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San Diego Infrastructure Bond Holds Under Legal Challenge

City crews work on a sinkhole that opened after a water main break on Shawnee Road in Clairemont on December 27, 2011.
Nico Smedley
City crews work on a sinkhole that opened after a water main break on Shawnee Road in Clairemont on December 27, 2011.

A Superior Court judge indicated he will reject a lawsuit challenging the city of San Diego's right to use a $120 million infrastructure bond to pay for constructing and repairing fire stations, libraries, storm drains, streets and sidewalks, a city official announced today.

The suit filed by San Diegans for Open Government and attorney Cory Briggs questioned the legality of the financing method — lease revenue bonds — which the city has used to pay for neighborhood improvement infrastructure projects for decades, according to Gerry Braun, spokesman for the City Attorney's Office. The lawsuit sought to bar the city from financing projects that could not be built and paid for within a year.

Superior Court Judge John S. Meyer said on Monday that the bond fell under what had been approved by the state Supreme Court in 1998's Rider v. San Diego case, which found that the structure of lease financing was appropriate, according to Braun. A final written ruling is expected next week, Braun said.


"This lawsuit was unnecessary," City Attorney Jan Goldsmith said. "Like it or not, the Supreme Court has found lease revenue bonds legal and they are relied on for infrastructure projects by cities throughout California."

The bond was initially part of a multi-year plan that includes cash funding and three previous bonds to offset the city's backlog of infrastructure projects. The San Diego City Council tentatively approved the proposed $120 million bond issue in January.

About $48 million was earmarked for libraries, fire stations, life guard stations and other neighborhood facilities. Another $43 million was to go toward streets and paving, $22 million was designated to replace aging storm drains and facilities and $1 million to fund new sidewalks, according to city officials.

"This is an important step toward fixing our neighborhoods," City Council President Todd Gloria said. "During this legal battle over a known responsible funding mechanism, our neighborhoods have had to wait for road repairs, expanded branch libraries and fire station upgrades. I hope to be able to deliver those improvements soon."