And the Beat Goes On

Sorry I’ve been off line for a bit, my frequent reader. I’ve been battling migraines which leaves precious little time except to get my day job (which often extends into nights and weekends) done. I’ll try and post a few before the all important, probably won’t change much June Primary.

Change much like City Hall’s reaction to the latest shoe/minor atomic bombshell whichno-one seemed to notice dropped last month by the SEC. A month ago the SEC charged five former San Diego officials, including “Former-by-virtue-of-having-been-defenestrated-by-then-mayor-Dick-the-Murph-Murphy” Michael Uberuaga, for fraud in misleading Wall Street investors over the City’s finances while raising a quarter billion in bonds. Gee, isn’t that what Mike Aguirre’s been saying since the beginning of time: That a City the size of San Diego doesn’t go down the financial tubes merely due to incompetence, good intentions gone awry or lousy breaks? That it takes the determined, deliberate effort of a large number of people more willing to break laws and violate ethics than risk their jobs and careers by telling people the truth about how badly they’d screwed things up? Aguirre has been saying there is a culture of such corruption at the top reaches of San Diego government for years. And been pilloried for it. Usually by those in the top reaches of San Diego government—and those who benefit from them being there.

I’ve waited for the last month to see City leaders—on the Council, in the Mayor’s office—express the sort of outrage they should over these SEC charges. What the SEC is telling San Diego is that its body Bureaucracy and Politics is infected, diseased, corrupt. And the City has, in the last month, done nothing to bleed any of these noxious humours from its municipal blood, or even acknowledged just how damning the SEC action is.

Of course, this is the same City that has seen three councilmembers indicted for corruption, two convicted, and a Mayor resigning in failure and responded with a “business as usual,” put a nice, former cop in the figurehead position and life goes on.

Is it any wonder the City is still out of the bonds markets, months after Jerry Sanders announced he saw the light at the end of the bondless tunnel?

Lucky Star

I’ve said it before and I’ll say it again. Mike Aguirre must have been born under a lucky star. Which will serve him well through June though it might go into eclipse by November.

The City Council doesn’t like him, the entrenched city bureaucrats don’t like him, the city labor unions don’t like him, the cops don’t like him, the Chargers want him to fall in the bay (right in front of where they’d like that new, downtown stadium, if possible, the Union Trib loathes him, the Mayor is sticking pins into his little Mikey voodoo doll and the public has become progressively less enamored with him. (Rumors that his dog has declared “undecided” in a recent poll appear unfounded—I don’t think he has a dog. I do hear that his fish is looking at him with suspicion, however….)

And a recent Competitive Edge poll (the local gold standard on the public pulse) shows Mike Agonistes losing to all three of his major competitors: Judge Jan, President Peters and, well, Brian Maienschein—a guy so blandly nice that its hard to even come up with a handle for him. (Note to self: Call W on this one. He’s always got a good nickname or two…) Goldsmith beats him by 23 points, the other two by less than half that.

Conventional wisdom has Agonizing Mike surviving the June primary with maybe 25% of the vote, enough to win in a field divided between Aguirre and everybody running as “Not Aguirre.” But then he goes bye-bye come the November big show.

Not so fast. The assumption here is that those who will vote for different candidates to replace Aguirre June will rally around the second place winner in the fall—which, according to the CE poll, seems to be how likely voters are currently thinking.

But likely voters are still seeing June as a race between Aguirre and his competitors. It’s not. The race is now between Goldsmith, Peters and Maienschein. And, according to the CE poll, Goldsmith is in the lead in the race for second—but not so far out in front (17.6% to Peters 14.2% to Maienschein’s 9.5%) that he’s a juggernaut. With attorney Dan Coffey dropping out of the race and endorsing Peters, if his 2.1% of supporters throw in with Prez Peters he and Goldsmith are almost tied.

Had Jan Goldsmith been allowed to challenge Mike Aguirre Mano-a-Mano without the other wanna-be Mike whackers piling on Aguirre’s plight would have been dire indeed. Given the abysmally low voter-turnout likely in June—consequence of the early March Prez Primary—which would favor a more conservative candidate like Goldsmith, Aguirre might have been turned into a lame duck before the June Gloom had cleared.

But it’s not. Peters and Maienschein, both realizing their paycheck ends this year, decided a) they didn’t like Aguirre enough to run; and b) they might be able to beat him. (And, if either was the only candidate against Aguirre in June, they might have—though Peters was and is clearly the more logical City Council candidate to take vengeance on Menacing Mikey.)

So now if either hopes to advance to the title bout in November they have one job: convince the anti-Aguirre voters that “Mr. Ferret” (as a Republican assemblyman Goldsmith’s major accomplishment was to unsuccessfully push a bill to legalize the private ownership of the furry little rodents) is not the guy to take on Mauling Mike. That means they have to aim their energies at making Goldsmith look bad.

For both Peters and Maienschein this means showing San Diego voters that Goldsmith is a) an outsider originally from Poway (where he was Mayor) and who had to move his residency from Coronado to Little Italy so as not to appear the carpet-bagger he is); b) that Goldsmith is an outsider from Poway (where he was Mayor) and who had to move his residency from Coronado to Little Italy so as not to appear the carpet-bagger he is) who has had almost no experience in local San Diego City politics; and c) that Goldsmith is an outsider from Poway (where he was Mayor) and who had to move his residency from Coronado to Little Italy so as not to appear the carpet-bagger he is) has the worst hair in San Diego politics. Peters can also throw in that, being a Democrat, he is the safe Democratic alternative to Aguirre compared to the other two Republicans.

Goldsmith, meanwhile, is taking the high road of running against Aguirre as the generic establishment candidate. But if he doesn’t pay attention he could well be pulled down by the hounds of ambition nipping at his heels. Which could yield the unusual result of having two Democrats running in a City-wide general election for a higher office—Peters and Aguirre. Which, also, could also be the best chance for anti-Aguirreistas to remove him from office.

Come fall the political landscape changes dramatically. Especially if Barrack Obama is the candidate. Come November the combination of an energized Democratic base (and the city is now majority Democratic in registration) and depressed Republicans base (at least conservatives, of which San Diego has more than its share) uninspired by their party nominee could translate into a surge of voters more inclined to go Mikey should he be running against establishment Republican Goldsmith. If Peters is the opponent it becomes much murkier.

And, probably, nastier, as all the city’s dirty political laundry gets recycled yet again.

My money (all $7.39—don’t let my kids know or they’ll raid Dad’s wallet…) is that Aguirre survives into a second term by another narrow margin.

Duh!

Duh

My two big “Duhs” of the week. (Part of my award-winning series of insightful journalistic excellence entitled “Duh!”):

First, the front page  article in the NY Times yesterday  morning on how the bonds markets has been gouging cities and states on bonds fees due to the significantly lower credit ratings Wall Street gives City Hall than Corporate Headquarters.

Duh.

Of course the Bonds Industry sticks it to local governments.  They do it for the same reason the best and the brightest of the Wharton School and the Harvard School of Business gave us the S&L debacle of the 1980s, the Dot.Com debacle of the 1990s and the Sub Prime Debacle of the 2000s.  They did it because they can.  Wall Street is all about money, of course, but it is all about short term money, with every bonds trader and fund manager dreaming of one thing:  hitting the big bonuses for moving the most paper, worthless or otherwise and getting to retire as a modern feudal lord to a summer house in the Hamptons.  If you can get there quicker by screwing Main Street USA, be it consumers with jumbo, “yeah you’re going to default on this sucker someday but by then I’ll be promoted and it won’t be my problem” loans or City Halls from east to west with higher borrowing costs on bonds.

Funny thing about that.  The free market says credit ratings and the cost of borrowing money should be a function of risk.  So who is more likely to default on a loan – a municipal government or a corporation?  That’s right, corporations.  So why do they get charged less for loans?  Because the Bonds markets figured out years ago that municipal politicians, playing with taxpayer money, would be less likely to kick up a fuss about being gauged at the Bonds spigot than corporate leaders held accountable by irate share holders.

They screwed the cities and states for the simplest of all reasons: they could.  And they did.

Duh.

And then comes this from the Center for Policy Initiatives report on campaign contributions to local political races.  Brace yourselves:  Real Estate developers ponied up around 20% of the million plus dollars contributed in 2007 to the 2008 Mayoral and council district races.

Who’d a thunk it?  Real Estate developers want to curry favor with the people who, if elected, would craft the ordinances and policies dictating how real estate can be developed in San Diego.

Duh.

The surprising thing to me in the CPI report is actually what a small percentage of the total  contributions the development industry constitutes.  I mean, come on developers.  You stand to make tens of millions of dollars by turning Otay factory lands into compacted housing developments and cramming in  thousands of additional  residential units into the I-15 & I-54 corridors.  At least have the good manners to contribute real money to the political campaigns and not a paltry few hundred Gs.

I mean,  I’d like to think that if San Diego government is for sale, it at least goes for a good, hefty price….

Duh.

Charter Reform This

Egad how complicated can you make charter reform. What to put on the ballot? When to put it on? Come on, guys, it’s not that complicated. Here is the four-step plan to simple San Diego charter changes:

1. Mayoral Veto: The UT had to have published one of the most inane editorials it ever has (and believe me, the competition for the title in the annals of UT lore is intense) last Sunday when it lambasted the City Council for refusing to accede to the Mayor’s ultimate dream scenario of requiring a super-majority to veto Mayoral actions.

“The flimsy pretext for this unwarranted delay was that a six-vote requirement to override the mayor’s veto would constitute more than two-thirds of the eight-member council.”

So sayeth the oracles of the UT.

Exsqueeze me? Not wanting to adopt a 75% override super-majority is a “flimsy” excuse? So what now? The UT’s Bowtie Bob Kittle disinters Jimmy Madison from his crypt over in Montpelier and slaps the corpse around for having the temerity for putting a two-thirds veto Congressional majority into the Constitution as opposed to the three-quarters required for ultimate weighty issues like, say, amending the Constitution? How dare Mr. Madison, et. al, constrain the power of the energetic and noble executive.

A Super-Mayor (as opposed to just a run-of-the-mill Strong Mayor) would provide one-stop convenience shopping for the powerful economic interests that dominate the downtown scene. So, of course, the UT would love to see a Mayor with a super-majority veto shackling the City council. At least, that is, a Mayor who conforms to the UT’s editorial board positions which, often as not, align all so nicely with those of the downtown money crowd (which, given the paper’s dwindling readership, seems to be their principle subscribers anyway).

I wonder what the UT’s position on the veto would be if a social progressive like a Donna Frye was Mayor. Hmmmm, let me think…

UT, get over it. Ain’t nobody this homie knows of that requires a super majority for a legislative veto. The Council’s veto should be set at two-thirds. Which, of course, means the council has to be expanded to at least nine districts, with six necessary for the veto. And which leads me to suggestion….

2. Council Expansion.: The proposed nine council districts is better than the ridiculous even numbered eight council districts the Strong Mayor reform package left the city with. Going to nine districts will reduce the number of people each councilmember is trying to represent from 163k to 146k. But this pales in comparison to the level of personal representation afforded citizens of, say San Francisco, whose 11 supervisors represent around 70k citizens each or Chicago, whose 50 (yes, 5-0) Alderman represent around 50k each. In other words, San Diegans are vastly underrepresented.

Okay, significantly increasing the size of the council adds to costs (staff and salaries, etc.) and to complexity (more people trying to reach agreement). So, what? How about we abolish the council entirely and just have a mayor—maybe a wealthy one like Steve Francis who will foreswear his salary—running the show? Boy, that would save the moola. And, of course, flush the whole concept of democracy down the porcelain fixture.

I’d like to see a council of 11, 12, 15 or 18 (which makes the 2/3 veto majority math easy). That would increase representation (and, potentially, diversity) on the council. So what if that would also render the current council chambers obsolete. They keep saying City Hall is outdated and needs to be replaced. So do so and build a new one, big enough to accommodate the needs of San Diego in 2008 as opposed to 1974 when the current City Hall was built. Which brings me to suggestion….

3. Build a new City Hall and don’t build it downtown. Why is “downtown”– a place most San Diegans seldom go to–the nexus of City municipal life? Could it be because the rents and land there is are cheap it would be foolish to move City Government somewhere else? Could it be because downtown is centrally located and convenient in terms of traffic and parking for most San Diegans to reach? Could it be because it places City Hall within easy walking distance of all the developers, bankers and lawyers representing these said and other special interests who can afford to maintain tony downtown offices precisely to lobby City Government?

Gee, I wonder which one it could be?

How about we sell all the City’s downtown property and disperse the mechanisms of City government around the City itself? Downtown San Diego has always been more of a wish than a reality anyway. Why is Normal Heights or Clairemont any less advantageous a locale for the seat of governance of a sprawling Uber-burb like San Diego? There are these thing called phones, fax and the internet which, I hear, makes communication over vast distances (like, say, Linda Vista to Mira Mesa) very doable these days.

Put the main City Hall, and its council chambers someplace truly central, like Kearny Mesa or Tieresanta. Have each councilmember’s office and staff located in their own district so their constituents can find them as opposed to the downtown suits. And put the Mayor in a really big RV and have him or her tool around town, doing each day’s business in a different district.

Okay, the last one is a little pie in the cracked sky. But why keep all the representatives of the City in the same building every day? They should be in the communities they represent. And access is power, something, interestingly enough, mayoral candidate St. Francis of the City acknowledges when he’s suggested the Mayor’s office be moved to City Heights or some such . Why do you think the very first battle in every new administration, be it mayoral or presidential, is who gets the office closest to the chief? You keep city government downtown and,–Surprise! Downtown money interests get disproportionate influence.

Finally….

4. Fix the City Attorney conflict. An elected City Attorney cannot faithfully serve both the people who elects him or her and the members of City Government as the interest of the People and the Government often conflict. This puts the CA in an untenable position: either be a lapdog of the Mayor and Council (as past CAs were and which the Council and Mayor would like the current and future ones to be) or be a public advocate at odds with the very City Government he or she is called upon to represent. So, as I’ve advocated before, split the job. Create a new position of City Counsel to represent the City in legal affairs and turn the CA into something more akin to the County DA—a watchdog representing the legal interests of all members of the community. Do that or simply abolish the elected status of the CA and return the position to that of Council/Mayor appointment. You can’t have a good watchdog and lapdog at the same time. (Well, actually you can as my ninety pound shepherd-collie-Afghan mix attests to, but you get point.)

There are other tweaks that can be done (like having truly independent City Auditors appointed by a “blind” panel of public citizens and a truly independent City Ethics Commission. But these are my Big Four for Charter Reform.

Then again, why fix anything? I mean, things have been running so well in San Diego government for so long, if it ain’t broke……

Orange You Glad I didn’t say Derivatives

You’ve got to love San Diego City Council meetings. They drag on and on (like the nine and a half hour marathon session last December 4) about items of municipal minutia so mundane that even the most wonkish of policy wonks find their thoughts drifting to their next session of “World of Warcraft.” But buried in all this mundanity are often items of extreme importance. Which, of course, the press and public, overwhelmed by the sheer boredom of it all, don’t pick up on.

Like last Monday’s session. And Docket ITEM-200: Variable Rate Debt and Derivatives Workshop for the City Council.

Sounds enticing, doesn’t it? Like going over your insurance portfolio with your sixty-two year old, loves to talk about fly-fishing and vaguely smells of Lysol agent.

So last Monday the council sat through a long, monotonous presentation on how the city, should it EVER get back into the bonds markets, could pursue various options in reducing short term borrowing costs. All presented in the clearest of businesseeze readily comprehensible by any Ph.D. in economics with a five year post-doc in esoteria.

At the end of the presentation a motion was put forward to bring this topic before the City Budget committee next month to continue consideration of the high-falutin’ investment strategies—using variable rate bonds and derivatives to offset up front financing costs—with an eye towards recommending their adoption by the full council.

And then Donna Frye pointed out the five ton orange elephant in the room.

Orange, that is, as in Orange County which, more than a decade ago, went belly up when the similarly sophisticated investment strategies they had pursued came tumbling down.

Frye asked the workshop presenters to go over the risks of variable rate borrowing. You remember the concept: low initial rates that can skyrocket if conditions change? The kind of borrowing millions of Americans engaged in to afford their overpriced homes? What do they call that market, now? Oh yes, that’s right.

Subprime.

So there is the San Diego City Council all hellbent on signing the City up to engage in volatile interest rate borrowing without even the slightest peep of protest.

Except for Darling Donna.

After going over the risks associated with the scheme the council was being recommended to buy in to Frye then asked which of those risks would be present if the City continued to borrow under traditional, fixed-rate terms. The answer, of course, was none. So Frye asked the obvious question: why should a City bludgeoned out of the bonds markets because of its incompetent financial management even consider reentering those markets using riskier strategies than it ever used before?

The response of her fellow council members was deafening. Or, better said, deaf. The council over road Frye’s motion to reject the proposal out of hand as the snakiest of snake oil and referred the matter to the Budget Committee for further review. From whence it will emerge, months from now, to be considered and adopted by the full council during yet another marathon, bore the world into submission session, no doubt.

So why would the Council even consider getting the City into borrowing strategies which have the possibility of putting the City essentially into the same position as millions of homeowners (homeowners, that is, until the repo orders come down) who were caught in the subprime swamp? Why, for the same reasons that drove millions of Americans into that swamp in the first place.

San Diego, for all the smiley faces Jerry Sanders and many council members try and put on it, is still in a world of financial hurt. The City faces a three hundred million dollar, five year budget shortfall which will get worse as the economy continues to stagnate, is still a billion dollars in the pension hole and has hundreds of millions of dollars in backlogged building and repair projects thanks to its being locked out of the bonds markets for almost five years. Things are getting so tight that there is even talk of privatizing the crown Municipal Jewel, Balboa Park, which needs two hundred million dollars that the City doesn’t have for basic repairs and deferred maintenance.

If and when San Diego returns to the bonds markets it will need to hit those markets hard and heavy, borrowing as much as possible at the cheapest rates as possible. At least, that seems to be how the Council is trying to position the City. Borrow billions now at cheap entry rates, fix things, make everyone happy and then run on that goodwill for a higher office when term limits are reached. That also seems to be the underlying strategy of the Council. And when, in three or five years, the new financial house of derivative and variable rate cards collapses the perpetrators will be off to Sacramento or the Port District or some other home for former San Diego politicians.

Lovely.

But at least these decisions are made right out there in the open, right between “Requests for Continuance” and “City Council Budget Priorities for Fiscal Year 2009.”

With no-one paying attention.

Stirring

Stirring

In the end-of-semester grading rush, I completely overlooked blogging on the Mayor’s State of the City address two weeks back. You remember, the one where Gentleman Jerry gave a rousing speech on how peachy-keen things were going in San Diego and how even more peachy-keener they would be this year? And then the next day announced just how deep that pool of red ink the city was drowning in would be this year?

Let me say this about Jerry’s speech: Yawn.

Between the State of the City and the State of the Union addresses (the one where the Obama snub of Clinton was the most substantive thing to happen), all I can say is wake me up when it’s 2009.

Oh, and St. Francis of the City, take heart—Sanders continues to be so awe-inspiringly uninspired and you just might have a chance to win this thing come June.

Fire Flap

Okay, so Sanders and Aguirre disagree on what to do with state and city recommendations on creating stricter building code standards for homes in San Diego’s now well-proven fire-prone areas. Aguirre thinks such standards should be applied to all residences, those currently existing and those which are still but a twinkle in a developer’s eye. Sanders has balked, opposing retroactively applying such regulations to existing home owners. And legal experts say Aguirre may be off base in proposing to do so. Trying to enforce new fire codes on existing homes is a likely first-class ticket to the courts.

There goes that whacky old Mike again, making policy recommendations he isn’t charged to do that are legally dubious at best, politically disastrous at worst. And, once again, Aguirre is also right in what he’s advocating, even as the slings and arrows of the Mayor rain down upon him.

He may not be politically right, calling on home owners who have a good chance of being burned out in what, given global warming, will probably become even more frequent wildfires gone wild to take proactive steps now to prevent catastrophic loss later. It’s the classic short-term thinking free rider program. What homeowner wants to willingly shell out money now for a fire that may or may not (read “Will”) come later? Especially if the government can be relied on to rush in and spend whatever it takes to protect whoever needs protecting despite how little they’ve done to protect themselves?

This is America, dammit, where people are free to make any dumbass decision they want and expect everyone else, through the instrument of the state, to shoulder the cost. And Sanders, facing an unexpectedly contested reelection campaign, isn’t about to put the slightest pressure on a volatile electorate, public safety and common sense be damned. Interesting that, also facing a significant electoral challenge, Aguirre doesn’t flinch from pursuing what he thinks is good policy and plain common sense.

You see fire is a funny thing – it don’t give a wit if the house it’s chewing on is new construction or old, Your house gets in the way of it—be it a home in a brand new development or an old, established community, the fire dragon will eat it up and spit out the ash. What about the last two great fires don’t people get? So exempting any home in a fire-prone zone from upgrading to higher safety standards is going to result, when the next big one comes, in either more houses burning than should have or a bigger cost to our firefighting budgets—and potential lives of firemen—than should be, or both. My bet is on the later.

It seems likely the legal experts are right — attempting to do what Aguirre calls for and retrofit all homes for fire safety may be illegal under current law and will certainly draw legal challenges. So how about our local state legislators get off the stick and change said laws, indemnifying the City from challenges and damages in enforcing the sorts of fire codes we should have adopted decades ago in the first place? Then the messy business of making people do what is good for themselves and not push the cost of their inaction off onto everyone else can be addressed.

And if the Mayor and City Council don’t like the City Attorney crossing lines and usurping their legislative prerogative, then how about they get of the stick, too, and take real steps—potentially politically painful ones—to protect the people of San Diego from the inevitable next inferno.

But that Aguirre, man. Wanting to guarantee every home is adequately prepared to deal with the next fire. What a nutjob.

Birds of a Feather

What does the Gubenator and Gentleman Jerry have in common? Both are on the losing end of fiscal policy. What neither the politicians in Sacramento or San Diego were willing to accept was that the last two years were the good years in the tax revenue cycle and that the housing bubble bursting in 2007-2008, just like the dot.com bubble burst in 1999-2000, is going to take down their fiscal house of cards like Hurricane Katrina versus a Gulf Coast trailer park. It’s time we get use to the “R” word — recession — and with it renewed fiscal crisis. That’s my second “told you so” of the day.

As The Kids Say

Out of the Mouth Of Modern Babes

The question of the day on this morning’s KPBS radio was whether or not the Chargers doing well in the playoffs will affect their quest for a new stadium.

The answer, as the kids say, is a resounding “DUH!”

The Chargers spent 2007 preparing to clinch a playoff berth on the field while, off the field trying to clinch a location for a new stadium. Considering almost as many alternative locations as the Regional Airport Authority did looking to replace Lindberg (at least the Spanos family didn’t consider trying to build a floating stadium, though then again…) they zeroed in on Chula Vista—a city apparently in even worse fiscal shape than San Diego. The Chargers real end game is to put so much pressure on Jerry Sanders and Mike Aguirre in their respective reelection years—“What, you let them become the Chula Vista Chargers?”—that they finally get some concessions on their field of Dreams. And, just like the Padres understood, it doesn’t hurt to having a winning team while trying to woe the local pols and public. Meanwhile if Sander’s and Aguirre’s most likely serious challengers—that would be Steve “Let’s Spend Another Million” Francis and Alan “I’m betting the MEA hates Aguirre more than the SDTA hates me” Bersin, respectively—want a ready-made issue for June, Charger fever could become their best political lightening bolt.

Dream on Chula Vista – you’re just a shill in the Chargers’ end game.

Meanwhile, in case anyone is paying attention amidst all the Bolts’ hoopla, the Iowa and New Hampshire contests have come and gone and now its on to Michigan, South Carolina, Florida and Tsunami Tuesday and who are leading their respective packs? Ahem. That would be Clinton and McCain. And who has said since spring they were going to win the big enchiladas? Ahem.

Happy New Year

Check out my year end review in the current, last issue of the year edition of CityBeat print. And with that we close the books on 2007. Happy New Year to all. Next week: 2008 sneek preview!