San Diego Mayor Jerry Sanders may sue city attorney Michael Aguirre to push through a $103 million bond deal that would fund streets, sidewalks, and other infrastructure in the state’s second-largest city, a Sanders spokesman said Wednesday.
“He is holding the city hostage and it’s deplorable,” said Fred Sainz. “We are considering all our options, including taking Aguirre to court.”
The attorney last week pledged to block a city plan to borrow $103 million via a private placement with Bank of America because he believes the city’s lease-purchase agreement for the bonds is illegal. Aguirre said voters must approve the bonds because the leases are for city buildings but most of the money raised will be used for unrelated purposes like streets and sidewalks.
The City Council approved the issue after bond counsel contradicted Aguirre’s legal opinion, but Aguirre, an elected official, refused to sign off on the bonds.
San Diego has been locked out of the public bond market since Standard & Poor’s withdrew its AA-minus rating in September 2004 in the wake of a pension scandal. The Securities and Exchange Commission charged five former top city officials with fraud last month for failing to disclose the pension liabilities in bond documents.
Sanders and Aguirre are up for reelection this year, and both claim to be guardians of the city’s financial reform efforts.
Sanders faces fellow Republican Steve Francis in a June 3 nonpartisan primary. Francis is a millionaire businessman who founded a nursing staffing company. Sanders defeated him in a 2005 special election after former Mayor Dick Murphy resigned over the pension scandal.
Aguirre, a Democrat, faces four challengers — Superior Court Judge Jan Goldsmith, former deputy city attorney Amy Lepine, City Councilman Brian Maienschein, and council President Scott Peters. Both Maienschein and Peters were deemed “negligent” by the Kroll Report, a city-sponsored investigation that was headed by former SEC chairman Arthur Levitt. Neither was charged in the SEC fraud case.
