Mayor Talks City Budget, Retiree Health Care, Convention Center

San Diego Mayor Jerry Sanders joins us to talk about his revised budget proposal, and the recent deal to reform the retiree health care system. Sanders also discusses the push to expand the convention center, and efforts to build a new stadium for the Chargers.

Guest

Jerry Sanders, Mayor of San Diego

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CAVANAUGH: California's overcrowded prisons must release inmates. And more taxes money may mean more services for the City of San Diego. This is KPBS Midday Edition. It's Monday, May 23rd, I'm Maureen Cavanaugh. We'll be following a major ruling by the U.S. Supreme Court forcing California prisons to reduce population by releasing thousands of prisoners. Later this hour, we'll meet moveon.org cofounder Eli Pariser, talking about what the web is hiding from you. Right now, it's a pleasure to welcome our first guest to KPBS Midday Edition, San Diego mayor Jerry Sanders. Good morning mayor Sanders?

SANDERS: Good morning. How are you doing Maureen?

CAVANAUGH: I'm doing well. And thank you for doing this.

SANDERS: Oh, I'm happy to be a part of it.

CAVANAUGH: Now, Mayor Sanders, you're presenting your revised budget to the San Diego City Council today. So what is the difference about this budget than the one you released last month.

SANDERS: The difference is, we -- after going through some numbers we got from the state and from others, we found that we had some additional revenues because the economy is slowly starting to get to be in better shape. And we identified those revenues and really matched the one time revenues to one time needs and the ongoing revenues to ongoing needs and that's what we're presenting to council.

CAVANAUGH: And how big of a wind fall is this?

SANDERS: Well, we had about nine million dollars in both one time and long-term and that's good news. So we've proposed restoring all the park and rec hours back to 40 a week instead of halving that. And we've proposed to keep at least one major library in each council district open and pear the other two. And then just some other changes that we have done to increase the level of service in certain areas. But also to put the one time money into a fire station alert system, something we've been working on for quite a while. And also on some 88 projects which are things that we'd really like to get done.

CAVANAUGH: Just to be careful for the people listening, does this mean the City of San Diego is out of its financial crisis.

SANDERS: No it doesn't. I wish that were true. We still have one more year of deficits. But I pledged to get rid of that we next year, and I think we're well on the way of doing that. And this is good news because we've seen a strengthening in our transient occupancy tax, which is hotel taxes. We've seen a strengthening in the sales tax. But it's still weak in certain places, and we just don't know where the economy is going. I don't think that anybody does right now.

CAVANAUGH: You also recently announced an agreement with most city unions on retiree healthcare benefits for San Diego City workers. What do you project would be the financial benefit of that?

SANDERS: Well, it's a huge financial benefit over a 25 year period. It saves about seven hundred and 14 million dollars over 25 years. It also cuts about three hundred and 30 million off of the -- off what we call the ark or what we owe that system. So it's a huge amount of money. It lowers our payment by a third. But we won't see those savings until actually a few years down the line. And that's because we have programmed in a very specific amount of money over the next five years. So the money will not go up as the system uses it. And it's something that's been escalating really rapid he. This means it won't escalate at all for the first five years. It'll be the same amount of money every year.

CAVANAUGH: And where does that stand now? The City Council has approved it. What else does it need?

SANDERS: The City Council approved it. It has to go back for what they call the second reading. On all ordinances, they have to be read twice to give people a chance to come back and talk about them. So that'll be either late this week or early next week that that'll be done. And then the unions all have some things that they've gotta get done in terms of votes and their membership and all that.

CAVANAUGH: Let me change the subject, if I may, Miss, too and say that the problems that San Diego has been experiencing with certain members of the police department, the allegations of officer misconduct have garnered a lot of media attention lately. What do you think needs to be done in the police department to eliminate -- to address this problem.

SANDERS: Well, you know, I think the chief's taken a good start. He's gotten pretty tough in terms of identifying people. I know that he is putting out some expectations of all members. I know that we've also had command staff meeting with literally everybody on the police department all the way to the rank and file. He's beefed up some of the internal controls which I think'll be really helpful. So I think it's that type of thing, but Bill knows he's got a lot of work ahead of him in terms of creating a different environment. And I think that he's got a program in place to do that. But you know, I also know it's somewhat encouraging that these things are people. Because a lot of police departments, you never hear about any of this. And the fact that we are taking action on police misconduct here means that they're not trying to sweep it under the rug, they're really trying to make sure that we're playing it out in the way that it should be.

CAVANAUGH: When chief Lansdowne gave his announcement about how he was going to address this, within the police department. He talked about the fact that a lot of positions have gone unfilled within this San Diego police department, supervisory positions and others. So in a way, does this police problem also go back to tight budgets?

SANDERS: Well, you know, I think that it obviously does. I think that number one, morale is a little bit down because of the budget issues. But I us think that when you start cutting and you let some of those things go you know filled that you don't have the same quality of super vision out in the field. I think Bill's perfectly aware of that. I know he's taking steps to address that, and I think that's an important part of if because everything starts with the super vision in the field from the sergeants and the lieutenants.

CAVANAUGH: So can San Diego function indefinitely with such low city staffing?

SANDERS: Well, we're not gonna be doing it indefinitely. As I said, we will be closing the building gap next year. We'll get rid of the structural deficit for the first time in probably three decades. It's been something that's been around for a long time. But as the economy gets better, and I think it will get better, then we'll be able to start adding back those positions. But on the police department we can promote and do all of that. That's still in the budget. So that's just something that has been put on hold. And I think Bill will be real quick to start moving those three.

CAVANAUGH: I'm speaking with San Diego mayor, Jerry Sanders. And I'm wondering, sir, have you given up on asking citizens to contribute more in taxes for better city services?

SANDERS: Well, I think they fairly dramatically told me what they thought about it in that last election when we didn't do too well on the ballot with that. So I think it's something that I'm perfectly aware of now. I know how the people feel about that, and we'll try to find ways to make our cuts and do the things we need to do without reducing too much and still main stain core services.

MAUREEN CAVANAUGH: So where does that leave your goal of solving the city's structural deficit?

SANDERS: We have about 41-million next year that we have to come up with, and I think we'll see that plays out mostly in term was increased receive new. I think we've got a good shot at having greatly increased revenue. And then also our pension payments will be going down next year, and that's simple he a function of not having pay raises for the last three or four years, and it goes down pretty quickly when you have that scenario set up.

CAVANAUGH: You announced a new plan to fund the proposed expansion of the San Diego Convention Center last week. Why, first of all, do you think the city should expand the Convention Center?

SANDERS: Well, the Convention Center literally turns away a year's worth of business every single year. So it's a going enterprise, it makes a lot of sense. It also pumps back into the economy literally, millions and millions of dollars every single year. And a lot of that money, about 30 million a year goes out in sales tax and goes out to every other community in San Diego which benefits from the police and fire protection and all of that. So this is an industry wide group that is looking at it, and we've made it very clear that the industry is gone have to pay the lion's share of that, the ones that benefit the most. And I think you're seeing a concerted effort by the hotel industry, and by others, in putting together a plan that'll allow them to do that.

CAVANAUGH: What would be the city's obligation in that?

SANDERS: Well, at this point, we don't have an obligation. It may be that we get some TOT with the increased revenue from hotels. But the Convention Center is just a great deal for everybody. And it's a huge job generator. It generates about 12 thousand jobs in the City of San Diego, and we estimate it'd go up by another six or eight thousand with the expansion.

CAVANAUGH: So do you see any redevelopment funds going into the expansion of the Convention Center?

SANDERS: We had originally programmed some in starting at about 2025, but with the problems in Sacramento we just do not know if there's gonna be redevelopment at that point. So that's no longer part of the plan at this point.

CAVANAUGH: What about -- what's the latest on the city's discussions with the Chargers about building a new stadium downtown?

SANDERS: You know, even talking with the Chargers. It's something that's really somewhat dependent, at least right now, on redevelopment. If that doesn't -- if we lose the redevelopment money, then we'll have to pursue another course in that, and we've been talking with the Chargers about other options.

CAVANAUGH: I remember something about all projects that are in a planning stage, a certain point in the planning stage won't be affected if the redevelopment agencies go away. Are we in that stage in any of these projects? That we --

SANDERS: No.

CAVANAUGH: No. Okay.

SANDERS: Both these projects were not in that stage. We hadn't committed money to them already. So we're kind of left out on that.

CAVANAUGH: As you look at -- as you present the San Diego City Council with this revised budget, have you been looking at what the City Council has been giving you in terms of suggestions on how to make funding -- how to fund different things in the budget, how to cut certain things, where do find certain revenues?

SANDERS: Absolutely we did. And we've worked very closely with the council president this year, Tony Young. Worked with Kevin Faulconer, and Watad Gloria, who's the chair of the budget committee. And we've tried to incorporate many of the things they thought were important into this budget because it's much easier when it's a collaborative process. And I think that's what we've seen this year.

CAVANAUGH: And so what are some of the things you've taken from the City Council?

SANDERS: Well, just initially they made clear to me that their number one priority was restoring brownouts. So we put together a plan to allow that to happen over a year period that the budget's enacted. We also worked with them, and that's also the reason you're seeing park and rec hours restored and library hours restored because they indicated that was important to them.

CAVANAUGH: Several members of the council have offered ideas about how to keep the libraries open a little bit more than you have in your plan. Will you look at this?

SANDERS: We will. It's really in their hands once we give it to them. And I know they're looking at that, we're trying to identify the savings and we're simply trying to weigh in where we think those savings may not be wise because they may not actually be there. But we're working with the council all the way through this, and we're taking many of their originations and the IDA's recommendations.

CAVANAUGH: My last question to you, mayor, there's been some criticism about this wind fall that you've revised your budget on, that so much of it is made up of one time revenues that won't come again. The city won't see them again. So do we really have any kind of way to say that there -- we have seen a turn around? That we can expect more revenues to come into San Diego?

SANDERS: Well, as I said, the one time revenues we spend on one time projects. So there's no ongoing expense on that. But 7-million of that was actually revenue increases from TOT from the sale of the World Trade center projected out a number of years, and also a new contract that we put together with Lindbergh field for fire protection. So we have been aware of that. Only about three million of that was one time money. And we certainly don't program that into ongoing expenses.

CAVANAUGH: Quick question, what are the next steps in this budget process?

SANDERS: Council will start deliberating on it. And they'll come up with a budget package. It has to be done in the next probably few days because it has to go to council for their final ratification fairly soon. So I think we're seeing an end to the process coming fairly quickly.

CAVANAUGH: I've been speaking with San Diego mayor, Jerry Sanders, our first guest on the new KPBS Midday Edition. Thank you very much, mayor Sanders.

SANDERS: You're welcome, Maureen.