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Saturday, April 28, 2007 | Independent Budget Analyst Andrea Tevlin warned Mayor Jerry Sanders that his financial plan relies on too many uncertainties in a report released Friday, but she stopped short of demanding that the budget be completely overhauled.
Tevlin also took aim at the mayor’s definitive statement that the proposed budget will not decrease the levels of services citizens receive. The mayor has recognized that he can’t measure service levels.
Counting On It
“Without reliable measurements, the honest answer to the question [about service-level impacts] is ‘It’s impossible to know,’” Tevlin wrote.
The 126-page report marks the first formal critique of the mayor’s budget proposal for the 2008 fiscal year, although several City Council members have already chimed in with similar concerns. The IBA’s review of the budget will guide the council through the next two months’ of hearings. The council must adopt a final spending plan by a June 30 deadline.
Tevlin recommended that Sanders resist tying strategies such as real estate sales and massive employee layoffs into the budget. It’s unclear whether the plans will materialize, or even garner the council’s approval, throughout the year, she said.
The IBA also criticized Sanders for not providing sufficient information on the streamlining effort known as business process reengineering, or BPR. However, she did state that she supports the concept of BPR, which mines city departments for efficiencies.
Tevlin expressed skepticism about wrapping the $49 million in savings Sanders is estimating from a half-dozen department BPRs into the annual budget. However, she said it was acceptable this time to include the projections even though their approval by the council is indefinite.
“We’re not saying, ‘undo the cuts,’” Tevlin said in an interview Friday. “But in the future we would like to have the discussion about them before they are included in the budget.”
Sanders has touted the BPR process to bridge an $87 million gap in the city’s general fund, which funds police, libraries, firefighters and recreation programs. But it’s unclear how much of the $49 million in savings will come from the general fund.
The IBA and other council members have been largely supportive of the streamlining program, but they have lamented the confidentiality that has shrouded the process and the measurement of its impacts on city functions.
“I am a supporter of that process, and we need to know how to do it,” Councilman Kevin Faulconer said at a budget hearing Wednesday.
Sanders spokesman Fred Sainz said the budget was the proper venue for the BPR discussions. The council would have to adjust the city’s spending plan in a piecemeal fashion in the future if BPR savings were kept out of the current budget talks. Including all financial decisions in one budget was more comprehensive, he said.
“What we wanted to do was take advantage of the budget process to look at these savings,” Sainz said.
Tevlin said BPR and other strategies, such as the $15 million in planned land sales, should be reviewed well before the council stamps its approval on the budget. The council is slated to discuss the $34 million in real estate holdings that are nearly ready for sale, giving it enough time to judge whether the sales should be included in the budget.
But Tevlin recommended that a proposal to free up hotel tax money be completely removed from the budget because it is very uncertain that the gains will be realized this year. The council and a group of hoteliers would have to approve the change before the city could realize the $5 million to $7 million that Sanders is anticipating for 2008, the IBA said.
The IBA also acknowledged it is enmeshed in a fundamental disagreement with Sanders over service levels.
Even before Friday’s report, the 300 layoffs and the elimination of 370 unfilled roster slots included in the budget drew skepticism from the council and its budget professional. The council officials were hesitant to embrace the mayor’s declaration that cuts would not impact the services residents receive from City Hall.
“There are 220 positions reduced from park and rec and the mayor is saying there will be no cuts to service levels. I just don’t see it,” Councilman Tony Young said.
Tevlin said Friday that, despite the disagreement, “the focus should now turn to remedying this situation.”
That doubt was compounded when Sanders also acknowledged that the city cannot accurately measure the service levels it provides. The mayor said he plans to have a precise way of measuring the city’s performance by the time he rolls out next year’s budget proposal.
Tevlin thinks the mayor is oversimplifying the situation by ignoring all existing tallies of the city’s performance: library hours, the number of miles paved and the response times to a police call.
Sanders has dismissed those statistics, saying the city could be more accurate in its measurement by also weighing the amount of books re-shelved every hour at the library, the busyness of the street being paved, and the urgency of the police call.
Tevlin argued that the city should still pay attention to the existing yardsticks kept by many departments, even if the records are not perfect gauges.
“In the absence of more sophisticated data, that information could be provided because we found it for some areas,” Tevlin said.
Tevlin applauded the mayor’s concentration on funding for long-neglected areas of the city, such as improving the city’s dilapidated infrastructure and paying down the city’s billion-dollar pension and retiree health care deficits. Those efforts total $98 million in the mayor’s budget proposal, including $70 million from the general fund.
She said the mayor’s big-ticket priorities are “well chosen, given the City’s current position, and the realization of these goals over time will serve the City well and allow the City to return its focus to other issues of importance to taxpayers in the near future.”
Hearings on the budget resume next week, when the council will review the budgets for specific city departments: park and recreation, library, and programs for the arts, culture, and promoting San Diego.
The meeting will be held in the council chambers, located on the 12th floor of 202 C St. in downtown San Diego.