Vincent Farnsworth 4:30 p.m., March 15
City Delays Audit, Halts Bonds. Blames Computers. Hmmmmm
The City of San Diego today announced that it will hold a lottery. The winner gets the Coronado Bay Bridge. Well, San Diego didn't really say that, but it did the next most disingenuous thing: it said with a straight face that a new $50 million computer system has prevented the City from balancing its books. The annual audit will be delayed for at least six months past the December deadline, according to a story this evening (Nov. 16) on the Union-Tribune website. Last week, the mayor's office pulled bonds for refinancing the convention center. "Other bond refinancings are up in the air," says the U-T. Jay Goldstone, the City's chief operating officer, insisted that the half-year delay in the audit and the suspension of bond offerings would have no impact on the City's ability to sell bonds. (It's understood that Goldstone has won the Coronado bridge lottery and has announced there will be a $5 toll going both directions.)
Rumors about the bond cancellations -- and the City's attempt to blame them on the computers -- arose this afternoon. I kept watching the City's website. It never showed up. If the City posted the news, it was buried -- just as the U-T post was buried. "We will disclose this," the U-T quoted Goldstone as saying. Where? When?
San Diego has already been disciplined by the Securities and Exchange Commission for failing to make important disclosures in bond documents. "They [City officials] do not have to worry about the district attorney or U.S. attorney's office [because of inherent laxity] but does have to worry about the SEC," says Mike Aguirre, former city attorney. He was told that the City made some kind of disclosure at an open meeting. "But they didn't disclose it in a timely way," he says. "This also means the City is not going to be making the required disclosures to bondholders, required under the law."