Budget
 

There is not one mention of Managed Competition in either the BPR Report or the BPR Ordinance. That is important because nothing in the BPR Ordinance required consultation with unions, while Managed Competition required "meet and confer" consultation with the unions. So, the unions set about to create a link. If they could do so they could use California labor laws to impose a veto on BPR. And so it turned out. The whole reform movement has been stalled for over 3 years. As I predicted, the unions used Prop C to strangle BPR at birth and Sanders was not up to the job of countering them. Deep down he was still one of them.

He did not have the foresight or management skills to see it coming. BPR made him the Strong Mayor voters intended, but he allowed the unions to take it right back from him. He was a better politician than City manager. Managed Competition was hailed by his supporters as a hit on the unions. It brought in huge right wing political contributions for his campaign. But that is all it did.

Here is a video of how the unions and their political allies have left Sanders looking like an incompetent bumbler. They are now firmly in charge of "Reform".

Watch how the unions have linked BPR to Managed Competition. As a result the Mayor's entire "Reform City Hall" movement is dying on the vine.

More importantly the taxpayers are stuck with the bill. Sanders allowed the City's employees to acquire a veto. They have taken ownership of the reform process he was elected to implement. They call any ideas for efficiencies and economies their "trade secrets". Instead of a Strong Mayor form of government we got a Strong Union form of government. Sanders handed it to them on a plate.
 

Why locate a "Central Library" in this part of town? Because John Moores wants to enhance the attractiveness of the East Village to which he has been given sole development rights by the City of San Diego. Moores agreed to Project Labor Agreements (PLAs) to get his Ballpark built, now the labor unions are pushing to give his development district a Library.

Even the union-controlled School Board has offered to chip in $20 million of its precious Prop-S bond money to help build this "Moores Folly". Its over-compliant legal counsel wrote a convoluted, contradictory legal opinion purporting to justify the pre-payment of 40 years rent on two upper floors for an un-wanted Charter School. This so-called pre-paid rent is nothing more than a cash gift to Moores and is totally inconsistent with any school needs. It is a repeat of the infamous Ballpark deal, a diversion of public money for private use - but with jobs for union labor.

What makes it even worse is that the School Board is behaving like it has the $20 million sitting in its bank account. In its rush to serve a union-friendly developer, it wants to borrow $20 million using "zero coupon" bond financing, the most expensive form of borrowing imaginable.

"Zero coupon" means that a bond issuer pays no interest over a  period of years with principle and accrued interest-on-interest payable at the end. Most Prop-S bond borrowing will be done using this method. The School District has no other choice because the prior Prop MM bonds will not be paid off until 2029 and there are legal limits on annual bond servicing payments in the form of a maximum percentage of assessed valuation (AV). In the case of Prop MM it is $66.67 per $100,000 AV and $60.00 per $100,000 AV for Prop-S.

Thus, Prop MM bond servicing crowds out Prop-S bond servicing until 2029. Even then, because of the annual servicing cap, it is heavily deferred until 2044. The final payment in that year is almost a half billion dollars, mainly interest-on-interest. It may be much worse because this payment schedule is predicated on assessed valuations going up by 5% year-on-year, the reverse of what we know is happening. The truth is that Prop-S bonds are little better than junk bonds, a very poor way to finance school repair, let alone a "Moores Folly" Library.

Borrowing $20 million in these circumstances is like an indulgent parent, who is broke, putting $20,000 on a credit card at 20% in order to buy a wastrel son a sports car he will surely wreck his first night out on the town. If the School Board approves this folly today, it will rank as one of the worst examples of corrupt government in San Diego's sorry history.