The Morning Report
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So San Diego Mayor Jerry Sanders says we have a $60 million deficit just a couple of weeks ago. Then he says today, that he can close it if the employees cut $30 million from their compensation.
He says he found the rest of the money from a few sources: a few new fees, pinch a little bit from a library reserve fund (the same one he sneered at the City Council for raiding a few months ago) and $18 million from “internal stabilization reserves.”
No, these aren’t general fund reserves. We have literally found money. Here are the key quotes from him and Jay Goldstone, his top deputy (emphasis mine):
The internal stabilization reserves were created to back up debt service funded out of hotel-tax money, including Petco Park, the Convention Center expansion, trolley extensions, and improvements to Balboa Park and Mission Bay. If hotel tax revenues fell, the reserves provided a way to make the bond payments.
Sanders said the funds are not legally required and suggested today that they may have been created to squirrel away money.
“What we really think is perhaps past city mangers used that fund to put money in as another reserve,” he said. “We don’t know. We’ve never had to tap that.”
The city’s chief operating officer, Jay Goldstone, said city officials only became aware of the funds through the fall’s budget-cutting process. “Previous administrations buried these dollars, and apparently they did a good job,” he said.
We’re just supposed to believe that.
I don’t know what’s more difficult to do: 1) To believe the mayor that he honestly just stumbled onto $18 million and that previous administrators squirreled it away; or 2) To be OK with the fact that his internal accounting is so poor that he can just stumble onto $18 million.
Let’s do something really quick: Pretend you had a neighbor who was in financial trouble. He’s told you he might not be able to fix his fence or take out his trash anymore. Then one day, facing the possibility he might lose his car, he calls you and asks you to take him to get it out of impound. When you arrive, he pulls out $5,000 in cash.
He sees you looking at his pile of cash and he tells you he found it while looking under the bed for change. He says that his home’s previous occupants must have squirreled it away for him years ago.
You’re just supposed to believe that?