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In the short term, estimates of the looming budget gap facing the City of San Diego for the 2006 fiscal year range from $80 million to more than $150 million. Layoffs, pleas for pay freezes and extensive service and program cuts are likely.

In the long term, the city has been practically paralyzed since September, when factual errors and omissions in the city’s financial disclosures to the bond market were revealed. Sewer and water upgrades and library and fire facilities have all been affected.

The city won’t be able to raise funds until completing its overdue 2003 and 2004 financial audits. The city’s auditor, KPMG, has reportedly asked the city’s pension board to waive its attorney-client privilege to speed up ongoing investigations and finish the reports. Much of the focus has been placed on the retirement system, which faces a $1.37 billion deficit. The city’s future debt for retiree health care is also estimated between $500 million and $700 million.

Chargers Negotiations

When agreeing to a new Qualcomm Stadium lease last year, the San Diego Chargers and City of San Diego agreed to work toward putting a new stadium deal on the November 2006 ballot. If no agreement is reached on a new stadium, the team could leave town at the end of the 2008 season.

The City Council on February 7 refused to authorize contracts with experienced sports negotiators to begin talks toward fashioning the 2006 proposal, deciding that the idea was ill-timed in a time of financial crisis.

Airport

The San Diego County Regional Airport Authority hopes to have a proposal for a new airport or an upgrade to Lindbergh Field by November 2006, though which site will be put on the ballot still remains unknown.

The authority’s work is essentially at a standstill now as officials wait for the U.S. Department of Defense’s military base realignment process to conclude. The choicest locations are all currently occupied by military bases, including the favorite of many, Miramar. The department’s recommendations are due in May; President Bush is expected to finalize the closures in September.

Military sites crowd the list of finalists: the Marines’ Miramar Air Station, East Miramar and Camp Pendleton, and Navy’s North Island Air Station and March Air Force Base in Riverside County. An expansion of Lindbergh Field is also a possibility. Far-flung sites in Campo, Imperial County and Borrego Springs are also still officially under consideration.

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