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Looking at 2010: April Boling and Money

Few are willing to count beans like she does. What’s she looking forward to in coming months?

April Boling got involved in politics like so many others: There was a controversy in her neighborhood that propelled her to wonder how things really worked in the centers of power.

She found her way into the complexity. Armed with an accountant’s comfort for numbers, she’s tried over the years to articulate what she thinks is wrong and summon the passion to convince her peers to act.

She has been better at the former than the latter of those pursuits. Last year, she was heartbroken in a loss to Marti Emerald for the City Council seat vacated by Jim Madaffer. Having won the primary decisively, the Republican Party, by many accounts, thought her race was settled when the November 2008 general election approached. She ended up losing.

Over the years, the city’s political leaders have ignored her advice. Though she had been involved in Mayor Dick Murphy’s campaign, he pushed aside, in 2004, the recommendations offered by her and the Pension Reform Committee she chaired. You’d think, after all this time, that the city’s political leaders would take her insights seriously.

Boling’s other expertise is in campaign finance issues. She’s one of the few locally who are willing to serve as campaign treasurers. And she was instrumental in helping the Republican Party and others successfully challenge the city’s complex campaign finance regulations.

In both the Republican and Democratic circles, there are activists that represent interests — businesses, organizations or causes — and they push for the parties to evolve in whatever way supports those efforts. But there are others who do the work they do because they want things to function better and they believe their ideas, if implemented, would help improve the systems they worry about. I think Boling is part of that second group.

Like Murtaza Baxamusa, another subject of these e-mailed interviews I’m doing, you may not like or agree with Boling’s views but you can’t argue with her knowledge. She knows municipal financial issues like a chef knows his kitchen.

I wanted to see what she’d do if she could get into the City Hall’s kitchen.

 

To catch up on what I’m doing with these e-mailed Q&As, you can read the intro here along with the interviews with: Marco Li Mandri, Marco Gonzalez, Lorena Gonzalez, Dianne Jacob, Gil Cabrera, Tom Shepard, Carl DeMaio, Kathy Keehan, Murtaza Baxamusa, Kevin Carroll, Donna Frye and Walt Ekard.

 

If you had the chance to get into City Hall and do any analysis or grab any document, what would you look for first?

The simple fact is that we don’t know where we are financially. Some liabilities (like bonds) show up on the city’s balance sheet, but other important liabilities do not — such as the deferred maintenance backlog.

In addition to knowing where we are, we also need to know how much money it takes each year to maintain the current liability level. We have a five-year forecast, but no one can (or will) tell me whether we will be better or worse off by the end of that five year period. Without that information, we don’t know if we are making headway or if we are just slowly sinking away.

Armed with that information, I would then want to see a cash flow analysis. Do we have enough money coming in to pay our ongoing bills and also keep from going further into the hole?

You recently moderated a forum analyzing municipal bankruptcy. What did you learn from it? What do you think is most misunderstood about it?

I hope this answer doesn’t sound too wonk-ish, but here goes …

In the private sector, a business that spends more than it takes in cannot maintain that mode. First it will probably increase debt, but the debt payments then increase the cash flow needed. The next step will be to decrease expenses. If it cannot cut enough to meet its cash flow requirements, it then faces insolvency (inability to pay its bills) and files for bankruptcy.

In the public sector, there really is no limit to how much a municipality can cut. One could wipe out park and recreation services, libraries, facilities maintenance and then start reducing public safety. In other words, in theory, it should be impossible for a municipality to ever become insolvent. Taken to the extreme, you would have a handful of public safety employees, massive pension and benefit payments to retirees, and that would be it.

What I learned from the panelists is that those severe cuts are not required in the public sector in order to file for bankruptcy. Instead, the municipality determines what its minimum financial requirement is to operate. If the inflows do not meet that minimum level, then a municipality is eligible to file for bankruptcy. Put another way, there is a minimum level of services that citizens have a right to expect and that is protected by law. Bankruptcy is one vehicle for the protection of those of services.

What decision will you be paying attention to the most in the coming year and who will be making it?

I will be closely watching the Vallejo municipal bankruptcy proceedings and also the pension-related lawsuit in Orange County. Each approaches their current pension liabilities from a different perspective and will be instructive in dealing with similar problems locally.

Who is the most promising leader in San Diego these days and what do you think he or she might do in 2010?

Bonnie Dumanis has proven herself a strong leader during her tenure in office. She has also matured into the position and resisted the temptation of many elected officials to hunker down after the first few years and simply keep repeating the methods and practices of their first few years in office. I think she’ll continue to expand her base in 2010 in preparation for a move in 2012 or 2014. Personally, I think she should run for California attorney general.

My hope for 2010 and 2012 is that we find and elect candidates with the ability to bring an understanding of both the public and private sector to the governance table. Most elected officials have either one or the other, but not both. On the left we often see candidates who have spent their entire careers in the public sector, either as staff members or public employees.

This provides only one view of life and a limited set of suggested solutions to problems. On the right, we have candidates who insist that government should be run “like a business” which simply confirms their lack of understanding of how government works. Government doesn’t work like private business, nor does it work like the military. On the other hand, if private sector solutions are not incorporated, we see a system where job preservation is more important than the task of providing services.

What else are you looking forward to in 2010?

Statewide pension reform. The Public Employee Benefits Reform Initiative is about to enter its signature-gathering phase and is slated for the November 2010 ballot. If passed, it will cap benefits for all newly hired public sector employees in California. This will be an enormous boon to those who are attempting to reform public pension systems on a jurisdiction-by-jurisdiction basis. That is nearly impossible because of competition from surrounding jurisdictions. Let me be clear, I fully support competition, but when competition results in increased levels of benefits that cannot be reversed or reduced when times get bad, the process is devastating.

You sold your accounting business to run for City Council. What are you doing now?

I only sold the tax portion of my accounting practice. I am continuing to work in the area of campaign accounting and my plan is to do that through the 2010 election cycle. I have re-engaged with the Lincoln Club as well as the San Diego County Taxpayers Association. Most of my political activity during the last year has been done quietly; sometimes it’s just better to be out of the limelight for awhile.

My main focus over the next 10 months, however, will be the statewide pension/benefits reform initiative I mention earlier. I will be active during the signature gathering phase and then in the campaign itself.

Boling’s ranking of major projects for San Diego.

1. Expansion of the purple pipe (wastewater recycling) system

2. Siting of a second local desalination plant

3. An expanded convention center, contingent upon the financing plan

4. A new city hall, again contingent upon the financing plan

You asked about a “different” airport infrastructure and I’m not certain what you mean by that. We certainly do not need to re-live the notion of moving the airport to Miramar. Infrastructure improvements are moving forward at the current location and should continue.

Boling’s rank of local civic problems by how much they worry her.

Infrastructure decay, starting with the fact that I do not believe there is one local municipality that can provide a comprehensive list of its deferred maintenance backlog with dollar values attached. It is important to build new civic infrastructure, but we also need to take care of what we have.

Crime. As municipalities cut back services, criminal investigation and crime prevention are affected. We should not delude ourselves into thinking that a reduction in reported crime equates to a reduction in crime.

Both of these issues are the direct result of municipal budget shortfalls which are the direct result of runaway employee benefits. Unless and until we can get these costs under control, services will continue to be eroded.

— SCOTT LEWIS

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