Pro-football pushing San Diego closer to bankruptcy

“The mayor is in over his head"

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

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

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

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

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

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

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

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

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

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

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

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

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

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He believes that the pension scandals would never have arisen had the City put a sound tax structure into place following Proposition 13.


We would have had the pension problems with or without Prop 13.

Prop 13 had nothing to do with the pension problem, it was retroactive benefit increases of 50% that were the problem, nothing more and nothing less.

Any pension increase that instantaneously adds billions in costs with the swipe of a pen would torpedo any budget plan.

Response to post #2: I had favored Prop. 13 back when it passed, and we profited by paying low property taxes on our Mt. Helix home, but this legislation was at the root of many problems. As Steve Erie says, smart municipalities quickly found other sources of revenue following Prop. 13's passage. San Diego didn't. Best, Don Bauder

The fact is post 1978 state revenue did not go down at all because of Prop 13. As you correctly pointed out "fees" on everything under the sun increased sky high and replaced property taxes-so I don't buy the fact that a loss of taxes from Prop 13 would have cured this mess.

There is a republican propsal to lower to a simple majority the % of CA state representatives needed to approve a state budget AS LONG AS THE BUDGET DOES NOT EXCEED 5% OF THE PREVIOUS YEARS BUDGET.

Now that would work, but the democrats refuse to sign off because they want to increase taxes more than that 5%-which is in essence our spending problem in this state.

New York this year, for the very first time, spent more money on paying out pensions and healthcare to retirees than they spent on current employees. CA is not far behind.

When you have two work forces-one that actually works and the other one where they are paid NOT to work-and the second one costs more than the first-then you have big problems.

What about the libraries?? Good lord, if that doesn't speak to the downfall of a city, than I don't know what does. It will be a travesty if a single library is shut down.

We used to save for rainy days...

A decade ago 40% of the voters recognized that the ballpark was a bad idea. Yet we're all victims of McGrory and Moores' scheme to put money borrowed from the pension fund into professional sports.

The cold shower may take the form of bankruptcy, or worse. We're just beginning to pay for the deals of the past two decades. Without leadership we can only expect more of the same.

Yet San Diegans don't seem to much like leaders, because sometimes leaders can be rude. They don't tell us what we want to hear. They make us uncomfortable.

So leaders are either never elected in the first place, or are vilified and attacked so ruthlessly that they regret ever opening their mouths. Meanwhile, the very folks who got us into this mess are prancing along enjoying all the trappings of admiration and respect.

Term limits isn't the sole cause of this. Even when the bastards are finally out of office, they continue running the show from behind the scenes. Look at Steve Peace and his current gig with Moores, or McGrory and his work for Moores...both of them betrayed San Diego for money, using their positions in office to grease the way.

It takes at least a quarter million dollars to wage a credible district-only city council campaign. The system has evolved in favor of those who can bundle contributions like developers and public employee unions. We also know that that division of responsibilities between city, county, and state is baffling to most voters, so they don't know who to hold accountable when things go so very wrong.

When the cold shower comes, will it rain on their parade?

As the old song goes, "It's a big enough umbrella, but it's always me that ends up getting wet."

California is extraordinarily rich...but our wealth has been concentrated in the hands of the very few. They live in their own separate world behind gates and security guards, with their own schools and infrastructure to ensure their safety from the storm.

The rest of us can drown.

Politics has become a doorway into the pampered world of the elites, and it's the reason people like Peace go to work every day. They are desperate to join the upper-crust and will betray the rest of us to do so.

That's what we're paying for. The same kind of ambition and greed that brought down Rome, exemplified with gaudy stadiums, is wrecking out own society.

Response to post #3: California has massive problems. As you mention, one of them is the pension system. CalPERS is in bad shape, partly because it gambled with employees' retirement funds, going into venture capital, hedge funds and other speculations that a hedge fund had no business in. Best, Don Bauder

Response to post #4: It's bad enough that libraries will be closed, and others will go on shorter hours. What gets me is that the establishment is talking about a massive subsidy for the Chargers (probably a gift of land) while the libraries get shut down. This will reinforce the unfortunate reputation that San Diego already has. Best, Don Bauder

Response to post #5: You have put your finger on it: total lack of leadership. Sanders refuses to face the fiscal facts because he doesn't think the people want to hear the bad news. His opponent in the last election was honest about the city's big problems and went down to defeat. Many times, Donna Frye has given the people the bad news -- and given the bureaucrats the business -- and the Union-Tribune always calls her a "maverick." Actually, she is the only leader on the council. The Sanders administration only has sycophants who spend full-time boosting the fortunes of a feckless mayor who won't take the lead. The successful hate campaign against Aguirre will deter future leaders from coming forward. Best, Don Bauder

According to Bill Gates The USA became a great nation thanks to the public libraries and Andrew Carnegie. The only correct answer is: Football No, Libraries Yes. Hans Krol, Heemstede (The Netherlands)

According to Bill Gates The USA became a great nation thanks to the public libraries and Andrew Carnegie

Yeah!!!!!...........also according to Bill Gates he has hundreds of thousands of high paying computer jobs that no Americans want to do (they would rather be on $150/month in foodstamps instead of working for $100K/year) and therefor Microsoft needs a half million of H-2A visa's, because Indian computer engineers will work for half the cost of an American.

Response to post #9: Bill Gates was right on that one. Best, Don Bauder

Response to post #10: U.S. citizens are indeed losing some important computer jobs. Some are performed by Indians in India -- programming, for example. Best, Don Bauder

Response to #13: I would be wary of a Christmas greeting from someone named Ponzi except that I know it's a pseudonym. Happy holidays to everyone. Best, Don Bauder

Term limits would be useful on the San Diego County Board of Supervisors aka "incompetence in action" or inaction if you prefer.

County had same kind of pension problems as the City. County issued long term bonds to put off the "ticking time bomb" same thing Arnold tried to do with the State budget deficit last year. County's chickens will come home to roost too.

It was Classic when Senator Feinstein dressed down Supervisor Roberts for San Diego County being the largest County in the country without a unified County fire service.

Senator Feinstein was pissed that County had done nothing before or after the Cedar Fire on fire prevention and then watched as almost half the County burned again 3-4 years later.

If this is what lack of term limits has to offer then I would prefer to "term out" some of these do nothing County Supervisors

Response to post #15: The county definitely has severe problems. One of them is the pension system's investment in hedge funds. Best, Don Bauder

Merry Christmas everyone!

By Ponzi noon, Dec 24, 2008


Merry Christmas everyone X2!

Ponzi, you're going to have to change your name to "Madoff" in light of the $50 Billion he scammed!

Did you hear about the "Madoff scheme"....... it is a ponzi scheme disguised as a hedge fund!

I have no issues with the Chargers or any major NFL franchise being in SD. I think it adds luster, and I am a fan of the NFL. I do think all the dilly dally'ing about where to put a stadium is crazy. The "new" stadium, whenever it comes, and it will come, SD is too large of a town to be w/o a major sports facility, should just be where the Q sits today.

I do have issues with the management of our tax dollars. I pay upwards of 20k a year in property taxes, have no kids attending public school, and still they mismanage. I do not see how doing crazy things like ending firepits, or closing libraries is going to help. Now do we press for a new library right now? I think not, but saying flat out that we don't want the NFL here is also wrong. I see too many city workers sitting in their PB watering hole at 2pm. Instead of keeping these people on the payrole, there should be accountiblity.

San Diego is a great city, not the city of the 70's when I remember it best, but it still has the potential to be great. Donna Frye & Kevin Falkuner (sp?)play a larger part of the problem, in my opinion then Sanders/Aguirre et al. I think the city has no other choice then to BK itself.

Response to post #17: Wait until these hedge funds begin to collapse in earnest. Most are based on offshore tax havens. Hopefully, the average American will find exactly how corrupt the system really is, and demand reform. The government has already pumped billions into rescuing hedge funds -- no doubt because it feared that a derivatives nuclear reaction would bring down the whole system. What's really scary is the amount of pension fund money in hedge funds -- including money of the San Diego County pension fund. Best, Don Bauder

Response to post #18: I am all in favor of San Diego having a pro football team. In fact, I think it's great. What I strenuously object to is the public putting any money in a facility. There has been talk of the military giving Miramar to the City and the City turning it over to the Chargers. Utterly insane. That land will be worth billions. Alex Spanos is better off financially than the City of San Diego. As to bankruptcy: yes, I fear it is coming. It's hard to say when. An entity can be technically insolvent, as San Diego is, for a long time before being forced into BK. Best, Don Bauder

Response to post #20:

Don, no one knows better than you that the Republican Party is dedicated to destroying the middle class, which they have proven continuously over the last eight years at federal, state and local levels.

The GOP even has an army of anti-tax advocates who have betrayed the middle class as bogus “taxpayer advocates” committing as many betrayals as they can ever since Bush won his tax cuts for the richest and most powerful eight years ago.

Giving taxpayer monies to Spanos class bloodsuckers and other San Diego Republicans has been the worst treason in San Diego history.

Indeed, “Utterly insane. That land will be worth billions. Alex Spanos is better off financially than the City of San Diego” characterizes the continuing SDGOP treason very well.

Response to post #21: I don't know that the Republicans deliberately attempted to destroy the middle class. After all, they get a lot of votes from that segment of society. However, the Republicans' economic strategy definitely pumped up the rich and superrich, shrinking the middle class. Best, Don Bauder

Response to post #22:

Don, you keep documenting there is no greed like REPUBLICAN GREED, with Spanos a case study from hell all by himself.

Cheney and his puppet Bush, and the Neocons have proven for eight years that they don't give a damn about anyone but their own aristocracy, turning Wall Street into a Ponzi scheme that even Calbreath documented this morning in his column.

The fact that some middle class idiots voted Republican anyway only means that there really are far too many brain-dead voters willing to vote against their own interests without thinking.

The middle class is doing a lot more than "shrinking," the GOP is making them extinct even as they sacrifice republican idiots who aren't part of the superrich aristocracy.

Interesting "23 WHO LET US DOWN" Editorial this morning, the U-T Editorial Board is still covering up their own republican treason against San Diego because there are still far too many brain-dead republicans who believe everything the U-T and the GOP say in spite of the continuous acts of republican treason against American Democracy.

The bottom line is that the GOP aristocracy is crashing and burning the American Way of Life that ended when the GOP autocracy took over WashDC in 2001, even at the expense of destroying American Capitalism by selling out America to Communist China.

Response to post #23: Cheney, Bush and the neocons certainly have feathered the nest of their own aristocracy while fouling the nest of the nation. Best, Don Bauder

Response to post #24:

The Bush-Cheney/Republican Party legacy created over the last eight years includes:

Attacks against U.S. Constitution and American Democracy

Treason against the U.S. Military by failing to plan, lead and provide equipment, training and diplomacy to win the wars in Iraq and Afghanistan causing hellaciously excessive deaths and injuries to America’s Heroes and Patriots

Empowering Wall Street to maximize their own greed at the expense of the American economy

Selling America out to Communist China

Destruction of American education systems, libraries and other support that are required for a successful Democracy

Creating out of control poverty and conditions for destruction of the Middle Class

Response to post #25: All those factors have been tragic, but the deregulation of Wall Street, the creation of a massive disparity in wealth and incomes, the failure to do anything about derivatives, and then the bailouts of financial institutions without the removal of managements and controlling of grossly excessive executive pay may have been the most deleterious. Best, Don Bauder

You said it Don. The rush for passage of this bail-out, I mean I actually saw politicians scurrying in the view of the cameras, to shove this 'bonus for criminal malfeasance, bit of legislation down our throats. "What's the hurry?", I kept thinking to myself. The old maxim continued to play in my mind,"The louder they proclaimed their honesty, the faster we counted our spoons." The United States needs to start acting to abolish the Federal Reserve System. The whole concept of our economy, run by a mysterious cabal of global bankers, without constraint or serious oversight, boggles the mind! Marginal Banking? Are you kidding me? I was going to get carried away there, but we know what the wealthy will do with our tax money and public land:they'll give it to the rich! Keep up the good work Don, Thanks, Robert B.

Response to post #27: The so-called justification for the bailouts was to keep the global financial system from collapsing as derivatives unraveled. But that was never articulated to taxpayers very well. Also, More of the malefactors, particularly AIG, should have just gone into bankruptcy as Lehman did. The bankruptcy courts can deal with these crises, too. Best, Don Bauder


Your article was picked up by "Library Link of the Day," which means it was blasted worldwide to over 300,000 librarians-- as a single article of note. I learned this from from Arlene Sahraie Library Services Director, Bergen County Cooperative Library System,Hackensack, NJ. who emailed me your article! (I live in Clairemont).

If any city in the US were a poster child for the greed and mistakes of the last 10 years, San Diego is it. It's as if our city government, with the nodding somnalent approval of San Diegans, has operated a giant Ponzi scheme of no-accountability. When I say this to my native SD friends, their eyes glaze over and they say, "How 'bout them Chargers, baby!"

As Mike Davis's UNDER THE PERFECT SUN, a history of San Diego, tells it, San Diego was founded on the myth of paradise, and it will die with that myth--either by the guns of TJ drug lords or our collapsing city plumbing system or the city workers who have retired with more money than they ever made in their working lives or by the giant potholes that are slowly swallowing our streets. Anyone who doesn't believe it should drive through the condo-ghosttown downtown. Look in the windows of the empty restaurants. Visit La Jolla Shores and see the buckled boardwalk. Visit my local North Clairemont branch library and see the crowds of patrons. (What major city closes its libraries for an entire week at Christmas?!) We are a dying city-- and the tourists will recognize it before San Diegans wake up.

IT's not all good. Some days are bad. Thank you for speaking the truth.


Alex Finlayson

Response to post #29: Mike Davis put it well in his book, and Steve Erie of UCSD's political science department is preparing another which should be a doozy. You put it well when you say that San Diegans' eyes glaze over when they are told how their pockets are being picked. San Diego's sunshine may be its biggest enemy: the residents are in the county as permanent tourists, playing golf and basking at the beaches, and don't want anyone telling them the truth. Best, Don Bauder

Response to post #30: Yes, it is nice to see it there, posted on Dec. 24. Libraries are CRITICAL to any metro area's survival. Increasingly, people who can't afford computers can go online at a library. Best, Don Bauder

Prop 13 is not the problem. We are collecting more property tax REVENUE today than we did in 1977, the year PRIOR to Prop 13 (when property taxes were sky high and driving the initiative). Even after adjusting for inflation and population growth, we are collecting more property tax revenue today than in 1977.

For the county, in the last eight years (INCLUDING this abysmal fiscal year through 30 June, 2009), property tax revenues have doubled. DOUBLED! And even this year, the Assessor projects that the revenue will rise 2%. This is the unappreciated "smoothing" effect of the Prop 13 formula.

Doubling property tax revenues in eight years is about three times the rate of inflation. During that time, our population has been essentially stagnant.

I know it's popular to blame every government shortcoming on Prop 13, but it's simply not true.

Response to post #33: I thought Richard would come forth to defend Prop. 13. Will anyone argue with his figures -- say, the assertion that property tax revenues, adjusted for inflation and population growth, still top the revenues of 1977? Best, Don Bauder

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