Lockwood Says City Should Divert Funds to Pay Flooding Settlement

The city of San Diego should cancel plans to develop a revenue-producing parcel of North City land and appropriate millions of dollars from next year’s capital-improvement budget to pay off a $9-million liability settlement reached last week, City Manager John Lockwood said Wednesday.

Lockwood’s recommendations, if approved by the City Council, will cut nearly $4 million from the fiscal 1991 capital-improvements budget and cancel scheduled improvements for 106 acres off Interstate 805, north of Mira Mesa Boulevard, that the city had planned to sell or lease for use in scientific research.

“Next year, there will be less than if we hadn’t had that settlement,” Lockwood said. “Next year, it’s going to hurt.”

The budget juggling will be necessary to make a $9-million payment to 17 South San Diego families whose homes were flooded by rain that poured out of a city catch basin during a severe 1988 storm. The settlement was reached Oct. 4, three weeks after a Superior Court jury ruled that the city was liable for damage to 15 homes from the Feb. 2, 1988, flood.

Rented Space in Basin

The city had rented space in the basin to a firm that parked heavy equipment there, and the homeowners contended that the equipment prevented water from draining from the basin.

In another case, it remains undetermined how the city will fund a $6.3-million balance of a record $9.5-million settlement reached last month with attorneys for a woman who was left quadriplegic after her car was rammed by a speeding police cruiser on New Year’s Day, 1988.

Assistant City Manager Jack McGrory said that payment will be budgeted into city operating expenses during budget deliberations next year.

Under the terms of the flood settlement, the city, which is self-insured, will pay $6.8 million in damages and spend $2.2 million to purchase the 15 homes on Lauriston, Paxton and Elrose drives.

Cancellation of Improvements

Lockwood recommended that $5.1 million of the $6.8-million settlement for damages come from cancellation of improvements such as grading, sewer lines and roads for the North City parcel known as the Corporate Research Park.

Lockwood said that, barring any change of plans, money for the improvements will not be put back in the budget for at least six years. The move would require the council to waive a policy prohibiting use of industrial development funds for other purposes.

The rest of the payment will come from unbudgeted revenue in the city’s capital-improvements budget, including $1.44 million that the city had intended to spend on a South Bay police substation. That expense became unnecessary when the city negotiated an agreement to have a developer build the substation, McGrory said.

This current fiscal 1990 capital-improvement budget is more than $282 million, up from $183.4 million last year. Deliberations for fiscal 1991, which starts next July 1, will begin in the spring.

An aide to vacationing Councilman Ed Struiksma, who represents the district where the Corporate Research Park was scheduled to be built, declined to comment before being briefed by Lockwood.