Friday, December 03, 2004

City water projects in jeopardy

This certainly is not a good news for San Diego City..

Memo warns of money shortage; delays could lead to fines, lawsuits

By Matthew T. Hall
UNION-TRIBUNE STAFF WRITER

December 2, 2004

San Diego's dire financial situation is no longer so abstract: The city has run out of money to pay for new water and wastewater projects, and it may have to scrap plans to fix fire and lifeguard stations next year.

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City Manager Lamont Ewell sent a memo to the mayor and City Council 15 minutes before City Hall closed last night, telling them that the city cannot begin an unspecified number of water and wastewater projects, including some that are needed to comply with orders from environmental regulators.

Ewell and Mayor Dick Murphy downplayed any immediate effects, but a prolonged stoppage could subject the city to fines from environmental agencies and lawsuits related to unclean drinking water and sewage spills.

Curtailing new projects will put the city out of compliance with an order from the state Department of Health Services at the end of this month when the city fails to begin the required replacing of a water main in Otay Mesa.

It's unclear what effect that will have, Ewell and Murphy said.

"I can't predict what the federal or state government might or might not do, but you'd think state government would understand the problems of limited financial resources," Murphy said last night.

The city went public with its fiscal crisis in January when it admitted errors and omissions had been made in 2002 financial disclosures.

Now, city finances are the subject of federal investigations, there are allegations of fraud and two annual audits are overdue. Two Wall Street credit-rating agencies also have downgraded the city's rating and a third has suspended it, crippling San Diego's ability to borrow money.

"This is a tangible effect of the problems the city's had with its financial statements," Murphy said. "That's a fair characterization. On the other hand, it's just not going to have any impact on the public in terms of water and sewer service." Read More...
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1 comment:

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