San Diego Faces New Round of City Budget Cuts

Layoffs, program reductions loom large in mayor's midyear adjustments

The staggering economy is taking more of a toll on San Diego city government.

Mayer Sanders will soon be announcing another round of layoffs and service cuts to close a budget gap of up to $50 million just four months into the 2008-09 fiscal year.

"We don't have time to wait," Sanders said during  an interview in his City Hall conference room.  "Everybody knows we have to have a certain level of cuts.  We simply have no choice."

With a 3 to 4 percent shortfall in projected property, sales and hotel-room tax revenues, the mayor is calling on city department heads to to submit 10 percent cost reduction proposals, which he'll review and adjust on the basis of maintaining the highest service levels possible.

While "core services" such as public safety, water utilities and sanitation will be spared, supervisors and managers across the board will be expected to handle more tasks and personnel in the process of permanently cutting 600 positions now vacant after a two-year hiring freeze.

"We may have to suspend some services -- libraries that don't have as many people going to them," Sanders said.  "We may have the same thing with Park & Recreation programs.  There may be some things that police do now with civilians that we may not be able to do for awhile.  So we're going to look at the entire gamut."

Sanders is into a third straight fiscal year of belt-tightening since inheriting a financial crisis that torpedoed the city's credit ratings.

Only recently have those ratings been upgraded to levels that would allow the city to float major bond issues, once the nationwide credit crunch is sorted out.

He says he's optimistic that the City Council will back his budget-cutting agenda, even though they restored some of the cuts he proposed for the current fiscal year.

Four of the eight members are "termed out" and will leave office in December.

"I think this council will step up," Sanders said.  "I think they want their legacy to be 'balancing the books'.  I think they want to get involved in this and help us, and it's helping everyone in the city.

"So we'll take it to them and if we don't get what we need, then we've got a new council coming in and we'll have to take it right back again."

Sanders says he'll be looking for further reductions in his own office budget, after cutting his staff costs by 7 percent for the current fiscal year. 

He's leaving it up to the Council to determine the extent to which -- if any -- they'll trim their office budgets.

The mayor has no plans to seek new taxes or fees, such as charging homeowners for curbside trash collection -- which costs the city $54 million a year because of a free-pickup provision in the City Charter, which would take voter approval to rescind.

And while city property managers are negotiating the sale of a significant surplus land parcel, according to Sanders, he said the city's inventory of unneeded real estate will not be put on the market at "fire sale prices" amid the three-year downturn in property values.

"The ray of hope for us is that we have been doing this cost-cutting for some time," Sanders said.  "And so our problem is smaller than (that of) many other cities ... 

"The city of Phoenix, which is the same size as us, has a $200 million to $250 million problem."

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