No Big Splurges Expected From Labor Deal Savings

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    NEWSLETTERS

    People who live and pay property taxes in San Diego may have greater reason to be optimistic about the future of city government.
               
    However, big savings from a tentative new labor agreement won't come – or be spent -- all at once.
               
    After all, the city effectively is still operating 'on the edge'.

    It's expected that after years of pay cuts and freezes, the city's six labor unions will ratify contacts worth an average 5 and a quarter percent more take-home pay over the first three years of a 5-year deal.
               
    Pension obligations won't increase, so taxpayers could save around $100 million dollars over that time.
               
    But the mantra at City Hall is still austerity.

    "As long as I'm the Council President, we will continue to focus on fiscal discipline,”  Councilman Todd Gloria vowed in an interview Wednesday.  “It is what got us out of the depths of the last financial crisis, and it'll be what will keep us competitive in the years to come."

    The flow of projected savings from the five-year freeze on pensionable pay will take some time to fill the city’s treasury to the point where surpluses can go to discretionary spending.
               
    Cautious council budget hawks want to focus near-term on infrastructure -- battered streets, broken sidewalks, ruptured water and sewer mains.

    They’re intent on beefing up long-depleted public safety departments, restoring “hours” to neighborhood services such as libraries, parks, recreation centers and swimming pools

    Some are issuing a warning to Mayor Bob Filner. 

    "Do not take money out of reserves,” says Councilman Kevin Faulconer.  “That's something that I'm strongly against.  We cannot take money out of the city's savings account for day-to-day operations. "

    Meantime, there's concern that $28 million in debt payments on Petco Park and the first expansion of the Convention Center might wind up being assessed to the city’s general fund, now that the state has ended redevelopment spending.

    And, according to Filner, there's an $11 million shortfall in the budget for the fiscal year starting July 1st.

    Given those prospects,  incremental savings from the labor contract could come in handy even before money is allocated to public safety and neighborhood services.

    Says Lisa Halverstadt, city government reporter for Voice of San Diego: "Council members think it might be best if that money is in safekeeping for that purpose, rather than be used on new projects, hiring additional city staffers, that sort of thing."

    Federal budget cuts and another economic downtown also are top-of-mind issues in decisions about where to apply the budget savings.

    "You never know if some horrendous event could happen in the city that would just change things overnight,” Gloria points out.  And that's why you have to have healthy reserves, you have to have a conservative fiscal policy that makes sure that whatever we do, we're resilient."

    Besides union members and Council members, the city's retirement system trustees have to sign off on the deal, which would take effect in July.

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