Council Cuts $2.5 Million for 4 Agencies : Budget: Slashed were funds for the motion picture bureau, Economic Development Commission and Convention & Visitors Bureau, all of which help produce revenue for city.

In a fast-moving budget-cutting session that Mayor Maureen O’Connor later called “devastating” to San Diego’s economic health, the City Council on Thursday eliminated $2.5 million for four quasi-governmental agencies that attract business and tourists to the city.

Agencies losing all or part of their budgets for the fiscal year beginning July 1 were the San Diego Motion Picture and Television Bureau, which lost $362,000; the San Diego Economic Development Commission, $476,500; the Convention & Visitors Bureau, $1.6 million and the Greater San Diego Chamber of Commerce’s Economic Research Bureau, which lost $52,500.

Spokesmen for the Economic Development Commission and the motion picture bureau said their organizations would be forced to close if the cuts are not restored.

“That’s our budget, our entire budget,” said Motion Picture Bureau Director Wally Schlotter. “We’ll be completely out after 13 years.”

Schlotter maintained that the cuts made no sense because motion pictures and television shows shot on location in San Diego generate more than $362,000 in hotel and motel tax revenue that is returned to the city’s general fund.

“The $476,500 is half of our $930,000 budget,” said a shocked EDC Executive Director Dan Pegg. “We simply couldn’t sustain a program that has any value without city funding. . . . That cut would put us out of business.”

Officials with the various organizations sat in small clusters around the largely deserted council chamber as a consistent majority on the council supported a list of cuts proposed by Councilman Wes Pratt.

Voting in favor of the cuts were Pratt, Abbe Wolfsheimer, John Hartley, Linda Bernhardt and Bob Filner. Voting against the cuts were O’Connor and council members Ron Roberts, Bruce Henderson and Judy McCarty.

After the council voted to cut one group’s budget, Roberts predicted that Sunbelt cities such as Phoenix would be “applauding” San Diego’s decision to cut back on promotional spending just as the region enters an economic downturn. Henderson called the cuts “government by suicide.”

O’Connor maintained that cutting promotional spending is ill-timed because “up and down the state the tourism industry is having a difficult time.”

Executives from the organizations were clearly bewildered by the cuts, which were made as the council struggles to eliminate a budget shortfall that has been estimated at $35 million to $60 million.

Thursday’s EDC vote “didn’t make sense because most of the jobs we’ve attracted have benefited (Pratt and Filner’s) districts,” Pegg said. “I don’t know why they did it.”

The $1.6-million cut in the Convis budget would “hurt us dramatically,” said spokesman Al Reece. “But I didn’t hear any direction as to what they want us to cut.”

Just before the Convis vote, however, Pratt linked the $1.6-million Convis budget cut to promotional work done for the city’s newly opened Convention Center. Pratt described that work as “a duplication of effort” done by the center’s booking and promotion staff.

But, after the meeting, Reece maintained that the Convention Center staff is ill-equipped to handle the longer-range bookings that Convis handles because “a lot of the information we have is proprietary information that the center simply doesn’t have.”

The Chamber’s Economic Research Bureau has, for nearly 40 years, gathered economic data that the city and local industry use in their economic forecasts. The council cut would account for about 15% of the bureau’s budget, according to bureau director Max Schetter.

After cutting the promotional budgets, the council voted to maintain a $13-million housing trust fund designed to help make more affordable housing available. Pratt, who has guided the proposed housing trust fund through a series of previous cuts, bristled when McCarty suggested cutting back on the fund.

The council’s budget-cutting fervor also led to the elimination of $1.4 million requested by the city Commission for Arts and Culture, which wants to stage a citywide arts festival in 1992.

Arts commission Chairman Micky Milton Fredman later said the cut makes it impossible to book opera, orchestral, dance and other cultural groups for the proposed 1992 festival. Festival planners were counting on the $1.4 million as a line of credit that would be used to lure popular groups that regularly sign contracts several years in advance.

Arts groups generally want municipalities to issue “a vote of confidence” by promising funding, Fredman said. “But we got nothing.”

Without the funding, the arts commission will have to hope that the council funds are restored, or that private donors surface, Fredman said. But the danger in waiting is that “there’s just not going to be anything left” to book, Fredman said.

When McCarty suggested that the arts commission be given $100,000 to begin planning for a possible festival, O’Connor, who called the $1.4-million cut “stupid,” told council to simply “put the arts commission out of their misery because you don’t intend to do a festival.”