City to ‘Impound’ $6 Million for 1990 Budget

In another sign of San Diego’s gloomy financial situation, the city’s budget director has informed the heads of all city departments that she will “impound” funds from their current budgets to assure sufficient revenue for next year’s budget.

In an April 7 memo, Financial Management Director Patricia Frazier asked city department heads to find savings in their current, fiscal 1989 budgets totaling $6 million. That savings will be frozen in about two weeks to assure that the $6 million can be carried over into the fiscal 1990 budget, Frazier said in an interview.

So-called “carry-over” funds are routinely available each year and Frazier’s department this year assumed that they would total $6 million. But a recent look at city spending showed that only $1.5 million would be available for next year’s budget, the memo stated.

“Since the projection is significantly below the expected fund balance, it is necessary to impound departmental funds to ensure that the $6-million target is achieved,” Frazier wrote.

Move 3 Weeks After Order

The move comes about three weeks after City Manager John Lockwood ordered that all departments stop filling staff vacancies with the exception of safety-related positions--such as police officers, firefighters and lifeguards--and positions deemed “critical” to the operation of city government, said Assistant City Manager Jack McGrory.

In addition, the city has delayed the start-up of a class at the Police Academy until the San Diego City Council has the opportunity to review the fiscal 1990 budget and its impact on public safety.

Lockwood’s proposed budget for the fiscal year beginning July 1 is expected to be released sometime during the week of May 8, Frazier said. Lockwood has already served notice that cuts in city services will be necessary because the city’s growth is outstripping its revenue.

This year’s city operating budget totaled about $378 million.

Frazier’s unusual decision to impound funds from this year’s budget “is a sign that things are not as good as they have been,” Frazier conceded. “I don’t think I can remember a time when we have impounded in recent years.”

‘This Is Serious Business’

“This is hard times,” said Terry Flynn, director of General Services, one of the city’s larger departments. “This is serious business.”

Jack Katz, senior chief deputy city attorney, said that his department is delaying the hiring of several attorneys until after July 1 and may cancel plans for some attorneys to travel to seminars in order to save funds.

“I have vacancies. I know there are vacancies out there that we aren’t filling,” Flynn added.

Other departments are in the process of reviewing their options before forwarding recommendations to Frazier by Friday. The Fire Department, with a budget of $56.2 million, may put off some purchases until next fiscal year to save money this year, said Chett Chew, director of administration.

In her memo, Frazier said that if the savings identified by the departments do not total $6 million, “it will be necessary to arbitrarily freeze appropriations across all departments to achieve the necessary savings.”