San Diego — In January, San Diego mayor Dick Murphy gave his first "State of the City" speech, in which he set forth ten goals, including fixing sewer spills, building a downtown ballpark, and finding money for a new central library. In his speech Murphy asked the rhetorical question, "Can we afford to do all this?" and then answered, "We have to make sure we can. That is why I will be convening a blue-ribbon committee on city finances."

"The committee itself," the mayor continued, "will consist entirely of bankers, accountants, economists, and other professionals who are not city employees. Its task will be to make an independent evaluation of the current fiscal health of the city and make any appropriate recommendations."

On April 27, Murphy announced his appointees to the new committee, which he said would "help restore our faith in how the City spends our hard-earned money." Members of the group, he added, had been "selected for their outstanding qualifications and stellar reputations within their respective fields of expertise."

The panel, he continued, was going to "immediately begin an intensive six-month review of the City's budget process and evaluate and report on the fiscal health of the city." To insure the committee's independence from the mayor's office, a news release promised, "Murphy will only attend the initial meeting."

Since then, however, the mayor's blue-ribbon panel has disappeared from public view. It meets secretly and doesn't tell the public when or where the meetings are held. Nor does it keep a formal agenda or minutes of its meetings, according to a city official, who maintained that any documents generated by the committee were not subject to the state's public-records act.

Most of the group's members didn't return telephone calls last week asking about the panel's status. Those who did call back referred all questions to the group's chairman, who didn't return numerous calls. Even Murphy's gatekeeper and top lieutenant, former political consultant John Kern, didn't respond to telephone queries by deadline regarding the group.

Almost as soon as Murphy announced creation of the panel, questions arose regarding its members, their qualifications, and their financial ties to Murphy and his political agenda, including the downtown baseball stadium. No bankers or economists were appointed. And former city councilman Bruce Henderson, a longtime critic of Murphy's predecessor Susan Golding and her stewardship of the city's finances, argues that Murphy's committee made a major mistake when it failed to open its meetings to the public.

"The fact is that when it became clear that the committee was going to meet in secret so that there was no opportunity for the public to testify or evaluate any of its discussions and deliberations, it became virtually certain that it wouldn't be independent, as the mayor promised. As soon as you hear that the meetings are secret, you know that the whole thing is fake, that the report is going to be made as directed by the elected officials for their political ends."

The group's chairman is Joseph Craver, a retired Air Force colonel, government contracting consultant, and San Diego Chamber of Commerce activist, who, records show, is a stalwart Murphy campaign donor. According to court records, Craver's Galaxie Management, Inc., offers "defense marketing services" and provides "certain expertise and experience in marketing of products and services to various procurement agencies of the Department of Defense."

Other panel members include William McCurine, Jr., an attorney at Solomon, Ward, Seidenwurm & Smith. His wife Dana, an attorney employed at the downtown firm of Gray, Cary, according to campaign finance reports, also gave the mayor $250.

Other Murphy donors on the panel are April Riel, an accountant employed by RGL Gallagher LLP, $250; Victor Vilaplana, an attorney with the law and lobbying firm of Seltzer, Caplan, $500; Richard H. Vortmann, president of National Steel and Shipbuilding, $500; Linc Ward, La Mesa public relations consultant, $250; and Mary Ball, a top executive at Cox Communications, which has close financial ties to the Padres, $250. Vortmann's wife Jocelyn Cady also gave Murphy $500. In fact, only two of the nine panel members were not financial backers of the mayor during last year's campaign. The first is April Boling, an accountant who serves as campaign treasurer for San Diego city attorney Casey Gwinn, city councilman Brian Maienschein, and the San Diego Police Officers Association, among others.

The other non-Murphy donor is Andrew Poat, a public relations and lobbying expert who formerly worked for the now-defunct Stoorza, Ziegaus agency and was hired six weeks ago to be the City of San Diego's director of governmental relations, overseeing city-lobbying activities in Washington and Sacramento. According to city budget documents, the position pays $117,058 a year, and the total annual cost of running the office, including an assistant director's salary of $75,000, is $776,000.

Asked whether he considered that his new job with the city might create a conflict of interest with his role on the mayor's ostensibly independent financial review board, Poat said in a telephone interview last week, "I don't think so. I was appointed well before I became an employee of the city, and it's not a long-term commitment. It will conclude in a short time."

Ex-councilman Henderson maintains that Poat's continued membership on the panel violates Murphy's January pledge that no city employees would serve on it. "The mayor promised the committee would consist entirely of bankers, accountants, economists, and other professionals who are not city employees, so that none of the committee members could be beholden to the city. As soon as anyone becomes a public employee, they must resign. The question is how he could be permitted to continue serving when the mayor promised that there would be no city employees on the committee?"

Poat declined to characterize what the blue-ribbon panel has done so far or when it will finish its work, referring all questions to its chairman, Joe Craver. "Joe can give you a more detailed estimate. He's finalizing a lot of the committee's work. We've submitted a lot of work to him, and he's trying to craft this into a coherent report." According to Poat, no formal minutes are taken of board meetings. "Joe has a way of capturing part of it, and then there were written documents that emerged from various meetings."

Another panel member, National Steel and Shipbuilding's Richard D. Vortmann, a La Jolla resident and Murphy backer, also refused to discuss the board or its work and secretive procedures. "I should not and will not be communicating with you prior to the release of our report. You must talk to Joe Craver." Vortmann said he would ask Craver to respond to an interview request, but Craver subsequently failed to return numerous calls placed to the office of his Galaxie Management. A secretary said he was present in the office but declined to come to the phone.

Just what has the mayor's blue-ribbon panel been up to, then? The question is being asked around city hall more frequently, especially in the aftermath of the September 11 terrorist attacks, which have led to what city insiders say is a serious fall-off in hotel- and sales-tax revenue. With many hotels half-empty and the future of the convention business cast into doubt, at least in the months to come, the city's ability to balance its budget and still finance a host of big-money projects -- such as the downtown baseball stadium and library -- seem questionable to some.

Many other California cities are facing the same predicament, and some have already begun to carefully reexamine their budget projections, worried that tax losses could result in service cutbacks and even widespread layoffs for city employees. Last Monday in San Francisco, for example, Mayor Willie Brown met behind closed doors with business leaders and municipal financial specialists to sort out the impact of the crisis, the San Francisco Chronicle reported.

San Francisco officials are worried that the city's hotel tax, which last year netted $195 million, and its sales tax, which brought the city's general fund $145 million, along with a business tax that amounted to $270 million, will drop off sharply during what many expect will be a coming recession. "We really don't know what the worst case will be because we don't know when, or if, the other shoe will drop," San Francisco city controller Ed Harrington told the Chronicle. Warning that "everything is not fine in San Francisco," Supervisor Gavin Newsom has called for creating a priority list of jobs and projects that might be cut if the city runs short of cash.

In San Diego, however, city officials have managed to keep any concerns they have about the budget under wraps. A priority list of taxpayer-funded capital projects might end up pitting the proposed downtown baseball stadium against the library or present other politically unsavory choices, especially with ballpark financing currently hanging in the balance. A source in the city auditor's office says that figures on September hotel-tax revenues won't be available until late next month, and sales tax money figures for the third quarter wouldn't be available until the end of the year.

One indication of internal concern, however, may be Murphy's decision last week to surface a proposal to hike the hotel tax from 10.5 percent to 13.5 percent, with automatic increases after that. Firefighters union chief Ron Saathoff, widely regarded as the mayor's stalking horse on the increase, said more money was needed to replace worn out fire-fighting equipment, but insiders note that the city has long been lavishing funds on such nonessentials as Qualcomm Stadium and Chargers' ticket guarantee.

In any case, Murphy's blue-ribbon panel on city finances has declined to take up any of the budget controversies in public. According to Marian Thompson, personal secretary to San Diego City Auditor Ed Ryan, the group has not met since August 31 and as of last week had no future meetings scheduled. "There will not be an open meeting and no notices are published," she notes. "It's just a study going on right now, which is a work in progress."

As for when the committee's final report might be completed, Anderson says, "We thought it might be sometime this month until what happened in New York and Washington, which has really hit kind of hard. We were waiting for everybody to get their portion done and then they would have a meeting to review it and get it ready for a formal presentation to the mayor. It seems to me that most people are so busy on a number of other issues and knowing that the mayor is tied up on other issues, it will probably take a while."