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Kevin Faulconer On The Budget, Outsourcing And Working With The Mayor

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Aired 12/16/09

Kevin Faulconer represents the 2nd District (downtown, Old Town, Point Loma) on the San Diego City Council. We ask him about budget issues, outsourcing, accomplishments for 2009 and challenges for 2010 and 2011.

Press photo of Kevin Faulconer.
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Above: Press photo of Kevin Faulconer.

MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. The San Diego City Council has faced some tough choices and challenges this year, most of them having to do with the city’s shrinking revenues and a record budget deficit. We’re continuing our series of interviews with the eight members of the city council to hear about their districts and their backgrounds and what ideas they have to get San Diego back on firm financial ground. Today, my guest is District 2 Councilman Kevin Faulconer, who serves as Council President Pro Tem, and Councilman Faulconer, welcome to These Days.

KEVIN FAULCONER (District 2 Representative, San Diego City Council): Good morning. Thank you for having me.

CAVANAUGH: Yeah, thanks for coming in. Now, as I say, you represent San Diego’s 2nd District. Tell us a little bit about your district. What areas are included?

FAULCONER: Well, I’m probably a little biased but I think it’s the best city council district in the City of San Diego. It’s a very diverse district, includes all of downtown San Diego, all of Point Loma, Ocean Beach, Mission Beach, Pacific Beach, a large portion of Mission Bay, Old Town, Mission Hills, Bankers Hill and back on into downtown San Diego. So everything kind of all in and around the water and San Diego Bay. It’s a great district and my pleasure to represent it.

CAVANAUGH: How would you describe your district in terms of its residents’ age, income, diversity, that sort of thing.

FAULCONER: You know, I’ll tell you, it’s a very – From a political standpoint, it’s a very diverse district in terms of Democrats, Republicans, Decline to States and Independents, and I think that’s one of the very unique factor for the 2nd council district. But it’s – You know, we have such great neighborhoods and that each have their own character and so, you know, downtown with all the redevelopment that’s been going on and businesses and people moving to downtown, that has its unique character. Ocean Beach is another example. Great people, lived there, you know, for a long time. Really a great sense of history in this district because, you know, if you look at it – and, of course, Old Town San Diego, which is also there, you know, just a remarkable history, and so the history of San Diego is really embedded, I think, in the – in this particular council district.

CAVANAUGH: Well, speaking of history, this is the end of your third year on the city council. I wonder what you know now that perhaps you wish you had known when you first got there in 2006?

FAULCONER: Good – Oh, probably a lot of things. But, you know, when I started, I knew that my focus would be on financial issues of the City of San Diego, and I think when I was running for office, at the time I probably didn’t realize the depth of the changes that needed to occur in terms of our – the way the City does business and the way money’s spent, the way the bureaucracy works or doesn’t work. And so I’ve spent a lot of time over these last couple of years really on financial issues. I’m working closely with the mayor to try and turn this ship around. You know, if you look back on where the city was, we were frozen out of the capital markets, we had our credit rating suspended. We were under investigation by the Securities and Exchange Commission for a whole host of reasons. And you fast forward to now, I think there’s been some significant progress. Back in the capital markets, obviously our city has a credit rating, and we’re turning the ship around. And I spent a lot of time on that because, Maureen, I believe it’s so important because if your city is not fiscally strong, if you don’t have strong internal controls, you’re not able to spend the money wisely that you have. And so as chairman of the City’s Audit Committee, I’ve focused a lot on that over the last three years, strengthening our oversight, ensuring that our auditor, as an example, is now independent. We have an Independent Audit Committee in terms of public members as well. So there’s been a whole host of things that if you circle back to when I started, I knew we needed to have some changes but when I got in there and got elected I realized the extents of changes that needed to happen.

CAVANAUGH: Fast forward to now and money is still a big problem for San Diego. You voted with the majority of the council for the cuts that close a $197 million deficit in San Diego’s budget for 2010 and a lot of 2011. What was the hardest part of casting that vote in support of those cuts?

FAULCONER: Well, you’re affecting services and you’re affecting people. And that’s not an easy thing to do but certainly from my standpoint, it’s a necessary thing to do. The City of San Diego is really no different than any other business. We have to live within our means. We have to live within the money that we have. To do otherwise leads you down a path of mistakes and what the city used to do. So we did make some significant reductions and cuts earlier this week and last week that will affect services. At the same time, it’s – we needed to do that. And if it means there were some – you know, we – there were some less people that are working for the city, that’s just the way we have to be. And that is no different than any other business out there right now in this economy. Small businesses, large businesses, they have had to make some of these decisions. They have had to look at their personnel and decide what they can do, how they do the job. And so I think that’s somewhat of a change from a City of San Diego. I was proud that my colleagues, the majority of my colleagues, supported the mayor because I think even though it was tough, it was the best thing for both the short term and the long term interests of the city.

CAVANAUGH: Is there something – Are there solutions that you would have preferred to the ones that were enacted with these cuts?

FAULCONER: Well, as I said at the outset, I think we needed to act and we needed to act now. The worst thing we could’ve done is to wait, to wait until June for the normal budget cycle. But I give the mayor a lot of credit. Mayor Sanders came and said, we have the opportunity, we know we’re going to have less revenue, let’s make some of these cuts now because we will save money if we do that and we save over $20 million by acting now. That’s real money. And so the council really worked closely with the mayor in terms of our public outreach, our San Diego Speaks. We had many public forums, listened to the public in terms of what is important to protect in this budget and I think that was largely accomplished where we protect our sworn officers, our men and women of the police department, fire department, you know, kept our libraries open, did not close libraries, focus on our rec centers. There were some other areas, of course, that did take some hits so I think from an overall standpoint, the collaborative nature and the relationship right now between the mayor and the council is very good. Nobody wanted to have to do this but we did do that and so I was glad that the council acted now. We’re not done with it yet and I think that’s a message that, you know, we’re committed to keeping a close eye on it and making sure that in the future we’re living within our means.

CAVANAUGH: I’m speaking with the San Diego 2nd District councilman Kevin Faulconer. And, Councilman Faulconer, I know that you’re a big supporter of the San Diego Speaks project, the series of town hall meetings where people come in and talk about various aspects of what’s wrong or a problem in the city, most recently the budget. And I’m wondering if any of the cuts reflect what people said in those meetings?

FAULCONER: Absolutely. And I think what – To look at the question from another way, the cuts that weren’t proposed are a reflection of what the public desires and wants. And I give a lot of credit to my colleague, council member Tony Young, who’s chair of our Budget Committee. We started this process last year when we were facing some other significant financial issues and we said, you know, let’s just not have meetings at city hall, let’s go out to the community, let’s do it on weekends, let’s do it at night, and we did that in many areas of the city of San Diego and we heard directly from folks who’ve said, here’s what I want, here’s what they suggested, and we got some very good suggestions from them, ideas on how to save money. The mayor attended many of these sessions himself. And so I think, Maureen, as you look at that process, I think it’s been very instrumental in helping align, you know, what we need to do with what the public wants to see happen. And that really hasn’t happened in the city of San Diego in the past.

CAVANAUGH: Do you have an example of perhaps what you heard at these meetings about what not to cut that you decided to follow in the…

FAULCONER: Yeah, closing libraries. That was a suggestion that came out a year and a half ago, about a year ago. And I’m a strong supporter of libraries. Many people are. They’re so important to our neighborhoods and all neighborhoods. And so as we looked at priorities, you know, keeping our libraries open was very important, and that cuts across every demographic, whether you’re a, you know, a young person whose mom or dad likes to take you to the library, whether you’re a senior citizen who uses our libraries, these are very important civic assets. Also, of course, probably no surprise, a focus on keeping our police department and fire department in terms of our sworn officers, so we heard a lot about public safety, and rightfully so. You can never take that for granted. So there was a lot of good discussion back and forth on that and it’s healthy dialogue. You’re going to get people who agree with some things, disagree with others, and that’s the nature of local government. But I think from a collaborative standpoint and from a listening standpoint, it was a very, very good process for the city.

CAVANAUGH: Now just yesterday the Citizens Fiscal Sustainability Task Force, made up of a group of civic leaders and business leaders in the city, released a report with 12 recommendations to help the city avoid bankruptcy. They point to the city workers pension benefits as the – driving the city’s budget problems. Do you agree with that?

FAULCONER: Well, I think if you look at the bill that is due from the bad mistakes of the past, our pension costs are significant. They’re just astronomical. And you look back and why the city got in so much trouble to begin with, you granted increased benefits at the same time you underfunded those benefits. And so those lines, you know, continue to get farther apart rather than closer together. And so that is an unfortunate reality that those of us on the council and the mayor find ourselves in, having to continue to deal with that because that eats up more and more of our general fund which could go to a variety of different things. So we’ve made some changes in terms of new hires, what that pension program will look like, and so that is an important thing that we absolutely have to keep working on. But another one that’s equally important from my standpoint, Maureen, is the issue of retiree healthcare because the city has a tremendous deficit in what it should be – what it needs to pay in terms of unfunded retiree healthcare. It’s going to be very important in my estimation in the coming year that we sit down with our employee groups together and help solve that because that is about a billion dollars—billion with a B—liability. That’s unsustainable and so we have to attack that in the coming year and I’m hopeful that my colleagues and along with the mayor and our employee groups are going to come to the table and get something done on that because we have to lower those costs. We just have to.

CAVANAUGH: On the other side of the ledger, do you support any revenue enhancing ideas such as increased fees and taxes in the City of San Diego?

FAULCONER: No, my focus has been on spending the money that we have wisely, and I think people want us to do that. Any significant increase would require a vote of the public and I think people rightfully are saying to the city, you know, show us that you can manage the money that you have now. And so that’s been my focus. That’s why I’ve spent a lot of my time on the Audit Committee in particular with our auditor focusing on performance audits, so looking at a variety of city departments, saying how are they doing their job and how can you do that better and how can you save taxpayers money because I think that’s what people want us to do. We’re in the midst of a, you know, no surprise, a severe economic recession. Going to ask people to send more money to city hall is not where we are at this point.

CAVANAUGH: In a letter to Councilman Tony Young, you recently proposed private sponsorships might be one way to preserve city services. You point to the lifeguards as trying to get business to sponsor their training. What other private sponsorships would you like to see the city pursue in order to be able to preserve some city services that perhaps the city can’t afford right now?

FAULCONER: Yeah, and I’m glad you mentioned the lifeguards because I think that’s a very good example of, you know, people are out in our departments there who are trying to say how can we get somebody, as an example, to help sponsor our lifeguard trucks? How can we get sponsorships for that? That avoids the city having to pay for that. That, in my opinion, makes perfect sense, and that is the type of thing we should do. Another thing that I’m a strong believer in, Maureen, is managed competition and the council has not been able to implement that yet, and I think that is regrettable. And we had a vote on that a couple of months ago and I’m hopeful that after the first of the year that issue will come back. And managed competition, in essence, is to say what are services out there in the private sector that we can bid and compete to help save money, the citizens of San Diego. You’d let the employee groups bid on it, you let outside private entities bid on it, you have a lot of safeguards and protections, but the whole goal is to save money for the citizens of San Diego and to still provide those services. And I believe that the voters and the citizens want that. That measure passed by a significant margin several years ago. It’s been delayed by a variety of factors but I believe that the thrust behind that has not changed. People want the city to try and go out there and say how can we provide the services for the lowest amount of money. And so I’m – I haven’t given up that fight yet, I know the mayor hasn’t as well, because I believe managed competition, when set up and done correctly, will save the city money and that’s what I believe the majority of people out in the city of San Diego want us to be doing right now.

CAVANAUGH: Just one fast question to follow up on that sponsorship idea, the public-private sponsorship. Has any company come forward to sponsor a lifeguard training or anything of that nature?

FAULCONER: Well, the lifeguard group is in discussions right now on the issue of their vehicles, as an example. They’ve raised some other examples of what other cities do up and down the coast in terms of, you know, small signage on a lifeguard tower or a trash can. And from my standpoint, those are things that we should be looking at to see, oh, does it make sense? Is it tasteful? You know, you don’t want to, you know, over-commercialize your beaches certainly but I think you want to look for ways that – and I think the lifeguards are doing that to say how can we help out with some small sponsorship opportunities to help offset some of the costs. You know, we do have a mechanism in the city for corporate contributions and dollars, and when times are so tough and we are scrounging for every nickel and every penny, I think it behooves us to look at all of those options and see which ones make sense and which ones don’t.

CAVANAUGH: And following up on outsourcing managed competition, there have been some critics who say that the city council is dragging its feet on implementing Proposition C and in providing managed competition. Why would you say that that has not happened yet to any real extent? What are the impediments that’s slowing that process down?

FAULCONER: Well, I think some of my colleagues have a disagreement on how it would be implemented without getting too technical, I suppose, because there’s a lot of factors involved. But we did have the opportunity to vote on it, as I mentioned, a couple of months ago and the council decided not to move forward at that time, which I think was regrettable. I voted to – that I thought we should support what the mayor had proposed and to try to get this process going because even if you have managed competition, it doesn’t say that the private sector will get it or the employee groups but you’re competing for it, and I think that that is what we want to help lower those costs. And so some of my colleagues wanted some additional changes put in there. I believe we shouldn’t delay. I think the public wants us to have this competition. I think the voters voted for it overwhelmingly and so I’m hopeful that after the – in the next year, in the first quarter, that we can have this back before the council again because I think it’s just so important and particularly now what we’re facing from an economic standpoint in the city of San Diego. We should be looking at saving every dime that we can.

CAVANAUGH: And there was just a legal opinion issued by Jan Goldsmith that the city does not have to accept bids from city workers if they want to engage in an outsourcing move. Would you support, however, including city workers, city departments, in that bidding process for managed competition?

FAULCONER: Well, managed competition does include it now as it’s written. And so it says, you know, for example, if you were going to look at a printing operation that you would have employees for the print shop come give – get together a bid and you’d have other folks outside the city put together a bid. You’d have to save at least 10% even to go out to bid to begin with, so I think there was a lot of protections that were in there now that would allow the city to move forward. And then the council’s certainly involved as well, so I think there’s a lot of oversight. That’s why I think the process should move forward because I think it was fairly well structured and I do think that the – that’s what the voters want and I think it’s in the best interest of the city. But as you know, and time to time people have differences of opinion but I would hope that my colleagues on the – the rest of my colleagues on the council will get to a point where there is a proposal that can be implemented because I think it’s in everybody’s best interest.

CAVANAUGH: I’m speaking with Kevin Faulconer. He is the representative of District 2 on the San Diego City Council. And I’d like to move on to the idea of so many construction projects that are now being proposed for downtown San Diego. Of course, that’s one of the areas that you represent and I’m wondering what your stand is on the various proposals from a downtown library all the way to a stadium for the Chargers. If you could run through those, the city hall and the downtown library and the Chargers stadium, etcetera.

FAULCONER: Sure. And let me start – Probably from an overall perspective, I’d say you have to look at each one individually and you have to look at each one, in my opinion anyway, does it make – is it a good business decision? Does it make sense? And that needs to be the driving factor. Not do you want something, would it be nice, but does it make sense from a business standpoint? And so each one certainly has its own different finances and moving parts to it, which is why I think you have to take a pretty hard look at it and ask some pretty tough questions. So, for example, as you look at the library, one of the issues there is how much is it going to cost. And so currently we have a bid out to say, you know, there is – CCDC had made a commitment, the redevelopment agency, on redevelopment, downtown redevelopment dollars for that. The state has put some money in but we still need to know, A, how much is it going to cost to construct? And then secondly, what are going to be the operating costs of a new facility like that as compared to the existing facility that our new main – our existing library downtown. And then the – I think the strongest issue in terms of whether or not a new downtown library becomes reality or not is do we have hard commitments in terms of private sector financing and donations to that. We cannot use any general fund money for that. We just don’t have it, Maureen, and so that will be a large driver on if, in fact, that project becomes a reality. But I will tell you, we have some great folks that are out there in the private sector that are raising some significant dollars. They’ve been working on this for awhile and so I would think in the coming part of the year here, we’ll see if that project makes sense.

CAVANAUGH: So do you support the project or is it sort of wait and see?

FAULCONER: Oh, it’s absolutely, from my standpoint, wait to see if it pencils out financially.

CAVANAUGH: Okay.

FAULCONER: And I think that that’s what people would expect before making a decision.

CAVANAUGH: How about the new idea for public funds being used to build a stadium for the Chargers where the Wonder Bread building is?

FAULCONER: You know, once again, from my standpoint, we cannot afford any general fund dollars for that effort because we need all of the general fund dollars that we have for our police, for our library, our parks, those are our city’s priority. So the city is not in a position, in my standpoint, to utilize any general fund dollars for the Chargers. Now, the Chargers have recently talked about could a stadium utilize any downtown redevelopment dollars, which are not general fund dollars, and I’ve said, well, we’re going to have to see what that proposal is and if it makes sense for downtown and if it makes sense for taxpayers. But we don’t have a proposal at this point so it’s hard to, you know, speculate…

CAVANAUGH: Yes.

FAULCONER: …on what that is. But I will say from an overall perspective I think it’s good that the Chargers and the mayor’s office are talking but you don’t know until what comes out on the other end in terms of it’s going to – if it’s going to be a deal that makes sense for the city of San Diego. And that’s, I believe, the prism that we have to view this from. I like the Chargers. A lot of people like the Chargers. But we have to look at it from a business standpoint, Maureen, and to see what the terms of that deal are before making a decision.

CAVANAUGH: If there was one accomplishment that you could point to this year for either you or you and the city council, what would you point to and say, that’s what I’m the proudest of this year?

FAULCONER: You know, I would say – And we spent a lot of time this morning talking about finances and I think rightfully so. I think the decisions that the council has made this year on some of these financial issues, going back to earlier in the year when we did have a unanimous vote to make some very tough decision in terms of benefits and compensation reduction where we reduced it by 6%. That was important. It was important, I think, for the long term of San Diego, it was important for the council to say we’re committed to doing this. And then I think the vote that we just took last week and this week on making sure that we’re still looking in that direction in terms of being fiscally solvent and taking these challenges as they come rather than waiting. And I think that’s a big difference than what you’re seeing at the city now that didn’t used to happen as contrasted by, you know, Sacramento and all of the delays and everything else like there because they’re not easy decisions to make but from a governance standpoint I’m glad to see that all of my colleagues have gotten together on that.

CAVANAUGH: Councilman Faulconer, we’re out of time.

FAULCONER: That was quick.

CAVANAUGH: It was. I want to thank you very much for coming in and speaking with us today.

FAULCONER: Maureen, thank you, and I’d love to come back anytime.

CAVANAUGH: I’ve been speaking with Kevin Faulconer. He represents District 2 on the San Diego City Council. If you would like to comment on anything you hear on KPBS, go to KPBS.org/TheseDays. Coming up, a list of the top high tech gifts this holiday season. That’s as These Days continues here on KPBS.

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