San Diego's City Manager Resigns in Wake of Pension-Fund Scandal

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San Diego's City Manager Resigns in Wake of Pension-Fund Scandal

Seth Hettena, The Guardian

March 16, 2004

City Manager Michael Uberuaga resigned Tuesday amid a federal investigation into the city's financial practices.

Uberuaga has managed the daily operations of California's second-biggest city for 6 1/2 years, overseeing more than 10,000 city workers and a $2.3 billion budget.

In his letter, Uberuaga said he intended to retire on April 9 but did not say why. He did not immediately return a message left seeking comment.

The U.S. Securities Exchange Commission and the U.S. Attorney's Office have opened preliminary investigations into whether city officials provided fraudulent information to investors to sell more than $2.3 billion in bonds. They also are looking into the city's $1.1 billion pension fund deficit.

City officials disclosed that San Diego has intentionally underfunded its pension system since 1996 in an effort to bridge budget shortfalls. Wall Street credit rating firms downgraded the city's once stellar financial outlook as a result.

Mayor Dick Murphy, who is running for a second term in the November election, praised Uberuaga as a "dedicated, hard-working employee."

"Mike always put the best interests of the citizens of San Diego first," Murphy said in a statement. "He has devoted himself to his work and his integrity is unparalleled."

Ron Roberts, a county supervisor who is seeking to unseat Murphy, has said he would fire Uberuaga, a move that Murphy said he opposed. Roberts said Uberuaga failed to steer the "good ship San Diego" away from a "financial iceberg."

"At the very least, he was acquiescing in what were some very bad decisions," he said.
The mayor said he will ask the City Council to promote Assistant City Manager Lamont Ewell to fill Uberuaga's job. Roberts said the city should conduct a nationwide search.

"If he were Superman, I still would have gone out for a search," Roberts said.

Murphy's spokeswoman did not return messages left seeking comment.

Before coming to San Diego, Uberuaga spent more than two decades as city manager of Milpitas, Concord, Huntington Beach and Steamboat Springs, Colo.

Under San Diego's charter, most city functions are set by the city manager while the mayor has just one vote among the nine-member City Council. Murphy and Roberts have both said they would support revising the 70-year-old charter to give the mayor greater power.