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The city’s budget deficit appears to be steadily climbing.
The city’s budget analyst said Monday delays in implementing managed competition could translate into an additional $3.9 million shortage in the city’s day-to-day budget next year, adding to the likely $40 million budget gap officials already identified.
And while former Mayor Jerry Sanders had assumed savings for this year, those could fail to fully materialize too, Independent Budget Analyst Andrea Tevlin said at Monday’s City Council meeting.
San Diegans approved an update to the city charter to allow competitive bids for city services in 2006. More than six years later, only one contract has been fully implemented. That follows plenty of legal wrangling in court and negotiations with city employees, who have won all of the contracts so far. Some work agreements are still being negotiated with the city’s employee unions. A handful of other contracts are still in the works.
Mayor Bob Filner’s take on managed competition further complicates matters.
Filner has said he’s not convinced the process actually results in savings. Last month, he told U-T San Diego he wanted to put a hold on managed competition and scrutinize contracts the city has approved.
“I almost want to call it mismanaged cuts, not managed competition,” he told the newspaper.
Filner’s view of managed competition holds weight. The mayor can choose whether to forward potential projects or services to be bid on to Council.
Last month, Councilman Kevin Faulconer wrote a memo to Filner urging the new mayor to allow the process to continue to ensure savings outlined in Sanders’ budget projections.
“Any delay in implementation could cost the city millions of dollars that would otherwise be directed toward core city services and future budget uncertainties,” the councilman wrote.
Francisco Estrada, the mayor’s liaison with the Council, said at the Monday meeting that Filner had nothing to do with the delays in implementing the fleet management contract, which mostly involves repairs and regular maintenance of city vehicles. That contract had been projected to save the city $4.2 million annually. The delays occurred under Sanders’ watch, Estrada said.
He also emphasized, as Filner has recently, that the former mayor’s budget predictions haven’t panned out.
“The financial picture that was posed by the previous administration as they were leaving office appears to have been very rosy and we’re starting to find there were some issues with the budget as a whole that have started to call into question whether or not we are going to be at a deficit at the end of this particular fiscal year,” Estrada said.
With that in mind, Filner is trying to get more information about managed competition contracts before he proceeds, Estrada said.
To do that, he said Filner has asked City Auditor Eduardo Luna to review the fleet management contract, which Filner has publicly panned. It’s not clear whether Luna has agreed. He had been set to examine the city’s publishing services contract regularly scheduled as part of the managed competition process.
Faulconer and fellow Republican Councilmembers Scott Sherman and Lorie Zapf, all of whom support the measure, argued it’s too early to evaluate the contract for city vehicle repairs because it hasn’t been fully implemented yet.
“The delay for an audit on something we haven’t even started yet frankly makes no sense to me,” Zapf said. “Let’s move this forward.”
Tevlin acknowledged the timeline for the managed competition projects may have been overly optimistic.
Still, she said, the delays could hit the budget hard.
“What we’re really concerned about is if (managed competition contracts) don’t get implemented fairly soon you’re not going to see those savings that we’re counting on for fiscal year 2014, 2015, 2016 and so on,” she said.
Lisa Halverstadt is a reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa.halverstadt@voiceofsandiego.org or 619.325.0528.
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