Title: San Diego Today
Author: Pat Flannery
from: Point Loma/Ocean Beach area
Blogging since: October 2004
Post Date: December 11, 2006
Post Title: The Mayor's best chance of fixing things is to let the light in.
I have been studying the 2007 City budget. It is a hodgepodge of inarticulate statements that do not fit together to give an overall picture of the City. It raises more questions than it answers. It is not like any financial statement you would ever see in the private sector. Sanders's Five Year Plan is a mere extension based on assumed percentage increases and decreases. The City's operations are carried out within various funds: The General Fund provides core services such as public safety, park and recreation, library services, refuse collection, finance and human resources. Its major revenues are property tax, sales tax, transient occupancy tax and franchise fees. Enterprise Funds provide various services such as water, metropolitan wastewater, development services, refuse disposal, recycling and others, through user fees.
Interfund transfers are dispersed throughout the fund statements. An unitemized total ($147 million) is shown at the end. But these money transfers are not grouped or totaled within each fund. The mayor should require clear revenue and expense statements per fund. Interfund transfers should be itemized and shown as a total in each fund. We need to know how money is moved around. There should be a balancing statement, showing all money transfers within the system. All we know right now is that inter-fund transfers total $147 million. The opportunities for abuses and cover-ups are enormous. In addition to interfund transfers, there are all kinds of internal services being billed backwards and forwards: (It is unclear what the payment of $39,470,593 to the pension fund represents. Can the admin costs be nearly $40 million? Apparently so.) Again, all we know is the total. There is no overall reconciliation of these charges. We don't even know when an expense item is internal or external. Nor is it possible to link a revenue item with its counterpart expense item in the fund where it is a charge. Here are a few puzzling questions: how does the $293 million Capital Improvement Program (CIP) money get from other funds, e.g., do sewer fees get transferred from the sewer fund to a CIP fund? How does the half-cent sales tax get from the TransNet fund to a CIP fund? When are internal services paid by fees and when by interfund transfers?
The truth is that financial reporting at the City is a mess. The City's staff has been allowed to get away with unbelievable sloppiness for years. The Brits certified me as a public accountant nearly 40 years ago in London and I have never seen such bizarre "accounting" anywhere, here or in Europe. After a whole year, Sanders has failed to demand what any manager, from the smallest to the largest business, would require -- basic revenue and expense statements.
The citizens would quickly reform this City if the light of day were allowed to shine into its finances. They would ask the questions Sanders is obviously not asking. The clamor for reform would be deafening. It makes one wonder whether Sanders really wants reform or if he just wants to reward his developer/business backers while he is in there. He has surrounded himself with a team of control freaks. To get clarification on anything you have to fill out a public information request. Instead of openness, the information doors are closed tight. Everything has to go through the mayor's control freaks. The Five Year Plan is business as usual. According to these people, they will fix the City in the General Fund. All other funds are off limits because they are self-sustaining e.g., DSD and waste water. Half the General Fund is also off-limits -- it is for police and fire services. Therefore the City will be fixed within the $500 million left in the General Fund after public safety. That is insane.
The following funds are not only off-limits to Sanders's cuts, they are completely off the books and off the budget. Nancy Graham, President of CCDC, gets to spend a whopping $176 million to service her downtown developer "clients." Not a cent of that $176 million CCDC money goes to service the debt or pay a cent off the ballpark or convention center bonds. All that comes out of the General Fund. Susan Golding and Jack McGrory reserved the tax increment money for their developer friends and so it remains today. The rest of the General Redevelopment Fund is spent building theaters and other "essential" infrastructure, to be given away to private entities like the North Park Theater Co. Data processing is a slush fund for the IT well-connected. Does anybody know what the housing commission does with its $275 million? I sure don't. Overall there is approximately $3 billion sloshing around in these badly managed "funds." Incompetence is piled upon incompetence. Sanders, Froman, and Goldstone haven't got a clue as to what is going on let alone know how to fix it. They run around doing BPR (Business Practice Reengineering) like kids playing doctor with toy stethoscopes. Fred Sainz heads a bloated PR staff to put a lid on all information while keeping the Sanders spin machine whirring. Jerry makes soothing public appearances, smiling to the TV cameras, kissing babies and cutting ribbons. We must be America's Dumbest City.