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San Diego Could Lose $41 Million Next Year Through Redevelopment, Pension Costs

Evening Edition

Above: Jay Goldstone, San Diego's Chief Operating Officer, talks to KPBS about the impact pension changes and loss of redevelopment funds will have on San Diego's budget.

Aired 12/21/12 on KPBS Midday Edition.

Guests

Jay Goldstone: San Diego Chief Operating Officer

Jeff Graham: President Civic San Diego

Transcript

The state will not allow San Diego to spend $4 million in redevelopment money on a permanent homeless shelter. It also nixed a $20 million affordable housing development and nearly $5 billion in additional projects, including cleaning up a downtown site for a potential Chargers stadium.

Document

Redevelopment Letter

Redevelopment Letter

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Last year the state legislature eliminated redevelopment agencies, but said the agencies could continue funding projects that were already underway if the state approved them. City officials say they will either have to accept this latest blow or file a lawsuit against the state.

But not everything got the budget ax. The state approved spending about $21 million on the North Embarcadero Visionary Plan, which aims to beautify the area around the Broadway Pier on Harbor Drive.

The state's elimination of property-tax funded redevelopment agencies will cost the city's general fund about $11 million a year in debt service for Petco Park and about $3 million annually in bond repayments for a previous expansion of the San Diego Convention Center.

San Diego Mayor Bob Filner said he would try to get Department of Finance officials to change their mind regarding some of the projects.

"The position I'm going to take with regards to everything, but especially the budget, as mayor, is not to be Pollyanna. We're not going to say the roof is falling or we're not going to cry wolf, but we are going to try to be honest about the budget,'' Filner said at a news conference.

The city of San Diego's budget could also take a hit next year because of a decision made by the board that oversees the city of San Diego's employee retirement system, Filner and Chief Operating Officer Jay Goldstone said today. Combined with the state's redevelopment decision, the city could lose a total of $41 million next year.

The San Diego City Employees Retirement System directors decided to budget about $27 million in upfront costs for Proposition B for the coming fiscal year, which starts July 1. City officials had hoped to defer increased annual contributions to the pension system for another year.

Two-thirds of voters approved Proposition B in June in anticipation of the city saving hundreds of millions of dollars through 2040. But pension system changes will cost the city more than it will save for the first four years or so, according to Goldstone.

Filner said San Diegans should temper their expectations about things such as expanded library hours or quicker repair of potholes.

The city recently was awarded $27 million in a settlement with San Diego Gas & Electric over the 2007 wildfires, and nearly $7 million in lawsuit over miscalculated fees for the administration of property taxes.

Filner said he wants to use that money to pay for public safety projects, such as replacing the police department's communications system.

City officials previously projected a surplus of about $4.9 million for fiscal 2013-14, and growing surpluses in the future, but they failed to account for pension and redevelopment issues, because those decisions had not been made yet.

At worst, according to Filner, the budget deficit for FY 2013-14 would be about $37 million. The city may have to make a one-time payment up to $10 million to the pension fund, which has been performing below expectations.

Also, the city could lose some state funding for municipal construction projects because voters passed Proposition A, which bans the city from requiring Project Labor Agreements.

Comments

Avatar for user 'hopeheadsd'

hopeheadsd | December 21, 2012 at 8:33 a.m. ― 1 year, 3 months ago

This is somewhat misleading.

When the Redevelopment agencies were abolished, each CA county and city were required to form Oversight Boards to oversee the ROPS payments.

Now, in all honesty this is new for everyone including the state, but the City of SD missed the boat here or did some poor management on their part as it relates to the projects submitted prior to the deadline of the now abolished Redev Agencies.

The State has been firm, bit fair in regards to obligated payments. I would like to know why these were not ok for the City of SD. For some reason, the City Manager and his office have not disclosed that information in any interview. So I am a little unclear as to why Jeff Graham is talking about litigation.

As an FYI, all Oversight Board committees in each respective city must have the chair sign off on all the ROPS payments and these meetings are all open to the public.

Just look at other San Diego County cities. Why are some of them getting almost of their funding and the City of SD completely missed the ball with this hefty chunk o change?

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Avatar for user 'hopeheadsd'

hopeheadsd | December 21, 2012 at 8:36 a.m. ― 1 year, 3 months ago

Sorry, meant to add that Jeff Graham is not the City Manager, but I had read in another article that he was threatening this course of action as the CEO of the now defunct CCDC aka Civic San Diego.

I am unclear as to the lines drawn between CCDC bing the developemnt arm vs an actual city which may have set up a 'redevelopment district'.

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