Jeff Smith 1:30 p.m., May 28
Councilmember Frye Says City Budget Deficit Actually Much Higher; Also Derides Bond Issuance
Councilmember Donna Frye, consistently the only member of the body to have a grasp of economics, today (March 20) sent a letter to Mayor Jerry Sanders, stating that the actual budget deficit could be $60 million, not the $45 million that the City reports. She asks Sanders and Jay Goldstone, chief operating officer, to provide her the most recent budget deficit numbers. (This does not include the disastrous pension situation. What's owed for the pension is done with a two-year lag. If new information were included, the realistic deficit would be at least $100 million higher, she says.) Frye says she spoke with Independent Budget Analyst Andrea Tevlin, who said she had been told by Goldstone that the actual deficit is more like $60 million. "When was Mr. Goldstone planning to tell councilmembers and the public?" asks Frye. She also wrote a letter today to Council President Ben Hueso about the $103 million bond that Sanders announced yesterday. The bond includes almost $4.9 million in interest-only payments through June of next year. Then the City will pay a higher interest rate. This is the kind of kinky mortgage that has gotten the entire society in deep trouble. Former City Attorney Mike Aguirre had opposed the bond issuance, saying the public should vote on it. It became an issue in the election that he lost. Says Frye, "I am very concerned that it is a private placement, there is a two year interest-only teaser rate, no revenue source has been identified to pay for this." Frye says that when the council initially OK'd the bond (she voted against it) in April of last year, the council was going to see it again if the projects to be financed changed. She believes there have been such changes. "This is an end run around the public" which should have been given a chance to vote on the issue, she says.