“For years to come, political scientists and municipal finance experts, not to mention investigative reporters and grand juries, will sift through the wreckage of San Diego city government for answers to this question: How could the government of such a sunny and prosperous city get into such a fix? But we don’t have to wait for all the answers. Some are already apparent.

Background: San Diego is $1.4 billion in arrears to its city workers’ pension program, a sum it can’t pay. Terrible things are happening as a result. The city’s outside auditor won’t certify past financial statements, so the city can’t sell bonds for infrastructure improvements. Bankruptcy protection is a possibility. Because of uncertainty about the pensions — and the near-certainty of layoffs — some police officers are bailing out for nearby cities. “Bit by bit, the wheels are starting to come off,” a San Diego political observer told the Washington Post recently.

How could this happen in sober, conservative San Diego? It’s a complicated tale, but it’s one with important lessons for other cities. One is, don’t monkey around with the money. San Diego’s slide toward insolvency began in 1996, when city officials were trying to pay for hosting the Republican National Convention and other one-time costs. The right thing to do, of course, was to raise taxes, cut services or both, but San Diegans are unusually averse to tax increases and city officials weren’t brave enough to reduce services. So they tried financial slight-of-hand instead, cutting a deal with the city’s pension fund, which was then running a surplus. Pension fund administrators allowed the city to reduce its contributions over the next decade; in return, the city promised to make a big lump-sum payment should the fund’s assets fall below 82.3 percent of projected liabilities. The thinking was that returns from the pension fund’s investments would keep that from happening.

You know the rest of the story: The stock market tanked in 2000, city finances worsened, and the gap between the payments and liabilities widened until the unthinkable happened: The city was on the hook for a gigantic one-time contribution, which it couldn’t make. This is when the city made a second, even more disastrous deal: In return for the pension fund foregoing the lump-sum payment, the city offered to boost employee benefits.

Think about it: San Diego couldn’t afford the pensions it had promised, so it increased them — which was like fighting a fire by throwing gasoline on it. And that brings us to the second lesson: Don’t let employee benefits get out of control. San Diego leaders had decided it was safer politically (that is, less likely to attract attention) if they handed out pension and health-care increases than if they raised salaries. (This explains why the city’s pension and health-care costs have shot up by more than 127 percent in the last five years, as the San Diego Union-Tribune reported recently.) But these benefits have serious long-term financial consequences. Long after they’ve finished paying their salaries, governments will pay the pensions of former employees.

But what about the elected officials? Weren’t they supposed to be on guard for such things? This brings us to the third lesson: Keep the budget simple. Over the years, San Diego city managers had produced budgets so complex that mayors and city council members had given up trying to make sense of them. As a result, elected officials didn’t have a set of numbers to warn them of trouble ahead, nor did it occur to them to ask for such numbers. Referring to a former city manager and his budgets, one former council member told the Union-Tribune, “Jack was the only one of us who actually understood that document. It was like Da Vinci looking at a drawing off one of his flying machines.” Alas, it was a flying machine that was destined to crash.”