San Diego Still Paying for Mistakes
Monday, July 20, 2009
San Diego is still paying for the mistakes it made seven years ago when the city failed to disclose its billion-dollar pension deficit to investors. But a monitor, who reports to the Securities and Exchange Commission, says the city is cleaning up its act.
Stan Keller is a Boston attorney who closely follows everything the city of San Diego does to keep Wall Street informed of its fiscal health. He reports his findings to the SEC.
It’s part of the settlement the city had to accept after it was found hiding damaging information from investors in 2002 and 2003.
Keller told the city council that the city’s web page for potential investors in city bonds is an improvement. “It’s not just numbers,” he says, “or what has been referred to by the SEC as analysis that ends up being not much more than elevator music, but getting behind the numbers and explaining what they mean.”
Keller says the city’s audit committee, which is more independent of the mayor’s office, and includes citizen experts, is a good step forward.
The city is spending around $40 million for software called "One San Diego," that’s supposed to strengthen the city’s financial controls, but still isn’t working properly.
Keller, who will finish his three year stint as monitor next year, says he likely won’t charge the city more than $2 million for his services. http://www.kpbs.org/news/2008/jun/13/aguirre-to-present-council-with-malpractice/Previous consultants hired to help extricate the city from its legal turmoil charged $26 million.
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