Friday, May 27, 2005 | Every week, Golden Hill resident James Wade and his two children visit the Central Library. He uses the microfilm archives and California Room to research the storied history of how San Diego’s neighborhoods came to look the way they do today, a hobby of his. Wade’s children gather books for school and work on research projects in the children’s room.

However, his reason for addressing the City Council this week wasn’t to praise the San Diego’s public libraries, but rather to express discontent over the downtown hub’s “disgraceful state.” For Wade, the Central Library could make some improvements to its cataloguing system, as it’s difficult for him to navigate the research materials he’s looking for or to know what’s available in the basement collection, he said.

“In reality, what our Central Library has become is a book museum. It doesn’t function as a real library,” he said.

Patrons’ ability to access library materials will most likely be further hindered next year, as the City Council has tentatively agreed to eliminate staff and reduce funding for computer and software upgrades. San Diego currently has the lowest full-time staff-per-book ratio, one librarian per 10,032 books, out of California’s 10 largest cities, a recent study showed.

Despite assurances by city officials that money is being shifted back to core services like police and fire in fiscal year 2006, San Diego lawmakers and citizens alike are catching on after several budget hearings: Years of pension underfunding and increased benefits have forced the city to make larger payments into the embattled system at the expense of services and city jobs.

The city’s day-to-day budget is estimated to grow by $40 million because of strong economic growth expected in the next fiscal year, although San Diegans will still see services and programs squeezed if the proposed budget plan is passed.

“The wages and fringe benefits are increasing. You’re going to see stagnation or decrease in other areas,” said Ron Villa, the city’s acting financial management director.

It is a trend that will likely continue absent a change in the benefit structure or an increase in revenues, as pension payments are expected to consume city budgets for years to come.

Thirty budget departments take personnel and service funds from the city’s general account. Across the these departments, spending on staff salaries, service and supplies dropped by $11.4 million compared to the 2005 budget, while benefit expenditures increased by $42.8 million, an analysis of City Manager Lamont Ewell’s fiscal plan showed.

Employee benefit expenses also include unemployment insurance, workers’ compensation, health care flex benefits and long-term disability, but Villa said the majority of this budget category is comprised of payments into the San Diego City Employees’ Retirement System and retiree health benefits.

Villa said that, across the board, half of the costs associated with the “fringe benefits” are related to the city’s payments into the pension plan or retiree health benefits.

Current estimates of the pension shortfall lie between $1.37 billion and $2 billion. The funding shortfall for retiree health benefits ranges between $500 million and $800 million, estimates show. The health care deficit is expected to grow annually, as the city continues to account for only annual, rather than amortized, costs.

If the City Council approves Ewell’s budget for the next fiscal year as presented:

– San Diego Fire-Rescue will spend 22 percent more, or $9.6 million, on employee benefits next year than last year while salaries, services and supplies will increase about 3 percent, or $2.9 million. Deputy Fire Chief Tracy Jarman said the proposed budget doesn’t compensate for the city’s growth in areas like Mission Valley, which will hinder Fire-Rescue’s ability to acquire new equipment.

“For a large metropolitan department, it’s going to be tough to get through the year,” she said.

The city manager proposed an overall annual increase of $9.4 million to the department’s budget.

– The library department will pay 17 percent more, or $1.4 million, into employee benefits than this year while absorbing a nearly 3-percent cut to salaries, services and supplies. City libraries will see a 20-percent cut to book and material purchases, the shortening of branch hours, and no new computer or software purchases.

The proposed increase to the entire department is $240,000.

– The park and recreation department will allocate an extra 18 percent, or $2.8 million, for benefits while taking an 8-percent cut to salaries, services and supplies. The proposed cuts to parks include the closure of almost all city pools for about three months, reduced hours at recreation centers and the elimination of some groundskeeper and maintenance jobs that could result in unkempt parkland and less frequent restroom cleaning.

A decrease of $3.5 million is proposed for next year’s park and recreation budget.

– The police department will pay an additional 23 percent, or $20.9 million, for benefits while only receiving a 2-percent boost for salaries, services and supplies. The budget plan reflects negotiated increases to department salaries, but also the losses of 40 community service officer positions and one of the five assistant chiefs, said Bill Maheu, executive assistant chief of operations.

An increase of $24.5 million is proposed for next year’s police budget.

Deputy City Manager Bruce Herring said that the salaries for city workers will get a boost in the next fiscal year because labor contracts were structured so increases would be felt in the 2006 fiscal year. However, the city will pay less in salary expenses in many departments because the savings created by laying employees off more than 200 employees will offset those salary increases, he said.

The shortage in service and job funding comes from two sources, Herring said. First, the state will not contribute $17 million in car tax revenue next year because of Proposition 65’s passage in November – money that would otherwise be used for day-to-day operations, he said.

Secondly, of the existing general fund money available, Herring said more must be spent on the retirement system as part of a lawsuit settlement reached with retirees last year.

“You add the two retirement issues together and there’s the significant increase in benefits (paid by the city),” Herring said, speaking of the city’s pension contribution and retiree health payments.

Previously, the cost for retiree health benefits was taken from the retirement system.

And, after more than a decade of underfunding its pension system to free up cash for other services, the city is paying $163.5 million – $30 million more than last year – into its pension system this year.

Still, many close to the pension system believe that the contribution continues to dig the pension deficit deeper. They estimate it would require about $40 million more to hold the deficit steady.

Councilman Jim Madaffer said the service and personnel cuts would have been made in years before if the city had been making full payments into the retirement system.

“We’re finally paying into the pension when the reality is that we haven’t for the last decade,” Madaffer said. “The city has a pension problem today because we’ve been robbing Peter to pay Paul.”

City Attorney Mike Aguirre contends that the benefits granted by the city under 1996 and 2002 agreements with the pension board are illegal, and that voiding them would save the city $700 million to $800 million.

“They basically have shut down the city,” Aguirre said of the City Council. “… They are cutting into the bone marrow in order to fund these illegal benefits.”

Councilwoman Donna Frye is the only member of the council who subscribes to Aguirre’s idea of rolling back the benefits.

Some council members have asked for other solutions to fund services, supplies and salaries in the upcoming fiscal year. Councilman Tony Young motioned Wednesday to divert more funding from the city’s hotel tax revenue to the park and recreation budget, but the proposal failed.

Because the payments into SDCERS and retiree health are virtually locked into the budget, it’s apparent to many that the only way discretionary expenses like staff and services can be saved from the budget axe is to raise more revenue, possibly through new fees.

“If we don’t look for additional revenue we’re never going to fund our park system and that is so direly needed,” said Young, who asked the city manager to study different ways to generate revenue to restore cuts made in the proposal. “We can look at charging for the equipment we provide them, but what troubles me is that those types of things weren’t in the budget.”

View a table of how the proposed budget will affect some of the city’s departments.

Please contact Evan McLaughlin directly at

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