A Lopsided City, and a Decision

Friday, June 20, 2008 | It is perfectly normal for city’s leaders to be squabbling about painful budget cuts like the ladies and gentlemen downtown are doing now.

What is so uniquely San Diego about this latest feud, however, is that revenues are up. Yes, to understand the depths of the financial problem San Diego faces you need only try to digest the truth that our little government has more money right now than ever before. Yet at the same time, city services are in jeopardy.

Put it in perspective: The city of San Diego’s general fund budget of $1.19 billion is 7.4 percent larger than it was last year. By any measure of inflation, this is definitely keeping up with the times. Drill down a bit more and you can see that the general fund for the upcoming year will be 45 percent larger than it was in 2005.

Yet despite the healthy growth in revenues, Mayor Jerry Sanders and his staff have legitimate reason to advocate cuts in services as painful as he has since he took the job three years ago. Ask him and he’ll tell you that he foresees similar cuts as far into the future as he can see.

On Monday, the City Council will convene to decide whether to override his veto of their plans to keep his cuts to a minimum. The mayor would like to cut several positions including managers at libraries, the supervisor of a skate park and staff at a “temporary” fire-rescue station near the La Jolla Children’s Pool.

The City Council would like to restore these positions. But the mayor claims that dropping them won’t affect services at libraries and pools and skate parks. These services will just be provided, as his spokesman Fred Sainz claims, in a “different way.”

“We don’t quibble with the fact that there will be adjustments, there may be an impact to this or that service, but the rubber is finally hitting the road and we have to deal with the city’s structural deficit,” Sainz said.

Ahh. Structural deficit. Remember, this is the government jargon that basically explains why we can have so much more money at City Hall than we did before but we still have to cut, err, excuse me, “adjust” services. It’s all because we have a structural deficit — our debts and liabilities are growing faster than our revenues.

This is the legacy the old City Council is leaving us. This is the reason that Council President Scott Peters’ rosy talk about having gotten the city back on track while he ran for city attorney fell on deaf ears.

But back to Monday. What’s going to happen? In all likelihood, the City Council can muster the five votes it needs to overrule the mayor and restore these positions in the city budget.

Where is the money coming from? This is the most interesting part. What was once anathema among city leaders — save a few bold souls — is now embraced.

If the City Council gets its way, the city will be redirecting even more of the funds housed in that once untouchable land known as the Redevelopment Agency and, very specifically, the Centre City Development Corp. Remember, these are the funds supposedly set aside, locked away, for downtown’s future. The mayor once considered this type of move so sacrilege that he told me it would be like cashing out a person’s IRA that had been set aside for retirement.

No one would do that.

Except the mayor, apparently. He, this year, quietly decided to direct downtown redevelopment dollars toward paying the annual bill of Petco Park. He only wanted to send $5 million of the redevelopment budget to this effort — well aware that what he was doing had the potential to raise the hackles of downtown developers who have already been burned by the housing market flame-out. This money was supposed to be theirs, err, downtowns. The mayor stepped onto these burning coals. And there’s a reason he of the hundreds of press conferences did not hold one when he made this decision.

It’s a hot one.

But Sanders plans to increase his reclamation of the downtown redevelopment funds next year to $7.5 million.

The City Council, led by the independent budget analyst, saw this and said, “Hey, instead of waiting until next year to boost the Redevelopment Agency’s contribution to retiring the debt of Petco Park, why not just make it $7.5 million this year?”

It’s logical enough. The city spends $11 million every year paying down the credit card it took out several years ago to buy itself a new ballpark. The Redevelopment Agency can apparently only spend its money on construction projects downtown — which conveniently includes Petco Park. There’s really no reason in my mind we couldn’t use redevelopment funds for the entire $11 million annual payment.

I, for one, am a bit shocked we’re even talking about it. Again, this was completely unheard of even a year ago. We weren’t even debating whether to use this money. Now we’re debating how much of it to use. We’ve made progress.

Sainz, the mayor’s spokesman, initially tried to argue that the City Council and its budget analyst were really just trying to use “found” money to protect these city services. This was meant to imply that they were playing the kinds of monetary games this city was famous for — moving money around to fill gaps.

But there’s really nothing more “found” about the City Council’s money than there was about the mayor’s $5 million.

The mayor now just claims that it would be imprudent to spend even just a couple million more this year than he plans.

“I do not believe that restoring these positions is fiscally prudent due to the uncertainty surrounding the state budget deficit and its potential effect on the city,” Mayor Jerry Sanders said the other day explaining his veto.

In other words, like the downtown developers, the mayor is a bit freaked out about the economy.

Finally. Nothing bad happens when city leaders look to the future with worry. It’s when they think everything is going to be rosy that we get into trouble.

What we will have on Monday is the end of a healthy debate. The council’s independent budget analyst, Andrea Tevlin, says her bosses all know about the potential trouble the economy or the state’s leaders in Sacramento could cause. But they will react to it.

“Everyone is very knowledgeable about the threat of the economy and the state budget, and if becomes a true problem, the City Council will go back to the budget again and adjust,” Tevlin said.

The mayor thinks we should save now and brace for later — that if we do redirect more money from the redevelopment agency, we should put it toward reserves. He certainly also knows that every little bit more that he takes from CCDC makes it every bit more likely one of the downtown boosters is finally going to break and unleash on him.

This, like I said, is a healthy debate about priorities that couldn’t happen without two major advancements for the city: The advent of the independent budget analyst, and the tacit yet historical acknowledgement by the city’s powers that be that downtown’s redevelopment money is really just the city’s and it should be used in a way that benefits the entire area.

These are good and bode well for the future. We can dream that someday, when the budget grows, we don’t actually have to cut services.

It’s a simple goal, yet unimaginable at the moment.

Please contact Scott Lewis (scott.lewis@voiceofsandiego.org) directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.