Independent Budget Analyst Andrea Tevlin’s office has released its review of the mayor’s 2009-10 budget proposal. You can read the full report here, but here are some noteworthy items:
- Trash or Stormwater Fees. Tevlin is recommending that the city form a citizen committee to study two major fee increases: charging for trash collection at single-family homes and increasing the fees the city charges for complying with regulations on preventing stormwater pollution. Tevlin said the committee should make recommendations to the council by October, providing enough time to put together a ballot item for 2010.
- One-Time Funds. Tevlin notes the mayor’s turnaround on using one-time funds to plug the budget hole but says she agrees with the proposal to use the money this time, saying it’s only being used for one-time expenses.
Mayor Jerry Sanders had told me otherwise: that his budget used nearly $18 million from the so-called internal stabilization reserves for one-time uses, but that around $4 million was being pulled from a library system improvement fund was being used for ongoing expenses because it had been plugged in the budget at the last minute when the City Council kicked back a plan to increase parking meter fees.
I’m not sure where the discrepancy comes from, but the IBA’s office does count one-time expenses differently than the mayor by not counting transfers to other city funds as one-time spending.
- Mystery Money. Remember when the mayor said his office had discovered funds that turned out to be not to be such a mystery after all?
The IBA’s report notes a few other funds that merit closer scrutiny. One is the library operations and maintenance fund, which is a cousin to that other library fund the council drew on to keep libraries open this year and the mayor is proposing draining for the upcoming budget year. That fund was created for the construction expenses of new and improved libraries included in a grand expansion plan; the library operations fund was created to run those libraries.
The city has been putting aside $300,000 a year into that library operations fund, even as it proposed closing library branches last year. The IBA report notes that since the library expansion plan is stalled, the City Council should evaluate what to do with the fund balance, which tops $1 million.
- Hotel Taxes. The report flags the mayor’s projections for hotel-tax revenue as potentially optimistic. The city is estimating that hotel taxes will decline by 2 percent in the financial year starting July 1.
But the tourism picture is so gloomy that the San Diego Convention & Visitors Bureau just launched an $8.7 million marketing campaign. The mayor’s budget even notes that room demand is expected to drop 8 percent during the 2009 calendar year and average occupancy will hit a five-year low, but it’s expected to start to turn around in 2010.
The IBA says it’s possible the marketing efforts could offset some of the projected decline, but cautions that there is a “downside risk” to the hotel-tax projections.