Thursday, June 16, 2005 | The city of San Diego recovered nearly $1.1 million in back loans from the Centre City Development Corp. on Tuesday, allowing the City Council the option of nearly halving the $2.5 million budget gap for next fiscal year.

The current deficit – which has surfaced since City Manager Lamont Ewell presented a balanced budget plan in May when the fiscal proceedings started – may be about $12 million instead, and the CCDC money could look like a drop in the bucket.

The deficit could be $9.6 million larger if the “contingent revenue” assumed by City Manager Lamont Ewell falls through. Council members could be dealt that possibility in the coming weeks if the state budget leaves out reimbursements to cities that pay jail booking fees, no mayoral candidate wins a majority of the vote in the July 26 election, or the council refuses to use Mission Bay lease money on day-to-day costs instead of recreational improvements.

“I don’t know what a ‘contingent revenue’ is,” consultant John Gordon told a council committee Monday during a presentation on city budgeting. “It’s either a revenue or a hope.”

Several changes have been made to Ewell’s $857 million budget plan since it was presented to the council in May. The council approved about $740,000 less in new and increased fees than the city manager expected, the July 26 special election has since been scheduled to replace resigned Mayor Dick Murphy, and the city’s labor unions rejected work furlough proposals in negotiations that would have saved about $3 million.

The $2.5 million gap projected in Monday’s budget update does not include the worst-case scenario costs for state booking fees, a runoff election or the Mission Bay Ordinance.

The city pays the county a $5.2 million booking fee every year to provide beds for prisoners. The state has picked up the tab for the city in the past, although that may not be the case this time around. The booking fees reimbursement was left out of Gov. Arnold Schwarzenegger’s May revision of the state budget, but legislators inserted the provision during a legislative conference.

Brent Eidson, assistant director for governmental affairs for the city, said it is still too early to tell whether the city will receive the funds.

“It’s too difficult to handicap,” Eidson said, “but I can tell you that we are encouraged that it’s being addressed right now.”

The state constitution requires the governor to approve next year’s budget by June 30, although recent budgets have been delayed past the deadline.

Another potential expense for the city is if none of the mayoral candidates win at least 50 percent of the vote in the July 26 election, a runoff would have to be held at an estimated cost of $2 million to $3 million. City Hall insiders say that it’s very likely that a runoff will happen.

“Mathematically, it’s almost impossible for anyone to win in the primary with 11 names on the ballot,” said lobbyist Jon Dadian.

“It would be miraculous for someone to get 50 percent in the first election,” political consultant Scott Barnett said.

In a memo sent to the mayor and City Council on Wednesday, City Clerk Chuck Abdelnour said San Diego could save $2.5 million by consolidating the runoff with the special election called by Schwarzenegger earlier this week.

The city manager’s budget also assumes that the council will waive the Mission Bay Ordinance, a 2002 policy that directs lease money paid by the bay’s tenants to a fund to pay for recreation upkeep and improvements at Mission Bay Park. If the council fails to waive the ordinance, another $1.4 million gap would have to be reconciled by the end of the month.

Councilwoman Donna Frye said she does not support waiving the ordinance, but also doesn’t support “that type of budgeting process,” referring to Ewell’s assumptions.

Members of the council say they are cautious that a lot can happen to the budget between now and July 1, the start of the new fiscal year.

“It’s going to be dependent on a lot of things and obviously we’re hoping we can identify more additional revenue so we don’t have to make more cuts,” said Councilman Tony Young.

Ron Villa, the city’s financial management director, said he and other administrators are working to put out a memo to council offices Friday to look at other solutions to bridge the deficit. Public budget hearings are most likely to resume Monday at the council chambers, located on the 12th floor of 202 C St.

Please contact Evan McLaughlin directly at

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