The city council will look at the long-delayed 2005 financial report today (March 3). Mayor Jerry Sanders still insists the City can return to the municipal bond market. But that market is roiling. Friday, hedge funds were forced to dump bonds. Muni yields spiked above Treasury yields -- quite unusual, since Treasury bonds are taxable and muni bonds are tax-free, state and federal. Municipal bond insurers may lose their AAA ratings; bond issuers such as California are no longer using insurance. Could San Diego afford to sell non-insured bonds at high rates? The lack of certified audits for past years blocks the City's entrance into the market. Mark Blake, deputy city attorney, says that in the draft of the 2006 statement, the pension fund is only 78 percent funded, "the low end of municipalities." Says Councilmember Donna Frye, "I have not seen anything that convinced me that this city will be back in the public market any time soon." Mike Aguirre, city attorney, says the City has blown its opportunity to get its finances in order.