SAN DIEGO -- Mayor Jerry Sanders accused City Attorney Michael Aguirre on Friday of holding up an audit of San Diego's 2005 financial statements, which must be completed before the city can re-enter the public bond markets.

The mayor said Aguirre has deliberately withheld a letter needed by the city's outside auditors to complete the review.

"I believe he is withholding that representation letter, which is his responsibility to provide, by the way, to create whatever leverage he believes he can get to help his case on a number of issues," Sanders said.

San Diego needs the 2005 audit, and subsequent ones, before it can re-establish its credit rating and begin borrowing money on the public bond markets to pay for billions of dollars worth of overdue infrastructure upgrades.

"As I said, with every passing day, these kinds of games cost our taxpayers lots of their hard-earned money," Sanders said.

Following Sanders' news conference, Aguirre said the letter is done and "may have already gone out" to the mayor's staff.

However, Aguirre said the letter will follow a Sept. 7 memo he sent to Sanders that outlines 14 conditions he said the city must meet before it can re-enter the public bond markets.

Jay Goldstone, San Diego's chief operating officer, said that could throw a roadblock in the city's efforts to secure a certified audit of its 2005 financial statements.

In his memo, Aguirre said the city must rescind pension benefit enhancements approved in 1996 and 2002. He has long held those deals were forged illegally, but has been unsuccessful in overturning them in court.

"I recognize the need to tap into the market," Aguirre said. "I want to get into the market too, believe me.

"The problem is this: if we go into the market and we lose our credit rating again, and we are facing the kind of crisis I think we are, we will then be in a horrible situation," Aguirre said. "This will keep the mayor out of trouble, what I am doing."

Sanders said only a judge can unilaterally rescind the benefits.

"It is my strongly held belief that pursuit of this reckless course would expose San Diego taxpayers to millions of dollars in liability and would set our city on a course that could well lead to contempt of court," he said.

Aguirre's memo dictates that he be re-established as the attorney for the pension system, that certain benefits be reworked, that "responsible" retirement trustees be appointed and San Diego's $1 billion pension debt and $1.4 billion retiree health care shortfall eliminated.

The eight-page document also accuses the mayor and "certain" City Council members of making "false and misleading" statements concerning San Diego's financial condition.

Sanders Friday issued a scathing response to the city attorney's Sept. 7 memo, calling Aguirre's 14 mandates "wholesale creations."

"The majority of the claims the city attorney makes lack merit, have been dismissed by courts of competent jurisdiction or are unnecessary impediments to the city's return to the bond markets," Sanders said.

Sanders called Aguirre's allegations that the mayor and council made false and misleading statements "dangerous."

"While he does not come out and say it, the city attorney is alleging securities fraud," he said. "I want to make this very clear to all of our citizens -- nothing could be further from the truth."

The mayor accused the city attorney of seeking to force the city into bankruptcy to effect his political goals.

"I think it's quite clearly a strategy to try and rehabilitate the cases that he has lost in court," Sanders said. "I have said over and over we are not going into bankruptcy. We are paying our bills, we have no cash problems, we have streamlined the city and cut positions."

Aguirre vehemently denied he wants the city to go into bankruptcy, but stressed that "very difficult" measures need to be taken to resolve San Diego's financial problems.

"By getting rid of the debt, then we don't need to go into Chapter 9," the city attorney said.

Both memos from the city attorney and mayor were forwarded to the Securities and Exchange Commission, which, after a lengthy investigation, sanctioned the city last year for failing to fully disclose the scope of its pension fund deficit to potential investors.

Aguirre and Sanders have been engaged in a weeklong political battle, publicized during daily dueling news conferences, on a host of issues.