Wednesday, May 17, 2006 | When beachgoers flock to San Diego’s shorelines in the summertime, many will tote along an oversized beach bag or backpack containing a towel, volleyball, sun block – and most importantly for beach-area business owners like Nima Abrahim – a wallet.
But Abrahim, who owns the Mission Beach restaurant Luigi’s, also knows that tourists can’t invade the coast without their cars, and a resurrected proposal to charge out-of-towners for parking near the beach has him worried.
“Obviously nobody here would be happy about that,” Abrahim said. “We believe we’d lose a substantial amount of business.”
Charging a fee for parking in public lots near the beach areas and Mission Bay is one of a handful of ideas San Diego City Council members are proposing in order to raise additional revenue for the cash-strapped city. As budget hearings proceed up until the council’s June 30 deadline, the council is currently tweaking the mayor’s spending proposal for the next fiscal year, which begins in July.
Council members have made it clear they want to better fund police, libraries and parks than what is called for in Mayor Jerry Sanders’ budget proposal. To pay for those programs and services, some have also suggested ways to raise revenues, including seizing a share of funds that go to tourism promotion, increasing fees for historical-designation reviews on properties, and charging for parking at the beach.
The city has seen much of its budget chewed up in recent years from its efforts to pay down its behemoth pension deficit, while at the same time voters have rejected tax-raising propositions. A strong housing market and economy have propped up the city’s operational budget to help offset some of the pension costs without any increase to tax rate.
But this year’s ideas for raising revenue through new and increased fees are much fewer in number and undeveloped compared to the overtures then-City Manager Lamont Ewell made last year. Sanders has not made any of the usual proposals of past city administrators and has vocally opposed asking people and businesses for more money.
While council members say they understand the mayor’s stance, the council has the final say on the budget.
Several council members, in public hearings and memos, have indicated that they want to locate the money needed to boost the city’s sagging budget in order to add more police officers to the streets and increase the staffs at libraries, parks and other city agencies. Many officials are also hoping to secure more money for graffiti removal.
Because the mayor did not expend up to $10 million that the city saved by requiring employees to pay more into the pension fund, council members have made it apparent that they are counting on that money to pay for some of their desired funding increases. But most are silent about how to locate extra money beyond that.
However, a few council members have revenue proposals.
Councilman Jim Madaffer said the city could raise about $1.15 million by charging nonresidents to park near the beaches and Mission Bay, piggy backing off an idea budget administrators have floated before, only to be rejected.
Madaffer was out of town and unavailable to discuss his parking idea, a spokeswoman said, but Ewell’s proposal last year would have charged non residents $10 a day to park everyday between Memorial Day and Labor Day as well as the fall and springtime weekends. It was estimated that Ewell’s plan would have added up to $1.77 million a year to the city’s coffers had it not been rejected by the City Council.
Abrahim, the Mission Beach restaurateur, said the fees would be too much of a hassle for visitors and for residents. For example, he said, many of the residents near the beach areas are local college students whose driver’s licenses are likely to list an out-of-town city, which would unfairly charge them.
“It looks like this would be a headache and cost more to manage than it’s worth,” he said.
Madaffer also proposed snatching about $12 million from the city’s promotions budget, which is funded through a tax on hotel rooms, by pushing ahead an ongoing plan to allow hoteliers to assess themselves a fee.
By instituting a tourism improvement district, or TID, hoteliers would pay into a fund that is outside the purview of the City Council, which has cut from the promotions budget several times over the past few years. The city would likely keep a larger portion of the hotel-tax revenues once a TID was established.
However, it doesn’t appear that the TID proposal will form in time to be included in the upcoming year’s budget.
“We’re not on any kind of fixed schedule,” said Mike McDowell, the chief executive officer of the San Diego Lodging Industry Association. “We’re working behind the scenes and we’re a few months out.”
In budget hearings, Councilman Ben Hueso has also mentioned that he would like to consider putting a hotel-tax increase on an upcoming ballot measure, saying it would not significantly impact San Diegans, but rather out-of-towners.
Sanders said in an interview that he hopes the TID will be launched this year, adding that any budget adjustments that accompanied its formation would have to be proposed in the middle of the year.
Council President Scott Peters and Councilman Kevin Faulconer also proposed levying a higher fee on property owners who are trying to secure a tax break for maintaining historical resources. Many of the city’s older neighborhoods in Mission Hills, North Park, Point Loma and La Jolla contain homes that qualify for a historical designation, which allows the owners of those lots a property tax reduction of up to 75 percent under the state Mills Act.
Betsy McCullough, the acting planning director, said the historical review process is backlogged by about one year and could use an extra staff member.
In June, a council committee will hear a proposal to raise the application fee from $400 to $525, which McCullough said more accurately reflects what it costs to perform a review. The proposal would also charge property owners who earn a historical designation a $1,200 processing fee for the designation.
Craig Benedetto, spokesman for the San Diego Building Owners and Managers Association, said extra costs might turn off certain owners from preserving their property.
“Potentially, more historical properties may be redeveloped,” he said. “The implication is that it if the new cost is anywhere near what the amount of the tax credit, it could have the opposite effect.”
Peters has also asked to raise wastewater rates to pay for the storm drains improvements.
“Currently, the City’s storm drain fees cannot support the funds necessary to make necessary storm drain repairs and meet environmental regulations in the near future,” Peters said in a memo.
Any money collected from an increase in wastewater rates would go back into wastewater improvements, not the operational budget that covers police, fire and parks.
The council president also said he wanted to study land sales and the fees the city could collect for trash pickup, parking, recreation and other service to make sure the city isn’t borrowing from other parts of the budget to keep certain programs afloat. However, he said that he didn’t think that discussion would occur this year.
“At some point we should have a conversation with taxpayers about whether there are other things they’d like to pay for in addition to the services they’re getting,” Peters said. “Clearly, until we get our financial house in order, nobody is going to be open to that.”
– Staff writer Sam Hodgson contributed to this report.
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