GLORIA PENNER (Host): Wednesday night, Mayor Jerry Sanders delivered his fifth State of the City Address. Despite San Diego’s ongoing gloomy financial climate, the mayor found a bright spot.
JERRY SANDERS (San Diego Mayor): As the new year begins, cities across America must cope with recession-driven declines in revenue. Most will act at the last minute. Our City Council was proactive, adopting its new budget six months early to lessen the impact of those cuts by spreading them over a longer period. And in doing so, it protected $24 million in public services.
PENNER: Joining me now to dig into the mayor’s remarks are David Rolland, editor of San Diego CityBeat, and Tom York, contributing editor for the San Diego Business Journal. Let’s start with the mayor’s thought. Tom, how were the cuts less painful because they were spread over 18 months instead of 12 months?
TOM YORK (San Diego Business Journal): How were they less painful? Well if you're spreading out cuts that’s the best way to do it. You don’t want to take all the cuts at once. So they were able to think about exactly what they wanted to cut and where they would cut and when they would cut. So it gave some thinking into the process.
PENNER: But there were still cuts, David, I mean how did that spread protect the $24 million in public services that the mayor was talking about?
DAVID ROLLAND (San Diego CityBeat): Well, I think the earlier you cut the greater the benefit down the road.
PENNER: You have to explain that to me further.
ROLLAND: I’m not sure I can. Maybe Tom can do better at that.
PENNER: Alright, so does it appear that the mayor was accurate here or was he stretching to try to find some good financial news? What's your general assessment?
ROLLAND: Yes. He was happy with the city council that basically they gave him precisely what he had asked for, which is different than what had happened previously. It’s almost as if they agreed to it ahead of time, you know, behind closed doors. But it was also easy for the city council to do these cuts because they included one-time monies from sources that don’t include a real effort to fix the structural deficit in San Diego.
PENNER: Let’s talk a little bit about that structural deficit. How frank do you think, Tom, the mayor was about the city’s problems? And what he's going to do to fix the structural deficit, which basically means that we’re spending more money than we’re taking in?
YORK: Well I think that the mayor has been dealing with this structural problem for the entire time that he’s been in office. What he's dealing with is the chicanery of the previous decades of setting up an unfunded liability with the pensions system. And then when the mayor came to power after the scandal, there was hundreds of millions of dollars that had to be accounted for that had to be pumped into the pension systems. I think he's done a really good job with this and I think he continues to do a good job with this in the sense that he's been able to sidestep really draconian cuts. You know, in the most recent budget he mentioned that just 200 employees have lost their jobs. I mean, when you think about where the city was 3, 4, 5 years ago, that’s incredible. He's been able to actually pull off – I wouldn’t use the word miracle, but a big surprise.
PENNER: But I think it’s interesting he said that San Diego should be used as a model to the governor and the legislators on discipline and undertaking serious reforms. Do you have as glowing a feeling about the mayor’s behaviors in office as Tom does?
ROLLAND: I'm sort of right in the middle between where Tom seems to be and the critics who complain that Sanders and the City Council are really, really not addressing the structural deficit. It is difficult to address a structural deficit when you are in the midst of a recession. I think it’s probably an easier thing to do when you're sort of at a base line that’s more typical of where you would be in kind of normal times.
PENNER: Ok, well most of the speech was delivered quietly, but the mayor’s enthusiasm was evident when he talked about the future of the Chargers.
JERRY SANDERS (San Diego Mayor): So let’s talk about the Chargers. They want a new football stadium. They’ve agreed to partner with us to explore sites. And it’s no secret they could leave San Diego for another city, virtually any time they choose. These two issues – whether they get a new stadium and whether they stay in San Diego – have hung over this City for far too long. They need to be resolved, one way or another. This is an issue where many are inclined to draw lines in the sand, rather than seek common ground. I trust people know where I stand. I believe the Chargers are San Diego’s team, and that they belong right here in San Diego County. (Applause) The current focus is on using a stadium as a catalyst to extend redevelopment east of downtown; in the same way that Petco Park brought $1.7 billion in construction and economic activity to East Village. If there is a deal to be made in which both the taxpayers and the Chargers come out a winner, this is the City that can find it.
PENNER: Ok. So, David, he's committed to pursuing an analysis of a downtown stadium? And not too long ago he said that San Diego didn’t have the money or the time to keep the Chargers. What changed?
ROLLAND: Well when you're talking about the money that would be spent, you're talking about redevelopment money. CCDC, the redevelopment arm of the San Diego City Government has money for use to fix blight in the downtown area. And they have already chosen to spend I think what is $160,000 to study this. I have a little bit of a problem with that because you're really just spending public money. And redevelopment money is still public money.
PENNER: It is.
ROLLAND: You're spending it on what is essentially a private business. And there wasn’t much discussion about whether that was an appropriate expenditure of money. And they're talking about now spending even more to study the feasibility of putting a stadium downtown.
PENNER: And this is before it even goes to the voters to see if the voters want to spend public money. They're just spending it. Do you think that stadium is now going to get priority over those other downtown development projects, like library, a City Hall, an expanded convention center?
YORK: I do. I do, I think that the stadium downtown is on a fast track. It’s all sort of being done behind closed doors. I don't know if that’s the right thing to do or not. But I think now the mayor feels like he has the unfunded liability with the pension under control, city finances somewhat under control, it’s time to turn our attention to the Chargers. The Chargers, whether you agree or not, they're an economic generating phenomena. And so you’d like to have them downtown where you could have the baseball in the summer, Chargers in the fall and winter, and you have a year-round economic machine going on.
PENNER: Short comment?
ROLLAND: Yeah, I do need to take issue with how Tom characterizes that the city finances are under control. They're not. The pension unfunded liability is not under control. It continues to grow and it will continue to eat up a larger portion of the general fund.
PENNER: Thank you very much David Rolland, Tom York.
