Ever since I arrived in San Diego in 1970 as an editorial writer for The San Diego Union, I have been a City Hall watcher. Never in all of the intervening years has San Diego’s government been so wracked by scandal and near bankruptcy as it is now: three council members indicted on sleazy bribery charges and mounting, long-concealed liabilities in employee pension and health coverage obligations that exceed $2 billion. This mind-boggling debt that was deliberately incurred by City Hall to cushion its deficit spending must be paid. The inevitable, calamitous increase in taxes and reduction in vital city services will be the intolerable price for perhaps the worst betrayal of public trust in San Diego’s history.

What we hope will be the final straw is the investigation by the Securities and Exchange Commission and the U.S. Attorney’s office for evidence of securities fraud in the city’s application for $500 million in bond sales by way of misrepresentation and concealment that have been rationalized as “errors and omissions.” For the second time within months, FBI agents prowl City Hall for evidence of city-connected crime. Mayor Dick Murphy should not be blamed for this disaster. Most of it was his inheritance from years of council malfeasance.

How one of America’s best-run cities came to such an awful pass lies in understanding and addressing the developments that brought us to this unprecedented crisis.

During the early 1970s, San Diego’s population was slightly more than 500,000 — less than half what it now is. In those years, the city manager type of government served the population well. Council members, for the most part, were civic leaders who, noblesse oblige, contributed their time and talent to public service. Meeting once or twice a week, they decided policy as a true legislative function and relied on the city manager to carry it out and run the city as its CEO. The mayor was largely a ceremonial figurehead.

Although imperceptible at first, drastic changes were imposed in the city’s day-to-day operation by mushrooming population growth. Council districts required full-time attention and representation. Inevitably, that produced politically ambitious council candidates, ever-expanding staffs, and ever-expanding budgets.

During the waning years of the ’70s, Mayor Pete Wilson, recognizing the need to restructure the city’s government, placed a measure on the ballot calling for a strong mayor with budget and veto authority. This was defeated, leaving San Diego as one of only two major cities in the nation with a city manager structure.

Nevertheless, Wilson evolved into a strong, effective mayor by serving three terms and gaining mastery over the council through the filling of vacancies. This provided for real mayoral leadership and wonderful developments in the city’s managed growth not seen since.

The acute failings in the city’s antiquated charter were exacerbated during the 1980s when the council’s politicians succeeded in seducing the voters to approve election by district only instead of the tried and true method of nomination by district and election by the city at large. With no concern or accountability beyond their districts, council members have been hell-bent for years on deficit spending. District only log rolling has required the sell-off of city assets until there is little left to cover the red ink but increase in taxes and reduction in critical services. Even worse, City Hall’s extravagant, red-ink spending has been cushioned for almost a decade by borrowing from the city’s pension and health care funding by way of simply making no payments thereto.

This disaster has been building year after year under the now departed City Manager Michael Uberuaga’s administration. Uberuaga was a willing, if not helpless, collaborator with spendthrift council members, his bosses. He “went along and got along” and was precisely the kind of malleable city manager they wanted. This harsh assessment is not altogether fair because Uberuaga was trapped in a system that clearly does not function properly. City Hall lacks budget control because the city manager is in no position to veto the deficit spending of his superiors. Lamont Ewell, the new city manager, is off to a good start, rattling some big cages in City Hall. But, is it realistic to expect him to succeed, as able as he appears to be, where Uberuaga and other managers have failed?

Our current weak city manager, weak mayor, and powerful City Council have brought us to this brink. The time is long overdue to restructure our city government. Mayor Murphy’s recent promise to undertake this organic reform should top his burdened agenda.

Former City Manager Jack McGrory, who argues against the accountable, strong mayor reform, was himself in office a powerful argument for abandoning the workable city-manager operation.

Only in recent weeks and months did City Hall’s financial jigsaw puzzle fall piece by piece to form the appalling reality that San Diegans must now face: Mayor Murphy’s Pension Reform Committee has informed the City Council that $202 million must be paid into the City Employee Retirement System during the next fiscal year beginning July 1. This huge payment does not reduce the $1.167 billion deficit; it’s a tread-water sum to keep the liability from growing. The interest payment in fiscal 2005 alone will be $93.4 million that otherwise could pay for desperately needed city services. And no plan has yet emerged for dealing with the unfunded retiree health care costs of more than $1 billion.

Meanwhile, because the city manager and council have once again devised a budget that spends more than it takes in, the pull and haul is how to trim the projected $24 million shortfall. The likelihood that the state will reduce city revenue by about $15 million projects a total deficit upfront in fiscal 2005 of about $40 million.

Even that deficit pales compared with a potential mind-boggling new liability of $266 million in state and federal money the city may have to repay for failing to restructure sewer rates as required by the grants. That failure dating back to the late 1990s and potentially destructive consequences did not become known outside secret council meetings until early April of this year.

Small wonder Moody’s Investors Service has placed San Diego on its “Watchlist” with a strong probability of soaring interest rates that could cost San Diego taxpayers additional millions of dollars. Moreover, Fitch Ratings and Standard & Poor’s Ratings Service lowered the city’s bond rating in February following admissions of errors and omissions in city financial statements prepared for bond application.

Bear in mind that any analysis of the city’s current crisis must take into account the inordinate influence that labor unions now exert over the city council. In the past, the unions did well to elect one or two council members with their support and money. It is widely perceived that five members of the current council owe their election to labor — a controlling majority. One direct consequence has been the bestowing of lavish employee benefits beyond anything imaginable in the private sector. Under the Deferred Retirement Option Plan city employees are allowed to work up to five years before retirement while simultaneously collecting full monthly pension payments. This egregious DROP parachute adds lump-sum payouts of more than a million dollars each for senior city officials in addition to their five years of double dipping. This council then in addition to the outrageous burdening of taxpayers for years to come, knowingly exacerbated the city’s staggering pension deficit that it helped to create by withholding annual funding.

What is to be done if San Diego is to avoid the sort of bankruptcy that besmirched Orange County some years ago? Thus far, the only talk we hear from City Hall is about the coming need to raise taxes and reduce vital services. At press time, we have heard little or nothing about rolling back the outrageously lavish pension benefits voted in the very midst of an unprecedented financial crisis. We hear nothing about cutting back the bloated bureaucracy that has added 500 more persons since 1996 than ongoing revenue could support. This paralysis contrasts with San Diego County, which plans to eliminate 983 vacant positions and lay off an additional 394 employees in preparation for the loss of $151 million in state funding.

City Hall should note as grateful taxpayers remember how the county of San Diego in deep financial difficulties a few years ago brought in Larry Prior from the private sector to deal with the crisis. He squeezed more that $100 million in savings out of the overblown bureaucracy and took other tough measures that within three years restored the county to financial stability.

As bad as it is, San Diego’s financial crisis is not hopeless. The county’s dramatic recovery from near-bankruptcy is an instructive precedent that half measures will not suffice. San Diegans who have been ill-served by successive councils are now summoned as never before to become actively engaged in demanding reform, reorganization and reductions across the board before taxes are raised or services cut.

Fike was editor of The San Diego Union’s editorial page between the years 1977 and 1991.