Roundtable: City Taxi Deal, District 4's Dirty Contest, Barrera Heads Labor Group, City Budget Grows
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May 24, 2013 1:10 p.m.
Megan Burks, KPBS News
Claire Trageser, KPBS News
Wendy Fry, NBC 7/39
Lisa Halverstadt, Voice of San Diego
Related Story: Roundtable: City Taxi Deal, District 4's Dirty Contest, Barrera Heads Labor Group, City Budget Grows
SAUER: Welcome to the Roundtable on midday edition. My guests today are Megan Burks of KPBS News. Hi, Megan.
SAUER: Wendy Fry of NBC. Hi, Wendy.
FRY: Good afternoon.
SAUER: Claire Trageser of KPBS News, and reporter Lisa Halverstadt of Voice of San Diego.
HALVERSTADT: Good to see you too.
SAUER: Think about this the next time you hot in the backseat of a San Diego taxicab. The driver likely works for very long hours for less than minimum wage, has no help or workers' comp, and dare not complain for fear of losing his job. Those are among the findings this week of a broad survey of San Diego cabdriver, a report that recommends reform of how the city manages its taxi business. Now, before we get, Megan, into what's happening there. Explain how San Diego's taxi industry is structured.
BURKS: In order to operate a taxi in the City of San Diego, you have to have a permit from the city. And the number of permits are limited to make sure that the market isn't oversaturated. There are two types of people who would have these permits, somebody who wants to be their own boss. So they get a permit and drive the taxi themselves. And then somebody who wants to be somebody else's boss. So they get a permit or several permit, and instead of driving the taxi, they lease out the taxi. So they're not making money from customers, they're making money from the lease.
SAUER: Who did the report and who was it produced?
BURKS: It was by the center for policy initiatives from San Diego state university. And they surveyed about 300 taxi drivers at taxi stands throughout the city. And they talked to mostly let's drivers, about 90% of the people driving taxis are these lease drivers.
SAUER: So this report, it's talking mostly about lease drivers. What did they find their working conditions to be?
BURKS: They found on average, lease drivers are taking home $4.45 an hour after tips.
SAUER: And that's just over half of minimum wage.
BURKS: Right. It's very, very low. The majority of the money they get from customers goes to pay their lease, which is about $400 a week. And then it's going to gas, to clean up their cars, and in order just to take home this meager wage, they're having to work over 70 hours a week on average. Many are working seven days a week.
SAUER: So as you noted in your story, 70 hours a week to earn what a minimum wage worker gets in a typical 40 hour.
SAUER: And what about health insurance?
BURKS: 99% of the drivers lack employee-based health insurance. Some have their own, but the majority have none. They're considered contract workers. So they don't have any workers' compensation. For the most part, I think 74% are not covered for accidents under the permit holder's insurance policy.
SAUER: You wonder why anybody would even take a job like this.
BURKS: Yeah, I heard yesterday about 90% of the drivers on the road are immigrants and refugees. So they're arriving in the country and going with the network that's already been built for them. And I should say that they have no health insurance. And a lot of times they're driving sick. I think if you work an hourly wage and you don't have sick time, you basically just aren't making money if you don't go into work. These drivers are actually collecting debt if they don't go into work, because no matter what, they have to pay their lease at the end of the week.
SAUER: A caller, Tony, go ahead.
NEW SPEAKER: Good afternoon. I'm calling to address some of the issues that have been left out of the report.
NEW SPEAKER: There seems to be one dimensional. We're talking about a group of people that are from a certain part of the world, that's call it Somalia, Africa, represented by UTW, who have a lot of these organizations hired to do this report, to create this idea that the taxi stray is totally sick. That there is no opportunity. And I think to be fair to everybody that works out there in the industry, I had drivers that worked for me for over 20 years that do make a living at this. They're professional drivers, drivers that have something to offer to their clientele. Drivers that are prepared. To me a driver that's prepared in the industry does make a living for himself. Are there challenges in every industry? Yes. But I think this dimension that's been put into the industry that all drivers make $4.35 an hour, why are they in it then? Why are they driving for $4.35 an hour?
SAUER: Okay. And you own cabs as you noted there?
NEW SPEAKER: Yes.
HALVERSTADT: Can I ask a question to the caller? Does it work -- do the drivers, are they able to work at different companies? Or do you hire one and they drive just your cars?
NEW SPEAKER: Well, people talk about our industry, a lot of people aren't educated on how our industry operates. We deal primary leer with independent contractors because people are self-employed in the industry, where they're a permit holder or a driver. We're all self-employed. So you get to work the hours you want to work based on the schedule you pick, you can drive for any cab that provides you a cab. In other words the sheriff's licensing division allows you to have so many names on your license that you can operate under.
HALVERSTADT: So I could drive for Yellow Cab day and drive for --
NEW SPEAKER: If you have that opportunity, you can do that. In San Diego and in a lot of cities throughout the United States, there is a lot of demand for cabs, as far as drivers. So there's a lot of competition.
SAUER: All right. Thanks very much, Tony. Appreciate your call. Megan, tell us more about how this survey was done and how many drivers we're talking about.
BURKS: Sure. They surveyed about 300 taxi drivers at taxi stands throughout the city. So it's definitely not -- they didn't talk to every taxi driver.
SAUER: But we just say, it's a fairly broad-based survey.
BURKS: It's fairly broad-based. And it's really one of the only of its kind. I think in the past year, taxi drivers have begun to become more active in getting their voice out. So we're just now hearing from them.
SAUER: Is there an agency be that oversees this and the working conditions we're talking about?
BURKS: Yeah, the metropolitan transit system, which does our trolleys and buses, they oversee the taxi industry in San Diego. So they cover a lot of the administration of these permits. They cover what a taxi driver should wear, what a taxi driver needs to display, your license, let customers know that you're licensed to drive the taxi. But one thing that they don't really regulate at all is this relationship between the lease driver and between the permit holder.
SAUER: And that's addressed in the report too. It's giving rise to a black market.
BURKS: We can't really call it a black market. It's not really illegal. But the respect says that it is suspect of the these are basically a public property and they're being sold for private gain. The MTS does get a nominal transfer fee, but they're being sold for as much as $140,000 behind the scenes.
SAUER: And what would that fee be?
BURKS: About $3,000.
HALVERSTADT: Megan, I was reading the report last night, and I just wondered how other cities regulate this relationship. And are the efforts that they make actually successful?
BURKS: I know that other cities do regulate the relationship, and so the way they'll do that is they'll set a cap on how high the lease can be. And in San Diego, there's absolutely no cap on how much a permit holder can charge a driver to drive the car.
HALVERSTADT: Interesting. Is it a flat cap across the board? There's probably smaller business, larger businesses, is it on a sliding scale?
BURKS: I can't really answer that right now. I just know that the organizers who work with the taxi drivers point to places like Chicago and New York where there have been some reforms made to try to regulate that.
HALVERSTADT: And one of the things they were saying is that the City of San Diego is considering bringing the administration in-house so the city itself would be in charge of regulating; is that right?
BURKS: Right. And I think about the past year, these taxi organizers and drivers have been talking to Filner, so he has assembled a task force to explore whether or not they want -- how they can regulate the industry and whether or not they want to transfer it from MTS to the city. So the contract MTS has is up in June, and the city said it won't renew it for five years like normal, just one year as it gathers more feedback.
SAUER: So it looks like the city is doing something in regards reform.
SAUER: How do the conditions outlined in this report, how do they impact the larger community?
BURKS: I think you have to -- a lot of people say, well, this is a personal problem for the drivers, they should find a new job. But you have to think about the passengers. They're riding with drivers who are tired, who are sick, the professor who put this study together pointed to the 2011 incident in which a taxi driver fell asleep at the wheel.
SAUER: Remind us about that. That was a tragedy downtown there.
BURKS: Yeah, the driver fell asleep at the wheel and ran into a crowd outside of the nightclub, and a lot of people were injured.
SAUER: And that was just exhaustion as they determined.
BURKS: Right, right. And the other way that it impacts customers is that these guys need to basically pay their lease at the end of the week. So I heard from some people that a lot of times drivers need -- are supposed to take credit cards, but they won't because maybe it's a Thursday and they know that Saturday they need to show up at the permit holder's house and pay for this. So you get -- I think when you feel like you're being ripped off by a tax I driver, that might play into it.
SAUER: We've got another -- oh, I'm sorry. Hold on. Line 3, jill, it is a caller.
NEW SPEAKER: Hi.
BURKS: Hi, Jill.
NEW SPEAKER: I'm the lead author on the report you're discussing. I'm a professor of sociology at San Diego state university.
SAUER: Thanks for calling.
NEW SPEAKER: I just wanted to clarify something that the last caller said. This report --
SAUER: Tony, an owner of cabs here. Go ahead.
NEW SPEAKER: I wanted to clarify the funding of the report. We were not funded by taxi drivers at all. The funding came from the university. I have a graduate class, a practicum class that the university funded to do a research project. So the funding came from there. And then CPI had funds from the California wellness foundation; the California endowment published the report of the it was a completely independent report. It was not funded by taxi drivers.
SAUER: Okay, thank you so much. I appreciate that. Thanks for clarifying that. We'll have another caller now. Michelle on line 1. Go ahead. Oh, I'm sorry, Michelle is not with us. Aaron, go ahead.
NEW SPEAKER: Yes, thank you for taking my call. My issue was the safety. I go to coffee shop often, I hear the cab owners if they want to save some money, they do their own maintenance, often they get used tires for their vehicle, often they get used motor. Is anybody looking at the safety of these vehicles? They would not be very safe for the public. Thank you.
SAUER: Thanks very much.
BURKS: The report says that a lot of taxi drivers report that they feel their cars are unsafe, and if they try to tell the permit holder it needs repairs, they're may be retaliated against. I did -- they also cited a statistic that about 98% of the cars that are inspected in the field by MTA are pulled off the road for violations.
BURKS: But I did speak to MTS, and they said that that statistic is a little -- doesn't give a full representation. They actually don't file reports for the cars that are pulled over, inspected and do just fine.
SAUER: Oh, okay.
BURKS: So that's --
SAUER: Somewhat misleading. We do have Michelle back with us now. Go ahead.
NEW SPEAKER: Thank you, Mark. I wanted to respond to your rhetorical question when you kicked off the conversation with your panel there. Why take jobs like this? Well, the drivers take jobs like this because they make money. They make a lot of money. And there's no absence of candidates to drive taxicabs. But you can't have it both ways. There are benefits of being an independent contractor, and there are benefits of being an employee. Currently the taxi drivers are independent contractors, but if they're employees, then the owners will be able to tell them the hours they work, where to go, when to have the car back. If independent contractors, the drivers use their taxicabs as their personal automobile. They take their families to the mall, they won't be able to do that as an employee.
SAUER: Do you own cabs yourself?
NEW SPEAKER: I'm involved with the taxi industry. And a real success story, west coast cab, who I fought very hard for back in the late '90s, we went through a long battle against the taxi industry and the city and MTS, and that resulted in more taxicabs being put on the street after a 20-year absence.
SAUER: All right, well, thanks for your call. I'm going to leave it there and give you the last word on this topic. We'll have to wrap it on the taxi report.
SAUER: I'm Mark Sauer, my guests are Claire Trageser and Megan Burks of KPBS news. The San Diego City Council has a full contingent of members. The vacant seat Tony Young left to take over the red cross was filled in a special election this week. Myrtle Cole bested Dwayne Crenshaw. But people called the race dirty.
TRAGESER: Myrtle Cole is a former police officer from Tucson. She came to San Diego and worked in police for the San Diego community college district. And I think they're still counting a few provisional ballots. But at last check, she had 54% of the vote.
SAUER: And it was a low turnout.
TRAGESER: It was about 18% turnout. So when you say 54% of the vote, she had about 900 votes more than their opponent.
SAUER: Okay. And let's quickly turn just for the record here on the assembly race in the 80th district.
TRAGESER: That wasn't quite as close. Lorena Gonzalez, the CEO of the labor council, had 73% of the vote. When they first released the initial count, she was 71%, so she's even gone up from there.
SAUER: No surprise there. That was a walkover. Getting back to the district 4 election, a lot of money was spent on this.
TRAGESER: Yeah. I think in the end, it was about 12,000 people who voted, 18% turnout. And it was voice of San Diego calculated that more than $630,000 was spent on the election combined. The general and the primary. And more of that money was coming from outside groups than from the candidates themselves.
SAUER: And that workings out to $25 a vote?
SAUER: Quite a lot. Does that raise claims that maybe this seat was bought somehow?
TRAGESER: Well, because there was so much money coming from outside, I think there were duelling parties' interests. The labor council I think endorsed Myrtle Cole about eight days after Tony Young whose seat she was running to fill resigned. So that was very early on. And they spent a lot of money. And the conservative group, the Lincoln Club, spent a lot of money on the campaign of Dwayne Crenshaw, sending out mailers and things like that. And Crenshaw is also a Democrat, but they just considered him the lesser of two evils, maybe, because cole was so heavily affiliated with labor. So they ended up spending a lot of money for him.
SAUER: And they're both Democrats. Is there much to differentiate them?
TRAGESER: That's another reason why people wondered why the race got so dirty in some ways because there was very little difference between them in a lot of ways. They're both Democrats, they both stand for similar things, both want to do similar things in their district. So they ended up pulling in these things from people's pasts as a way to try and paint the other candidate in a negative light.
FRY: Including a crack attack, we called is it in voice of San Diego.
[ LAUGHTER ]
SAUER: Tell us about this district first.
TRAGESER: It's in southeastern San Diego, and I think it's a majority minority district. So a lot of the things that the two candidates are looking for are very basic like more grocery stores. There's not very many. Maybe two major grocery stores in the entire district. Or more sit-down restaurants. Myrtle Cole I think said of the 65 restaurants in the district, only two are actual sit-down.
SAUER: Everything else is fast food.
SAUER: A lot of poverty, a lot of immigrants.
FRY: A lot of Asians and Latinos.
TRAGESER: Yeah, it used to be more African Americans, and I think it's grown to be more Latino and Asian as time goes on.
SAUER: So Voice did get into some of the nasty aspects of this campaign.
FRY: Yes, we did, and rolled our eyes along the way.
[ LAUGHTER ]
HALVERSTADT: I had fact-checked a few statements in this race of the one was that Myrtle Cole had been cited in an ethics commission case, which was not true. And then later there were accusations about Dwayne Crenshaw's time leading the coalition of neighborhood councils and the terms of his leave. Certainly there was a lot of craziness here. But the craziest thing that came out was actually from Myrtle Cole's campaign versus an outside group, which was surprising at the end of the race. And that was bringing up this more than 20-year-old incident where I guess Myrtle Cole accused Dwayne Crenshaw of doing crack, basically. And it was quite silly. The accusation ended up going national a bit.
TRAGESER: It said it was 3:30 AM and Dwayne was sitting outside a crackhouse on front of the mailer. And even when this accusation was made the first time, like 20 years ago, the police officer said no, no, that's not what was happening. He was there to help a friend or something like that. And then you guys called the police officer again?
HALVERSTADT: And he was horrifying that his comments were being used again inaccurately.
SAUER: We asked Myrtle Cole on Midday Edition here on KPBS about this false accusation with Crenshaw.
TRAGESER: Well, she seemed somewhat surprised by the question. She said I wasn't -- she basically said I'm not going to talk about this and then talked about it a little bit. She said unfortunate things happened over the course of the campaign to both candidates. And she said I hate to say that's politics because that's not how it should be, but that's how it was. So basically it happened, she didn't apologize for it, and she kind of tried to show that maybe Crenshaw had done similar things to her as well.
HALVERSTADT: It's so funny to me how fast everyone goes back to being friends though after, you know? These terrible, ugly, ugly, campaigns, and a few weeks later are they're talking again. Do you think that's going to happen?
TRAGESER: I don't know. I don't know if Carl DeMaio and Bob Filner are ever going to be friends.
[ LAUGHTER ]
SAUER: Well, these are Democrats too. I think they would pull their house back in order.
TRAGESER: And I did see that Dwayne Crenshaw is not going to return to being the director of San Diego Pride where he had taken a temporary leave of absence.
SAUER: How will Myrtle Cole fit in on the City Council? Tony Young was pretty business-friendly.
TRAGESER: I asked her how would you work with the City Council if you were elected, and she said I think we'll get along great and cited the people who David Alvarez and Todd Gloria, I believe, who endorsed here, and mayor Filner endorsed her as well. So I think maybe she will be closely allied with David Alvarez. He was at her election night party, was very popular with the labor groups there, which is funny because I think when he initially ran, they backed a nor labor-friendly candidate, and he ended up women.
SAUER: And it solidifies the democratic majority on the council.
TRAGESER: And no matter how the election was going to go, it was still going to be a Democrat either way.
SAUER: Absolutely. And you note it was a big night for labor since and Gonzalez won in the other race.
TRAGESER: She is the CEO of the labor council which is an organizing body of the federation of labor unions. I think they call themselves the union of unions. And they're very politically involved, I would say.
SAUER: And that's the labor council of San Diego and imperial. So she replaces Ben Hueso, arguably more of a centrist. What did she say about labor leaders running for office?
TRAGESER: She said her election night speech, if we want unions' interests to be represented in legislative bodies, we need to keep having union members running for office. So that's what she did. And I guess that's maybe a trend they will hope to continue in the future as well.
SAUER: Does this affect at all the supermajority that have been held around California? I think I read this week that --
FRY: When Ben Hueso went to the Senate, it gives them back their supermajority there. So the two thirds they need.
SAUER: It's still there. I know L.A. had special elections and other places in California.
FRY: This does bring that back for them.
SAUER: And I think going forward, we're going to touch more in a segment coming up regarding who's going toy are place her.
TRAGESER: Right. The musical chairs system that was created. It all started when mayor Filner was elected, that opened up his seat for Juan Vargas, and that opened up the congressional seat for Ben Hueso, and Lorena Gonzalez actually announced she was running before Ben Hueso had even been elected. So she sent out a press release that said if he wins, which it was assumed that he would, then I'm going to run for his seat.
FRY: She was going to either run when he was elected or when his term was up in two years.
TRAGESER: Yeah, so definitely on the ball.
FRY: Lots of special elections in a very short period of time.
TRAGESER: And I don't know if there's any way to tell having the labor council CEO's election on the same day as Myrtle Cole. Crenshaw asked to have the elections on separate days thinking that Myrtle Cole would get more of the labor vote because people were already out voting for Gonzalez.
SAUER: And he may have been right.
SAUER: We're going to close the polls on our special election discussion.
SAUER: There may or may not be solidarity forever at the San Diego unified School Board now that trustee Richard Barrera has become the new chief of the San Diego County and imperial county labor council. Before we get to his new job. Wendy, run down for us how the dominos fell. We were talking about that a little in the last election. It starts with Bob Filner, then we go from the congressional seat to the state.
FRY: Right, Filner gets elected, Vargas's seat, Hueso gets Vargas's Senate seat, and Gonzalez gets Hueso's assembly seat. And then they elect a new treasurer.
SAUER: Tell us about this new job. What is the labor council, and let's go over that.
FRY: That's good because what it is, it's like an umbrella organization for about 140 unions in the area. And it's both San Diego and imperial counties. And you want to think of it, as, like, biocom, that's an advocacy group that represents different life sciences businesses. But they have their own budgets, make their own decisions, and that's kind of the way the labor council is. The individual unions that make up the members of that, they have their own budgets, leaders, and they pay membership dues to the labor council to advocate for workers and to advance their ideals.
SAUER: So this umbrella organization is stepping back and looking out for union families, working families in general. And not specifically for one individual member of their union. Has Barrera had a left with local labor organizations?
FRY: Right. That's an interesting question. And he's brought it up that he spent the past decade working, he's worked for the united healthcare workers, the California nurses association. It's really interesting. When we're all asking if he was taking over a couple months ago when he started coming to every labor council event and union event, we all were trying to figure out if he was going to be the new secretary treasurer. And they were saying that he's not actually -- what union is he a part of? Because you have to be a union member to be the secretary treasurer of the labor council. So he's not a nurse, but he's worked very, very hard for the California nurses association. So I guess maybe he was an honorary member or something.
SAUER: So it sounds like making that stretch or fudging it somehow, if that's the right word. But no question he's going to be an advocate. Now, that raises the heart of the matter here, which is the labor council's involvement in public policy issues. Is it a conflict of issues for Richard Barrera to be on the School Board at the same time? The board negotiates labor contracts.
FRY: Right. It depends on who you ask, of course. The cord we're talking about, government code 87100, a public official cannot take a vote or use his official position to influence a government decision in which he has a financial interest. So the critics say SDA is a very strong union --
SAUER: That is?
FRY: The Teachers' Union at the schools. So if for some reason they become unhappy, they pull out of the the labor council, that affects the labor council's budget, that might affect his bottom line. So it's definitely not a direct conflict of interest.
SAUER: But indirect.
FRY: Or the appearance of a conflict of interest. The labor council had an official opinion --
SAUER: Who released the opinion?
FRY: They won't say. And that's interesting. When lawyers are asked to issue an opinion, they say, okay, this set of facts, A, B, C, and D, you can do X. And those are usually very limited and narrow. So without seeing the legal opinion, it's hard to say what he can and cannot do.
SAUER: He being Barrera.
FRY: He's going to take votes on the budget, the San Diego budget. He says if there's an issue that the labor council is lobbying on or taking an official stance on, he's going to recuse himself of that at the San Diego School Board.
HALVERSTADT: That would kind of leave the board --
FRY: One sort.
HALVERSTADT: And it's an uneven number. So it could be 4-4. Is there an expectation that will happen?
FRY: That's interesting too. If he wants -- he's worked his whole career for struggling families and teachers and stuff like that, working people. So he wants to advocate for them. He's always been a pretty -- not every single vote, but he's also advocated for the Teachers' Unions. So if he has to recuse himself, then they lose that vote. So how well can he represent them if that's what he wants to do?
SAUER: Jerry, go ahead.
NEW SPEAKER: Hi, yeah, the statement I'd like to make is why is it that when somebody from labor gets in a position of power, they are scrutinized so much? Whereas when people from business or the Chamber of Commerce seems to draw a path? It seems to me that somebody who's representing a union is representing the vast majority of regular citizens.
SAUER: Okay, very good. Thanks for that observation. I would point out just in response to his call that I think we saw in the mayor's election, and you folks can probably think of other examples, where business leaders were scrutinized. Carl DeMaio -- it was said of him by his opponents that he's an advocate for business and developers in the establishment, etc. The same thing was said of Jerry Sanders when he ran the various times.
FRY: But there are across the county, Bill Weber, he's in charge of the AEC, he sits on the La Mesa Spring Valley School Board. So he's questioned on both --
SAUER: On the other side of what we're talking about.
FRY: Yeah, exactly. But can you take a vote on that contract if those contractors are part of your trade organization? And then Jason Wells, he's the head of the San Ysidro chamber. So he gets a lot of questions about interest is he representing there.
SAUER: And I think it's the media's job, it's our job to ask these questions, tough questions, and raise these issues because whether it's someone who would be backing business fairly well if that's the way to put it, or labor on the other side, it's up to us to point that out and start that discussion. You mentioned a state law and how it reflects on this. Is the state attorney general or other official weighing in on this?
FRY: Just from hearing from the critics have been saying, I'm sure somebody is going to talk to the FPC about the vote, what the threshold dollar limit is on the member dues. But that would happen after some vote is taken.
HALVERSTADT: I was talking to my colleague Will Carless to get his thoughts on this. And he said that one thing that's really been lost in this is that Richard Barrera is really one of the most educated School Board members, just in terms of a broad range of issues in the district. Where some of the others, like example Scott Barnett is really tuned into financial issues, Barrera really has a good handle broadly. And so he's interested to see how when Barrera takes this new job that is more than a full-time job. Clearly Lorena Gonzalez was everywhere working at least 16 hours a day.
HALVERSTADT: So either he was questioning how does this affect Barrera's ability to serve on the School Board, which that's only a part-time job --
SAUER: But it's a handful in and of itself.
HALVERSTADT: Yes, and many. Us are interested in how he performs in that role.
FRY: He says theoretically, it only meets twice a month. About you just the board pacts alone. That's a good day or two that you have to read through the whole packet, and he does that. He reads all the documents. So yeah, the time I was really curious on how it was going to work out, it's going to be a really tough act to follow obviously. But the legacy that Lorena Gonzalez has left for the labor council which is she's done --
SAUER: She was really very visible. Absolutely.
FRY: And very effective. They got a lot of people elected that represent -- that support their ideology.
SAUER: In a tough era for labor.
BURKS: It was interesting to me, this was a couple years ago, but I used to cover the School Board meetings, and I remember one of the votes for teacher layoffs, all of the union members were there, and Richard Barrera did vote for layoffs. And people were getting up one by one and saying shame on you for doing this!
FRY: He's been picketed at his house by unions.
SAUER: Well, that's interesting!
FRY: He's voted, not just the pink slip process in March, but he did the final layoffs. And then he voted against the building trades which is also a very powerful union in the labor council on closing a school, whether or not to close a school. So not every vote he takes is in step in line with the unions. And that for a lot of the members that are more pro union, both the Southwestern College too, they advocate for them and support their ideas so much it's particularly continuous for them when they get the pushback from the people they support.
SAUER: So this is a real personal thing for him. And as we noted, full-time job, a lot on your plate with the "part-time job." So you wonder at some point, maybe he'll pick the council and move on.
FRY: I'm also interested to see the new direction that it takes in leadership. Because they have been -- they're political heavy weights, and almost like a third political party. At one point they said they weren't going to give anymore money to the San Diego County Democrats, they were just going to run their own races and their own people. And they've got some real political muscle in the state legislature to get the state law that stops funding if a city has bans on PLAs. I think Barrera is and more of a community organizer, focused on getting more families in unions or more working families that get living wages that are comparable to what people in the unions get. So I'm wondering if he's going to be more focused on the ground rather than the political side.
SAUER: We'll have to wrap it there.
SAUER: Welcome back to the Roundtable.
(Audio Recording Played)
SAUER: Old Satchmo! That takes us back. It seems if you look long and hard enough, you can find some pennies, if not from heaven, from somewhere. Mayor Filner is talking about spending on neglected needs instead of cutting his been. What's the total, and where do the biggest chunks go?
HALVERSTADT: Well, it's no small chunk of change. We're talking about $2.7 billion. But really, most city budgets really are comprised mostly of city services. And the places you interact every day. Public utilities, water, trash, public safety. That's where the bulling of the city's money is going.
SAUER: Streets and potholes, of course.
FRY: Of course.
SAUER: How does the total compare to last year's final budget as we're in the process now?
HALVERSTADT: It's really about the same.
SAUER: Is it? Okay. Pretty much even. You wrote at the beginning of the budget process, the mayor was facing $38 million and change in a deficit in funding day-to-day operations. What was the cause of that?
HALVERSTADT: Well, the city's pension bill for city employees who retire came up higher than the city had planned due to changes mostly associated with the implementation of Proposition B. And the city has to deal with a state decision to shut down redevelopment agencies. And so they have to pay about $14.3 million for the Petco Park debt, and for the conventional center debt.
SAUER: They all piled up at once. And a month later, here's found the pennies from heaven.
HALVERSTADT: Well, the mayor got very lucky. It turns out that the city had a surplus this year of more than expected.
SAUER: More tax money coming in?
HALVERSTADT: In some ways. We'll figure that out. But about $17 million in spur plus for this year. Of that, about $14 million is being used for next year. So just like we have a savings account, we've got more money coming in this year, we're going to hold onto that for the next year when we know our bills are going up.
SAUER: And we had some other settlements here in some outside money that came across. Some tobacco settlements, SDG&E.
HALVERSTADT: Yes. One major insight that really helped the mayor this time around was that the projections for property tax collections are said to be up. So that's exciting for the city. Tobacco settlements which are basically -- comes from a large-scale settlement made with a lot of attorney generals across the nation. Cities get a certain amount of cash every year associated with that. This year the city is getting more money. That way they also had a settlement from SDG&E associated with wildfires that came in this year which they were able to use. And also because of the extra cash that the city has this year, they were able to kind of offset some of their payments for workers' compensation funds that my need to pay into.
SAUER: Two of the more interesting areas of savings are from lease savings and the city attorney's office.
FRY: The City of San Diego was in a bit of a find a month or so back. They have a major city lease coming up on May 31st. And the previous administration had actually signed on with a contractor to help the city divide do we want to stay at this building where about 400 city employees work or move them?
SAUER: That 6th and B?
FRY: Yeah, 600 B Street. And that's where public utilities workers work. So at the last minute, the mayor decided he was going to appoint Jason Hughes who is a really well known real estate broker downtown to help the city with its leases. And lo and behold, he was able to come up with a deal for the city. Although I'm not sure if it's actually been inked yet that saves the city some significant cash.
SAUER: And he doctored a negotiation for the city before?
HALVERSTADT: He had. It was quite a contentious process, but back in 2010, the city had been looking at a new City Hall. And the Sanders administration put out lots of figures, and Jason Hughes came out and said they didn't quite look accurate to him. And as a result there was a bit of a resentment about Hughes. So when he actually, last year when they were going through the process to figure out who might negotiate the city's leases, he offered to do this for free! But he was turned down, and some folks say it was because of his previous conflicts over the City Hall issue.
BURKS: And he did if are free for Filner?
HALVERSTADT: Now he is doing it for free. But I should point out he certainly does benefit. Because the city is such a big real estate holder downtown, if the city can get a lower rate, that gets press obviously, and that lowers the cost for others downtown.
HALVERSTADT: And Hughes works for the tenants rather than the buildings themselves. So this is really a good deal for him too.
SAUER: Now, the story of the budget and the city attorney is a little more upfront.
HALVERSTADT: Yes, it is. So the mayor's initial proposed budget called for a $1.4 million cut to the city attorney's office budget. And he said while all these other city departments in really tough years had cut back, the city attorney's office actually increased staffing. So that $1.4 million cut would have forced the city attorney's office to cut about 13 position, presumably. In the mayor's second round of his revised budget, he's now suggesting that the city attorney's office use about $925,000 from a fund that funds environmental and consumer protection cases.
BURKS: So he's basically saying you made this money, so you can keep it now instead of I'm going to take it; is that right?
HALVERSTADT: Yes, yes. But there are some complications associated with that.
BURKS: Right. You can only use it in a certain way.
HALVERSTADT: Exactly. And so the assistant city attorney was telling me this week, well, it looks like we're getting extra cash on paper here. But in fact, we can only use it for a certain number of positions or certain efforts. And as a result, they would still need to make some cuts.
SAUER: Claire, you went to the City Council meeting this week. 300 individuals and groups had one minute to take their case for city funds.
TRAGESER: It was funny when council president Todd Gloria said we have 300 speakers, and everyone cheered! And he looked like, oh, my goodness. We have no idea what we're getting into!
[ LAUGHTER ]
BURKS: So there were a lot of just different people there'd indicating different interests. One of the big ones was a mid-city can, which is a youth advocacy group in City Heights. And they were there to ask for free bus passes for low-income student, which is interesting because the budget already provides free bus passes for low-income students. So they were coming up to ask for something they're already getting, although it's only written in as a 1-time expense in this budget so there's no guarantee they'll get it for the future.
TRAGESER: It's at a pilot program that would be at four high schools. And as far as I know, I think they're hoping to use this 1-time expenditure to kind of show that it's worth it, and then ask SANDAG to allocate some TransNet funds for more sustainable programs.
SAUER: We've got a caller who wants to join us of the Catherine, go ahead.
NEW SPEAKER: I just wanted to say for the Convention Center debt and the Petco Park debt, that's $450 million we could have had paid off already. But because of CCDC before, they misinterpreted redevelopment law and kind of made up excuses why we couldn't have the whole $450 million put into an agreement.
NEW SPEAKER: And for the Convention Center, they said it's not in the project area, that's why we couldn't. But of course it is in the project area.
SAUER: All right, well, thanks for that call. I appreciate it. Before we wrap up today, I do want to get a plug in for our KPBS building game on our website. Explain how that works.
BURKS: That's right. We talked to a number of leaders in the community and got their input on things that they would like to see added to our cut from the budget. So there's bike lanes, affordable housing, cut the Convention Center subsidy, Qualcomm subsidy, and you can go through and click items and balance the budget, essentially. So go to KPBS.org/budget, then you click on play the budget game.
SAUER: And people are having fun doing that.
BURKS: Yes. And city leaders even are going to play the game and share their --
SAUER: Todd Gloria tweeted it out.
BURKS: That's right.
SAUER: So wrap us up now. Of what's the next step in the budget process?
HALVERSTADT: Well, the next step is that the independent budget analyst for the city will take a look at this, go through it, and make some presentations to council to weigh in on whether the mayor's new appropriationals make sense. And then the council will eventually be voting on this.
BURKS: June 10th I think they said.
SAUER: We'll have to leave it there.