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Home / Articles / Opinion / Political Lunacy /  Haven't we been here before?
. . . .
Tuesday, Sep 29, 2009

Haven't we been here before?

In San Diego politics, the frame of the game stays the same

By Carl Luna

If I had written this, as I’d thought to, two weeks ago, when word was circulating that they were at it again (they being the city of San Diego and its pension-fund board talking about short-sheeting city finances), I would have framed the piece based on all the similarities between the city, circa 2009, and the city, circa 2002. (Maybe I’d have even gone for broke and tagged it with an clever headline like “Déjà vu all over again,” too!) I mean, look at the checklist of correlations:

Back in ’02, the city was facing the fiscal fallout of the financial failings of wily Wall Street and the twin hits of the dot.com bubble burst and 9/11 economic terror. Seven years later, the city is facing the same sort of fiscal fallout from a burst mortgage bubble and subsequent massive economic meltdown.

Check.

In 2002, the mayor, City Council and pension board connived to short-change the fund that pays retirement benefits to former city employees in order to meet short-term budget shortfalls while long-term pension obligations skyrocketed, even though such underfunding would inevitably grow into ruinous future required balloon-payments (you know, like the sort that ruined mortgage-holding homeowners from Eastlake to New Rochelle). In 2009, the mayor, City Council and pension board consider conniving to underfund the pension with resultant higher long-term payment costs to the city.

Check.

In 2002, the city attorney sat congenially by and green-lighted said conniving without the slightest private qualms or public squeaks. In 2009, the city attorney sits congenially by without qualms or squeaks while the wheels of underfunding roll on.

Check.

In 2002 the citizens of our fair Gotham, distracted by terror, war and wilting 401k plans, paid scant attention while city leaders mortgaged their municipal financial futures. In 2009, San Diegans are distracted by terror, war, ruined retirement plans—and, just for the heck of it, a looming pandemic.

Check.

So there I was, all set to add the coup de grace: In 2002 the board and council green-light the underfunding; in 2009 they do the same!

Check and mate.

But lo, mine expectations were deceived and, delightfully, disappointed: The pension board voted 10-2 against pursuing an accounting option that would have lowered the city’s short-term payment obligation. Apparently, the board wisely internalized what can be called the Bush 43 rule of non-repetitive mismanagement: “Fool me once, shame on—shame on you. Fool me—you can’t get fooled again.” The board, in short, has learned from past mistakes—something the Mayor’s office seems to be lagging behind on.

Now, unlike some nattering nabobs of negativity (rest in peace, William Safire—and I’m talkin’ ’bout you, Donna Frye and Carl DeMaio), I don’t have a big beef with the board just looking into manipulation of the arcane accounting mechanism—the potential route to saving $30 million in pension payments today in exchange for higher payments tomorrow. Pension-fund honcho David Wescoe is justified in claiming that the board was acting under its fiduciary obligation to consider the option in light of the current financial fiasco—just as it was also within the realm of financial prudence and political sanity for the board to then soundly reject said proposal (though I’d sleep just a tad better if the vote had been unanimous rather than simply overwhelming.)

I take limited exception to Wescoe’s subsequent, exceptionally vehement tirade against those who criticized the whole discussion process. Wescoe should understand the natural (horrified) reaction from many in seeing the board consider underfunding the pension no matter what accounting term is deployed in justification. Seeing the board talking about such things is kind of like seeing Dr. Frankenstein cleaning up the lab and ordering new Tesla coils. Wescoe should have counted his blessings that the local peasantry didn’t storm the pension-board castle, fiduciary obligation or no.

But, alas, the board made the right decision, so we can all move on. No harm, no foul.

Except, that is, for the rather foul way the Mayor’s office dealt with the whole affair. On the issue of potentially short-changing the pension—the very issue that ultimately elevated him to the Mayor’s office even as it de-elevated his predecessor, Dick Murphy, to political oblivion—Gentleman Jerry Sanders demonstrated the steely resolve that has become his tenure’s trademark. First he tells CityBeat that he wouldn’t rule out supporting the board’s payment deferral idea. Then, later, he seemingly reverses himself, saying the city would make its “full pension payment, to the penny.” Due note, however, that his Gentlemanness’ commitment to making a “full pension payment” would have been satisfied whichever way the board had decided the issue. Said “full pension payment” is, after all, whatever the board sets it at, change or no change. Nice wiggle room, your Honorableness.

But that paled in comparison with the incredible spin Jerry’s Svengali of Reality, Chief Operating Officer Jay Goldstone, then put on the whole affair. To hear the Jayster tell it, the pension board’s decision on Sept. 18 to leave the city’s pension payment obligation at the same level ($224 million) that it was on Sept. 17 (and Sept. 16 and Sept. 15 and for months prior to that) was tantamount to the board taking $30 million out of the mouths of the citizens of San Diego and throwing hundreds of city workers into the street because, now, “300 to 400 positions will have to be cut on top of other cuts we’ll have to make.”

With all due respect to Dr. of Finance Jay, the board’s decision means no such thing. The board’s decision means the city will simply have to pay what the city already simply had to pay. The 300 to 400 positions that need to be cut need be cut because Dr. Jay and Mayor S (and let’s throw in the Gang of Eight on the City Council, as well) did not take steps over the last year (or two or four) to either raise revenues or cut spending during the comparatively good pre-mortgage-meltdown fiscal climate. The positions will need to be cut because the council and mayor passed a $3-billion “balanced” budget last June that was already $100 million out of whack. On what planet does not getting money you were never supposed to get amount to losing money that you now don’t have?

Oh, that’s right. San Diegoland.

Not only does Dr. Jay have the huevos rancheros to blast the pension board for acting responsibly and hang the city’s current deficit problem on their starched collar necks—some local reporters bought the way he framed the story, wood, matting and glass. The press followed his crafted lead, proclaiming in headline after headline that the board’s decision now meant the city had to make tough choices, when the tough choices existed way before the board considered the accounting change.

So, maybe the next time Wescoe wants to lash out at somebody, he should lay off those with legitimate worries about pension shortchanging. Maybe next time he should bite the hand that smacks him—like the mayor’s C(onsigliere)OO.

So, in recap, a mayor is seemingly oblivious to just how fiscally bad things are while his underlings cast blame on others for the mess? Just like 2002?

Maybe it is that old déjà vu after all.

Write to carll@sdcitybeat.com and editor@sdcitybeat.com.

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