July 25, 2005
Upheaval Continues in San Diego as 11 Vie for Mayor
By ANDREW POLLACK, NY TIMES

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SAN DIEGO, July 21 - Discussing why he should be elected this city's next mayor, Jerry Sanders recalled how he commanded a SWAT team in 1984 that shot a man who had opened fire at a local McDonald's, killing 21 people.

"There's nothing in the world that could be tougher than that," said Mr. Sanders, a former police chief.

But governing San Diego right now might not be far behind.

This city, the nation's seventh largest, is reeling from accusations of civic corruption. Two City Council members, one serving his first official day as acting mayor, resigned this week after being convicted of taking payments from the owner of a local strip club. Federal authorities are investigating possible improprieties in the management of the city employees' pension fund, which has a deficit of at least $1.4 billion.

San Diego has long billed itself as "America's finest city." But the pension deficit is draining general city finances, leading to cutbacks in library hours, after-school programs and pothole repairs. And because the city has not produced audited financial statements since 2002, it cannot issue bonds for projects like improving sewage treatment.

One could wonder why anybody would want to be mayor, especially given that there have been three in the last week, the latest being Councilwoman Toni Atkins.

"There's more security being president of Iraq than there is being mayor of San Diego," the comedian Jay Leno remarked in a monologue on "The Tonight Show."

Nevertheless, 11 candidates are on the ballot for a special election on Tuesday to replace Dick Murphy, who resigned last week as mayor barely eight months into his second term, saying the city needed a fresh start.

The candidates have different views of the city's needs. While Mr. Sanders says San Diego needs a strong leader, another candidate, a corporate executive, says the city should be run as a business. The environmental activist says city government needs to be more open. And the bankruptcy lawyer says San Diego should declare bankruptcy.

"You're in a single forum in front of a single judge," said the lawyer, Pat Shea, arguing that bankruptcy would be the most efficient solution to the city's financial problems. Mr. Shea, who represented certain government entities in the Orange County bankruptcy proceedings in the 1990's, said that San Diego's pension deficit might be as large as $6 billion and that the city has to face up to "reality reality" as opposed to "political reality."

But polls suggest that Mr. Shea has little chance of winning. And the other major candidates say bankruptcy is a drastic step that should be avoided.

The leader in the polls is Donna Frye, an environmental activist and co-owner of a surf shop, who joined the City Council in 2001. Ms. Frye ran a write-in campaign last November and nearly toppled Mr. Murphy.

Ms. Frye is the lone Democrat among the top contenders. Still, neither she nor any other candidate is expected to get 50 percent of the vote on Tuesday, so there is likely to be a runoff election in November between the top two finishers.

Vying for second place are Mr. Sanders and Steve Francis. After retiring as chief of police, Mr. Sanders helped turn around the local chapters of the Red Cross and the United Way and is closest to what may be called an establishment candidate.

Mr. Francis founded, ran and is now chairman of AMN Healthcare Services, a publicly traded corporation that supplies nurses to hospitals. He portrays himself as an outsider in the mold of New York's mayor, Michael R. Bloomberg.

"I plan to downsize city government through business principles of improving service through lower cost," Mr. Francis said in an interview in his office in one of the gleaming new business parks that stretch through the northern part of the city.

Mr. Francis has put nearly $2 million of his own money into the campaign, easily outspending his rivals. He has accused them of being open to raising taxes, forcing Mr. Sanders and Ms. Frye to state emphatically that they are not.

Some experts say the city's troubles began precisely because it was unwilling to tax itself, instead siphoning money from the pension fund.

"This is a city that has lived on the cheap for years," said Steven P. Erie, a professor of political science at the University of California, San Diego. He said San Diego has lower taxes and fewer police officers and firefighters per person than many other cities.

Now, hard decisions will have to be made, including perhaps a rollback of what an editorial in The San Diego Union-Tribune called "24-karat pensions" for city workers. But the decisions are unlikely to be made soon.

The City Council could be partly paralyzed for months because it is down to six members, from eight, and five votes are needed to pass any measure. The election to replace the councilmen convicted in the so-called Strippergate affair, Ralph Inzunza and Michael Zucchet, is expected to be held in November, along with the possible mayoral runoff. Mr. Zucchet, who had been named acting mayor, and Mr. Inzunza could face two to five years in prison; they maintain their innocence and have said they will appeal.

Meanwhile, 4 of the 13 members of the pension system board have resigned in the last two weeks, leaving barely enough for a quorum.

Six former or current board members have been charged with felonies under the state's conflict-of-interest law. The board sought unsuccessfully this week to get a restraining order to force the city attorney to stop threatening legal action against it.

What could help San Diego recover is its relatively strong economy. Once-dreary sections of downtown have been renovated with new homes and a trendy restaurant district called the Gaslamp Quarter. The biotechnology industry here is the envy of many cities. The unemployment rate is 4.4 percent.

Business leaders and politicians say the city's problems have not affected the economy or the business climate, though they are concerned about the prospects if the problem drags on too long or if a City Hall upheaval results in an end to pro-business policies.

For now, the city's blissful climate and beautiful beaches somehow make the problems easier to take for many residents.

"Bottom line," said Rudy Ramirez, who has a metal fabrication business in nearby Chula Vista, "I still wouldn't live anywhere else."

Murphy resigns
San Diego mayor announces departure less than 5 months into second term
By Jeff Dillon
SIGNONSANDIEGO, April 25, 2005

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SAN DIEGO – First the quarrelsome city attorney demanded that San Diego Mayor Dick Murphy quit. And last week Time magazine named Murphy one of the three worst big-city mayors in the country. Then came increased rumblings of a recall movement.
Less than five months after starting his second four-year term, Murphy, 62, announced this morning he would resign effective July 15.

"I now believe to be effective the city will need a mayor who was elected by a majority of the people and who has a clear mandate to take this city forward," Murphy said. "A good leader needs to know when it is time to move on, and I believe it is time for me to move on and time to bring a fresh start to our city."

Murphy was re-elected last fall in a three-way race with County Supervisor Ron Roberts and write-in candidate Councilwoman Donna Frye, narrowly edging out Frye after several thousand write-in ballots were disqualified.

The mayor took no questions after making a brief statement at City Hall.

Murphy said he selected the July 15 date for two reasons: It will let him finish work on the fiscal year 2006 budget and it will potentially give the City Council time to schedule a special election for mayor and combine it with a likely Nov. 8 statewide special election.

The City Council also could opt to appoint a replacement to serve out the remainder of Murphy's term, which would end in 2008.

Frye said today she would run again if a special election was held.

Deputy Mayor Michael Zucchet would serve as acting mayor until the vacancy is filled. But there is potential complication: Zucchet, along with Councilman Ralph Inzunza, goes on trial May 3 on federal corruption charges.

City officials and council members said they were notified of Murphy's decision only minutes before the announcement.

Zucchet, who attended the news conference, said he was stunned.

"I'm in a bit of shock right now, if you can't tell it from my voice," Zucchet said. "I got a call, 15 minutes after you got your press release, I got a call, saying what it was."

Murphy cited many accomplishments during his first term in office:

The establishment of the city Ethics Commission, the San Diego Regional Airport Authority and the San Diego River Conservancy.
The completion of Petco Park, state Route 56 and the construction of six branch libraries.
Several quality-of-life improvements: Cutting sewer spills, undergrounding power lines, and reducing violent crime.
"When I ran for re-election, I had hoped that my second term would be as productive as the first time," Murphy said. "But now that seems unlikely. It's clear to me the city needs a fresh start."
He also noted that the city is converting to a strong-mayor form of government. As of Jan. 1, the mayor, not the city manager, will have the power to hire and fire department heads and prepare the city budget.

City Attorney Mike Aguirre, a vocal critic of Murphy who called for the mayor's resignation over alleged lack of leadership in the city's pension crisis, said his office would advise the council on the proper procedure to follow in filling the vacancy.

"In making the hard choice of resignation, Mayor Dick Murphy has shown an admirable determination to do what is right, and also shown a level of courage to which all in public life should aspire," Aguirre said in a statement. "I respect his decision and pledge to work with the mayor over the next few months towards a smooth transition."

Councilman Jim Madaffer issued a statement shortly before noon, saying it was "unfortunate" that Murphy found himself in a "perfect fiscal storm," but added he respected the mayor's decision to step down.

"This is a very difficult time, unlike any in San Diego history," Madaffer said. "But I am confident that we will get through this sad chapter and get our city back on course."

Murphy's announcement follows a spate of bad news for San Diego government.

The Securities and Exchange Commission is investigating city finances and allegations of securities fraud.

The U.S. attorney and the FBI are conducting a criminal investigation into possible public corruption.

Wall Street rating firms have repeatedly downgraded the city's bond rating.

A Sept. 7, 2004, New York Times headline on a story on San Diego's financial woes dubbed the city "Enron by the Sea."

The election that returned Murphy to office also was embarrassing. What was supposed to be a two-candidate run-off between Republicans Murphy and Roberts became a three-way race when Frye, a Democrat, realized city codes didn't prevent her from running as a write-in candidate.

And though her name was written on more ballots than ballots were marked for either Murphy or Roberts, it was determined that not enough of those ballots were legally marked for them to count as being cast for Frye.

Time got personal with its criticism in its April 18 issue, blaming Murphy for failing to deal with the city's looming $1.35 billion pension deficit and labeling him one of the nation's three worst big-city mayors, along with the mayors of Detroit and Philadelphia.

Murphy dismissed the article.

"People should be proud of what we have accomplished in this city," he said. "Tell Time magazine that they just don't understand what's going on."

Murphy first was elected mayor in 2000. He briefly decided not to run for re-election, then announced he would run again after supporters urged him to reconsider.

Earlier in life he served as a lieutenant in the Army, a bank marketing manager and as a corporate attorney. He was on the San Diego City Council from 1981 to 1985, was appointed a municipal court judge in 1985 and elevated to the Superior Court in 1989.

SignOnSanDiego's Steve Perez contributed to this report.

Crises beat Murphy down until he surrendered
By Philip J. LaVelle
UNION-TRIBUNE STAFF WRITER

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Dick Murphy is tired.

And in the end, sources close to the mayor say, the accumulated weight of multiple crises wore him down, leading him, methodically, to the conclusion that it was time to go.

Murphy reportedly reached his decision during a private meeting over the weekend with his family and his political advisers.

For Murphy, it had become clear that a successful second term was "unlikely" and that the city needed "a fresh start."

With that admission, made Monday in front of a dozen TV cameras and a press corps from which Murphy had become increasingly isolated, San Diego's 33rd mayor took himself out of the game, ending a mayoral career that had begun with much promise five years earlier.

It was a long fall for Murphy, a man whose resume – which played a central role in his 2000 campaign – spoke of high achievement.

The only child of Illinois educators, the straight-A Murphy got himself into Harvard Business School, received a U.S. Army commission and a prestigious posting at the White House, and then was admitted to Stanford Law School.

After an uneventful stint on the San Diego City Council in the early 1980s – Republicans were disappointed that he did not become the protege of then-Mayor Pete Wilson – Murphy was appointed to the Municipal Court bench.

That court merged with the larger Superior Court, and Murphy would breathe the rarefied air of a judge's chambers for nearly two decades.

Law and order. Perhaps the perfect environment for Murphy, a tidy, orderly man who prefers a tidy, ordered world.

But politics is not a tidy calling, and City Hall these days is anything but orderly. This was the second time Murphy summoned the media to announce he was getting out. The first was to quit his re-election campaign, though his backers soon prodded him to jump back in.

From the start, Murphy sought to form his agenda around his "10 Goals," but events cartwheeled beyond the narrow confines of the program, and critics said he was slow to respond.

Today, when San Diego's problems are legion, the worst involve the sort of financial affairs that Murphy, in his first campaign, argued his Harvard education had trained him to tackle.

Murphy inherited a pension system that was dangerously underfunded, then allowed the problem to worsen. He argued that too much was being made of "this one problem," but the $1.4 billion deficit put a stranglehold on the city budget and prompted investigations by the Securities and Exchange Commission, the FBI and the U.S. Attorney's Office.

Meanwhile, city audits for 2003 and 2004 are uncompleted – all on the watch of a mayor who had boasted of his mastery of complex financial documents.

Worn down after one term, Murphy got no respite as his second one began. His re-election was marred by the fact that the courts, not the people, declared him the victor over a write-in opponent, Councilwoman Donna Frye.

And the same election teamed him with an aggressive new city attorney, Michael Aguirre, who has a tendency to wear down opponents.Aguirre recently called for the mayor's resignation, saying Murphy committed civil violations of federal securities laws.

The final straw might have been the least substantive – a piece in Time magazine last week ranking him among America's three worst big-city mayors – but one that exacerbated his political vulnerability.

Only months into his second term, Murphy was no longer in control of a council majority or his political fortunes.

Recall seemed increasingly likely, but one poll last month by Competitive Edge Research & Communication indicated that Murphy was not necessarily a goner. This poll showed a favorable rating of less than 40 percent, with more than 40 percent of San Diegans disapproving of his performance.

Not good – but something a fighter, perhaps, could have overcome.

"What was striking was that nobody had a strongly favorable impression," said Competitive Edge President John Nienstedt. "His hard-core support had vanished. But he still had soft-core support.

Nienstedt saw nothing to suggest Murphy should throw in the towel so soon.

"The sense was, he wasn't definitely out, although one good shove might push him off the cliff. But he was not Richard Nixon in '74. That's why I looked at this and was a little surprised."

Philip J. LaVelle: phil.lavelle@uniontrib.com