SAN FRANCISCO - San Diego's auditor has signed off on the city's financial statements for fiscal 2006, Mayor Jerry Sanders announced Monday afternoon.
By completing the fiscal 2006 certified annual financial report, the city has now cleared up the backlog of delayed financial statements that have prevented it from accessing the public debt markets, Sanders said in a news release.
San Diego has not issued publicly traded bonds since its comprehensive annual financial report for fiscal 2003 became entangled in the crisis that developed after the city revealed in early 2004 that it had not disclosed to bond investors the extent to which it had underfunded its employee pension plan.
That revelation ultimately led to Securities and Exchange Commission sanctions against the city.
The CAFR for fiscal 2003 was not completed until March 2007, and the city has been playing catch-up ever since, culminating with auditor Macias Gini & O'Connell LLP's approval of the 2006 CAFR, the fourth annual financial report the city has released within the last year.
Sanders said that he now plans to ask Standard & Poor's to reinstate the ratings the agency suspended in 2005, citing the lack of updated city financial statements.
The city retains underlying credit ratings from the two other major credit agencies, though they are much diminished from pre-crisis levels. Fitch Ratings, which had rated San Diego AAA, now rates it BBB-plus. Moody's Investors Service rates it A3, down from Aa1 before the crisis.
"While only Standard & Poor's has suspended the city's rating, Mayor Sanders will ask all three agencies to reconsider the city's current rating," said the news release San Diego issued Monday. "Once the city's ratings have been reinstated, the city is hoping to return to the public bond markets to finance critical infrastructure projects at more attractive rates for taxpayers."
Sanders took office in 2005, after the previous mayor, Dick Murphy, resigned. Sanders is up for re-election June 3. His four opponents include wealthy businessman Steve Francis, who has poured more than $1 million of his own money into the campaign, far outspending Sanders.
The June 3 mayoral vote is a nonpartisan primary. If someone gets more than 50% of the vote, he is elected. If not, then the top two candidates will face off in a November runoff.