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Monday, Jan. 29, 2007 | In recent months as our city continues its transition to the strong mayor form of government, the mayor and the City Council have come to loggerheads over budget cuts and the city’s budget process itself. On the surface, the debate revolves around a key question: How much discretion does the mayor have as the “executive” to make cuts in programs to keep the budget in balance? 

This question first surfaced last fall when the Mayor had to make two changes in funding levels for two pet earmarks of the City Council as part of his efforts to balance the budget.  At the time Andrea Tevlin, the Independent Budget Analyst with the City Council, weighed in with her concerns over the mayor’s budget changes. 

Last week, an all-out food fight and war of words erupted between City Councilmembers and the mayor’s office in the wake of a formal proposal made by Tevlin to require council approval before the mayor changes any allocations in the budget mid-year.

The City Council argues that it is only concerned with good public policy — that as the legislative body for the city it has a right and obligation to review mid-year changes to the budget in public and approve them. The mayor contends that he needs flexibility to manage department resources day-to-day in the most efficient way possible and that transfers between budget accounts are a routine and necessary part of managing complex organizations such as the city.

From a policy perspective, both the mayor and the council are right. And from a policy perspective a reasonable compromise can and should be worked out that satisfies the objectives of both branches.

Unfortunately, like the mayor, I highly doubt most on the City Council are really interested in “good policy” by raising this issue. In fact, three years ago, I offered a proposal similar to the one presented by Tevlin — only to have these same City Council members emphatically dismiss the idea. Somehow I doubt the same City Council members — who insisted on giving vast authority to the then-city manager to monkey with the budget mid-year out of the public’s view — suddenly have had a change of heart.

Moreover, I’m concerned that the same City Council members — who spent our city into massive budget deficits and papered over those deficits with accounting gimmicks and erroneous financial statements — suddenly claim to have the backbone to make the tough decisions to get our city out of its current financial crisis.

Dig a bit deeper and you will find the City Council’s real motive is to assert its authority over the mayor in an effort to slow down, if not derail, reforms of city departments and efforts to cut city spending to balance the budget. Indeed, to date, the council has only sought changes in the budget process to restore cuts made by the mayor, rather than support the cuts. What’s worse, the council has yet to identify alternative cuts to keep the budget in balance.

Hidden in the council’s proposal is a sneak attack on one of the most important tools being used by the mayor to streamline city government: Business Process Re-Engineering (BPR). The city’s labor unions are up-in-arms over the BPR efforts and have put immense pressure on the councilmembers to halt the studies. Remember Proposition C? BPR is supposed to be a pre-cursor to Managed Competition. Stop BPR and you derail the will of the people for full, fair and open competition for efficiencies in government.

Put simply, the council seems intent on moving the city back to the days of candy-land budgeting — and they are shamefully doing it in the name of transparency.

Instead of taking the bait, the mayor should call their bluff. If this City Council is serious about making the tough decisions, offer them a reformed budget process to make them a partner in that important undertaking.

A compromise budget reform package could feature three important elements:

  • Service Level Objectives: For each department budget, the City Council should articulate and establish by Feb. 1 each year clear service levels that would constitute the official “policy objectives” of the budget to be devised and submitted by the mayor. This would allow the departments to forecast what budget would be necessary to achieve those service levels. In government this is called “performance-based budgeting” and this approach is widely used by other cities and counties. Understanding that there’s not enough money to fully fund every service level desired by council, the service levels should be revised by the mayor when he submits his budget and by the council upon passage of the final budget.
  • Quarterly Budget Report: The mayor should advise the City Council quarterly on any changes made in the budget and a justification for the change made. As long as these changes do not impact service levels, the mayor should be given flexibility to make budget changes throughout the year. If the City Council felt strongly that a specific cut be restored, the council could always pass an ordinance requiring the mayor to restore the cut. On the flip side, the mayor should also advise the City Council on any budget account that is projected to be in deficit at the end of the year and provide a solution for re-balancing the budget.
  • Budget Reconciliations: Should a budget change impact a stated service level as articulated by the council for the budget year, the mayor should advise the City Council of such a change. The City Council would then be given 60 days to reject this change, although if no action occurs by the council, the mayor would have full authority to change the budget and reduce the service level. Should the council reject a change made by the mayor, the council should have to identify the cuts or resources to “re-balance” the budget. 

This process would be “after-the-fact” and would give the mayor flexibility to manage resources efficiently day-to-day. Rather than require the mayor to seek approval in advance for each and every change, it would require the council to take a specific action to block a budget change.

Like the overwhelming majority of the general public, I trust Mayor Sanders any day over the current City Council to exercise spending discipline and keep our budget in balance. That being said, this debate is not and should not be about Jerry Sanders and the current individuals who sit on the City Council. We should look past the current holders of these offices and consider the governance system we ought to have in place — long term. 

We need these kinds of checks and balances between the City Council and the mayor on the budget. San Diego has a chance to make significant improvements to its budget process — and continue its transition to a strong mayor form of government. As the council and mayor prepare to square off on Feb. 5 on this issue, we encourage both sides to consider a compromise along the lines about to clarify their respective roles in the budget process.

Carl DeMaio is president of the Performance Institute. Agree with him? Disagree? Send a letter to the editor.

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