MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. San Diego Mayor Jerry Sanders will deliver the State of the City address this evening. Although 2009 was a tough year for the city, the mayor and city council were able to reach a deal to close a $179 million deficit in the budget, which many say gives the city some breathing room. What the mayor intends to do with that small amount of room may figure prominently in tonight's speech because any way you look at it, the City of San Diego is still in financial trouble. KPBS metro reporter Katie Orr joins us now to discuss the expected topics of tonight’s State of the City speech. And, Katie, welcome.
KATIE ORR (KPBS Metro Reporter): Thanks, Maureen. Thank you for having me.
CAVANAUGH: I want to invite our listeners to call in. What would you like to hear the mayor talk about tonight in his State of the City address? You can call us at 1-888-895-5727. So, Katie, how do you think the mayor will assess the difficult year of 2009?
ORR: Well, I think you just said it. It was a difficult year. The City cut more than $175 million from its budget and that’s before they began dealing with the most recent budget. That was over the previous 15 months and it never really seemed to provide any relief, things just kept getting bigger and the deficit kept growing until we were facing a $180 to, some put it at, $200 million deficit that they just dealt with in the most recent budget.
CAVANAUGH: Now, do you think that that budget deal, that 18 month budget deal, was one of the perhaps proudest accomplishments of the mayor’s this year?
ORR: Well, I don’t know if it’s something he would call an accomplishment. I think it’s something that everyone realized they needed to get done. If they just let the budget sit there and they didn’t deal with it, they waited until the spring, which is when they normally deal with the budget, it wasn’t going to help anything. And it’s kind of acknowledged, as you said, that this is really sort of a stopgap measure. It buys the mayor and the council some time to focus on fixing some of the City’s structural budget problems. And in this past budget, there were a lot of one-time fixes, there were layoffs at the City, there were cutbacks in City services. So, again, I don’t know that it’s something anyone would call an accomplishment but it was something that had to be done.
CAVANAUGH: Now this, as I said, is the mayor’s fifth State of the City address. It seems that each year the mayor has had to address some major financial problem in San Diego. Remind us of the fiscal problems that he’s had to deal with.
ORR: Well, he’s still dealing with some of them to some extent. Of course, there’s the large pension liability. San Diego paid a record-breaking $154 million into its pension this year. There’s the retiree healthcare, which is separate, which is not funded very well at the moment. The City has over a billion dollar liability looming in the retiree healthcare and a lot of people say that’s going to be a bigger problem than the pension payments because the number is so huge. Sanders, he also dealt with the city being frozen out of the bond market over the past year. San Diego has gotten back into that market so that’s a slight improvement in the situation.
CAVANAUGH: What are people hoping that he might say this time around that might fix the city’s financial situation? And I guess what I’m talking about here is the city’s chronic financial problem that many people have pointed to about this problem between revenue and expenditures.
ORR: Well, that’s just it. This 18 month budget cycle is, like I said, supposed to give the city council and the mayor some time to really look at ways to solve the structural budget problems. San Diego does not take in enough revenue to cover its expenses. And there is actually a Revenue Commission in place now to look at ways to generate more revenue for the city. Of course, that might not be very pleasant for some of the residents because it might involve new taxes. Some people say San Diego is not taxed at the level that it should be to pay for all the services we want. And, of course, there is this little chatter around people. The word bankruptcy keeps popping up. Some people do think that filing for bankruptcy would be the answer to San Diego’s problems. It would get them out of some of their obligations. But no one, no elected officials, are really considering that right now. It’s not something anyone’s really talked about seriously in – elected officials. There have been task force (sic) that mentioned it but politicians aren’t saying that right now. But it’s really looking at how does San Diego bring in more revenue to cover our expenses so we don’t have to keep dealing with these deficits because the deficits aren’t going away for the – in the coming years there’s still projected budget deficits. Fiscal year 2012, we’re projected to have a $77 million deficit. Some people expect that to grow to $100 million. So they really want to look at ways they can reform how the city operates so we don’t have to keep dealing with these when the economy gets better.
CAVANAUGH: We’re talking about the topics that will most likely come up in tonight’s State of the City address delivered by San Diego Mayor Jerry Sanders. And I’m speaking with KPBS metro reporter Katie Orr. Now let’s talk about one of the issues that I think the mayor supports and that is his position on managed competition. I believe that he campaigned on that. How does that work into what we’ve been talking about, about the City’s finances?
ORR: Well, managed competition or outsourcing is something that the mayor would really like to see happen as would several members of the city council and would voters. They approved the measure in 2006. But the City and the labor unions haven’t been able to come to an agreement on how the City should proceed going about that because obviously the labor unions don’t want to be shut out of these services. You know, that’s what they’re there for. Those are their jobs. So it really hasn’t gotten anywhere. They’ve tried again recently to get it moving and it didn’t. So it’ll be interesting to see if there’s any progress on that in the coming year but, for the moment, it appears to be stalled.
CAVANAUGH: And you just mentioned the fact that nobody likes – seems to like to talk about new fees or new taxes as a way correct this structural imbalance that we have in San Diego and I know that politicians don’t usually like to tell people things that they don’t want to hear so where does the mayor stand on things like perhaps imposing new taxes or fees to raise revenue?
ORR: Well, under the latest budget, the 18 month budget, there was a provision in there that said the mayor has to study looking at imposing fees for trash collection for single family homes and for storm water, storm water fees. You know, well, I don’t – You know, and I don’t know exactly what studying it means. Who knows how long that can take if there’s a commission that’s formed or something. But nobody on the council or the mayor will really come out and say yes, let’s, you know, we want these fees, we need these fees, at least not yet. I don’t know if the year progresses and the Revenue Commission says, listen, this is what we need to do if we want to fix the city, maybe that will change. But for now, no one is publicly coming out in support of these because, you know, who wants to, you know, back new taxes? It’s not something that voters are very, you know, appreciative of. And a lot of people, in regards to trash pickup, believe they already pay for it through their property taxes. So, you know, if the City really wanted to charge for that, as every other – Every other city in the county charges for trash pickup. And if San Diego wanted to do that, they would really have to make the case that it’s something separate from property taxes and it might be a bit of a fight.
CAVANAUGH: Now, San Diego is in the process of experimenting with the strong mayor form of government and a lot of people had a lot of trepidations about that when it first went into place. What would – How would you describe the mayor’s relationship with the city council?
ORR: Well, from what I’ve seen it seems to be a pretty smooth relationship. There’s not a lot of debate and maybe I think that’s because there’s not a lot of options or they don’t seem to think that there are a lot of options for getting the City out of these budget deficits. They’re so large that, you know, everyone sort of acknowledges that we have to do what we have to do and they just get along and everyone sort of makes these cuts. If the financial situation improves or we start dealing with some really hot-button issues like, you know, building a new stadium downtown or going ahead with the new city hall, which would be public money, that might – you might start seeing the divisions between the council and the mayor a little bit more. But right now, they’re pretty much – they appear to be pretty uniform in their approach to city government right now.
CAVANAUGH: Doesn’t the strong mayor form of government come up for a vote to make it permanent, I believe, sometime this year? And I was speaking with – Well, you know, we had all the members of the San Diego City Council, they were gracious enough to come on the program and talk to us and some of them would like to make some revisions in that process because it seems now they can – they have to call the city manager to get information rather than calling agencies directly and some of them had a real problem with that.
ORR: Well, it does seem that at – not the city council but at city hall, I mean, the mayor’s office definitely runs things and for a lot of things you go through the mayor’s office to get to the other departments. So perhaps that’s something that they, you know, don’t really like to have to run their ideas past, you know, the mayor’s office before they go talk to whoever they want to speak with.
CAVANAUGH: We are talking about the mayor’s fifth State of the City address. San Diego Mayor Jerry Sanders will be giving that address tonight. I’m speaking with KPBS metro reporter Katie Orr. And if you have a – if you’d like to tell us what you’d like to hear the mayor talk about, you can give us a call at 1-888-895-5727. You just mentioned, Katie, those construction projects…
ORR: Umm-hmm.
CAVANAUGH: …that have been talked about in downtown San Diego. What are these construction projects that the mayor supports?
ORR: Well, there are a couple of projects and I want to say I don’t know if he specifically supports…
CAVANAUGH: Okay.
ORR: The concept, he might – he supports the concept but as far as specific plans, that might change depending on – He always says as long as they don’t – If they’re beneficial to the city, he would support them. We’re talking about a new library downtown, a new city hall, an expansion to the convention center, and now, although this is, you know, very preliminary, a new Chargers stadium that might be located in the East Village. And it could be interesting to see what he says about that. He might point to Petco Park and say, you know, look what this has done for that neighborhood. The Chargers stadium would just, you know, further enhance it. But as people know, there’s been talk of taxpayers paying for that stadium or at least a portion of that, and I don’t know that that’s something the public and the politicians would support at the moment. I don’t know, if the Chargers win the Super Bowl, who knows?
CAVANAUGH: Who knows, indeed. That’s a big who knows at this point. You know, we covered the State of the State address last week, Governor Schwarzenegger, he – among many things, he asked for more of California’s money back from the federal government. Now we have a sort of ancillary problem here in San Diego. I wonder, do you expect to hear an argument from Mayor Sanders about how the state is draining San Diego?
ORR: Yeah, over the past few months that’s really been – since the summer, actually, that’s really been one of his big talking points. He’ll have multiple press conferences where he goes – he talks about the state really, he calls it, balancing their budget on the backs of local governments. For example, San Diego’s redevelopment agencies lost $50 million that they were supposed to get because the state kept it, didn’t, you know, didn’t give it to them. And Mayor Sanders and some other local politicians actually recently got together and held a news conference urging for state legislation that would ban the state from taking local money. So it’s something that they’re very concerned about and the – you know, California’s facing a $20 billion deficit. I think they’re definitely worried that that could happen again and with San Diego facing its own, you know, $100 million deficit, it’s not really something that they can afford.
CAVANAUGH: They don’t want the state to take any more money.
ORR: Right.
CAVANAUGH: Yeah.
ORR: Umm-hmm.
CAVANAUGH: Okay, I want to let you know that Christine from San Diego called us and said that some single family residences do pay a separate trash fee in the city, such as gated communities do.
ORR: Right.
CAVANAUGH: So, yeah, this is a…
ORR: Yeah, it’s a very…
CAVANAUGH: …big issue.
ORR: It’s very complicated. If you can get your trash to a public street in a public bin, you don’t have to pay for it but everyone else does pay for private service.
CAVANAUGH: Now I’ve said that the speech is going to happen tonight. Is it open to the public?
ORR: It is open to the public. It’s taking place at the Balboa Theater downtown and it starts at six o’clock tonight.
CAVANAUGH: Okay, and I also know that people can watch this on Cable Channel 24 as well, so if you can’t make it to the Balboa Theater, you can turn on Channel 24 and watch it there. Katie, thank you so much.
ORR: Thank you.
CAVANAUGH: I’ve been speaking with KPBS metro reporter Katie Orr. And we have to take a short break. When we return, we will discuss the issue of human trafficking. You’re listening to KPBS.
