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In an editorial this morning, the Union-Tribune claims that City Attorney Mike Aguirre wants to "kill" a $103 million bond issue Mayor Jerry Sanders has proposed. Actually, Aguirre has said that under state law and the San Diego charter, this proposal should go to a vote of the people. That doesn't mean it would be killed, but don't tell the U-T. Also, Sanders's proposed offering has a variable rate of interest. With inflation ready to rise significantly, the City could face a double-digit rate of interest on this kinky proposal. And there is no relationship between the collateral the City would put forward and what it proposes to construct. Under this deal with a large bank, the City would put up its main police building as collateral. If the City could not pay, the banks could seize that building. "You only pledge these kinds of assets when you are in pre-bankruptcy mode," says Aguirre. The City may well be in such a mode. But voters should learn about that. They won't find out on the Union-Tribune's editorial page.

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Comments

JohnnyVegas April 27, 2008 @ 9:03 a.m.

Oh, I just posted about this on your other blog entry today, before this one came out...my bad.

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Anon92107 April 27, 2008 @ 9:17 a.m.

What will it take for San Diego's most gullible to realize that the U-T publishes lists of their puppeticians as "Ballot Recommendations"? And that anyone who is a Davies controlled judge is a machine puppet.

One would think that now that Sanders vocabulary emphasizes his role model Cheney's favorite "F" word, that some of the U-T's living dead followers would begin to wake up.

The U-T/Davies machine has found a way to overthrow Democracy and the Rule of Law in San Diego.

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Don Bauder April 27, 2008 @ 10:51 a.m.

Responsed to post #1: OK, I will check the other one. Best, Don Bauder

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Don Bauder April 27, 2008 @ 10:56 a.m.

Response to post #2: I believe the public should be educated on the real estate holdings -- particularly downtown -- of local judges. I remember that came up once durng the ballpark lawsuits, but don't remember that it was an issue in other matters. Best, Don Bauder

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Don Bauder April 28, 2008 @ 9:11 a.m.

Response to post #7: Amazing. You would think LA's pols would read what has happened in San Diego. Pretty soon, Golding and McGrory will surface in San Diego exulting, "See, Los Angeles is copying what we did in San Diego! We must be smart after all!" Best, Don Bauder

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Justice4all April 28, 2008 @ 10:26 a.m.

Spend now, pay later. Politicians will try and do that because they know in 6-8 years they will be gone anyway.

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JF April 27, 2008 @ 7:42 p.m.

Don, I'm not exactly a huge defender of the U-T. However, I think you're a little off base here. Here's a quote from the actual article you reference, "Yet on the very morning last week when the City Council was preparing to vote on the bond sale, Aguirre issued a memo calling it illegal and claiming that such borrowing required approval by two-thirds of San Diego's voters." Isn't that the truth of the matter that you claim they left out?

But then the article goes on to say, "Aguirre now declares he will not sign off on the initiative, thereby threatening to derail it altogether." Did Aguirre say this? Would that act effectively kill the proposal?

Remember that this is an editorial, not a news report. Is it possible that you're letting your dislike of the U-T color your reporting?

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Don Bauder April 27, 2008 @ 8:19 p.m.

Response to post #5: It takes two-thirds to approve a bond measure. San Diego has been evading this requirement for 17 years. This was clearly an election year move by Sanders; he wants voters to think he is trying to do something about the rotting infrastructure. He hopes that the variable interest rate and pledging of a valuable city asset doesn't soak in with the public. (People should have learned something from the subprime calamity, but we'll have to see.) Only Donna Frye, the one financially-savvy person on the council, voted against it. The U-T said that bond offerings "historically have included the signature of the city attorney." I do not believe that if Aguirre refuses to sign it, the issue would be dead. Best, Don Bauder

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JohnnyVegas April 28, 2008 @ 8:05 a.m.

HEY LOOK- LA is catching the San Diego pension scamitis disease!!! Pretty soon LA will be facing San Diego style pension black holes...oh wait-they already are!!! And it is no different than the $103 million dollar San Diego pension bond boondogle, delay paying upfront so you can pay DOUBLE on the back end!!!! I love it.

L.A. pension-payment delay plan called accounting gimmick

A proposal to delay an $81-million payment to the city's employee pension fund until next year is drawing criticism.

By David Zahniser, Los Angeles Times Staff Writer April 28, 2008

Los Angeles Mayor Antonio Villaraigosa's plan to balance the city's $7-billion budget is filled with ideas that are starting to draw heat from the public: cuts in Sunday library hours, mandatory employee furloughs and a 38% hike in trash fees, to name a few.

But within City Hall, one proposal generating fierce debate is a little-known plan to delay an $81-million payment to the city's employee pension fund until next year -- a move criticized by some as an accounting gimmick.

Delaying that payment would cost taxpayers more than $15 million in penalties, according to a document issued Friday by the city's top budget analyst. By 2013 -- which could be Villaraigosa's eighth and final year as mayor, should he win a second term -- the rearranged payment schedule would have cost the city $85 million, a sum larger than the payment being delayed this year.

http://www.latimes.com/news/local/la-me-labudget28apr28,1,7328624.story

L.A. pension-payment delay plan called accounting gimmick

A proposal to delay an $81-million payment to the city's employee pension fund until next year is drawing criticism.

By David Zahniser, Los Angeles Times Staff Writer April 28, 2008

Los Angeles Mayor Antonio Villaraigosa's plan to balance the city's $7-billion budget is filled with ideas that are starting to draw heat from the public: cuts in Sunday library hours, mandatory employee furloughs and a 38% hike in trash fees, to name a few.

But within City Hall, one proposal generating fierce debate is a little-known plan to delay an $81-million payment to the city's employee pension fund until next year -- a move criticized by some as an accounting gimmick.

Delaying that payment would cost taxpayers more than $15 million in penalties, according to a document issued Friday by the city's top budget analyst. By 2013 -- which could be Villaraigosa's eighth and final year as mayor, should he win a second term -- the rearranged payment schedule would have cost the city $85 million, a sum larger than the payment being delayed this year.

The City Council's Budget and Finance Committee is scheduled to discuss the plan today, the first day of budget hearings. But some council members are raising doubts about the payment proposal.

"The fundamental question at the end of the day is, are we being penny-wise and pound-foolish?" asked Councilman Richard Alarcon.

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Don Bauder April 28, 2008 @ 12:17 p.m.

Response to post #9: Earlier, Sanders wanted to sell pension obligation bonds. These bonds are classic examples of what you are talking about: they simply pay for an obligation that should be a current obligation. Pension obligation bonds don't finance new schools, etc. -- just transfer the burden of pension payments to future generations. These bonds that Sanders wants to sell are similar. They are for MAINTENANCE. Since when do you sell a bond to finance maintenance? Classically, maintenance should be paid out of current money on hand. Also, the City will pledge its assets, the main police station, and take a variable rate, which is likely to soar in the coming years. Best, Don Bauder

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Fred Williams April 29, 2008 @ 6:48 a.m.

I'm beginning to think that it's already too late for San Diego.

The "good times" are over.

We didn't save any money when we had the chance, but instead went into heavy debt to enrich wealthy hotel and sports-team owners.

All while ignoring the maintenance of our infrastructure.

Now the clowns downtown propose that we borrow at an unknown interest rate to pay for what we've ignored all these years. This is just piling more debt on the taxpayers at the worst possible time.

Yet where is there any other money? It's all gone to the well connected insiders who have screwed the city, and there's none left for essentials.

Unemployment is rising, housing values are dropping along with the dollar. Inflation is already high, and threatens to spin out of control soon. San Diego's economy has become highly tourist dependent.

What do we produce?

Even our proud bio-tech firms are largely dependent on imported talent, and the Chinese and Indian scientists are starting to return home.

San Diego is just dreaming, and we might well slip into a deadly coma.

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Don Bauder April 29, 2008 @ 8:19 a.m.

Response to post #11: Yes, corporate welfare for real estate developers and sports team owners helped drag San Diego under, along with excessive salaries and benefits for employees. The Sanders administration is owned by the real estate developers, just as the Golding and Murphy administrations were. Manufacturing is a small percentage of San Diego's employment. Home values are falling at close to the fastest rate in the nation (19.2 percent over last year, see most recent post). This is not surprising because the prices had zoomed so far during the bubble years. It's possible the decline is only half complete. Best, Don Bauder

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JF April 29, 2008 @ 9:52 p.m.

Here's an interesting bit on salary negotiations. The firefighter's union offered to take no increase. With a caveat, of course.

We offered to the city that they could bring in an independent auditor to analyze DROP. If DROP cost the city money we would take no raise this year. If DROP made the city money, we'd get all of that money in the form of a raise.

Since "everyone knows" DROP costs the city so much you'd think the city would jump at that offer, wouldn't you? But they didn't. Hmmmm... I wonder why? Maybe we should have offered to take just half the money.

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Don Bauder April 30, 2008 @ 7:40 a.m.

Response to post #13: The trouble is finding a truly independent auditor, particularly on a subject such as DROP. Evaluating the efficacy of programs like DROP involves making a lot of assumptions. And it involves political fence-walking. Best, Don Bauder

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JohnnyVegas April 30, 2008 @ 8:11 a.m.

DROP is a SCAM!

The only reason the DROP scam "works" is because the FF have been given the sweatheart deal of the century and allowed to "retire" 60% earlier than everyone else in America (age 50).

Here is an idea, you want to keep "good employees" then hike the "retirement" age to 65. BOOM! problem solved.

Oh, BHT JF, here is another one of your DROP type scams in operation in Berkeley;

UCPD Chief Retirement Deal Draws Criticism By Vincent Quan Daily Cal Staff Writer Date Added Monday, April 28, 2008 | 3:14 am Date Modified Monday, April 28, 2008 | 3:14 am

University administrators have come under heavy criticism after UCPD Police Chief Victoria Harrison was found to have retired with a lump sum package of around $2.1 million and, after a deal with campus officials, returned to the same job soon after.

Harrison, who has been the campus' police chief for 18 years, was rehired on Aug. 1, 2007, after retiring on June 28 of that year and receiving a lump sum package of about $2,130,259, according to campus officials. Her retirement benefits also give her about $4,621 a month for 10 years, totalling to about $554,520.

http://www.dailycal.org/article/101468/ucpd_chief_retirement_deal_draws_criticism

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JohnnyVegas April 30, 2008 @ 8:13 a.m.

And before I forget, I found a GREAT new website that exposes all of the various pension scams here in CA. (and eslewhere)!

JF, please educate yourself on public employee scams here;

http://pensiontsunami.com/public.php

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Justice4all April 30, 2008 @ 9:28 a.m.

If DROP is such a money saver for the city, every private employer would offer it. The fact is that double dipping costs money up front. In addition, they have an earlier retirement age compared with private sector (401k's, IRA's, SS). And remember the pension payments are for life, while defined contribution plans like 401's and IRAs can run out. So a FF retiring at age 55 who lives to 80 has 25 years of payments, while a private sector employee who cant retire until age 65 and who lives to 80 has only 15 years of payments (not to mention only enjoying 15 years of retirement.

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Don Bauder April 30, 2008 @ 10:20 a.m.

Response to post #15: That is quite a story from Cal-Berkeley. Eye-opening. Best, Don Bauder

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Don Bauder April 30, 2008 @ 10:22 a.m.

Response to post #16: I haven't had a chance to check, but I assume that site is worth reading. Best, Don Bauder

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Don Bauder April 30, 2008 @ 10:24 a.m.

Response to post #17: Good points. Best, Don Bauder

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JohnnyVegas April 30, 2008 @ 11:57 a.m.

If DROP is such a money saver for the city, every private employer would offer it.

HS educated, blue collar employees in the private sector cannot retire at age 50-much less retire at age 50 with a defined benefit pension making more than when they were working.

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Don Bauder April 30, 2008 @ 12:15 p.m.

Response to post #21:...unless they are the owner's son. Best, Don Bauder

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JF April 30, 2008 @ 1:05 p.m.

Justice, Don't forget that you simply don't want public safety officers working until 65. That's why we (and you) pay more into the system each month, than you would into SS. So that we can retire earlier.

I'm not going to look for it now, but I did see an article a while back talking about how DROP programs are starting to catch on with private employers.

Again, if it costs so much money, it should be no problem for the city to prove it. Yet time and time again, they refuse to. Why? Why not prove once and for all how bad it is?

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Don Bauder April 30, 2008 @ 3:20 p.m.

Response to post #23: If private employees are taking up DROP programs, I have not heard or read about it. If you can find that article, I would appreciate knowing about it. Best, Don Bauder

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JohnnyVegas April 30, 2008 @ 3:43 p.m.

JF-you do NOT pay more into the City pension system than SS. In fact because of the "pick ups" given to the City employees you are paying substantially LESS while getting substantially more in benefits.

The SS contribution is 7.65%- which includes the REQUIRED health care contribution of 1.2%-which you seem to conveniently leave out of all of your posts.

In addition, you do not get a FULL retirement in SS until age 67, versus 50 for the City-or a spread of 17 years, or 60% LONGER in SS.

There is not a single DROP program in America in the private sector-so JF, look all you want-it's not out there.

As far as proving the DROP scam is a scam, costing hundreds of millions, it has already been proven. Numerous times. But here it is AGAIN in case you missed it;

Page 1, footnote 1 (DROP costs taxpayers $200-$400 MILLION!);

http://www.sandiego.gov/cityattorney/reports/pdf/080130report24.pdf

And last-YOU may not want our FF and cops working to age 65 (hmm, that is a big surprise!), but I do(and the rest of the City).

Do you think you're special??? Seriously.

I will FIND some work for you and your other FF buddies to do from age 55-67 if you claim you cannot do the FF duties. Heck I will have you out painting curbs, cleaning up trash or doing other public service jobs-I can guarantee you I can find WORK for you to do.

I think the FD and the PD better stop trying to run their "retire" at age 50 (but keep working) scams and start earning their keep.

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Don Bauder April 30, 2008 @ 5:51 p.m.

Response to post #25: Good idea. If the firefighters can't work after age 55, let them complete their tenure with the City by doing just what you describe: painting curbs, cleaning up trash, repairing infrastructure, etc. Best, Don Bauder

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