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San Diego County Taxpayers Association attacks high-rise hotel on the old Campbell Shipyard

"Leadership in this city is very risk-averse"

Mayor Susan Golding loves to hate Scott Barnett. Not that Barnett, the 37-year-old executive director of the San Diego County Taxpayers Association, hasn't backed some of the mayor's biggest pet projects. Last year, Barnett even costarred in television commercials with Father Joe Carroll, the Catholic monsignor, in which both touted the merits of expanding the downtown convention center with public money. And last November, Barnett's group, connected to some of the city's most politically wired insiders, including Chargers owner Alex Spanos, San Diego Gas & Electric, and John Burnham & Company, also endorsed the taxpayer-funded plan to build a downtown baseball stadium.

But Barnett, a consummate fiscal-policy wonk who served on the city council of Del Mar when he was in his 20s, has never concealed his contempt for the San Diego City Council and what he says are its profligate spending habits. And two weeks ago, the Taxpayers Association came out strongly against the city's plan to have the San Diego Unified Port District finance construction of a high-rise hotel on the old Campbell Shipyard adjacent to the convention center. Recently, he shared his views about what he says are some of the city council's other transgressions.

Q. What are some of the worst things happening now in San Diego?

A. Well, from our perspective, the city's overall fiscal condition is worrisome. And it's worrisome for a number of reasons. The economy is going as good as it's going to go. If anything, at some point, it's gonna level out.

But in this good revenue time, the city still is balancing its budget with about $35 to $40 million of one-time revenues. The reserves of the city are still drastically -- and we think dangerously -- low. El Niño hit a couple years ago in the city, and they had $10 million of unbudgeted emergency projects. So they had to shift funds from other capital projects. On top of that, the city has about $300-plus million of deferred maintenance projects.

That does not include interior painting, plumbing, all sorts of other things. And those numbers are several years old. So, well over $100 million in deferred maintenance on the several thousand city facilities. Everything from lifeguard towers to bathrooms to fire stations and so forth. On top of that, not counted in that number is city hall.

City hall, as you know, is gonna be in violation of the city's codes at the end of this year if they don't do from 5 to 20 million dollars of upgrades to city hall -- just to bring it up to code, which all the surrounding commercial buildings had to do.

On top of that, there's at least $40 to $50 million of major storm-drain project needs, which affect not only flooding of streets, but the quality of the streets. It creates sinkholes in neighborhoods and those types of problems.

And forgetting for a moment whether the employees deserve raises or not -- I mean, they may have all deserved them, but from a fiscal point of view, those raises in this current budget they just approved are eating up just about all the new revenues the city is getting this fiscal year. The raises are probably counting for $20 to $22 million in this budget they just approved, and the revenues I think were in the 25 [million] range of ongoing revenues.

You have no reserves. You have major capital-deferred maintenance needs. You have a budget, and you have all your new revenues eaten up by ongoing expenses. And they're increasing other things -- just hiring additional staff, additional personnel, and no ongoing revenues to cover it.

So you add all that and then on top of it, the potential for additional capital projects -- ballpark, main library, North Embarcadero, Naval Training Center, other projects.

It doesn't mean the city will go bankrupt or won't be able to pay their debts. In fact, the first thing they'll pay will be all their debts -- debt service. Then they will pay their contractual obligations, raises and so forth. And if they are short on funds for other projects, that's where they're gonna have to start cutting things like parks and police and fire.

But is there a real-world impact on ordinary people from all this financial fooling around? Why should anyone care if the city council exceeds its budget or hires too many staffers or gets into too much debt? The sun is still going to shine, isn't it?

South of [Interstate] 8, you have much older communities, mostly... more with people of color, which have older libraries, older parks, older sidewalks, older sewer and water infrastructure...alleys that are unpaved in some cases. The more money that goes to debt service and the more money that goes to salaries, it means less money that's available for basic services.

What I think will happen is there will be an increased marginalization of the quality of life, especially in the older parts of the city. And my long-term worry, to be honest, is that we end up with an L.A. situation, where you have the "haves and the have-nots." You have the "have-nots" who have older neighborhoods, older parks, older facilities. And we're spending a lot of new money in downtown, and you know we, the association, for the most part has been supporting those, but we need to look at the broader impact on the community and the neighborhoods. And it's those neighborhoods...the worry is there is going to be some flash point and they're going to realize, "Wait a minute. We're getting the short end of the stick here, and we already started behind in the quality of our services and neighborhoods."

So that's what I think the concern is; you're gonna see a continued erosion of the quality of services or you'll have an increasing explosion of assessment districts where neighborhoods say, "Well, we're not getting our services. So we're going to assess ourselves to pay for it." Well, once again, the poorer neighborhoods are going to have less ability to do that. But everybody in the city is affected.... The water rates are gonna more than double in the next five to six years -- water and sewer rates -- to pay for the infrastructure. So those are the issues, which are there, but nobody on the current council or mayor want to address those issues.

How much debt are we talking about?

It's amazing how many things the city has debt for. This year's budget says they have $30 million in yearly payments on that debt. But that doesn't include the proposed downtown library. It doesn't include the North Embarcadero, which is about another $5 million a year. It doesn't include the Naval Training Center. It also does not include another $5 million of debt that the city had incurred on police decentralization.

You add all these things up, and you have a lot of General Fund debt. And in a few more years if the ballpark bonds are issued and the library goes full ahead, you know, the city could be looking at doubling its annual General Fund debt payments up to potentially $50 to $60 million, which is a tremendous amount of debt supported by the General Fund.

Do you think the police are going to get a pay raise during the council and mayoral races? Of course. And if they get one, the fire will get one, and then the other unions will get one, so that could even outstrip the revenues more.

Any other examples of the city abusing its credit?

This year there was a large ballyhoo about the council doubling the street maintenance budget for the next couple of years. You know how they did that? A credit card. They basically issued additional debt of about, I think, $16 million in commercial paper, and they're paying it off with future transit tax revenues, from the half-cent sales tax that the city gets each year [about $20 million dollars a year] to bond for that. So they're not even using that as cash. They're doing additional debt to pay off for that short-term note. So, you know, even those great ballyhooed additional funds for street resurfacing are being done with debt. When you add it up, the city already has -- between gas tax, transit taxes -- probably close to $60 million of revenues they could use yearly to redo streets and so forth, but they've been diverting it to other programs.

I thought the city had a lot of land it owned called "Pueblo Land" from the old Spanish land-grant days and was going to sell it off to make the annual payments on a big bond issue that was used to build some new police stations a few years back. Do they have any Pueblo Land left to make the payments?

Very little. From what the auditor's office showed us, by next fiscal year they will have to rely on general revenues [about $5 million a year] because all the land, the Pueblo Land, will essentially be sold. Now the city always can sell other lands, like water-department land. But that's supposed to go in the water utility [fund] and other types of things. Of course, you know they have golf courses and things like that, which we would certainly say they should consider selling, but that's a big political issue.

How many more years will the city have to pay on the police station debt?

It's at least, boy, I think it's at least under five to ten years or something. And the city has a habit of advancing funds. Like, for the convention center, they ended up using $29 million from various sources, including Balboa Park funds. And they transferred, I think it was about $5 million or $6 million over to the convention center.

Then when the convention center bonds were issued, the Balboa Park fund was paid back from that bond money, correct?

This is classic. They paid the money back from the convention center to the Balboa Park fund. And it was in there for a millisecond, and they immediately transferred it out to build another police station out at, I think, 25th and Imperial. We wrote them a letter on this, and they said they will pay it back based on future grants they hope to get from the state. Well, if they don't get 'em, then those Balboa Park projects may be out or delayed.

So whose fault is all of this mismanagement?

Partly it's the structure of our government, to be honest. I think the fact that with the term limits and the impact of district elections -- although, I think district elections served a purpose in that finally the districts south of 8, they started getting something, whereas before they got nothing. If you'd see what's happened in the districts south of 8, now there's been a tremendous increase in just services. So I think that's important, but because of the term limits and district elections, the focus has been almost totally on the neighborhood services at the exclusion of good financial management.

And you have a city manager then who becomes the most powerful person in the city of San Diego. I'll give you an example. A few years ago, our former city manager, who's one of the most brilliant maneuverers in the world. I'm sure he in a past life was in the Sultan's palace, whispering in the ear of the Sultan. A councilmember wanted a new fire truck, a brush truck. And it wasn't in the budget, and they'd already gone to a budget hearing, and it was blocked.

And this councilmember went to the city manager and said, "What do I do?" And the city manager said, "Don't worry. I'll put in the appropriations ordinance." Which is the ordinance the council passes after the ballot budget is approved, which is all the detailed transfers and detailed minutiae of the actual implementation of the budget. Nobody reads it. Certainly no one on the city council, none of the city staff, probably two people in financial management read it, and maybe the auditor, and nobody else reads it at all.

He put it in there. So when the appropriations ordinance was approved unanimously, this person got a fire truck. That is essentially, I believe, a corruption of the system you have. An action was taken behind closed doors between a city councilmember and the city manager.

The councilmember then owed their allegiance, essentially, and loyalty to the city manager for life and basically left the city manager alone to increase a lot of these internal programs, which don't give services directly to the people but build the city manager's control and empire. And the city manager probably made deals like that all the time with council. So that's why the danger [exists] of this essentially strong-manager form of government; it's called council-manager, but [it's actually] strong-manager form of government. The manager has total control of all the information, all the numbers, and gives the council only what he wants. During budget time, I get calls from council offices all the time saying, "Do you have information on this? I can't get it." And partly because of charter restrictions and partly because the staff says, "These people are short-timers. They'll be gone. They don't understand the budget. They're ignorant. All they care about is getting their new playground equipment. And we bureaucrats understand the real picture, and so we gotta make sure they don't understand this." So the system right now, I believe, is geared toward wasting money.

The people at city hall say not to worry, that taxes on tourists staying in hotels here are going to bail out all of the new projects and expenses.

Hotel-tax revenues have been tremendous. They've been fabulous, but they've been descending downwards for several reasons. Our occupancy is really high in the city. It's great. And our rates were all raised during the Super Bowl. And the rates never came down. So our average hotel rates are even higher than L.A. and our occupancy is already like at 80 percent. So it's not gonna go up. If anything, it's gonna level out and potentially go down; although, there will be some new product brought on-line.

That doesn't mean the hotel industry is gonna be doing bad. It's still gonna do extremely well, but it won't be growing at the same rate, potentially not at the double-digit rate. And as you know, the pro forma for the ballpark, which includes the library...counts on at least an 8 percent growth rate of the TOT for 30 years straight.

This year [the hotel tax-growth rate] was down to about 10 -- and it's trending down, and the hotel folks say the next couple of years they expect the amount of revenues to not grow as high. And at some point maybe even flattened out just about the time ballpark bonds could come on.

That's why it's worrisome, and then on top of that, the council is doing nothing to reduce costs, absolutely nothing. They are not looking at privatization or outsourcing in any way, like the county is.

Why is that?

Last November, the council met in closed session. And the issue was should they meet with the labor unions just to discuss the potential of putting a charter amendment on the ballot, so there would be no doubt that they could do the same type of contracting out that the county does. The city attorney believes they can, but just to avoid the problem, put a charter amendment on the ballot. The council in closed session voted 8-to-0 to not even open discussions with the fire union and police unions and others about it. The mayor was out of town at the time. So they don't even want to think about real outsourcing -- privatization -- at the city [level]. They spend several hundred thousand dollars on their so-called competition staff, a year. Several million dollars the last few years. And we've not seen any real monetary savings, real dollars.

So you think the next city council is going to inherit some rough problems from the folks who are being termed out?

Yeah, I mean, they will run out of one-time resources. And they will have increased debt obligations and increased ongoing expenditure obligations. And then lines have already crossed in that there isn't enough revenues ongoing to cover it. You know, they're at a point where they're gonna start burning the furniture, basically. And you can only do what we do in our own lives -- refinance our debt with lower-interest credit cards -- for so long until the lines start crossing. And the city is using a lot of creative ways to avoid facing making a tough decision. That's really what it's been. And, as I say, part of it's been the structural problem. And part of it's been, I think, the personalities of the council, and they don't have the threat. No one's demanding it. And staff is "enabling" them, as the pop term is these days.

Any other examples of local screw-ups?

Look at the airport issue. Here you had [new port director Dennis Bouey] brought in from Philadelphia, and he gave the best approach to doing the airport issue I've ever seen. He said, we're gonna do with Lindbergh for the next 15 years but we're gonna decide a new site in the next 18 months. He had a plan; problem is, he flunked Politics 101. He didn't talk to his board first. The mayor goes down, says, "No. I'm the leader in the airport issue." And [state senator] Steve Peace goes down and says, "I am the leader." And SANDAG says, "I am the leader." And none of those above have done anything on the issue at all except duck it. And here's a guy whose knees were cut off or worse by his own board. The bumper sticker used to say, "Welcome to San Diego; Now go home." Well, I think they kind of gave Bouey one of those and that's unfortunate.

Secrecy seems to be a big theme when talking about what goes on at city hall.

Financial service and auditors, off the record, and others will agree to all this. But nobody wants to talk about it in public. And even the city manager, who in all good stead a couple years ago, when he first came here, produced a budget, which showed the one-time revenues. Showed the land sales. Showed all those things. And by the time the final budget was approved, they were all, like, expunged -- those charts and graphs -- from his final budget because they had been directed by the mayor's office that they did not want to talk about those things in the budget so they were all just expunged.

And this year they've gone even further and counted carryover from a previous year, not as a one-time revenue but as ongoing revenue, where just about every other government puts it either in reserves or calls it a one-time revenue. So they're playing bookkeeping games. And the staff really are "enablers" of the city council's obsessive spending approach, and so there's sort of this symbiotic relationship of "don't ask; don't tell; don't show anything that's potentially negative news -- in public."

There has been a lot of criticism of the city council for meeting behind closed doors to avoid public scrutiny.

Well, the city attorney opines that they can discuss the entire financing pro forma of ballparks or convention centers behind closed doors because it's part of a negotiation process. And maybe it's technically legal, but it is contrary to, I believe, good government and good decision- making. When they walked into that room, they have made up their mind and there really is not any real role, more than at a theater, that the public interest plays. And everyone in town knows that that's how their decisions are made. I mean, it's just the way it's been. Doesn't mean it's right.

The same criticism has been made of the Port Commission.

The Port is probably worse because they're not accountable to anybody. The Port has an incredible amount of assets and resources and makes almost all their major decisions behind closed doors. But once again, they're not challenged on it. That's the way it's done. And getting information out of some of the agencies -- at least from our perspective -- is very hard. Getting information out of Centre City Development Corporation [CCDC] and the Port in the past has been very difficult, next to impossible.

There are a lot of Port meetings held in public, but they seem to cut their deals and work out the negotiations behind closed doors, or they find a legal, or so-called legal reason to meet and discuss it in closed session. It doesn't mean it's good government, but it may not be illegal.

The question is whether or not essentially the deals have been determined behind closed doors. And don't get me wrong, I don't think you can negotiate a deal in public, but that's not what we're talking about. We're not talking about negotiating a deal. We're talking about the deliberations among public officials. That should be in public.

So how do you manage to find out so much what is happening behind closed doors, if the public doesn't know?

Well, they have not informed me what's going on in closed session or behind closed doors. But I had an old girlfriend who said, the only secret she believed in was a pirate's secret, where the other party's dead. You know, once you tell a politician or a political appointee something, he talks, and it doesn't take very long for things to be heard and get around. Once again, the insiders hear, but not the public at large. So you generally have an idea what's happened. It's not a public process. And the newspaper environment in this town is... I think there's not enough competition to force the papers to go out to do the story behind the story, and really, really get 'em out for the public to see it.

[The Union-Tribune] has some very good reporters, but I think the overall sense is, "We don't have to go and beat somebody for a story." Everyone's busy. I mean, everyone. They're two-family working houses, kids, jobs, maybe some fun. Who has time to worry about the machinations of city hall? That's true. I mean, the most interested people are us activists or lobbyists or lawyers or just sick people who are interested in the workings of government. But they're not even gonna know about it if it's not covered in the paper or covered on television. And there are some good television reporters there but, you know, you get 18 seconds to do a story.

There are a lot of suspicions out there that San Diego is an especially closed place, that it's run by a very tight old boys' network, and the rest of the community can forget having any role in decision-making.

Clearly all the major decisions are debated and discussed behind closed doors in a closed session. Not all. There are some things -- like whether the seals should be removed from Seal Beach or whether or not they should appoint someone back to the Historic Oversight Board -- I mean those weighty issues are, of course, discussed in public. But issues of ballpark pro formas and TOT plans, those are all discussed closed session, and then they release it afterwards and that's the way the city runs. And they have the appearance of procedures and process and participation, but for the most part, it is a Potemkin Village. It's there for show. And it's not real, I believe.

Most of the influence is done by the key influentials in the community who play this sort of direct lobbying and participating role. And in all frankness, the Taxpayers Association is one of those organizations that is one of the players in San Diego and has been for 55 years. So we are in some ways part of that paradigm as much as the Chamber and the Downtown Partnership and the other organizations.

I believe we also play other roles fairly and honestly by pointing out the risks of the decisions and raising these issues and are much more iconoclastic than other organizations are. But essentially, the structure of San Diego government, as far as I know, has always been kind of a "good ole boy, white man, downtown network." And now it's maybe "the good ole white man and white woman network."

We've tried to start diversifying our board now to be more reflective of other interests, but that's sort of the nature of the way decisions have been made in San Diego, and as I say, I've been part of that process as well. But I've seen it, and the truth is the truth. You know?

So why is the city the way it is? Any ultimate reasons?

The weather. You know, I was born in New York. I've been in San Diego -- I grew up at the beach -- for 26 years, and there's something about San Diego, laid-back attitude. There's something about the San Diego attitude...it's sort of easier to just enjoy the day. You know? Maybe it's the water or the weather or something. And people...you leave a store and someone says, "Have a good one." That's the line. It's like, what does that mean? Have a good what? A good day, a good life, a good meal. You sort of fill in the blank. And you go to New York and you know what people mean and you know what they say.

And I think this city and the leadership in this city is very risk-averse. They're unwilling to take a risk because they may lose something. They may get attacked. They may lose a contract, and you know we all have mouths to feed. But I think that's the nature of the government in San Diego. Plus, we don't have the corporate leadership, especially since we lost the leaders we had. So there's a lot that's not here in the leadership sense, although it's certainly the greatest place to live.

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San Diego in books - Henry Miller, Rick DeMarinis, Max Miller, Alfred Alcorn

Don Bauder, World Almanac, Louisiana Purchase Exposition Commission

Mayor Susan Golding loves to hate Scott Barnett. Not that Barnett, the 37-year-old executive director of the San Diego County Taxpayers Association, hasn't backed some of the mayor's biggest pet projects. Last year, Barnett even costarred in television commercials with Father Joe Carroll, the Catholic monsignor, in which both touted the merits of expanding the downtown convention center with public money. And last November, Barnett's group, connected to some of the city's most politically wired insiders, including Chargers owner Alex Spanos, San Diego Gas & Electric, and John Burnham & Company, also endorsed the taxpayer-funded plan to build a downtown baseball stadium.

But Barnett, a consummate fiscal-policy wonk who served on the city council of Del Mar when he was in his 20s, has never concealed his contempt for the San Diego City Council and what he says are its profligate spending habits. And two weeks ago, the Taxpayers Association came out strongly against the city's plan to have the San Diego Unified Port District finance construction of a high-rise hotel on the old Campbell Shipyard adjacent to the convention center. Recently, he shared his views about what he says are some of the city council's other transgressions.

Q. What are some of the worst things happening now in San Diego?

A. Well, from our perspective, the city's overall fiscal condition is worrisome. And it's worrisome for a number of reasons. The economy is going as good as it's going to go. If anything, at some point, it's gonna level out.

But in this good revenue time, the city still is balancing its budget with about $35 to $40 million of one-time revenues. The reserves of the city are still drastically -- and we think dangerously -- low. El Niño hit a couple years ago in the city, and they had $10 million of unbudgeted emergency projects. So they had to shift funds from other capital projects. On top of that, the city has about $300-plus million of deferred maintenance projects.

That does not include interior painting, plumbing, all sorts of other things. And those numbers are several years old. So, well over $100 million in deferred maintenance on the several thousand city facilities. Everything from lifeguard towers to bathrooms to fire stations and so forth. On top of that, not counted in that number is city hall.

City hall, as you know, is gonna be in violation of the city's codes at the end of this year if they don't do from 5 to 20 million dollars of upgrades to city hall -- just to bring it up to code, which all the surrounding commercial buildings had to do.

On top of that, there's at least $40 to $50 million of major storm-drain project needs, which affect not only flooding of streets, but the quality of the streets. It creates sinkholes in neighborhoods and those types of problems.

And forgetting for a moment whether the employees deserve raises or not -- I mean, they may have all deserved them, but from a fiscal point of view, those raises in this current budget they just approved are eating up just about all the new revenues the city is getting this fiscal year. The raises are probably counting for $20 to $22 million in this budget they just approved, and the revenues I think were in the 25 [million] range of ongoing revenues.

You have no reserves. You have major capital-deferred maintenance needs. You have a budget, and you have all your new revenues eaten up by ongoing expenses. And they're increasing other things -- just hiring additional staff, additional personnel, and no ongoing revenues to cover it.

So you add all that and then on top of it, the potential for additional capital projects -- ballpark, main library, North Embarcadero, Naval Training Center, other projects.

It doesn't mean the city will go bankrupt or won't be able to pay their debts. In fact, the first thing they'll pay will be all their debts -- debt service. Then they will pay their contractual obligations, raises and so forth. And if they are short on funds for other projects, that's where they're gonna have to start cutting things like parks and police and fire.

But is there a real-world impact on ordinary people from all this financial fooling around? Why should anyone care if the city council exceeds its budget or hires too many staffers or gets into too much debt? The sun is still going to shine, isn't it?

South of [Interstate] 8, you have much older communities, mostly... more with people of color, which have older libraries, older parks, older sidewalks, older sewer and water infrastructure...alleys that are unpaved in some cases. The more money that goes to debt service and the more money that goes to salaries, it means less money that's available for basic services.

What I think will happen is there will be an increased marginalization of the quality of life, especially in the older parts of the city. And my long-term worry, to be honest, is that we end up with an L.A. situation, where you have the "haves and the have-nots." You have the "have-nots" who have older neighborhoods, older parks, older facilities. And we're spending a lot of new money in downtown, and you know we, the association, for the most part has been supporting those, but we need to look at the broader impact on the community and the neighborhoods. And it's those neighborhoods...the worry is there is going to be some flash point and they're going to realize, "Wait a minute. We're getting the short end of the stick here, and we already started behind in the quality of our services and neighborhoods."

So that's what I think the concern is; you're gonna see a continued erosion of the quality of services or you'll have an increasing explosion of assessment districts where neighborhoods say, "Well, we're not getting our services. So we're going to assess ourselves to pay for it." Well, once again, the poorer neighborhoods are going to have less ability to do that. But everybody in the city is affected.... The water rates are gonna more than double in the next five to six years -- water and sewer rates -- to pay for the infrastructure. So those are the issues, which are there, but nobody on the current council or mayor want to address those issues.

How much debt are we talking about?

It's amazing how many things the city has debt for. This year's budget says they have $30 million in yearly payments on that debt. But that doesn't include the proposed downtown library. It doesn't include the North Embarcadero, which is about another $5 million a year. It doesn't include the Naval Training Center. It also does not include another $5 million of debt that the city had incurred on police decentralization.

You add all these things up, and you have a lot of General Fund debt. And in a few more years if the ballpark bonds are issued and the library goes full ahead, you know, the city could be looking at doubling its annual General Fund debt payments up to potentially $50 to $60 million, which is a tremendous amount of debt supported by the General Fund.

Do you think the police are going to get a pay raise during the council and mayoral races? Of course. And if they get one, the fire will get one, and then the other unions will get one, so that could even outstrip the revenues more.

Any other examples of the city abusing its credit?

This year there was a large ballyhoo about the council doubling the street maintenance budget for the next couple of years. You know how they did that? A credit card. They basically issued additional debt of about, I think, $16 million in commercial paper, and they're paying it off with future transit tax revenues, from the half-cent sales tax that the city gets each year [about $20 million dollars a year] to bond for that. So they're not even using that as cash. They're doing additional debt to pay off for that short-term note. So, you know, even those great ballyhooed additional funds for street resurfacing are being done with debt. When you add it up, the city already has -- between gas tax, transit taxes -- probably close to $60 million of revenues they could use yearly to redo streets and so forth, but they've been diverting it to other programs.

I thought the city had a lot of land it owned called "Pueblo Land" from the old Spanish land-grant days and was going to sell it off to make the annual payments on a big bond issue that was used to build some new police stations a few years back. Do they have any Pueblo Land left to make the payments?

Very little. From what the auditor's office showed us, by next fiscal year they will have to rely on general revenues [about $5 million a year] because all the land, the Pueblo Land, will essentially be sold. Now the city always can sell other lands, like water-department land. But that's supposed to go in the water utility [fund] and other types of things. Of course, you know they have golf courses and things like that, which we would certainly say they should consider selling, but that's a big political issue.

How many more years will the city have to pay on the police station debt?

It's at least, boy, I think it's at least under five to ten years or something. And the city has a habit of advancing funds. Like, for the convention center, they ended up using $29 million from various sources, including Balboa Park funds. And they transferred, I think it was about $5 million or $6 million over to the convention center.

Then when the convention center bonds were issued, the Balboa Park fund was paid back from that bond money, correct?

This is classic. They paid the money back from the convention center to the Balboa Park fund. And it was in there for a millisecond, and they immediately transferred it out to build another police station out at, I think, 25th and Imperial. We wrote them a letter on this, and they said they will pay it back based on future grants they hope to get from the state. Well, if they don't get 'em, then those Balboa Park projects may be out or delayed.

So whose fault is all of this mismanagement?

Partly it's the structure of our government, to be honest. I think the fact that with the term limits and the impact of district elections -- although, I think district elections served a purpose in that finally the districts south of 8, they started getting something, whereas before they got nothing. If you'd see what's happened in the districts south of 8, now there's been a tremendous increase in just services. So I think that's important, but because of the term limits and district elections, the focus has been almost totally on the neighborhood services at the exclusion of good financial management.

And you have a city manager then who becomes the most powerful person in the city of San Diego. I'll give you an example. A few years ago, our former city manager, who's one of the most brilliant maneuverers in the world. I'm sure he in a past life was in the Sultan's palace, whispering in the ear of the Sultan. A councilmember wanted a new fire truck, a brush truck. And it wasn't in the budget, and they'd already gone to a budget hearing, and it was blocked.

And this councilmember went to the city manager and said, "What do I do?" And the city manager said, "Don't worry. I'll put in the appropriations ordinance." Which is the ordinance the council passes after the ballot budget is approved, which is all the detailed transfers and detailed minutiae of the actual implementation of the budget. Nobody reads it. Certainly no one on the city council, none of the city staff, probably two people in financial management read it, and maybe the auditor, and nobody else reads it at all.

He put it in there. So when the appropriations ordinance was approved unanimously, this person got a fire truck. That is essentially, I believe, a corruption of the system you have. An action was taken behind closed doors between a city councilmember and the city manager.

The councilmember then owed their allegiance, essentially, and loyalty to the city manager for life and basically left the city manager alone to increase a lot of these internal programs, which don't give services directly to the people but build the city manager's control and empire. And the city manager probably made deals like that all the time with council. So that's why the danger [exists] of this essentially strong-manager form of government; it's called council-manager, but [it's actually] strong-manager form of government. The manager has total control of all the information, all the numbers, and gives the council only what he wants. During budget time, I get calls from council offices all the time saying, "Do you have information on this? I can't get it." And partly because of charter restrictions and partly because the staff says, "These people are short-timers. They'll be gone. They don't understand the budget. They're ignorant. All they care about is getting their new playground equipment. And we bureaucrats understand the real picture, and so we gotta make sure they don't understand this." So the system right now, I believe, is geared toward wasting money.

The people at city hall say not to worry, that taxes on tourists staying in hotels here are going to bail out all of the new projects and expenses.

Hotel-tax revenues have been tremendous. They've been fabulous, but they've been descending downwards for several reasons. Our occupancy is really high in the city. It's great. And our rates were all raised during the Super Bowl. And the rates never came down. So our average hotel rates are even higher than L.A. and our occupancy is already like at 80 percent. So it's not gonna go up. If anything, it's gonna level out and potentially go down; although, there will be some new product brought on-line.

That doesn't mean the hotel industry is gonna be doing bad. It's still gonna do extremely well, but it won't be growing at the same rate, potentially not at the double-digit rate. And as you know, the pro forma for the ballpark, which includes the library...counts on at least an 8 percent growth rate of the TOT for 30 years straight.

This year [the hotel tax-growth rate] was down to about 10 -- and it's trending down, and the hotel folks say the next couple of years they expect the amount of revenues to not grow as high. And at some point maybe even flattened out just about the time ballpark bonds could come on.

That's why it's worrisome, and then on top of that, the council is doing nothing to reduce costs, absolutely nothing. They are not looking at privatization or outsourcing in any way, like the county is.

Why is that?

Last November, the council met in closed session. And the issue was should they meet with the labor unions just to discuss the potential of putting a charter amendment on the ballot, so there would be no doubt that they could do the same type of contracting out that the county does. The city attorney believes they can, but just to avoid the problem, put a charter amendment on the ballot. The council in closed session voted 8-to-0 to not even open discussions with the fire union and police unions and others about it. The mayor was out of town at the time. So they don't even want to think about real outsourcing -- privatization -- at the city [level]. They spend several hundred thousand dollars on their so-called competition staff, a year. Several million dollars the last few years. And we've not seen any real monetary savings, real dollars.

So you think the next city council is going to inherit some rough problems from the folks who are being termed out?

Yeah, I mean, they will run out of one-time resources. And they will have increased debt obligations and increased ongoing expenditure obligations. And then lines have already crossed in that there isn't enough revenues ongoing to cover it. You know, they're at a point where they're gonna start burning the furniture, basically. And you can only do what we do in our own lives -- refinance our debt with lower-interest credit cards -- for so long until the lines start crossing. And the city is using a lot of creative ways to avoid facing making a tough decision. That's really what it's been. And, as I say, part of it's been the structural problem. And part of it's been, I think, the personalities of the council, and they don't have the threat. No one's demanding it. And staff is "enabling" them, as the pop term is these days.

Any other examples of local screw-ups?

Look at the airport issue. Here you had [new port director Dennis Bouey] brought in from Philadelphia, and he gave the best approach to doing the airport issue I've ever seen. He said, we're gonna do with Lindbergh for the next 15 years but we're gonna decide a new site in the next 18 months. He had a plan; problem is, he flunked Politics 101. He didn't talk to his board first. The mayor goes down, says, "No. I'm the leader in the airport issue." And [state senator] Steve Peace goes down and says, "I am the leader." And SANDAG says, "I am the leader." And none of those above have done anything on the issue at all except duck it. And here's a guy whose knees were cut off or worse by his own board. The bumper sticker used to say, "Welcome to San Diego; Now go home." Well, I think they kind of gave Bouey one of those and that's unfortunate.

Secrecy seems to be a big theme when talking about what goes on at city hall.

Financial service and auditors, off the record, and others will agree to all this. But nobody wants to talk about it in public. And even the city manager, who in all good stead a couple years ago, when he first came here, produced a budget, which showed the one-time revenues. Showed the land sales. Showed all those things. And by the time the final budget was approved, they were all, like, expunged -- those charts and graphs -- from his final budget because they had been directed by the mayor's office that they did not want to talk about those things in the budget so they were all just expunged.

And this year they've gone even further and counted carryover from a previous year, not as a one-time revenue but as ongoing revenue, where just about every other government puts it either in reserves or calls it a one-time revenue. So they're playing bookkeeping games. And the staff really are "enablers" of the city council's obsessive spending approach, and so there's sort of this symbiotic relationship of "don't ask; don't tell; don't show anything that's potentially negative news -- in public."

There has been a lot of criticism of the city council for meeting behind closed doors to avoid public scrutiny.

Well, the city attorney opines that they can discuss the entire financing pro forma of ballparks or convention centers behind closed doors because it's part of a negotiation process. And maybe it's technically legal, but it is contrary to, I believe, good government and good decision- making. When they walked into that room, they have made up their mind and there really is not any real role, more than at a theater, that the public interest plays. And everyone in town knows that that's how their decisions are made. I mean, it's just the way it's been. Doesn't mean it's right.

The same criticism has been made of the Port Commission.

The Port is probably worse because they're not accountable to anybody. The Port has an incredible amount of assets and resources and makes almost all their major decisions behind closed doors. But once again, they're not challenged on it. That's the way it's done. And getting information out of some of the agencies -- at least from our perspective -- is very hard. Getting information out of Centre City Development Corporation [CCDC] and the Port in the past has been very difficult, next to impossible.

There are a lot of Port meetings held in public, but they seem to cut their deals and work out the negotiations behind closed doors, or they find a legal, or so-called legal reason to meet and discuss it in closed session. It doesn't mean it's good government, but it may not be illegal.

The question is whether or not essentially the deals have been determined behind closed doors. And don't get me wrong, I don't think you can negotiate a deal in public, but that's not what we're talking about. We're not talking about negotiating a deal. We're talking about the deliberations among public officials. That should be in public.

So how do you manage to find out so much what is happening behind closed doors, if the public doesn't know?

Well, they have not informed me what's going on in closed session or behind closed doors. But I had an old girlfriend who said, the only secret she believed in was a pirate's secret, where the other party's dead. You know, once you tell a politician or a political appointee something, he talks, and it doesn't take very long for things to be heard and get around. Once again, the insiders hear, but not the public at large. So you generally have an idea what's happened. It's not a public process. And the newspaper environment in this town is... I think there's not enough competition to force the papers to go out to do the story behind the story, and really, really get 'em out for the public to see it.

[The Union-Tribune] has some very good reporters, but I think the overall sense is, "We don't have to go and beat somebody for a story." Everyone's busy. I mean, everyone. They're two-family working houses, kids, jobs, maybe some fun. Who has time to worry about the machinations of city hall? That's true. I mean, the most interested people are us activists or lobbyists or lawyers or just sick people who are interested in the workings of government. But they're not even gonna know about it if it's not covered in the paper or covered on television. And there are some good television reporters there but, you know, you get 18 seconds to do a story.

There are a lot of suspicions out there that San Diego is an especially closed place, that it's run by a very tight old boys' network, and the rest of the community can forget having any role in decision-making.

Clearly all the major decisions are debated and discussed behind closed doors in a closed session. Not all. There are some things -- like whether the seals should be removed from Seal Beach or whether or not they should appoint someone back to the Historic Oversight Board -- I mean those weighty issues are, of course, discussed in public. But issues of ballpark pro formas and TOT plans, those are all discussed closed session, and then they release it afterwards and that's the way the city runs. And they have the appearance of procedures and process and participation, but for the most part, it is a Potemkin Village. It's there for show. And it's not real, I believe.

Most of the influence is done by the key influentials in the community who play this sort of direct lobbying and participating role. And in all frankness, the Taxpayers Association is one of those organizations that is one of the players in San Diego and has been for 55 years. So we are in some ways part of that paradigm as much as the Chamber and the Downtown Partnership and the other organizations.

I believe we also play other roles fairly and honestly by pointing out the risks of the decisions and raising these issues and are much more iconoclastic than other organizations are. But essentially, the structure of San Diego government, as far as I know, has always been kind of a "good ole boy, white man, downtown network." And now it's maybe "the good ole white man and white woman network."

We've tried to start diversifying our board now to be more reflective of other interests, but that's sort of the nature of the way decisions have been made in San Diego, and as I say, I've been part of that process as well. But I've seen it, and the truth is the truth. You know?

So why is the city the way it is? Any ultimate reasons?

The weather. You know, I was born in New York. I've been in San Diego -- I grew up at the beach -- for 26 years, and there's something about San Diego, laid-back attitude. There's something about the San Diego attitude...it's sort of easier to just enjoy the day. You know? Maybe it's the water or the weather or something. And people...you leave a store and someone says, "Have a good one." That's the line. It's like, what does that mean? Have a good what? A good day, a good life, a good meal. You sort of fill in the blank. And you go to New York and you know what people mean and you know what they say.

And I think this city and the leadership in this city is very risk-averse. They're unwilling to take a risk because they may lose something. They may get attacked. They may lose a contract, and you know we all have mouths to feed. But I think that's the nature of the government in San Diego. Plus, we don't have the corporate leadership, especially since we lost the leaders we had. So there's a lot that's not here in the leadership sense, although it's certainly the greatest place to live.

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