated for redevelopment, it is legal. All
because the City needs to retroactively "qualify" its past CDBG abuses.
HUD's Rebuttal. HUD stands firm that the City still has not provided
any documentation for the CDBG monies it spent in the Central Imperial
redevelopment project area. So let's concentrate on that actual
recipient area. Read
Criteria for spending CDBG funds - Central Imperial clearly does not
HUD also reminds the City of a specific rule to prevent CDBG becoming a
"spending account", in other words a "slush fund".
The injustice of all this, to the low and moderate income citizens that
are supposed to benefit from redevelopment, is that large amounts of
CDBG monies were spent in Central Imperial, which is not
"primarily residential". We are expected to believe that because it
benefited developers of large commercial and industrial projects, it
must have benefited ordinary homeowners throughout
South East San
Diego (map) i.e. it "trickled-down".
Now the citizens of San Diego want their CDBG money to trickle back up
again, starting with this
Central Imperial "loan". They want it back. Their CDBG money was
stolen by the Redevelopment Agency to benefit developers. To add insult
to injury the Redevelopment Agency, not satisfied with spending it, put
it down as a "loan" from the City in order to get "tax increment" and
they never intended to pay it back as it wasn't a real loan.
This scandal must not get buried under the usual City double-talk, often
reprinted by the media. The fact is that in order to avoid requiring the
Redevelopment Agency to pay back this CDBG "loan", the City knowingly
did not show it as a loan in its books while showing it as a loan in the
Redevelopment Agency's books! That's fraud.
Everybody knows that you can't spend money and show it as a loan to
somebody else at the same time. The City knew perfectly well that it
couldn't show CDBG funds as a loan to its Redevelopment Agency and at
the same time claim it had been spent according to CDBG rules. It
chose the later.
This must be corrected or there may be fraud charges from the public
against the City. The only possible solution, other than giving it all
back to HUD, is to reverse the entries in the City's books showing this
CDBG money having been spent by the Redevelopment Agency and re-book it
as a loan. That will mean that it still has not been properly spent. The
rightful beneficiaries of this Federal CDBG grant money have yet to
receive the benefit of it. They are the low and moderate income citizens
of this City.
Finally, now that San Diego is a known CDBG scofflaw, this City may have
damaged its ability to receive future Federal block grants, which will
be the preferred way of getting stimulus package monies directly down to
The Obama administration and the Democratically controlled Congress will
be watchful for cities like San Diego where all Federal money seems to
quickly disappear down a developer sinkhole. San Diego has demonstrated
a tendency to ignore Federal guidelines in spending grant monies, how
will it convince the Feds that it "will be good" spending stimulus
CCDC is Downtown's "slush fund". 01/21/09 by Pat Flannery
the CCDC Board, on its Consent Agenda without public or Board comment,
approved three items purporting to pay
the $11.3 million annual debt service on the Ballpark Bonds. I say
"purporting" because CCDC is showing the $11.3 million on its
budget as a
"City Repayment", i.e. repaying a Center City redevelopment
project debt, not a
contribution to any "debt service". There is no mention of the Ballpark
Bond debt service.
That is a major misstatement of fact. So far the media has swallowed
this deceit. They are giving credit to CCDC for paying the Ballpark debt
service. Here are the facts:
The Budget Item being increased today, from $7.5 million to $11.315
million (it had already been increased from $5 million to $7.5 million)
is Item 29, "City Repayment", on CCDC's FY09 Budget. Here is the
Budget Document. Note that the Budget Item is not "Debt
Service" but "City Repayment".
This is the
Budget Amendment Item on today's CCDC agenda amending that
Budget Item. Note the wording: "to accommodate payments for debt service",
not to make payments on the Ballpark Bond debt service. CCDC is
claiming that this is a partial "repayment" of the outstanding Center City
project loan from the City described in
Repayment Agreement approved today (also on the Consent Agenda).
Note that the CCDC staff report says there is no other outstanding City
loan administered by CCDC.
The City will have no choice but to "book" this as a
Redevelopment Agency "repayment" in
its books. That is what the CCDC Board has called it. It can't be one
thing on the Redevelopment Agency's books and something else on the
City's books. In other words it is not a "revenue" to the City. Repayment of a debt
is not "revenue", one does not have to be an accountant to know that.
This $11.3 million "repayment" has no effect on the City's Revenue &
If the City wishes to book this $11.3 million as "revenue" it must
instruct CCDC to re-docket a new resolution specifically calling this
payment "debt service". But that was never the intent. They want it both
ways. CCDC wants the Redevelopment Agency to receive credit for paying Ballpark Bond debt
service for five years, while receiving credit, with the same payment,
on the Center City redevelopment project debt.
Working together in 2002, the City and CCDC used the same duplicitous bookkeeping
methods to funnel cash for the ballpark. First, CCDC used $95
million of the Redevelopment Agency's tax increment money for the
purchase of the land donated for the ballpark. Then CCDC conveniently "coincided" a
$46 million repayment of a Center City project loan, enabling the City
to give $46 million cash to the ballpark. The City then
borrowed $160 million, in the form of a General Obligation bond,
repayable out of the City's General Fund. That made the City's total
investment $301 million. The Padres put in $153 million for a total
ballpark cost of $454 million.
Here is today's spurious SecondAmendment to the 2000
Ballpark Cooperation Agreement between
the City and its Redevelopment Agency. I say "spurious" Second Amendment for the same reason I said
"purported" to pay debt service above because this payment is not a
Ballpark Bond debt service. It is a "City Repayment". Therefore there is
no need for any redevelopment "findings". This is what staffers call an
Now for the
Repayment Agreement triggered by the
HUD audit. First of all, none
existed before. Note this is not an "Amended" Agreement. This is a first.
When/if this agreement is approved by the City Council, the Mayor has no
choice but to enter it in the City's books. It will be the first time
this loan to the Redevelopment Agency will have appeared in the City's
That has huge implications. As I pointed out in my
blog dated January 7, 2009,
Mayor Sanders must disclose this error (or worse) before
going to the bond market. Unfortunately for him and the City he already
has issued a bond without disclosing this gaping hole in his CAFR.
If the City Council approves this action when it comes before them, it
will be a scandal. It will also be dangerous for each of them
personally. Suddenly discovering that your
favorite slush fund, the Center City redevelopment project, owes you $116 million
that was not previously reported, is no small matter. Yet
that is exactly what has happened. The fact is that this Center City
redevelopment project debt was never recorded in the City's books.
As if to add insult to injury, CCDC now proposes that the Center
City redevelopment project pays back its City debt
without interest. Here is the proposed
Repayment Schedule. The first payment is in 2013, the last in 2021.
Interest is waived.
These money transactions must be accounted for properly. If they
are loan "repayments" they must be entered in the City's books as such.
The City cannot show these repayments as "revenue" so
that it can use that "revenue" to pay the debt service on the Ballpark Bonds.
To sum up: the "purported" action today was to approve "repayments" on a
loan that does not exist until the loan described in the CCDC-proposed
Agreement is approved by the City Council and entered in the City's
books. Note that CCDC reports that there is no
other City loan. In calling this repayment "revenue" the City is using CCDC as a "slush fund".
It is "loaning" money to a Corporation and receiving it back as "revenue".
Open government Obama-style vs. "Staff" government in San Diego.
01/21/09 by Pat Flannery
I watched the Budget Committee debate this
morning and noted the contrast between Obama's high ethical ideals vs. those of
our Council Budget Chairperson Tony Young. Obama announced tough
rules curbing the power of lobbyists - Young embraces the lobbyists.
Watch the video
He openly admitted having had numerous private meetings with
union and business lobbyists, asking for their budget priorities. It
shows Mr. Young's priorities. Why do you think he wanted to be Chair of
the Budget Committee? Because he is now the guy lobbyists have to
"lobby". That's power - exactly what Obama wants to eradicate from the
The citizens will be asked for their
opinions at five citizen meetings, starting January 30, 2009 but while
he has invited the union and business lobbyists to these citizen
meetings, the citizens were not invited to the union/business meetings.
Note on the video
how Tony is on first name terms with MEA boss "Judy" Italiano.
Judy knows how to keep her "staff" in line.
As for the planned "community forums", by the time the Mayor's office,
the Council, the union bosses and the business lobbyists get done telling us citizens how it
is all our fault for being so cheap, there will be very little time for
hearing citizen views. Community forums organized by the City are always one
sided affairs - the City talks and we listen.
No One as Irish as Barack O'Bama" 01/20/09 by Pat Flannery
'Tis True! - Happy
Inauguration Day - from the proud Irish.
Yes, they are dancing in the streets all over the world.
The America the world loves is back, the real America, the America that
cares about people. The "greed-is-good" era is over, the
"people-are-good" era begins.
Ben Hueso's gift to the Developers/Unions: Barrio Logan.
by Pat Flannery
I went to the "Community
Meeting to review/discuss land use alternatives" for Barrio Logan
today between 9:00 A.M. and 1:30 P.M. It was an object lesson in how the
City will impose "mixed use" zoning on San Diego as a whole. It was
a sight to see, a well-oiled propaganda machine. The bottom line is that
virtually all the (yellow) residential lots west of I-5 will disappear.
here for the full zoning map, then zoom in for even higher
First, Council President Ben Hueso and Mayor Jerry
Sanders arrived to show their "respect" for this doomed residential
neighborhood. It was like they were coming to a funeral, or like the old
American Indian tradition of "honoring" an animal before killing it for
food. Looking very chummy and pleased with themselves, they left
together - one representing the unions the other representing the
developers, San Diego's axis of greed.
Then their well-oiled City propaganda machine swung into action. The
slick consultants launched into
their fast-moving PowerPoint presentation. The doomed residents, many
with only a poor command of English let alone the sophisticated
nomenclature of city planning, sat glassy-eyed contemplating their
inevitable fate. They all know that this so-called City "planning
process" is nothing more than a cynical land grab designed to drive them
from the little homes most of them inherited from their parents or grandparents.
The City's hired "consultants" remind me of those dreadful people who
run up and down the aisles at the now all-too-familiar foreclosure
auctions at the Convention Center and Del Mar Fairground. The function of
both types of snake oil salespeople is to create what professional
manipulators call an "affirmative momentum", i.e. a roomful of
mesmerized bobble heads.
Next the staff "commissars"
broke the citizenry into "tables". Each table was supervised by a City
staffer, mostly from the Planning Department. I table-hopped to get a
flavor of what was going on. A clear pattern soon emerged.
At each table was at least two very aggressive representatives of
Logan Smart Growth Coalition", which
represents the owners of existing light industries and commercial
lots, each hoping for an up-zoning of their property. The rest were from
other government agencies such as SANDAG, the Port District etc., all
dedicated to "multi-use", but not one homeowner.
What I assumed to be the single-family residential community was huddled
together at two tables speaking Spanish.
The well-known community activist Rachel Ortiz,
executive director of Barrio
Station, one of the oldest Latino community organizations in San
Diego which she founded in 1970, had the biggest crowd at
her table. Unfortunately I was unable to understand their conversations
but I could feel their vulnerable intensity.
The room was thus abuzz with outside non-residents "planning" changes of
use for the actual residents' properties, a very strange business
indeed. No wonder Ben & Jerry went away smiling. They make a great team.
They had just succeeded in setting one half of this old community
against the other half, so they and their developer/union friends can
come back in a few months and pick up the pieces. Is this what is ahead
for all of San Diego?
The School District's Project Labor Agreement.
01/14/09 by Pat Flannery
I stuck it out to the bitter end last night as the San
Diego Unified School District (SDUSD) Board debated whether or not to
adopt a Project Labor Agreement (PLA) for spending the voter-approved $2.1 billion
Proposition S money. No surprise - the unions got their PLA, in a
unions now control the School District.
The real battle of course was fought at the November election. However, is Board
Member John Lee Evans a true
"union man" or just the property of
one union, the
teachers union? There may come a time in the spending of the $2.1
billion bond money when the teachers' interests may not coincide with
that of the building industry unions and Dr. Lee Evans may switch sides.
After all, John
de Beck (Mr. San Diego School Board himself) did exactly that last
The winning votes came from Richard Barerra, John Lee Evans
and Sheila Jackson.
Barerra, with a Masters Degree in Public Policy from
Harvard University, is the only true-blue union person on the Board. He
is very ambitious and aims to get wherever it is he is going, with union
help. But the real ruling coalition of this Board may yet turn out to be
Jackson, Lee Evans and de Beck. Yes, de Beck. Barerra may be just too
Jackson, the ultimate local gal made
good, is finally getting a taste of power and is loving it. Her predecessor
Nakamura was beside herself with frustration last night.
When she had the chair Nakamura "stuck it" to Jackson more than once,
now it is Sheila's turn. Sic transit gloria.
But there is more to this than personalities. There are some big issues
at stake here. It is where big money and big labor meet. It is also
where Tom Lemmon, business manager of the San Diego County Building and
Construction Trades Council and Lorena Gonzalez secretary-treasurer and
CEO for the San Diego and Imperial Counties Labor Council, can make big mistakes. Their careers are on the line.
Lemmon and Gonzalez are in a similar position to the Israeli generals
who invaded Gaza. They must win. No second chances. Lemmon cannot afford
another Gaylord and Gonzalez has yet to fully fill Jerry Butkiewicz's
Because I wrote the ballot argument against Proposition S, I received
dozens of emails today from people I do not know, telling me that if
they had guessed that the unions would hijack the $2.1 billion School
Bond money for "social engineering", they would never have voted for it.
My impression is that union leaders Tom Lemmon, Lorena Gonzalez and
CPI's Donald Cohen may have gotten a little ahead of
themselves on this one. They have left very little room for a strategic
retreat if events go against them. What if the Obama public works
program swamps their School District gig? What if Obama money and Prop.
S money together create a shortage of labor in San Diego? The PLA will
be a burden to the Schools. Like Jackson to Nakamura, the taxpayers will show no mercy.
The only way Lemmon and Gonzalez can protect their flank is by securing
similar PLAs with SANDAG and the
City of San Diego, maybe even the County. But that is a tall order,
especially with SANDAG. They just might pull off a "living wage" style
PLA ordinance with the City, but the
San Diego Regional Chamber of Commerce dominates SANDAG, which will
be the main gateway for Obama public works money (if it ever starts to flow).
The unions may celebrate their achievement at the Unified School Board, but like the Israelis, they shouldn't declare victory just
yet. The people who voted for Proposition S did not vote for a jobs
program, nor for social engineering. There will be a backlash if the
unions turn it into either.
Community Planning Group Indemnification is tricky business.
01/12/09 by Pat Flannery
A proposed ordinance that would indemnify approximately 600 members
of Community Planning Groups (CPG) throughout the city was introduced at
City Council on November 24, 2008 and approved following an extensive
public hearing. It was docketed for final adoption on December 9, 2008
but was "pulled" by the new City Attorney Jan Goldsmith for further
the ordinance would indemnify (temporarily) untrained CPG
members and (always) include non-members on sub-committees;
requiring the City Attorney to "defend" rather than "provide for
the defense of" members would preclude the retention of outside
counsel and create conflict of interests for the City Attorney;
the ordinance would extend coverage to former members (this is
known as a "tail" in insurance coverage terms);
the City Attorney is required to complete a "thorough
investigation" for eligibility of coverage within the 30 day period
for answering a complaint, which may not be enough time;
the proposal to require the City to defend and indemnify each
CPG member on each and every complaint filed, regardless of the
allegations, may invite predatory lawsuits and exorbitant
the proposed ordinance would provide CPG members with a greater
level of indemnity than the City provides its own employees and is
more than the law requires.
is an edited video
of the City Attorney's remarks explaining his legal advice to the City
Council. He was obviously very persuasive because the vote was unanimous
to send the whole ordinance back for further work between the City
Attorney and the CPGs.
In an interview with Mr. Goldsmith afterwards I raised what I believe
to be the greatest concern of CPG members viz. a fear that they might be
targeted for a personal law suit because of their outspoken opposition
to some project or other that may have political support in high places
at City Hall. He referred me to an area of law known as
Strategic Lawsuit Against
Public Participation (SLAPP) lawsuits (which
I have since researched).
Mr. Goldsmith thought he might have his staff write a memo expanding on
how he would defend against SLAPP lawsuits, if it would help allay fears
in the minds of some CPG members. It might. I know that a force behind
the City to defend and indemnify each CPG member on each and every
complaint filed, regardless of the allegations" was
the fear of somebody (a City Attorney, City Council or a Mayor)
"finding" that a CPG member had committed "a deliberate act" and
therefore was not covered, when in fact they were the target of an
intimidation (SLAPP) lawsuit.
Mr. Goldsmith can be forgiven for not realizing the depth of distrust
that has accumulated in the area of land use in San Diego. When he sits
down with the representatives of these Planning Groups he will find it
very difficult, if not impossible, to keep strictly to the law and avoid
"mixing politics and law".
He did an excellent job in identifying the underlying attorney/client
problem. He proposed that in future the City Attorney may not deny a
defense without authority from the City Council. That is a sensible
step in the right direction but it may not satisfy a majority of CPG
members unless their trust in the independence of City Council has
greatly improved. I doubt it.
This will require all the lawyerly skills Jan Goldsmith possesses and
more. It will require considerable political skills - by somebody. Too
bad we don't have a hands-on Mayor. It is unfair to ask Goldsmith to do
the politics also.
My analysis of the current City Council.
01/10/09 by Pat Flannery
There are two kinds of San Diego City Councilmember's: "staffers"
and "legislators". The "staffers" are Faulconer, Gloria, Young
and Hueso and the "legislators" are Lightner, DeMaio, Frye and Emerald.
"Staffers" are easily identifiable by their "institutional" mentality.
They demonstrate a natural sympathy with the bureaucratic mind and
identify more with city staff who come before them for "Council
Action" than with the electorate. They see "Council Action" as part of a
bureaucratic process rather than the revered workings of representative
Kevin Faulconer was first elected for District 2 on January
10, 2006 with 15,044 votes to Lorena Gonzalez's 14,320.
He had worked for the public relations firm of Porter Novelli and
served on a wide variety of civic boards and commissions. His
professional clients were large institutions such as San Diego State
University and the San Diego Unified Port District. He was already a
solid "institution" man.
Now, as a City Councilmember, he thinks as an institutional lobbyist.
He always looks for ways to "get things done" between the City and the
various agencies and corporations that interact with each other. He is
very good at it. But that skill set makes him less at home in the living
rooms of his District 2 constituents than in the boardrooms or committee
rooms of downtown.
Todd Gloria virtually fawns over any City staffer that comes
before City Council. Like Toni Atkins before him in District 3 he
indulges in tiresome ritualistic thanking of city employees for simply
doing their jobs.
Perhaps he thinks this affability will be rewarded whenever he asks
staff for "favors" in doing their jobs. Maybe he learned how to "kiss
up" to Congressional staff when working for Congresswoman Susan Davis.
In any case it is clear that Councilmember Gloria will use more carrot
than stick in dealing with San Diego City staff. Eventually, after he
has been lied to often enough, he may realize that staff self interests are
often adversarial to the public interest. Therefore the job of an
elected official is to question unelected officials closely and hold
them accountable, not pander to them.
Tony Young succeeded his (deceased) boss Charles Lewis who in
turn had succeeded his termed-out boss George Stevens, as Councilmembers
for District 4. Like his current Chief of Staff Jimmie Slack,
Young worked as an aide to County Supervisor Leon Williams.
Being a City Councilmember, County Supervisor or any other elected
official, is just another staff job to these people. They become
institutionalized. Young is the quintessential institutionalized
"staffer". One thing for sure, he is never going back to his old
teaching job with San Diego City Schools.
Hueso is more than a "staffer", he is a "staffer boss". What makes
him "boss" is that he was such a reliable "staffer" to begin with. Ben
knows on which side his bread is buttered. And the unions have been
generous with the butter. They know he will not let them down. That is
why they appointed him "boss" of all the other compliant City
All Ben has to do is keep troublesome "legislators" like Carl DeMaio in
check and run the City Council meetings on time as a service to city
staff to get their "Council Actions" through on schedule. That is how
it has worked for decades. Ben will always have a smile on his face
because all he has to do is read what is put in front of him and his
bills get paid. He doesn't even have to remember which District he
Sherri Lightner is the antithesis to a staffer. As a
longtime community volunteer she has seen how city staff routinely sells
out citizens' rights to developer greed. For decades she has been on the
receiving end of their manipulations of Land Use and CEQA laws.
She and her fellow-engineer-husband Bruce, put their considerable
(self-made) family fortune on the line for the long-suffering citizens
of San Diego. She is not doing this for the money nor is she interested
in higher office. She will be a worthy opponent for venal city staff who
are counting the years to their over-benefited retirement. She is a true
Carl DeMaio is a bit of a hybrid - he is a public servant, but
with ambition. He seems to have a genuine interest in good government
and to have made it his profession. He is in a frightful hurry, which is
both good and bad. San Diego has problems that just won't wait, so Carl's
passion to make a difference is good.
But those who are not in such a hurry, Ben Hueso and Tony Young, will
use Carl's haste against him. We saw what happened to Aguirre who was
also "on a mission". I am impressed with Carl's sincerity, if not his
impetuosity. If DeMaio can build a team, he could make a
difference and bring his success to the next level, perhaps Governor. He
is, for good or ill, a quintessential Californian.
Frye is a legend in her own time. For years she has held the fort
for honesty-in-public-life, when all around her was corruption and
deceit. She has, without doubt, earned an honored place in the annals of
San Diego. The only question is: are her best days behind her or before
her? I hope the latter.
She is a natural-born leader and despite having been robbed of the
office of Mayor and the Council Presidency, she will doggedly lead the
"legislators" against the "staffers" for the next two years. Her grasp of the issues
is second to none.
Marti Emerald makes it into the "legislators" category despite
having one foot firmly in the union/staff camp. It is probably true that
she would not have made it onto the City Council without the help of the city
unions, "staffer" Ben Hueso and "godfather" Ron Saathoff.
But Marti has another (hopefully even more powerful) side to her - she
has an instinct for "the people". Channel 10 was not mistaken when they
made her their very successful TV "Troubleshooter", a role she loved.
She is hard not to like. She is a touchy-feely "people" person. She will
probably defer, out of loyalty, to union/staff interests when she must,
but she is no "staffer" - she is no Ben Hueso, and I think the unions
These are the eight people who will make key decisions on the lives
of 1.3 million San Diegans over the next two years. We need to watch and
understand their motives. The above analysis suggests that four are
public-serving and four are committed to special interests - business
Carefully watching them during their first two weeks on the job, certain
basic trends are evident. The "staffers" are already protecting the
status quo by carefully containing the "legislators".
Council/Committee deliberation, a vital part
of good legislating, is being kept to a minimum.
Despite the Brown Act, "Staff" President Ben "I move the staff recommendation" Hueso, working to
a staff script, will shepherd each agenda item along in order to quickly implement
the staff recommendation. After each
successful "Action" Ben can hit the "That was Easy"
The "legislators" and the public will have to constantly outsmart the
wily administration staff and their puppets on the Council. That
will not be easy.
has a new "Redevelopment" problem. 01/07/09
by Pat Flannery
Responding to a citizen complaint, the
Office of the Inspector General of the Department of Housing and Urban
Development (HUD) took a look at San Diego's handling of the
Federal Community Development Block Grant (CDBG) program. It issued
Report dated December 30, 2008 requiring the
"1. Pay back more than $1.8 million plus any
applicable interest to HUD from nonfederal funds for CDBG project costs
determined to be ineligible.
2. Provide supporting documentation for unsupportedredevelopment project activities or reimburse its program more
than $11 million from nonfederal funds.
3. Execute written interagency agreements and loan
agreements with the Agency for outstanding loans totaling more than
This means that the City's
(Comprehensive Annual Financial Report) is wrong by $139
million. According to HUD the CAFR shows a certified debt to the City of
$139 million on the Redevelopment Agency's (RDA) books, with no
corresponding asset on the City's books!
Sanders will need to disclose this "error" before he goes on his
borrowing spree. But that is only part of his problem. Providing HUD
with retroactive "supporting documentation" for the CDBG monies spent on
unqualified projects, will require some "imagination". He will
need to put his most "creative" accounting staff on this one - or he
will have to pull $11 million from the General Fund and spend it on
new qualified CDBG projects.
For a start, HUD requires him to immediately and formally acknowledge
the $139 million RDA debt to the City. It was this deceit that prompted
a citizen to complain to HUD. The City, including its current Mayor,
likes to keep its finances "informal" (like a slush fund). They hate to
be constricted by "policies and procedures", to the extent they actually
ignored the accounting requirements that come with CDBG grant money.
They lied on various annual reports to HUD - that they had a CDBG
monitoring program in place, when in fact no such thing existed. HUD has
found that "there were no project files in the
City's CDBG administration office" and that the RDA
"was free to spend CDBG funds at will". HUD
noted that "SEDC staff managing four redevelopment
projects areas were not aware that most of the loans issued by the City
were actually funded through the CDBG program." Sanders can't
blame this on Carolyn Smith.
Why would City staff do this? They clearly knew they were falsifying
important HUD reports; they must have known their books didn't balance;
City Comptrollers certified and submitted to the State of California,
for fiscal years 2001 through 2008, multiple false
"statements of indebtedness", in order
to obtain redevelopment tax dollars i.e. they certified RDA debt to the City
totaling $139 million, with no record of that debt on the City's books.
Report is very clear as to the City's motive:
"The Agency [RDA] received well over $500
million in tax increment funds between fiscal years 2000 and 2007. CDBG
represented nearly 20 percent in the Agency's total debt in fiscal year
2007, illustrating how instrumental CDBG debt has been in obtaining tax
It is impossible that this was just an accounting error, as Sanders will
no doubt try to spin it. It was all very deliberate and very dishonest.
HUD found that "the City and the Agency
[RDA] were primarily using the CDBG funds to
leverage/obtain tax increments from the state." City staff
actually admitted to HUD that they were fully aware that CDBG "loans"
were being used as a "tax increment leveraging
tool". City staff "repeatedly indicated"
to HUD that the City intended to eventually write
off the RDA loan - which may explain why they never bothered to put it
on the City's books to start with.