The Uncivil War at City Hall
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Lawsuits. Accusations of corruption. Power struggles. With subpoenas from the city attorney’s office and potshots from the city council, has City Hall become a war zone?
WHEN BARRY BONDS smacked home run number 755 in August at Petco Park, tying the record held by Hank Aaron, about half the fans in the stadium cheered the accomplishment, and half booed.
The half who cheered knew that, despite some misgivings they might have had about how Bonds got to be so big and strong later in his career, they had to acknowledge what he did was significant. The half who booed were fixated on their sense that, while they could not deny Bonds accomplished something unusual, the way he went about it was so distracting, the achievement didn’t matter.
So goes the work of City Attorney Mike Aguirre.
He steps off an elevator in the lobby of City Hall, and citizens who are there to protest a governmental action recognize him and break into cheers. He waves to the common people and tells them he is on their side. He is their Napoleon.
But mention his name to others—those depending on unfunded pensions, for instance, or those who have been on the receiving end of his accusations—and a sneer develops. Long silences spread like shadows creeping through darkening windows. He is their Brutus.
To many who love San Diego, he is the only one minding the store. To them, he has discovered a vacuum in who is running this city, and he has decided to fill it.
Others, who love the city just as much, think he is delusional. The city is making progress toward adapting to its new strong-mayor form of government, they believe, and Aguirre is a distraction. A sideshow. Dangerous.
The strong-mayor proposition, approved by voters in 2004 for a five-year trial starting in 2006, replaced a long-outdated system of a city manager working as the gofer for the city council. The old system was inefficient for a city this large and gave cover to back-room deals that average citizens didn’t hear about until years later, when they backfired. The Chargers’ guaranteed ticket sales comes to mind. Liberty Station, anyone?
By contrast, the strong-mayor approach puts the mayor in charge of the city— he or she becomes its CEO, no longer just another voter on the city council. The buck starts and stops in the mayor’s office. The mayor is accountable to the public, not the council or special interests.
But with the transition now into its second year, and with the mayor politically wounded by a 180-foot monster called Sunroad, and the Securities & Exchange Commission accusing councilmembers and others of securities fraud, and the city attorney filing countless legal claims against city employees, squirrel killers and valet parkers, citizens are justified in asking: Is this any way to run a city?
“I don’t think we have anyone running the city right now,” says Aguirre. “We are being told that things are going well, but nothing could be further from the truth.”
This kind of talk chafes city council president Scott Peters.
“Who is running this city? It’s Jerry Sanders, but it’s really a collaboration between the mayor and the council,” says Peters, who has publicly sparred with Aguirre over many issues, especially over the role of the city attorney. Aguirre, according to Peters, is one of the reasons San Diego has trouble accomplishing anything.
“The city will never get anything done as long as Aguirre is here,” Peters says. “He says he’ll advise you one day and then sues you the next. We can’t advance the ball if the running back is tackling the quarterback.”
Aguirre has accused some councilmembers, including Peters, of committing a crime by voting to approve the city’s pension while knowing there wasn’t money to pay for it, putting the city more than $1 billion in debt. And Aguirre points to city charter statements from 1931 that declare his independence from other government entities.
“The council wants to decide as a matter of policy whether they want to follow the law,” Aguirre says. “My job is to make sure that everyone follows the law. The city council didn’t elect me as city attorney. The citizens of San Diego did. We won’t be able to get anywhere on our debt problems until this council is gone.”
So far, the courts have denied Aguirre’s claim of criminal conduct because the statute of limitations for filing the claim expired before he even took office in 2004. Aguirre is researching cases back to the 1850s in an attempt to get the courts to change their mind and allow him to proceed with his suit.
Aguirre’s zeal has cost taxpayers plenty. Private law firms are used frequently to handle many of the suits and appeals he files, and the bill for using outside counsel has risen dramatically in the years since he took office. In fiscal year 2003, before Aguirre took office, outside lawyers billed the city approximately $131,000. In fiscal year 2006, the bill was more than $3.5 million.
Critics of Aguirre’s methods say he has cost the city closer to $50 million, but much of that figure is for legal work related to the SEC's investigation.
And there isn’t much to show for the money spent. He has made progress in reducing the settlement in the long-running De la Fuente Business Park suit and with the Police Officers Association’s claims of labor violations, but most of his claims have been tossed, defeated or stalled.
ALL OF THIS, of course, takes time and money away from the city’s other pressing issues. And despite the publicity Aguirre creates regarding the underfunded pension, it is not one of those pressing issues, according to Peters.
“There is no pension crisis,” he says. “Labeling it as a crisis is destructive and outdated.”
Both the pension and the expensive health benefits promised to city retirees are being paid off in a long-term plan, Peters says. According to an actuarial report provided to the council in April, there is “no material risk that SDCERS [San Diego City Employees’ Retirement System] will be unable to pay the benefits the city has agreed to pay.”
Aguirre calls the actuarial report “hocus-pocus,” done by an actuary who was “hired to make things look better than they really are. It’s creative accounting done to create a misleading conclusion,” he says.
The more accurate conclusion, Aguirre says, is far more dire. “There is a giant meteor headed for this city,” he says. “That’s the point of what the SEC told us. We’ve granted millions of dollars in benefits with no money to pay for them. The city council has been managing a Ponzi scheme.”
So with the city council and the city attorney arguing over how to define their roles, and over whether they are allies or enemies, who is running the show around here?
“It’s me, with help,” says Jerry Sanders, who was elected mayor in 2005—and whose office took one month before deciding to grant an interview to San Diego Magazine for this story. “We’ve seen the transition with the mayor going from a ninth city councilmember to another branch of government where everyone reports to me,” he says. “Before, the city manager was more interested in making the council happy, because they had the ability to hire and fire him. The new system gives the chief executive officer the ability to get things done. Citizens know who to hold responsible.”
He points to two years of balanced budgets and a five-year financial plan, as well as a 20-year plan to pay off the pension liability, as evidence of progress. Also in the works are plans for sewer and water infrastructure improvements, plus a plan to get the city back into the bond market (Wall Street put San Diego on its blacklist after the pension fiasco was uncovered).
Carl DeMaio, head of The Performance Institute, a reform-minded think tank, says what Sanders has achieved in the political system, after what he inherited, is Herculean. “He was hired as CEO of a company that had $2.5 billion in liabilities, a budget deficit, no ability to borrow, with predecessors who left under a cloud of corruption, employees who are being subpoenaed and investigated, and customers who are irate,” he says. “The fact that he kept the lights on at all is remarkable.”
Then, as if to tie a boxer’s hand behind his back, he doesn’t even have a supportive board of directors, DeMaio says. “The council repeatedly tries to thwart his efforts to streamline the process, labor unions make demands before there is even a discussion, and the company lawyer says ‘Good luck—I won’t help you, but I will hang you out to dry if you screw up.’ ”
But whether Sanders is running the show was debatable during the Sunroad debacle. When the Sunroad Corporation built an office tower last year near the Montgomery Field runway and exceeded FAA height limits for buildings in the area by 20 feet, the city’s real estate office knew the building was in violation. Caltrans knew it. The FAA knew it. Sunroad knew it. And apparently, the mayor’s office knew it. Not until Aguirre knew it, though, did anything happen.
Aguirre sued Sunroad in an effort to get the construction stopped. He tried to serve Sunroad with a subpoena, but the police chief had misgivings about it, and Bonnie Dumanis, the district attorney, said Aguirre didn’t have jurisdiction to issue it. Eventually, Sanders issued a stop-work order. What was revealed later was that Sanders’ office had entered into secret negotiations with Sunroad and the FAA to pursue an alternative to lowering the building by 20 feet.
“We pulled back the curtain and showed there was a party going on,” Aguirre says.
Sunroad stopped work on the building, sued the city and is taking off the top two floors. But suing Sunroad was unnecessary, according to Ronne Froman, who was Sanders’ chief of staff for 19 months and resigned earlier this year.
“We were working it out on a day-to-day basis,” she says. “But the city attorney likes to create chaos and turmoil, and it got whipped into a frenzy.”
That argument, Aguirre says, is one he hasn’t heard since his childhood.
“My brother used to do that,” he says, laughing. “He used to tell me, ‘I was going to do such-and-such, but since you did what you did, now I can’t do what I was going to do.’ How can you respond to that? They were conducting secret meetings!”