San Diego Mayor Jerry Sanders went further than he’s ever gone on Wednesday to declare an end to the theme that has dominated his tenure.
“I don’t think we’re in a financial crisis at all,” Sanders said.
Sanders made this announcement as part of presenting next year’s $1.2 billion day-to-day operating budget, the last in his seven-year tenure. This budget, Sanders said, is structurally balanced. That means it’s the first one in at least a decade that doesn’t need reserves, accounting tricks, transfers from different funds or one-time pots of money to cover the fact that the city was set up to spend more money than it collected.
Two months ago, the mayor telegraphed this news by using a surge in tax receipts to declare the city’s budget balanced. Back then, he said he was restoring hours to each of the city’s branch libraries and recreation centers, which had been some of the biggest causalities in previous cuts. Also back then, Sanders’ staff made a point of saying that his budget announcement didn’t mean the city’s financial crisis had ended after we and others had interpreted it that way.
On Wednesday, Sanders left no doubt. It means he believes he’s ended the financial crisis that catapulted him into office in 2005.
But at the same time, Sanders was explicit about the city’s major ongoing financial challenges. He identified some of them at Wednesday’s press conference.
Here’s Sanders on road repairs: “That doesn’t mean that all of our streets are overlaid yet. We’ll be working on those.”
The city still is about $30 million short in its day-to-day budget to keep streets and other infrastructure from deteriorating further. The budget also relies on a $75 million loan to help pave streets and patch storm drains that need help now, a bill future generations will pay.
Here’s Sanders on service levels: “We’re certainly not providing the same level of service we did in 2003. We don’t have the same number of police officers. We don’t have the same number of park and rec hours, of library hours.”
City services have deteriorated significantly since the mayor took office. Exactly how much we aren’t sure because Sanders’ administration has stopped tracking many of the service levels that would make it simple to understand how far they’ve fallen. The mayor did restore five hours of service to each branch library and recreation center in this budget.
And here’s one immediate budget issue that the mayor didn’t mention: pension reform.
Proposition B, the ballot initiative promoted by Sanders to replace pensions with 401(k)s for most new city workers, will cost money in the short term, according to the official financial analysis.
Assuming voters pass the measure, the city will face a $19 million deficit in 2014 instead of the $2 million surplus the mayor now projects.
Still, Sanders deserves significant credit for reaching this point. The city got to a balanced budget even as it stared down a massive economic recession that took a major toll on its tax revenues. Other big cities in California, the mayor noted, still have much more red ink.
Of particular note, Sanders has increased the city’s reserves to a healthy 11 percent of the budget. That’s a far cry from when the city barely had enough money set aside to cover two weeks of payroll.
All of these positive and negative financial statistics could have been the reason for some of the mixed messages from Sanders, his staff and three of the City Council members who joined the mayor at his press conference. They all said fiscal problems remained.
“I’m not here today to raise the victory flag,” the mayor said. “We still have more to do.”
The City Council will begin discussing the mayor’s budget next week with an eye toward final approval in June.
Liam Dillon is a news reporter for voiceofsandiego.org. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.
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