CDIAC/CSMFO Pre-ConferenceJay M. Goldstone, Chief Operating Officer

City of San DiegoFebruary 29, 2012

FISCAL STRESS AND PERSONAL LIABILITY FOR

LOCAL GOVERNMENT OFFICIALS

THE GAME HAS CHANGED!

OVERVIEW

The economic/political pressures/realityYour obligations as an issuerYour exposure/risk as an issuerHow can you protect yourself/staff/agency?San Diego Disclosure Improvements/ Enhancements

ARE YOU FEELING THE PRESSURE?

Revenues are downPension payments are upLocked into multi-year labor agreementsLabor unwilling to talkDemand for services are not going awayCity Council does not want to face the realities

LET’S GET CREATIVE

WHAT ARE YOUR PROFESSIONAL

RESPONSIBILITIES?Due diligenceBe thoroughEverything matters

Can’t just rely on your financing teamUnderstand the importance of your CAFR

Numbers are not enoughWhat’s in the notes

Understand the importance of your POS/OSACCURACY/TRANSPARENCY IS AN OBLIGATION

WHAT IS THE ISSUER’S EXPOSURE?

POS/OS is your document and everything contained in it is your responsibility – own it!Misinformation (no matter the intent) could equal securities fraudYou could be held personally liabilityElected officials can’t ignore their obligations

IN THE END: COULD BE A CAREER KILLEROR WORSE

PROTECT YOURSELF, YOUR STAFF, YOUR AGENCY

Establish systems of checks and balancesInternal/External Working GroupYOU CAN’T RELY ON THE PROFESSIONALSUnderstand your roles/responsibilities/relationshipEducate/train your staff!!!!Educate/train your elected officialsRead carefully before you sign!!

SAN DIEGO DISCLOSURE IMPROVEMENTS/ENHANCEMEN

TSConsolidated financial operationsDevelop a debt policy and proceduresEstablished the Disclosure Practices Working Group (DPWG)

Multi-disciplinary groupReviews virtually every document/statement expected to reach the financial markets

Established an investor web page

Provide training to City CouncilProvide training to City staffStaff personal signoff on informationDPWG CertificationMayor/City Attorney Certification

SAN DIEGO DISCLOSURE IMPROVEMENTS/ENHANCEMENT

S – (cont.)

QUESTIONS