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City Hall Update: Budget Cuts, Trash Pickup, Business Taxes, Fire Pits


It's been a busy week for city politics, and KPBS Metro Reporter Katie Orr is here to give us an update on the latest news coming out of City Hall. What are the details of the latest proposal to keep libraries and recreation centers open? Could a public-private partnership save the beach fire pits? And, why are the business fees in San Diego less than other California cities?

It's been a busy week for city politics, and KPBS Metro Reporter Katie Orr is here to give us an update on the latest news coming out of City Hall. What are the details of the latest proposal to keep libraries and recreation centers open? Could a public-private partnership save the beach fire pits? And, why are the business fees in San Diego less than other California cities?


Katie Orr, metro reporter for KPBS News

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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: I'm Maureen Cavanaugh. You're listening to These Days on KPBS. After recent predictions of dire service cuts in the City of San Diego, law makers seem to be finding more money. San Diego City Council recently proposed a series of belt tightening measures within city government that would almost cover this year's projected deficit of $57 million. Now another budget plan has been announced that would restore proposed cuts to San Diego's libraries and rec centers. That story, plus an update on what else has been going on. San Diego City hall lately with KPBS metro reporter, Katie Orr. Good morning, Katie.

ORR: Good morning Maureen.

CAVANAUGH: So tell us about this new budget plan announced by councilman Todd Gloria.

ORR: Gloria is working to try and save the libraries and rec centers. And I should say he's not the only councilman who's been trying to rev up support for that. Councilman Kevin Falconer has also been actively saying we should be keeping these open as well. But Gloria has presented a plan that he believes could save them. It allocates $15 million to the libraries and rec centers open at current levels. And what it does is make cuts in other areas, for instance, it would eliminate cell phones, city cellphones borrow all nonpublic safety departments, it would require about $3,000 in compensation reductions for top level city employees, managers, the City Council members, and their staffs, about $3,000 each. It would also take the money that the city will receive from selling the world trade center, and that is the building that they are selling to the city's redevelopment agency to be turned into a permanent homeless shelter. It would take the proceeds from that, about $8 million, and put it towards the city's debt service on the second is Convention Center expansion, thus freeing up general fund money to go toward these libraries of so it's a bit of shuffling the chairs around there. And it would also count -- it also just counts on increased revenue. The city's sales taxes and TOT taxes ticked up a bit in this budget cycle. And their pension payment went down a little bit. So it left them with a bit more money than they were anticipating.

MAUREEN CAVANAUGH: So how does this proposal differ from the mayor's budget proposal?

ORR: Well, the mayor's proposal calls for cutting the hours of libraries and rec centers in half. Libraries would only be open 18 hours a week. Basically each library branch would be open two days a week, and rec centers would be open only 20 hours a week. And Gloria says that he just thinks that's a good idea.

NEW SPEAKER: We are in this better position for something that we did not anticipate last fall, namely the improving economy is happening more rapidly than we anticipated. And we also have been able to work collectively with our workers here at the city to reduce the cost of government. Those two things have been very critical in making sure that the worst of the cuts have not been realized. Lastly, I would point out that half of the mayor's budget solutions are one time. And so we could easily be in this position again next year.

ORR: And that's Gloria just reemphasizing that things are better than that happen they were expecting them to be. Because he has gotten a question a lot, listen, last fall, you were campaigning for Prop D, the sales tack increase, it was all gloom and doom, our fire and police services will slashed, libraries wouldn't be open, rec centers wouldn't be open, and that was sort of the feeling you got if the sales tax didn't pas. Well, the tax department pass. And the police didn't see too drastic of cuts, fire service has been restored, libraries and rec centers are really the only things that might be on the chopping block. And Gloria, as you just heard, says a lot of things have changed that make the situation better than we had thought it was going to be.

CAVANAUGH: So good news, I guess.

ORR: Yeah. And that's true. It is good news. Of course, more money is better. And nobody wants -- you know, it's a great thing that our libraries and parks might not be cut, and that police and fire have not seen these draft cuts. But there are people who are saying, you know, were you just trying to scare us back in November and he maintains that's not the case.

CAVANAUGH: So when might the city Council discuss this new proposals to keep libraries and rec centers open?

ORR: Well, the council's budget review committee began meeting this morning. And what if does is any true the mayor's proposal, and did through the city departments, department by department, looking at these cuts, seeing if that's something that they should go ahead with or not, modify, making changes, and it's going to be a long process where they go through all of these things, and these discussions will be worked into that process as well.

MAUREEN CAVANAUGH: Let's move to another question facing the San Diego City Council. Should San Diego raise its business fees to match other California cities? What's that discussion like? And how much do local businesses currently pay in fees and taxes?

ORR: Well, the average San Diego business pays about $79 -- I should say that is the average fee the city gets from businesses. $79 a year. San Diego taxes businesses based on how many employees you have. So some businesses, if they're on the small side, could pay $34 in business taxes a year. And this is a call, this is an issue that's been discussed on and off in San Diego throughout the years. Most recently, it's being raised by DeClercq, the head of the San Diego firefighters' union. His union has come under fire for the large pensions that some firefighters have received. And in the meantime -- so they are feeling a lot of the heat for the city's financial problems of but he says, listen, we have made concessions or salary freezes 6 out of the last 7 years, other city union have made concessions as well. He really feels that it's time for the business community to step up and help contribute toward a solution for San Diego's financial problems. So his solution would be raising the business taxes. Just to get an idea, San Diego is the lowest out of the -- California's ten largest cities of so San Jose charges, it's an average about $225 a year, Los Angeles, their average is nearly $1,300 a year in business taxes.

CAVANAUGH: As opposed to our $79 .

ORR: Yes. And even though San Diego, we are the second largest city in California, out of the ten largest, we charge the lowest business tax. And I should say on the other side, the business community says San Diego's not a cheap place to live. You have to pay for rent, you have to pay your employees so they can afford to live here as well. We are just coming out of a recession. Voters have clearly said they don't want new taxes. They have voted down increases in TOT taxes, they voted down an increase in the sales tax just last fall. So they say that that is not something that there is an appetite for. And to increase this business tax, you would have to get a vote of the people.

MAUREEN CAVANAUGH: But as the unions, the city workers' unions who are under fire are, I guess, saying now, there is that disparity. If somebody can pay $13 in Los Angeles and they're only paying $79 here. That's a pretty big spread.

ORR: And it's true. And the -- it's not -- the cost of living in LA and San Francisco aren't cheap. And the cost of doing business there, San Francisco's is a little over $1,100 a year is their average. I talked to Allen gin, the professor of economics at USD. And he was saying there is a benefit to having a lower tax, that's definitely a draw for business, that they come here knowing that that tax is so low. But he said, does it have to be so well low? I mean San Diego has what we call a structural budget deficit, meaning we continually spend more money than we take in, and we're always looking for ways to generate more revenue. And in various reports that has come up as something that the city should consider.

CAVANAUGH: So it's come up in reports. Has anybody actually made some sort of proposal at the City Council, or is this just an idea that's floating around isn't.

ORR: Right now, it's just an idea that's throating around of getting on the band wagon and lobbying for a new tax is something that's really hard to do. And we saw it last fall. We saw the mayor come out. We saw councilman Todd Gloria. The Chamber of Commerce came out in favor of this sales tax, and it just didn't fly. People just -- maybe don't believe that we need it yet. You hear a lot of people saying I want reform, I want pension reform, and in my story, that's what Ruben Morales at the Chamber of Commerce said. Let us see some real action. We want to see real results from the reforms you're implementing, and then we can talk about maybe looking at something like increasing the business tax.

CAVANAUGH: Let's talk a minute or two about the push to save the beach fire pits because that's an ongoing story, and I think anybody else hearing it from around the country might --

ORR: It's classic San Diego.

CAVANAUGH: Chuckle out of it. So who's behind the latest proposal to try to save these fire pits?

ORR: Well, right now, it's a coalition of groups, really, tourism groups, the hotel/motel association, the convention and visitors bureau are two of the groups that are sort of working to launch a campaign to save the fire pits. Every year, you know, it seems that these guys are on the chopping block. And they really want to make sure that they can set up a public/private partnership, maybe get some really corporate support mind these fire pits so that we don't have to keep going through this.

MAUREEN CAVANAUGH: How much do they cost to maintain?

ORR: It's about $150,000 a year, and I think there 186 fire pits through the city. And people say, well, why do you have to maintain these? But you have to get in a large back hoe or piece of equipment in there to lift these up and dump out the ashes, and the debris gets in there so that they don't over flow. So you just have to have regular maintenance and that takes a lot of money. And the city has a $57 million budget deficit, it's, you know, something that people -- and I heard a point that the mayor made once, which I thought was interesting, people love the fire pits. Not a lot of people use the fire pits. Now, certainly, there people that probably dispute that. If you go out there on a summer's day, you have to get there at 6:00 in the morning if you want one. But throughout the rest of the year and things like that, he was saying it might be more of a -- something people like to think about, but maybe not use as much.

MAUREEN CAVANAUGH: Right. They'd hate to see them go even if they don't use them.

ORR: Right. You don't want use them, but you want to upon you could use it if you wanted to.

MAUREEN CAVANAUGH: And lastly, let's talk about the issue of charging for trash pick-up on the city's private streets. 14000 residents on private streets. So why did the mayor want to end this free trash pickup?

ORR: Well, the city spends millions and millions of dollars a year on trash pick-up. They spend $54 million on refuse collection, trash and recycling. And it's a huge drain on the city. Of course, overturning it on public streets is something that we can't do without another vote of the people because of the People's ordinance declaring we get free trash pick-up of but these private communities have made agreements with the city called hold harmless agreements, and it's under the mayor's decision to end those when he wants to do that. So in his budget, he chose to end those. It saves about $1.2 million for the city. It's certainly a very controversial move to do.

CAVANAUGH: So controversial that some members of the City Council wanted to over -- basically stop the mayor from doing that. Were they successful?

ORR: They were not. There were four votes that would have taken away the mayor's power to do this, and then ultimately reverse his decision. But they needed five. So his proposal stands. And the trash -- free trash pick-up to people living on private streets will end on July 1st.

CAVANAUGH: There were lots of town hall meetings, people on these private streets are not happy about this.

ORR: No 678 I mean, a lot of people in San Diego believe it's something that should be covered by their property taxes. And at this meeting, a city staff member came and said he was clearing up the misconception that property taxes cover this. And San Diego is the only city in the county to not charge for trash pickup. It's a pretty unusual thing that the city does not charge, just in terms of fact that so many other places do, like anywhere from 20 to $30 a month is what the typical fee will be. But people have been getting it for years, and it's not something that they like to give up.

CAVANAUGH: And there was sort of a class issue here, at least an income issue, in the sense that a lot of condominium complexes all over town have always been paying for their trash pick-up. And these private streets were really in nice communities right?

ORR: Right. If you live in an apartment, you don't have to pay for trash if you can get your trash to a public street in a city bin of but if you live in an apartment with 20 other units, you can't all have your trash bins out there. So they pay for a private hauler. So the thinking is, if you can't afford a nice house, you don't have a lot of space you're more likely to live in an apartment, and then you have to pay for trash. Whereas if you can afford a nicer house in a nicer community, you can get your trash to a public street or private street in agreement with the city, you don't have to pay. And so it is -- there is some income disparity in there, and I believe the IBA just put on out a study saying something about 40 percent or so of the city residents actually do pay for trash because they live in communities where they -- public trash does not -- they aren't serviced by public trash trucks.

CAVANAUGH: Are there any appeals left for people who still adamantly oppose this, or is this a done deal now?

ORR: Well, it would appear that the July termination for these people is a done deal. The mayor has that authority. And that authority was challenged, and that challenge did not succeed. I mean, who knows? In this day and age, there could always be a lawsuit. I'm not saying there will be. But I suppose that's a possibility. And I think the over all question of ending the People's ordinance for everyone is something that we're going to continue to discuss. Because the fact is, San Diego just spends too much money. And it is not bringing enough money in. And if you keep shooting down ideas to bring in more receive new, eventually what are you left with? Something's gonna have to happen, I believe.

MAUREEN CAVANAUGH: And this is what you've been talking about, finding some money over here, finding some money over there, all in an effort to try to close this deficit gap.

ORR: Right.

CAVANAUGH: Well, thank you so much Katy.

ORR: Thank you.

MAUREEN CAVANAUGH: I've been speaking with KPBS metro reporter, Katie Orr. If you would like to comment, please go on-line, Days. Stay with us for hour two of These Days, coming up in just a few minutes here on KPBS.

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