SAN DIEGO
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Mayor Jerry Sanders announced plans yesterday to review all of San Diego's enterprise funds by June to ensure none of the money was being spent inappropriately on unrelated daily operating costs.
The mayor said he would cancel any improper arrangement, but he did not commit to reimbursing each fund with all of the money misused over time.
He said some fees might have been diverted for 15 or 20 years, making a full repayment too much to bear for a city with numerous financial challenges.
“I'm committed to ending the raids on enterprise funds throughout the city,” he said. Such funds raise money through fees for services like water, not taxes.
Previous city managers turned to the practice to balance departmental budgets that depended heavily on tax revenues that are difficult to raise.
As part of a midyear budget adjustment, Sanders also will ask the City Council to put $2 million from general fund reserves into recycling and refuse disposal enterprise funds to make up for raids on them this year. He made that pledge two weeks ago after a whistle-blower went public with the problem.
A deputy of City Attorney Michael Aguirre wrote a memo to Aguirre and two of Sanders' top aides a year ago detailing the improper arrangements, but no one proposed paying back the money until the issue emerged publicly.
Months after that memo circulated, the San Diego County grand jury ripped similar arrangements with the water and sewer funds as hidden taxes, and Sanders announced he would pay back more than $1 million to those funds.
This month, Aguirre demanded that the diverted recycling and refuse disposal funds be paid back as far as the arrangements were made. Yesterday, he said it would be unrealistic to expect the city to reimburse all the misspent funds.
“We can't correct all wrongs that prior administrations engaged in for all time,” Aguirre said. “Exactly where to delineate that line is something that's going to have to be worked out with the auditors and legal research.”
Sanders said his purchasing administrator would review the deals between the general fund and enterprise funds so that improper arrangements could be halted and accounting changes made by the July 1 start of fiscal 2008.
He said a more in-depth study of the cost of these deals dating to their inception would take longer, and he did not set a timeline for it.
Matthew Hall: (619) 542-4599; matthew.hall@uniontrib.com
