Kroll report discloses financial mismanagement

By Alison St John / Reporter, KPBS Public Broadcasting

Published August 7, 2006 at 9:00 PM PDT

This story was published more than 18 years ago.

A report on the San Diego city pension crisis concludes both the city and pension board failed to obey the law when they under funded the system in 1996. The city also broke the law in its sewer billi

A report on the San Diego city pension crisis concludes both the city and pension board failed to obey the law when they under funded the system in 1996. The city also broke the law in its sewer billing practices. However, the Kroll report blames a culture of financial and political expediency and does not hold the city council legally liable. KPBS Reporter Alison St John has more.

Arthur Levitt, former FCC Chair and head of the consultants who conducted the investigation said the City's pension system has been debilitated by years of reckless mismanagement.

He said that though the city and the pension board acted illegally and improperly, officials did not set out with the intention of defying the law. Rather, he said, the failure was a cultural failure, based on lack of transparency and denial of fiscal responsibility.

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The consultants recommend remediation measures, some of which could prove costly to the city. An independent monitor should be hired to oversee the city's compliance for the next three years.

Most importantly, the city's outside auditor, KPMG, said that report is sufficient for them to complete their audit, though they gave no guaranteed timeline.

The council accepted the report, but City Attorney Mike Aguirre is grilling the consultant, since he fears the report will undermine his attempt to roll back benefits. Alison St. John, KPBS News.

Alison St John

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Alison St John currently serves as a general assignment reporter and occasionally co-hosts KPBS Midday Edition. She fell in love with KPBS Radio when she arrived in San Diego in 1985 and first heard NPR. She has been a voice on KPBS Radio since 1989, and has served as a news reporter for radio, TV and the web, as well as anchoring, hosting, producing and editing. Alison has reported on stories about North County and was based in the KPBS' North County Bureau. Alison covered the metro beat during the critical period of the San Diego City pension crisis, and the education beat while Alan Bersin was the controversial Superintendent of San Diego City School District. She covered health when the industry was converting to managed care and told welfare reform stories in the late 1990s when Clinton was “ending welfare as we know it.” She has covered land use issues extensively, looking at the challenges of meeting a growing population while preserving community character, and developing a better transportation system to meet environmental concerns. She has done many stories on the military in San Diego, and the series she edited on the challenges veterans face returning from active duty to civilian life won “Best of Show” from the San Diego Society of Professional Journalists. She occasionally hosts the KPBS Roundtable and KPBS Midday Edition. Alison has won awards from the San Diego Press Club, the Society of Professional Journalists, the Associated Press TV and Radio Association, and the California Golden Mike Awards. Alison was born in Tanzania, brought up in Scotland, and earned her degree in psychology and sociology from Durham University in England. Her postgraduate diploma is in student counseling. She worked in England, Nigeria, Switzerland, Belgium, India, and Japan before moving to the United States in 1981. She now lives in Oceanside and enjoys how her community is growing and changing.