Showing posts with label municipal bankruptcy. Show all posts
Showing posts with label municipal bankruptcy. Show all posts

Wednesday, October 23, 2013

Sex and the City

Let’s ease into this subject with a mindful autumn walk.  Notice the days getting shorter... morning air chillier... leaves turning gold on liquidamber trees.

Now notice a fact as unwavering as the seasons -- the fact that sex plays a dominant role in San Diego public affairs.  Hook it up with other San Diego mainstays (uninspired leadership, stunted civic aspirations, free-floating corruption, overinflated egos, corporate welfare, legal-establishment collusion, Republican Party strategy, dubious fidelity among leading Democrats, to name a few) and it wallops a punch potent enough to knock a new mayor out of the ring and force the city into a costly, rushed election to bring in a replacement. 

Of course this is not how the Chamber of Commerce markets our city.  It’s motto: Good for Business - Good for San Diego says it all.  Same for our Tourism Authority, which promotes the city as a clean-cut, open-air paradise: 70 miles of beautiful beaches, countless parks and gardens, and endless opportunities for pampering at one of the areas many spas and resorts… an excellent destination for some quality R+R.

I've noticed that San Diego sells itself as a trophy town of moderation, rectitude, and civility.  But scratch the surface and you’ll discover the other San Diego -- a town constantly preoccupied with commercialized sexual indulgences (move over, Las Vegas). 
  • Aren’t we the fun-loving host of the over-the-line tournament, the frisky, sandy weekend of boosted beer, bouncy breasts, and bared behinds? 
  • Isn’t the weekend street scene in our redeveloped Gaslamp Quarter every bit as raunchy as the notorious pre-CCDC days of sailor bars, hookers, and peepshows?
  • And you wouldn't call our very own glistening rompers and exhibitionists at the summertime Pride Parade chopped liver, would you? 
  • How about San Diego’s collection of privately-catered swinging establishments, open to you, me, and the lamppost? 
  • And what would you say to hugh-hefner-wannabe accommodations upstairs at the U-T?
  • Have you taken the oral history tour of City Hall, a behind the scenes tale of who-did-what-with-whom (or who-was-doing-what-with-himself)?  It starts at the 12th-floor Council Chambers and works its way down.
  • And what about our ferociously fought-over 25-foot bayside statue immortalizing a sailor’s frontal assault on an unconsenting female – you know, the one with the woman in a headlock submitting to a forced, full-mouth kiss?  Once named “Unconditional Surrender” nowadays it’s known as felony false imprisonment.
Not bad for an upstanding city like ours that goes ape over tales of a mayor’s clumsy kiss, posterior pat, and too-tight arm around the shoulder.  (For a rare honest response from the U-T take a quick look at what Logan Jenkins has to say.)  Will we entertain similar hysteria over the next round of scandals that are bound to make headlines?

By now most of us who entertained high hopes for what an experienced, old-time liberal mayor like Bob Filner could bring to the city of San Diego have resigned ourselves to the new reality – which looks oddly like the old reality called business as usual.  Surely you've noticed what a busy beaver our interim mayor Todd Gloria has been in setting the clock back to pre-Filner time.  In fact, a time warp engineered by downtown Republicans along with select Democrats has pretty much erased all traces of what almost was but might have been.

Which brings us to the current candidates running to replace Bob Filner. 

Of the four front-running mayoral candidates, only one is being honest with the public about a core issue: the untenable financial state of the city.  The other three have chosen to avoid the subject.  They're choosing to promote the homespun San Diego fable about having our cake and eating it too. 

Mike Aguirre has taken every opportunity over the past couple of months of campaigning to make a simple but crucial point – that a big (and growing) chunk of the city’s general fund budget is set aside annually for payment into the employee pension fund.  This results in a significant reduction in the cash available to pay for routine city services.  This year's required annual pension payment is $275 million -- the bulk of which ($200 million) is eaten up as interest on the $2.3 billion pension deficit that drags the city down.  

Notice this contrast: a mere $55 million is allocated for our roads.  The decision to take from Peter (fire, police, roads, and neighborhoods) to pay off Paul (the City Employees Retirement System) was a choice made by former Mayor Jerry Sanders, abetted by the City Council, so he could fake a balanced budget and claim he had resolved the city’s fiscal crisis before leaving office.

You can hear plenty of campaign chatter about paved roads, upgraded libraries, recreation centers, parks, decent streets (smooth streets, in the words of Nathan Fletcher; sexy streets, per temporary-mayor Todd Gloria), homeless facilities, and other neighborhood needs.  You'll get a deafening silence from the others when Aguirre starts talking about the city's crippling pension problem. 

Aguirre is tackling the difficult financial issues head-on (despite sniping from candidate Fletcher).  The other candidates won’t touch it.  So far, neither has the U-T nor our other news and opinion providers.  Neither have the economic analysts and political gurus who comment regularly on city business.  (I noticed with dismay that then-mayor Filner also steered away from the same time bomb that's already detonating in other U.S. cities.  Detroit, anyone?)

David Alvarez has been denigrated as too young by Democrats who’ve been smitten by Nathan Fletcher.  But notice that there’s a mere three-year age difference between them -- Alvarez is 33, Fletcher is 36.  Notice that interim-mayor Todd Gloria is only 35.   Also notice that Alvarez has an upper hand in understanding how the city works and what makes it tick – an important qualification for anyone wanting to be mayor.  (Yes, I also noticed that the lack of municipal government expertise was a fatal shortcoming in the Filner administration.) 

Others question Alvarez’s independence from the Labor Council, his primary financial backers.  It’s a fair question that should be asked of all candidates running for office: Will you be free and strong enough to balance the demands of your friends and major financial backers with the good of the city at large?  While it seems to me that committed Democrats ought not to distance themselves from the union movement -- the most important ally American working people have ever had -- there's a lot of work to do by Democrats as well as labor unions before they reemerge as comprehensive, progressive, visionary leaders of the future.

Kevin Faulconer blithely sails by without anyone questioning who his keepers are.  He’s best described as San Diego’s retrograde candidate of the 20th century – a cordial, sunburned, amorphous kind of guy sporting the Chamber of Commerce logo on his sleeve.  He may well have an underside (and who among us does not?) but so far his passive, follow-the-leader style has protected him from getting bitten where it hurts. 

Here’s one good thing about Faulconer: you know exactly what you’ll get… exactly who’ll be whispering in his ear… exactly what his agenda will be… and exactly what you’ll be fighting against.  He’s someone you can depend on to deliver what he and his financial backers know how to do best: the downtown fraternity two-step (one for you, one for me, more for you, more for me).

Nathan Fletcher is a cipher.  He’s been described as a changeling, a switch hitter, a chameleon adept at overnight transformation.  Other than a photogenic face and military boasts (what kind of person capitalizes on the business of interrogating prisoners of war?) you have no idea what you’re getting… who’s whispering in his ear… what his agenda will be.   Trendy clichés spill effortlessly from his lips: innovation... creativity... we put a man on the moon.  But he's like quicksand: there’s no there there. 

Keep in mind that Fletcher was adopted (metaphorically speaking) into the Qualcomm family and reaps the benefits of a well-paid corporate job and faux UCSD professorship. His wealthy and influential backers pave the way for him to scoop up high-profile Democratic endorsements like handfuls of Halloween candy.  We've all noticed that money wields inordinate influence over the political fortunes of seated elected officials as well as most of those who'd like to be.  He's belongs to somebody, but it's not the public.

Fletcher's political message boils down to this: I’m your man, San Diego!  Forget my past voting record!  Look into my eyes and trust me!

Sex and the city... the mayor's race... what's the connection?  There's no mystery to this one.  Sex has great commercial and utilitarian value in our town.  We either pretend not to notice it, or we use it as a political battering ram.  Notice that sex was the weapon of choice for deposing former-mayor Bob Filner.  It's precisely what brings us here today as we contemplate the mayor's race.  

San Diego voters will be making a choice about who will be our next mayor (notice that not choosing is a choice that permits someone else to choose for you).  My advice is to wait a while before turning in your vote.  Keep listening -- but not to the pollsters, not to political pundits, not to anyone's subjective calculus predicting the odds and trying to manipulate the outcome.
What are we listening for? less talk about smooth and sexy streets and a whole new conversation about the unsexy time bomb ticking in our back yards -- our multi-billion dollar municipal pension deficit.  

Any mayoral candidate who pretends he can fulfill his campaign promises of neighborhood improvements and safety protection by shutting his eyes to the way the city cooks the books guarantees bad consequences for all of us.  

I’ve never been good at playing the numbers (neither was my father -- though I named this blog in his honor, anyway).  I know what I've already heard and I intend to keep listening before I confirm my choice for our next mayor. 



Monday, December 5, 2011

Make the call, already

Gotta hand it to the guy -- New York City’s Mayor Bloomberg knows how to lay it on the line.  “The difference” he recently told an audience at MIT “between my level of government and other levels of government is that action takes place at the city level." 

Of course he’s right.  That's the beauty of local government.  It takes place in the here and now.  City politicians take a particular action (positive, negative, good, bad) and sooner or later the results show up in your neighborhood, around your corner. 

Back to Bloomberg.  Whatever else you want to say about him, this guy's not shy about how he uses his power.  And he's not coy about who's in charge of what goes on in his city.  As he informed the Cambridge, MA citizens, “I have my own army in the NYPD.”  

Back to OCCUPY.  Last week I wrote that mayors across the country consulted with one another about how to manage and/or quell OCCUPY activities in their cities.   Concurrently, police chiefs and federal agencies were doing the same thing.

Back to San Diego.  This may explain why our own Mayor Sanders managed to keep a straight face when he denied participating in conference calls with other mayors.  

Maybe what he really meant to say was that he let the city's Chief of Police Lansdowne do the talking for him, which would be consistent with his power under our newish 'strong mayor' form of government.  Under San Diego's new rules the SDPD is the mayor's right hand...if not his own army. 

Which brings me to the conference call I WISH had taken place.  

I wish that all mayors who felt so threatened by the OCCUPY activities in their cities (never mind that they've been essentially peaceful and lawful public assemblies, marred only occasionally by minor problems) were holding serious powwows over the ACTUAL common threat to cities across the country.

I wish that these mayors would come together to discuss the unprecedented number of cities possibly facing bankruptcy (yes, even San Diego) and understand that there's a connection between municipal financial failures and the Occupy Wall Street message.  

These mayors should compare notes on how their city's practice of gambling in the stock market destabilized their municipal pension funds and created unsustainable pension debt, leading to crushing financial crises in their cities.  

I only wish San Diego's mayor was kidding about how he didn't participate in OCCUPY conference calls.  As our city's top leader he owes it to us voters to act like a prime-time mayor should.  He belongs on the phone with other mayors.  And I don't mean talking football! 

My final wish for the day: I wish that Mayor Sanders would seize the opportunity in his waning days in office to set an example of good leadership for San Diego's future 'strong mayors' and start the ball rolling with the following small but crucial step to revamp our dysfunctional city finances:  

I wish he would initiate a conference call to mayors across the nation with the agenda of getting city employee pension funds OUT OF THE STOCK MARKET and back into stable and dependable public investments.

Now that would be an honorable and productive use of the phone wires! 

Wednesday, July 27, 2011

Comic-Con is us


San Diego’s delusional politics could have easily taken the grand prize at last weekend’s Comic-Con convention.   How can I be so sure?  Glance over to the sidebar on this page and scan halfway down until you find the heading Hot-Ticket Items.  I put a list there to keep track of important city issues until the time was right to deal with each one in detail.  
The time has arrived to look at the hot-ticket item "Balboa Park Conservancy."  You'll see that it's rife with enough capriciousness and absurdity to prove that Comic-Con and San Diego are tried and true soul mates.  Some details:

San Diego’s fame and success as a tourist destination have everything to do with our renowned, architecturally-idiosyncratic oasis, Balboa Park.  But like all aging facilities, Balboa Park is in constant need of maintenance and repair.  And given that the Park’s 2015 centennial celebration is just around the corner, wouldn’t it be nice to indulge in a few Park enhancements?  But the fact is, we can’t.

Why not?  Because the city of San Diego is flat broke. I’ve been beating this drum for quite a while. 
By this time we all know that city services have been slashed in the interest of paying routine bills.  And people inside City Hall know that no matter how fast and deep we slash, we are falling behind.  Faster and deeper.
But instead of grappling with reality, our Mayor and Councilmembers have turned a blind eye to restructuring our city’s rotting financial foundation.  The city’s new crop of politicians has mastered the standard routine passed down by their predecessors: simulate anguished gyrations during the annual budget process and then twiddle your thumbs for the duration of your terms in office.

If this sounds bad, it’s actually much worse.  The Mayor and City Council are not only taking the easy way out when it comes to the city’s financial crisis, they’re also lining up on the wrong side of the battle between a) the forces of self-proclaimed good-guys, who condemn government as bloated, voracious, and passé while hawking the efficiencies and efficacies of private enterprise; versus 2) the waning number of branded bad-guys, who persist in believing in the value, necessity, and public benefit of a strong, well-run government. 
Reason and fact may count for little in a setting where San Diego and Comic-Con are joined at the hip, but it’s truly disheartening to watch our politicians mount the private enterprise bandwagon and act as agents in the business of sectioning off our city into auctionable pieces. 

Case in point, Balboa Park.  It started a number of months ago when our elected representatives buckled under and acquiesced to recommendations from a high-powered, well-funded campaign to transfer the maintenance and management of the iconic centerpiece of our city, Balboa Park, to a private corporation. The Balboa Park Conservancy was thus created, with independent staff to manage and control projects and activities in Balboa Park.
To justify their decision, our elected officials endorsed the fantasy that magnanimous benefactors would miraculously materialize in the city of San Diego and would unselfishly and altruistically finance and operate Balboa Park on behalf of the public good.
(A quick aside: how many San Diego philanthropists have been falling over one another, checks in hand, to prop up construction of our floundering downtown library?  It could have been a nice gesture from John Moores, but he took all he needs from San Diego and moved on.  Have I missed a success story somewhere else?)

OK, the Conservancy is a done deal, no sense in looking back.  Let's get on to the “Balboa Park bridges“ item.  If you’ve been following recent local news, you’re aware of the current brouhaha over what to do with auto traffic inside Balboa Park.  You may also be aware that the City Council (save Councilmember Sherri Lightner), in lockstep with the Mayor’s wishes, approved a Memorandum of Understanding (MOU) with an entity called the Plaza de Panama Committee – a nonprofit corporation created by San Diego’s prominent businessman and benefactor Irwin Jacobs.
The MOU lays out a complex and costly (>$40million) solution to a supposedly straightforward goal of removing 67 parking spots from the Plaza de Panama in front of the Museum of Art.  The Plaza de Panama Committee solution entails the construction of a bypass bridge veering off the Laurel Street bridge entrance to the Park. The bypass bridge (plus other aspects of the “Proposed Project,” including a paid-parking garage) is anathema to a large contingent of civic activists and general members of the public.
While the proponents of the Jacobs project swore up and down that Council approval of the MOU would not obligate the city to give final approval to the Jacobs project, of course it does.  Even in Comic-Conland, everyone knows that a green light means go.  Yes, there will be more public hearings, but from here on out the public voice will be irrelevant.   The Conservancy, hand in hand with the Plaza de Panama Committee, will take care of the Park.  That’s their job now.

San Diego officials have a choice: honest accounting and bold financial restructuring to head off the city’s financial and structural collapse.  Or leading the parade to dismantle and privatize the city.  
Ironically, no bankruptcy judge would ever force the city of San Diego to transfer control of city assets and public property into private hands.  Yet that is what the Mayor and City Council are doing -- of their own free will.  It's a trickster's story.  San Diego has indeed morphed into Comic-Con.  

Wednesday, March 23, 2011

Just the facts, m'am


Facts we already know:
  • San Diego has a multi-billion-dollar debt, accumulated through years of “creative” pension practices like underfunding and retroactive payouts. Think of it as a 30-year mortgage with double-digit interest rates and a principle that grows instead of shrinks. Despite increased payments we keep falling behind. It's a structural deficit.
  • We've also got an annual budget deficit.  Think of it as the unpaid amount on a credit card statement for a year’s worth of city services.  
  • Payments into our structural deficit bite off bigger and bigger chunks of our city's revenues, making it impossible for the Mayor and City Council to pay off our annual “credit card” to balance the budget.  So we resort to drastic cut and slash options -- last year, this year, next year, and for decades to come.
  • It's a touchy secret: the city has exceeded its ability to pay down our huge debt while also keeping the city running at an acceptable level.
Birds do it…bees do it…let’s do it…let's throw caution to the winds and indulge in a lightweight Q&A on the facts of life about municipal bankruptcy:

1) Ugh, bankruptcy...who would do such a thing? A city in obvious financial distress-- ours, for example.  Filing under Chapter 9 of the federal Bankruptcy Code would provide San Diego with a time-out to develop and negotiate a plan for adjusting (reorganizing) our city’s debilitating debt, while protecting us from lawsuits and related actions.
2) Who makes the first move?  It’s a voluntary act, so the City Council could pass a resolution (with, one would hope, the Mayor’s blessings) acknowledging our city’s insolvency and intention to file a petition for bankruptcy protection.
3) Who else gets in on the act?  The city’s petition goes to the chief judge of the 9th circuit appeals court, who then appoints a federal bankruptcy judge to take on the case. The point of doing it this way is to get an experienced, qualified, and politically-independent judge to handle the proceedings.  Plus high quality, problem-solving bankruptcy lawyers and accountants to work on behalf of the city.
4) Can the bankruptcy court have its way with us?  No, the rules are strict: Help clear up our financial mess but hands-off our private business!  The bankruptcy judge:

* cannot interfere with the city’s day-to-day operations
* cannot take over the political powers of the Council or Mayor
* cannot order the city to sell city property or assets
* cannot interfere with city revenues or governmental affairs
* cannot appoint a receiver or trustee to take over city business
* cannot control the city’s spending decisions or force new taxes
* cannot tell the city whom to hire as experts or consultants

  5) Bankruptcy costs big money, right?  Yes, in the short run. This quick, responsible, and effective legal process to reduce the massive debt that incapacitates our city is expensive.
          No, in the long run. We would soon stop flushing wasted millions down the city's broken, running toilets.
6) Then who does what?  Everything gets put on the table – including open disclosure of the city’s financial data. (This would force the hand of city officials, still withholding full financial disclosure in our overdue city audit – a troubling throwback to the bad old days of fraudulent financial cover-ups in City Hall.)
Everyone – including impacted stakeholders like banks, bondholders, creditors, public employees, residents -- has a place at the table to address disputes and find a comprehensive solution.
7) Who writes the recovery plan?  It’s the city’s responsibility to negotiate and file a recovery plan (with the help of financial advisors and bond counsel) for adjusting the city’s debt.  The plan is delivered to the bankruptcy judge, who responds to dissenting challenges and has the last word on confirming – if the job is done right -- an optimal financial recovery plan for the city of San Diego.
          To allay fears of disrupting city access to the public market, the city has the power to affirm its obligations to bondholders and designated others.
8) Who wants you to think that Chapter 9 bankruptcy is a dirty word?  Believe it or not, there are influential people in San Diego who make out like bandits despite (due to?) the city’s chaotic responses to its financial distress.  Name a few, you say?  This won’t make me any new friends but here goes:

* Upper echelon politicians who draw or look forward to generous pensions
* High-stakes investment advisors, hedge fund operators, banks, lawyers
* Other interests also luxuriating in vast pools of pension funds
* Panicked politicians worried about their future careers
* Ambitious politicians manipulating fiscal chaos to advance their agendas
* City officials adept at tapping into slush funds to balance budgets
* Short-sighted people refusing to give up anything – the future be damned.

Once more for the road: Municipal bankruptcy is a way for cities to reorganize their over-the-top debt.  It’s a respectable option we can pursue to restore San Diego’s fiscal health.  It merits frank discussion and evaluation so we can decide whether reorganization of our debt via Chapter 9 municipal bankruptcy is in the city’s best interest
Let's see how far we get once we start talking dirty.

Wednesday, March 16, 2011

Our own private earth-shaker

In the face of cataclysmic events on the other side of the globe, we feel like helpless onlookers.  By contrast, San Diego’s financial crisis is small potatoes.  But keep this in mind: here at home we’re not just onlookers.  And we’re far from helpless about problems in our own backyard.  We have the ability to go mano-a-mano with San Diego’s political and fiscal affairs and shape their outcome.

Our own private earth-shaker.  It wasn’t so long ago that talking about the big C was a no-no in polite circles.  Nowadays in San Diego the forbidden word is the big B -- BANKRUPTCY.  Dare to whisper it and poof! you’re a pariah – ridiculed and banished from every movers-and-shakers club in town. Don't even think about it, say the big bosses. 

Bankruptcy is not a dirty word.  In fact, it could prove to be (like our sea, sand, and sun) a blessing.  One thing’s for sure: San Diego’s financial predicament now hangs like an albatross on private and public interests, alike.  It’s time for deniers, delayers, deceivers, politicians, and political hopefuls to back off.  What do we need? A no-holds-barred public conversation about municipal bankruptcy.  When do we need it? Now.

It's not the remedy that's dangerous, it's the disease.  And the clock is ticking. Within the next couple of months the Mayor and City Council will slash city spending by upward of $75M (give or take millions), for the purpose of balancing our annual budget for the fiscal year 2012. 
City officials will rehash a now-familiar litany of cost-cutting measures: raising fees, axing employee salaries and pensions, selling off city property, juggling numbers, and reducing services to the bone.  This year's hatchet job comes on the heels of two years of bloodletting that already cut more than $200M worth of public services and jobs in the process of balancing previous budgets.

It’s a vampire saga.  Apparently, city officials don't want to alarm the public by disclosing their little secret -- that a multi-billion dollar monster has first dibs on the city's bankbook, aka General Fund, and that balancing the budget does not make it go away.  Neither does fiddling with new kinds of pension plans.  Nor giving away city services to private corporations.
Specifically, we've got a  $3.5B debt (give or take a few billions) that the city owes in back payments to our pension system. Each year, city officials quietly transfer mega-millions from the General Fund into the pension pot.  This year’s installment is $232M, next year’s will be $255M, then $300M, and in fifteen years the projected payment is $500M.

Problem is, there's not enough in our General Fund to keep paying off such a massive pension deficit and also cover basic city needs.  The Mayor said public safety (fire, police) will be sacrificed.  Ditto for neighborhood parks and libraries.  You know the miserable state of our streets.  And we still haven't seen that long-overdue city audit.  (Is there not enough money to pay for getting it done? Is the money-juggling too unspeakable for  public or bond market consumption?)

It boils down to this: our city is insolvent.  Even if we mash ourselves flat enough to produce a budget this time, we won't be able to pay our bills a month afterwards.  That's the definition of insolvency.
To save itself from further harm and degradation, an insolvent city can petition for bankruptcy.  There's not a single corporate lawyer with any standing or integrity who would recommend otherwise for his/her corporate client when confronting financials like ours.  San Diego is a municipal corporation.
  
Bankruptcy is a rational and practical process that can produce positive and humane results.  Is bankruptcy is the right choice for San Diego?  We need energetic leaders with brains and guts to step forward and get the public conversation going.  Any takers?
     
Coming next: the ABCs of municipal bankruptcy -- who, what, when, why, how. 

Thursday, March 10, 2011

It's only money -- or is it?



I’ve been chastised for being too hard on San Diego’s elite.  I suggested that they take care of business by adhering to a code of silence.  (By the way, if you have a better term than “elite” to describe the wealthy, powerful, and politically influential people in our city, please let me know.)  I suggested that the elites are not stepping up to the plate on the issue of the city's fiscal crisis.

But whoops.  I see in yesterday’s newspaper that a task force of select local business leaders let the cat out of the bag and declared that San Diego has a fiscal crisis.  The “Citizen’s Fiscal Sustainability Task Force” report states that the city’s upcoming budget deficit is a deafening $130M.  Then their report  hurls some tough-sounding recommendations in the direction of the City Council that dazzle for a minute before  ricocheting like the rat-a-tat-tat of a fizzling firecracker.

The stated goal of the task force is commendable, no different from yours or mine. They, like us, want to “return San Diego to a position of financial stability.”  But kumbaya comes to a screeching halt with their list of “tradeoffs required to accomplish this critical task.”
What’s on this list?  Pretty much what you'd predict, given the business-oriented identity of this task force: job elimination; wage cuts; substituting volunteers for paid city workers; transfer of public services like trash collection and the city library system to private entrepreneurs; reducing the protective role of the civil service system…

Sadly, there are no real surprises here.  Over the years, similar faces on similar task forces promoted similar solutions: tighten the screws on public employees, loosen regulations, privatize public services.
There's no reliable evidence that these measures are effective in saving the city money, so why target them?  Whose interests would be served by proposals to sell off public assets, privatize municipal facilities, outsource city services, and reduce oversight?  Yes, it's all about money, but who are the winners in this kind of setup? 

It could have been different this time.  Only a year and a half ago, the Citizen’s Fiscal Sustainability Task Force candidly expressed the point of view that municipal bankruptcy might be option as we try to resolve the city’s fiscal crisis.
The San Diego County Grand Jury was saying the same thing.  The San Diego Taxpayers Association entertained the subject at their municipal bankruptcy forum.  As did the League of Women Voters.  The word was getting out that municipal bankruptcy might be our only chance to get everyone to negotiate at the same table at the same time without dismantling the city in the process.
Then someone pulled the plug.

I stick to my guns: there IS a gentleman’s agreement among San Diego’s elite to remain mute. Read the latest task force report -- not a word about the bankruptcy option.  Not even a footnote explaining where, why, or how it disappeared.  Why isn’t it on the table for consideration, along with other remedies?  
Somebody’s fingers got rapped.  By whom?  Silence…


Monday, March 7, 2011

When the sun shines in San Diego

Let's start on a positive note: when the sun shines in San Diego life feels beautiful.  It’s a fact, a gift of nature, our claim to fame.  We’re a mecca for visitors from far and wide.  Even down-home residents experience a sense of awe over our flawless skies/breezes/sunsets…each time feels like the first time.  It's a blessing.  But it’s not the whole picture.

Here's an equally striking fact about our city: San Diego is flat broke.  Natural blessings notwithstanding, our city cannot cover it’s annual expenses, its normal, everyday bills -- not without jacked-up fees, sharply-reduced city services, and whichever additional measures the Mayor can come up with to save a million here, a million there.

How broke are we?  The answer depends on who's running the numbers. The Mayor admits to being $46.5 million in the red for the next fiscal year...okay, make it $57M.  Hold on, says the city’s budget analyst, the deficit is more like $96M.  Now wait a sec, says a stickler-for-details city council member, I’m calling it at $176M.
The public is obviously not getting the whole story.

What we do know for certain is that San Diego’s finances are in worse shape than ever before.  Despite worker layoffs, neglected streets, fire station brownouts, burnt-out street lights, repeated cuts in city services (they call it belt-tightening) the city’s financial sinkhole has grown wider and deeper.
What we also know is that we're required by law to pass a balanced budget for fiscal year 2012 and the deadline for getting it done is June.
What we don't know is whether there are enough notches left on the city’s belt to squeeze this one out.  And what we don't know is what kind of starvation measures will be required when the next fiscal year roles around.  Or the one after. And so on.
This should begin to give you an idea of how broke we are.

At this point you might ask: If we’re in such terrible financial straits, surely the Mayor and other city leaders have a comprehensive plan to tackle the financial collapse of our city, right?  The answer is NO.
This astounding fact warrants repeating: there is NO comprehensive plan to address our city's crippling, intractable, ballooning, long-range financial crisis. 
Instead of an honest plan, the city’s budget gets massaged and manipulated through money juggling and shell games.  It's a San Diego tradition that city officials persist in perpetuating, whether or not it brings the house down.   
Tradition is a more respectable word than incompetence. Or for that matter, corruption....

Another quirky tradition among San Diego's elite is a gentleman's agreement to remain mute.  It appears to be a unique San Diego phenomenon.
Our city has a wealth of politically-savvy law firms and bankers. There are business-savvy entrepreneurs, in and out of the Chamber of Commerce. We've got academically-savvy public policy experts, business schools, and institutes. And experienced retired politicians, unions, and do-good organizations.
But the only consistent and vocal pressure to set things right and to remedy glaring breaches of the public trust comes from a handful of stalwart citizen gadflies -- and they're getting mighty tired and hoarse and old.  They need reinforcements.

Of course we know that the city's financial debacle is not the only issue needing attention.  In fact, people are debating so many hot-ticket issues nowadays that we risk succumbing to an ailment called (to coin a phrase) mass-attention-deficit disorder.  It causes people to run in circles and has the opposite effect of mass hysteria, which would at least focus attention to the rampaging elephant in the room.

So let's try this for a start: let’s take a quick break from the nonstop barrage of hot-ticket items like supersized Walmarts, cruise ship terminals, $4.1B in redevelopment projects, community gardens, and monkey business to change the way our city schools are governed.
Let’s put a cork in cheerleader frenzies over flashy proposals for downtown trophy projects.
Let's put these hot-ticket items on a sidebar* for now so they won’t get lost in the shuffle while we turn our attention to the hottest-ticket item of them all:

Preventing a city that is broke from becoming a terminally broken city.