Mayor Jerry Sanders on Friday morning released an update of his five-year financial plan, declaring that he would funnel $146 million toward the city of San Diego’s estimated $3 billion in backlogged infrastructure needs and long-term deficits.

In this year’s budget, the first year of the five-year plan, the mayor dedicated $102 million to these needs. The backlogs covered in the five-year plan aren’t exactly sexy, but they do represent some of the areas most neglected by city leaders over its financial decline. They include: streets and storm drains; city buildings’ compliance with the Americans with Disabilities Act; workers compensation fund; and emergency reserves.

“The days when the city budget was a shell game is over,” Sanders said.

At the same time, the mayor and his chief operating officer, Jay Goldstone, announced an estimated budget deficit of $32 million going into fiscal year 2009 budget preparations. Sanders said that figure doesn’t include any possible cuts from the state in the wake of its budget problems or any raises that would be given to employees.

“All that is in the five-year outlook is not good news,” he said.

In an interview yesterday, Sanders hinted that he expected to offer pay increases to police officers and firefighters.

Goldstone said the growth in the city’s property tax revenues had slowed considerably, with a projected increase at 6 percent, substantially lower than the 12 percent to 14 percent growth seen during the heights of the housing boom. But of the most concern are the city’s sales tax revenues, which have weakened considerably and are coming in lower than expected in the ongoing fiscal year.

The two officials said they have asked all city departments to show them what a 10 percent cut would look like and then will judge what positions to cut based on how they would affect city services.

In the five-year outlook, originally unveiled last year, the mayor set out a plan to finance what he deemed the “eight significant areas” long neglected by previous city leaders.

Here’s how the funding breaks down when compared to the fiscal year 2008 budget:

  • Pension: The first area in the outlook deals with payments made above and beyond the baseline bill presented by the pension system. The payment was envisioned to eliminate what’s known as negative amortization — whereby the city formerly paid an annual amount to its pension deficit that didn’t even cover the full interest and therefore allowed the pension deficit to continue growing.

    Last year, Sanders dedicated an additional $27.3 million for that purpose. This year, with the pension system having adopted a new financing plan to eliminated negative amortization, he envisions that figure to be only $9.7 million.

  • Reserves: Sanders will put aside $7 million — up from $3.3 million — for the city’s reserves in an attempt to increase them ultimately to 8 percent of the total budget. He foresees getting to 6.5 percent in fiscal year 2009.
  • Deferred Maintenance: The mayor predicts he will put $29.7 million toward the estimated backlog of between $800 million and $900 million in repairs to city buildings and infrastructure.
  • Retiree Health Care: The city has established a trust fund to start dealing with a problem familiar to many governments around the nation — an estimated $800 million in future retiree health care bills. This year, Sanders spent $25 million. Next year, he plans to double that.
  • Storm Water Runoff Compliance: This line-item will increase from $18 million to $29.5 million.
  • ADA Compliance: This will stay the same at $10 million.
  • Workers Compensation: This area will increase from nothing to $5 million. Goldstone said the city must start squirreling away funds for these claims or future claims will be forced to come out of the everyday budget that goes for city services.
  • Public Liabilities Fund: The city budget has been sapped in recent years in this area, as countless bills for attorneys, consultants, accountants and other outside help in the city’s financial crisis have taken their toll. The mayor has set aside $5 million for next year, the same amount as in this year’s budget.

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