City Hall's Search for a Bailout

By Scott Lewis

E-MAIL STORY

Thursday, Oct. 16, 2008 | Mayor Jerry Sanders' "we're-in-a-pickle" speech Tuesday produced two main themes.

The first is his allusion to his own hygienic habits with this line from the speech:

Scott Lewis

"I’m trying to lead by example, also. I'm using one-third less water than I did a year ago by making my home more water-efficient and modifying my behavior in small but significant ways. I found I can save several gallons each day by shaving over a sink instead of in the shower. Think of it as just another one of my common-sense reforms."

I wasn't able to go to the speech but I'm told the shaving-in-the-shower-line brought uproarious laughter. I ran into one prominent community member Wednesday who said he didn't get the joke.

I guess jolly naked mayors make for guaranteed giggles.

But there's no laughing about the second theme. We were all a bit surprised that the mayor wanted to hype a speech the way he did this time. He's always talking at various events and panels. He wanted attention on this one.

He said San Diego should brace for a major revenue shortfall as a result of the dramatic reductions in the money coming in from property and sales taxes and tourism. To be sure, he pegged gap between the amount of money the city has and the amount it is planning to spend at $43 million. And he pledged to bridge the gap without the shell games, which have characterized budgets past.

This is somewhat of a hollow promise because it's not like he's got much choice. All the games that could be played have been. As Chief Operating Officer Jay Goldstone offered the other day: All the low-hanging fruit has been picked.

In fact, you know it's a troubling time when Council President Scott Peters sends out an alarmist press release. This is the guy who argued relentlessly that there was nothing worth worrying about with the city's endless list of liabilities. He played the role of the booster for the boosters -- the apologist for the apologists.

Now he pretends that none of this could have been foreseen. The devious "market" has backhanded us this awful blow, he said in the worry and sympathy-filled statement.

"San Diego has been a leader in responding to fiscal challenges in the past and we will continue to show that leadership. ... Thanks to efforts by Council President Pro Tem Jim Madaffer at the League of California Cities, the governor did not take from the City budget. Now, however, the markets have, and the economy has," Peters said.

This is how San Diego leaders have always explained the fiscal mess they've created: We're awesome -- my buddy over there, he's just wickedly awesome -- and we'll continue to be awesome. Because of our awesomeness, this could be a lot worse. But even though we're awesome, we can't control those crazy stock markets.

His Awesomeness went on:

"I pledge to deal with this deficit in a sensitive manner, respectful of the likelihood that there will be people who will lose their jobs," he wrote.

For all his hedging, it's the first time in years he's come at something like this without simply denying there's a problem or accusing us crazies of freaking out about it too much.

That's progress San Diego-style.

So what about the mayor?

His speech conveyed worry, yes.

And here's what he offered as reassurance:

"Soon, I will bring before the Budget and Finance Committee an amendment to this year’s budget that addresses this problem without damage to our city’s core services. At this moment, I can’t speak to its content, but I will attest to its character: It will meet the problem head-on. It will tell the public the truth. It won’t flinch from the tough decisions before us," the mayor said in his speech.

What does that even mean? The mayor has a plan to deal with this shortfall but he "can't speak to its content" only its "character?" Again, only in San Diego does an honest -- though secret -- budget amendment deserve praise for its character.

The fact is, this is the ride we've all been bracing for (or should have been). The booming housing market; the money people pulled out of their homes and spent on cars and dinners and niceties; and the massive loans cities and citizens saddled themselves with -- they all provided a cushion for City Hall's structural budget deficit. It protected the city from feeling the true burden of the liabilities it had incurred without raising revenues to meet them.

Now the cushion has been pulled out from under us.

And the mayor says he has a plan. He's just keeping it close.

He should change that quick.

Why? His silence on this point, even during a long speech, sucks the air out of the room. And the mayor has rivals out there willing to pump it full of their own.

Carl DeMaio, the newly elected City Council member just dying to get into office already, fired off a press release with his own potential cuts.

The cuts he proposes include a brutal slashing of the Ethics Commission. He's been butting heads with that group for a long time.

But the point is this: The mayor wisely saw the need to set the tone of what was going to be a difficult discussion. But if he is going to make a speech loaded with alarm about the budget, and he wants to reassure us that he's going to lead us out of it, he needs to show his plan.

Otherwise he leaves the discussion open for others to define.

Please contact Scott Lewis (scott.lewis@voiceofsandiego.org) directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

Editor´s Choice
The reader comments you won't want to miss. (Editor's Choice selection do not represent the views of the editors. They are comments that seem to add to the discussion as opposed to less productive insults or arguments.)

His speech made sense. It gave us a heads-up that cuts are coming, and he's on top of it. You yahoos don't have any sense apparently of how much more difficult a job it is to be mayor when you are also the city manager. Jerry is a good man, with a good heart, who is doing good for the city. What are you doing for the city? Anyone? Anyone?

Posted by Ronald Truman | reply to this comment
October 15, 2008 8:15 pm

The mayor will never mention the $250 million owed by the Redevelopment Agency to the City general fund. . What about payback, Jerry ? No, it's more important to spend $26 million on the Balboa Theatre.,Do we have a serious theatre shortage ?This is just one example of misplaced priorities.. Dowentown counts. The rest of the city doesn't.

Posted by mel | reply to this comment
October 16, 2008 6:42 am

Sanders stating San Diego is in a mess because of the collapse of Wall Street demonstrates either ignorance or "intentional deception" on the mayors part. San Diego led the nation to this point, it didn't follow. San Diego couldn't obtain credit during a time of such liquidity that banks were writing 100% subprime loans with no documentation. All the indications were here first, before the rest of the nation. San Diego had more toxic subprime loans than just about anywhere else. Our housing market went through the roof, then led the downturn. Others (notably Frye in 2005, and Aguirre) argued that the problems in San Diego were dire and must be attacked immediately and aggressively, or we faced bankruptcy. Sanders offered his do nothing approach, and rather than take tough action to prepare for a downturn, we're broke before the downturn even hits.

Posted by Paul | reply to this comment
October 16, 2008 6:46 am

Suppose the City Hall finance manager suspected the property tax projections from the county, which are based on assessments, might not pan out because a lot of homes are going into foreclosure, so the tax bills won't get paid. Pretty good assumption. But how do they quantify what money "might" not come in. How do you start laying off city staff and cutting services based on a deficit that "might" occur? I would wait to see how big a shortfall to expect before I started basically destroying the lives of my employees and their families too. That way they can do it all at once and avoid the long, slow bleed-to-death approach the union tribune took.

Posted by sympathy for the devil | reply to this comment
October 16, 2008 9:20 am

16 Comments so far on this story...

Scott, we have been waiting for the Mayor's plan for close to four years. If patience is a virtue then San Diegans are full of virtuosity and extremely low on cash. When do we hear about tax increases that are cloaked in the terms of fee enhancements, user fees, and pay as you use, etc.? The caretaker of choice has been treading water in this rising tide of red ink. Last night, I watched Paul Bloom, on television, throw one softball question after another, as the Mayor talked his usual generalities. Would someone on the press side please ask the Mayor some pointed and specific financial questions? He has had four years to come up with something beyond his empty reformist mantra. Paying a few bills isn't reform, it is doing what you are supposed to do.

Posted by Dale Peterson | reply to this comment
October 15, 2008 6:35 pm

Not to pick on you specifically, Dale. Just a point of clarification for a number of people who keep saying that Sanders has been mayor for nearly 4 years, or, at times, over 4 years. But Sanders has been mayor for less than 3 years (Murphy resigned in April '05, then we had primaries and run-off special elections). Again, just wanted to set the facts straight, and not commenting on the substance of your comments.

Posted by Hank | reply to this comment
October 15, 2008 7:08 pm

Mr. Truman, forgive me for saying this. You are either very naive about this mayor or you have no idea what is going on in this City with this Government. Let me explain: The mayor constantly rants about water shortages, increased water fees and just the other day, WATER RATIONING. Yet, he is prepared to issue permits to build a 4800 house community just north of Friars Road. No worry about water there. He also desires to have the current City Hall and surrounding buildings raised so he can have a new City Hall and Mall constructed at that location. Not only is the question, from where is all the construction water to come and let us not forget to mention the half a billion bucks it will take to complete it?

Posted by Peter J. DiRenza | reply to this comment
October 17, 2008 7:25 pm

I'm not sure virtuousness and virtuosity are the same things, but I agree with Dale Peterson that we have been waiting forever for this Mayor to DO something about the financial hole the City's in. Television newsreaders like Paul Bloom ought to be ashamed of their non-confrontational, uninformative performance, but you have to admit that Jerry Sanders is the most genial-seeming tenor-voiced public official in town. Didn't I read somewhere that he wants higher office, like State Treasurer or something? Now that's really scary.

Posted by Fed Up | reply to this comment
October 15, 2008 9:27 pm

I get that you want specifics, but I understand how Sanders doesn't have them yet too. He needed to alert the public quicly, but how quickly can anyone make big changes? It seems you are just finding reasons to be angry at Mr. SAnders.

Posted by Pri Lewis | reply to this comment
October 15, 2008 9:58 pm

How quickly to present changes? Well, the city has had a $1.5B underfunded pension obligation since before Sanders took office. That's been well understood. In order to bridge that massive financial chasm, our bold mayor has, for 2-1/2 years held to the explicit policy of no revenue increases, no cuts in services: a.k.a. no sacrifices. // Now the City will make sacrifices, but it won't be the Mayor's fault. No, it's the economy's fault. Jerry will forever stay everyone's best buddy til he can run for another office and pass our aging financial mess on to the next chump. Courage we could use.

Posted by Augmented Ballot | reply to this comment
October 16, 2008 10:09 pm

Why wouldn't Peters start talking tough? He's on his way out. Easy to talk trash when you don't have to carry it out yourself. As for our esteemed mayor, if he really wanted to make a difference, he'd start cutting out the waste that he's put INTO city hall in PR and "ethics" flacks, and he'd step up to the task of cutting CCDC and SEDC off at the knees. There's millions of dollars right there.

Posted by Larry | reply to this comment
October 16, 2008 7:33 am

The first rational step toward budget reform is to stop paying $15 million every year to the Chargers and the Padres. Spanos and Moores can pay their own damned business expenses. Then the Mayor can reduce his taxpayer paid PR staff. His campaign committee can fund his campaign propaganda. Stop back room beautification projects like the Grantville funded C Street and Embarcadero boondoggles before they waste that $31 million, and fold the corrupt CCDC and SEDC into the city's redevelopment agency...there are plenty of savings to be made.

Posted by Fred Williams | reply to this comment
October 16, 2008 8:45 am

One of the many, many reasons the City has a deficit is that the various impact fees that are supposed to be paid by developers to fund infrastructure improvements have not kept pace with inflation (when paid at all). The community plans are based on annual increases to the DIF, HIF, etc. None of those fees ever increase because of the intense lobbying that prevents it. The DIF in Mid-City hasn't budged a dime in ten years and our infrastructure shows it. Then there is the ridiculously low $1500 in lieu fee to get out of building affordable housing. Until the Mayor shows some leadership and demands that the developers pay their share, it will be on the backs of the Joe Homeowners to make up the revenue shortfall.

Posted by goodhabits | reply to this comment
October 16, 2008 9:11 am

One of the problems of predicting a shortfall is that many properties are being reassessed. Since the value of San Diego real estate has tumbled, there will be less tax revenue as more houses are reassessed. So, it is not only foreclosures that are the problem. The actual numbers can't be predicted with any accuracy, just as the original numbers were wrong. To wait til the end, whatever that means, is not an option.

Posted by Fran | reply to this comment
October 18, 2008 9:20 am

Ronald Truman = KFC Sander's brother??????? BK, Chpt 9 is the only way out.

Posted by Billy Bob Henry | reply to this comment
October 16, 2008 5:35 pm

Readers and responders, we were in a financial pickle when Jerry Sanders first took office. So, why are there some folks who believe that Sanders is now exhibiting leadership? Treading water and caretaking isn't decisive--it is putting off the inevitable. If we had entered BK/reorganizatiion, a couple of years ago, we would have already been through most of the tough love stuff. Also, now, we would be better equipped to deal with 08 and 09's stark economic realities. The "we are in trouble, but I'll get back to you," sounds like an upside down mortgage holder, still "Wishing and Hoping" (with apologies to Dusty Springfield) for a miracle. Mayor Sanders seems to consistently announce the popular thing. However, when is he going to shift out of first gear? Or, will he ever? Me and my plumber (Josephine) are skeptical.

Posted by Dale Peterson | reply to this comment
October 18, 2008 12:36 pm

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