With three weeks left in office, City Attorney Mike Aguirre is recommending municipal bankruptcy for San Diego. He says "Chapter 9" is the only way to save the city without steep new taxes, property sales and service cuts.
"Mark my words: the good people of San Diego are being led down the path to a massive tax increase," Aguirre told reporters at a City Hall news conference Monday. "And they're laying the groundwork for that by shutting down essential services."
Aguirre says balancing the retirement system's books would cost San Diego households 7-thousand dollars apiece.
As the deficit approaches 3 billion dollars, public services are on the chopping block. Municipal employee unions are taking up bullhorns and picket signs outside City Hall. Critics say "Cadillac pensions" are granted to all too many retirees.
"And now, we're going to have to pay the price," Aguirre warned. "And the price very well may be that we go into re-organization." Meaning Chapter 9 -- municipal bankruptcy.
Aguirre wants the City Council to consult with a law firm that represents the city of Vallejo, which declared bankruptcy earlier this year -- and got a federal judge to set aside union wage and benefits contracts for renegotiation.
But Aguirre's advice doesn't seem to be resonating at City Hall. Mayor Jerry Sanders appears in no mood to go 'Chapter 9'.
"We're doing the things that should be done to look at the pension system over a long period of time," Sanders said in an interview. "Not taking a snapshot every single day, the way you wouldn't go out and sell your 401k one day because it was up a lot or down a lot."
Leaders of the city's labor unions have begun meeting with Sanders. But not with the kind of suspicions they have about Aguirre's agenda.
"I think it's just Mike Aguirre -- a final push on his way out, to create some disruption," said Frank De Clercq, representing San Diego City Fire Fighters Local 145 at an afternoon session in the mayor's office. "I don't see that's a viable solution for the city."
Aguirre, meantime, told reporters a Chapter 9 filing would require Council approval.
He said he'll leave pension issues to his elected successor, Jan Goldsmith, and that he has no plans to speak out further as a private citizen.
Goldsmith could not be reached for comment.