Monday, Jan. 5, 2009 | With a new city attorney at the helm, San Diego city officials hope they can move forward on backlogged infrastructure improvements halted when ex-City Attorney Mike Aguirre refused to sign off on a complex plan to borrow more than $100 million.
Signing off on the financing plan could be a key early decision for Aguirre’s successor, Jan Goldsmith. Mayor Jerry Sanders has long touted the need to make long-delayed fixes to city streets and other facilities. The infrastructure bond marked one of many clashes between Aguirre and the mayor, who supported Goldsmith in the recent election.
Goldsmith said he has yet to fully analyze the proposal, in which the city would essentially pay rent on its own properties to raise money without a public vote. But echoing statements made during the campaign, Goldsmith said he would give greater weight to the opinion of the city’s outside bond counsel, which has opined that the borrowing arrangement is legal.
“What I said is we had legitimate opinions based on legitimate securities experts and bond experts,” Goldsmith said. “I would tend to defer to them unless they were flat-out wrong.”
City officials say the arrangement used to fund the bond is a common one that will fund much-needed repairs to the city’s streets and buildings. But the transactions have been criticized as a way to issue debt without voter approval, and experts say such borrowing must be carefully scrutinized to ensure public agencies get a good deal.
Last spring, City Council members agreed to issue up to $108 million in bonds through an arrangement known as a lease-leaseback. The city would lease five city-owned buildings — the police headquarters, the Rose Canyon operations station and three branch libraries — to a city-controlled financing authority for $1 a year. Using those assets as collateral, the financing authority would issue bonds, the proceeds of which would finance repairs to buildings, streets, sidewalks and storm drains.