Roundtable: City Budget Agreement Offers Short-Term Fixes
Editor's note: During our broadcast, we incorrectly identified Kelly Davis as "assistant editor for San Diego CityBeat." Kelly's correct title is "associate editor for San Diego CityBeat." We apologize for the error.
Friday, June 10, 2011
The City of San Diego is at the cutting edge of budget deficits because its pension problems have forced it to deal with deficits since well before the economic downturn began.
The City of San Diego is at the cutting edge of budget deficits. Its pension problems have forced it to deal with deficits since way before the economic downturn began.
But now, while other cities like Escondido,Oceanside and Chula Vista are reducing library hours, San Diego has managed to keep them and even restore some fire service brownouts.
Is mayor Sanders leaving the structural budget problems for his successor to deal with? And who might that successor be?
Guests: Craig Gustafson, reporter, San Diego Union Tribune
Kelly Davis, associate editor, San Diego CityBeat
David Garrick, reporter, North County Times
ST. JOHN: San Diego City finds ways to avoid cuts next year. But other cities in the North County don't. Why which city you live in makes a difference to your quality of life. And state assemblyman Juan Vargas votes no on a bill that could have helped distressed homeowners in his district avoid foreclosure. This is the KPBS round table. It is in other words, June tenth. I'm Alison St. John, and joining us at the round table today, we have Craig Gustafson, who is the city hall reporter for the San Diego Union Tribune. Craig, thank you for coming in.
GUSTAFSON: Thanks for having me.
ST. JOHN: It's the first time you've actually come into studio, and we're happy to have you here.
GUSTAFSON: Thank you.
ST. JOHN: Then we have Dave Garrick from the North County times. David, we really appreciate you making that drive.
GARRICK: Thanks for having me having me.
ST. JOHN: And Kelly Davis who is assistant editor of San Diego CityBeat. Great to have you here too, Kelly.
DAVIS: Thank you, Alison.
ST. JOHN: So we would also like to hear from you if you would like to join us at the Roundtable, the number is 888-895-5727. But if you have a though, be sure and dial that number fast because we move along pretty fast here. So let's start with the City of San Diego which is at the cutting edge of budget deficits. Its pension problems forced it to deal with deficits since way before this economic downturn even began. But now while other cities like Escondido, Oceanside, and Chula Vista are doing thing like cutting library hours, San Diego has managed to keep them open and to even restore some fire service brownouts. The question is is mayor Jerry Sanders letting the structural budget deficit slide for his successor to deal with, and us who might that successor be? We'll touch on that question also. So do you think the budget is a short term fix? Are they putting off the really difficult decisions? We'd like to hear from you. 1-888-895-5727 is the number to call. So Craig, you've been covering this really closely. What was the budget deficit hole they had to close?
GUSTAFSON: Well, originally last fall during the Prop D campaign which was the half cent sales tax the city leaders tried to put on the ballot, and it eventually failed, it was about 72 million dollar deficit. And that changed shortly thereafter, after the sales tax failed, and it was about 56 million that they had to close early this year. And because of revenue increases, hotel and sales tax, and lower pension costs, they were able to close that deficit without really devastating libraries and parks, and actually increasing the amount in the fire department to end the brownouts of fire engines that have been going on.
CAVANAUGH: So we all thought that the library and rec center hours were gonna be on the chopping block. What does this deal actually include? How did they manage to avoid that in.
GUSTAFSON: Well, like I said, they had revenue increases, they lowered pension costs, and they move a lot of money around. They tapped reserves, they delayed a fire alert system. And a bunch of other small changes in order to restore the cuts that mayor Jerry Sanders had proposed a couple months ago. So as of right now, the libraries remain unchanged, there'll be a few minor cuts in the parks department, although, if you ask the parks director, she probably wouldn't think they were minor, things like beach maintenance and you know --
ST. JOHN: Were you surprised that they managed to find the money from -- to fill that hole this year again? Yet again?
GUSTAFSON: Well, no, not really. Like Jay Goldstone, the city's chief operating officer, every time he explains the budget situation to me, I always ask him, where is he gonna find the 10 million dollars in the couch cushions this time. Because they always seem to find this money, and sometimes it's in that city fund, and the money's just sitting there left over, and they'll take that at the end of the year and reduce the deficit.
ST. JOHN: So one of the big things that the mayor did say he would do is to reduce the structural budget deficit to actually get rid of that all together before he left office. He's got a year left. Do you get a feeling there were a lot of one time fixes again this year and that this deficit is still remaining to be solved.
GUSTAFSON: They absolutely are one time fixes. And mayor Jerry Sanders was very clear, there's about 35 million in his proposal of one time fixes, this is not putting money into reserves and tapping those funds where money is left over at the end of the year. And basically they did that because they're hoping over the next year that pension costs will again decrease, revenue will increase, and that 41 million dollars, which they've kicked down the road will hopefully not -- they won't have to do much to close that next year.
ST. JOHN: Now, one council member did vote against the plan. It was a seven to one vote, wasn't it? The City Council when they voted on the budget.
GUSTAFSON: Yeah, Carl DeMaio opposed it, 'cause he believes that the city should have closed that additional 41 million now rather than waiting till next year.
CAVANAUGH: So he's one of the candidates who has thrown his hat into the ring to be the mayor next year, right? So is his opposition to this budget sick cant in that respect?
GUSTAFSON: Are well, I think his opposition, it's a principled stance that he's made continual he that he does not want to increase taxes to solve the city -- and fees to solve the city's problems and he wants to make the cuts now to end the problem, deal with it now rather than push it down the road. But then you also have to, you know, the political question is, is he just doing that so he can run on that and oppose the status quo and what's going on so he can use that as a platform to run for mayor?
ST. JOHN: And would he have gone for cutting the budgets? The libraries, for example? That would have been a little bit of an unpopular move. How is he proposing to balance the budget.
GUSTAFSON: He was with every other council member in saying they dibble those cuts were necessary to fix the deficit. And in the end, they weren't.
ST. JOHN: Kelly?
DAVIS: I was just gonna point out that he's been very clear that the plan to fix the structural deficit is contained within something he put together called the roadmap to recovery. And so he's been shopping that around the city and trying to build up a coalition of supporters. And I'm pretty sure that that will be -- kind of help him layout his platform as he campaigns for mayor.
ST. JOHN: This is Carl DeMaio. So the question was, how do you restore the library cuts? And there were different solutions that he had in mind, right? Can you shed some light on that?
DAVIS: Outsourcing our competing out more city services or city departments. And let's see. It was various -- combining departments, various efficiencies that he's identified how many of those are workable, I'm not sure. Craig might know better.
GUSTAFSON: A lot of what he had in there dealt with employee compensation, reducing the pensionable pay for city workers which would then reduce the pension costs, you know, dealing with retiree healthcare which the city has just done. He pitched that a whole back. It was a long list of cost cutting measures he had in his man.
GARRICK: Did he propose to change the 401K for --
GUSTAFSON: Yeah, he's with mayor Jerry Sanders and Kevin Faulkner in supporting this ballot measure for next June, June 2012, they're gathering signatures right now to try to get it on the ballot. It would switch most city workers to a 401K, new hires. So it wouldn't affect any of the current employees. So all new hires would receive a 401K instead of a guaranteed pension.
CAVANAUGH: Wasn't it because of Carl DeMaio that in fact the number of people who would lose their pensions was increased under the mayor a proposal?
GUSTAFSON: Yeah, the mayor, and the councilman Kevin Faulkner, they had originally proposed not having police officers and firefighters as part of the 401K plan, and folks at the Lincoln Club and tax payers' association were able to work out a deal where firefighters would receive a 401K.
ST. JOHN: Okay. Well, it's so interesting, isn't it? Because that is one of the questions that's coming up on the ballot next year is that pension reform, and we would like to know what you think about it. So you can joins at 1-888-895-5727. We have Andrew from OB who's calling us. Thanks for joining the roundtable. Go ahead, an due.
NEW SPEAKER: Hey, thanks again for your show. I just wanted to throw my two cents in about -- it's interesting on what the -- spending. In OB we've I guess there's been this -- we call it the OB gateway, and they just finally finished it, and it looks cute, it's a palm tree and a couple cute little lights and a sink where you can wash your feet or something. But we still don't have public restrooms at the beach. It's pretty sad when you pull into the parking lot at dog beach or avalanche and you see ten nasty port-o-potties that stink up the beach, when I know it costs a lot cheap upper just to billed one.
ST. JOHN: Andrew, thank you for that point. I think that's an example, that's a really good example of some of the things that people assume that your city would be able to provide for you. Pretty basic, it would seem, to provide restrooms at the beach. But Craig, is that a realistic hope?
GUSTAFSON: Well, I guess I would say that as we were talking before about the parks' budget and some of the cuts that did stay in there were for beach maintenance. So I guess I wouldn't bank on that improving, if you see that as a problem at your beach. So at least not in the coming year.
ST. JOHN: You're not holding up much hope when you look at the state of the city budget.
GUSTAFSON: Well, the parks' budget is gonna be stretched thin. And that's just a fact of life.
ST. JOHN: Kelly?
DAVIS: Well, I'm not sure what funded the OB gateway. I'm guessing that it might have been business improvement district. I know there's Ocean Beach main street there, and we're -- the CityBeat offices are in Northpark where we have Northpark main street where you have businesses paying to put up trees and repair sidewalks and do the sorts of things that the city can't pay for.
ST. JOHN: That's a really good point. Do you think that's probably going to be something we see more of? Basically around the county? Is private investment taking over where we used to expect the city to cover things?
GUSTAFSON: Well, you're already seeing it. Of the City of San Diego -- it's clearly going down that path. The fire -- the beach fire pits were saved by private donors, and the city is definitely going down that path and trying to build up marketing partnerships to cover a lot of the expenses that they can no longer afford.
ST. JOHN: Which is the consequence of voters saying we don't want to see our taxes raised so therefore we're throwing the ball really into the private sector ballpark. The question is will the private sector respond in a way that the voters are satisfied. David?
GARRICK: I think it's a tough time for that, obviously with the economy as bad as it is, philanthropy is on the wane. Relative, there's fewer people with fewer dollars. Some interesting things happened in my city of Escondido this Spring. You had a donor offer one thousand dollars to keep recreation programs and the library open, but he had a little condition on it, that he wanted the programs to remain roughly as they are. He didn't want to write a blank check and allow the city to do whatever they want. And a separate group of donors offered half the cost of keeping a library branch open, and also strings attached, the city had to agree to funding in subsequent years, and the city balked at both proposals, and both donations weren't accepted as a result of the donors wanting certain conditions upon and the city said, we're gonna set the policy, we're not gonna take your money if we have to agree with what you want. So interesting dynamic, where it's not as simple as someone just dropping off a check sometimes.
CAVANAUGH: And then you gotta wonder, should the voters be involved with saying we want you to accept this private money? But on the other hand, if the private sector is gonna be setting conditions which are basically unrealistic for the public sector to live up to, how do you resolve that dilemma? So when you look at the field of people who are running for the mayor's race next year, and it's shaping up to be, wouldn't you say, Craig, one of the most interesting races that we've seen at the city for a well very long time.
GUSTAFSON: Absolutely, you got a lot of heavy weights in the race. State assemblyman Nathan Fletcher, City Council machine Carl DeMaio, Bonnie Dumanis, and Bob Filner have all declared they're running, and in it to win it. And it's gonna be a tough slog over the next year as they duke it out and try to get one to be one of the top two in that June primary and make the rub off to November.
ST. JOHN: And where do those people stand on the pension issues since that's also gonna be on the ballot and is presumably one of the bigger keys to resolving the budget?
GUSTAFSON: Yeah, the 401K ballot measure, the only one that supports it is DeMaio at this point. Fletcher has said he didn't feel comfortable with firefighters being out of that plan or having them take 401Ks, and Dumanis has said the same thing. Filner said he's gonna have a plan of his own in about a month, that will not place all the sacrifice on city employees. What that means I guess we'll wait and see. But they're all clearly gonna have to stake out some territory on pensions because it's a huge issue, it's a huge part of the city's budget, and it needs to be dealt with in a way that reduces the cost of the city and still provides some security for city workers.
ST. JOHN: It's so interesting that Bonnie Dumanis in fact has not endorsed the mayor's pension initiative, and why the mayor has endorsed Bonnie Dumanis. What accounts to that?
GUSTAFSON: He said that you can't agree on every single issue, and he agrees with her on potentially ninety-nine percent of things except this issue on the firefighters and whether they should receive 401Ks or not. And he has a long relationship with her. He's been friends with her for 20 years, and political allies for a while. So I mean, it didn't surprise me at all. I don't know who else he would have endorsed.
ST. JOHN: And Faulkner also has endorsed her. It's interesting, when you read their endorsements, they're almost word for word the same except Faulkner's only known her ten years and the mayor has known her twenty.
ST. JOHN: David from the North County's perspective, do you think people care about who is gonna be the mayor of San Diego? Is there gonna be some interest up there also?
GARRICK: Certainly parts of North County like Rancho Bernardo and Rancho Peñasquitos are in the City of San Diego. But I think the other people, they follow it somewhat closely. It's weird. In North County it's disjointed with seven different cities, so you don't have that one mayor's office. And San Diego now with a strong mayor, it's even more important. I think it definitely gets followed. But maybe not as closely as maybe some state races even.
ST. JOHN: Good, well, coming up, we'll be delving a little bit more into why some cities in the North County are facing even stiffer cuts than the City of San Diego, and some are fairing better than others. So we'll take a look at why that is. Coming upright after the break. You're listening to KPBS's roundtable.
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