If Mayor Jerry Sanders' administration was a band, Sanders would be the lead singer, Chief Operating Officer Ronne Froman would be on drums, policy adviser Kris Michell would play lead guitar, spokesman Fred Sainz would play the keyboard, City Attorney Mike Aguirre might fill in when needed on the cowbell-and hanging out in the background, keepin' it real on bass, would be Chief Financial Officer Jay Goldstone.
Without stealing the limelight or making himself obvious, Goldstone's management of the city's books is pivotal to accomplishing Sanders' campaign goals of restoring integrity to city government and balancing the budget. As San Diego's chief money manager, the spry, bespectacled Goldstone must work out the mechanics for balancing the budget, find some way to pay off the $3 billion in pension debt and retiree medical benefits, enlarge the reserve fund and help get the city back into the public borrowing market. All that, and for the last few months he's been working with the mayor and staff to prepare the five-year budget plan this week, and begin preparing the 2008 budget. At the moment, Goldstone is enjoying that rarity for bass players: an extended solo.
Of course, for Goldstone, cleaning up financial messes has practically become a career path. He chose to become a public servant after a work-study program in high school landed him at City Hall in St. Louis Park City, Minn. After undergraduate work at the University of Minnesota, he went to pick up his master's degree in public administration at Arizona State University, where he crossed paths with the woman who would later become his foil in San Diego, Andrea Tevlin, who serves as the City Council's independent budget analyst. Tevlin remembers Goldstone as “a good student, with a great sense of humor.”
From there, his career took him on a tour of California: San Mateo County, Santa Clara (where he also earned his MBA), Richmond (where a short tenure as acting city manager cured him of ambition for that office), and then Pasadena for a decade of work. At each stop, he found himself helping a local government mature into a professional organization, upgrading its computers and revising its financial procedures into the 21st century.
In Pasadena he was, as spokesperson Ann Erdman put it, “universally respected.”
He guided the Rose Bowl Operating Company through a trying financial period and helped the city balance its books. By the time he left in 2005, the city had ample financial reserves, a bond rating (AA+) better than 90 percent of California municipalities and up-to-date budget procedures and systems. But Goldstone had run out of challenges in Pasadena.
“I love a challenge, versus coming to work and cruising through the day,” he told CityBeat.
In Pasadena he worked with the accounting firm KPMG, the same company doing the long-delayed audit of San Diego's 2003 finances. A KPMG official must have heard Goldstone talking about the need for a challenge, and he passed Goldstone's name to then-mayoral candidate Sanders. The situation in San Diego at the time was, as now, bleak: deep debt, elected officials blaming appointed officials for misleading them into passing bad information to bond buyers, federal and local corruption investigations. As the Brits might say, everything was all ahoo.
Goldstone applied for the gig, even though he knew there were risks.
“I left a ton of credibility in Pasadena,” he said.
In December he had three interviews. By January he was ready to dig in.
Goldstone had visited San Diego before-his son attended UCSD. He and his wife had developed a fondness for the city. These days, the couple decamps from their Mission Valley home to stroll the beaches to unwind (he's been resisting pressure from his son to learn to surf). Goldstone describes himself as an inveterate sci-fi fan, a man who has seen every episode of every Star Trek series. These days he's into Lost, 24 and Grey's Anatomy, but since last January, he's had to depend on his TiVo to catch any of them-the city's money woes demand a lot of attention.
The 2007 budget represented Sanders' first major submission to City Council. When he took office, Goldstone had two months to prepare the document while at the same time breaking his staff from “the San Diego way.”
“I have found some very dedicated and smart people, but most people have grown up in this organization, and they only know the San Diego way, so it gets perpetuated from generation to generation, and they're using, in many instances, 1950s ideas,” Goldstone said.
As the city hemorrhaged money, Goldstone had to put in seven-day weeks and 12- to 15-hour days to stabilize it. There were some rough patches, for sure. The presence in the budget of bonds to make payments on the pension deficit alarmed Tevlin and others, since the city could not (and still cannot) sell bonds on the public market. The bonds were excised, but the budget passed, an early success for the mayor and for Goldstone.
Since then, he has persuaded the City Council to close gaps in the budget by borrowing against expected revenue from the states' legal settlement with Big Tobacco, and he has helped produce a draft record of the 2003 budget, a crucial step in San Diego's recovery. Having enough credibility to persuade a leery City Council is an accomplishment itself.
“The concern is: Can I establish [credibility] here in San Diego,” Goldstone said, “especially in an environment where the council members felt betrayed by staff that they gave credibility and comfort to. Now I come in and say, ‘Trust me; I'm telling the truth.'”
So far, he seems to be succeeding.
“He's a good communicator,” said Council President Scott Peters. “One of the problems we've had with people in the past, without naming names, but we didn't always know what they wanted to say, or they didn't want to say much.”
“He answers our questions honestly at council and also when we call him,” said Toni Atkins, chairwoman of the City Council's Budget Committee.
Observers of city government seem to agree.
“He improved integrity, analysis of issues to the mayor and council, and I give him high marks for financial-management process,” said Carl DeMaio, director of The Performance Institute, a local think tank. “But for budget formulation and justification, he needs to improve next year.”
“He's valuable to the city. We're pleased with his performance,” said Donald Cohen, executive director of another think tank, the Center on Policy Initiatives.
Since the summer, disagreements between Sanders and the City Council have grown in intensity, but Goldstone has kept his hands clean. Recently, the council and the mayor clashed over Sanders' unilateral decision to cut funding to a pair of programs specifically named in the council's amendments to the budget. Tensions are still simmering over whether the mayor has that authority, but Goldstone escaped entanglement in the mess.
“Decisions about budget priorities are made from the mayor and Ronne Froman. He answers to them,” Atkins said. Another highly placed city source confirmed Goldstone had nothing to do with the decision to make the cuts.
“I present options, but the mayor makes the final policy decisions,” Goldstone said in an interview before the hubbub erupted.
Even as the five-year financial plan rolls out, Goldstone will have to get right back to work preparing the 2008 budget. The mayor has sworn not to raise taxes, which means making some tough decisions.
“We'll probably have to do things that some constituents will be unhappy about,” Goldstone said. “The 2008 budget will not go as smoothly as the last one.”
He is hopeful that the reorganization and consolidation of city departments, along with the enhanced, voter-approved ability to outsource city services to the private sector, will create savings through efficiency. “We have to decide what businesses the city should and should not be in,” he said, though he would not specify which services he thought might be high on the cut list.
Throughout the interview, Goldstone's philosophy of governance appeared to fit neatly with the mayor's-perhaps too neatly. But then he made a remark that may give San Diegans confidence in his steadiness.
“I'm at a point in my career where I need to work, but I don't need this job, so if I wasn't happy with what I was doing and didn't feel comfortable, I would just pick up and move on.”