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Roundtable: Water Rates, Port Ideas, SDUSD Budget, San Miguel Fire

May 18, 2012 2:38 p.m.

Guests: Mark Sauer, Senior Editor, KPBS News

Katie Orr, Metro Reporter, KPBS News

Will Carless, Investigative Reporter, VoiceofSanDiego

Aaron Burgin, Watchdog Reporter, UT-San Diego

Related Story: Roundtable: Water rates, Port Plans, SDUSD Insolvency, Outsourcing Fire Protection


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: Ports and polls in the San Diego mayor's race this week. The dreaded I word, insolvency, and CAL FIRE poised to step in at the San Miguel fire agency. This is KPBS Midday Edition. I'm Maureen Cavanaugh, it's Friday, May 18th. Midday Edition Roundtable once again takes on the top San Diego stories of the week and invites your calls. First a report on the bomb shell San Diego County water authority dropped Thursday about a significant increase in water rates. KPBS senior news editor Mark Sauer is here with more.

SAUER: Hi, Maureen.

CAVANAUGH: How much is the county water authority proposing to increase rates and why?

SAUER: This proposal is nearly 10% for 2013, expected to generate more than $43 million next year, county wide. $4 per month for a typical household, and that's a real burden for some folks struggling in this economy.

CAVANAUGH: And why do they say the rates are going up?

SAUER: Much of it is due to a deal struck in 2003 with the imperial water district to import more water, costs for that start ramping up next year. And about a quarter of the rate increase is a proposal for a $21 million jump in debt service payments due that falls next year.

CAVANAUGH: And of course they've made much about the fact that Metropolitan Water District, that boost accounts for about half of this increase.

SAUER: That's about half of it, and that's been very controversial in the last couple of weeks, you bet.

CAVANAUGH: Is the public going to have any opportunity to speak out on what may be a 10% boost in rates?

SAUER: There's a public hearing set for June 29th on this jump, and I think we can all expect some tough questions to be raised at that time.

CAVANAUGH: Thank you very much. Today's Midday Edition Roundtable guests, Katie Orr is KPBS metro reporter. Hi Katie.

ORR: Hi, Maureen.

CAVANAUGH: Will Carless is with voice of San Diego. Welcome back.

CARLESS: Nice to be here.

CAVANAUGH: And Aaron Burgin is watchdog reporter with UT San Diego. Welcome to the problem.

BURGIN: Thanks Maureen. It's good to be here.

CAVANAUGH: We'll begin with a conversation about the San Diego mayor's race, which is heating up to the boiling point, and to candidates duelling ideas about the port. Katie, the unified port of San Diego has become a focal point in this mayoral campaign. Tell us -- give us a sort of 101 on the unified port of San Diego. Who's in charge of it?

ORR: The port is managed by the port commission whose members are appointed by the member cities from around San Diego. Chula Vista, Coronado, imperial beach, national city, and San Diego. They all appoint members. San Diego gets to appoint three members, and the others appoint one member. And basically, the port manages San Diego bay, and the tide lands around the bay. They manage the cruise ship terminals, the two cargo terminals, the park land around the bay. And they manage hundreds of businesses, the leases for hundreds of businesses around the bay.

CAVANAUGH: All the candidates have talked about the port this election cycle. Why?

ORR: Well we first saw it with Bob Filner. He came out and made it an issue. He says that it is a way to generate middle class jobs in San Diego. Of course here on KPBS, we did a story, or investigative newssource did a story calling out Filner on his claims about the port saying he got a lot of stuff wrong. He was saying basically his ideas are there, the numbers might have been different, but the idea is there, and his idea is that you want to expand the port and grow it. And that it's really the source of middle class job creation for San Diego.

CAVANAUGH: And Nathan Fletcher has released his plan for the port.

ORR: He would like to see an increased military presence in it San Diego bay. He would like to see more local businesses using the port to ship their goods instead of -- he says anecdotally he's heard of businesses shipping their stuff on trucks to long beach, and then shipping their goods out of that port San Diego of using San Diego. Also he says it would be a good place to create middle class jobs in San Diego. So it's nothing I don't think that's super revolutionary, but it's kind of articulating what he would like to see the port be used for.


CARLESS: This mirrors what's going on with the presidential election where everybody is just so in love. I think coming out of this, you know, maybe coming out of this hideous recession that was created by all of these kind of Amorphous things that you can't touch like these derivatives and securities and all this crazy stuff that wasn't real, this real feeling that we want something tangible. We want jobs that are connected to nuts and bolts going together.

ORR: Right.

CARLESS: And everybody is, in the presidential election, they're talking about car factories and stuff like that. This to me looks like certainly Fletcher's way of saying hey, we can do that in San Diego too.

ORR: Right. It's interesting because his plan mirrors one that President Obama announced in 202010 to increase all of the U.S. exports by half by the year 2014. Fletcher wants to see the region's exports increase by $5 billion by the year 2020. And his plan to have a bigger military presence in the bay, that's something the military has been talking about for a while. In 2009, Len Herring who was the commander of the Navy region southwest at the time talked about the military increasings it presence in the bay. He has come out and supported Fletcher's plan. But this is something that has been in the works for a long time.


BURGIN: I was just going to bring out that I think one of the things too about jobs that we discussed is the fact that a lot of the jobs that have been created during this shruggish economy have been some of the lower end jobs, the service industry jobs, are and with the weakening of union power across the United States , you've seen a great deal of those once middle class jobs that you could hold without having a college degree kind of go by the wayside. The port is one of those entry points for people that don't have that level of education, and obviously there are a couple of candidates that see that growth is something important to increase those job offers.

CARLESS: I've been watching this race through the prism of education, kind of, because I'm covering education tonight, and they've all come out with their plans on education. At the end of the day, the mayor can't really do anything about the San Diego Unified. What's your feeling, Katie, can they do much? We have a port commission. We have guys in charge of this. What can the mayor actually do?

ORR: Well, I think where they have the power is that they appoint three of the members. So I spoke to Carl DeMaio and he said he wants to see the port become more transparent, he wants it see it more accountable, he doesn't think it's particularly well-run. So he says if he was elected mayor, he would appoint these three commissioner, and if they didn't do what he wanted, he would appoint new commissioners who would do what he wanted.

CARLESS: Interesting.

ORR: So how easy is it to reappoint commissioners? I'd have to look into that. But that's his idea. I think the basic thing is San Diego is, like, the main city in the county. It's the biggest city that makes up the unified port. There's a lot of money involved in it. So I think they have that certain amount of weight. But you're right, it's a separate government entity. It's not like the mayor can order the port to do something and the port necessarily has to listen.

CAVANAUGH: And does Bonnie Dumanis have much to say about the port?

ORR: Her focus has mainly been on education, that's where she's dedicated her time. But she says she thinks the port has been run well. She would like to see a greater emphasis on transportation, making it easier for people to get and from the port. Also to get to the airport, you know, using trolleys and things of that nature. And that is a big issue. That's another part of Nathan Fletcher's plan, and Filner mentioned it as well. You have to put in the infrastructure to make it easier for the trucks to get in and out of the 10th avenue marine terminal. Right now, harbor drive is in horrible condition down there. It's really hard for the trucks to maneuver, they have to go through Barrio Logan, which isn't great for the neighborhood either. So there is that whole aspect of managing the port.

BURGIN: Especially with the changing dynamics in the Barrio Logan community, with the El Mercado growth and the development there, you're going to see that clash between the port and the industry, and the residential side that they're trying to grow.

CARLESS: What's interesting to me from a political perspective is the way that Fletcher by announcing this plan is able to basically take away what's supposed to be Bob Filner's big talking about. Where is Filner's plan? Where's his -- really, how much effort is it to get some staffers to draw up a concrete plan? That's been Filner's big issue all along. And he's just allowing Fletcher to sort of pluck that away from him.

ORR: Well, it was interesting. And I was interviewing all the candidates for my story this morning, and Bob Filner said, well, I'm glad Nathan Fletcher is on board with my idea.

CARLESS: He likes saying that.


ORR: And I think to be fair to him, it is something he's been talking about, he is backed a lot by the labor unions, and they make up a large part of how the cargo terminals are operated but it's true, Fletcher just kind of jumped onto that.

CARLESS: He's been talking about, he's just been getting everything wrong.


CAVANAUGH: Another political aspect of this is that you have Fletcher and Filner being very prominent in emphasizing the importance of a working port, whereas there was this big idea from Doug Manchester in the UT about using the 10th marine terminal to have perhaps a Chargers stadium there, and just basically downplaying that working port idea.

ORR: Well, and I don't think that has gotten a lot of traction among the candidates, on her website, Bonnie Dumanis offers some tentative support for, that basically looking into it. And she was telling me that's really the only idea they've floated out there. But there aren't any specifics.

CARLESS: What's Carl's position on that? He's got the UT's backing now.

ORR: Well, he -- I don't think he supports turning the 10th avenue terminal into a stadium. He says he wants to see more businesses use the port as well. He wants to see it become -- a lot has been talked about how, like, 95% of the customers are outside of America. And so everyone wants to be a big international shipper. And so I think people realize the potential there to kind of build up the port a little bit. You don't see a whole lot of discussion about a possible stadium among these candidates.

BURGIN: It seems like DeMaio is I guess his focus is more the nuts and bolts and the infrastructure of how the port is ran as opposed to what it will be.


ORR: I think that's fair. He says if he's elected in the first 90 day, he'll do a performance audit of the port. He said he would like to see it contribute more toward civic waterfront projects like the north embarcadero visionary plan, mentioned contributing more to the Convention Center deal if that is to go forward. So I think Aaron is right. It's more about the nuts and bolts of how the port works.

CAVANAUGH: I want to talk about the mayor's race just in general. We had new poll numbers come out this week. Tell us about them.

ORR: Right. 10 news released their latest poll earlier this week. It showed Carl DeMaio pulling at 31%, Fletcher and Filner are tied for second at 21%, and Dumanis has --

CAVANAUGH: What happened to that boost for Fletcher?

ORR: Well, he dropped five percentage points from this poll to the last. The margin of error was 4.4%. So it's relatively in there. Carl DeMaio was there 3%. It's interesting, so Fletcher got over that initial hump, but he's still a lot higher up than he was. He was in solid third place. And now he and Filner are battling it out for second. So it'll be interesting. You can't turn on your TV without seeing an ad for DeMaio or Fletcher or one of them trashing the other.

BURGIN: Just don't turn the TV on.


CAVANAUGH: If I remember correctly, it was very interesting to see the number of undecideds had really gone down.

ORR: Yeah.

CAVANAUGH: So people are paying attention now and making up their minds.

>> At least the people they are polling are. It'll be interesting to see who actually comes out, who actually votes. Because I was speaking to Nathan Fletcher the other day, and he said they've registereded a lot of people to vote. Normally in a primary, it's thought that the extremes for the party comes out, and they're the ones that actually cast ballots. He says no, we've registered more people, we're going to have a good turnout, and it'll be really interesting to see if that actually is the case.

CARLESS: To me the interesting trend here, and I hate to keep coming back to Filner, but it's the fact that we have a plurality of Democrats in this city, then we have -- what is it about Bob Filner that he's just -- he shouldn't be tied with an independent candidate in second place. He should be well in the lead or at least up there with DeMaio. What do you think he's doing wrong?

ORR: Well, he got a lot of flack early on for not getting his name out there, being lackadaisical about campaigning. His view was he's the Democrat, he's going to get into the primary, and maybe he'll step it up in November. But I think he's running into Nathan Fletcher, a popular guy, he's raising a lot of money. I just got an e-mail today about a super pac being formed for independent voters. Primarily going to help Nathan Fletcher. So it's a lot of -- he's got a lot of support. And he's got a lot of money backing his campaign. Fletcher does. Again, whether or not that translates into vote, we'll have to see.

BURGIN: I think the other thing is too, you see the fact that the Filner campaign has been criticized for the lackadaisical campaign, San Diego City beat came out with their endorsement.

ORR: Lukewarm endorsement.

BURGIN: To say the least. They were really close to going Fletcher's way, but they stuck with him because he's the progressive in the race. But it is a bit troubling when you hear an organization that should be clearly in the corner, and even they're tepidly supporters.

CAVANAUGH: I just wanted to point out something that can explain, I think, a lot of the campaign tactics that we're seeing at this point. Recent UT San Diego polls show in a head-to-head match-up, Carl DeMaio would beat Bob Filner, but he would not beat Nathan Fletcher.

ORR: Yeah, and CityBeat brought that up in their endorsement. And I think it's something that's on a lot of Democrats' minds. Do you like Bob Filner more or do you like Carl DeMaio less? I mean, which do you want to see more? And I think that's what a lot of people are thinking about.

CARLESS: I'm so interested. And I guess we'll find out if Filner gets through the primary, I'm interested to see how much of that lack luster support for him is down to a poor campaign, and how much of it is down to the fact these Bob Filner? I think I've literally seen one Bob Filner yard sign, and you can't -- you can't turn on your TV, you can't step out of your house without seeing Fletcher and DeMaio.

ORR: Right. If you were judging based on yard signs and TV ads, you would definitely think this is a 2-person --

CAVANAUGH: DeMaio and Fletcher are just having this battle Royale right now.

>> Right. And we've heard on twitter, and other people say Filner might be perfectly happy to sit back and let DeMaio trash Fletcher and do his work for him.


BURGIN: I was going to say that's why I'm glad I live in Vista and I don't have to see them.



CAVANAUGH: Katie Orr, Will Carless, and Aaron Burgin with the watchdog at UT San Diego. Now there's apparently turmoil among School Board members and union leaders at San Diego Unified school district. We're inviting our listeners to join the conversation if you'd like. Will, we all know San Diego Unified is in deep financial trouble like a lot of other districts in California. The million dollar question is is it insolvent?

CARLESS: Well, are the billion dollars question, I think.


CARLESS: At this point, it becomes a question of semantics. The first point I want to make is that although you do have this split on the board, on the School Board about whether they're insolvent or not, everyone on the School Board agrees about the numbers am they're not arguing about the size of the deficit or the size of the problem. What they're arguing about is that Scott Barnett is saying at the point that you have to lay off 1,600 people plus in order to survive, in order to be able to make your obligations next year, you are basically insolvent because you are not offering a quality education, and also by the time you have to sell off $20 million worth of property in what he calls a fire sale, and they're selling this property at heavily discounted rates because they need the cash right now, at that point you're insolvent. That's the same as a family who's selling the furniture in order to pay their mortgage.

CAVANAUGH: There is however that word basically, and that means a lot to the legal mind.

CARLESS: It does.

CAVANAUGH: The distance between basically insolvent and insolvent can be a long one.

CARLESS: Exactly. Legally, they are not insolvent. Now school districts enshrined in state law, they're allowed to cut into certain things and allowed to cut things to a certain extent. There are other things they're legally mandated to do, they cannot put 150 kids in every classroom. That would trigger a state takeover. So what the rest of the board, I think it's fair to say they've pointed out is look, we may be cutting a lot, but we are not insolvent. There's a whole lot of stuff we can and will do to make sure we do not go insolvent, which involves them being taken over by a state trustee.

CAVANAUGH: Let me ask this one point. Just to be clear about what Scott Barnett wants the district to do, he would like to take this basically insolvent situation, have the School Board basically trigger a series of insolvent events, and then have some sort of insolvency board.

CARLESS: Yeah. Look, Scott wants to redesign a process that's already enshrined in law and that's already happened several times in California. It's never happened with a school district as big as this. Some of his ideas, I've talked to a few expert, yes, it's possible that you could tweak it and make it happen in the way that he's described. Basically what he wants to do is say rather than laying those people off, let's rescind the layoff notices which puts their budget well out of whack and triggers them becoming insolvent and the state trustee coming over. He wants to do that as you said in conjunction with forming several committees that would guide whatever comes out at the other end. Whether a state trustee, who would be the ulteight arbiter of what's going on goes forward, whether he would have to pay attention to those committees is a different question.

ORR: What is the benefit of going insolvent and having the state take you over especially when the state has a $16 billion deficit? It's not like the state has a lot of money to help out.

CARLESS: Scott Barnett wants the School Board to do certain things. He wants them to not sell land. He wants them to close school schools. He wants them to study with their special education spending is so high in comparison to other districts. He wants them to do those things. No one else on the School Board wants to do those things. He basically throws his hands up in the air and says if you're not going to do, let's bring in somebody who's willing to do it. And we get the benefit of having fully staffed classrooms for the next year. You have to weigh that against going insolvent. It's a huge deal.

BURGIN: I was going to ask that as well. Talk about the politics of insolvency, as a reporter in 2004, I watched the Compton college district deal with having a state trustee and havings it board rendered to an advisory level. And I can tell you watching that dynamic was volatile at best. What would the politics of insolvency look like for a district like San Diego?

CARLESS: Basically what happens, are it is different for every school district, and there is an argument to be made that because our district is so big and so powerful, there might be some sort of wiggle room in the law. But essentially what happens is that a state trustee, nonelected, state administrator, becomes the boss. And the School Board becomes an advisory committee, the superintendent is given the boot, and that trustee is given the business of running the day to day --

BURGIN: And he doesn't have to listen to anybody.

CARLESS: He can just listen to his own conscience if he wants to. And he starts to make all of the tough, horrible decisions --

BURGIN: That the School Board hasn't made.

CARLESS: Refuses to make. If you want to talk about what's the benefit, arguably, that's the benefit. You take politics out of the question. And there's a lot of people who say the School Board are beholden to union, so this is a way of sidestepping the unions. But again, everyone I've spoken to says this is a terrible idea. It's a really bad thing to do. Not only is it undemocratic, taking away from albeit a flawed political system, but it also saddles a school district with huge amounts of debt for decades going forward.

CAVANAUGH: Right. The county school superintendent here, San Diego County, Randy ward, administrated Oakland's district when it was declared insolvent. And he was here talking about it, and he said this can affect a district for years. Because you don't actually get any extra money. You have to pay it all back.

CARLESS: Exactly. It's a loan. That's what insolvency is structured as. It's a big loan from the state to the school district to get it out of the immediate financial bind. None of the problems go away. A school trustee, a state trustee, has the same menu of options available to him as the current School Board does. He can lay people off, close down schools, shorten the school year. Of there's only so many things you can do. So the counter argument to insolvency, another one, is hey, does it really matter who's pulling the triggers? Who's making the decisions? The net effect is still the same.

CAVANAUGH: Let me talk to you about the fallout from Barnett's insolvency idea. You wrote about phone calls from investors trying to find out whether or not the school district really was seriously contemplating insolvency.

CARLESS: That's what I was told. That's what the deputy superintendent of business told me. He says he's been fielding an awful lot of worried phone calls from analysts. Scott's timing was a little bit strange in that he's making this big announcement at the very time that the school district is going out to float $230 million in a bond. It's got a transbond to sort of pay its wages for the next few months. So yeah, Phil Stover said it's possible that the cost of that bond could go up by a quarter of a million dollars, maybe more, as a result of Scott saying these words.

BURGIN: Have any of the major investor agencies and analysts downgraded them yet?

CARLESS: They did last year. But not since that statement. And it's important to remember that, look, these agencies, lenders who are lending $230 million know the numbers. They know the financial situation of the district. If they don't, you've got to be a bit worried. So it's politics. Should you take this hyperbole and make that Trump all the numbers and figures they already know? There's an argument, if they can, they will, because then they can charge more interest. Shouldn't make any difference what Scott Barnett says.

ORR: Well, it's just so interesting. The City of San Diego went through this similar situation a couple years ago. And I admittedly was not here when Mike Aguirre was the city attorney, but the bankruptcy talk was there, San Diego's bond ratings were decimated, and only in the past couple years they've started coming back up. We had news a couple weeks ago about one of the credit agencies, I forget which one, but increasing the bond rating for San Diego. So I mean, it's just kind of interesting the parallels between the school system and San Diego and San Diego obviously did not declare bankruptcy. But it was a lot of people, or some people, were arguing that that is the way to go. Wipe the slate clean. And I wonder if the school district can look to the city at all as saying, hey, eventual you'lly you'll get through this.

CARLESS: Well, I think it's different in that you have this mechanism where the state comes in and takes over. There's a similar analogy would be what's happening over at the fire district in San Miguel where the state has taken over. My understanding is, and I don't know very much about the city's bankruptcy and he what might have happened, but my understanding is that it's different because of that sort of -- there is sort of a big brother who can come in and take over.

CAVANAUGH: Let me take clear. The other board members on the San Diego Unified School Board do not agree with Scott Barnett, at least publicly, and basically the School Board president has told people to stop using that I word, right?

CARLESS: Which is ironic, because the only reason anybody is using the I word is because superintendent Bill Kowba stood up in a meeting and said we are headed down the road to insolvency. Then they turned a course and said well, it's not really that bad. And I find that hard to swallow at this point.

BURGIN: Another big dynamic is the fact that the state does play such a role in the financial outlook. They are tied together. The school and state in terms of revenue coming in. What's the outlook? What's the forecast looking like that maybe there are brighter days ahead for the school district and the state for that matter?

CARLESS: Well, as far as the state, we just had the May revise, the governor's revised budget, and it looked worse. The deficits are bigger, and there's no sign that the governor is going to back out on this idea of, look, you have to pass that's tax increases, otherwise there will be huge cuts. Right now, if those taxes don't pas, schools are in a whole world of hurt.

CAVANAUGH: You showed in your articles about this, it's not just the problem that the state is, it's the problem that San Diego Unified got itself in it with the contract with the teacher's union.

CARLESS: Oh, absolutely. Basically the School Board made a deal with the unions in 2010 that said, right, you guys need to help us out for the next two years. We want you to take five unpaid days off, which amounts to about a 2.7% reduction in their salaries. That saved the district about $20 million in the short-term. But they also said we're also going to give you a succession of pay raises in the third year. Well, it starts on July the 1st, and those pay raises start going into effect. Those pay raises, that deal, a huge part of the reason that the school district is in such a problem. We're actually coming out with a graphic that will show that, just how much of this problem is attributable directly to the board's own actions.

ORR: And I think everything that Will is talking about is why education has played such a big role in the mayor's race this year. As you said, the mayor doesn't really have anything to do with the school district except the city charter dictates the makeup of the School Board. But people with kids in school are voters. And this is number No. 1 on the minds of lots of parents. The they don't want to send their kids to a school that is disintegrating. And I think anyone who is going to lead the city, regardless of whether or not they have any actual power has got to at least be sensitive to the fact that these parents are not happy with what's happening at the schools. If it gets bad enough, they could had move. It can be a whole domino effect. And I think that's why we've seen Bonnie Dumanis focus a lot on the school, Nathan Fletcher has made it an issue as well. Bob Filner used to be a School Board president. It's on the minds of the candidates. And frankly, it's probably not something they can ignore.

CARLESS: And look, San Diego, yes, is in a lot of trouble. Yes, a lot of school districts in California are in trouble. But there are plenty of school districts that are doing pretty well. Poway is doing pretty well right now. My wife is a teacher in Poway, and he just was notified that they want to bring her back for summer school. This is -- and so the mayoral candidates I think to a certain extent particularly probably the Republicans among them are sitting there wishing that they could do something to either reverse or change the course of those decisions.

CAVANAUGH: I do want to get to not only turmoil on the School Board, but turmoil within the teachers union. There was a letter released by a former union president Camille Zambro this week.

CARLESS: That was a pretty extraordinary day. I have done a lot of reporting on the union, the Teachers' Union, the internal dynamics, and it was interesting for me because that letter justified a lot of the reporting that I had done that was based a lot on background sources. Essentially what Camille said was there is a huge schism in the union between bill Freeman, the president, and his supporters who want to sit down and talk to the district. She says they're on the verge of making historic concessions, which would essentially mean not taking pay raises next year, and allowing that money to pay for bringing teachers back. Whereas Camille and Craig leedam who's just been dismissed from the union, on the other side, who basically are saying stand our ground, we're not going to talk to the district. It was an an incredibly huge letter, huge insight into the workings of the most powerful union in San Diego.

CAVANAUGH: And the interesting part is the fact that the new union leader, bill Freeman, has only given the mildest of indications that he might be willing to actually talk with the School Board. There's been no concessions.

CARLESS: Absolutely. And I talked to Bill last night for the first time in a long time, and Bill does not sound like a guy who's about to make concessions. He doesn't sound like the sort of guy who's going to sit down and make a deal with the school district any time soon. Before that conversation, having read what Camille had written, I thought that he was. And after that conversation, he made it pretty clear, we're not about to do that any time soon.

CAVANAUGH: And yet the time, you said you've been getting letters from rank and file teachers in San Diego Unified urging -- saying we want to make some concessions if it's going to bring more teachers back and if it's going to help the school district. Do you think that there is that sort of a turmoil within the ranks?

CARLESS: 600 of them are going to get laid off. As things stand right now. So sure, the 600 people who are very upset and probably want the union to make concessions yesterday. Want so certainly that's there. And I'm sure there's also -- I'm also getting e-mails, letters from teachers who aren't in that situation who have said look, we can give a little to keep these teachers on board. That's what this is going to come down to. Of the ball has been placed firmly in the union's court by the district. They've said it's up to you guy, make concessions or all these teachers get laid off. Is it fair? Probably not, but that's the situation we're in.

BURGIN: It's interesting to see is play out at the micro level. I have a kid that goes to a school in San Diego Unified, and there is that sentiment out there, that teachers are willing to give up that pay raise, are willing to make certain concessions so that the rest of their teachers can still be there. Of I think my son told me that his school is looking at losing nearly half of their teachers. And class size is going up to 30 from K-2, and for 35 for the third graders and up. And that's as a parent a very troubling scenario for me because he's been in classes that have been small. It's an unfortunate situation, but I do see that type of dynamic happening at that school level where teachers are, like, listen, we will give these things up as long as we're able to maintain the status quo or at some point begin to improve things.

CARLESS: What we're talking about here is not talking about teachers going into next year getting paid less than they're being paid this year. What we talk about in terms of concessions is you're not going to get a big pay increase next year. So the choice is between teachers getting a pay increase or lots and lots of people getting laid off and class sizes swelling. That's vital for everyone to remember.

CAVANAUGH: Thank you all.


CAVANAUGH: My guests are Katie Orr, Will Carless, and Aaron Burgin. We just discussed the talk of insolvency at San Diego Unified. And now that I word surfaces again at the San Miguel fire district in San Diego's east county. We invite our listeners to join the conversation. Aaron, fire chief Auggie Ghio who continues to recover from a serious motorcycle accident last weekend is quoted as saying San Miguel fire district used to be the place for the top in firefighter compensation. But the agency is paying a price for those good old days. CAL FIRE is in negotiations to take over operations. How did San Miguel's money troubles start?

BURGIN: Well, you got to take a trip back to 2006, 2007, when things were really good. The real estate boom was rocking, and you have a fire agency that relies heavily on property tax revenue I think about 90% coming from property taxes. So you have this situation where you've --

CAVANAUGH: You've got all of that money coming in from housing, and then when it's on the upsurge --

BURGIN: Everything is going well, are and you can afford some of these things. You can afford giving high salaries to the rank and file and the administrators. You can afford to give your fire board lucrative healthcare benefits that aren't seen at any other fire agency in this whole region. And you're able to do all of these things. However, once that spigot slows and then ultimately goes in reverse, those things start to hurt. And that's what happened basically with San Miguel fire district.

CAVANAUGH: A lot has been said about the salaries and the benefits mostly of not only fire officials but board members at the San Miguel fire district.

BURGIN: By 2008, we looked at a couple of surveys that were done at that time, and it showed that the salary and compensation for the average rank and file firefighter, fire the fire chief, and for the board were either the highest or among the top two or three among fire agencies in San Diego County. And it was consistently like that through the beginning of the decade until the point where they said, listen, we can't afford this anymore. They attempted to float a parcel tax bond measure in 2009, failed. So they limped along by taking a series of cuts and concessions. They took furlough days upon they changed the way that they accrue vacation time so now it's less than it was in the past. However, they've still had to honor a number of those things. They have had to honor the fact that people had vacation time banked. One of the things we reported on was the fact that if they were to shut their doors today, they would still owe over $1 million in vacation time that they don't have the money to pay for.

CAVANAUGH: Wow. So in comes CAL FIRE.

BURGIN: Well, we got to go back a couple of months ago to about October of 2011. There were whispers of the board and also of the fire administration talking with CAL FIRE already about it. Then in December of 2011, they had a really heated meeting in which they discussed we need to at least explore this option and put out what's called a request for proposal, RFP. Any fire agency was allowed to submit a proposal on what they would do to save money, and the only agency that responded was CAL FIRE. CAL FIRE is the state fire agency. They also run the counties' fire authority, are the fledgling fire authority that the county is operation, and this would be the largest takeover by CAL FIRE, I think in its -- in this region and beyond. This is a very big deal.


ORR: I just wonder, I've done a couple stories on the county's lack of a county wide fire department, and they say because they have this agency, they actually do have a fire department but not officially. How does the fate of San Miguel work for or against that?

BURGIN: The talk we've reported on is that this is the first domino that would fall to make that county fire agency a tangible and real agency with firefighters and an actual department.

ORR: So this could work in favor of establishing an official county fire district?

BURGIN: It could in fact. However you have to look on the other side, the rank and file and the union, and of course the residents of San Miguel have spoken pretty loud that they don't want this to happen.


CARLESS: And as I said earlier, this draws some parallels to what's going on at the school district in terms of the state taking over in a way. What's interesting is I know that if there's a state takeover at schools, they can't do anything about the union contracts, they can't touch those. Do you know what the deal is?

BURGIN: Well, they can do one thing. And when CAL FIRE came with their proposal, they said that they could save about $3 million a year. And the biggest change, in fact, the change that would represent the bulk of that decrease is the fact that their work week, are the rank and file firefighters' work week would change from 54 hours a week to 72 hours a week.

ORR: Whoa.

BURGIN: At the same level of pay.

ORR: That's a lot!

CARLESS: 54 hours a week, yeah.

BURGIN: Well, most of the local fire agencies, San Diego fire and rescue, all the municipal fire agencies work on that similar schedule between 50-60 hours a week. CAL FIRE is on the higher end.

CAVANAUGH: So in essence, the firefighters at San Miguel are going to take a big drop in pay.

BURGIN: Exactly.

CAVANAUGH: I'm fascinated about what Katie just said. So even though this is bad news for the firefighters at the San Miguel fire agency, this could be good news for San Diego County?

BURGIN: For San Diego County, a county that has been criticized for not having that regional force that Los Angeles has that Riverside County has. This could be that first domino to fall.

CARLESS: I remember doing some reporting on that countywide, the idea of a countywide agency. Weren't they going to have the San Miguel fire district be the core of it back in the day? They were going to turn that into the county and add more stuff onto it?

BURGIN: I'm not certain about that. But I know that there were discussions about some of the outskirts, are the agencies in the far flung regions in the back country starting to form that. And San Miguel would be the largest of that. I know that the residents of that have been very sensitive to the fact that they want a local fire agency.


BURGIN: Similar to what we talked about in the school insolvency debate, one of the things that you keep hearing in the San Miguel argument is who wants the State of California to take them over?


CAVANAUGH: Well, also, what does it mean to be taken over? In other words all of these firefighters now would actually be CAL FIRE firefighters?


CAVANAUGH: Instead of San Miguel. So does that mean if there's a fire upstate --

BURGIN: They can be called up. The big difference, the big thing that you have to remember is that that's only the rank and fire. The San Miguel would still have a staff. It would include their chief, their division chiefs, and the public information officer. We wrote a story about the controversy surrounding the public information officer who worked for five years, and now he's fully vested for life and healthcare benefits, and he earns quite a nice salary between his work with San Miguel and the Otay water district. And one thing we heard from people when we did these stories is the fact that the rank and file are willing to make more concessions, but what you hear is that administration hasn't made the concessions, and there are a lot of things on the table that administration could do to cut costs. And that kind of undercuts them in terms of salary. Of

ORR: In San Diego, of course you've had all these talks about the overblown pensions, and the people making pensions are managers. It's not the trash collector, the guy on the street. There were firefighters, but the managers are the ones that get these benefits. It's just -- yeah.

CARLESS: Can I take this really big picture for a second? The two issues that we've just discussed to me, they personify what's basically going on in public services in California today, which is the fact that we've always had a situation where public sector workers, maybe they didn't get paid too well, but they always could rely on really good benefits and pensions. And now we're getting to the stage where those benefits and pensions cost so much that we don't have the tax money coming in. And Californians are just going to have to realize over the coming years that if we want to maintain that paradigm, then we need to pay more taxes. If we don't want to maintain it, if we want to not give public employees healthcare for their whole families and retirement benefits, then we can kind of do that on the money we have now. But there's no way of doing both of these two things.

CAVANAUGH: What's even more complicated is there is also an ideological aspect thrown into the mix here. And it's not just that we can't afford it, it's that there is an element of political thought that really wants to destroy unions.


CAVANAUGH: Wants to get away.


CAVANAUGH: Make everything right to work, they don't like unions. And so therefore that's in the mix too.

ORR: Absolutely.

CAVANAUGH: With the legitimate idea that we can't afford it, be unless we pay more taxes. But that's all this complex --

ORR: And stories like Aaron's and what we've seen in it San Diego, that we're still recovering from, do not help out the situation.


ORR: When people see that, free healthcare for life, they might legitimately think that's not fair.

CARLESS: Especially because everybody in the private sector has been tightening their belts.

ORR: Right.

BURGIN: And we have to mention the fact that once upon a time when Will, myself, and Katie weren't on the earth, they weren't --


BURGIN: Public employees weren't paid a great deal of money. It was the benefits that drove them into civil service employment. And about 15, 20 years ago, you saw this dramatic ramp-up in salaries.

CARLESS: In education, that's still true. It's certainly true in certain elements. A lot of public employees don't get paid very well. It's just the benefits when they go up ten, 15% every year, it's just an unsustainable model.

CAVANAUGH: Aaron, these negotiations are still underway, this is not a done deal, right?

BURGIN: This is not a done deal. There is a sentiment in the community that is pretty much is a done deal. But the negotiations are still ongoing. And we'll know in a couple of months whether or not this is going to be a reality.

CAVANAUGH: Is this any real movement of the opposition, the people who don't want to see this happen? Do they have any clout?

BURGIN: There's been organized resistance in the face of the union, and as well as community members that don't want to see it happen. However, that board, the board that makes those decisions, and pretty on board with what's going to happen next.

CAVANAUGH: I want to thank you all.

ORR: Thank you.

BURGIN: Thanks.

CARLESS: Thank you.