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Pro-football pushing San Diego closer to bankruptcy

“The mayor is in over his head"

"The pride and presence of a professional football team is far more important than 30 libraries.” Intelligent people laughed when former pro-football-team owner Art Modell made the comment. Now San Diego, painfully broke, is the butt of the joke. It is discussing closing libraries while its establishment lobbies for subsidies for a team owned by a billionaire who is in much better financial shape than the City. The suggestions keep coming: to play the games on a jerry-built concrete deck above the Tenth Avenue Marine Terminal (mercifully voted down) or on land elsewhere in the city (as proposed in a Union-Tribune op-ed piece). The mayor and most of the city council have refused to recognize fiscal reality and continue to focus on the glitz while ignoring the City’s rotting underbelly.

“We want to settle for being the Acapulco of the north,” says Norma Damashek, copresident of the League of Women Voters. “We have great tourist facilities, great convention facilities and gambling, but does anybody look at what happens to the streets and libraries? The people in our gated communities are doing fine, but does anybody care about the rest of the city? Our deficit grows year after year, lowering our standard of living. We talk about letting a foundation run Balboa Park. Could it be we will say we have to sell this land? We propose that libraries be shut down. Some builder may be able to acquire land on which a library stands and build on it.”

Damashek adds, “The mayor is in over his head. We have no newspaper or television station crying, ‘Whoa! What is happening to our city?’ People in government are floundering. What they do know they don’t want to tell us. We are in a state of denial.”

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San Diego is building a downtown bridge partly to accommodate the fewer and fewer people going to the ballpark. Tourism revenues are plunging, particularly as business travel plummets, but there is talk of still another convention-center expansion, along with a new civic center.

“We have incredibly misplaced civic priorities,” says Steve Erie, professor of political science at the University of California, San Diego. “This partly reflects our deep-seated insecurity. We need the Chargers as a marker. We spend millions for a ballpark but not one red cent for fire protection. We think we will be a second-class city without a pro football team but don’t spend a plugged nickel on basic public services and amenities.”

“Transit is suffering from recent cutbacks,” points out Jim Mills, former president pro tem of the California State Senate. He has begged politicians around the county for more money, “but the pols are elected with developers’ money, and they do what the developers tell them to do.”

“The council has been focusing on a year-to-year approach,” says Scott Barnett, president of TaxpayersAdvocate.org. “They need a long-range plan. The pension- and structural-deficit problems have been building for a dozen years. But the council has instant gratification needs.” He doubts that Mayor Jerry Sanders will have much support for the plan to have bureaucracies compete with the private sector for projects. Without massive head-chopping, municipal unions aren’t likely to take voluntary pay cuts. The most recent convention-center expansion may pay for itself with transient occupancy tax receipts, but the new expansion plans will be dead on arrival with today’s costs of construction and bonding.

“Given all the problems on every level — federal, state, local — I am not optimistic,” says Barnett. “When Pat Shea first brought up the B-word [bankruptcy — in the 2005 mayoral election], I didn’t think it was bad enough to go in that direction. I thought we could restructure our way out of it. But given the federal, state, and local recessions, it may be the only option.”

“Shea and Aguirre were prescient in pressing the case for bankruptcy,” says Erie. “All other towns in America are facing these kinds of pressures, but we face them more so. This is a town in deep denial, facing death not by a thousand cuts but a million cuts — cutbacks in perpetuity.” After Proposition 13 passed in 1978, San Diego erred by not enacting higher utility and hotel taxes and higher franchise fees. The utility tax “is a huge revenue source in other California cities,” and so is the hotel tax, which is often steeper than San Diego’s. But former mayor Susan Golding instructed her city manager “to never put the word ‘utility’ in front of the word ‘tax,’ ” says Erie. He believes that the pension scandals would never have arisen had the City put a sound tax structure into place following Proposition 13.

Councilmember Donna Frye ran in the 2005 mayoral election against Shea and several other candidates. “I jokingly referred to ‘bankruptcy light’ — reorganization without bankruptcy,” she recalls. The situation is far worse now than it was then, “and it is going to get worse and worse and worse.” So it’s more important than ever: “Stop the incremental torture. Try to spend the time putting together a solution.” However, the mayor’s office doesn’t cooperate. “We are given the information so late, and then we don’t even know if it is accurate. We work hard to get the pension folks [officials from San Diego City Employees’ Retirement System] to show up at a meeting, and then when they come, they don’t answer questions.”

Both Damashek and Mills point out that officials are always looking forward to their next job. That’s especially true of consultants. Damashek notes that Stanley Keller, who makes $700 an hour monitoring the City’s compliance with federal securities law, “doesn’t deal with reality. He says the City has done a good job [complying with Securities and Exchange Commission dictates]. Nobody wants to break the bad news to our city. People on the outside are always looking for their next opportunity, their next job, their next consulting work; they are not going to say anything to upset the powers in this city.”

“This all relates to term limits,” says Mills. Councilmembers used to be concerned about the long-term good of the City. “Now they are concerned about making the people happy who might hire them after they are no longer on the council.” He cites former councilmember Barbara Warden, who went to work with the Downtown San Diego Partnership, an advocate for downtown development, and former councilmember and assemblymember Juan Vargas, who served four years as chairman of the assembly’s Insurance Committee and went on to be a vice president of the California branch of Safeco, a Seattle-based insurance company.

Yet San Diegans think everything is fine. Asks Damashek, “What is wrong with our city?” Then she gives an answer: “We need a cold shower.”

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"The pride and presence of a professional football team is far more important than 30 libraries.” Intelligent people laughed when former pro-football-team owner Art Modell made the comment. Now San Diego, painfully broke, is the butt of the joke. It is discussing closing libraries while its establishment lobbies for subsidies for a team owned by a billionaire who is in much better financial shape than the City. The suggestions keep coming: to play the games on a jerry-built concrete deck above the Tenth Avenue Marine Terminal (mercifully voted down) or on land elsewhere in the city (as proposed in a Union-Tribune op-ed piece). The mayor and most of the city council have refused to recognize fiscal reality and continue to focus on the glitz while ignoring the City’s rotting underbelly.

“We want to settle for being the Acapulco of the north,” says Norma Damashek, copresident of the League of Women Voters. “We have great tourist facilities, great convention facilities and gambling, but does anybody look at what happens to the streets and libraries? The people in our gated communities are doing fine, but does anybody care about the rest of the city? Our deficit grows year after year, lowering our standard of living. We talk about letting a foundation run Balboa Park. Could it be we will say we have to sell this land? We propose that libraries be shut down. Some builder may be able to acquire land on which a library stands and build on it.”

Damashek adds, “The mayor is in over his head. We have no newspaper or television station crying, ‘Whoa! What is happening to our city?’ People in government are floundering. What they do know they don’t want to tell us. We are in a state of denial.”

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San Diego is building a downtown bridge partly to accommodate the fewer and fewer people going to the ballpark. Tourism revenues are plunging, particularly as business travel plummets, but there is talk of still another convention-center expansion, along with a new civic center.

“We have incredibly misplaced civic priorities,” says Steve Erie, professor of political science at the University of California, San Diego. “This partly reflects our deep-seated insecurity. We need the Chargers as a marker. We spend millions for a ballpark but not one red cent for fire protection. We think we will be a second-class city without a pro football team but don’t spend a plugged nickel on basic public services and amenities.”

“Transit is suffering from recent cutbacks,” points out Jim Mills, former president pro tem of the California State Senate. He has begged politicians around the county for more money, “but the pols are elected with developers’ money, and they do what the developers tell them to do.”

“The council has been focusing on a year-to-year approach,” says Scott Barnett, president of TaxpayersAdvocate.org. “They need a long-range plan. The pension- and structural-deficit problems have been building for a dozen years. But the council has instant gratification needs.” He doubts that Mayor Jerry Sanders will have much support for the plan to have bureaucracies compete with the private sector for projects. Without massive head-chopping, municipal unions aren’t likely to take voluntary pay cuts. The most recent convention-center expansion may pay for itself with transient occupancy tax receipts, but the new expansion plans will be dead on arrival with today’s costs of construction and bonding.

“Given all the problems on every level — federal, state, local — I am not optimistic,” says Barnett. “When Pat Shea first brought up the B-word [bankruptcy — in the 2005 mayoral election], I didn’t think it was bad enough to go in that direction. I thought we could restructure our way out of it. But given the federal, state, and local recessions, it may be the only option.”

“Shea and Aguirre were prescient in pressing the case for bankruptcy,” says Erie. “All other towns in America are facing these kinds of pressures, but we face them more so. This is a town in deep denial, facing death not by a thousand cuts but a million cuts — cutbacks in perpetuity.” After Proposition 13 passed in 1978, San Diego erred by not enacting higher utility and hotel taxes and higher franchise fees. The utility tax “is a huge revenue source in other California cities,” and so is the hotel tax, which is often steeper than San Diego’s. But former mayor Susan Golding instructed her city manager “to never put the word ‘utility’ in front of the word ‘tax,’ ” says Erie. He believes that the pension scandals would never have arisen had the City put a sound tax structure into place following Proposition 13.

Councilmember Donna Frye ran in the 2005 mayoral election against Shea and several other candidates. “I jokingly referred to ‘bankruptcy light’ — reorganization without bankruptcy,” she recalls. The situation is far worse now than it was then, “and it is going to get worse and worse and worse.” So it’s more important than ever: “Stop the incremental torture. Try to spend the time putting together a solution.” However, the mayor’s office doesn’t cooperate. “We are given the information so late, and then we don’t even know if it is accurate. We work hard to get the pension folks [officials from San Diego City Employees’ Retirement System] to show up at a meeting, and then when they come, they don’t answer questions.”

Both Damashek and Mills point out that officials are always looking forward to their next job. That’s especially true of consultants. Damashek notes that Stanley Keller, who makes $700 an hour monitoring the City’s compliance with federal securities law, “doesn’t deal with reality. He says the City has done a good job [complying with Securities and Exchange Commission dictates]. Nobody wants to break the bad news to our city. People on the outside are always looking for their next opportunity, their next job, their next consulting work; they are not going to say anything to upset the powers in this city.”

“This all relates to term limits,” says Mills. Councilmembers used to be concerned about the long-term good of the City. “Now they are concerned about making the people happy who might hire them after they are no longer on the council.” He cites former councilmember Barbara Warden, who went to work with the Downtown San Diego Partnership, an advocate for downtown development, and former councilmember and assemblymember Juan Vargas, who served four years as chairman of the assembly’s Insurance Committee and went on to be a vice president of the California branch of Safeco, a Seattle-based insurance company.

Yet San Diegans think everything is fine. Asks Damashek, “What is wrong with our city?” Then she gives an answer: “We need a cold shower.”

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