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Tuesday, April 19, 2005 | Stormy predictions. The City Council dug into the city manager’s new five-year financial forecast for the first time in public Monday, and the result is likely a sign of what’s to come. Mayor Dick Murphy and the City Council voted to waive policies that normally set aside $14 million for libraries and $6.6 million for environmental growth such as park acquisition in order to fund more basic public safety needs.
The move knocks a chunk out of an estimated $30 million to $50 million budget hole for the fiscal year 2006, which begins July 1. The mayor and council are seeking a bevy of labor concessions in closed-door talks that could help close this gap, but service cuts and layoffs are also distinct possibilities. Some think that the budget gap is actually larger if a different set of pension numbers are used to figure what the city should pay to keep the $1.37 billion pension deficit from growing. Budget deliberations officially begin next month.
Speakers from the public and the council itself applauded city officials for fulfilling a long-standing wish to have a long-term budget structure. “At the risk of being disrespectful, it’s about flipping time,” said Lisa Briggs, executive director of the San Diego County Taxpayers Association.
City Manager Lamont Ewell said the plan is a way to pull the city’s spending within its revenue means. If the city were to stay on its current spending track, it would face shortfalls of $48 million in 2006 and $97 million by 2010. But if major concessions are won from labor and reductions made, the projections show tens of millions of extra dollars to go toward the pension deficits – either through lump sum payments or to finance pension obligation bonds.
Of course, there were plenty of complaints about the assumptions used to arrive at these numbers. Briggs said the city must start funding retiree health care for the future instead of its current pay-as-you-go approach. That approach has left the city with an estimated $500 million to $800 million in future unfunded retiree health care costs. Overtime costs for police and fire fighters aren’t budgeted honestly, Briggs said. It’s common knowledge that the city budget consistently underestimates its overtime budget for the public safety departments in the millions of dollars.
The budget will certainly be barebones for the years to come absent revenue increases, though public talk about raising fees and taxes has increased gradually in the past months. City Councilmembers Scott Peters and Toni Atkins both stressed the need to attack the city’s unfunded needs list, specifically road repairs. But Ewell squelched any talk of adding expenditures in these areas.
“The city does not have the revenue base to do all the things you would like to see get done,” he said. Murphy pointed out that without the waiver, city officials would likely have to search for the $20 million in public safety budgets.
City Councilmembers Donna Frye and Jim Madaffer voted against waiving the funding of the annual library plan and the Environmental Growth Fund. They said they’d like to be presented with the entire budget deficit and then begin trimming rather than have the decision made for them by staff.
Ewell said the forecast is a tool the council can use to set priorities and send a message to its financial partners and financial markets. City Attorney Mike Aguirre has his staff working on verifying the numbers and expects to have that work completed in early May. He advised the council against officially passing the forecast sooner because it will be seen by financial markets and potential investors.
Strong somebody. Grabbing accolades from its once-critical citizen advisor, the City Council made a number of moves to speed up the transition to a strong-mayor form of government. Its first act was voting to make itself an independent committee that will meet, likely on Thursdays or Fridays, to begin the planning process for the switch.
It also voted to name Peters its temporary presiding officer. The title will last only until the committee’s first meeting, at which time council laws require that it name an interim presiding officer, likely to be Peters as well. On Jan. 1, when the transition goes into effect, the council will then name its real presiding officer.
In November, voters approved restructuring city government, moving the mayor from his position as a voting member of the council to the city’s chief executive. The mayor will be in charge of hiring and firing department heads and assembling the annual budget, roles previously assumed by the city manager in the so-called “strong-manager” form of government. The mayor will also have veto power under the five-year test run.
The council is then to act as an eight-member legislative body headed by a presiding officer or council president who is elected by council peers.
Norma Damashek, who is leading the council’s advisory group, warned the council about its lack of action on the issue last week. She said she was pleased with its new sense of urgency.
A Time to love, a Time to hurt. As news broke like an egg on the face that Murphy had been named among the top three worst big city mayors in the United States by Time magazine, the prevailing thought in political circles Monday was that the title would further harm the public perception of the mayor and financial markets’ perception of San Diego.
The city’s perception on Wall Street is already tarnished as the fiscal year 2003 and 2004 audits are on hold pending an investigation into possible wrongdoing by city officials and federal investigations of city finances and politics enter their second year. There is some thought that the title essentially kills San Diego’s effort to be the headquarters of California’s new stem cell institute.
Aguirre called on the mayor to resign Friday after his newly appointed and much-heralded pension board voted to do the same thing the previous pension board had done: withhold documents from federal investigators. Although many thought that the dubious title from Time would increase pressure on Murphy to resign, few thought he actually would.
And while recall talk continues to serve as a backdrop to so many political conversations, it’s estimated such a campaign would cost $300,000. Because of campaign contribution laws, that would have to come in many, many small hunks of $250 or one grand donation from a single giver.
Murphy said that people are only focusing on the negatives, whereas his administration has had many positives as well. Among them: completion of a stalled ballpark, reduction of sewer spills and creation of the Ethics Commission.
“I completely disagree with Time magazine’s conclusions,” Murphy said in a statement.
– By ANDREW DONOHUE, Voice Political Writer
Please contact Andrew Donohue directly at