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Blog Archives - 2007 Fourth Quarter


One more negative result of pension giveaways - no brush management. 12/31/07

                                                       by Pat Flannery                                        top^

This is the wildfires "Watchdog Report" offered by the U-T on Sunday December 30, 2007. It brought this reaction from Mike Aguirre, who pointedly reminds us that:

"Money that could have been spent since the Cedar Fires in 2003 on brush management to prevent the 2007 wild fires was diverted to fund the City’s illegal pension debt."

Between 60% and 70% of the City's Budget is payroll. The unions are calling due a rash 2005 City promise to raise $500 million before July 2008 by borrowing against or selling City properties. Will Sanders tell the people about that little upcoming fiscal problem in his State of the City address on January 10th? Probably not. Good news only for Jerry.

Sanders is hiding the fact that our city has become one giant employee welfare system.

KPBS did an excellent series of TV Specials on  June 12, 2007
,  June 15, 2007 July 5, 2007 and July 6, 2007 clearly documenting why "we’re setting ourselves up for a massive fire storm", as Gloria Penner so prophetically put it.

In pushing for better brush management in June 2007, Donna Frye told KPBS that we need: "
To do everything we can possibly do to prevent tragedy from occurring in anyone's community. We've all seen what happened with the Cedar Fire, we all went through that. We saw the tragedy of people losing their home and efforts to rebuild. Those are lessons. Those are sad memories that no one should forget, ever." She published this Memo in May 2007.

Sanders on the other hand told KPBS that "We think we've got a program that works". His timing was off a little, that's all, is how the U-T appears to see it. On Sunday they allowed him to brush away his no brush management policy with: "If you don't have a fire for 15 years, people probably don't see it as money well spent." In other words Sanders gambled on the 2003 fires not being repeated for at least another 15 years.

The U-T again: "In his ongoing search for budget cuts, Sanders this year suggested eliminating one of the three fire inspectors responsible for identifying brush violations" ..... "in 1986 the City had 11 such fire inspectors" ....."A deputy city manager told the City Council it would cost at least $4.4 million a year to adequately tackle the brush problem". 

Good information, but shouldn't Sanders' inability (or unwillingness) to find that $4.4 million have been the real story? Instead, the U-T reader is left with the impression that homeowners, environmentalists and gnatcatchers are the problem.

As background the U-T explains: "This story is based on more than two dozen interviews with elected officials, city administrators, deputy fire marshals and residents who live near San Diego's canyons and wild lands. The reporting, writing, mapping, editing and production of the story took two months."

It shouldn't have taken them two months to discover that Sanders had other priorities. Sanders' "plan that worked" was to cut the number of fire inspectors and deprive City workers of the money they needed to clear brush on City-owned land.

Sanders' commitment to protecting the pensions of former and current City colleagues means that City
services must be sacrificed on the alter of "pension rights".

Towards the end of his long career with the police department, Sanders was one of the main beneficiaries of retroactivity. He received a huge "benefit" in the form of an increased pension "multiplier" for previous years of service. These retroactive benefits cost the City $451 million, nearly 40% of the current pension deficit. Yes, he owes them.

The runaway DROP program (retiree nest eggs with a guaranteed 8% interest compounding quarterly), the $146 million "air time" and the $451 million retroactive benefits are the real reasons why Sanders could not afford a brush management program. Yet, down at the U-T, he can do no wrong, while Aguirre, a so-called "liberal", who is tackling this fiscal problem, can do no right. Very strange behavior for a "conservative" newspaper.

If this is modern "conservatism" then something very strange has happened since the days of Ronald Reagan. The welfare reformers of yesteryear have become the welfare queens of today. While "liberal" Aguirre defends the taxpayer by fighting the over-benefiting of City employees, the "conservative" U-T helps a "conservative" Mayor preserve illegal "benefits" as the spoils of office. Ronald Reagan would turn in his grave.


The story the U-T does not want you to read - Dumanis and Chula Vista. 12/29/07

                                                       by Pat Flannery                                        top^

Here is a video of a letter being presented to the Chula Vista City Council on December 18, 2007.
Activist Sonny Chandler, on behalf of a civic group called the "Chula Vista Better Government Association", called upon the Council to conduct an investigation into official corruption in Chula Vista. The letter was also sent to the State Attorney General and to the U.S. Attorney on December 7, 2007 asking that they:

" ... conduct an investigation to determine if there are conflicts of interests, abuses of power and prosecutorial misconduct involving John Moot, Chula Vista Mayor Cheryl Cox and the local District Attorney’s office. For the reasons listed below, we are not confident that the District Attorney’s office or the City’s Board of Ethics can perform a fair and impartial investigation into these matters.

We further request that you investigate a potential conspiracy involving former Chula Vista City Councilmember John Moot, the office of District Attorney Bonnie Dumanis, local land developer Jim Pieri and Chula Vista Mayor Cheryl Cox to deprive Chula Vista voters of good government by abusing their positions and power to improperly influence and intimidate elected officials and community groups on behalf of the proposed condominium high rise."

It makes interesting reading, especially the parts about Bonnie Dumanis and Pat O'Toole. The civic group suspects that Dumanis and O'Toole may have filed bogus charges against Chula Vista City Councilmember Steve Castaneda, at the behest of a well-connected Chula Vista developer named Jim Pieri, who apparently wanted "someone more likely to approve his projects" on the City Council. A natural reaction for an ambitious developer.

The group reports that Pieri contributed $15,050 to the Lincoln Club of San Diego County during Cox's campaign who in turn contributed $51,000 to Cox. Yep, that's how it works.

I was also informed that the U-T refused to run the story, despite the fact that the "Chula Vista Better Government Association" did all the work. It compiled these 334 pages of back up material and obviously did its research. This story should be the kind of juicy political yarn any red-blooded newspaper would love to run. And it is all documented.

Pieri is now leasing office space to the DA in Chula Vista at $71,328 per month. That's a pretty nice lease. Here it is. Interesting how Dumanis ended up renting from Pieri.

I have a feeling we have not heard the last of this story. I wonder why the U-T did not want you to read it. Are they protecting Dumanis? Well, here it is anyway, all 334 pages of it.



The DROP program is an illegal gift of public funds. 12/23/07


                                                     by Pat Flannery                                        top^

"DROP is intended to be cost neutral."  So says the Municipal Code. As I explained in my December 19, 2007 blog, each individual DROP participant's account is credited with an 8% "actuarially assumed rate of return", and compounded quarterly.

Unfortunately that "actuarially assumed rate of return"
of 8% is not being achieved by SDCERS in the real world. Over a 7 year period from 1999 to 2005, years for which I was able to obtain figures, actuarial losses exceeded gains by $334 million or 1.51% less than the assumed  8%.

Year   $  


1999 -18 - 0.71
2000 110 3.66
2001 - 264 - 8.84
2002 - 297 -10.74
2003 -114 - 3.86
2004 242 6.60
2005 8 - 0.18
Total - 334 - 1.51

To verify those figures please check my two source documents: SDCERS published "Net Assets" and SDCERS published "Investment Income" for those years. Where SDCERS alters the figures for a previous year in a subsequent year, as it frequently does, I used the subsequent year's figure. I found no note or explanation as to why they made those alterations.

Here are the same numbers in more detail and in table form.

Year Net Assets    Investment
Income at 8%
1999 2,476,445,621 $180,463,938 198,115,650 (17,651,712) -0.71%
2000 2,999,010,145 $349,654,651 239,920,812 109,733,839 3.66%
2001 2,987,534,675 ($25,126,082) 239,002,774 (264,128,856) -8.84%
2002 2,772,864,422 ($75,934,760) 221,829,154 (297,763,914) -10.74%
2003 2,968,014,758 $122,729,552 237,441,181 (114,711,629) -3.86%
2004 3,680,553,203 $537,196,172 294,444,256 242,751,916 6.60%
2005 4,281,806,067 $350,209,486 342,544,485 7,665,001 0.18%
Total or
3,166,604,127 1,439,192,957 1,773,298,311 (334,105,354) -1.51%

That shortfall (from 8% to 6.49%) added $334,105,354 to the unfunded actuarial liability. Amazingly, it is still widely believed that the cause of San Diego's pension deficit is "under funding" by the City, when the real cause is investment losses and over-benefiting.

During those 7 years SDCERS continued to credit individual retiree DROP accounts with 8 % interest, compounded quarterly. For some degree of member/sponsor equity those DROP accounts should have been credited with the actual rate of return, 6.49%, and should at least have been charged an administration fee as they would elsewhere.

The dishonest assertion by the employee unions that the UAAL is a "loan" to the City, causes serious structural anomalies. One anomaly is that SDCERS actually credits itself with 8% interest on its own investment losses!

But the biggest member/sponsor inequity of all is an ongoing attempt by the unions to impose an "obligation" to "pay back" this "under funding" in the form of "Pension Obligation Bonds" and the sale of City property. In many ways this fight for member/sponsor equity is only beginning.



How pension liabilities continue to threaten the City's financial health. 12/20/07

                                                       by Pat Flannery                                        top^

City Attorney Mike Aguirre will speak during public comment at the SDCERS monthly Board Meeting tomorrow morning at 8:30 a.m. He will present his latest Report on the pension system. In it Aguirre wrote:

"San Diego City taxpayers have a right to know about the financial burdens they are facing. If the granting of unfunded benefits is allowed to go uncorrected it will result in further deterioration of the City’s financial condition."

I have not yet had a chance to fully study the Report but I found the following graphs and charts compelling. First, they offer a comparison of PVFB  vs. pension assets.

"The “present value of future benefits” (PVFB) measures the total amount of money owed to all active employees and retirees who have worked long enough to receive a pension."

In the Report Aguirre goes on to examine the main causes of the above growth e.g. DROP, purchase of service credits, retroactive benefits etc. But I will confine myself to comparing the PVFB with the value of pension assets. Here they are side by side in chart form:

Year Market Value of Assets PVFB






















Here is the source document for Aguirre's PVFB figure of $6,475,469,077. It is important to understand what that PVFB figure is, because much of his presentation depends upon it. The following information should help you understand it.

These are some actuarial terms that may help. Here is the full 2006 Actuarial Valuation Report and an extract showing two different PVAB valuations for accounting purposes known as FASB No. 35 and GASB No. 25. See how confusing it can get? For those who really want to study this thing here are FASB No. 35 and GASB No. 25.

Note that a FASB 35 valuation returns a "
Ratio of Assets to Value of Benefits", in this case 98.87%. That was the number quoted by City actuary Joe Esuchanko on the witness stand in the POA case and is often misquoted by union people as the UAAL ratio.

GASB 25 on the other hand returns a "Ratio of Actuarial Value of Assets to Actuarial Liability", in this case 79.92%. That is the pension system's real UAAL, "the excess of the Actuarial Accrued Liability (AAL) over the Actuarial Value of Assets (AVA)".

The AAL is defined as "that portion of the Actuarial Present Value of Total Projected Benefits (APVTPB) not provided for by future normal costs".

The AVA is defined as "the value of cash, investments and other property belonging to the OPEB plan, as used by the actuary for the purpose of a valuation".

The PVAB used by Aguirre is used in a popular method of calculating the UAAL ratio, EAN, because it offsets the PVAB with the "Present Value of Future Normal Costs". SDCERS uses the less popular PUC method, which does not use the "Present Value of Future Normal Costs" and returns a lower value for the UAAL ratio. Perhaps that's why.

Now let's look at the relationship between the City's annual required contribution (ARC) and the employees contribution. It reveals a disturbing trend..

First, the City's 2006 "contribution" needs to be adjusted because it includes a once-off payment of $100 million, derived from borrowing against the City's tobacco settlement.

Note that the lines on the graph dramatically parted company in 2004. Even after a "tobacco adjustment" the City's red line continues arching upwards, opposite to the downward trend of the employee contribution black line.

Both lines should trend in the same direction, whether the number of employees is increasing or decreasing. Therefore the City's annually required contribution (ARC) is spiraling upwards for reasons other than the number of employees entering or leaving the system. It is primarily because of a growing UAAL amortization component in the ARC.

Unfortunately no UAAL amortization schedule can keep pace with such an actuarial liability growing exponentially due to interest accruing at 8%, compounded annually. Oh, the magic (or curse) of compound interest. The interest alone on a billion dollars at 8% is $80 million per year. At least another $80 million per year would be needed to amortize it. An out-of-control upward spiral is inevitable using 8% compounding annually.

Therefore in my opinion the pension system has serious internal structural problems. Unfortunately four of the current City Councilmembers want to keep it all under wraps until they term out next year. Unfortunately also the Mayor is avoiding the pension problem until he is safely returned next year for a second term. He will not fight the unions.

With the exception of Donna Frye, Aguirre is the only elected official willing to take on this issue. He is paying a very high political price for it. The employee unions, and strangely the conservative U-T, are ganging up on him, while the Mayor eggs them on. But it is inevitable that sooner or later Aguirre will be vindicated because the facts are on his side.


The pension DROP program is a financial wildfire. It is out of control. 12/19/07

                                                       by Pat Flannery                                        top^

Here is a snapshot of DROP I compiled from data published in the
SDCERS Board Meeting Agenda December 21, 2007. There are currently 1,575 participants in DROP, 995 active service employees and 580 retirees. The total DROP liability is $282,259,890.

DROP Accounts - November 30, 2007

Active Members Retired Members
Legislature       1 $43,140
General 555 $63,754,558   299 $39,974,553
Lifeguard 5 $933,991   4 $683,996
Police 215 $41,053,262   137 $40,207,096
Fire 181 $46,282,238   130 $44,346,024
UPD Safety 6 $668,151   2 $388,813
UPD General 28 $3,076,698   6 $403,069
APA General 5 $291,136   1 $153,157
Totals: 995 $156,060,038   580 $126,199,852

The rationale for DROP was the retention of highly trained employees, especially police and fire - it costs a lot of money to train cops and firefighters. It quickly became another abused element of the City's pension plan. It is now almost totally out of control.

The reason: where can you get 8% on your money compounded quarterly? Where can you double your money in 8 years and 9 months, in total safety? So, everybody wants in.

The above $126,199,852 has been shrewdly left in their DROP accounts by 580 ex-employees who have actually retired. But why would the City continue to offer DROP to them when the rationale is gone - retaining them is no longer possible? Here is a web site that does the calculations. That $126,199,852 becomes $252,385,765, roughly double, in 8 years and 9 months, 35 interest periods, at 8% APR with 4 interest periods per year.

Therefore, if these shrewd 580 retirees leave their money in their DROP accounts for the next 8.75 years, they will double their money. But it will cost SDCERS $126,185,913 or $14,421,247 per year in interest alone, in addition to normal pension benefits.

How many of the current 995 "actives" who, by DROP rules must already be within 5 years of retiring, will opt to stay in DROP after they actually retire? Probably quite a few. If they all do, it will cost SDCERS $312,102,839 - $156,060,038 = $156,042,801 or $17,833,462 per year in interest alone for the next 8.75 years, in addition to normal pension benefits.

If not one new person joins DROP after November 30, 2007, SDCERS still has a potential liability of $14,421,247 + $17,833,462 = $32,254,709 per year in DROP interest alone.

There are currently 9,772 active members in SDCERS. The vast majority of these people were hired prior to July 1, 2005 and will therefore be eligible for DROP. I dread to think what will happen if they all enter DROP when they become eligible and stay in it for an extended period of time after retiring. I won't do the calculations. It is too scary.

Even if the entire DROP program was terminated today, and everybody took their money and left,  SDCERS would still have to find $282,259,890 in cash to close the existing accounts. It is clear that the DROP program, as currently administered by SDCERS, is unsustainable. If ever there was an "inconvenient truth", this is it.


Sunroad gets compensated - it doesn't need to move the substation. 12/18/07


                                                     by Pat Flannery                                        top^

I went to the Planning Commission meeting last Thursday December 13, 2007 to watch the City let Sunroad off the hook from its promise to move the old SDG&E transformer from its present inappropriate location, smack in the middle of a condominium complex, to a City-mandated location in Sunroad's new commercial area.

I watched as Aaron Feldman, Tom Story, Steve Strauss and a roomful of Sunroad "suits" smiled as they got their way.

Why did I get the feeling it was all arranged behind closed doors and that I was just watching a public farce, put on for the CityTV cameras to make it all look legitimate?

Anyway, Sunroad got its Planned Development Permit and its Vesting Tentative Map for its 5-story residential building containing 129 "residential units" and its two 4-story residential buildings containing 379 "residential units". These "residential units" will be converted into condominiums when they are about 90% completed. That is how, with the aid of DSD, San Diego developers avoid discretionary permits, CEQA and impact fees.

Our DSD is a stand-alone, developer-serving "Enterprise Fund" within the City Budget. It is all perfectly legal. The developer pays DSD's direct expenses - we pay the rest.

Remember this? I took some video of the old SDG&E transformer and talked to local residents back in June 2007. The residents were horrified that the City would allow an ugly transformer to remain right in the middle of a new condominium complex. I notice that as of today my video on YouTube has been visited 2,293 times. That suggests there is continuing local interest - and anger. I received a lot of angry emails and phone calls.

Even Jim Waring was adamant that no more permits would be issued to Sunroad until that out-of-place transformer was moved. Here is Waring in a May 11, 2006 email to Sanders' political commissar, Kris Michell, making it clear that the "environmental documents and the development agreement between Sunroad and the City require the substation to be moved". He was adamant that no permits were to be issued to either Sunroad or Lyon until the substation was moved. Here is his email to DSD's Gary Halbert on March 2, 2006. And here is Gary Halbert reiterating that same position to Sempra on June 2, 2006.

SDG&E promised the PUC on February 7, 2003 to build a new substation
as required by a Mitigated Negative Declaration (MND) prepared for the City of San Diego and designated LDR No. 41-0101. They told the PUC:

"The new substation will be located on the south side of Lightwave Avenue approximately 400 feet east of the intersection of Lightwave Avenue and Kearny Villa Road in the City of San Diego. Spectrum Substation is designed to significantly increase the capacity and reliability of the electric distribution system in the area to serve the planned future development, which includes commercial buildings and high density residential."

Why then did the City cave in to Sunroad again last Thursday?

My guess is that Sanders wanted to compensate Sunroad for the loss of the top 20 feet of the infamous "too-tall" Tower. Therefore a way had to be found to get Sunroad its
Planned Development Permit and its Vesting Tentative Map. The City could settle for a promise to move the transformer later. That is exactly what happened. All the City demanded of Sunroad was a commitment not to build on the dedicated 0.69 acre site until after SDG&E decommission the transformer. In the meantime it can be used as a parking lot.

SDG&E indicated at the Planning Commission meeting on Thursday that "within 3 to 5 years" they would "probably" increase the capacity of another transformer in the area thus releasing the site to Sunroad. They announced that they have forged a "confidential" agreement to that effect. One thing is for sure, Sunroad's 0.69 acre site will never see an SDG&E substation. After a suitable passage of time Sanders will fix it for them again.

Sanders needed to send a message to his developer contributors, that he was still in charge of planning and land use and could still deliver for them. The message of last Thursday will not be lost on the developer community. Their campaign money still works.

So Feldman and his slick Sunroad lawyers came out smelling like roses. They were even brazen enough to tell the Commission that they estimate on getting 92 condominiums on the site. Sometimes they forget they are speaking in public and that we are not all idiots. They were applying for a permit to build "residential units", i.e. rental units, but spoke of condominiums. They don't even bother to hide the fact that they fully intend to pull a "switcheroo"  when they are 90% built, getting a condo conversion on Council "consent".

I feel very bad for the people who bought Lyon condominiums in full expectation that the transformer would be moved. Now SDG&E can move it when and if they please. Maybe never. In the meantime, Sunroad gets to use the 0.69 acre site as a parking lot. I never thought I would actually miss Jim Waring.

Even Waring would not have countenanced this crooked deal. I said many times that Jim did not belong in government - he didn't realize just how crooked government work can be.


AG Report on City SLAs may prompt tighter Internal Controls. 12/17/07

                                                       by Pat Flannery                                        top^

In a letter published today, addressed to Jerry Sander, Mike Aguirre and Scott Peters, State Attorney General Jerry Brown found no reason to pursue any individual for questionable billing practices in the City Attorney's office as far back as 1987. The AG decided to close the matter after a 16 month investigation involving the
collection, numbering, indexing and review of 11,906 pages of Citywide documents.

The investigation came about because a former Deputy City Attorney, William Newsome, filed a complaint with every prosecution office in San Diego on December 6, 2004, four days after Mike Aguirre took office. The complaint alleged wholesale falsification of billing records by the former City Attorney Casey Gwinn. It seems Newsome waited until Gwinn was safely gone and Leslie Devaney defeated, before going forward with his complaints.

Aguirre immediately stopped the practice of billing "projected time" to Departments such as the Water Department. On December 21, 2004 he circulated a memo  directing that in future only "actual hours" would be billed to City Departments for special legal services.

It must have cost Aguirre some full-time attorneys as Gwinn raked in over $7 million in 2001 alone from various Enterprise Funds and Block Grants.

Reading the AGs letter today reinforces my belief that one of the great weaknesses in our City government has been, and continues to be, a serious deficiency in internal controls. This has been pointed out by various parties such as Kroll.

The lack of satisfactory internal controls has been a major cause of delay in finalizing audits over the years. It also added enormously to the cost of those audits. Senior management seemed to like it that way. It gave them latitude but it served the City badly.

The present Mayor and his senior staff seem to have a acquired a liking for the good old days. They are very slow (unwilling or unable?) to provide requested financial information.

Therefore this thorny issue of internal controls will be a major issue in the discussion now opened up following the Mayor's decision to revisit the 2005 CAFR. Perhaps he has finally decided to start running the tighter ship he promised during the election.

Mayor forced to do an "about-face" on pension disclosures. 12/14/07

                                                       by Pat Flannery                                        top^

Jay Goldstone delivered this letter, dated yesterday, December 13, 2007, to today's Audit Committee meeting. It is titled: "Modification to the City's Fiscal Year 2005 CAFR".

The letter shows that the Mayor has (albeit reluctantly) instructed Goldstone to reopen the City's 2005 CAFR. Is this Sanders' second epiphany?

In the letter, Goldstone tried to minimize the impact of this "about-face".
No doubt Goldstone's letter was heavily "debated" by the two (ex-Golding) political commissars,  Fred Sainz and Kris Michell, before being released today. The Mayor's spin team does not want this to be painted as another "flip-flop" like the gay marriage issue or the pulling down of the top two stories of the Sunroad building. But like the Sunroad climb-down, it became politically necessary. It is now up to Sainz and Michell to do the damage control.

Did the SEC
charges against the former auditor on Monday play into this? It must have spooked the current auditors, Macias Gini. Did some of the pressure to reopen the 2005 CAFR come from them? Or was it all from the political wily Sanders? He knew that Aguirre and Frye had beaten him on this one. It could only have got worse for him. His characteristic obfuscation was not working with regard to the City's pension liability.

This Draft Report by the City Attorney, prepared over the last few weeks and presented today to the Audit Committee for comment only, was a clear signal to Sanders and his elitist Mayoral team that Aguirre and his financial team, led by Deputy City Attorney Larry Tomanek and Deputy City Attorney Mark Blake, every bit as financially capable as Jay Goldstone and Greg Levin in financial matters, were not going to be sidelined.

Bob Kittle's divisive "meddling" editorial did not help foster a city-wide team mentality. In reality it was Kittle who did the "meddling".

It is only by working together, the City Council as the Legislature, the Mayor as the Executive and the City Attorney representing the Law, that the business of the City can get done. The Mayor, with the help of the U-T tried to exclude Aguirre and Frye.

If the Mayor wants to meet his own policy deadlines, like getting to the bond markets next year, he needs to start thinking of Aguirre and Frye as part of the Citywide team, not as his political opponents. For the welfare of the city as a whole, he needs to stop conniving with fellow doctrinaire "insiders" like "Bowtie" Bob Kittle who think that "outsiders" like Aguirre and Frye should be seen but not heard. The people want to know the truth.


The snake in the garden - "surplus earnings". 12/12/07

                                                       by Pat Flannery                                        top^

"The Snake in the Garden of SDCERS  -  the seductive concept of "Surplus Earnings"". That is how Vinson & Elkins described "surplus earnings" in its September 16, 2004 Report. Here is an extract of the 5 pages describing the "surplus earnings" issue.

Unfortunately the same snake continues to seduce the present Mayor and his staff.

Yesterday, the SEC condemned this practice in its complaint against former auditor Thomas Saiz. Here is the relevant page from the complaint.

Obviously the SEC did not like the fact that Saiz certified "surplus earnings" for distribution as a 13th Check etc. It noted that this practice was responsible for 17% of the increase in the City's unfunded pension liability between 1997 and 2003.

But Sanders is continuing the exact same practice! He is the arbitrar of these payments. The San Diego Municipal Code specifies his staff as the originator. The Code says:

§24.1501: "Surplus Undistributed Earnings shall be determined by the City Auditor and Comptroller in accordance with this Section and shall be certified by the City’s independent public accountant."

Obviously City Auditor and Comptroller, Greg Levin, obliged. So did the independent public accountant, Macias Gini. Here is the proof. Mark Hovey, Chief Financial Officer for SDCERS, presented the required certification from Macias Gini to the Business & Governance Committee of the SDCERS Board on November 2, 2007.

The Board then presumably transferred $186,095,249 from the "Undistributed Earnings Reserve" to the "Reserve for Employer Contributions" for "earnings received that were attributable to fiscal year 2005". But according to page 60 of SDCERS 2005 CAFR: "
At the beginning of each fiscal year, SDCERS’ Board credits all Surplus Undistributed Earnings to the Reserve for Employers’ Contributions in order to reduce SDCERS’ current liabilities." Why only $186,095,249? What about the rest - 344,884,797- 186,095,249 = 158,789,548?

Is that how much will be distributed to retirees as "surplus earnings"?

I wonder how Mayor Sanders will explain that little piece of arithmetic in his forthcoming "
cover letter to the 2005 audit". Will addressing the distribution of "surplus earnings" affect his own pension check? Does he receive a 13th Check?

In his "meddling" Mike Aguirre discovered all this and wrote to Macias Gini on December 4, 2007. Amazingly, Macias Gini denied having provided the above certification. Therefore either Macias Gini or Mark Hovey of SDCERS is lying. How Sanders must long for the good old days of City Attorney Casey Gwinn, who took office in 1996 promising to
"be more responsive to the business community's needs". He was.

Both Aguirre and Frye have called for the practice of paying "surplus earnings" to be docketed at City Council for review. Here is Donna Frye's letter to Peters dated November 19, 2007. But with Scott Peters in the Council President's seat, I wouldn't hold my breath. The last thing Peters wants to do is raise his past transgressions against the SEC.

He and Dick Murphy must be top of the SEC list of elected officials to be prosecuted if this purge continues. Peters should do the constructive thing and "get out of the way to let the City Attorney and the Mayor do their jobs". The City needs a fresh start. It can't wait until December 2008 when Peters will be "termed out". Go now Scott, for the City's sake and Mayor Sanders, have that "honesty" epiphany real soon. We need our infrastructure fixed.


Maybe it's time for another epiphany by Sanders. 12/12/07

                                                       by Pat Flannery                                        top^

Mayor Sanders should write a big "Thank You" note to Mike Aguirre for "meddling" in the City's financial disclosures. The 2005 CAFR (Comprehensive Annual Financial Report) which Sanders has already signed, is replete with the same kind of potentially "false and misleading" doubletalk for which former auditor, Thomas Saiz, is charged by the SEC.

I have dealt extensively with the long and thankless efforts by Aguirre and Frye to get the Mayor's office to correct several potentially "false and misleading" statements in the 2005 CAFR. Finally, in a letter to the Rules Committee last Thursday, Sanders, through Jay Goldstone, agreed albeit reluctantly, to "add a cover letter to the 2005 audit".

Aguirre's "meddling", as described in the U-Ts most recent Aguirre-bashing editorial last Saturday, is getting Sanders a second chance. Don McGrath, Aguirre's Executive Assistant City Attorney, put it perfectly in a pithy response to the U-T today:

"The city found itself in trouble because a prior city attorney did not “meddle” enough in the decisions being made by the mayor and City Council. Had the actions of our elected officials been better scrutinized, the city would never have been bounced out of the municipal bond market."

Therefore, to paraphrase the U-Ts "meddling" editorial "
Is it too much to ask the Union-Tribune either to play a constructive role or get out of the way and let the City Attorney do his job?" Defending city lies is not helping the city Mr. Kittle. Honesty is the best policy.

There is a lot of honest work to be done before the City can get back into the public bond markets. Sanders wants to sweep all the pension stuff under the carpet while Aguirre wants to bring it all out in the open. Aguirre believes in full disclosure, Sanders believes in bluff and bluster. Nowhere was this more evident than during the Soledad Mountain affair.

Sanders was angry at Aguirre for going before the cameras and speaking openly and honestly about what the City may or may not have done prior to the landslide. It was all going to come out anyway. Why lie about it? But that is exactly what Sanders would have done if he were not in Washington
as errand-boy for Doug Manchester's Navy Broadway.

The approach to the truth is a fundamental difference between these two men.

Maybe in writing his promised "cover letter" to the 2005 audit, Sanders will take a leaf out of Aguirre's "honesty" book. As a lawyer Aguirre knows: always tell the truth to the jury. Maybe it's time for another epiphany by Sanders.

He should start by taking a look at the "surplus earnings" being distributed as a 13th Check to retirees like himself, having first been certified by his own office and by the City's current "independent" auditor, Macias, Gini - which will be the subject of my next blog.

SEC accuses San Diego's former auditor of fraud. 12/11/07

                                                       by Pat Flannery                                        top^

Yesterday, the SEC
filed charges against certified public accountant Thomas J. Saiz and his firm, Calderon, Jaham & Osborn (CJO). They have charged Saiz of drafting "false and misleading footnotes to the City's financial statements". These statements were included in the City's offering documents for its 2002 and 2003 municipal securities offerings.

Auditors play an important role in providing investors with material information in municipal securities offerings” said Linda Chatman Thomsen, Director of the SEC’s Enforcement Division.  Now we understand why the City's current auditors,  Macias, Gini & O’Connell were so spooked last Thursday when Mr. Aguirre asked to meet with them and suggested they to bring their attorney along. Perhaps now they will answer his and Ms. Frye's pension questions. Ms. Frye's questions have been outstanding since April 2007.

Here is the actual court filing and here is this morning's SEC press release.

Mr. Aguirre is holding a press conference at 10:30 A.M. I will have more on this later.


Snake oil vs. the truth in the "excess benefits" pension issue. 12/10/07

                                                       by Pat Flannery                                        top^

I have been working on a full understanding of the interaction between the City's financial statements and the pension system. Retiree benefits are the City's biggest liability.

I therefore went along to listen to SDCERS
Retirement Administrator/CEO, David Wescoe, make his report to the Rules, Open Government and Intergovernmental Relations Committee, a sub-committee of the City Council, on Thursday, December 6, 2007.

Here is his letter to that Committee.

It and his
verbal presentation to the Committee seemed designed to excuse the fact that he continues to make IRS "excess benefits" payments to 102 retirees out of the SDCERS trust account, long after he "discovered" that these payments were in excess of IRS-allowed limits for a qualified government pension plan.

Pressed by Mr. Aguirre as to why he continues to make these payments he offered this extraordinary explanation - that the IRS has "extended the period of his Voluntary Compliance Program".

He wants us to believe that it is OK for him to continue making these payments because he has entered the IRS Voluntary Compliance Program. That's like an alcoholic saying he will continue to drink because he has joined Alcoholics Anonymous.

San Diego seems to attract world-class snake oil salesmen and Wescoe is right up there with the best of them. Sanders is still the champion of all snake oil salesmen. He is the cause of this whole farce because he is afraid to confront the unions on pension issues.

Two things are now very clear:

(1) Mr. Wescoe intends to "keep drinking after joining AA", in other words he has no intention of stopping the payment of these "excess" benefits out of the regular trust fund. Wescoe added the 415 infractions to his Voluntary Compliance Program with the IRS on August 6, 2006, but he continues to make these "excess" payments to this very day!

(2) We would never have known about it if it were not for Donna Frye asking questions and Aguirre aggressively following it up. They still make a formidable pair. Donna famously asked what this "Proper treatment of IRS benefit limitation", the $22.8 million item on the April 16, 2007 actuary report to the City Council was all about. That question sparked the whole "excess benefits" investigation and raised the IRS Section 415 issue.

It took Jay Goldstone until September 17, 2007 to respond to Ms. Frye's questions of April 20, 2007. That has really rankled with Frye. It turned out that the City's actions were far from the "proper treatment of IRS benefit limitations". The City continues to engage in very IMPROPER treatment of IRS benefit limitations.

Wescoe's claim that he must first obtain a "Private Letter Ruling" from the IRS, before he can determine which retirees were overpaid and by how much, the so-called "testing methodology", is merely a cover for continuing to pay these "excess benefits" from the "qualified" trust fund. He says in his letter to the Rules Committee: "Until the IRS issues the letter ruling, no payments can be made from the POB plan". That is simply not true.

The IRS publishes full details of its 415 Code, just as it does with all its Tax Codes, all Wescoe and Goldstone have to do is read it and comply. Their "testing methodology" is just a smoke screen. Wescoe invoked it several times in his presentation on Thursday.

A Preservation of Benefits Plan (POB) was set up by the City Council in 2001. "Excess" benefits should have been paid out of this plan from that date. The City did NOT need a "Private Letter Ruling" from the IRS to start doing so. SDCERS did not need to take any action other than to give the City a list of the "excess" amounts per retiree. It should not have been difficult. A column in a spreadsheet, with the appropriate "testing" formula, was all that was needed. Why it was not done is a mystery. They simply chose to ignore it.

Wescoe is a political animal, a team player. Like his predecessors, Sanders wants his cake and eat it. He wants to mollify the unions and get back into the bond market as well.

The credit agencies will ask the same questions asked by Aguirre and Frye - what is the real cost to the City? The outside auditors seem unable to determine it. Therefore Aguirre has asked for a meeting with them, which they interpreted as a threat. Why should it be a threat? What are they afraid of? Unless they have cut corners and fear the consequences.

As for Sanders, he may have decided that he has no chance of getting back into the markets without breaking with the employee unions, which he is unwilling to do. He has chosen therefore to blame it all on the "obstructionism" of Aguirre and Frye.

But the facts and the truth are on Aguirre and Fry's side. The retirement benefits for at least 102 retirees became so bloated that they exceeded the (generous) IRS limits for a qualified pension plan. Topping the list is former City Attorney, Casey Gwinn, who retired at age 44 on $100,000 per year. Gwinn was rewarded for the giveaways he signed off on between 1996 and 2004. Sanders and his corporate backers do not want to penalize such service. Indeed they are straining every muscle to replace Aguirre with another Gwinn.

Scott Peters "star chamber" antics were in vain. Dr. Pollack lost. 12/05/07

                                                       by Pat Flannery                                        top^

It is nice, once in a while, to able to report a victory for the little guy. Great credit is due to activist Randy Berkman and Councilmember Donna Frye for not allowing Dr. Pollack to build on environmentally sensitive land (ESL) in Mission Valley. On Tuesday they ended the proposed Pacific Coast Building, despite Scott Peters "star chamber" Council tactics.

The defeat of the Pacific Coast Building project is important for two reasons:

(1) It overturns the spurious "economic benefit" argument. Contrary to assertions by Dr. Pollack's aggressive attorney, Mike McDade, and his developer-serving doctrinaire supporters on the City Council, Scott Peters,
Brian Maeinschein, Jim Maddafer and Ben Hueso, every property owner does NOT have a god-given right to a private "economic benefit" that supersedes all public land-use considerations, environmental or otherwise.

On October 19, 2007 Scott Peters went so far as to say, on the record, that if the City denied Pollack's right to bust the City's steep-hillside environmental considerations, the City would have to purchase the property. That is
doctrinaire free-market in the extreme.

(2) It demonstrated the power of CEQA. This State Law stipulates that, upon appeal, an environmental ruling by an unelected body, such as a Hearing Officer or the Planning Commission, must be upheld by a majority of the discretionary body, in this case the City Council. There is no further appeal. The project is dead for lack of an adequate EIR.

Read Manis's answer to Donna Frye's Motion. He couldn't bring himself to use Donna's name. She became Council District 6. He "found" that there were "special circumstances" viz. that Pollack would suffer "unnecessary hardship" if not allowed to develop this site.

I visited the site a few weeks ago to see for myself. I was appalled that the City would consider such an application. It made me realize just how corrupt DSD has become.

I wonder if Scott Peters ever visited the site. If he had he would surely be embarrassed that he ever championed such an outrageous "development". Not only does the site start at an existing high retaining wall, at the back of an office parking lot, it climbs upwards at a very acute angle and has a natural gas pipeline buried beneath the steep brush-covered slope.

Read the entire saga here. Our appreciations are due to the Honorable Councilmembers Frye, Atkins, Faulconer and Young who did the Honorable thing in denying this project.


The privatization of Transient Occupancy Tax. What's next?  12/04/07

                                                       by Pat Flannery                                        top^

When asked by an an aide how history might judge his support for the terror-bombing of German cities (particularly Dresden, the cultural capital of Europe) in the last days of World War II, Winston Churchill replied: "don't worry my boy, I shall write the history".

I wonder whether the editorial board of the Union-Tribune might have given a similar answer to any hoteliers who might have feared that
appropriating $25 to $30 million of city TOT revenues to the exclusive use of the hotel industry might be a little too blatant. Even Bill Evans might have wondered if that was not going a bit too far. What about those needed fire stations? What will the public say? What will Fire Chief Tracy Jarman say?

The U-T wrote this "short take" today. Staff writer, Ron Powell could have written it on a postage stamp: "The increased room tax is expected to raise $25 million to $30 million in its first year, which the district will use to advertise San Diego's hotels and motels". No problem. Everything is OK. The tourists will put out their own fires. Jarman doesn't need the money. After all she gave evidence in front of the City Council in favor of Bill Evans' Rose Canyon Bridge and lied (she later retracted it) about why she didn't need a fire station in South University City. We are hardly going to hear from her on this $30 million.

For a history and timeline of the "Tourist Marketing District" scam, go to my "Source Documents" column. There you will see how this kind of thing is done. It becomes clear that our City staff take their orders from the business interests. They even let them write the Ordinance. The City Council rubber-stamp it, as they did yesterday, and the U-T get to write the history. It is a little closed university of privilege and misinformation.

That is how "government" is done in this city. It is not just the hotel industry, the building industry, employee pensions, it all adds up to a city of giveaways. There is nothing left for city services. We the people can "shelter in place". We are not going to get fire protection.

Increasing taxes would only increase the giveaways. They have privatized vast amounts of property tax revenue in the name of "redevelopment". We have a city within a city called CCDC, with its own unelected mayor, imported from Florida, Nancy Graham. What's next?

Why this site is "more than a blog". 12/02/07

                                                       by Pat Flannery                                        top^

I recently devoted a great amount of time to gathering information on the San Diego pension system. I wanted to have it all in one place - a sort of electronic filing cabinet.

Whenever I needed a document to illustrate a point, I had to hunt through mountains of online documents on web sites such as SDCERS, the unions, City Comptroller, Aguirre's Reports, Donna Frye's Memos and God knows where else. So I brought them all together in my "Source Documents" column opposite - finally, my Pension System Filing Cabinet.

I hope you find it as useful as I do. I will add more documents, historical and current, as I discover them. Anybody who knows of a document that sheds light on any aspect of the pension story, please email it to me. I will put it on my timeline, so we can all share it.

Albert Einstein was once asked what he thought was the most significant discovery of the 19th Century. His answer: "Compound Interest". I am no Einstein but if I were asked what was the most significant discovery of the 20th Century, I would answer: "The Hyperlink".

The "Hyperlink" is what makes the Internet so incredibly powerful. With the click of a mouse you have instant access to an online world-library of knowledge. More and more of the world's knowledge is going on line every day. We live in an exciting "knowledge" time.

San Diego is a microcosm of this world-wide phenomena. A growing "knowledge gap" is emerging between those of us who get our news and information online and those who only read the print newspapers and watch the evening news. There is a saying in politics and in business: "he who has the data wins". That is true in all walks of life.

Just as I no longer accept a newspaper's "report" on what a source document says, e.g. a court filing or a news release, I don't expect you to do so either. I therefore provide a hyperlink to the actual document. Even if you do not read it, you know it is there.

Please check out my "City Pension" hyperlink opposite. Think of it as your own personal filing cabinet for the city's pension system. I hope to create a similar "electronic filing cabinet" for other hot issues such as Navy Broadway, NTC, Chargers' Stadium, Sunroad, Density Bonus, Redevelopment Abuse etc. etc. That is why this is "more than a blog".

Please study the pension information opposite. It is your money.

Poway should go on red alert. "Findings" Manis is coming. 11/29/07

                                                       by Pat Flannery                                        top^

I did not know this yesterday when I wrote my blog but apparently Bob Manis is to be Poway's new Director of Development Services. God help Poway.

He starts January 7, 2008. Mayor Mickey Cafanga obviously means to ram his Town Center visionary project through (with public money) whether the citizens of Poway want it or not. Mickey wants it to be his civic monument. But it will come at the expense of all other infrastructure in Poway city, which badly needs street, water and sewer upgrades.

Manis' parting gift to "Pappa" Doug Manchester was this lying
Navy Broadway CEQA finding. But it's not over yet. Cafagna may find that Poway citizens will know a lot about Manis and his lying CEQA "findings". I will try to make sure they do.

Cafagna wants to use Poway's (redevelopment diverted) tax-increment money on the Town Center. He therefore hired Bob "pay-me-to-lie" Manis. There is no doubt that Manis is the right man to ram through whatever EIR the Poway Town Center project will need.

Thank goodness Manis has made his last CEQA finding in San Diego. He left a trail of environmental disasters around this city. But it may not be too late to undo the damage at Navy Broadway. Manchester may have secured the last San Diego Manis "finding", with his $50,000 donation to Sanders, but both Manchester and Cafagna may find that ex-San Diego City heavyweights like Manis and Story, tend to over-promise the power of their lies.

The citizens of this city still hold the purse strings. 11/28/07

                                                       by Pat Flannery                                        top^

In over three years of writing this blog (I started it in November 2004) I have used the strongest condemnatory language on individuals in the matter of Navy Broadway. It seems to bring out the worst and the best in all of us. It will ultimately define who we are as a city.

If Bob Manis is who we are as a city then we are lost indeed. He epitomizes the very worst of what this city has produced in government service over the last few decades. No doubt he will retire (well away from San Diego, probably on a ranch in Idaho) with other over-benefited high-ranking employees who ruthlessly hollowed out this city for their own gain. "Enron-by-the-sea" hardly covers the rapacity of privileged city employees like Bob Manis. When he retires he will join a long list of infamous pension-gougers like Casey Gwinn.

Here's what I wrote about Mr. Manis and his bought-and-paid-for Navy Broadway CEQA "finding" in October 19, 2006. I didn't expect him to change his spots in the meantime. Here is his Navy Broadway CEQA "finding" dated yesterday, November 27, 2007.

I would not change a word of what I wrote about Manis over a year ago. I still consider him a "
profoundly dishonest" human being. His latest "finding" is just another "grave and deliberate act of maladministration". Unfortunately he is only one of many.

While people like Manis walk the corridors of power of this city I will urge every citizen and every politician to resist every attempt to impose a pension tax. As a citizen I will oppose the reelection of Jerry Sanders as Mayor for many reasons not least of which is this. One of the first things Sanders did as Mayor was to "securitize" the tobacco settlement in order to pay for the golden years of people like Manis. He hailed it as a great achievement.

So, Mr. Manis, you can write your bought-and-paid-for Navy Broadway CEQA "finding", abusing your fiduciary duty to the citizens of this city, but don't expect us to pay for your golden retirement on your Idaho or Wyoming ranch or wherever you plan spending your golden years. Your service to this city has been less than golden. We will not forget.

What do the Chargers really want? 11/27/07

                                                       by Pat Flannery                                        top^

Mark Fabiani (first from left below), attorney and chief salesman for the Chargers, was the guest of Councilman John McCann (second from left), chief Chula Vista cheerleader for the Chargers, at a community outreach meeting last night. It lasted two hours.

McCann first listed all the reasons why the Chargers would be great for Chula Vista and finally got around to mentioning what I was looking for, the Chargers' "incentive".

Two Chula Vista sites are considered suitable, a 139-acre site owned by the Port District, currently occupied by the South Bay Power Plant (which everybody wants rid of) and a 500-acre site in East Chula Vista known as the "university site" (because everybody wants a university there). So which site will the Chargers pick?

The answer is BOTH.

They would rent the bayside site from the Port District for the stadium while the inland site would be a "development opportunity" for the Chargers. There would be no such "opportunity" at the bay front as Gaylord
and smooth-talking local developer Ash Israni have already staked out everything except the power plant. The "university" project would therefore have to generate the $850 million in profit, the going rate for a stadium nowadays.

Fabiani says the Chargers will not ask for a penny from the Chula Vista taxpayers. Just as well, Chula Vista is broke. He and McCann both promised total transparency with regard to the wording of the ballot measure, but no word yet on the exact words.

I spoke to Fabiani afterwards and asked why not offer the same "cost neutral" deal to San Diego, if it exists. Apparently he did, but Sanders turned him down! Blaming Aguirre! "Why Aguirre?" I asked. "Oh, he would think of some way of stopping us" said Fabiani.

I suggested that maybe Sanders had his own reasons for not wanting to keep the Chargers in San Diego and was using Aguirre as an excuse. How could Sanders turn down a stadium deal that did not require a dime from the City? What would the fans say?

If all that is required is a suitable "development opportunity" for the Chargers, SDSU badly needs student housing, as is evidenced by the mini-dorm problem. Surely $850 million could be squeezed out of a housing deal near the present campus if it could be done in Chula Vista. SDSU has been trying to do the Paseo project for years, right on its own campus, and now it is ready to do an $850 million deal in Otay Mesa?

If the Chargers are really offering a genuine "cost neutral" stadium deal to Chula Vista, Sanders should grab it for San Diego. You will hear no objection from Aguirre, from Donna Frye, or anybody else. If bonds are not involved, as with Petco Park, then the fact that Chula Vista has access to the bond market, while San Diego does not, is not the issue.

It just doesn't make any sense. My guess is that the Chargers aren't going anywhere. Why would they? They already have the sweetest deal in the NFL. So, relax Charger fans.


Why the San Diego Pension System is like a Ponzi Scheme. 11/24/07

                                                       by Pat Flannery                                        top^

Wikipedia defines a Ponzi scheme as:

"a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business."

It is named after Charles Ponzi (1882–1949), an Italian immigrant who became one of the greatest swindlers in American history. Prior to being caught, he ran an investment scheme in Boston that paid out abnormally high returns while running up colossal liabilities. His picture opposite is a 1920 mugshot.

During a three-day run on his Securities Exchange Company he paid out $2 million in cash to a frenzied crowd outside his office. He passed out coffee and donuts and cheerfully told them they had nothing to worry about. Many believed him and the run stopped. He would have made a perfect Mayor of San Diego.

San Diego's pension system is not technically a Ponzi scheme but it has many Ponzi-like characteristics. Like all Ponzis it is ultimately doomed to fail because it is based on a false premise. The San Diego pension Ponzi assumes the unlimited taxing power of city government, that pension promises can grow unrestrictedly like the national debt.

But it has been repeatedly demonstrated by the San Diego electorate that they will never agree to additional taxes to pay down the pension deficit. Politicians who propose such a tax will continue to be defeated at the polls. Ask Donna Frye.

The reason: San Diego pension deficit is caused not by underpayment of taxes but by over-benefiting of employees. The main examples of that over-benefiting are:

(1) The Purchase of Service Credits (PSC) program,
(2) The DROP program,
(3) The 13th Check.

The PSC program alone has added $146 million to the pension deficit. The SDCERS actuary has not provided similar analyses for the DROP program or the 13th Check. But, we know that these three programs combined have caused at least 102 retirees to exceed IRS qualifying limits, thereby jeopardizing the entire pension system as a 401(a) tax-deferred plan. The Mayor's 2005 CAFR failed to disclose that material fact.

The Mayor admitted learning of this unauthorized $146 million deficit in his September 21, 2007 "angered response". He said: "I am angered by this revelation and find it to be completely unacceptable." Since then his anger seems to have mysteriously dissipated.

Another reason the present San Diego pension system will fail is because its perpetrators know exactly the fraud being committed, and like all Ponzi operators, they hide it.

According to
SDCERS own actuary, in this letter dated August 14, 2007, SDCERS "sold" 20,643 years of service, adding $350 million to the total actuarial liability. The amount actually paid for those phantom years, after accumulating compound interest at 8% for many years, was $204 million as of June 30, 2006.

In order to arrive at that figure of $204 million (and therefore the $146 million), SDCERS and its actuary had to know what portion was the original contract cost and what portion was the accumulated interest, because each contract had to be calculated separately.

Like all Ponzi operators they withheld that vital piece of information. And Sanders has now become their willing spokesman. All that is missing is the coffee and donuts.  

Despite the fact that we cannot know the actual amount paid for these phantom years, without access to the original contracts, if we take the "accumulated" $204 million as the actual purchase amount, we find that it is 58% of the total liability of $350 million. Therefore the real contract price for each year of service "sold" was considerably less than 58% of its true value.

If you divide $350 million (the total value of benefits added) by 20,643 (the total number of years "sold") you get a value of $17,000 per year. Divide $146 million by $17,000 and you get 8,588, the number of service years actually given away.

The SDCERS Board had no authority to sign these contracts. Giving away 8,588 years of phantom service, valued at more than $146 million, was a breach of their fiduciary duty to the Pension Trust and an illegal gift of Trust assets.

If Sanders proves as slow to correct this as he was with Sunroad, it will be his undoing. These "purchase of service credits" are as illegal as the top 20 feet of that Sunroad building. And just as sure as that Sunroad building had to be reduced in height, the 2005 CAFR will have to be amended to disclose the illegality of these benefits.



Lest we forget - Our politicians lied to us. 11/21/07

                                                       by Pat Flannery                                        top^

This picture was taken at about 1:00 AM on the morning of Tuesday October 23, 2007.

It tells, in a very graphic way, how the men and women of the U.S. Navy (in the foreground) were forced to stand idly by while their home port city was threatened by fire.

Within this picture (bottom right) stood Navy helicopters ready and willing to fly up there, to San Miguel Mountain, and put out that fire.

This man, Ruben Grijalva, was all that prevented them from doing so.

And where was Arnold Schwarzenegger? Covering for Grijalva! Several times Arnold lied to the cameras, blaming high winds.

There were no high winds when this picture was taken. I know: I too was watching those flames, from a lot closer than the person who took it. I could have flown up there in a Cessna that night.

And what about our own fire chief, Tracy Jarman? Did she cede control to Ruben Grijalva during the fire emergency?

If so we do not have a City Fire Department any more. Grijalva is our fire chief.

Contrary to Schwarzenegger's lies about the wind, it was precisely because there was no wind that awful night that the city was spared. If the winds were as bad as he said, the fires would have engulfed the whole city.


The 2008 Eminent Domain Initiative is "something else". 11/21/07

                                                       by Pat Flannery                                        top^

The Howard Jarvis Taxpayer's Association is co-sponsoring a reform of eminent domain initiative. Project leaders, Californians for Property Rights Protection, announced yesterday that it has collected more than 1 million signatures to put a measure on the June 2008 ballot.

Here is the initiative as submitted to the State Attorney General's office on May 3, 2007. It will be sold to the electorate as a cure for eminent domain abuse. But read the final section:

"The provisions of this Act shall become effective on the day following the election ("effective date"); except that any statute, charter provision, ordinance, or regulation by a public agency enacted prior to January 1, 2007, that limits the price a rental property owner may charge a tenant to occupy a residential rental unit ("unit") or mobile home space ("space") may remain in effect as to such unit or space after the effective date for so long as, but only so long as, at least one of the tenants of such unit or space as of the effective date ("qualified tenant") continues to live in such unit or space as his or her principal place of residence.

At such time as a unit or space no longer is used by any qualified tenant as his or her principal place of residence because, as to such unit or space, he or she has: (a) voluntarily vacated; (b) assigned, sublet, sold or transferred his or her tenancy rights either voluntarily or by court order; (c) abandoned; (d) died; or he or she has (e) been evicted pursuant to paragraph (2), (3), (4) or (5) of Section 1161 of the Code of Civil Procedure or Section 798.56 of the Civil Code as in effect on January 1, 2007; then, and in such event, the provisions of this Act shall be effective immediately as to such unit or space."

The relevant provision that shall "immediately apply" is that "limiting the price a private owner may charge another person to purchase, occupy or use his or her real property" will henceforth be considered a "taking" and consequently unlawful under this initiative.

This initiative is considered by many, including Jim Madaffer, President of the League of California Cities, as a sneak attack on rent control. It certainly looks that way to me.

It is not the first time much needed reform of eminent domain was used as a Trojan horse for "something else". This 2008 initiative bears a remarkable resemblance to the defeated 2006 Proposition 90. That initiative's "something else" was this:

"Except when taken to protect public health and safety, “damage” to private property includes government actions that result in substantial economic loss to private property. Examples of substantial economic loss include, but are not limited to, the down zoning of private property, the elimination of any access to private property, and limitations on the use of private air space. “Government action” shall mean any statute, charter provision, ordinance, resolution, law, rule or regulation."

Much as the people desire to limit the use of eminent domain to genuine "public use" (yet to be satisfactorily defined) and outlaw the "taking" of private property and giving it to another private owner (supposedly to achieve a desirable public "purpose", as allowed by
Kelo v. City of New London), they rejected the "substantial economic loss" principle of Prop 90 and will probably reject the intended extinction of rent-controlled properties, in the 2008 initiative.

It is time somebody proposed a "clean" solution to Kelo v. City of New London. This initiative is not it.


Push-pull in politics is healthy, just as in business. 11/20/07


                                                     by Pat Flannery                                        top^

"At Goldman, the controller’s office — the group responsible for valuing the firm’s huge positions — has 1,100 people, including 20 Ph.D.’s. If there is a dispute, the controller is always deemed right unless the trading desk can make a convincing case for an alternate valuation.

“The risk controllers are taken very seriously,” Mr. Moszkowski said. “They have a level of authority and power that is, on balance, equivalent to the people running the cash registers. It’s not as clear that that happens everywhere.”

The above is an extract from a recent New York Times article, that gave rave reviews to Goldman Sachs who seem to have "gotten it so right when nearly everyone else was getting it so wrong." They got it right because they curbed their "happy talkers", their naturally exuberant sales people.

Politicians are naturally exuberant sales people. They need "controllers" even more than high-flying Wall Street securities salesmen. "Controllers" in San Diego are called either "whistleblowers" or "obstructionists". It is a thankless job. But right now the people need to know that Sanders is over-promising regarding getting back into the markets and he is avoiding the problem of over-benefiting city employees. The two are incompatible.

This, along with the other three CAFR’s which have already been received and reviewed by the rating agencies, should bring closure to this chapter in the City’s history and reopen access to the public capital markets."

The above is an extract from
the Mayor's "Strategy for Accessing the Capital Markets and for Issuing Outstanding Audits" dated November 19, 2007. His "strategy" ignores this extract from his 2005 CAFR, showing the condition of the City's Net Assets. Read the last sentence:

"This deficit in and of itself should not be considered an economic or financial difficulty; however, it does measure how far the City has committed the government’s future taxing power for purposes other than capital acquisition."

Now look at the Net Pension Obligation (NPO) account in the City's books - the admitted primary cause of restrictions on the City's future borrowing power. The City's NPO account shows the balance of unpaid pension debt, as of the date of the CAFR. It is a City liability in addition to the $1 billion unfunded actuarial liability (UAL) on SDCERS books. Just as it does with the UAL, SDCERS charges 8% on the outstanding balance.

Here is the current credit ratings for the City. Note the "negative outlook/watch" on all of them. Does Sanders really think that he can reverse those credit ratings without confronting the out-of-control pension benefit machine that is devouring the City?

The numbers are there for anybody to see. Here is the complete 2005 CAFR. It is clear that this City must either reverse its pension benefits binge or go under. You don't have to be a Wall Street expert to see that.

Here is a list of the people whose "Excess Benefits" are at issue. It includes names.


Excess Benefits - we need answers, not more questions. 11/19/07

                                                       by Pat Flannery                                        top^

Aguirre concluded his Interim Report # 22 dated November 14, 2007 with these words:

"... it is the recommendation of the City Attorney that all payments in excess of IRC Section 415 limits should immediately be halted, unless and until, SDCERS and/or the City has a legal mechanism within which to make these payments and if so directed to by the voters of the City of San Diego."

City Comptroller Greg Levin, concluded his November 16, 2007 response with these words:

"What happens if SDCERS loses its "Qualified" or "Tax Deferred" status per the Internal Revenue Code?
(a) What is the likelihood of this outcome? (remote, reasonably possible or probable);
(b) What is the range of loss to the City that arises to the City from this outcome?
(c) Please describe potential legal remedies to this situation."

Thus Sanders has answered Aguirre's dire pension warnings with a flurry of "avoidance" questions. Is Sanders seriously contemplating pressing the "Excess Benefits" button? He seems to be asking: "will the City's Pension Plan lose its "Tax Deferred" status if I pay these Excess Benefits"? Of course it will. He sounds like a President asking "will people really die if I press the nuclear button". Sanders is in pension denial happy land.

Aguirre didn't make this up. For five months Donna Frye has been warning about not having IRS approval for "Excess Benefits". For five months Jay Goldstone ignored her. In the meantime the City kept paying them, as if they were normal pension benefits. These are not normal pension benefits. They are contrary to the IRS code for a qualified pension plan.

Is Sanders now going to ignore Aguirre? In his "response", Levin does not seem to be making a good faith attempt to grapple with the issue. Does Sanders really think he can sweep it under the carpet? Does he really think he can gain access to Wall Street while in open breach of IRS pension rules? Maybe he thinks he can fool the people until after the June 2008 election. No doubt he hopes to get over 50% in that Primary. But how is he going to explain his broken promise - to get the City back into the bond markets?

The City's current auditors, Macias, Gini & O’Connell, are not going to sign off on the 2005 CAFR until they get pension answers. Wall Street has said that it will not even look at San Diego again until it has certified its 2006 CAFR. And we don't even have 2005 yet!

Levin needs to rethink his strategy. Asking mouse questions of Aguirre while there is an elephant in the living room is not wise. Wall Street knows that Aguirre did not create this problem. Rather it knows that Casey Gwinn would have swept it under the carpet.

Mr. Aguirre has made his position clear: if the City cannot show a legal basis for having credited
"Excess Benefits"
within a qualified 401(a) pension system, i.e. having credited retirees with benefits in excess of IRC Section 415 limits, it must correct its 2005 CAFR.

These benefits were credited to "qualified" retiree pension accounts illegally. Period.

If Sanders cannot face up to that reality, he should resign. He was elected to make tough choices. This is one of them. Again and again he has proven to be a weak Mayor, not a strong Mayor. He has not stood up to the union bosses. He has not stood up to Scott Peters who is using his position as Council President to cover up the pension giveaways. Not standing up for the people, against powerful insider special interests, cost Dick Murphy his job and his reputation. Sanders is Murphy II. Sadly, the "happy talk" continues.

Here is the Mayor's
"Strategy for Accessing the Capital Markets and for Issuing Outstanding Audits" dated November 19, 2007. And that strategy is: blame everything on Aguirre.


"Yet another rip-off of San Diego taxpayers" - purchase of service credits. 11/15/07

                                                       by Pat Flannery                                        top^

Back in 2003, between June 30th and October 31st, there was "a deluge" of requests for purchase of service credits according to this letter dated May 4, 2004 from Rick Roeder, the pension actuary at the time. The unions put the word out that the cost to purchase one year of service was going to go up on October 31, 2003. A general employee would soon have to pay 27% of their current salary, instead of the old 15%, for an extra year of service, called "air time". Here is the complete chart of the old and the new rates.

City employees were lined up around the block. SDCERS had to take on extra staff to cope with the "deluge" of applications. City employees are no fools.

Roeder predicted a likely increase in unfunded pension liability of between $22 and $25 million for the period between June 30th (when the word went out) and October 31st. He underestimated the greed (or their shrewdness, as I am sure Ann Smith would put it) of the City employees. We now know that they added $34 million to the City's unfunded pension liability between August 16, 2003 and October 31, 2003 alone. No word on how much was added in the month and half between June 30th and August 16th.

We know about the $34 million figure from this letter dated August 14, 2007 (see page 1) from Roeder's successor, Cheiron. The letter shows that a total of $146 million was added to that part of the unfunded pension liability attributable to purchase of service credits, up to October 31, 2003, where it has remained ever since.

Now Ann Smith is gloating about her "victory" in getting the pension board to uphold the giant giveaway. Here is her letter to MEA members today. It is entitled "
Yet another victory for MEA Members and Fee Payers!"

Yes Ann, and yet another rip-off of San Diego taxpayers. You should be ashamed of your $146 million "legal" larceny. Because larceny is what it was: "
the wrongful taking and carrying away of the personal goods of another from his or her possession with intent to convert them to the taker's own use".

Here is an extract from the City's 2005 CAFR (page 21):

"On September 21, 2007 the President of the SDCERS Board of Administration issued a press release stating that, under the direction of the Board of Administration, SDCERS’ staff, actuary, and legal counsel, he had reviewed the SDCERS purchase of service credit program, and that his review concluded the following:

  • With respect to SDCERS’ service credit pricing structure that was in place prior to November 2003, Cheiron, SDCERS actuary, has determined that the full cost was not reflected in the price then charged to SDCERS members.

  • This pricing shortfall, which totals approximately $146 million, has been included in the System’s Unfunded Actuarial Liability since the inception of the service credit program.

  • With respect to the SDCERS’ service credit pricing in place since November 2003, Cheiron advised SDCERS that structure covers the full projected cost to the System when members purchased the service credits.

The pricing shortfall of approximately $146 million, which is included in the System’s Unfunded Actuarial Liability, is reported in the RSI of these financial statements."

The $146 million was a giveaway. It is a clear breach of the State liability limit law. It is an unconstitutional "gift of public funds".

Yet Sanders will pay it, because he is unable or unwilling to stand up to Ann Smith and the MEA. Is the (employee union) tail wagging the dog or is Sanders still part of the tail?


The 102 retirees who got $8,160,027 in "excess" pension benefits. 11/13/07

                                                       by Pat Flannery                                        top^

"To date, I have not received any notice from the IRS concerning this matter which would indicate that they are dissatisfied with the management of SDCERS or that our treatment from a financial reporting perspective was inaccurate or incomplete."

That is how City Comptroller, Greg Levin, finished his October 26, 2007 letter to the City's auditors, Macias, Gini & O’Connell, disputing the "representation letter" from City Attorney, Mr. Aguirre, filed in compliance with government auditing standards, for inclusion in the City's 2005 Financial Statements. Why would Levin do that? He's not the City Attorney. Obviously the Mayor did not like what Aguirre had written.

Here is a list of 102 former senior City officials, whose pension benefits exceeded the maximum allowable by the IRS, disqualifying the entire 401(a) fixed benefit pension plan!

The City not only credited these excess benefits, far in excess of IRS limits, to 102 high-ranking retirees, it put each "excess" into the equivalent of a DROP program and rolled it forward indefinitely earning 8% interest cumulatively. It is breathtaking in its audacity. SDCERS knowingly commingled IRS "excess" pension funds with regular 401(a) funds.

And the City Comptroller, acting no doubt on instructions from the Mayor, covered it up.

Here is that same list showing the total "roll-over" for each individual fat-cat retiree. Look at # 1. It happens to be former City Attorney Casey Gwinn. This was the man who facilitated giveaways like NTC. In return he got to retire at 44, with a lifetime pension of $100,278.49.

Still working, he draws $35,000 per year putting the rest into a tax-free "roll-over" DROP-like account earning 8%, which already, since Aguirre took his job on December 7, 2004, has ballooned to $213,913.07. After only three years! Tax free! Gwinn has earned $71,302 per year, in "excess" benefits, almost what a City Councilmember makes in salary.

Here is a list of 29 people known to be included in the 102. Based upon their retirement date and their date of birth, the 29 will gradually be matched with the 102. That's how Casey Gwinn was identified as # 1. How many people retired on December 7, 2004 who were born on September 7, 1960? The SCDERS board approves and publishes the names and dates of birth of the new retirees each month.

Look again at the "roll-over" list. Retiree # 38 has accumulated $896,938.01 in "excess" pension benefits since retiring in February 2, 2001. Who is it? What "services" did he/she provide to get $128,134 per annum in "excess" benefits, on an annual base pension benefit of $191,776.47. Honesty doesn't pay at our City, dishonesty does.

How many of these 102 people played active roles in creating these massive illegal pension benefits to begin with? We know Gwinn played a key role, as in other giveaways. And they demonize Aguirre? What does that say about our city?

Was Aguirre justified in writing this strong "representation letter" dated September 28, 2007 and his follow-up dated October 10, 2007 in response to Macias, Gini & O’Connell's questions? I would say it was a pretty mild letter, given the circumstances.

Sanders was elected to clean up the City, instead he is having his City Comptroller write cover-up letters to the City's auditors. Sanders was one of those who benefited from retroactive pension increases, strictly forbidden by State liability limit laws. Sanders knew his benefits were illegal. The City increased his multiplier in the final years of his police service. That multiplier was then backdated for more than 20 years. And we are expected to believe he didn't know? That was a huge conflict of interest in running for Mayor.

He is still conflicted. He has joined his former union colleagues (at heart he is still one of them) in their vicious strategy of discrediting Aguirre in his pursuit of pension reform.

Sanders should be helping Aguirre solve the pension problem, not covering it up. Here is Aguirre's latest letter to Macias, Gini & O’Connell dated today. Will Sanders and Levin try to refute this one too? Here is a Report from SDCERS own tax attorney, Ice Miller LLP, warning of the dire consequences of exactly what Sanders is trying to cover up.

The City is in a Voluntary Compliance Program (VCP) with the IRS regarding the pension system, a fact well known to Sanders and Levin. Yet Levin said in his October 26, 2007 letter to the auditors that he had "not received any notice from the IRS" concerning irregularities with the pension system. That was not true.

Here is a letter from Ice Miller LLP dated August 22, 2007, long before Levin wrote his October 26, 2007 letter to the auditor, making it perfectly clear that there were ongoing pension difficulties with the IRS. And here is a similar letter from Ice Miller dated August 9, 2006 saying that they had "identified corrections necessary with respect to the requirements contained in IRC 415".

That Ice Miller letter made it perfectly clear, back on August 22, 2007, that 102 retirees had in fact exceeded the IRS 415 limit for a total of $8,160,127 and that there were outstanding IRS concerns regarding the DROP program. I'm sure Sanders would love to have Casey Gwinn back, he sure asked a lot fewer questions than Aguirre.

Here is Aguirre's latest Report entitle "The Pension Plan's Violations of Internal Revenue Code Section 415(b) - Excess benefits". As the Report states on the first page, Donna Frye's persistent questioning of the Mayor's staff was the principle cause in bringing these "excess" benefits to light. Aguirre and Frye still make a formidable team. It is time the Mayor instructed his staff to treat them with the respect they deserve. The Mayor could have saved much of the present difficulties with a timely response to Ms. Frye's questions.

City Council picks and chooses among City Attorney's legal opinions.  11/10/07

                                                       by Pat Flannery                                        top^

The City Council takes Mr. Aguirre's legal advice when it likes it and rejects it when it dislikes it. Navy Broadway and the 30-foot height limit are perfect examples.

Here is Aguirre's advice to the City Council regarding the 30-foot height limit back in September 9, 2006 and here is his advice regarding Navy Broadway on October 4, 2007. The Council took his advice on the 30-foot height limit and rejected it on Navy Broadway.

On the 30-foot height limit, Deputy City Attorney Shannon Thomas wrote in 2006:

"While generally, municipal initiatives and regulations are preempted by State Density Bonus Law, the height limit set forth in Proposition D has previously been certified by the Coastal Commission as part of the City’s land use plan. The City does not have any authority to grant a permit that is not in conformance with that certified land use plan."

That legal opinion is fatally flawed. Why Mr. Aguirre has allowed it to stand is a complete mystery to me, although I have a few suspicions.

Yes, the Coastal Commission has approved Proposition D as one of the many City considerations in its issuance of a site development permit within the Coastal Zone. But, like all municipal land use laws, it is preempted by the State Density Bonus Law.

In other words, the fact that it is certified by the Coastal Commission, as part of the City's land use plan, does not exclude it from preemption by the State Density Bonus Law as Ms. Shannon's opinion so wrongly states, reminiscent of a Bob Manis "finding"

The City Council used that flawed opinion to pass a Density Bonus Ordinance, which gives a 35% density bonus for "moderate" income families, a category for which, based on their Council salaries, most Councilmembers qualify. "Moderate" income is based on a county-wide median income, skewed upwards by our gorgeous county being host to a disproportionate number of individuals declaring some of the highest incomes in the nation.

Now for that City Attorney's opinion on Navy Broadway rejected by the City Council. Deputy City Attorney Shirley Edwards wrote:

"Based upon the analysis provided herein, it is the recommendation of the Office of the City Attorney that before CCDC can make its consistency determination, the City must complete a 21166 evaluation to determine whether any further environmental documentation under CEQA is necessary for the Navy Broadway Complex Project."

For emphasis, the day before the November 6, 2007 Council hearing (page 41 of 45, to uphold or reject appeals against the so-called CCDC "determination", that the 1990 EIR was adequate), the City Attorney personally reminded the City Council of the October 4, 2007 opinion letter. Here is his urgent November 5, 2007 letter to City Council.

Those two letters may have been sufficient to give even Jim Madaffer second thoughts. After all, Madaffer is now Chairman of the California League of Cities and has his state-wide reputation to consider. He can no longer afford to do the old San Diego "so sue me" trick and scoff at California State law, as he used to. He seemed to baulk a little at the November 6, 2007 CEQA hearing. Strangely, he favored a continuation to January 7, 2008.

It may turn out that when the adequacy of CCDC's "determination" on Navy Broadway comes up for a final City Council vote on December 4, 2007 (it was continued to that date), we may not need Tony Young's vote to uphold the CEQA appeal. According to Deputy City Attorney Shirley Edward's opinion letter, wholly endorsed by her boss Mike Aguirre, the City must make a whole new 21166 environmental determination, i.e. a whole new EIR.

Finally, if Madaffer decides to stick to his old ways, and Young is too beholden to the developers to change his infamous January 9, 2007 vote, the City is guaranteed to lose in an inevitable court challenge. According to Deputy City Attorney Shirley Edwards:
"Courts have set aside government actions where review of the current adequacy of an EIR, given changed circumstances, has not occurred first."

So, if I were Perry Dealy (Manchester's CEO) I would be nice to John Moores and Steve Peace when I next run into them. "Pappa" Doug has a history of "not being amused" when one of his pet projects goes south. And Navy Broadway was to be the jewel in his crown. Right now it is headed due south.


The 30-foot coastal height limit was given away. 11/08/07

                                                       by Pat Flannery                                        top^

I asked Bill Anderson last night whether he would resign should his assurance to the City Council that the Coastal Commission will enforce the 30-foot coastal height limit, proves unfounded. His answer: No.

I asked why he felt so confident that the Coastal Commission will enforce the Prop. D height limit. His answer: the City Attorney has assured him so.

Apparently Mr. Aguirre has assured Bill Anderson that the Coastal Commission will protect Prop. D. I wish I could be so sure. Here again are the facts:

"Items not considered incentives by the City of San Diego include, but are not limited to the following:

(2) A deviation from the requirements of the Coastal Height Limit Overlay Zone (Chapter 13, Article 2, Division 5)."

Note that the above extract from the new Density Bonus Ordinance says: "the requirements of the Coastal Height Limit Overlay Zone" (the 30-foot height limit) "are not considered incentives by the City of San Diego".

Even that weak "not considered" phrase is tentative: "until the date the California Coastal Commission unconditionally certifies those provisions as a local coastal program amendment."

I asked Bill Anderson what will happen if the Coastal Commission does not "unconditionally certify" the City Ordinance but instead rules that a coastal height deviation IS available as an incentive - he will just fall back on the City Attorney's advice, but no resignation.

The future of our 30-foot coastal height limit therefore hangs on Mr. Aguirre being right.

It was clear to me from my discussion with Mr. Anderson last night that he knows very well that the Coastal Commission will not enforce the coastal 30-foot height limit. All he would say was that, based upon the City Attorney's advice, he was "very confident" that the Coastal Commission would "
unconditionally certify" the City Density Bonus Ordinance.

He ended his "explanation" by saying "they (the developers) can sue the City". The game plan obviously was:

(1) give Councilmembers like Kevin Faulconer cover to pass the Ordinance by pretending that the coastal 30-foot height is protected by the Coastal Commission;
(2) then when a developer is refused a deviation from the height limit as a density bonus incentive, he will "sue the City", right on cue as Mr. Anderson predicts;
(3) the developer will win and the City Attorney will be blamed for giving wrong advice.


A General Plan: of the developers, by the developers, for the developers. 11/08/07

                                                       by Pat Flannery                                        top^

I went to a special meeting of the Community Planners Committee (CPC) called last night to endorse the Sanders/developers' "General Plan". It imposes density without added infrastructure.

Developers, like wildfires, need "fuel" to burn their way through our neighborhoods. Sanders' land use czar, Bill Anderson (Jim Waring's replacement), told us that we must accept "infill" now that outward expansion is no longer possible. He did not say that the neighborhoods are clamoring for "infill", just that we must have it.

Various speakers spoke passionately about the need to link infill development with failing infrastructure. Their passion was met with equal dispassion by Anderson. We are going to get density infill without any relief from the already overstressed infrastructure. Just silence from Anderson on roads, sewer and water.

It can be very disconcerting to attend such a "community" planning meeting where it is clear that the entire city planning apparatus exists to serve the developers. There was more than a half dozen "city planners" there last night, their body language betraying the fact that they consider the people their enemy. They consider the developers their boss.

And so we have a General Plan: of the developers, by the developers, for the developers.

D-Day for Tony Young. Who does he represent? 11/06/07

                                                       by Pat Flannery                                        top^

Today the City Council will finally decide the fate of the Navy Broadway Complex.
Read my blog of January 10, 2007, the day after the City Council voted on this issue last time. Also read the four blogs before that. All the relevant documents are listed in those five blogs.

On that date Peters, Madaffer, Faulconer,
Maeinschein and Tony Young voted to reject two citizen appeals. Frye, Atkins and Hueso voted to uphold the appeals and reject the adequacy of the 1990 EIR, which still purports to be the basis for permitting the project.

Because Tony Young offered no explanation for his vote (he never spoke throughout the entire proceedings and absented himself for much of the public comment), I asked at the time whether he might have sold his vote to the developers. I still do.

Peters, Madaffer, Faulconer,
Maeinschein are all well known to be heavily indebted to the developers for their positions on the City Council, but why would Tony Young turn traitor to the predominantly blue-collar, ethnically mixed, South East San Diego population that elected him? What could his District 4 possibly have to gain with Navy Broadway? It gentrifies the waterfront and walls it off from his poorer constituents.

Today the developers will need Tony to stay with them. Today we will see the real Tony.

Manchester must retain the five votes to reject two new appeals of the Environmental Determination made by the Centre City Development Corporation ("CCDC") on July 25, 2007 and uphold CCDC's determination that no additional environmental review is necessary for the proposed Navy Broadway Complex - that the 1990 EIR is still adequate.

Essentially, what the developer-controlled CCDC is doing is asking the City Council to ignore CEQA. If five Councilmembers turn a blind eye to the many substantial changes that have taken place along the waterfront in the last fifteen years, the City will undoubtedly be sued under CEQA. And courts have tended to side with appellants on such lawsuits. They tend to order cities to carry out full EIRs.

The most important new environmental discovery is an active earthquake fault running across the bay, coming ashore close to the proposed site and trending right through it.

As a result, the City is in the process of changing its Downtown EIR and Community Plan to show the Coronado Fault as part of the Rose Canyon Fault, showing it active and heading towards the Navy Broadway Complex site. Is that not a material change?

Also, a new "Geotechnic and Geologic Fault Investigation" dated March 6, 2007 for the Navy Broadway site was done by Geocon Inc., which was never turned in to the City geologist. We know that this investigation was done because Geocon referenced it on the last page of its Lane Field Geotechnic and Geologic Fault Investigation report.

The Scripps Institute of Oceangraphy seismologist, has said the Coronado Fault goes through the site, based on his underwater investigation of the seismicity of San Diego Bay.

10 News did an in-depth TV investigation and raised some serious concerns about building on that site. Finally, the USGS has a web site that shows up-to-the-minute recent-earthquakes, just in case anyone has forgotten how earthquake-prone California really is.

P.S. A reader just sent me Young's campaign contributions list. It reads like
Peters, Madaffer, Faulconer and Maeinschein - the developers own him too. Thanks reader.


Four reasons why Tuesday's proposed Density Bonus Law is BAD. 11/04/07

                                                       by Pat Flannery                                        top^

Here again is the full Proposed Code Amendment.

The existing code section
s §143.0750 and §143.0760 requiring a Site Development Permit (decided in accordance with Process Four for each development seeking a density bonus for affordable housing) have been deleted. Therefore these findings will no longer be needed. Here is the full code section §126.0500 for Site Development Permits (SDP).

Just as with other land use concerns that trigger a SDP e.g. environmentally sensitive lands, historical districts etc. (as described in
§126.0502 above "When a Site Development Permit Is Required") the location of affordable housing is a legitimate land use concern for the Planning Commission or the City Council. Now the developers will get to decide where affordable housing will go. That is why DSD has deleted §143.0750 and §143.0760.

(2) In addition to "any deviation to a development regulation", the proposed density bonus ordinance at §143.0740 (b)(2 would offer "mixed use" as an affordable housing incentive:

"Approval of mixed use zoning in conjunction with a residential development provided that the commercial, office, or industrial uses:

(A) Reduce the cost of the residential development; and
(B) Are compatible with the proposed residential development; and
(C) Are compatible with existing or planned development in the area where the proposed residential development will be located."

That means that any development, even in a residential zone, can become a mixed use development.

All it would require is a Bob Manis "finding". Bob would easily "find" that a 7-Elevan in your subdivision is perfectly compatible with your residential zoning. So is a hairdresser, a dry cleaners, even a McDonalds. All a developer would have to do is provide 10% housing for "moderate income" families, who can earn more than a San Diego City Councilor.

(3) Regarding the coastal zone the DSD proposed ordinance says at §143.0740 (c):

"Items not considered incentives by the City of San Diego include, but are not limited to the following:

(2) A deviation from the requirements of the Coastal Height Limit Overlay Zone (Chapter 13, Article 2, Division 5)."

That offers false protection to the coastal 30-foot height limit. It is overridden by Section 4 of the Proposed Ordinance which says:

"This ordinance shall take effect and be in force on the thirtieth day from and after its passage, except that the provisions of this ordinance applicable inside the Coastal Overlay Zone, which are subject to California Coastal Commission jurisdiction as a City of San Diego Local Coastal Program amendment, shall not take effect until the date the California Coastal Commission unconditionally certifies those provisions as a local coastal program amendment."

Including the above "protection", putting §143.0740 (c)(2) into San Diego's Local Coastal Program, whether it be approved by the California Coastal Commission or not, will not override the State Density Bonus Law. Enforcing a local coastal height limit, whether put there by ordinance or by ballot measure, is not covered by the Coastal Act and is therefore outside the jurisdiction of The Coastal Commission. DSD and the politicians know that.

(4) §143.0740 (d) deals with the processing of a density bonus application. It says:

"(2) Granting an incentive shall not require a General Plan amendment, zoning change, or other discretionary approval.

(3) The decision process for a development requesting an incentive shall be the same decision process that would be required if the incentive were not a part of the project proposal.

(4) The development permit requirement for a development requesting an incentive shall be the same development permit that would be required if the incentive were not a part of the project proposal.

(5) Notwithstanding Sections 143.0740(d)(3) and (4), when a development permit is required, the decision to deny a requested incentive shall be made by the decision maker for the development permit."

All they had to do was use the wording of the State Density Bonus Law:

"The granting of a density bonus shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval."

The reason DSD and the politicians did not use the State language is because it includes the words "local coastal plan amendment."

Put another way, the State Law says that any development standard in either a general plan, a local coastal plan or a zoning regulation, can become a concession.

It says:
"the granting of a density bonus" shall not require "a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval".

What could be clearer than that? If they had adopted the State Law wording they would be admitting that the coastal 30-foot height limit, which is part of a local coastal plan, is not protected, as they falsely claim. They have been giving false assurances to the people.


Two political hacks have to go: Ruben Grijalva and Tracy Jarman. 11/03/07

                                                       by Pat Flannery                                        top^

Ruben Grijalva and Tracy Jarman are products of a corrupt system that rewards civil servants who kiss up to political bosses. Can either one of them say they hold their present position because of their fire fighting prowess?

Ruben Grijalva had the reputation while Palo Alto's Fire Chief of rarely leaving his desk. How many actual fires has Fire Chief Tracy Jarman put out in the course of her career?

The U-T reported today: "During the Cedar fire, then-Fire Chief Jeff Bowman circumvented Cal Fire and used Navy helicopters to drop water in and around Scripps Ranch." Why did Chief Jarman not do the same in 2007? Because she takes political orders, that's why.

Fire Chief Jarman is a mere tool of the Mayor's office. Just as Police Chief Lansdowne had to check with the Mayor's office whether to serve a subpoena on a former mayoral chief of staff, Tom Story, this Fire Chief had to receive political direction before calling in the Navy and Marine helicopters to drop water on Rancho Bernardo homes.

The real chain of command was: Jarman to Sainz (Sanders' political handler), Sainz to the Governator's equivalent, Ahnuld's political handler then calls Cal Fire's Ruben Grijalva (who needs no political handler). Grijalva, still sitting at his immovable desk, reminds everybody of political realities; this is the private fire of private contractors - remember?

The Governator "remembered". First rule of politics: follow the money. Ahnuld says: OK, I'll tell the media it's the wind. They will print anything I say.

And so the word came back to Tracy. This fire has already been privatized. No military.

Did she react like a firefighter? No, she reacted like a civil service job climber, just like her counterpart in Sacramento. Maybe some day she hopes to be State Fire Marshal or even get Grijalva's job. If she sticks around Jerry Sanders long enough, she might. She will master the art of the photo op. That's how you get to the top. Ask Sanders.


Mike Aguirre's Report "sparks" a discussion on the wildfires. 11/02/07

                                                       by Pat Flannery                                        top^

If you have an interesting personal story involving the recent fires, that you would like to share, I will be happy to publish it here. All I ask is that you identify yourself to me, in a verifiable way e.g. your full name and email. I will not post anonymous emails.

You may however request that your name be withheld from publication. Just so long as I can know that you are a genuine, responsible (and hopefully polite) person.

I have created a web version of  Aguirre's Fires Report (written in civil service PDF format)
and posted it opposite. I think it contains some valuable information and good exhibits. It may spark a positive community discussion on what went right and what went wrong.

I have asked for and received Mr. Aguirre's permission to use my blog as a point of contact for those who may wish to comment on his report or add some personal fire stories.

Density Bonus - "In and of itself" is being avoided like the plague. 11/02/07


                                                     by Pat Flannery                                        top^

Here is the Density Bonus Item 334 for City Council next Tuesday, November 6, 2007. Note that
Karen Heumann, Assistant City Attorney, cautions regarding the coastal zone:

"The regulations are intended to apply city-wide; however, until approved by the Coastal Commission, only the existing State Density Bonus Law would apply in the Coastal Zone."

The existing State Density Bonus Law does not recognize San Diego's local coastal 30 foot height limit. The Coastal Commission is not empowered by the Coastal Act to implement a local height limit. The State Density Bonus Law was intended by the legislature to apply equally to all parts of the state.

Therefore the provisions of this Code Amendment apply equally to all parts of the city of San Diego. The coastal zone is no exception, no matter what the Municipal Code says.

But the strangest feature of the Code Amendment is the manner in which the City says it will implement the State-mandated density bonus. One would think the obvious thing would be to use the wording of the State Law 65915 (k), which is perfectly clear. It says:

"The granting of a concession or incentive shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval. This provision is declaratory of existing law."

The State did not want the implementation of its density bonus law to be used as an excuse for other activities. But San Diego City staff have consistently avoided the words "in and of itself". Why?

I asked that question of DSD's Dan Joyce and he told me that the City Attorney's office had advised him that the State wording was too confusing. I then asked the same question of Shirley Edwards, the Deputy City Attorney handling the Density Bonus issue.

She declined to confirm or deny that she had given such advice to DSD, citing attorney-client privilege. That raises the question I wrote about in my blog dated May 16, 2007: who does the City Attorney represent?

Here is the actual Code Amendment that will be voted upon on Tuesday. Without the words "in and of itself", it presents a confusing set of implementation alternatives to the City Council. The State's wording would have been so much clearer.

Here are my blogs on the issue from when it first burst upon us in January 2007. Links to all the relevant documents are provided.

Density Bonus alert. 05/16/07
Another Friday Surprise from Aguirre's office. 03/24/07
The latest on the City's Density Bonus shenanigans. 03/23/07
We are in the midst of a deadly attack on our democracy. 03/22/07
Proof positive that "density bonus" is an attack on our neighborhoods. 03/20/07
My Powerpoint Presentation and Density Bonus definitions. 03/18/07
The Big Lie. 03/17/07
Latest! Waring secretly changes the Density Bonus EIR! 02/26/07
The two Density Bonus Options side by side. 02/25/07
The City Attorney's legal advice must prevail. 02/25/07
When high-rise condos start going up on the beach, people will wake up.  02/23/07
The Density Bonus Law is a defining moment in City Government. 02/22/07
The solution to the Density Bonus vs 30 Foot Height Limit problem. 02/16/07
A faded old picture tells the story - only too clearly. 02/15/07
1,000 lying lawyers cannot change Prop D vs. Density Bonus. 02/13/07
The City's proposed Density Bonus Law definitely busts Prop D.  02/07/07
Here is the smoking gun - DSD meant to neuter Prop D. 01/30/07
Full background on how "Affordable Housing" will neuter Prop D. 01/30/07
After tomorrow, the 30 foot Coastal Height Limit is history. 01/29/07

Shame on you Tony Perry. I used to think you were a good reporter. 10/30/07

                                                       by Pat Flannery                                        top^

Sanders has experience with life-and-death crises that require quick decisions. In 1984, when he was head of the city's SWAT squad, a gunman killed 21 people at a McDonald's restaurant in San Ysidro. The gunman was threatening to kill more when Sanders gave the green light that allowed a police sniper to kill him."

Sanders made a quick decision all right, but it was the wrong decision. The fact is that he put his addiction to self-promotion before the lives of others.

Tony Perry's article in the LA Times today is an outrageous distortion of the facts by an experienced journalist. The truth of what happened on that Wednesday, July 18, 1984 is far different. And Tony Perry, to his eternal disgrace as a reporter, knows it.

21 shooting deaths and 15 injuries took place at McDonald's restaurant in the San Ysidro area of the city of San Diego on that day. The shooter, James Oliver Huberty, fired 2,156 rounds of ammunition over a period of 77 minutes starting at 4:00 P.M. before being killed by police sniper Chuck Foster at 5:17 P.M. He was the 22nd person killed that day.

For most of those 77 minutes, Jerry Sanders, who was in command of the City's police sniper team, withheld permission to shoot the murderer. He wanted to be on scene when it ended. Camera teams were racing to the scene.
                The 21 who died at San Ysidro
  • Elsa Herlinda Borboa-Firro, 19 (McDonald's employee)
  • Neva Denise Caine, 22 (McDonald's manager)
  • Michelle Deanne Carncross, 18
  • María Elena Colmenero-Silva, 19
  • David Flores Delgado, 11
  • Gloria López González, 23
  • Omar Alonso Hernández, 11
  • Blythe Regan Herrera, 31 (mother of Matao Herrera)
  • Matao Herrera, 11
  • Paulina Aquino López, 21 (McDonald's employee)
  • Margarita Padilla, 18 (McDonald's employee)
  • Claudia Pérez, 9
  • Jose Rubén Lozano Pérez, 19
  • Carlos Reyes, 8 months
  • Jackie Lynn Wright Reyes, 18 (mother of Carlos Reyes)
  • Victor Maxmillian Rivera, 25
  • Arisdelsi Vuelvas Vargas, 31
  • Hugo Luis Velazquez Vasquez, 45
  • Laurence Herman "Gus" Versluis, 62
  • Aida Velazquez Victoria, 69
  • Miguel Victoria-Ulloa, 74 (husband of Aida Victoria)

Take a good look at that list Mr. Sanders. We know you are capable of tears, we saw you tear up on TV.

As for Tony Perry, he should write letters of abject apology to every single family member of the victims opposite.

He should visit the graves of each of the 21 shooting victims and note the time of death.

He should compare each with Sanders' journey down I-805, then re-write the story.

Shame until he does.

The picture opposite is of Doña Adelina Hernández, remembering her 11 year old son, Omar Alonso Hernández, killed on that day. He would now be 34.

Read this editorial by Daniel L. Muñoz, Publisher of La Prensa San Diego, dated August 19, 2005. It is a long way from Tony Perry's description of Sanders as an "immensely popular police chief before he retired in 1999 to run the local United Way."

Here's what we know for sure about Sanders' movements on that fateful day, from 4:00 P.M. until Huberty was put down by a single shot from a police sniper, Chuck Foster, positioned on a post office roof a block south of the McDonalds restaurant.

Sanders was attending a San Diego police department event and a police birthday party afterwards at the Salmon House, Marina Village, Mission Bay. Soon after 4:00 P.M. he was informed of the San Ysidro situation, although he claims his beeper did not go off.

Eye witnesses say he was dressed in civilian clothes, yet he arrived at the massacre scene over an hour later dressed in police uniform. Did he go home to change or did he have a spare uniform in his car? The question has never been asked.

There are numerous reports of intercepted radio communications between Sanders and the police snipers on the scene at San Ysidro asking for the "green light" to take down the shooter Huberty. Each time Sanders answered in the negative. Yet we are asked to believe that he spoke on the radio only once. Why not release the 911 tapes? That would clear the whole thing up. But they were never released. Are they still in existence?

How could any human being, particularly a man entrusted with the power of life and death as a SWAT commander, put his own desire to be present at the scene and be the one before the cameras afterwards, above the lives of innocents he knew to be dying as he drove south on I-5? Yet that is exactly what Jerry Sanders did. All he had to do was give the "green light" earlier and several of the above named victims would be alive today.

Here is Wikipedia's account of the incident. At the very least Jerry Sanders should have never again been entrusted with life or death power. The incident was never independently investigated. We only have police accounts. Bill Kollender openly lied about the 77 minute time frame the following night on Nightline. It was all neatly swept under the carpet.

And I was willing to let sleeping dogs lie until Tony Perry wrote this disgracefully misleading line in the LA Times today: "The gunman was threatening to kill more when Sanders gave the green light that allowed a police sniper to kill him."

It was clearly designed to give the false impression that Sanders actually saved lives not caused deaths. Shame on you Tony Perry. I used to think you were a good reporter.

Final quote: "Sanders has announced his intention to run for reelection". And Tony Perry has announced his intention to write whatever distortions it takes to get him reelected.


Let's not kid ourselves, we just got lucky. 10/30/07

                                                       by Pat Flannery                                        top^

I-8 was the only exit open on Monday October 22, 2007; the fires were in danger of joining together and closing off even that exit. But we could have got out then, if we acted.

      Source: San Diego County Emergency Homepage

The thing that still puzzles me is the mind-set of the authorities on that Monday. What were they thinking?

As they repeatedly told us, the dry east winds were blowing hard and forecasted not to let up until Wednesday.

Things looked very bleak that morning: two huge fires raging out of control, expected to burn to the ocean.

Despite all the congratulatory hoopla, the firefighters were essentially just getting out of its way. Undermanned, they had little choice. What did they expect to happen Monday and Tuesday? Did they just pray for a miracle?

It is clear that if the fires got into the heavily populated areas the situation would be out of control.

In a way, they got their miracle. But what about next time?

We have only two choices: (1) we plan for "sheltering-in-place" or (2) we plan for a "mass evacuation". In October 2007 we did neither. Let's not kid ourselves, we just got lucky.


There's your answer Mr. Aguirre. 10/29/07

                                                       by Pat Flannery                                        top^

“We could evacuate the whole city if we needed to".

That's what Police Chief William Lansdowne told Jennifer Vigil in the U-T today. I checked to see if he was right. Here's what I found out:

There is no plan to "evacuate the whole city if we needed to". He is blowing smoke (pardon the pun).

There is an internal county evacuation plan, of sorts. It says on page 13: "the evacuation distance between the impacted site and the "safe zone" generally does not exceed 30 miles, and the evacuation efforts generally do not extend beyond the OA boundaries".

On page 84 there is an Appendix A to "The Plan". It "considers" a Level III (catastrophic) evacuation. It merely says: "A large scale evacuation effort over a long distance may be very challenging given the transportation network of San Diego County." But no plan.

It should read: ".... given the lack of a transportation network in San Diego County ... ". Take another look at my aerial map from last Thursday.
America's finest rat trap?

I talked to
Donna Faller at the City's Office of Homeland Security. She told me that her department was working on a draft "whole city" evacuation plan, which they hope to have completed by Spring 2008. Interestingly, she all but ruled out any evacuation southwards into Mexico, citing passport and nationality issues. Of course there is also the fence.

She agreed that there are effectively only three ways out, Interstates 5, 8 and 15. How quickly would they become clogged? Ask the folks who tried to get out of Ramona last week. It was instant gridlock. Our county "transportation network" could quickly become a "Falaise Pocket". The evacuation would be worse than the battle.

Was that what Lansdowne was telling Aguirre last week? That we are trapped? Then why is he now telling the U-T that he could
"evacuate the whole city if he needed to"?

In Appendix B, "Sheltering-in-Place", "the Plan" tells us:
"Use duct tape and plastic sheeting (heavier than food wrap) to seal all cracks around the door and any vents into the room." That should do it. Duct tape.

God help us if we ever have a terror attack or a major earthquake. Between our Police Chief telling us that he can get us out if he wants to and our Cal Fire Director insisting upon "spotters" on every helicopter, our best bet might be duct tape after all - over the mouths of all of them. As many a home owner found out last week - we are on our own.

As for me, I own a sail boat, but don't tell anybody. Soon I may have to own a gun too.

Who is Ruben Grijalva? A political hack. 10/28/07

                                                       by Pat Flannery                                        top^

For three days last week
the most powerful man in California was not Governor Schwarzenegger, it was Republican loyal, Ruben Grijalva, political appointee to the position of Cal Fire Director, whose private contracts involve much political patronage.

Grijalva had so much political juice that for three days he was able to face down the ranking Republican (and former chairman) of the House Armed Services Committee, one of the most powerful men in America, Duncan Hunter.
Duncan Hunter Ruben Grijalva

This smoking gun quote is from Duncan Hunter himself, in today's U-T:

"Immediately after the fires were under way, Gen. Mike Lehnert, the Marine Corps Regional Facility commander, deployed three CH-53s and one CH-46 to the tarmac at Miramar, ready with their buckets to engage the fire. He was notified by the California Fire Fighting Agency that his choppers could not be used without certified Cal Fire “spotters” accompanying each chopper.

“Fine,” responded Gen. Lehnert, “put your spotters on the choppers, and let's go.” Cal Fire responded that no such spotters were available at the moment and, therefore, the choppers would have to sit.

At 10 p.m. on Tuesday night, I talked to Cal Fire chief Rueben Grijalva by telephone, and he agreed to lift the spotter requirement. This was done during the operational briefing between me, Congressmen Issa and Bilbray, and Supervisor Ron Roberts. To Grijalva's credit, he agreed to drop his spotter requirement
[my emphasis] for the Marine aircraft, and they were able to take to the air the next day ".

HIS spotter requirement?

I thought we were a government of laws, not of men. Yet here is an instance of one man deciding the fate of tens of thousands of families. A true political hack, he remained faithful to the terms of his appointment: to protect and serve the political patronage of his office. Accordingly, he let the homes burn. That kind of political loyalty is well rewarded.

By Wednesday when he finally relented, lifting HIS spotter requirement, the fires had largely burned themselves out. He is still free to impose HIS requirements next time.

Where was Schwarzenegger in all this? Covering for
Grijalva. He lied to the cameras. He blamed high winds that had long died down. It could so easily have been different.


There were only 3 ways out. And Mexico. Whew! 10/25/07

                                                       by Pat Flannery                                        top^

I-15 was closed, I-5 was in imminent danger of being closed. There were fires on both sides of I-8. What if the high winds had continued through Tuesday? Even the military firefighting helicopters would not have been able to fly. And we were minutes away from losing SDG&E power. That was the situation on Monday morning.

Anybody familiar with WW II bombings knows that a firestorm creates its own weather. It could have happened here. There was plenty of "fuel" - a whole city of timber houses.

We need an evacuation plan before the next one. We live in a fire trap. In the meantime enjoy the guaranteed Charger win on Sunday. San Diego is on a lucky streak.


Mission accomplished. Evacuate the evacuees. 10/25/07

                                                       by Pat Flannery                                        top^

Welcome to San Diego Mr. President. The Blog of San Diego art department prepared this summary of San Diego conditions - Jerry Sanders has everything under control.

If we still have that 2003 banner we can hang it out at Qualcomm Stadium this Sunday for the San Diego Chargers vs. Houston Texans. The game is on.

The following quote from an article in the U-T today pretty well guaranteed that the Stadium would be cleared of evacuees for the big game on Sunday:

"The Chargers do have an insurance policy that covers lost gate receipts, but the deductible is extremely high. The team can generally expect a home game to bring a gate of more than $7 million."  

The Mayor may have received threats from Chargers' attorney Mark Fabiani, that the City would be liable for that deductible. In any case Jerry Sanders has given the order to clear the Stadium of cats and dogs and give it back to the Chargers.

Entry to the Stadium parking lot is now restricted. It is a one-way traffic down there. Time to leave. The occupants are being corralled into smaller and smaller areas of the stadium. The police are checking IDs and taking names. The "humanity" party is over.

Qualcomm Stadium will not be on the Bush itinerary. Katie Couric is gone. CNN got its uplifting story. Your caring politicians got their pictures taken. Now it's sports time. What do these people think big sport is? A game?

T-Mobile offers free HotSpot service for hot spot San Diego. 10/24/07

                                                       by Pat Flannery                                        top^

Are we in for a firestorm of corporate generosity? Could this be a turning point in advertising? If T-Mobile does well out of this, maybe PS (Public Service) will replace PR.

BELLEVUE, Wash. – Oct. 24, 2007 In response to the Southern California wildfires, T-Mobile USA is offering complimentary Wi-Fi Internet service through Oct. 31 at nearly 1,200 T-Mobile® HotSpot locations in Southern California. 

People can access complimentary T-Mobile HotSpot service during this limited time
in the following locations where T-Mobile has agreements to offer HotSpot service in Los Angeles, San Diego, Orange, San Bernardino, Ventura and Santa Barbara counties:
·       Airports: 
·       Throughout Los Angeles (LAX), Ontario (ONT), Burbank-Glendale-Pasadena (BUR), Palm Dale (PMV), and Van Nuys (VNY)
·       Complimentary service is also available to patrons of airline clubs of Delta, United, US Airways, and American at airports within the affected counties
·       Nearly 1,000 Starbucks coffee shops
·       FedEx Kinko’s
·       Borders Books & Music stores
·       Hyatt Hotels
·       Red Roof Inns
·       Select T-Mobile retail stores
The service is intended for those who have been displaced from their homes or are seeking refuge from the wildfires.  This
complimentary service for fire-affected areas in Southern California is for Wi-Fi service only, not T-Mobile voice or other services. 

For a complete listing of T-Mobile HotSpot locations, visit or call 1-877-822-SPOT (7768).

All users should visit to view T-Mobile HotSpot terms and conditions and the security policy.  T-Mobile HotSpot service requires a Wi-Fi
enabled laptop computer or PDA.

Now if Starbuck's would offer free coffee I might move my laptop over there.


Aguirre needs to be perfected - "Just like Ann Coulter". 10/24/07

                                                       by Pat Flannery                                        top^

Until the U-T goes to a document-based reporting system like Blog of San Diego, here is the
"Voluntary Evacuation" memo sent by Mike Aguirre to Mayor Sanders on Monday morning October 22, 2007. It was the source document for this morning's U-T story headed: "Aguirre wants San Diego evacuated in wake of wildfires".

You must
judge for yourself whether or not the U-T story was a fair representation of what Aguirre expressed in his memo. It was addressed to "Mayor Jerry Sanders". He must have considered it seriously enough to pass it on to the Police Chief, the Fire Chief and even Governor Schwarzenegger, unless of course he was being mischievous.

Perhaps the U-T just wants Mike to be "perfected" - "Just like Ann Coulter".

The cowboys and environmentalists must be friends. 10/23/07

                                                       by Pat Flannery                                        top^

The American Heritage® Dictionary defines ecology as:

The study of the detrimental effects of modern civilization on the environment, with a view toward prevention or reversal through conservation."

This image of the fires in California was captured at 1:55 p.m. U.S. Pacific Daylight Time on October 22, 2007.

It bears a striking resemblance to the recent Greek fires. The cumulative impact on wild life of these two pictures must be enormous.

Is man burning down the natural forests to make room for his "developments"? Would these "wildfires" be happening naturally, if we were not here? Probably not like this. The fact is we are hard on "wildlife", i.e. every species other than our own. They have not done so well since "the rise of man" in the last few millennia.

Before the proliferation of man's "developments", wildlife escaped a forest fire by out-running it or running in the opposite direction. Now there are precious few places to run.

If we continue to destroy the habitat of so many species (our manifest destiny as earth's masters?), pretty soon we will be the only species left on the planet.

Just as in the great Oklahoma song: "The farmer and the cowman should be friends", the developers and environmentalists must be friends. Otherwise Hollywood will soon be making "How the West was Lost".

Now that we can view our handiwork from space,
to survive we must learn to sing "Oh What a Beautiful Morning". The cowboys and environmentalists must be friends.


Dumanis' email - DA or private individual? 10/21/07

                                                       by Pat Flannery                                        top^

"Public officials should never be permitted to govern by fear and we should never tolerate bullies terrorizing our citizens." I agree. Yet District Attorney Bonnie Dumanis wrote this email to "Bar Leaders" dated October 18, 2007 supporting Bill Gentry for City Attorney.

Was her email a breach of the
Hatch Act?

Covered state and local employees may not-
  • be candidates for public office in a partisan election
  • use official authority or influence to interfere with or affect the results of an election or nomination
  • directly or indirectly coerce contributions from subordinates in support of a political party or candidate."

There isn't much doubt that a District Attorney is a "covered employee", the only question is whether Ms. Dumanis exercised "official authority or influence" in this email. She signed herself "Bonnie" and used a hotmail address.

However, she did write: "Shortly, I will be sending a letter to the legal community and my supporters asking them to also support Bill."

What supporters was she referring to? Those who supported her election to "
official authority", or some kind of supporters in her private life? Could be.

We should ask a District Attorney - or a Judge Wellington. Never mind.


The $146 million pension rip-off was NOT legitimate union bargaining. 10/21/07

                                                       by Pat Flannery                                        top^

According to the Pension Board's actuary, Cheiron, pension staff wrote an average of $618,000 of Purchase of Service Credits per day between August 16, 2003 and October 31, 2003.

Here is Cheiron's report dated August 14, 2007. It shows that $34 million in PSCs was granted between those dates, 55 working days, $618,000 per day. SDCERS had to hire extra staff to deal with the frenzy.

This is the "Effective Dates For Benefit Changes" table. I went down to SDCERS last week and obtained it. It is no secret. What caused the frenzy was a tip-off by the MEA to its members that the cost of purchasing a year's service credit was going up from 15% to 27% of one's annual salary, on October 31, 2003.

The fact is that San Diego City employee unions abused their privileged status. They have taken unfair advantage of their inside knowledge.

As Mayor Sanders quite rightly asserted in his
angry letter dated September 21, 2007, the taxpayer should not "end up paying the price for a program that should be cost neutral to the City".

Sanders is now "running with the unions".  10/20/07

                                                       by Pat Flannery                                        top^

I didn't go to the contentious pension meeting last night as I am not a fan of the Jerry Springer Show. I preferred to wait for Jennifer Vigil's report in the U-T today. I wanted to see if anybody asked the questions I posed in my blog of 10/15/07.

I spoke to both Donna Frye and Mike Aguirre today and they told me that, after the meeting, they each asked Cheiron's Gene Kalwarski, what exactly is the City's liability.

I don't think they got satisfactory answers. Cheiron and the Mayor's office seem to be desperately trying to pull numbers out of the air. They know very well that the City is NOT obligated to pay for service credits purchased for less than their actuarial value.

That would be stealing from the City. No wonder the pension members who mortgaged their homes to purchase such "credits" are worried. They should be.

The central question remains:

"who will pay for the $146 million of below-cost benefits?".

City Attorney Mike Aguirre wrote this letter to the Mayor and City Council on Friday October 19, 2007. He points out that:

"Although funds have been set aside in Citywide Program Expenditures of the FY 2008 Budget, to cover this years benefits, Council should nonetheless specifically hear the item and take appropriate action".

The Mayor does not have authority to accept this additional $146 million liabilty. He has admitted as much. He wrote this angry letter on September 21, 2007. Was that letter just for show? Was he electioneering? Where was he last night? Is he backing away from the "angry" position he adopted on September 21, 2007?

Perhaps as he gets closer to reelection time he gets less angry at the unions. That's not what he promised the electorate in 2005 when he ran against Donna Frye. She is now doing what he promised, while he is running with the unions.

That's exactly what he accused Frye of in 2005. Anything to get elected Jerry.

Hell hath no fury like an attorney defamed. 10/19/07

                                                       by Pat Flannery                                        top^

David Copley has a decision to make this weekend. He must either force Bob Kittle to apologize to the City Attorneys he defamed in his editorial column on October 10, 2007 or cost the U-T big bucks. Either way the six City Attorneys Kittle defamed will be happy. Copley can either "make their day" or make Kittle eat crow.

"How do you like your La Jolla crow Mr. Kittle, fried or barbecued?"

Here is Deputy CA Kathryn Burton's demand for an apology. It is going to take an awful lot of crow to stop this lady from suing. Hell hath no fury like an attorney defamed.

Does a developer always have a right to an "economic benefit"? 10/19/07

                                                       by Pat Flannery                                        top^

altering of minutes and manipulation of docketing, star chamber-style, by Scott Peters on the Pacific Coast Office Building project in Mission Valley, is rooted in the doctrine that each developer has a god-given right to an "economic benefit" on every property they own. Peters actually said so at the July 31, 2007 Council Meeting.

Announcing his support of Dr. Pollack's Pacific Coast Office Building project, he went so far as to say, on the record, that if the City denied Pollack's right to bust the City's steep-hillside restrictions, the City would have to purchase Pollack's property.

This is the same malignant doctrine that Jim Waring used to champion Sunroad's interest over that of the City. Waring insisted that if the City enforced its Land Development Code at Montgomery Field, it would be liable for Sunroad's loss of "economic benefit".

When the Mission Valley height-busting Pacific Coast Office Building comes up for a final vote on Tuesday October 23, 2007, it will be hustled through by Scott Peters on the basis that the City has no choice. In other words, we cannot enforce CEQA or our own Land Development Code without compensating a developer for loss of "economic benefit".

So let's look at this "economic benefit" of which Dr. Pollack and his family will be deprived, if the City does not let him build on the site.

Pollack purchased the property on December 5, 2003 for $250,000. You couldn't buy a bedroom condo in Mission Valley for that in 2003. Here is the Grant Deed. $275.00 in Documentary Transfer Tax represents a purchase price of $250,000 at $1.10 per $1,000.

Here is the County Tax Assessor data. Pollack uses an LLC, like all the developers.

Notice that
the previous owners, Raymond & Rebecca Willenberg, had purchased it in 1982 for $600,000. Too bad the Willenberg's, who live in Mission Beach, did not know Scott Peters or Jim McDade at the time. They would now be chasing that "economic benefit", not Pollack. If you're going to mess around in land development in San Diego you better know who the players are.

Here is the assessor's map of the 5 acre site.

Here is an aerial photo. It is a classic steep hillside lot. It never had any economic value.

Peters has closed the item to further public comment. He will ram it through on October 23rd, just as he did with the $4.8 million gift to PDC for the Rose Canyon bridge design.


Did Nancy Graham's attorney, Sabrina Teller, go too far in covering up? 10/17/07

                                                       by Pat Flannery                                        top^

This emailed letter to Nancy Graham from her attorney, Sabrina Teller, and leaked to the San Diego Union-Tribune newspaper, put a favorable spin on why Manchester CEO, Perry Dealy, was allowed to attend a sensitive City staff meeting on October 9, 2007.

I called Deputy City Attorney Malinda Dickenson to comment on Teller's version of what happened that day. Dickenson made two major corrections:

(1) Perry Dealy, who both Teller and Dickenson agree attended that City staff meeting, was never asked to
"wait outside" at any time. He was already familiar with the settlement offer. Both Graham and her attorney have admitted that they had already discussed the offer with Dealy before that City staff meeting.

(2) Nothing in the telephone conversation Teller had with Dickenson on Monday October 8th, could have led Teller to understand that "
the petitioners would be calling the other parties to also inform them of the terms of the offer", as Teller alleges in her email.

We are all entitled to a good attorney if we get into trouble, but are we entitled to an attorney that will lie for us? Ms. Teller is guilty, at the very least, of misrepresentation. If Dealy was never asked to
"wait outside", why did she say that he was? Was it an awkward attempt to exonerate Graham? If so, it was not only awkward but unnecessary, as Dealy already knew all about the settlement offer - from Graham.

And why did she say
"I understood from that conversation that the petitioners would be calling the other parties to also inform them of the terms of the offer?" If that were true why did she not just say "Dickenson told me that the petitioners would be calling the other parties to also inform them of the terms of the offer?"

Because it is easier to fudge around
"I understood" than defend a flat out "she told me". Nancy must be in real trouble if she is trying to get her attorney to lie for her.

The truth is that Nancy Graham betrayed the confidence of a sensitive City legal matter that she knew was already docketed for the City Council Closed Session scheduled for Monday October 15, 2007.

Here is that Closed Session Docket. The Navy Broadway Item is CS-4. It clearly says:
"The City Attorney will update the Mayor and City Council on the status of the litigation and convey a settlement offer in Closed Session."

Next she will be bringing her developer friends into the City Council Closed Sessions. I am sure attorney Sabrina Teller could think up some cover story for even that.


Nancy Graham's "deny, deceive and delay". 10/16/07

                                                       by Pat Flannery                                        top^

Nancy Graham, President of CCDC, is in deep defense mode over her improper handling of a
settlement offer from the Navy Broadway Complex Coalition of its lawsuit against the City and CCDC regarding the City's approval of developer Douglas Manchester's project despite known seismic and other environmental issues. Lives and money are at stake.

Ms. Graham is not dealing with a bunch of whacko obstructionists here. The Navy Broadway Complex Coalition consists of some of the most experienced and informed citizens in San Diego. As you can see from their web site they are part of Citizens Coordinate for Century 3, known around town as C-3.

Here is how C-3 describes itself on its web site:

"Citizens Coordinate for Century 3 (C-3) is a nonpartisan, nonprofit organization of informed citizens who are interested in local and regional planning issues. For over four decades C-3 has played an important role in shaping city policy and informing citizens on planning issues -- from the preservation of rivers, parks, canyons, valleys and beaches to the revitalization of downtowns and neighborhoods."

Its membership reads like a "who's-who" of prominent San Diego citizens, particularly those who have served in high planning and government positions in the San Diego area.

As a newbie from Florida, Ms. Graham may not realize with whom she is dealing. What she did was improper, there is no question about that. The sooner she faces up to that, the sooner she will start climbing out of the hole in which she now finds herself. This letter from her attorney, which she gave to the U-T today, is simply digging that hole deeper.

Did the Mayor's office tell her to "deny, deceive and delay"?. It sounds familiar.

Graham's attorney says: "Ms. Dickenson (Deputy City Attorney) did not tell me that the offer was intended to be kept secret from Manchester". Did Ms. Dickenson not know that Doug Manchester must be informed about everything that happens at CCDC? Surely everybody knows that. That is what Nancy Graham in effect is saying.

She expects us to believe that, having asked Perry Dealy and his attorney to step outside while she discussed the terms of the offer with the City Attorney and DSD staff, when they stepped back in, she "had no further communications with Manchester or the petitioners regarding the settlement offer". They probably talked about the weather.

Not even this Mayor can continue to keep somebody on the City's payroll who has clearly put a developer's interest before that of the City. We know City staff do it all the time but this time, one of them, Nancy Graham, got caught red-handed. Can you imagine the outcry from the Mayor's office if a City Attorney did something like this?

Perry Dealy seems to work out of Graham's office. That has to stop. I look forward to hearing what Malinda Dickenson has to say about what really happened at that "staff" meeting. I suspect it will be a little different from Nancy Graham's version.

Scott Peters "Star Chamber". 10/16/07

                                                       by Pat Flannery                                        top^

City Council has become a
star chamber under the presidency of Scott Peters. He regularly uses the authority of the President's Chair to favor his political clients. This morning was another example of how he takes care of the developer community.

Scott does not like this legal opinion dated September 18, 2007 prepared by the City Attorney. It says: "There is substantial evidence to support the City Council's determination that an EIR is required." It refers to Dr. Robert Pollack's proposed Pacific Coast Office Building in Mission Valley. Peters wishes to help Pollack avoid an EIR.

Somehow the minutes of the last City Council Meeting, where this matter was discussed, got altered, according to Randy Berkman who opposes the project. Berkman "pulled" ITEM-30: Approval of Council Minutes, for further discussion today.

The matter could easily have been disposed of by a simple correction to the minutes, to reflect the action the Council actually took at the last meeting viz. granting the appeal, rejecting the MND and continuing the action ONLY "to allow an opportunity to articulate specific findings to assist DSD's preparation of the EIR". But Peters did not like the "granted the appeal" part of the minutes and went to work on behalf of Pollack.

So he seized upon the specific findings wording to introduce "confusion".

Accordingly, he denied the City Council a vote to approve the "pulled" minutes. He tried to continue that approval to the same meeting that will discuss the specific findings matter, even though he knew that would create an impossible parliamentary situation - you cannot "notice" a continued item, without approving the minutes where it was continued.

In the midst of all this false "confusion", he finally agreed to docket the approval of the "pulled" minute to a different future meeting. All this to benefit an aggressive developer.

He could so easily have disposed of the item today - if he were being honest. But then a
star chamber is not designed to be honest. Let's hope that next time he will finally accept that the City Council granted the appeal and settle for telling his developer friends that he did his best to help them. Sometimes Scott, even a star chamber is not enough.

Is Sanders up to Dick Murphy's old tricks, lying to the markets? 10/15/07

                                                       by Pat Flannery                                        top^

On January 12, 2007 the pension actuary, Cheiron, wrote to the Pension Board telling it the good news that the Unfunded Actuarial Liability (UAL) was reduced from $1,394 billion to $1 billion. Sanders needed that real bad in order to get back into the markets.

Here is the full Pension Report released January 12, 2007. Go to page 4 of the Report for an explanation of how the UAL was reduced by $393.2 million.

Notice that the $393.2 million figure is a "net" figure. Not all the figures reduce the UAL. There are three items that Increase the UAL:


$ Millions
 2. UAL change due to purchased service credit 12.3
 6. UAL change due to reflection of "contingent" liabilities 112.7
11. Expected change in UAL 21.4

Total Increases


The items that Reduce the UAL are:


$ Millions
1. UAL change due to investment experience 158.9
3. UAL change due to overall liability gain 58.6
4. UAL change due to contribution in excess of expected 105.6
5. UAL change due to the marking the smoothing method to market value 183.8
8. UAL change due to removal of liabilities in excess of IRC S. 415 limits 22.8
9. UAL change due to removal of future disability benefits 9.9

Total Decreases

Less Increases 146.4
Net Decrease 393.2

Therefore the real reduction is $539.6 million. But can we rely on it?

Here is the published Agenda for a Special Meeting of the Pension Board scheduled for this Friday October 19, 2007 at 8:30 A.M. Referring to how much the below-market "purchase of service credits" program (PSC) has cost the pension fund, it says:

"The shortfall totals approximately $146 million, and has been included in the system's Unfunded Actuarial Liability since the inception of the PSC."

But Cheiron's August 14, 2007 letter to SDCERS administrator, David Wescoe, says that at least $20 million ($22.8 million) of that $140 million ($146 million) is NOT included in the UAL. It says:

"approximately $20 million of the $140 million
(sic) is not part of SCDERS Unfunded Actuarial Liabilities (UAL) as of June 30, 2006".

It goes on to say that the $20 million ($22.8 million) "represents benefits in excess of IRS limitation (Section 415) and is a direct obligation of the City".

Cheiron's figure of $140 million is just sloppy for the total shortfall of $146.6 million in the table below and the $20 million is another sloppy reference to the $22.8 million item 8 in the "Increases" table above. It is hard enough keeping track of all this without having to deal with such sloppiness from the highly paid consulting actuary, Gene Kalwarski.

Here is a table I have prepared of the $146.6 "shortfall". Don't confuse this amount with the $146.4 million "increase" in UAL liability. They are unrelated, just similar amounts.

City of San Diego "Purchase of Service Credits"
(Since inception to June 30, 2006)


     General          Safety            Total
 (still working)

  Retirees   Grand
PSC Contracts
3,037    859   3,896   2,079   5,975
Average Age at Purchase
45.1   39.6   43.9   52.5   46.9
Total Years Purchased
11,242   2,045   13,286   7,357   20,643
Average Years Purchased
3.7   2.4   3.4   3.5   3.5
Contract amount "accumulated"
102,675,827   37,242,284   139,918,111   63,290,901   203,209,012
Additional PSC Liability
147,777,961   34,264,234   182,042,195   167,774,878   349,817,073
(due to PSC undervalue)
$45,102,133   $2,978,049   $42,124,084   $104,483,976   $146,608,060

Who is telling the truth? Cheiron or the Pension Board? Somebody should ask them at Friday's meeting. They should also ask if the figure of $20 million ($22.8 million) is reliable. Could it be much more? If so, how much more? And where does it appear on the City's balance sheet? It should appear somewhere if it is in fact a City liability.

Is this another case of hiding a known pension liability from the bond markets? Until the Mayor's office and the pension board answer these questions, the City Attorney should not sign a "representation letter" for the 2005 audited financial statements.

Councilmember Donna Frye has asked everybody to follow her example and give back, or pay for, any undervalued PSCs. I can just see Ann Smith's face in reaction to that suggestion.

Read Ms. Frye's press release. It is an appeal to any City employee with a conscience to do the right thing. She writes: "I do not believe that it is reasonable or proper for me to receive any benefit that I have not fully funded. I hope others feel the same". We will find out how many consciences there are in our fair city.

If only Ann Smith and Judie Italiano had the moral integrity of a Donna Frye. It is the total absence of such morality that has put this city in the state it is in.

Sanders seems to be up to Murphy's old tricks, lying to the markets. Just as back in the bad old days that got us into this mess, these pension figures seem to have been tailor-made for Sanders to get him back into the bond markets.

His political consultant, Tom Shepherd, has already publicly identified getting back into the bond markets as his basic re-election strategy. It's all raw politics.


Did Fred Sainz commit a felony in "IP-gate"? 10/14/07

                                                       by Pat Flannery                                        top^

Read Don Bauder's blog entry in the Reader dated October 12, 2007 headed "
Here's Memo That Got Rick Reynolds Fired". It refers to a request by Fred Sainz for the IP addresses of all the network computers in the City Attorney's office. Bauder quotes Rick Reynolds' September 27, 2007 cautionary email to Fred Sainz as follows:

"the information could be combined with network logs or other trackable system information, resulting in individually identifiable information which would typically not be available for or subject to disclosure. In addition, disclosure of our internal IP addresses to any unauthorized parties would violate system security policies by providing information that could be used maliciously for 'hacking' or gaining unauthorized access, to City systems (either internally or externally)." 

Lance Wade is quoted as expressing a belief that Sainz intended to hand over the IP addresses to Bob Kittle of the Union-Tribune as part of his escalating attacks on Mike Aguirre. If that is the case, this war is nastier than anybody suspected. But why?

Bauder goes on:

"Sainz demanded that Reynolds erase the letter. Apparently Reynolds did not do so, because I got a copy of it. Wade says he gave this information to the Union-Tribune, which did not use it."

I checked with Mr. Reynolds. He confirmed what he had told me and other media before, that he was following legal advice in not releasing the memo. But he confirmed that the memo was a public record because he sent it over the City email system, his usual custom. He did not dispute Bauder's version of it, which I read to him.

That raises a much more serious issue. It means that if Fred Sainz ordered a senior member of the Mayor's staff to erase a public record, he committed a felony.

How many times has this happened during Sanders' term in office? We would not know of this instance if Rick Reynolds and Lance Wade were not honorable men, "officers and gentlemen", from their Navy training.

What is going on between Fred Sainz and Bob Kittle? Why would Fred Sainz order the felonious destruction of a public document? This thing is far from over. The parallels with Nixon get more and more real, as we learn the inner workings of Sanders' administration.

John Kern should quit while he is ahead. 10/14/07

                                                       by Pat Flannery                                        top^

Just to put John Kern's U-T hit piece today on Mike Aguirre into context (there is a big demand for hit pieces on Mike Aguirre at the U-T. Get in line), here is a summary of Kern's interview before the Kroll investigators on May 6, 2006. Note that Kern was represented by Theresa McAteer, the same Theresa McAteer who last week filed a complaint against Mike Aguirre to get him removed from office.

This is part of her earnings from her Rose Canyon Bridge activities - $63,000. Will she still be able to represent clients doing business with City now that she has challenged the very legitimacy of its City Attorney? Sounds like a conflict of interest to me. Her client Project Design Consultants, is before the City Council on Tuesday for $4.8 million.

For other Kroll interviews go to
Kroll Interviews in the column to the right. They are all there. I thought this might be a good time to revisit John Kern's involvement in the ballpark bond shenanigans and the Kelco affair. I think Mr. Kern should quit while he is ahead.

Who will go first, the Union-Tribune or Bob Kittle?  10/12/07

                                                       by Pat Flannery                                        top^

Assistant City Attorney,
Karen Heumann, fired the first shot late this afternoon in the "Battle for the Union-Tribune". Here is a letter, dated today, from Ms. Heumann's attorney to Bob Kittle and his current employer the U-T.

I say "current" because he may not have his job for very long. Not just the City Attorney's office but the city as a whole has had just about enough of this small minded man. The more this little man writes the smaller the Union-Tribune gets. Have you noticed how light it has become lately? Kittle has become a major cause of its decline.

I now look forward to seeing Executive Assistant City Attorney, Don McGrath's, letter in the same vein. McGrath says he will settle for nothing less than ownership of the paper.

Ms. Heumann's attorney's letter makes it abundantly clear that Kittle, in his mad rush to destroy Aguirre, recklessly defamed City Attorneys
Don McGrath, Kathryn Burton, Walter Chung, Karen Heumann, Jeff Van Deerlin and John Serrano  This time he went too far.

McGrath has so much money that he didn't even know he had got a raise!

On top of all that Mr. Aguirre, in this letter sent this evening to Publisher David Copley, demands that his newspaper correct the notorious hit job his reporter Alex Roth did on Aguirre last Sunday, October 7, 2007. It really was yellow journalism of a very low order.

Roth's piece was full of distortions and inaccuracies as Aguirre points out. It was a far cry from the excellent writing Phil Lavelle did for years for the U-T on pension issues. Lavelle finally had enough of Copley and went to work for Diane Feinstein in Washington DC.

The U-T was not always the inferior publication it has become. It still has a few good writers, but how long will they last? Unless the publisher retracts, these lawsuits may crumble the paper further. They may be the tipping point towards new ownership.

In any case enough is enough. It is up to David Copley - the paper or Kittle.

How stupid was it for Sanders to lie about Mount Soledad? 10/12/07

                                                       by Pat Flannery                                        top^

How Mayor Sanders could say that the City had no knowledge of any water leaks prior to the October 3, 2007 Soledad Mountain landslide, beggars belief. Read these emails just released by the Mayor's office. Here is a Distribution List, which may help identify some of the unfamiliar names and tell "who's who" around the City administration.

Sanders repeatedly said that the City had no forewarning of an imminent disaster.

Here is a memo, dated September 27, 2007 from
Downs Prior, Principal Contract Specialist, Purchasing & Contracting, to Tammy Rimes, Deputy Director for Equal Opportunity Contracting at Purchasing, urgently requesting the approval of a $250,000 Sole Source Request to retain the services of Helenschmidt Geotechnical Inc, a female-owned geotechnical consulting company, for the immediate installation of inclinometers on the 5700 block of Mount Soledad Mountain Road.

Downs Prior memo said that the area was "on the verge of possible catastrophic failure".

What jury would now believe a word out of Jerry Sanders' mouth? How stupid it was to try to hide City emails. They are public documents and would eventually come out in court.

Sanders fixes it for Manchester. 10/12/07

                                                       by Pat Flannery                                        top^

The Navy Broadway environmental appeal hearing was pulled from the City Council Docket for Tuesday, October 16, 2007 by Nancy Graham, President of CCDC. Why?

It now says "NOTE: This item has been taken off the docket." It was to be
"a public hearing on the matter of the Appeals of the Environmental Determination by the Centre City Development Corporation on July 25, 2007 regarding the Navy Broadway Complex project consisting of challenges to the Determination that no further environmental review is required for the project under the California Environmental Quality Act (“CEQA”)"

It had been properly noticed by CCDC in the San Diego Daily Transcript on Tuesday October 02, 2007. Here is the publication. Letters were mailed to the appellants. Emails were also sent to the appellants, which were then widely re-circulated among the public.

Everything was set for Tuesday October 16, 2007 when the Mayor had the votes lined up to defeat challenges to the CCDC Environmental Determination regarding Navy Broadway dated July 25, 2007. But two things went wrong: Soledad Mountain had a landslide, raising awareness of San Diego's seismic vulnerability and the environmentalist litigators made an unexpected settlement offer. Stuff happens. The enviros wanted to narrow their concerns and focus on the seismic issue. A double whammy for Manchester.

Everybody knows that the Mayor wants Manchester's waterfront project to proceed unimpeded. Everybody knows that Doug Manchester contributed $50,000 to Mayor Sanders campaign for Proposition B and C in 2006, to that end.

Here is an extract from a U-T article by Matt Hall, dated October 28, 2006 explaining it all.

"On Oct. 13, Manchester Resorts gave $50,000 to a fundraising committee of the Lincoln Club of San Diego County, a Republican business organization that has long been active in politics. It was Manchester's second large contribution to the committee this year, after a $10,000 donation a month earlier, and it was the largest contribution to the club in 2006 by far.

Then on Oct. 17, the Lincoln Club contributed $70,000 to Sanders' campaign for Propositions B and C.

Two days later, one of Sanders' development services directors issued a report that concluded that no further environmental review was needed before Manchester's Navy Broadway Complex deal could proceed."

Here is the infamous Bob Manis' "NBC CEQA Finding" dated October 19, 2006. When I learned about it, on the same day, I wrote this blog dated October 19, 2006, .

Manis was instructed by Sanders to reward Manchester's donation of $50,000 with what must be the most corrupt CEQA finding in the history of all California. Manis, on behalf of the City, certified that no substantial environmental changes had taken place in downtown San Diego between 1990 and 2006 and therefore Manchester need not do a new EIR.

Back to the present: the Mayor was in Washington DC on the day of the catastrophic landslide in La Jolla.  He was on a lobbying trip to the Secretary of the Navy for Manchester's Navy Broadway project. Everything else was just cover.

The San Diego Business Journal published his schedule: "First up, a meeting at the Pentagon, with Donald C. Winter, secretary of the Navy. Among the issues scheduled to be covered: military priorities in San Diego, the war on terror and the proposed Pacific Gateway, which would redevelop the Navy Broadway Complex in downtown San Diego."

What neither Sanders nor Manchester knew was that Cory Briggs, attorney for the appellants, had sent this settlement offer to Malinda Dickenson, the City Attorney handling the case, on October 2, 2007. It was an offer the City could hardly refuse. (I did NOT get my copy of the email from ANY of the attorneys involved, but it IS genuine.)

On Monday October 8, 2007 Ms. Dickenson shared this information with Sabrina Teller, outside counsel for CCDC, pursuant to an information sharing agreement between the City and CCDC on legal matters. Attorney Cory Briggs was not previously aware of that agreement. He had assumed he was dealing with the City Attorney's office only.

It turns out that this sensitive information was immediately shared with more than CCDC.

When Perry Dealy, Executive VP of Manchester Financial, became aware of it for the first time on Monday October 8, 2007, he rejected it out of hand. He was not willing "to conduct a comprehensive seismic study and a traffic study for the proposed Manchester development of NBC before Manchester receives any further approvals to proceed with the development". A seismic study of the site is the one thing he dreads above all else.

That $50,000 Manchester donation to Sanders for the passage of Proposition C in 2006, is still in play. In other words Sanders still owes Manchester. There wouldn't be much point in lobbying the Navy Secretary in Washington DC on behalf of Manchester one day and on the next day conceding the one thing he dreads the most - a seismic study.

Sanders had to kill the offer because it was such a good deal for the City. It would be impossible for the City Council to resist it in open session. Therefore it had to be forced underground to a closed session, where CCDC and the Mayor could control the outcome.

But why not just go for a continuance when the Item would be called on Tuesday? It is very telling that they did not take that option. Why? Because the public can speak to a continuance. They wanted to silence all public comment on the issue of seismic activity.

Therefore the Item must be pulled from the public session, until such time as the present consciousness of seismic issues, raised by the La Jolla landslide, has died down and the decision in closed session to reject the enviros' settlement offer will be fully implemented.

But how to explain pulling it off the regular Council Docket? The CCDC project manager for Navy Broadway, Eli Sanchez, called attorney Cory Briggs on Tuesday morning at 11:00 A.M. He left a message asking if Mr. Briggs would agree to a postponement. He didn't hear back from Briggs until Wednesday. The answer was a firm "no". The appellants wanted that seismic study - that was their bottom line.

Now for the interesting part. DSD arranged a City staff meeting for 1:00 P.M. on Tuesday October 9, 2007 to discuss the settlement offer. It was to include Deputy City Attorney, Malinda Dickenson, together with representatives from DSD and CCDC.

Guess who turned up. Perry Dealy. At the invitation of CCDC President, Nancy Graham.

To her surprise, City Attorney Malinda Dickenson discovered that Nancy Graham had already discussed the settlement offer with Perry Dealy, prior to the 1:00 P.M. meeting.

We do not know whether Perry had attended DSD and CCDC meetings the previous day. We DO know that Graham and Perry had already decided to pull the item off the regular Council Docket because they had instructed Eli Sanchez to contact Michelle Strauss at the Council President's office and Sanchez had left a message on Cory Briggs' answering machine, to that end. Sanchez had been told to "fix"  the Docket.

But Sanchez lied to Michelle Strauss at Scott Peters' office. He told her that the NBC Item had been improperly noticed and needed to be pulled from Tuesday's Docket. She chose to believe him and so instructed City Clerk Liz Maland, who then marked the item "NOTE: This item has been taken off the docket". It is now scheduled for November 6.

Was the Mayor in on all this? Of course he was. Nancy Graham would never take such responsibility upon herself without Sanders' express instructions. Kinda reminds one of Lansdowne refusing to serve Aguirre's warrant on Tom Story. Of course Lansdowne talked to Sanders. The insiders stick together. That's the whole purpose of insiders.

Besides, the only one Manchester has leverage over is Sanders. $50,000 is a lot of money even for "Pappa" Doug. Sanders owes Manchester even more than he owed Sunroad. Feldman merely organized a fundraiser, while Manchester donated $50,000 of his own money. That should be enough to bury the seismic issue. So far it has.

But the Mayor and Nancy Graham made two fatal mistakes:

(1) they invited Perry Dealy to a City staff meeting attended by a City Attorney, involving a very delicate legal matter, in which he is an affected party. In doing so, Graham put Manchester's interests before that of the City and the people of San Diego. They are so used to inviting Dealy to all City staff meetings involving Navy Broadway that they forgot that this one included a City Attorney. Bad mistake Nancy. You gave the game away.
(2) then they lied to the Council President's office and in turn to the City Clerk. As I have demonstrated above, the item was in fact properly noticed.

They were so anxious to get the Soledad Mountain excitement calmed down, that they made mistakes. They wanted no media attention on seismic issues until Navy Broadway is clear of the public hearing at City Council.

The settlement offer Item is still on the Closed Session Docket (Item CS-4) for Tuesday October 16, 2007, but only as a legal issue related to the action taken by the City Council in January 2007. There can be no discussion of the Environmental Determination made by CCDC on July 25, 2007regarding the Navy Broadway project. That matter can only be discussed in open session. I hope everybody remembers that.

The City Attorney will probably make a recommendation regarding the settlement offer, but we may never know what it was. This is another way of sidestepping the advice of a City Attorney that does not play their games. The Mayor will seek to get the City Council to reject the environmental settlement offer in closed session. If the City Council accepts it, the matter will be docketed for open session, but probably in the Consent Agenda.

However, Sanders must take responsibility for the improper actions of Graham or fire her. Did she act with his instructions or not? She put the interests of a large campaign donor before that of the City. Did she decide to invite Manchester's CEO, Perry Dealy, to attend a City meeting on her own authority, or was she instructed to do so by the Mayor's office?

It is precisely the same question that precipitated Waring's firing: did Waring approach Donna Frye with the 166 foot high compromise on the Sunroad building on his own authority or was he instructed to do so by Sanders? Waring has never admitted to doing it without instructions, nor has he accused Sanders of instructing him - he wants to be able to work in this town again, while he is still young.

In either case Nancy Graham, in addition to having helped Manchester dodge  the seismic bullet, may have helped him set the City up for a lawsuit similar to his successful suit against the City of Oceanside. That's what Manchester does when he fails to get his way.

Manchester's Navy Broadway project is in the same geological fault zone, the "Rose Canyon Fault Zone", as the Mount Soledad landslide. This explains why Sanders handled the La Jolla landside issue so carefully and why he is so frightened of Aguirre's openness.

The City (DSD and CCDC) has been helping Manchester avoid a seismic study at Navy Broadway from the very beginning. They shudder when anybody utters the words "Rose Canyon Fault Zone". How many times did the Mayor refer to any fault zone in his Mount Soledad press conferences? Never, that I am aware of. "Pappa" Doug told him not to.

When Manchester filled out his "Environmental Checklist Form" he failed to check the box at VI a) i) at page 7, which asks if there is a "Rupture of a known earthquake fault, as delineated on the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault?"

The City has known from the get-go that the Navy Broadway site is on "the most recent Alquist-Priolo Earthquake Fault Zoning Map". Manchester has refused to indemnify the City against all lawsuits, even though he is contractually obliged to do so. He is reserving the right to sue the City itself and the Mayor and Nancy Graham are helping him set it up.

If there is a heated argument going on right now between the Mayor and the City Attorney over how to handle the subsidence of a section of Soledad Mountain Road, where miraculously a school bus was not traversing at the moment of subsidence, can you imagine the argument that would result if future fatalities took place at Navy Broadway as a result of knowingly building on an earthquake fault. $50,000 can only go so far.


Speaking of Charter Sections ...... 10/11/07

                                                       by Pat Flannery                                        top^

How about this one?

"Section 135: Certain Political Practices Forbidden

No person about to be appointed to any position in the service of the City shall sign or execute a resignation, dated or undated, in advance of such appointment."

Didn't His Honor the Mayor request and obtain a signed resignation letter from Ronne Froman and perhaps other hires "in advance of their appointments"? I seem to remember Jerry boasting about the fact that he had the resignations of all his senior staff sitting on his desk as a "Sword of Damoclese" hanging over their heads? The Voice of San Diego wrote this at the time.

Bob Kittle needs to get a new lawyer. He needs to quo warranto the San Diego Charter Section 135. In fact he needs to go quo warranto himself. Ooops.

For those of you who like to check things out for yourselves, here is a treasure trove of campaign contribution info, courtesy of the
Center on Policy Initiatives. And here is the Public Portal for Campaign Finance Disclosure at the City Clerk's office. Have fun.

I don't think Kittle did Sanders or the Republican Party any favors in opening this can of worms. It's time Kittle got "canned" himself. He and
Krvaric are an embarrassment to ordinary decent Republicans - like Executive Assistant City Attorney, Don McGrath, who will probably sue the pants off Kittle. I see Kittle admitted in a U-T article today that he was in fact the author of yesterday's editorial hit piece on McGrath and the others.

Yeah, I think Kittle is going to need a better lawyer than the amateur who fed him the quo warranto nonsense. Don McGrath is an old salt and will have them both for lunch.


Speaking of deals .... 10/08/07

                                                       by Pat Flannery                                        top^

I read and reread this U-T article trying to figure out its logic. Then I started to notice how much of it was about attorney Michael Conger, not Michael Aguirre. Conger was the attorney who sued the City in the Corbett and Gleason cases, so I did a little research.

It turns out that he lives in a multi-million dollar home in Fairbanks Ranch.
It is one of the luxury homes in the aerial picture below (I'm not telling which), in the ritziest part of Rancho Santa Fe, enough to make even "Duke" Cunningham envious.

I noticed that he closed his escrow on September 9, 2000 and that his Corbett Judgment was granted on May 19, 2000. Again, no problem. Lots of successful attorneys move to better digs after winning a big case. It still does not answer why the U-T favors him and hates Mike Aguirre. Even the U-T is above simply taking care of - the
nouveau riche.

The answer must lie in the Corbett and Gleason cases themselves. So I read and reread both of them. First the Corbett
Settlement with its accompanying Clarifications.

Conger files a lawsuit on July 16, 1998 against the City of San Diego's pension administration, SDCERS. The city unions join Conger as "Intervenors". Ann Smith becomes the lead attorney for the four city unions: the MEA, Firefighters 145, AFSCME Local 127 and the San Diego Police Officers Association (POA).

This was a case of collective bargaining using the court system as leverage, facilitated by a private attorney, Michael Conger, for which he got well paid. Conger did not come up with all this stuff himself, it was a well-planned black bag operation by the unions.

Conger ostensibly based his suit on the "Ventura" case, where the California Supreme Court ruled in August 1997 that Ventura County's retirement board:"was required to classify certain payments made by the County of Ventura to its employees over and above their basic salaries as "compensation earnable" and to include those payments in "final compensation" used to calculate the monthly pension benefits payable to the retired employees". 
He argued that the "same rationale" should be used in San Diego.

The unions wanted the courts to secure their pensions. And the courts fell for it.

The case quickly became a class action suit. Part of the plan? All members of SDCERS would be bound by the outcome. Corbett was just the John Doe and Conger the willing accomplice. He had the full resources of four powerful unions behind him.

The City Attorney at the time, Casey Gwinn, allowed the City to "settle" the case and sign away hundreds of millions of dollars in illegal benefits - retroactive pension raises, "contingent" benefits such as the 13th Check, below-cost purchase of service credits and  the DROP. All this disregarded the State's spending limitation laws.

How a judge, Robert E. May, could override the State Constitution escapes me. But that is exactly what happened, he "approved" a "settlement" that broke State law.

We are definitely missing something here. It has to be more than personalities. Casey Gwinn gave away hundreds of millions of taxpayer dollars but the U-T fusses over the present City Attorney spending
$968,000. Why?

The answer begins to emerge when you carefully read the Corbett case. You come to realize that the Corbett "settlement" was an integral part of the pension heist all along. NTC and the ballpark could only happen if the unions were given their turn at the public trough. Such giveaways required the collaboration of senior (union) staff at City Hall. That is why the U-T is committed to protecting the pension deal. So was Murphy.

But back to Conger. Not content with his fee from Corbett, Conger came back for more. Perhaps his Rancho Santa Fe house needed a pool or something. So he files the Gleason case. This too becomes a class action case, which means that any settlement will be binding on all City employees and retirees. It was "settled" on July 26, 2004.

This time the unions wanted a mortgage on City properties. They got it. They were afraid their greed would bankrupt the City. Here is the so-called Gleason settlement.

Now read Barton's ruling on Phase One of the SDCERS' lawsuit. Notice the Pension system sued Aguirre not the other way around, as the U-T always fails to mention. Again, just as in the two Conger cases, the City unions are the real suing party and Ann Smith is the lead attorney for
the city unions: the MEA, Firefighters 145 and the AFSCME Local 127, who again come in as "Intervenors", a legal term meaning somebody who "enters into a suit as a third party for one's own interests". Planned in advance?

It has all the hallmarks of a setup to me. Barton was asked to decide: "Whether the City’s argument the Managers Proposal I ("MP1") and Managers Proposal II ("MP 2") benefits are null and void is barred because of the Gleason litigation and settlement" (line 18 page 2). What did he decide? You guessed it: "the Gleason settlement ended the contribution relief by SDCERS and thus the City’s reliance on setting aside the benefits under the debt limit laws by suing SDCERS alone, is unavailing" (line 17 page 6).

Now we know why the unions sued Aguirre: he would have no choice but to defend the City and when he inevitably lost, they would make him look like a loser and close the pension case forever. The unions used judges as part of their "collective bargaining" strategy. After each major benefit increase they went to the courts on some pretext, such as the Corbett and Gleason cases, to draw the mantle of court protection around their illegal benefits. It worked.

Barton knew it and threw Aguirre this compliment: "The legal principles the City uses to challenge the benefits in this action appear to be one of the few available mechanisms to do so under the remedies in the state court system. Despite the creative use of these principles and the excellent presentation of the case at trial by the City, previous inconsistent positions taken by the City before the filing of the cross-complaint raise significant obstacles to the City’s current effort to undo the remaining pension benefits."

You can say that again, Judge Barton. "Significant obstacles" were indeed raised by the City's "previous inconsistent positions". It was all well planned and well executed.  The  U-T does not want to undo the long sordid pension affair because it was tied to the ballpark deal. Absent major sports in this town, the U-T's circulation would drop by half.

Aguirre's election caused panic to the architects of the plan. But they soon turned it into an opportunity to create smoke. His unwelcome presence morphed from being a worry to being a godsend for the purpose of obscuring the nuts and bolts of the pension giveaway.

It reached its zenith yesterday in a front page story
eviscerating him. So long as the U-T keeps us thinking that this is all about Mike Aguirre, so long will the unions get away with their $900 million heist. But the U-T may have made its first major mistake yesterday in juxtapositioning Aguirre's $968,000 with the $900,000,000. It just doesn't add up.

The next Mayor will simply refuse to pay the illegal pension benefits. Sanders will not get re-elected. The fact is that this administration continues to violate State spending limitation laws by continuing to authorize illegal payments. Sanders will inevitably pay a price for siding with the unions. Law breaking can never be part of "collective bargaining".



Let's make a deal. 10/06/07

                                                       by Pat Flannery                                        top^

The Navy wants to build its new shore installation management headquarters for its  Southwest Region at the Navy Broadway site below.

The building's function is to provide "
housing, environmental services, security, family services, port services, air services, bachelor quarters, supply, medical and logistics for the region's hundreds of thousands of active duty, reserve and retired military".

But does it have to be on our best waterfront location? Could we not have the economic benefits and preserve our magnificent waterfront as well? I believe we could. Here's how:

We move the whole thing to what is now Qualcomm Stadium - by way of a land swap.

That would remove the worrying security problems associated with the waterfront site. It is much too small to build a buffer zone around the proposed Navy HQ building. Such a building, wherever it is located, will inevitably become a prime target for terrorists.

At Qualcomm the Navy could build an open space perimeter and use it for parking. A truck bomb would be spotted and neutralized long before getting to its target. We don't want another Oklahoma City and the Navy needs to practice force protection.

Rather than a tempting target for terrorists, a park, similar to Chicago's "Grant Park", would greatly enhance overall property values downtown. Chicagoans preserved their waterfront and built a magnificent municipal park. Development boomed. Everybody wanted to be near the water and the parks. We could do the same - if we are smart.

Look at how much Chicago has given over to its waterfront park. All the private development took place behind a line. Our line should be Pacific Highway.

A Military Contracting Center at Mission Valley would help our regional economy as much as the downtown Convention Center undoubtedly has done. This Mission Valley complex could be the national meeting place for all military industrial contracting - where the nation's military leaders meet the nation's best private contractors to compete for the honor of making our military more efficient and effective. Where better than San Diego?

The Navy's "Admiral Baker Golf Course" is nearby. "Montgomery Field" could handle the executive jets. One spouse could enjoy our Mission Valley Malls while the other closed the big contract deals. The MV traders would love it. A win-win for everybody.

What about Manchester, the Navy and the Chargers?

Manchester could still build his hotel rooms - perhaps do even better than he had hoped at Navy Broadway. "Hoped" being the operative word, because the Navy will never be able to build on its waterfront site. There is an earthquake fault running right through it. It is worth about as much today as a site on the 5700 block of Soledad Mountain Road.

The Navy is still vainly trying to get around the California Coastal Commission, which means it knows only too well that the State will never grant it a building permit. The Navy has the same chance Sunroad has in getting the FAA to allow its 180 feet high building.

As for the Chargers, nothing short of an out-and-out gift of the Qualcomm site would stop Mark Fabiani from whining to the media. Well, here's the deal Mark. Go to Chula Vista and don't let the door hit you in the rear on your way down there. But we will help you.

Chula Vista has the site, but it does not have the borrowing power to put a stadium deal together. We could still call the team the "San Diego Chargers", if we formed a Joint Powers Authority, called "The Stadium Authority". It would consist of the Port of San Diego, the City of San Diego and the City of Chula Vista. Here is the Chula Vista site.

Surely all this is not beyond our powers of good business and good government. If it makes sense, let's do it. Does anybody have a better idea? I don't mean Doug Manchester or Mark Fabiani. We know what they want - everything for themselves.


Sanders is in deeper trouble than we thought. 10/05/07

                                                       by Pat Flannery                                        top^

Here are the results of a poll apparently taken three days ago by national pollster McLaughlin & Associates.
You may subscribe to their Mailing List and receive updates to their valuable polls. Somebody sent me this one today. They poll for New York's Mayor Bloomberg and Presidential Candidate Fred Thompson, among other national figures.

Just to make sure it was genuine I called pollster Jim McLaughlin in New York. He personally confirmed the data shown below but declined to say who paid for the poll.

Perhaps it was the San Diego Republican Party just wanting to see how Jerry's flip-flop has affected their issues. Sanders' popularity is tied to their Charter Review proposals. The Republican Party wants the Strong Mayor Charter Change
confirmed and the Mayoral veto strengthened. It does not want to lose all that over Sanders' gay marriage flip-flop.
Question More likely Less Likely
Would you say that whatever you may have seen, read or heard in the news about Mayor Jerry Sanders in the last few weeks has made you more likely or less likely to vote to re-elect Mayor Jerry Sanders?  25.8 % 43.3%
Would you agree or disagree that Mayor Jerry Sanders flip-flops on the issues?
If you knew that each of the following statements about Jerry Sanders were true, would each make you more likely or less likely to vote for Jerry Sanders for Mayor?    
"Jerry Sanders was wrong to flip-flop his position on gay marriage because he was elected Mayor in 2005 after promising the voters he would oppose gay marriage". 13.0% 36.8%
If you knew that each of the following statements about Jerry Sanders were true, would each make you more likely or less likely to vote for Jerry Sanders for Mayor?
"San Diego voters strongly support traditional marriage between one man and one woman, but Mayor Jerry Sanders has decided to implement his personal views supporting gay marriage into city policy". 18.5% 37.8% 
Among Conservatives:   64.4%
Among Republicans:   53.3%
If the election for Mayor were held today, would you vote to re-elect Jerry Sanders, regardless of who ran against him?
(No/all other responses)

If I were a Sanders supporter right now I would be thinking that my boy was in trouble. He has taken an enormous hit over the gay marriage issue and the jury is still out on how the La Jolla disaster will play with the public. It can't be good. Our infrastructure is crumbling.

To add to Sanders crumbling infrastructure problems Arthur Levitt gave an interview yesterday to Bloomberg News where he practically shut off all doors to the public municipal bond market until officials' heads roll in San Diego as an example to cities and counties around the country. San Diego is Enron-by-the-Sea in a very real real sense. It will be from here the municipal bond sacrificial lamb will come.

Of course Levitt is being a charlatan as always. He is stealing the thunder of the real SEC Chairman, Christopher Cox. Levitt knows that Cox has not done with San Diego. Here is some of what Cox had to say about San Diego in a major policy speech at the Biltmore Hotel Los Angeles, on July 18, 2007.

"Very recently the SEC sanctioned the City of San Diego for committing securities fraud.

They failed to disclose to municipal bond investors important information about their pension and retiree health care obligations. San Diego's offering documents didn't tell investors that the city's unfunded liability to its pension plan was projected to grow dramatically - from $284 million at the beginning of 2002 to $2 billion by 2009 - or that the city's liability for retiree health care was projected to grow to more than $1 billion.

Investors had no way of knowing that the city knowingly under-funded its pension obligations so that it could increase pension benefits, while deferring the costs. If investors had known this, they could also have figured out that San Diego was bound to face severe difficulty funding its future pension and retiree health care obligations - a minor little piece of accounting business

It sounds like Mike Aguirre, doesn't it? Scott Peters might want to rethink his chosen role as commanding general in the war on Aguirre. It is Aguirre who will deal with Cox when he comes calling. Peters should be playing nice to Aguirre not attacking him.

And Sanders should stop telling the people that he is on the home stretch in getting into the public bond markets. The SEC knows our reserve-threatening infrastructure and pension problems better than Sanders (maybe because he doesn't want to know). The rating agents will listen to Cox of the SEC more than they will listen to Jerry  Sanders.

This poll shows that he may be coming to the end of his "sweep-everything-under-the-carpet" smiley act. The people need substance. They need consistency, not flip-flopping.

He could still redeem himself, if he got rid of spin artistes like Fred Sainz and Kris Michel. He should replace them with people of substance. But he seems incapable of holding an unscripted public event. He travels around in a motorcade with his ever-present uniformed Police and Fire Chiefs, looking more like a South American dictator than a city mayor.

He keeps getting rid of people like Rick Reynolds and Lance Wade, who "don't fit the political profile". Maybe its time he changed his political profile, for the good of the City.

Who is going to pay for the La Jolla landslide? 10/04/07

                                                       by Pat Flannery                                        top^

The big question on everybody's lips today: "has the City got any financial liability for the La Jolla landslide"? Will we be hit with budget-busting negligence claims?

I picked one of the affected properties and analyzed its recent ownerships. Here is the current Tax Assessor's details for 5715 Soledad Mountain Road, one of the properties you have seen on your screens several times today.

It was listed in the MLS until yesterday. Here is the listing and the accompanying photographs. It had been on the market since February 7, 2006. Two back-to-back listings with Greg Neuman of Prudential California Realty had expired without selling.

The thing that struck me about the listing's "remarks" section was the total absence of any reference to the property being in a Natural Hazard Zone. It is located both on an active earthquake fault and in a designated slide area. That would have to be disclosed in the settlement papers but I would have put it in the remarks section of the listing as well, just as I would for a cracked slab or other known adverse site condition.

A potential purchaser deserves to know such things before wasting their time going to look at a property they would never buy. There is a limited market for homes with known site problems, but realtors by nature are reluctant to mention negatives up front.

The current owners are Hany & Summer Girgis who purchased it on March 14, 2001 from William Sheehan for $589,000. Did they fully understand the slide condition? Did they try to get insurance and fail? It had been listed since September 9, 2000. Sheehan purchased it from Marcy Holthus on May 29, 1998 for $409,000. Holthus was also the listing agent. She had purchased it from Julio & Mary DeGuzman on December 29, 1997.

Perhaps the most interesting situation is that of the McCormicks at 5734 Desert View Drive. They purchased their home on May 24, 2007 for $1,050,000. Here is the listing and the pictures. This is the tax assessor's public record. I notice that the lender of their $634,259 mortgage is a private party and that it was dated 12 days after close of escrow. This would suggest that the McCormick's were unable to get institutional financing.

Again, they could hardly not have known about the pre-existing slide condition and the proximity of an earthquake fault, otherwise their realtor has serious liability. Realtors are required by law to make Natural Hazard Disclosures, which include known geological conditions. It is standard procedure in all residential transactions.

Each of the above sellers are liable to their respective purchasers for such geological disclosures.

It is very unlikely the purchasers were not aware of the slide condition.

This geological map clearly shows the location of this well known slide area with a seismic fault running right through it.

It would have appeared on the statutory disclosure.

The information was readily available to the sellers, purchasers and their lenders. The above geological map was kindly provided by my very good friend Katheryn Rhodes PE.

The City sent this letter to all homeowners in the 5700 block of Soledad Mountain Road on September 19, 2007. It reveals that there was a series of water leaks from the main water line. The City had commenced installing an above-ground water pipe so that they could shut off the underground pipe that was leaking.

It is not clear whether they had already shut off that pipe by October 3, 2007. What is clear is that the City knew there was a problem. The Mayor may not have helped the situation by denying in his press conference that the City was aware of any problem prior to the landslide. That will not help the City's defense later when the claimants' attorneys try to paint the City as caring more about its budget than its citizens.

However, one can hardly blame the City for the above slide and seismic fault condition. One could blame it for having permitted development in that area. But then most of La Jolla is unbuildable by that standard. Look at another of Katheryn Rhodes' maps below.

There are several areas similar to the area circled in red. For example there are huge slide areas marked north of Mount Soledad. The main Rose Canyon Fault (the black line) runs along Mount Soledad Road, up to Mount Soledad and right down to La Jolla Cove.

The only thing the City could be accused of is not doing enough to prevent water leaks, which may have triggered the actual slides or it may have been something else, like the series of earthquakes we have had recently. But nobody can deny that the actual slide was an event waiting to happen. Nobody can say that the City is solely responsible.

I am told by legal experts that all the affected homeowners need prove is that the City was partially responsible and it will be held fully liable. That seems very unfair, but that is what attorney Patrick Catalano will be trying to prove. If he succeeds, then the City will need to look at its permitting procedures to protect itself in the future.

One way would be to require all future developers to indemnify the City against all claims or loses arising out of any development in areas designated as a "Natural Hazard Area". That indemnity would "run with land" as a deed restriction. In other words all future owners would assume that risk from the original developer. No more claims against the City.

This area of Soledad Mountain Road is a designated Natural Hazard Area. Any future permits for rebuilding should carry such deed restrictions. It may give pause to anybody who thinks they can rebuild and sue the City next time nature takes its course.

There are lots of such "Natural Hazard Areas'" around the city, such as the controversial Navy Broadway site. Our City Government needs to take immediate steps to protect the taxpayers from potential liability, such as La Jolla in the future.


The La Jolla landslide: community meeting at 6:00 P.M.  10/03/07

                                                       by Pat Flannery                                        top^

I talked to Mike Aguirre a short time ago and he told me that he will
hold a community forum tonight at 6 P.M. at the La Jolla Recreation Center to discuss the hillside collapse that occurred this morning on Soledad Mountain Road, temporarily displacing a number of La Jolla residents.

The meeting will be held to provide members of the community the opportunity to voice concerns, ask questions about the hillside collapse and the potential for further collapses. Representatives of the San Diego City Attorney’s office will be present at the meeting to answers residents’ questions and to take community input.

He also told me that his staff had put all City staff who are responsible for risk management at the City on full legal alert. He confirmed that the claims departments of all insurance companies that do business with the City are aware of the situation and have been advised to take appropriate steps to meet their responsibilities for any losses and to protect themselves against any spurious claims.

There is obviously a lot of property damage and recriminations about who is responsible has already commenced. It should be an interesting public meeting at 6:00 P.M.

Here is high quality data on Charter Review progress. 10/03/07

                                                       by Pat Flannery                                        top^

"Less than Strong Support for Below the Radar Effort to Re-Mold City Charter" according to this Survey published today by Steve Francis' San Diego Institute for Policy Research. It is an interesting read.

The Charter Review ballot measure will complicate the June Primary. As always the political strategist are busy trying to identify various target voters as they scramble to figure out how each race will influence their own race. This Survey provides them with a free source of data. There is an old saying in campaign management: "he who has the data wins". The SDI is to commended for providing this public service. Normally data of this high value would be available only to those who paid for it, and be jealously guarded.

Now we can each read this SDI Survey and play campaign manager for our favorite candidate or ballot measure. There is another old political truism: "the world is run by those who turn up". If you don't "turn up" you can't complain.


Mayor Sanders: reinstate Rick Reynolds and Lance Wade.  10/02/07

                                                       by Pat Flannery                                        top^

The firing of two top-level City officials on Friday confirmed my suspicions that Judie Italiano is running the Mayor's office. She and Ron Saathoff have done so for years.

Ron Powell's story in the U-T today ignores some well known information circulating at City Hall - that this whole brouhaha originated with "she who must be obeyed" Judie Italiano. The firings have nothing to do with City contracts or Ace Parking.

It has to do with, of all things, City IP addresses. Here's what really happened: remember this story by Matt Hall in the U-T on August 17, 2007? Judie Italiano, General Manager of the 4,800 strong Municipal Employees Association (MEA), had to apologize to the City for sending this email to 4,800 City employees at their City email addresses.

Her highly political email
violated Council Policy 300-06, "Use of City Resources" (page 9. The use of City facilities, equipment and other resources is limited to "activities pertaining directly to the employer/employee relationship". Italiano's email was a blatant misuse of these City facilities and equipment. It was a political hit job on an elected official - the City Attorney Mike Aguirre - whom she called "the mad man".

She was reprimanded by Scott Chadwick, the City's Labor Relations Director, in this email as soon as he heard about it. Forced apologies do not sit well with Ms. Italiano so she has been seething about it ever since.

The problem for this city and for its citizens is that not even the current "Strong Mayor", Jerry Sanders, was able to resist "She who Must be Obeyed" Judie Italiano when she demanded that Fred Sainz and Jay Goldstone provide her with the IP addresses of all the computers in the City Attorney's office. They actually provided her with that list!

When Mr. Reynolds expressed concerns to his boss, Jay Goldstone, regarding the appropriateness of the Mayor's office, or anybody else, having such sensitive information, he was fired. Mr. Wade was fired for no better reason than he was closely associated with Mr. Reynolds, having served together in the U.S. Navy. Both were hired by Ms. Froman.

But why would Judie Italiano want the IP addresses of all the City Attorneys' computers?

Because she actually believes that it really was the San Diego City Attorney, Mike Aguirre, who made that 11:26 P.M. "Post a comment"
entry on an LA Times story dated May 11, 2007 regarding the sensationalized murder trial of Phil Spector.

Chris Reed has been hyping this story on his U-T "America's Finest Blog". He writes: "
If it was Mike, does he owe Italiano and the city in general an apology for using his official e-mail address to express the following sentiments in defending the honor of the victim in the Spector case from the attack of another poster?" She hopes to even the score.

Thus, Italiano's need to justify her inappropriate blast email may have cost two honest City employees their jobs. These two men are damaged for life. Even an eventually successful wrongful-dismissal law suit against the City will not restore their good name or their current employment prospects. Right now they are in disgrace and without income, apparently because of the inability of a weak Mayor to stand up to a labor leader.

Or did Mayor Sanders seek and obtain that list of IP addresses for his own purposes? If so, what were his purposes? What could possibly justify his requiring the IP addresses of all the attorneys in the City Attorney's office? There can be no doubt that he actually did it. I will leave it to the two men who were fired when and how to release the proof.

My immediate concern is one of fairness and decency for these two men. It is totally intolerable that two retired Navy officers and blameless employees could find themselves in this position, simply because they "no longer fit the political profile" of the Mayor's office. Jay Goldstone asserted that they served at the pleasure of the Mayor.

True, but the Mayor serves at the pleasure of the people. Richard Nixon had to resign over the Watergate break-in.

Last week Sanders dispatched his goons to bag the IP addresses of those whom he considers his political enemies, the City Attorney's office. Stealing the City Attorney's IP addresses is as serious as breaking into the National Headquarters of the Democratic Party. Reynolds and Wade were fired for protesting its immorality.


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