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Local Committees Urge S.D. To Address Long-Term Financial Challenges

Audio

Aired 12/18/09

The San Diego City Council has approved Mayor Jerry Sanders budget proposal for next year, but now two powerful citizens groups are coming out with their own ideas. Who are these citizens groups, and what are their recommendations for the city? Also, how do the recommendations from at least one of the groups conflict with the mayor's most recent budget proposal?

GLORIA PENNER (Host): I’m Gloria Penner and I’m joined by the editors at the roundtable These Days in San Diego. Today, we’ll look into a critical report on Mayor Sanders and the city council’s budget balancing act and ask whether the citizen’s task force has some better ideas, the successful push by labor unions to get term limits on supervisors on the June ballot, and the spike in Tijuana’s drug related killings and accusations of human rights abuses against police and the Army. The editors with me today are Ricky Young, government editor for the San Diego Union-Tribune. Welcome back, Ricky. It’s good to see you.

RICKY YOUNG (Government Editor, San Diego Union-Tribune): Good morning, Gloria. It’s nice to be here.

PENNER: Good morning. Andrew Donohue, editor of VoiceofSanDiego.org and, Andrew, I’m glad you could join us today.

ANDREW DONOHUE (Editor, VoiceofSanDiego.org): It’s always good to see you, Gloria.

PENNER: Thank you. And Vicente Calderon, editor of TijuanaPress.com. Vicente, thank you for coming.

VICENTE CALDERON (Editor, TijuanaPress.com): Thank you. Good morning.

PENNER: Good morning. Our number today is 1-888-895-5727, 895-KPBS. I’m sure you’re going to want to join this conversation. Well, it really was a peaceful acceptance of the mayor’s proposal to deal with the $179 million budget shortfall. The council caved, the unions didn’t struggle, the public was peaceful and then came the citizen’s task force, critical of the mayor and the city council for closing the hole with too many one-time fixes and for not imposing serious long term discipline on spending. So let’s start, Andrew, with the 11 person task force headed by businessman Vince Mudd, who met with the business owners, CEOs, financiers and assorted executives over a 5 month period every Monday for four hours. The task force report says it was established as part of the civic leadership team. Does that mean by the mayor?

DONOHUE: Well, there’s a little bit of debate about that, that, you know, we talked about this. The mayor has this legacy team that he’s put together to sort of take a look at where he is right now and what he can do to build his legacy. Now, as part of that, we’ve all been made to believe that there was this group that was going to look at city finances. And then a couple of weeks ago our reporter, government reporter, Liam Dillon, broke the story with a draft report by this task force and basically the report said do a bunch of really hard things, stop doing all these easy things, and if you don’t you’re going to have to look at bankruptcy and, as a matter of fact, you should probably start preparing the groundwork no matter what. So…

PENNER: Ooh, they said the ‘B’ word.

DONOHUE: They did say the ‘B’ word. So as soon as that report got public, all of a sudden it wasn’t so much the mayor’s committee, he very much distanced himself from the committee and sort of acted like they were just a group of people that walked up to him and plunked a report on his desk.

PENNER: Well, but that, you’re saying, isn’t exactly what happened.

DONOHUE: I’m…

PENNER: They weren’t a group of people who plunked a report on his desk.

DONOHUE: No. I mean, this is a group of very well respected business people who spent a whole lot of time putting together this report. Now, they obviously took it in their own direction and I think, as a credit to them, they put a very unvarnished, you know, look at this thing. I mean, they really laid bare what we’ve known for quite a long time but I think just having these names behind it and having it be this group of advisors to the mayor really adds a whole lot of gravitas to it.

PENNER: Well, you know, Andrew’s sort of teasing us a little bit, isn’t he, Ricky? I mean, he’s telling us how severe the report was but he didn’t tell us exactly what was in the report. Were you following the report? Did you see what was in it?

YOUNG: I did see what was in it. There were a group of business leaders, as Andrew said. They included shipbuilders, restaurateurs, it was chaired by an interior decorator, and they made a number of suggestions basically calling for political will. They called for unspecified cuts and unspecified people to be laid off, you know, via an initiative, 1500 city employees out of 10,000 if the mayor and city council couldn’t show some political will and make some cuts and/or raise some revenue to fix the ongoing structural issue in the city’s budget. Now this was easy for them to do because they’re business people and they don’t face the voters, you know, every four years or what have you. And I think that the mayor and the city council, in what they did recently, which was criticized for using a number of one-time sources and such, it did save – I mean, it did avoid tax and fee increases and cuts that would’ve been very unpopular and probably the reason they did that, as opposed to what the business owners are suggesting, is because they report to the voters.

PENNER: All right, I just wanted to say one thing. You said it was headed up by an interior decorator. Vince Mudd, I think, owns San Diego Office Interiors. I don’t know if he’s really an interior decorator.

YOUNG: Well, interior…

PENNER: I mean, he does supply…

YOUNG: Yeah.

PENNER: …office furniture.

YOUNG: Yes, that’s…

PENNER: Yes.

YOUNG: …I’m…

PENNER: Yes, that’s what he does. We know him here at KPBS. For full disclosure, he sits on our advisory board so…

YOUNG: He does a number of civic functions…

PENNER: He does.

YOUNG: …and duties and serves well.

PENNER: He does. All right. All right, Vicente, I don’t know whether you’ve been following this or not but here you have the mayor and the council agreeing on a budget and then you have this task force coming along and obviously they’d been working for months and months and months but the point is that they waited until this week, after the mayor and the council agreed on a budget to release their recommendations. Doesn’t that make them a little bit late to the party?

CALDERON: Well, it seems to me from a distance that it does but, well, this is a group that is not trying to be – look at as the tax commission. But at the end, apparently there’s going to be – that’s what their job will ended up doing. They are talking now about storm fees and trash collection fees…

PENNER: Yes.

CALDERON: …as a possibility? I mean, I don’t know, it’s funny. I remember the previous mayor of Tijuana was telling us that he was planning – he was promising to make Tijuana more like San Diego. I’m sorry, I think Tijuana is getting, in some ways, more – San Diego is getting more as Tijuana for the problems, the budgeted problems that you guys are facing now. And it’s amazing to me that since – when was the last time you were in a so deep crisis was when Mayor…

DONOHUE: Yeah, this has been going on since 2002, basically.

CALDERON: Yeah, and it’s amazing. We look at the U.S. politicians to – for some example and this is not helping.

PENNER: Okay. Well, let me ask our listeners about that. I don’t know whether you’ve been following this or not but I would think that by this time you’ve heard about the fiscal task force that has come through with recommendations, pretty tough recommendations, basically saying, look, if you can’t pay for it, you don’t have it. The city provides core services and nothing more unless you can pay for it, and the only way you can pay for it, of course, is by bringing in more revenues. What do you think about that idea? Our number is 1-888-895-5727. Ricky.

YOUNG: Another interesting aspect of the report in terms of core services is they sort of list the city should limit itself only to core services and then they list almost everything the city does, core services or state mandated services, and it didn’t really suggest any services that would be shed. It just listed core services which seemed to cover about every city department.

DONOHUE: Well, but I think…

PENNER: Did it really? I mean, we’re – I was trying to go through that, too. Did they say that the city really doesn’t have to be involved in things like the airport?

DONOHUE: I – I…

PENNER: Which I don’t think the city is involved in, that’s important.

DONOHUE: Yeah, I mean, the city really isn’t. That’s something that…

YOUNG: Montgomery Field and Brown – and Brown…

PENNER: That’s what it is.

YOUNG: …Brown Field are the ones they suggested be offloaded to the Airport Authority.

DONOHUE: I think the key thing here is, is when you read this report, it says stop the gimmicks, stop the one-time solutions. And, it says, you have to cut your expenses and you have to start bringing more money in. These are the things that various reports have been saying for the last seven or eight years now and I think, really, if you take a step back and look at it, what it’s really saying is that the mayor and the current council haven’t done a lot of the things that they promised to do. I mean, basically these are the things that the mayor was trumpeting when he was running for office that he was going to do to fix the city’s long term financial problems, and I think what they’re saying and what the important part of the whole deal is, is that these are the mayor’s supporters. These are legitimate, mainstream people that everybody has a lot of respect for, are now basically saying like, listen, if you don’t do this long list of 11 things, 11 very difficult things, you’ve got to really start thinking about bankruptcy. And I think we’re starting to get to the point where people are actually having a legitimate conversation about this, that if we continue to let our services slide and our city deteriorate that we’re going to get to a really tough spot.

PENNER: Our number is 1-888-895-5727. What do you think about bankruptcy for the City of San Diego? That certainly is one way of going that people talked about a few years ago. Pat Shea, I think, was talking about it, oh, just before the mayor was elected and now the word is coming up again. I’d like to hear from you, 1-888-895-5727. Let’s hear from Steve in Tierrasanta. Hi, Steve, you’re on with the editors.

STEVE (Caller, Tierrasanta): Hey, Gloria, thank you very much.

PENNER: Sure.

STEVE: Hey, just a comment to your sort of question of – or comment about the report perhaps being a little late to the, you know, to the table, if you will. I just, you know, maybe the mayor, you know, in the final steps to distance himself, he pushed his budget quick and got it, you know, in to preempt that. So just a question, I mean, is that possible? Is that something, you know, that may have happened? So I’ll take it off the air and just curious.

PENNER: Well, that’s interesting. A thought is, you know, the task force was working on this for five months so maybe the mayor got wind of it and decided to, you know, get that budget through and get the council on board. What do you think about that, Andrew?

DONOHUE: Well, I don’t – I think the point isn’t – it isn’t about whether it was for this year’s budget or last year’s budget, it’s about actually changing the way that people are doing things. And it’s about, actually, starting to put together some sort of long term plan, whether it was last year’s budget, the year’s before’s budget, every budget going back that I’ve been around since I’ve been around city hall has been patching this thing over, has been cutting library hours, has been doing some sort of small adjustment or robbing reserves just to get to the next day. And so the point it, is whether it’s this year, next year or the year after that, that the city’s got to – the city actually has to finally put in a long term plan to fix it.

PENNER: But there is this poison pill. I think that’s what they call it, poison pill. If the council can’t make structural cuts – First of all, what’s a structural cut, Ricky?

YOUNG: Well, they’re talking about a structural deficit which means the city has an ongoing problem, that it has more expenses than it has revenue. And that’s why each time the budget cycle goes through, you see them, you know, finding places to plug, as Andrew notes, you know, and putting band aids on this issue. And what people have been calling for for some time—and I’ve seen a number of these reports in the time I’ve been in San Diego—is to fix that problem on an ongoing basis. Now the problem is to fix that problem on an ongoing basis, you either need to raise taxes and fees or cut services, neither of which people really want. So I think there’s a sort of community of wonks that says the responsible thing to do is to fix the structural deficit, and then when it comes to the people, they really don’t want that.

DONOHUE: But the people, by their own politicians, haven’t been honestly told what they have to do. I think if you had a true leader in office, he would stand up and actually tell people what they’re going to need to do and people would actually get behind that. There’s no leadership right now. Nobody’s – I mean, we have this sort of vague idea of what people say in San Diego they want or don’t want, but there hasn’t been a vote on anything. There hasn’t been any proposal for them to shoot down. I mean, there’s just sort of this general sense, for some reason, that San Diegans won’t pay for it or that San Diegans won’t do this or that but the fact is, San Diegans aren’t even being asked to do anything.

PENNER: Well, what do you – Vicente, do you think you can be a strong leader and be Mr. Nice Guy at the same time? Because our mayor is known as Mr. Nice Guy.

CALDERON: Well, that’s – If you put your political capital to risks, yeah, you can. But that’s what I don’t see that they are doing it. Because they’re, as you were saying, they’re afraid that – He has to respond in the next election to the consequence of these actions.

DONOHUE: Well, that’s the funny thing, though. He doesn’t have to. I mean, he’s termed out. He has no more elections unless he’s…

CALDERON: Oh, really?

DONOHUE: …planning on running for Senate or attorney general or governor of California. I mean, he has no more elections left. So the idea that he’s got to preserve himself for some sort of vote in the future, I think is a little falatious.

PENNER: That – that’s really because…

YOUNG: Well, he’s also got to get a budget passed and it’s got to get through the city council.

PENNER: That’s true. So, you know, you have to keep up your friendships and your liaisons. We’re going to come back in just a moment and finish this discussion, and we’re going to take your calls because a lot of people want to talk to us about this, the city council, the budget, the mayor, city government in general. Our number is 1-888-895-5727. This is the Editors Roundtable. I’m Gloria Penner.

PENNER: This is the Editors Roundtable. I’m Gloria Penner. And in case you just joined us, we’ve been talking about the city budget. The mayor and the city council agreed to figure out a budget that absorbed or closed a gap of $179 million, which is really kind of a record shortfall but they did it and there was no screaming, no yelling, no fussing, no crying, they just did it. And so it sounds good but then along came the Fiscal Task Force and we’re not sure if they were self-appointed or not at this point, and they said, nah, you didn’t do it well. Those were one-time fixes; we need some long term help on figuring out that we don’t spend more than we actually take in. And that’s what we’re talking about now and we have Blake in Bay Park with us. Blake, let me just reintroduce my editors first so that people don’t forget who they are. Andrew Donohue, Voice of San Diego, from TijuanaPress.com, Vicente Calderon, and Ricky Young from San Diego Union-Tribune. And now Blake in Bay Park, please join us.

BLAKE (Caller, Bay Park): Yes, good morning. My belief is the fixes are strictly trickery and won’t take us any distance other than closer to bankruptcy. Matter of fact, bankruptcy was one of the possible solutions proposed by this board. Now, I’ve spent some time looking at this over a period of about two years and there was a document that the City put out about 2008 and it’s a two – it’s a five-year plan. And in it, it reflected roughly $200 million per year deficit. And so, you know, what’s that funded by? And there – It’s obviously going to be smoke and mirrors at this stage.

PENNER: Okay.

BLAKE: That’s all I have to say.

PENNER: Thank – Well, Blake, you really said it. I suppose you put it in that nutshell, which is that we consistently seem to be having a budget shortfall and that’s what the task force is trying to work through with the mayor and the council. And, Ricky, at this point, we really didn’t say what the poison pill is if the council and the mayor can’t come up with those structural changes.

YOUNG: Well, this fits into what Blake was asking. He looks at this five-year plan that shows deficits every year, you know, in the high ones and low two hundred million dollars. And what the task force is suggesting is a number of things the council should do and the mayor should do, basically saying exercise political will and close these gaps. And it suggests if they cannot do that, that the citizens should pass an initiative that forces layoffs of 1500 city employees, which is about 15% of the workforce because they have about 10,000 employees.

DONOHUE: Yeah, I mean, there was a reason there was no screaming and political matches and everything this year is because there really wasn’t all that much sacrifice that was asked of anybody. I mean, if you don’t make anybody sacrifice, nobody’s going to get mad. I mean, this was, you know, like we talked about before, a bunch of short term fixes and I think what these gentlemen, in the end, are advocating is that everybody sacrifice in some way.

PENNER: I think there was a woman on the task force, too.

DONOHUE: I’m sorry. With this task…

PENNER: Yes, Barbara Warden is on the task force.

DONOHUE: Yeah, and so was Susan Snow. So I…

PENNER: Right.

DONOHUE: I apologize. These people, these humans.

PENNER: Okay, so, Vicente, we were talking about the fact that the mayor is not up for reelection in 2010 or 2012. He’s termed out. However, there are some city council members who are up for reelection if they want to go forward. Actually four of the seats are up for grabs. Donna Frye is termed out, but there are several others who are up. Is it just too dangerous to tackle the tough stuff when you know you’re going to have to face the voters in just a few months?

CALDERON: Well, the budgeting problems, it’s always a inherent or adjacent problem to political works, if I can just say that way. And the thing is I really – I’m surprised what you were saying, Andrew, of the fact that nobody’s really complaining on the part of the citizens amazes me because how can these guys be living out of the public funds, as politicians obviously do, and not being really accountable for this problem that has been just been put out for later and later. Before, last time we talked, last time we talked here, we were talking about the same issue and we see not much progress.

PENNER: But, you know, something did happen which I found interesting. Andrew, I want to ask you about this. The same day that the task force released its report, another panel, a new city commission called the Citizens Review and Economic Competitive Commission – Competitiveness Commission, had its first meeting at city hall. So now we have the Fiscal Task Force, and we have the Citizens Review etcetera Commission. Are we seeing a war of committees?

DONOHUE: Well, we’ve already seen a Blue Ribbon Committee and a Pension Task Force Reform something or other. Yeah, I mean, there’s only so many of these things we can keep doing. It’s just like the wildfires. Every time we have a wildfire, somebody puts together a really impressive, you know, thick report on everything we have to do to fix our problems and then it just sits on a shelf. So, I mean, I think it’s important that people are starting to take a look at these sort of things. There’s been study after study, year after year, that shows the City of San Diego just takes in a lot less money than comparable cities all across California. So it’s important for them to actually to be studying these but like we talked about before, this has got to be looked at holistically so that everybody’s sacrificing. I don’t think residents are going to put up with any sort tax increases unless they’re shown that there are big cuts being made and that there are other people that are sacrificing as well.

PENNER: All right, let’s hear from Ron in Mission Hills now. Hi, Ron, you’re on with the editors.

RON (Caller, Mission Hills): I just heard that comment about the Blue Ribbon Commission. That was Mayor Murphy’s great idea back in 2000, I guess, when he took office in early 2000 or 2001, I guess it was. And he said he needed a Blue Ribbon Commission report because there’s important projects on the horizon and they had to make some decisions and make recommendations. I think that’s almost exactly the words. Well, the important project, of course, was the baseball park. And, of course, he didn’t say that. But the Blue Ribbon Commission report was supposed to come out in September of 2001 but after the bonds were issued in February of 2002, that’s when the Blue Ribbon Commission report came out. And, of course, this Blue Ribbon Commission, which included some pension specialists didn’t quite notice the pension disaster that was coming up to where we were about a billion dollars in the hole. So you just kind of wonder how good commissions are.

PENNER: Oh, and I guess that’s – you know, that’s really the question. But it sure keeps people busy, doesn’t it?

DONOHUE: Actually, they – that commission did recognize the pension problem. Now there was staff members that worked very hard within the City to massage the language so that it was a lot less harsh than it originally was going to be but the fundamental lesson from that report is that it was ignored by the mayor that commissioned it. So I think the next thing we watch then moving into 2010, is this one ignored by the mayor who commissioned it.

PENNER: Well, that’s interesting because so often reports are simply put on the shelf. I’m thinking back to 2000 when the Board of Supervisors put a report on the shelf that came up with a redistricting plan that they didn’t like, so it went on the shelf. Ricky, you get the last word on this and then we move on.

YOUNG: All right, I just want to – You had asked earlier if we had the current commissions. There’s sort of a battle of the commissions. And the one, you know, heavy on the business interests, of course, seems to be emphasizing this poison pill, the massive layoffs, and the other one that’s chaired by a guy who was a communication – did some communications work for the Municipal Employees Association, seems to be pushing more toward the tax increase sort of thing. He indicated in terms of cuts that all the meat is off the bird, to use sort of a holiday feast analogy. And so when the meat is all off the bird, you gotta go get something else to eat, I guess.

PENNER: Or get into the bone.

YOUNG: Yes.

PENNER: Yeah, that’s probably it.

YOUNG: Well, he wasn’t saying get – he was indicating that it had been picked clean, was kind of his analogy, I think, and I think you’re going to see that commission looking at some tax increases.

PENNER: Okay, well, thank you very much. You’re talking about the commission now, not the fiscal task force.

YOUNG: That’s correct.

PENNER: Just wanted to be sure. Okay, just wanted to be sure.

YOUNG: The one – the one with that other name, the one…

PENNER: Gentlemen, thank you very much for your comments, and let’s move on.

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